England & Wales, Global Democracy, devolution and governance, Finance

Let’s make a deal

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Is the art of the deal replacing the art of politics? Earlier this month we released the findings of the annual The MJ/LGiU local government finance survey. As you might have anticipated it makes pretty dismal reading.

Eight out of 10 key decision makers in local government have little or no confidence in the sustainability of the system. One in 10 councils are anxious about their ability to fund statutory services.

As it does every year, this research generated a huge amount of interest with coverage on ITN, Sky, BBC and front pages on The Daily Mail and The Telegraph.

There is a real sense that local government is climbing up the national news agenda as people start to realise the fragility of key services like adult care. And our survey wasn’t the only local government story in the news that week as Jeremy Corbyn accused the Government of reaching a ‘sweetheart deal’ with Surrey CC to avert a planned referendum on council tax increases.

Amid all the drama of Prime Minister’s Questions and leaked text messages to a man named ‘Nick’, the eventual outcome was a little more prosaic: Surrey was to take part in next year’s wave of business rate retention pilots – an option, the Government stressed, that was open to any council.

That may be true, but it still involves government making bilateral arrangements with individual councils and, as such, can be seen as part of a shift away from policy- making and towards government by deal-making.

That is something we are getting used to; the devolution process played out through a series of deals.

This is not a bad thing in and of itself, if by ‘deals’ we mean bespoke, locally-driven arrangements and full disclosure. That is exactly what Patrick Diamond and I argued for in our 2015 Devolution Road Map. This seems preferable to a rigid decentralisation policy in which one template is applied across the country at the speed of the slowest.

But what we ended up with was a series of deals made confidentially, behind closed doors. That made it almost impossible for the sector as a whole to get a sense of what was desirable or deliverable, or to come up with any sort of collective or collaborative positions.

The information asymmetry was a barrier to positive outcomes and fundamentally undemocratic.

Perhaps this shift is unsurprising. After all, the most powerful elected leader on the planet’s most notable contribution to the world of letters is an autobiography entitled The Art of the Deal.

I understand it trades in a very alpha, zero sum view of the deal in which there is a winner and a loser, one guy who triumphs and one who gets screwed.

It is the sort of thing which candidates in The Apprentice tend to come out with.

Most serious business people, however, will say that it doesn’t work like that; the best deals are ones in which both sides feel they are benefiting and where both parties want to come back for more.

And while deals in business may well need to be confidential, in public life there should be a presumption towards openness and transparency wherever possible.

It is local government’s job to fight for the best deal for its residents and it must use whatever policy instruments are available to do so. But it is central government’s job to make the whole system work, to ensure every council has equal access to that opportunity.

A system based on deals, rewarding those councils with the best access, or the best negotiating capacity is not localism. This is tighter government control disguised as decentralisation. It is certainly not a substitute for well grounded, evidence- based policy. We have seen that in relation to devolution and now we are seeing it in local government finance reform and social care funding.

We know that while it may be rising up the news agenda, local government is not the Government’s top priority. It has Brexit, the mother of all deals, to negotiate.

Let’s hope that as it gets into that deal we get real, thought-through negotiations, not the reality TV version.

Jonathan Carr-West is the Chief Executive of LGIU. This article was first published in The Municipal Journal.

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