Anyone following the budget announcements in recent days would be mistaken for thinking the economy is booming. Transport, NHS, social care and education are all set to receive substantial boosts next Wednesday when the Chancellor delivers his Spring Budget in the House of Commons, but where is he finding all the cash and why is it not being shared with local government?
Over the last month council after council have revealed their local authority budgets, filled with tax hikes, service reductions and reserves being raided. Croydon Council has been forced to raise council tax by 15%, 10% above the standard limit, just to keep essential services afloat, yet central government support for councils like Croydon doesn’t seem to feature in Jeremy Hunt’s plans at all.
Yesterday the Department for Transport revealed it’ll be getting a £40bn boost over the next two years to pay for major rail and road projects including the eternal money-pit HS2 and road decarbonisation projects in Liverpool and Essex. Meanwhile, with some notable exceptions such as Milton Keynes and their 28-day guarantee, potholes are being made quicker than local authorities can fill them.
More is expected next week on how social care reforms will be funded beyond the social care precept, yet councils across the country are struggling to find the cash needed to recruit and retain enough staff.
Some Conservative backbenchers and business leaders are also hoping for a reversal of the corporation tax rise announced last November, while the Independent Business Network (IBN) are calling for a cut in VAT, but local authorities are being forced to roll back on regeneration projects designed to entice businesses to their high streets.
The Government are praising the unexpected surplus from a better-than-predicted winter for their ability to invest next week, with announcements also expected on public sector pay deals to end the strikes and energy support for households being extended. The Office for Budget Responsibility (OBR) are also predicting a much shallower recession that previously feared, giving the Chancellor more breathing space.
But with local elections taking place across much of England this year, and many Conservative Councillors fearing for their seats, why is local government being left out to dry?
Major road renovations are important, but filling potholes is an election-winner.
A shallower-than-expected recession is good for the economy, but people are still paying more council tax than ever before.
A reversal of corporation tax rises will be welcomed by small and medium-sized businesses, but it will do little to breathe life back into high streets up and down the country.
The Chancellor could’ve used this budget to properly fund local government. Councils like Croydon, Thurrock and Slough could’ve had their debts wiped and council tax reduced. Transport funding could’ve been distributed across local authorities to fill more potholes than ever before, and fill them with materials that last. Regeneration projects that missed out on Levelling Up funding in the last round could’ve been given the green light.
The fault may lie with the way local government currently lobbies the Treasury for funding. The majority of pressure local government can exert on central government is done through the Local Government Association (LGA), which is made up of representatives of every council in England and Wales.
As the majority of councils in England and Wales are controlled by the Conservative Party, they currently hold the power within the LGA, with Conservative Councillor James Jamieson the current Chair. Following a disastrous 12 months for the Conservative Party, who have been through three leaders, countless scandals and resignations, and are consistently 20+ points behind Labour in the polls, it’s understandable that the Conservative Chair of the LGA wouldn’t want to add more fuel to the fire and create more Blue-on-Blue divisions by criticising the Government’s approach to local government funding.
But the lack of criticism by the LGA amid a deepening financial crisis for local government has made some question the point of the association and whether it does actually have any sway over the government at all.
Contrast that with NHS England’s vocal CEO Amanda Pritchard, who consistently calls for more investment and criticises the approach of the Health Department in clearing the backlogs quickly or paying NHS staff enough.
The political nature of the LGA will always mean that the lobbying of central government will be softer when the LGA Chair belongs to the same party as the Prime Minister. With Labour ahead in the polls, and many councils in England facing all-out elections this year, there is a strong chance that the chairmanship of the LGA could change hands in a few months time, which would certainly increase pressure on the government as the countdown to the general election begins.
Independent bodies such as the Association of Local Government Chief Executives also need a stronger voice to speak up for local government. The focus on the LGA as the primary body capable of lobbying government needs to change. Senior Council officers have a wealth of experience, often being in post much longer than the average Council Leader. This knowledge and experience must be given a stronger voice if local government is to successfully lobby for more funding.
As we count down to Wednesday’s Budget we should expect more rabbits to be pulled out of Jeremy Hunt’s hat. Striking public sector workers are expected to get a boost to their pay packets, while households struggling with the cost of living should receive more clarity on energy bills support schemes. The doom and gloom of the recent local government budgets, however, will continue to loom over the government. With voters going to the polls on May 4th, it won’t be corporation tax or major road projects that decide the fate of local councillors, it’ll be council tax and potholes.
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