Roy Kennedy on giving struggling councils greater financial certainty to do their job properly
Councillors and the local authorities they control are often the main contact that residents have with the state. They provide a wide variety of services from nursery and pre-school provision to social care towards the end of life, along with more general neighbourhood services.
To do their job effectively they need certainty, stability and clarity in the area of funding to plan the delivery of service years in advance. Although the Local Government Finance Bill was lost in the last Parliament due to the snap election, observers were surprised there was no mention of this Bill being brought back in the Queen’s Speech.
That Bill would have allowed local government in England to keep the £26bn it raises in Business Rates each year. But we wanted to ensure there was an effective mechanism in place to ensure that those council without the business rate base were not unfairly penalised and an already difficult situation made worse.
Local government has taken far more than its share of spending reductions since 2010 and by 2019/20 the central government grant will have fallen by 63% - despite public spending rising by 4% over the same period. Ministers have made a welcome commitment to a fair funding review but it has to assess the commitments of local authorities and the needs of the communities they serve.
An example of where this has, so far, totally failed is the Homelessness Reduction Act 2017. A well intentioned piece of legislation, based on initiatives taken by the Welsh Government but which has been inadequately funded, bringing additional risks for everyone. Passing legislation only solves a problem or creates better conditions if the resources are there to match the obligations being made.
Greater London has particular problems, demands and challenges that need to be addressed within social services, education, housing and public transport. By 2039, the Capital’s elderly population will have risen by 70%, with huge rises also expected in the number of young people.
But whether London or elsewhere, Theresa May’s government needs to be clear how local government will be funded, including whether an element of localism will be introduced to allow councils to decide the levels of fees and charges they levy on matters such as planning applications. Even allowing full cost recovery would be a huge step forward.
So we now have a perfect storm. Local government with no certainty over how it will be funded post- 2019/20. Greater pressures and more demands on services, especially for those that are most vulnerable in our society. A housing crisis with no plans to let councils build homes for rent. All matched by a central government apparently in no hurry to do anything to address these serious concerns.
Local authorities are speaking with one voice asking for stability and certainty. They should be allowed to get on with the job and it's time for Ministers to give them the tools to get on with it.
Lord Roy Kennedy of Southwark is Shadow Local Government Minister in the House of Lords. He tweets @LordRoyKennedy
Published 13th July 2017
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