27 November 2023

Can local government take much more?

Can local government take much more? image
Image: Number1411 / Shutterstock.com.

Dr Andrew Walker, head of Research, LGIU reflects on the Autumn Statement and asks: what might it take for the Government to pay attention to local authorities?

The Chancellor’s Autumn Statement last week will have done little to boost confidence in local government. Local authorities will have been left wondering how much more of a crisis needs to ensue for their concerns to be recognised and addressed by the Government.

We know from LGIU’s recent State of Local Government Finance survey that confidence in the Government’s capacity to address the funding crisis is at rock bottom. Just 14% of senior council officials are confident in the sustainability of council finances, and under 5% are happy with the progress that’s been made on delivering a sustainable funding system.

This is a stark figure and includes Conservative council leaders.

Recent high-profile collapses, including the section 114 notices issued in Birmingham and Woking, effectively declaring bankruptcy for councils, indicate the scale and potential of the disaster. More and more well-run and effective councils are saying that they could be next.

Councils have been pulling every lever available to them to balance their books: raising council tax, cutting services, and spending their finite reserves, and still we are seeing an ever-increasing number of councils unable to make ends meet in the face of central government spending cuts and increasing demand for council services, particularly adult and children’s social care.

Each year citizens are paying more and getting less from their councils, and without significant structural changes to the way funding is allocated it is difficult to imagine these dire straits ending for councils and the communities they serve.

Instead of grasping the nettle on the bold changes needed to bring stability and consistency to the sector, we have seen yet more tinkering around the edges, with tweaks to business rates and planning. With over a hundred measures, it is alarming that the needs of councils, who provide services, leadership and coordinate essential growth, have not been reflected.

Frontline services are at risk, but so are the nuts and bolts of good governance. Our recent report, The Changing Role of the Monitoring Officer, published in partnership with Lawyers in Local Government and Browne Jacobson, highlights the strains and pressures that those who perform this essential role are under.

Certainly, investment zones and the devolution deals in four areas, Hull & East Yorkshire, Greater Lincolnshire as well as expanded but non-mayoral deals with Cornwall and Lancashire, are indeed welcome for those areas. And then there was the unveiling of the new ‘Level 4’ devolution arrangements, which include control of transport and spatial planning, so far in Greater Manchester and West Midlands and could be available to other areas in the future.

But this still does not add up to a coherent pattern of governance, while the overlap with investment zones and freeports arguably creates more confusion and complexity. Indeed, we are still a long way short of the strategic leadership needed for a sector that is essential to delivering economic growth, wellbeing, services, and community cohesion.

One of the themes emerging from our recent research with our members to mark LGIU’s 40th anniversary is the need for a formal mechanism to enable productive dialogue between local and central government. Other countries have a similar set up, as our detailed research on local government in Italy, Germany and Japan has shown.

The need for such a forum is fully evident as the Autumn Statement presents a more of the same approach to local government, deaf to the needs of local service users and freezing out the desperate calls for reform from elected council leaders.

There seems to be an idea in Westminster that there is more efficiency to be found in the system, or that we can patch up the public realm by distributing a few more ring-fenced pots through a competitive process.

In the current circumstances, what might it take for the Government to pay attention?

For more on the Autumn Statement check out the following:

Autumn Statement: Hunt devolves but councils face new costs

Autumn Statement: Planning system to prioritise EV charging

Autumn Statement: Hunt announces surprise LGPS plan

Autumn Statement: Unprotected departments face further cuts

Autumn Statement: Level 4 devolution unveiled

Autumn Statement: Living Wage hike places council budgets under pressure

Autumn Statement: Business rates measures to be fully funded

Autumn Statement: Councils to be able to recover planning costs

Autumn Statement: Housing benefits unfrozen

For more on local government finances check out our features, 'How to fix local government finance' and 'Preventing future Section 114 notices'.

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