Mark Whitehead 09 January 2018

The end of the local government finance conundrum?

The end of the local government finance conundrum?

Thurrock Council in Essex is on the way to becoming the first large council to become financially self-sufficient.

It's a bold claim made by finance chief Cllr Shane Hebb, highlighting the latest example of how the local government landscape is changing dramatically.

For as long as anyone can remember, councils have spent time and energy every year putting together their budgets and then, very often, issuing a statement regretting the cuts they have been forced to make but promising to continue delivering the best possible services.

Thurrock sees itself bucking that trend. It has identified balanced budgets for the next two years while at the same time increasing its reserves.

Cllr Hebb declared himself 'the first portfolio holder from a top tier authority to be able to forecast for the next two years', adding that 'by also running a surplus, this means we can fund one-off investments in the coming months.'

He said: 'This council is on its way to becoming the first unitary authority which is self-sufficient in the whole United Kingdom, and we will ensure that the residents we represent see the benefits come through.'

With austerity biting as hard as ever it seems remarkable that a large council can rise above the fray and seemingly solve the problems of local government finance.

Cllr Hebb explained to LocalGov that the council will continue to receive funding from central government but will be less reliant on it. Its innovative approach will mean more choice about how to run services following a 'bottom-up' review.

Whether this amounts to 'self-reliance' in the usual sense may be arguable, but there is doubtless a sense of independence in Thurrock that other councils may recognise - and the government will no doubt thoroughly approve.

Finance experts at CIPFA say there is a definite trend for councils to look for more stable ways to pay for services.

It's all taking place in a scenario where the government is making fundamental changes to how councils are funded by withdrawing Whitehall grants and allowing them to keep more local business rates - and this means that for many councils 'financial autonomy' has become a key objective.

Years of funding cuts have taken a heavy toll on local government, CIPFA says - but a positive consequence has been a concentrated focus on efficiencies and innovation.

There is now growing focus on long-term planning, financial transformation and mutual self-help. Councils are getting used to the new landscape and they're looking for new ways of doing things.

CIPFA nevertheless offers a word of warning: the 'devolution agenda', it says, carries some inherent challenges - in particular it's concerned about how relatively less well-resourced authorities will fare in the new world of localised financing.

Thurrock is merely the latest example of a local authority grappling with the pressure being forced to rely less on central government money and find its own way to continue providing services to the public.

It remains to be seen how far the self-reliance agenda will succeed. But however it turns out, Thurrock appears to be trying something new.

In Essex as elsewhere, it seems, necessity is indeed proving to be the mother of invention.

 
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