Councils are saying what they need but will Whitehall listen?
Researcher
Yesterday, Deputy Prime Minister Angela Rayner called for councils in areas currently without devolution deals to come forward with proposals to take on increased powers. Signalling the start of a ‘devolution revolution’ within their first 14 days of being in power will be taken as a positive sign by local government.
Meanwhile, the deadline for local authority productivity plans is approaching this Friday. As part of the Local Government Finance Settlement last December the former Department for Levelling Up, Housing and Communities required councils to produce a productivity plan. These plans are expected to set out how the authority has and will improve service performance and reduce wasteful expenditure.
Each plan concludes with the council’s view on any barriers preventing progress that central government can reduce or remove. These provide a compelling list of reform ‘asks’ and, perhaps unsurprisingly, a lot of local authorities are saying the same things. If the Government hopes to achieve its ‘devolution revolution’, it should take heed.
Below are the most common ‘asks’ from the plans that have been published so far.
Fairly funded mandates
Over the last decade, the responsibilities held by councils have grown while demand on their services has increased and become more complicated. Despite the more significant role of councils, funding from government has decreased overall, and councils are reliant on the regressive and limited funds raised from council taxes. Many councils call for support with and reform of social care, SEND provision and temporary accommodation provision — all areas which have long been tumbling into crisis. With resources spread paper thin, authorities are stuck fighting fires and lack the capacity to prioritise transformation improvements and build up much needed skills.
Consequently, councils are calling for new burdens to be appropriately resourced and for the long delayed Fair Funding Review to take place. Somerset council want the Government to address the “broken” system of council tax and Mid Devon District Council have specifically called for a national decision on whether certain services should not be funded by council tax at all, with some direct service fees and charges perhaps more appropriate.
More time
A key frustration for local councils is the delivery timescales required of them when new legislative changes come about — for example extending services or one-off schemes. Even if additional burdens funding is provided council's rarely have time to recruit or plan strategic resource deployment due to quick delivery expectations. Councils need more time to conduct a thorough plan for a new project to use its assets most productively.
Multi-year settlements
Many councils condemn the current model of single-year funding settlements as “wasteful” because it prevents them from planning effectively in the medium-term (let alone the long-term). Councils are forced to carry out financial, strategic and corporate plans based on guesswork about next year’s provision. This uncertainty prevents councils from committing to plans extending over multiple years. The short-term funding grants don’t tackle the root causes and when allocations end the authority has to maintain schemes that have created dependencies. This style of funding reinforces the reactive, crisis-management mode that public services are stuck in. Councils want to see a change to a multi-year settlement with a preference for four years.
Positively for local authorities, Georgia Gould MP, former leader of Camden Council, has been appointed as a Cabinet Office Minister and last week condemned the competitive bidding process of the Levelling Up Fund, calling it a “massive waste”. Councils will be pleased to hear Georgia claiming that this Government will be “taking a strategic, long-term view alongside councils”. It appears this ask may be answered this time.
Re-evaluate how central government issues grants
Unsurprisingly, frustration around the competitive bidding process is a consistent theme. Councils feel the process is lengthy, resource intensive, unnecessarily complicated, and fundamentally wasteful. Some councils even report being compelled to use expensive professional bid writers. Ending this approach to grant funding would help ensure services and projects are less fragmented and that interdependencies are managed better.
Another issue noted is the existence of multiple grant schemes, each with their own criteria and reporting requirements, which can also produce significant inefficiencies. In its productivity plan, Wyre Forest District Council is calling for a “radical programme to transfer specific grants into the general settlement”.
Reform of the audit system
Councils also point towards the impact of a strained audit system and its substantial backlog. Mid Devon District Council reports seeing about a 200 per cent increase in audit fees, with no clarity of the value gained from the process. Spelthorne Borough Council — the second-most indebted council in the country — says that the backlog undermines stakeholder and public assurance.
Evidently, the ability of a council to run efficiently is constrained by the wider inefficiencies of the system they function within. As Mid Devon District Council puts it, “uncertainty breeds inefficiency”.
If the new Government wants to achieve a ‘devolution revolution’ they should work with local authorities to establish a clear vision for what the delivery of public services should look like in the future and a fair, reliable, and sustainable funding system that enables the delivery of this vision. Keep an eye out for more on this from us at Reform…