To call for ‘stability’ during a pandemic of the like unseen in a century is perhaps asking a bit much. Nevertheless, one clear impression to be gained from the business grants schemes during COVID, particularly the Additional Restrictions Grant (ARG), is of local government trying to establish certainty and consistency for local businesses in an environment of repeated volte-faces and changing rules. What the grant scheme can teach us is that a lot of the confusion and frustration caused can be attributed to the nature of central-local relationships, especially in a crisis.
The nature of the distribution process should, in the first instance, raise alarm bells to attuned observers of central-local relations. An indicator is selected which will quantify need, a value is affixed to the overall national cash pot and this pot is then proportionally divided according to that indicator. At a general level, this kind of process is inflexible and does not allow for recursive learning between the central and local state which might improve the process as it is carried out. Perhaps most importantly, this kind of distribution relies on the universality of the chosen indicator – in this case, population. As The MJ’s reporting has previously demonstrated, this was an ill-fitting metric by which to dole out business support grants.
A more collaborative approach, characterised by better sharing of intelligence between central and local government, may have led to a more efficient and effective allocation of resources. This is not to argue that, amid a fast-moving national emergency, a moratorium should have been called for an extended dialogue but rather to suggest that the British state does not lack the technological or bureaucratic sophistication to receive data from councils on local business bases and factor this into allocation decision-making. It is a question of how the role of councils is envisioned rather than what is technically possible. In the case of the ARG and broader business support grants, councils come off more as a delivery mechanism than a partner in delivery, to the detriment of the overall policy.
It helps to return to the purpose of the policy. The goal was to ensure that businesses did not go under because of coronavirus restrictions, to the overall end of reducing the social and economic impact of the pandemic by not allowing the public health response to be undermined by a nationwide catastrophe of business closures.
This was undoubtedly a good idea and in doing so, making use of the local state – which charges business rates and licences venues, among other functions which generate local business intelligence – was sensible. But how is this goal served by setting a rule that councils cannot receive top-up funding until they have spent, or tried very hard to spend, every penny of their original allocation?
This kind of arbitrary, or at least unexplained, stricture is frustrating at the best of times, but when the nature of the guidance changes on a dime with major implications, the situation becomes unworkable in many places.
Events evolved in this way because of the immaturity of central-local relations. Local government should be seen as assets of information in a national emergency, something to be interfaced with and a partner in shoring up resilience, rather than as a tool of crisis management.
At Localis, we heard many times in 2020 of how distribution of the initial and additional business grants had further expanded and nuanced councils’ knowledge of their local business base. This kind of learning should be respected and incorporated into policy as it evolves, not disregarded and swept away under changing deadlines and reversals of position. The lesson of the ARG, and the emergency measures employed throughout the pandemic, is that a more sophisticated and intelligent relationship between Whitehall and councils is needed as the basis of better crisis response.
Joe Fyans is head of research, Localis
@Localis