Optimistic nihilism

By Dr Jonathan Carr-West | 04 July 2023
  • Dr Jonathan Carr-West

This week the great gathering is upon us once again as the massed ranks of local government make their way to Bournemouth for the LGA conference.

As always, an annual event invites reflection on the state of the local nation. Have things got better or worse since we came together in Harrogate last year?

It’s hard to be positive about the position councils find themselves in right now with unprecedented financial pressures, an exhausted, overstretched workforce and rising demand across key duties like adult social care, children’s services and housing.

It feels like local government is close to breaking point; but then it’s felt like that for over a decade. Every year we reflect on the imminent break down of the sector, yet it never quite happens. Is it possible, to misquote Mark Twain that reports of the death of local government have been greatly exaggerated?

Well, as Elliot reminds us, the world ends not with a bang but a whimper. We should be in no doubt as to the level of threat that local government labours under. Alongside the perennial pressures listed above we have a funding system that is not fit for purpose. We are subject to incessant structural tinkering from a central government that appears to have neither affection nor respect for councils. And we are faced with a fatal lack of clarity about our core purpose and about the level at which decisions should be made. Caught between the Scylla and Charybdis of centralisation and community power, local democratic institutions are dangerously hollowed out.

All this at the time when we need local government more than ever: to help communities rebuild after the pandemic, to stimulate local growth and to facilitate joined up preventative public services.

It’s predictable to say that it is all about the money. It’s not all about the money but the money is pretty important. Our annual State of Local Government Finance Survey shows that just 14% of council leaders think our current system of local government is unsustainable, more than half are dipping in to reserves year after year. If that does not describe a broken system it’s not clear what would. The replacement of multi-year financial settlements with competitive bid funding is particularly egregious and even those councils that have done well out of it think that it is a mad way to fund local government and effectively inhibits strategic planning.

The growing number of councils that have issued S114 notices may well have made terrible decisions. In a broken system the places that make the worst choices will certainly be the first to fall over, but they may not be the last.

It doesn’t have to be this way. At LGIU we have been conducting comparative research on local government funding systems in different parts of the world. We see clearly that different systems drive different outcomes. In the UK, the lack of constitutional protection for councils and the level of central government control over funding inhibits long-term planning and a law-based regulatory system disincentivises regular, formal central-local relations.

Over the rest of the summer, we’ll be releasing deep dive analyses of the systems in Germany, Italy and Japan. Already we see, however, that clear constitutional roles, responsibilities and protections for local government, have enormous implications for funding, autonomy and power at the local level.

We could do that, but we choose not to.

Despite all this, as we talk to local government chiefs, we find a mood best described as optimistic nihilism: they are clear about the existential scale of the challenge, but they relish the challenge. This is local government’s greatest strength and perhaps our greatest failing. We keep on. Strapped for cash, overstretched and with an exhausted workforce, councils will carry on delivering. Until one day they can’t.

That’s not inevitable but if we are to avoid it, then whatever government comes in after next year’s General Election will have to make big choices and fast.

Dr Jonathan Carr-West is chief executive of the LGiU


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