Spending Review is our golden chance
The Spending Review should be the time to ‘reflect and set out a vision, to build back better, strengthen our economy, reduce inequalities and deepen national resilience’, says Katherine Fairclough
Even before the coronavirus crisis, local government was poorly funded – the Local Government Association was predicting an £8bn funding gap by 2025 – and there was no long-term vision for the sector’s finances, making it difficult for councils to plan from year to year.
Then came COVID-19, with its devastating personal, community and economic impacts exacerbating the sector’s financial problems. The latest analysis from the Institute for Fiscal Studies (IFS) shows the sector faces a £3.1bn funding gap this year alone – up 55% from its prediction in August. And the IFS has warned there is a strong chance this will widen further. The Government’s financial support packages to date just have not been sufficient to meet the challenge we face.
If things don’t change councils, large and small, up and down the country will be forced to take a series of incredibly tough decisions about which services reduce, or stop, in order to meet the legal duty to balance the books. More damagingly still, many of the services likely to be impacted are those which are vital not only in responding to coronavirus but in driving recovery too.
But this could be prevented if the Government can provide councils with early certainty over funding for the rest of 2020-21 and 2021-22.
As part of Solace’s Spending Review submission, we have urged the Government to issue, as a matter of urgency, a statement of intent on the size of the spending envelope for 2021-22 so councils can plan for the immediate future. We think this should be based on a ‘status quo plus’ approach, rolling over the sector’s 2020-21 settlement with an uplift of no less than 1% in real terms.
We have also proposed allowing councils to carry forward budget deficits (as the NHS can) over a limited period of time (such as five years) before returning to a balanced position. This technical, cost-free change would provide councils with a powerful tool to manage finances more holistically and would help authorities to avoid making drastic cuts to vital services. It would also significantly reduce the chances of any council needing to issue a section 114 notice.
The Spending Review should be the time for us all in the public sector to reflect and set out a vision, to build back better, strengthening our economy, reduce inequalities and deepen national resilience. All these topics, and many more, will be discussed during Solace’s virtual learning week (12-16 October), which carries the theme ‘Reflect. Reset. Re-Imagine’.
But we will miss this golden chance to rethink and reconfigure our public services, and lock in the best innovations deriving from the disruption created by the pandemic, if the Government does not provide local government with certainty and sufficiency over our finances. A failure to do so will come at a cost – to public finances and, more importantly, to the communities we serve.
Katherine Fairclough is Solace deputy spokesperson for local government finance; and chief executive of Cumbria CC
Lets move quickly to upskill citizens
A hike in unemployment is inevitable when the furlough scheme ends, says Ian Thomas. Councils are well placed to help replace lost jobs
With global GDP set to contract by around 5% in 2020 and in the UK, 10%, as widely trailed we are heading for the deepest recession since World War Two. COVID-19 sits at the heart of the economic outlook and together with Brexit on the horizon and the real prospect of a ‘no deal’, the old adage the only certainty is uncertainty has never been truer than today.
COVID has impacted in such a profound way on everyone – on population health, of course, but also on the public’s attitudes to personal liberty, employment and even the desirability of working in major cities – it is increasingly difficult to see any complete return to ways of thinking and living prevalent prior to the pandemic. As with other major global shocks – like the 2008 crash or 9/11 – life will continue but not in the same way.
So what does this mean for local government? This pandemic is both global and exceedingly local. As with other critical incidents requiring civil contingencies responses, we have a platform for experiential learning and a revitalised insight into the resilience of government at the local level to the challenges of emergent change. It is for this reason, I believe that communities’ confidence in councils remains strong, with 90% of people reporting that their council sustained normal levels of service throughout the height of the pandemic and 75% believing that their local council will put their needs first, according to recent Local Government Association research.
Given this confidence level, support for the sector and the relationship between central and local government, has never been more important. The challenges are stark. With arrangements for 9.6 million people on the furlough scheme coming to an end and a precarious outlook for some hard hit sectors such as retail, hospitality, recreation, tourism and the arts a sharp augmentation in unemployment rates is inevitable. The disproportionate impact on lower skilled jobs and the prevalence of COVID-19 will, if unaddressed, widen gaps for young people, BAME communities, women, economically deprived communities and those with disabilities.
