Looking deeper at local government
Author: Alex Thomson, the MJ |
In his Plugged In column for the MJ, Alex Thomson reflects on the understated role that local authorities play in driving growth in their area. Read the piece in full here.
To see the bigger picture you have to join the dots. Unfortunately, policy developments are often addressed by the national media in isolation, so that the direction of travel isn’t clear.
While it is clear to those in local government that growth is key to a sustainable future, there are still far too many reporters locked into a mindset that councils equal bins and care thresholds.
One key dot was George Osborne’s conference announcement on business rates, which has strong echoes of our 2011 report The Rate Escape. Another was the chancellor and the prime minister making clear that to facilitate a growing economy, a great deal more infrastructure ? including housing ? will need to be built. But if we are to be the builders, how are we going to fund it?
One under-used source are local government pension funds. Localis hosted two round table events at the party conferences with London Pension Fund Authority, Greater Manchester Pension Fund and Lancashire Pension Fund and there was no doubting the desire for the Local Government Pension Scheme to play a greater role in UK infrastructure investment ? for the decent returns it can generate as well as the long-term benefits it can bring to local economies.
Another option will be the Municipal Bonds Agency. As our recent pamphlet shows, it will act as an aggregator, allowing projects to be built that might have otherwise been too small to access cheaper funds.
Local government can also look to its own asset base. Across the country, the public sector, including councils, collectively owns a vast amount of land ? some unused and some under-used ? that can be regenerated at higher densities, providing better mixed-tenure housing, commercial and retail space and public amenities.
And, as we showed in our report last year, these redevelopments can also provide the local authority with substantial long-term cashflows to support services and be reinvested in other infrastructure projects. This illustrates another aspect of growth. Councils are becoming more entrepreneurial and commercially savvy.
Any minute now, the national newspaper and television reporters will make the connections, reassess their assumptions about the role of local government and highlight the role councils have as key catalysts for future economic growth.