“Playing it long” – local public services and the next Spending Review: Wednesday 26 May from 11.00 a.m. to 12.00 p.m.
After successive one-year stop gap spending rounds, one occasioned by Brexit and the next by pandemic uncertainties, a long-term public finance settlement is as much desperately needed as it is unavoidable. But don’t bet the bank on there being another stop-gap financial settlement.
To preserve the coherence of the local state, our councils need a long-term finance strategy as the basis from which to undertake social renewal and economic recovery. This has been said frequently and repeatedly over the past two decades but the pandemic has shifted the precariousness of local authority budget setting a further dial. Public spending watchdogs the National Audit Office warned in March that 75% of councils face a Covid funding gap, some significantly, more than a quarter facing overspend this year and the overwhelming majority set to reduce spending budgets in 2021/2022.
Furthermore the two main planks of local revenue-raising are beyond repair. Mooted Treasury plans to alter a council tax system in England, stuck seemingly forever in 1991 and without revaluation increasingly less relevant as a revenue-raising exercise may well precede fundamental reform of an already out-of-time business rates regime poleaxed by the decimation of the high street and dramatic shift to digital retail and home-working. Any routes to circumvent the funding gap through local authority commercial investments, as was the case in the last decade, have evaporated through lockdown where they haven’t been restricted by ministerial diktat.
Local authority spending was deliberately targeted at the 2010 spending review given the organizational flexibility and scope which councils had to deliver savings and reshape service delivery which protected areas of state spending lacked. A similar if not exact trajectory is likely to be set in the current parliament given what has already been banked in budgetary commitments to defence, educational and health expenditure and the headwinds of post-pandemic fiscal retrenchment.
The distance between long-term expenditure decisions made in SW1 and the places and communities in which they will play out can be vast, both spatially and politically.
- For example, questions of how we fund and manage social care services will determine how much ‘discretionary’ funding is available to support quality of life and the extent to which we can protect and possibly enhance our social fabric and infrastructure at local level.
- What will this mean further down the line for the provision of reformed local public services and opportunities to deliver better and more responsively?
- Given the government’s commitment to building up regional economies, what does the spending review need to include so we can enact lessons from the pandemic to create a resilient state also at local and community levels? Is an emphasis on upstream investment in population and preventative health and social infrastructure possible and if not can we still mitigate under-investment?
- To what extent can councils exploit their own assets or make use of their convening power to locally-fund vital services and social infrastructure or otherwise ensure local priorities are met?
- Michael Burton, editorial director of The Municipal Journal and author of ‘The Politics of Austerity: A Recent History’
- Abdool Kara, executive leader, local services, National Audit Office
- Angie Ridgwell, chief executive officer, Lancashire County Council
- Phillip Woolley, partner, Grant Thornton LLP
So this webinar asked us to consider:
• To protect, improve and reform local public services, what longer-term approaches for renewing a broken funding model are worth pursuing to diversify the local tax base, address the over-dependence on council tax and business rates and seek to recoup revenues that have evaporated during the pandemic years?
A transcript of the session is available here [click to download]:
A video of the policy debate is available here:
Event supported by: