Today leaders from councils, businesses, academia and professional fields will gather in Westminster for Tomorrow’s South East – a summit to discuss regional priorities for levelling up and reflect on options for the structure of local government across the South East.
The desire for this summit, chaired by the MJ’s Heather Jameson, arose from the Localis think tank report, for South East Councils; Resetting the South East – Levelling up after Brexit, Climate Change and Covid published before the summer.
This report investigated the role of the South East in ‘levelling up’ and what may be necessary for local authorities to deliver – individually and collectively – on DLUHC’s multi-layered and ambitious set of envisaged economic and social transformations.
With a new Prime Minister, much public policy is under review, awaiting a clear direction. Early zealous levelling up rhetoric has dampened in recent months and according to reports, the future of the agenda is opaque. Regardless, the ongoing need to renew and regenerate local communities in any region remains. As councils in all seventy local authority areas of the South East are well aware, the pressures felt throughout the region are not easing.
Local authorities facing political uncertainty
The past year saw much ministerial commentary about the potential for local government reorganisation. Trying to understand what local authority structures may look like in four years’ time is testing for leaders and cabinets busy planning and delivering for their local areas. Will a two-tier system be retained, or might unitary structures be the norm? Will metro-style mayors be pushed through despite doubts?
Resetting the South East viewed the current devolution framework as offering little for district councils working together or in partnership with counties and LEPs to achieve goals across a functional economic area. Accordingly it recommended that the devolution framework should extend the powers offered under ‘level 2’ to joint ventures incorporated as a single body. With Local Government Minister, Paul Scully at this week’s summit, it will be interesting to gauge his view on this ‘Localis level 2 plus’ devolution option.
Local authorities must adapt and deliver, despite financial pressures
Covid-19 has changed how we work, travel, enjoy leisure, spend money and how we communicate. The decade before the pandemic saw growing digital connectivity, but lockdown and ‘working from home’ has brought a huge acceleration in the uptake of new ‘gadgets and devices’ technology. How can local authorities adapt to satisfy these digital expectations? How far can digitisation of council services go?
Pandemic-driven impacts have ravaged income streams whether business rates, parking fees, social rents or income from tourism. Despite stepping up the Covid-19 effort, councils remain inadequately funded.
Relief is not coming anytime soon. The 3% boost to local government spending power claimed at the last Spending Review was about half that in reality - well short of service demands and inflationary pressures. An additional blow was the recent ministerial comment that the Fair Funding Review - although started six years ago - will not be concluded anytime soon.
Financial resilience is very much in focus as councils face challenging balancing acts with budgets topped up via reserves. Budget cuts can only go so far before service delivery is degraded and quality falls. Local authorities must consider where revenue can come from - Council Tax referenda are not a magic bullet and hard-pressed local businesses are not a reliable potential revenue stream.
Council finance and funding models need a reset, not least as rules on borrowing are driving councils closer towards a core service offer and away from driving national priorities at the local level.
The perennial question is how? The South East is one of three UK regions making a net contribution to HM Treasury. Shouldn’t this be rewarded with autonomy to build on this solid track record to the benefit of the entire country?
Here’s an idea – local authorities which are in areas making a net contribution to the Exchequer should be able to raise additional levies to fund investment. Let a representative cohort of councils in the South East run specified financial devolution pilots for two full financial years and then review the results.
Time to end local government finance orthodoxy and trial a fresh, empowering approach in a region with a proven track record of economic stability.
Sean McKee is director of South East Councils
@SECouncils
