At the beginning of October two documents were published that had important messages for Government on the funding of local government.
The first was the Local Government Association’s (LGA) submission, ‘Rethinking Public Services’ to the Comprehensive Spending Review (CSR).
It argues that councils face a funding gap of more than £5bn by 2024 to maintain services at current levels and that this figure could double as a consequence of the impact of COVID-19 pandemic. Backed up by analysis by the independent think-tank the Institute for Fiscal Studies, it makes a compelling case why the chancellor should use the CSR to provide an additional £10.1bn per year to core funding by 2023/24 so that the current shortfall can be made up and growing demands can be met. It argues that local government is best placed to lead the recovery and deliver better outcomes for communities, tackling deep-rooted inequalities and building inclusive growth.
The second, a report I was involved with as chair, is the UK 2070 report into the task of rebalancing or levelling up the economy post-COVID.
It finds the task of levelling is even more urgent than before the pandemic. COVID-19 has not been a leveller. It has exposed the existing huge inequalities and vulnerabilities in the UK. It argues that levelling up is going to be vital to a successful growth programme in the future and this can only be achieved by ‘going big and going local’, with a large scale, long-term, comprehensive programme of change combined with a step change in devolution of powers and funding. A one-year, independent commission is proposed to draw up the devolution plan drawing on the many studies that have been done.
Both of these papers ought to be warmly welcomed by the Government as valuable contributions to their goal to build back better. If the response to COVID-19 has shown us anything, it is the dangers of being a hugely over centralised country. Yet there is a real risk that the Government will go for another short-term fix rather than fundamental change. The White Paper on devolution looks likely to be delayed until next year as is the White Paper on social care.
Only the White Paper on planning, which removes significant powers from local government has been published. A ‘patch- up’ would be a missed opportunity, but worse would be if chancellor Rishi Sunak decided the huge increase in public spending due to the pandemic meant he could not afford to address the current shortfall.
My discussions with local authority leaders indicate that they are already having to draw up plans to make deep cuts in spending if additional funding is not forthcoming.
Now is the time for the Government to be bold. It is exploring ambitious plans to move departments out of central London so that civil servants are closer to the different communities that they serve.
The big change we need is to see powers and funding move out of Whitehall, not just departments. For this to happen, local government needs to be given genuine parity of esteem, seen as an equal partner in improving the wellbeing of Britain. Its funding base cannot be reliant on just two unbouyant and regressive tax sources in council tax and business rates.
In a recent webinar, my former boss Eric Pickles, put forward the idea of local government getting a share of a new online sales tax, which I think is an interesting idea well worth exploring.
There are for me some uncanny and worrying parallels between this government’s ambition to level up and David Cameron’s Big Society. Both were bold moves aimed at creating a better connected society. Civil servants caught on quickly and the Big Society came to be ubiquitously referenced in Government policy documents as Levelling Up.
The Big Society was big on ambition but small on detail. It lacked ministerial firepower as well as a coherent plan and was undermined by the impact of austerity and the lack of real impetus in Government.
There is still time to avoid levelling up becoming Boris Johnson’s Big Society. The Government needs to heed the messages of these two reports, resist the temptation to make do and mend and take some bold steps towards a more powerful and properly funded role for local government in the future.
Sir Bob Kerslake is president of the Local Government Association, chair of the UK2070 Commission and a former head of the civil service