Exploring finance and policy futures for English local government as a starting point for discussion
In a time of unprecedented challenge for English local government, how can the sector develop towards 2020 if it is to have a sustainable future? Our latest report provides a thorough analysis of the current political and economic context, explores a range of potential policies and outcomes, and suggests several scenarios to facilitate an open debate on the future for the sector.
The six scenarios
It is vital that the local government sector thinks hard about how it will manage future challenges to ensure a sustainable future. Six possible scenarios have been developed to provide a starting point for that discussion. These were tested with senior local government stakeholders and also considered in the light of international case studies.
Councils creatively redefine their role and are able actively to affect their operating environment, often working in close partnership with other authorities
Running to stand still
Councils are led and managed well and can see a positive future, provided that they can keep up the current pace and that there are no major shocks
Nostril above the waterline
Councils are only able to act with a short-term view, their existence is hand to mouth and even a small external change might seriously challenge their viability
Wither on the vine
Councils have moved from action to reaction. Their finances and capacity are not sufficient to the task and they are retreating into statutory services run at the minimum
Just local administration
Councils have lost the capacity to deliver services, either because they have ‘handed back the keys’ or because responsibility for significant services has been taken from them
Councils are subject to some form of externally imposed change, such as local government reorganisation
The response to the scenarios from local government stakeholders during the research stage indicates they have provided a language and permission for open discussion. There is a clear wish to set out a new settlement for the future based on an extremely open agenda. This has provided the basis for our four recommendations.
- Political parties - to consider wholesale change, so that whichever forms the next government is ready for a serious discussion with the sector directly after the 2015 general election about what the local/national deal should be
- Whitehall and the rest of the public sector - to participate in constructive dialogue about what the future could look like, leading to real change
- Local government and its private and voluntary sector partners - to agree that fundamental change is needed and to begin to plan for a transition to a more sustainable long-term framework
- Individual councils - to understand which scenario they would currently place themselves in, the context in which they are working and what they need to do next
Key issues to be addressed
We have identified the big issues that councils need to be addressing and the order in which they need to be approached in order maximise the chance of a successful bid for additional powers
1. What can we do differently and better?
Greater Manchester has provided a trailblazing example to councils across England. But their example will be best interpreted as a general atmosphere of collaboration and long-term partnership rather than the specifics of the GM deal. In other words, trying to take the powers GM has received ‘off the rack’ and applying them to another set of circumstances is a sub-optimal approach to say the least.
‘Differently’ and ‘better’ both matter in the question above. The Government has made clear its desire to see innovation and the understanding that devolution will mean a non-uniform set of delivery models and governance. It will also want to see results (not least where policy areas have a direct link to national tax receipts and priorities). By showing how they can deliver both and couching their asks in such terms, authorities will take a positive step towards gaining further autonomy.
2. What precise powers do we want and what economic geography is most effective?
Powers and geography are so intrinsically interlinked that the two questions need to be faced at the same time. What an area perceives it can deliver differently but better will inform the powers it prioritises. The nature of the geography (including any mezzanine levels) will flow from this.
Broadly, for example, a metropolitan set of combined authorities may conceive that they can deliver better outcomes for children than central government. They may therefore wish to pursue powers over early years funding and/or troubled families. This may chime with the geography of the metropolitan area, or it may lead a vanguard of councils within the area to conclude that they would be better able to achieve these outcomes by acting with more/less partners. The same group of authorities may also conclude that they can deliver better outcomes for their residents in the area of skills, but on a totally different geographical scale eg linking to a ‘travel to work’ area that stretches beyond the combined authority boundaries.
To some degree this involves a degree of utilitarianism – maximising outcomes for the highest number of people – which is not always consistent with either the remit of an individual local authority (accountable and responsible for particular lines on a map) or an established grouping of councils in a combined authority. But by showing such thinking, local government can in turn give the centre more faith that its intentions are serious, robust and long-term.
3. What governance do we need to give the centre confidence?
Several local stakeholders have expressed their displeasure at their conversations with the centre being dominated by talk of governance. One way of expediting such discussions however is to ensure the answers to questions 1 and 2 above are clear in the minds of all local negotiators. Authorities which come to the negotiating table with well prepared and specific answers to the above can couch their discussions of governance within these terms. The difference, in other words, is between the authorities frustrated at talk of mayors, but with little coherent plans for what any ‘mayor/non-mayor’ would exercise in any event, and those authorities willing to proactively move on a combined authority/mayor, but also with a firm set of locally appropriate asks that such a figure would have control over.