Title

ECONOMIC GROWTH

Wanted. New local governance structures

If the sector doesn't start building the locality of tomorrow today, and prefigure the final devolution settlement, central government will impose its own form, warns Simon Parker.

What would a game-changer look like for local government? We all know that councils are running out of money, and while I have a certain amount of faith in the ability of many parts of the sector to stagger on until the end of the decade, I am not sure we can go much further without something going seriously wrong.

There are really only three ways that an institutional disruption could go. One is to transfer substantially more power and funding to councils. Another is to take power and funding away. A third is to re-base the entire local government finance system.

The first approach would mean devolving a number of services that are only accidentally centralised to combined authorities: things like courts, prisons and perhaps even tax collection. 

But this probably does not go far enough. The most radical decentralisation would be a system in which local government commissioned the entire primary care budget and had to co-pay for hospital admissions, immediately creating a huge incentive for prevention.

The second would involve taking social care into the NHS, creating a sustainable local government system with a stroke of a civil service pen. However, we would also have created some of the weakest councils in the rich world. 

Finally, we are going to have to revisit the basis of local government finance. The current system has become so absurd and so manifestly unfair that it cannot simply be patched up for much longer.

If some form of game-changer is starting to look inevitable, the form of that change is not. 

We need to kick-start a national debate, that is not currently taking place, about the role of the local in British politics. And councils need to prefigure what an eventual devolved settlement should look like by starting to build new governance structures locally. 

If you don't build the locality of tomorrow, someone else will impose it upon you.

Simon Parker is director of the New Local Government Network (NLGN)

ECONOMIC GROWTH

Forward motion for SEND?

By Rob Powell | 15 January 2026

Local government funding is a huge talking point as the new year kicks into gear, with cumulative SEND deficits being one of the areas strongly in need of he...

ECONOMIC GROWTH

LGA's in need of a welcome revamp

By Heather Jameson | 15 January 2026

Now that the details of plans to reorganise the LGA are out, Heather Jameson says the organisation has 'always struggled to balance its functions as a lobbyi...

ECONOMIC GROWTH

EXCLUSIVE: LGA plan hits mid ranks

By Heather Jameson | 15 January 2026

The latest plans to slash the pay for Local Government Association (LGA) staff are unlikely to hit those on the very highest salaries, figures leaked to The ...

ECONOMIC GROWTH

EFS: Useful tool, not an end state

By Rob Whiteman CBE | 15 January 2026

Applying for Exceptional Financial Support? February could mark a turning point, as more councils see budgets stretched to breaking point. Rob Whiteman offer...

Simon Parker

Popular articles by Simon Parker