Those of us in leadership positions – nationally and locally – need to deeply understand this joint and shared responsibility for social and economic policy. When the going got tough, the tough got local. The logic of this experience now needs to inform ongoing fiscal support for SMEs and micro businesses, which are the lifeblood of our local economies.
Local councils are well placed to build on an improved relationship with their local communities, education institutions and local businesses to identify opportunities with our stakeholders, stimulating creativity and innovation and capitalising on emerging markets, such as tech, digital, hygiene and health care to replace lost jobs. Moving quickly now to upskill citizens to optimise new opportunities must be a prerequisite.
The pandemic has presented the country with some hard won lessons. This learning must shape not just health and social care policy but the reform of other major areas like the planning and devolution White Papers. The pandemic has shown us the core skills of local government – its pragmatism, its capacity for action, its ability to engage residents and influence them – which can now galvanise a more ambitious greener agenda, develop sustainable places, build homes, develop infrastructure, reimagine our town centres and boost economic growth.
Positive change can never be achieved by marginalising communities, or imposing external will. It is achieved by engaging with communities, supporting and persuading residents and helping them achieve their goals for a better life.
Ian Thomas CBE is chief executive of Kingston upon Thames RLBC and Solace spokesperson on infrastructure and planning
We need to adapt and innovate
As difficult as it is during a crisis, it is crucial that we think about, and plan for, the long-term, writes Robin Tuddenham
A s chief executive of Calderdale MBC, dealing with crisis is something I am used to, but the sustained and relentless impact of COVID-19 has been a crisis is like no other. The situation has been ever-evolving, with little pause for breath as we went on the watch list in late July, and is having a profound long-term impact on our organisations, and the people and places we serve.
The changing nature of work, for example, has been accelerated by the pandemic. Understanding what this means for our key employers and our communities will be vital if we are to rebuild and recover at pace. That includes adopting ideas from businesses and third sector partners; we must have the humility to learn from innovation, wherever it comes from.
Throughout the course of the pandemic the Government has sought to balance the needs of the nation’s health and our economy through a rolling series of announcements. But ad hoc reactive interventions will only get us so far.
As difficult as it is during a crisis, it is crucial that we think about, and plan for, the long-term. Looking to the future has always been an integral part of Solace’s annual event, and it is important that we reflect, reset, and reimagine during our virtual learning week.
And that means recognising that if we are to empower cities, towns and villages to drive sustainable growth and address the exacerbated inequalities that exist in all our areas then, as a nation, we need to stop seeing health and wealth as binary choices. The public health emergency and the economic emergency are inextricably interlinked and interdependent. We need a more coherent approach, looking beyond a pure growth paradigm to how we build sustainable places and neighbourhoods, strengthening community and unlocking the hidden wealth within places. But we also need to understand that sectors within our economy are close to breaking point, and an intelligence led targeted approach to support recovery is now imperative.
In our Spending Review submission, Solace proposed that the Government create a £100bn life chances endowment fund. The Government has already committed to spending £100bn on physical infrastructure but we argue that people are just as important as buildings and bridges, roads and railways.
Our fund – generated through a mixture of redistribution of the UK Shared Prosperity Fund and borrowing – proposes a fundamental shift towards prevention, early intervention, and people. Investing in such measures, particularly in relation to health, has been found to be an investment in economic prosperity through multiple pathways – and it delivers savings too. Typically, every £1 spent on prevention saves £4 in future demand.
Continuing to take a short-term, siloed approach to policymaking will not help the country to address the complex issues such as homelessness, skills or social care. The world has changed and if we are to enhance our recovery and increase resilience – economically and socially – then we need to adapt and innovate. And fast.
Robin Tuddenham is Solace spokesperson for economic prosperity, chief executive at Calderdale MBC, and accountable officer for NHS Calderdale Clinical Commissioning Group
Solace’s week of virtual learning Runs from 12-16 October, featuring a host of first rate speakers from the UK and across the world, opportunities to network and an immersive exhibition hall.
You can build your own bespoke experience by choosing the sessions that best fit with your diary and watch live, or access everything on-demand throughout the week, and for a limited time after the event