Beleaguered local authorities were this week lauded as the ‘unsung heroes’ of the recession by a senior Cabinet minister, who revealed Whitehall sceptics had previously doubted councils’ ability to deliver on key policies.
In an exclusive interview with The MJ, housing minister John Healey heaped praise on local authorities delivering not just new housing policies, but a wide range of programmes designed to help Britain tackle a deep recession.
Mr Healey, who was local government minister before joining the Cabinet this summer, said: ‘In some respects local government is the unsung hero of the response to this recession. It reflects my long held belief local government does a great deal more than it gets credit for.’
The minister’s words were warmly received by council leaders struggling with declining public sector revenues as demand on services has soared. This week, it was reported the financial situation at Birmingham City Council, Britain’s largest authority, is worse than anticipated, with overspends estimated at £20m. The authority has already earmarked £40m in annual savings but may need to find more or face service cuts.
An LGA spokesman said: ‘We’re delighted John Healey has recognised the hard work that councils have put in up and down the country to help their communities cope with the impact of the recession.’
Mr Healey was speaking as he launched the second phase of the Government’s Kick Start programme to reinvigorate stalled development projects. Last week, he also announced plans to build 2,000 new council homes across 47 authorities, part of Whitehall’s £1.5bn housing pledge to assist the sector during the recession. It is Britain’s biggest council house-building programme since 1992.
Asked if town halls were ‘ready and able’ to deliver new social housing during a downturn, he said: ‘I had the advantage of two years’ experience as local government minister. I had total confidence that local government wanted to start building new council homes; the commitment to do so, and the confidence that it could respond to that sort of challenge. Now, that wasn’t a view widely shared within government.’
A senior local government insider added: ‘It’s no surprise to hear that some Whitehall personnel are still wedded to outmoded views that councils can’t deliver complex local needs. [Mr] Healey, on the other hand, has long recognised that they can.’
Mr Healey said he has been ‘greatly encouraged’ by the quality of applications to build new council homes, the first wave of which should create 5,000 jobs across Britain’s struggling construction industry.
This week he also pledged that ministers and councils would link housing programmes with youth unemployment initiatives, by demanding apprenticeship schemes and local recruitment drives must be a condition for securing housing pledge support.
But Mr Healey revealed he would not ask councils to meet project-specific targets for apprenticeships. ‘I don’t want to fall into the trap of specifying too tightly what should happen in local areas. I think setting the clear policy and principles…is the right role for me as minister,’ he said.
He expects authorities to use a variety of methods to finance their commitments under the new council house-building programme, which requires town halls to match government funding, including wider use of prudential borrowing powers and the donation of land.
But he dismissed claims made by the Audit Commission and some housing charities that government initiatives focus too heavily on new builds.
‘A lot of these criticisms are nonsense, to put it bluntly. Councils are quite capable of doing more than one thing at once – and they do. The idea that by seeking to support new builds detracts from renovating properties, improving housing management or providing decent housing benefits services is wrong,’ he said.
‘If you look at the decent homes standard, four-fifths of that will be completed by the end of the year and I think that’s been £19bn in direct government investment plus £12bn from other sources. That’s just what the Audit Commission suggested needed to be done.’
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