Assessing the state of the state

By Jo Miller | 01 February 2017

This week I’ve been making the case on behalf of the Society of Local Authority Chief Executives for properly funded public services and the impact of fiscal policy, giving evidence to the Local Government Finance Bill committee, and meeting ministers regarding the health and social care challenge.

Local government has a chance to make a strong and compelling case for the state of the state we can afford, need and that people are willing to pay for. We go down a dangerous route when it becomes ‘every place for itself’ on the distributional front.

Sure London can do better than most places when it comes to business rates, and the UK needs a strong London. Its distribution shouldn’t be solved in isolation though.

The Finance Bill as it stands offers the Greater London Authority and mayoral combined authorities the opportunity to raise business rate supplements to help deliver infrastructure. While business needs certainty and assurance of due process and transparency, why aren’t these provisions open to all councils?

Local government has already allowed itself to become enmeshed in an arbitrary, incoherent devolution approach, and we should beware the dangers of the same on finance.

We should start by asking ourselves and legislators what ‘good’ looks like.

We embed two-tier finance raising powers and ignore distributional issues at our peril. If anyone was in any doubt that the ‘survival of the fittest, I’m alright Jack’ approach was a good thing, look no further than the Brexit vote and the wave of politics sweeping the Western world. It’s hard to see how either approach will enable a Britain that works for everyone with no one left behind.

Councils have long called for the ability to keep more business rate income and a reformed system must both reward councils that grow their economies and avoid undue suffering by those areas unable to do so. I can’t help but wonder if in some of this we are solving the issues of yesterday rather than those of tomorrow.

Some 85% of businesses in Doncaster are SMEs and the majority of them are very small indeed. Adults and children’s social care makes up 80% of revenue funding. Are those businesses really expected to pay the bulk of that burden, while major corporations seem to get off so lightly?

And what of technology and changing business models? In my own suburban village high street (around 30 shops/services) this weekend, I saw two imminent closures advertised. Both businesses moving online, as in a world of ever-squeezing margins they saw that as the best option to reduce their cost base. There goes those business rates as the companies will work from home offices.

It’s clear we will have a legislative agenda overwhelmed by Brexit. But if we really are to be a country where everyone has a chance to prosper with no one left behind, it’s time for some clever thinking and action by all of those with an interest in the state of the state.

Jo Miller is chief executive of Doncaster MBC and president of the Society of Local Authority Chief Executives

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