The COVID crisis has ‘sealed the fate' of centralised public services in the UK, former Chancellor of the Exchequer Philip Hammond has warned.

Addressing the Chartered Institute of Public Finance and Accountancy (CIPFA) virtual conference, he claimed the political debate in the 2020s is set to be ‘dominated by decentralisation, devolution and decarbonisation'.

He told delegates that he would be ‘astonished' if the post-mortem of COVID in years to come didn't conclude that the test and trace catastrophe would not have happened if the services had been devolved.

His comments echo those of the chief executive of the Local Government Association, Mark Lloyd, who last week told the Solace Virtual Learning week that any future inquiry into handling the pandemic would find the ‘relative disregard for local government' hampered the response, the Local Government Association chief executive has claimed.

Mr Hammond told the CIPFA event that part of the challenge of reacting to COVID had been the over centralization of public services in this country, compared with countries which are more devolved and have been ‘more agile' in their response to the pandemic.  

The former chancellor said the country had spent the last decade recovering from the previous economic shock, and it had taken ‘grueling hard work' to get finances back in order. While the government's economic response to the pandemic has been ‘textbook' he said: ‘COVID did not strike a tranquil millpond of an economy…We always knew the 2020s would be the most difficult decade to fund public services.'

The UK already faced recovering public finances, massive demographic pressures, a fourth industrial revolution, the productivity challenge and the process of decarbonisation.

‘In case those five are not enough, we have the challenge of Brexit,' he added. ‘Our pre-COVID starting point is challenging and the UK has arguably been the worst hit economy [by the pandemic].

He claimed the Government's painting of an Australian deal for Brexit as a positive was ‘delusional' and warned: ‘We are going to have second shock – whether there is a deal or no deal.'