England & Wales Finance

Unfinished business

Image by Kelvin Stuttard from Pixabay

Jonathan Carr-West shares his thoughts on where the Chancellor’s Budget fell short in its support for local government in his latest column for the Municipal Journal.

There were two notable features of chancellor Rishi Sunak’s budget for me. One, notable for what was there, one, for what wasn’t.
Both came in the third part of his speech where, having detailed what support the government was providing to cope with the pandemic and how he was going to start paying for it, he turned to his vision of the future economy.

This, you sensed, was the part of the speech that really enthused the chancellor and this, perhaps, was where we caught a glimpse of what we may one day call Sunakism: an economy that is global, green, high tech, high skill, low tax, low regulation, with targeted investment in innovation and open to the movement of capital (and people).

What was there no sign of? You guessed it: local government, local public services or local institutions of any sort.

That matters, because whether or not you like Mr Sunak’s vision of the future, it is clear that it is not viable, economically or politically, unless it has some link back to people and the places they live in.

The chancellor recognised this when he spoke about ‘innovative, fast-growing businesses hiring local people into decent, well-paid, green jobs’. And ‘people putting down roots in places they are proud to call home’.

Of course, a more cynical observer might think this is the only way to sell Rishi’s Singaporean vision in Red Wall seats. But we’ve surely learned by now that you can’t create this local connection from the centre.

It is not as simple as air-dropping in a relocated Whitehall department or a renamed grant scheme. If you want to connect economic activity with a real improvement in places and the lives of people who live in them, you need to do this through locally rooted, locally accountable institutions – especially, but not exclusively – local government.

And this is where the problem is. We are all understandably focused on COVID-19, but other crises remain available and local government will emerge from the pandemic dragging a long tail of problems from the past decade.

As we, at LGiU, argued recently in our Unfinished Business work, these include foundational issues such as how to fund and deliver social care and its relation with health, the basic mechanics of how to fund local government and the distribution of power between national, sub-regional and local authorities.

In all of these areas, the Government has trailed half-formed or incomplete reforms and councils have been left to pick up the pieces, all while operating in conditions of deep uncertainty.

Of course, there is also housing, homelessness, and a sharply rising demand for children’s services.

In all these areas the pandemic has amplified and accelerated existing challenges while simultaneously stalling progress towards them. No social care Green Paper, no fair funding review, no business rate retention scheme, no devolution White Paper.

This unfinished business in local government has weakened our national resilience in the face of the pandemic. We have seen a tragic death toll in care homes, councils on the brink of financial collapse and confusion about the most effective level to make decisions about public health interventions.

Meanwhile, local government continues to dip into reserves, to take the political heat for unavoidable council tax rises and to cobble together its finances on the basis of ad hoc one-year settlements.

That is not a sound basis for recovery or for building a future economy – whether to Mr Sunak’s blueprint or any other. These problems have been a decade and more in the making but if we do not act upon them now, they will continue to hold us back for the next decade.

It may not suit a chancellor with his eyes on the future, but unless we look back, we will not move forward.

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

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