Recent events in Northamptonshire have hammered home the message that local government has reached a tipping point in terms of its finances. Anyone who thinks that the problems faced at the County Council are unique is in for a rude awakening. In this context is it time for a new municipalism?
With policy pressures piling up and budgets diminishing rapidly for many services it is time for local authorities to take back control of their areas by reclaiming entrepreneurship, rather than the outdated thinking that someone else should do this for them. This is not about acting commercially in the blind pursuit of income generation but to identify the major policy puzzles facing communities and thinking creatively and innovatively about how to solve these policy conundrums. Where markets have failed to deliver the outcomes that local communities need then it’s time for local councils to step up to the plate.
From the eighties up until the late-noughties a fairly stable orthodoxy existed amongst many senior policymakers that the transfer of large swathes of local government services to national outsourcing companies was a good thing, would bring much needed investment, transformation of approach and efficiency in delivery. Anyone who dared question the reality of what outcomes would actually be achieved was ostracised and branded as a dinosaur by the industry that built up around the sector.
In APSE, we always try to look for tangible evidence and think through the long-term outcomes in any suggested approach to delivering local government services and it’s therefore fair to say that we held a fairly healthy scepticism of much of the claims of risk transfer, widespread additional employment benefits and pots of gold at the end of the rainbow. From around 2005 onwards we also started to see many contracts which harked back to the CCT days or which were early strategic partnerships start to run out of steam and councils start to insource them.
A recent APSE opinion poll, conducted by Survation, exploring public opinion on neighbourhood services, found that yet again, the public give parks the highest satisfaction ratings amongst all local government services, however we also know that parks are one of the hardest hit services as a result of austerity, with many facing an uncertain future.
Anyone who reads the local government sectoral journals is well versed in the graph of doom scenario and the squeeze it creates on non-statutory services. The £3B of cuts that have hit England’s neighbourhood services are playing out harshly on the average parks services and for the most deprived areas the impact of austerity is felt all the more harshly.
It was a hugely symbolic moment when Prime Minister, Theresa May, announced £2bn of additional funding for a new generation of council housing during her speech at the recent Conservative Party conference in Manchester.
Whilst it doesn’t quite take us back to the 1950’s when Housing Minister Harold McMillan enhanced his future Prime Ministerial credentials by building over 300,000 new homes in a single year, around 200,000 of which were council houses, it shows an eventual acceptance by Government that we are not going to tackle one of the biggest public policy challenges of our time without State intervention.
While successive Governments have talked about housing need, population growth, changing demographics and set ever increasing targets for the amount of homes required, we have seen little success on closing the gap between the numbers of homes needed and the amount of new builds actually taking place.
The recent report by the Local Government and Social Care Ombudsman, ‘Lifting the lid on bin complaints’, has reignited the debate around outsourced services and whether local government gets value for money from such contracts.
To my mind what the report highlights is the disconnect that can sometimes take place between the council, the contractor and the service user, when a contract is outsourced. Just because a service is outsourced it doesn’t mean that the public don’t think that the council isn’t responsible for it or should have democratic oversight of the service and when they complain they expect their issues to be addressed by the council and blame them if there is a slow response, rather than the contractor.
There are some who criticise local government as being bureaucratic and lacking in creativity. In reality, local councils are being highly innovative in plugging the income gaps left by ongoing austerity and there is something of a renaissance in municipal investments.
APSE and CIPFA property services set out to identity the scale, scope and advantages of municipal investments and the results of our research have found councils taking a measured approach to investments designed to balance risk and rewards. In many ways asset investments allow councils to convert capital investment into revenue - helping them to sustain local services.
With the General Election debate starting to heat up, it’s pleasing to see that the housing crisis is featuring quite prominently in the major political party’s manifestos and more importantly local government’s role as part of the solution.
Whilst it’s not quite the 1951 election where the parties were competing on who could build the most homes during the course of the next parliament, with Harold McMillan’s Prime Ministerial credentials established on the back of delivering on housing pledges made, there is significant recognition by all that the number of homes built needs to increase dramatically in the coming years. The question is how can this be delivered by the next Government?
It’s the infrastructure and facilities, it’s the look and the feel, it’s the local environment and how safe and secure the area is. At a time when we are trying to attract people to our localities and communities, are we cutting back on the very things that make places habitable, those very highly visible and publically recognised neighbourhood services?
We know that local authority expenditure in the UK will be 30% less by 2020, than it was in 2010, we also know that in England local government finance will have moved to a much more local financing model by that point. Under current Government plans most councils will be almost fully dependant on a mixture of council tax and business rates revenue, alongside a small amount of other grants and income generated through commercial activity.
Well it appears as if we are back at Groundhog Day again on housing policy, another white paper acknowledging that we have a major housing crisis in the UK but with limited ideas about how we fix it.
What we do have is some comforting words. Government has ‘listened ‘it wants to ‘help’ to ‘support’. But when we peel back the comforting language what lurks beneath? Well very little that we can rely upon. Whilst I appreciate that running alongside the white paper is a series of consultations it is a missed opportunity to put some tangible solutions forward.
APSE, alongside our research partners in the TCPA, are working on our third tranche of housing research. Time and again we find that the root cause of the housing crisis is the lack of supply of new build, the mix of properties that are being built and in particular the lack of affordable homes. We have consistently called for a strengthened role for local councils to deliver homes for rent on scale to alleviate the strain at the bottom end of the housing ladder.
Councils could be forgiven for wondering if Government remains as committed to devolution and decentralisation of power, post Brexit, as it appeared to be before June’s vote.
What started well and seemed to have support at the highest level of Government, with George Osborne’s zealot like enthusiasm, doesn’t appear to have the same prominence with new cabinet figures, indeed some fear that the agenda could simply fizzle out.