William Eichler 25 October 2021

What does local government hope to get from the Spending Review?

What does local government hope to get from the Spending Review? image

The Chancellor’s Spending Review this week comes against the background of an unprecedented number of challenges. A decade of austerity, COVID-19, Brexit – these are just a few of the factors that will be weighing on Mr Sunak’s mind as he sets out the Government’s spending priorities.

Local government will be listening carefully. The hope is that the Government recognises in concrete terms the important role local authorities will play in the UK’s post-COVID recovery. As the Local Government Assocation (LGA) put it in the introduction to their Spending Review submission: ‘Responding to the significant economic challenges ahead requires a renewed joint endeavour between local and national government as equal partners. Building back better means building back local.’

So, what does local government want from the Spending Review? Financial security is the main priority. The LGA estimates that the average increase in annual cost pressures facing councils is £2.6bn per year to maintain services at their current level. This means that the same services will cost around £7.8bn more to provide in three years’ time. And this does not include the continued impact of COVID-19.

In order to address the sector’s financial concerns, the LGA is calling for a multi-year ‘core’ local government funding settlement which ‘provides sufficient certainty and resources’ – a point reiterated by all the major bodies representing local authorities. The LGA also want to see local taxation reformed and councils freed up to diversify funding through other forms of taxation. The District Councils Network (DCN) summed up the latter point with a call for more ‘flexibility’.

The post-COVID recovery is also going to require significant investment. The LGA is calling for dedicated local growth funding through – among other initiatives – the Shared Prosperity Fund (SPF). The amount of funding the SPF receives should be at least equal to the quantum of the funding streams it is replacing, including £5.3bn in previous structural funding and all other predecessor funds

One of the major challenges facing local authorities is the ongoing social care crisis. Of the £2.6bn per year increase in cost pressures, £1.1bn is for adult social care. The LGA is calling for funds to cover these costs, as well as £1.5bn to stabilise the adult social care provider market. They are also urging the Government to invest £900m in the public health grant to return it to its 2015/16 level in real terms.

The County Councils Network (CCN) reiterated the need for social care funding and emphasised that a prevention-focused adult social care system could lead to better outcomes and a reduction in long-term care costs. ‘In aggregate,’ CCN wrote in their submission to the Spending Review, ‘this could help reduce the demand for increased spending in future years by an estimated £1.6bn per year.’

‘Levelling up’ is the current buzz word and local authority leaders hope to see some evidence that the Government is serious about its ambition to tackle regional inequality. As the DCN put it in their submission: ‘As put into stark relief by the pandemic and recent protest movements, Government ambitions for levelling up must go beyond addressing regional variations and include interventions to address those inequalities felt nationwide.’ To this end, the LGA is calling for the introduction of an unringfenced and ongoing Community Investment Fund, worth £1bn in 2022/23 and increasing to £3bn by 2024/25, so that councils can invest in strengthening communities.

The National Association of Local Councils (NALC) stressed that the ‘levelling up’ agenda should go all the way down. They are calling for all local government reorganisation and devolution deals to require the inclusion of local councils in all unparished areas. The NALC also wants the Boundary Commission – and not principal councils – to have the power to create/merge/abolish local councils.

Access to quality education and children’s social care is an essential aspect of levelling up and building back after the pandemic, which is why the LGA has prioritised both in its submission. The organisation called for measures to empower councils to build new schools in their areas, as well as the financial capital funding framework needed to support it. Both the LGA and CCN also urged the Government to provide councils with more support to deal with pressures relating to the education and care of children with special educational needs.

With COP26 on the horizon, another major priority of local and national government alike is the climate crisis. Last week, the Prime Minister set out his Net Zero Strategy, which is aimed at decarbonising the UK economy by 2050. The LGA is urging the PM to work with councils and businesses to establish a national fiscal and policy framework for addressing the climate emergency. This should include a focus on decarbonising housing and transport. The Government, according to the LGA, should also ensure the waste and recycling reforms are properly funded.

However, the CCN emphasises that while a national approach to tackling the climate crisis is necessary, the Government must recognise that ‘not all places are the same.’ Currently, the Government focuses a lot on air quality in urban areas, but neglects – according to the CCN – rural areas where more than half of CO2 emissions are accounted for. Any approach to tackling the climate crisis should be tailored to the particular needs of local areas.

This, in broad terms, is what local government is looking for on Wednesday. Will the Chancellor deliver? We’ll see.

Photo: Cubankite / Shutterstock.com

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