The answers cannot wait for long

By John O'Brien | 12 January 2021

Even before COVID-19 hit, the foundations set in place for the future of local government finance put in place by George Osborne five or six years ago were already beginning to look increasingly unstable.

The almost permanent inability to resolve the issue of the future form and financing of adult social care, allied to the progressive erosion of confidence that some form of retained business rates regime either could, or should, help underpin a future system, had already contributed to the sense the future was rather less clear than it had once seemed.

The financial challenges facing the sector are significant for most and, as we have seen, desperate for some.

While the recent settlement does not meet the scale of the pressing need that exists across the sector, some of the support made available will help councils keep some stability a little longer.

That, of course. does not mean there are not real and painful service reductions being implemented now, or that jobs are being lost. This brings us back to the critical need for a new financing road map.

The public expenditure outlook is tough whichever way you look at it, but for local government to be able to play the vital role required in the recovery of our places and communities, it will need some clarity and medium-term certainty about the underpinning regime.

What, for example, is the future of business taxation and what is its relationship to funding local public services?

What is the future model for delivering adult social care and how will it be funded?

What remaining ambition is there for moving towards greater sub-national fiscal powers as part of any renewed focus on devolution?

The delay in responding to some of these questions has been an understandable reflection of the scale of the uncertainty we have been going through. The answers cannot wait for too long.

John O’ Brien is chief executive of London Councils


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