by Rob Whiteman, Chief Executive CIPFA
Keeping the status quo is not an option for local government. The deepening financial challenges being faced by local authorities mean that services will necessarily deteriorate unless and until urgent and, probably, quite radical action is taken.
First and foremost, we must fashion a sustainable funding solution. For years, successive governments have kicked the can down the road and have avoided taking meaningful steps to resolve the sector’s financial issues. Whether Business Rate Retention and the Fair Funding Review will do enough to reform local government finance is frankly debatable. So, short of taxing people more or increasing communities’ overall share of government spending, bolder and braver moves will need to be taken to ensure authorities are able to deliver sustainable services. In a world of slender majorities these difficult decisions are all too likely to be avoided given the political sensitivities ensnaring potential game changers, like council tax revaluation, more means testing or giving regions the power to introduce local tax measures, such as tax on VAT, sales, tourism and income.
Secondly, devolution must remain a fixed political ambition. The scale and representative nature of the combined-authority model still looks to be our best hope of achieving an optimal economic distribution and effective coordination of the state’s resources to meet local regional needs, enabling place-based decision making across agencies that is tailored to local circumstance and context.
Such devolution could go some way to rebuild public trust, which has been shattered by Brexit, the demise of Carillion and collapse of Northamptonshire CC. The anti-EU vote in particular revealed just how far trust in the elite had broken down within some areas and communities. To help resolve this, the role of parish and town councils ought to be bolstered by making them a crucial part of service and engagement strategy. Through embracing and encouraging these councils, I believe we can establish the kind of local relationships that the two-tier and one-tier local authority structure inhibits. Of course, considering they are not part of the LGA and are frequently undermined as ‘not being part of the sector’, driving this change may be challenging.
Lastly, and more optimistically, local authorities must continue to embrace and take advantage of the burgeoning data and new technologies available to improve services for communities. To quote the RSA’s Matthew Taylor, councils must develop "tech-enabled, people-centred public services". Three key areas that can help achieve this are: an effective data strategy; creating outward-looking, innovative organisations; and collaborating with the private sector. There is no way that we can exploit the opportunities that technology provides unless the public and private sector work together.
Despite the big challenges facing local authorities, I am optimistic that there is light at the end of the tunnel. Indeed, the current financially-untenable position of some councils means the national and political mood music has shifted towards a greater desire for change and innovation, and local authorities themselves are continuing to beat the drum for reform. CIPFA will certainly do it all can to ensure the future of local government and the services it delivers are no longer at risk.
This article first appeared in the National Association of Local Council’s magazine LCR.