His Majesty’s Treasury will see local government as a “real delivery partner” if it looks at the sector’s track record over the past 14 years of funding restrictions.
Tom Wilkinson, city treasurer at Manchester City Council offered this verdict at Room151’s Monthly Online Treasury Briefing, stating that local government compared favourably to other government departments.
“Have the Department for Work and Pensions ever had an unqualified audit assessment?” he asked. “You hear about an MOD procurement disaster and the NHS always appears to be in permanent crisis. If I was Treasury, I’d be seeing local government as a delivery partner where they can get real value. I’d just urge them to be a bit bolder and trust us.”
Wilkinson called for consolidation of funding, noting that Manchester has “got 200 different grants that are coming through at the moment”. He was joined in the panel discussion by Michael Hudson, executive director finance & resources at Cambridgeshire County Council, who noted that of these grants “a lot have competitive bids and a lack of parity”.
Hudson said: “I urge Treasury to see what [government departments] are doing with their funds and follow that money. Then we’ll find that the effectiveness is at local government, and the driving of inefficiency to local government is coming from those other services. The government needs to understand that Treasury needs to see what’s going on with the funding stream.”
Conrad Hall, corporate director of resources at the London Borough of Newham, also joined the discussion, as the panellists assessed what the next steps for the new Labour administration could and should be, and how they can deliver on manifesto pledges to deepen devolution, create local growth plans that support a national industrial strategy, and deliver more social and affordable homes. The discussion took place in the context of Room151’s Municipal Missions Manifesto series, which is exploring what a reset between central and local government could look like.
Hudson said it was great to see so many members of the new government with local government experience, which will “give a different slant” even if “the money just isn’t there nationally”.
“Over the last year, local government has really proved that it’s not crying wolf,” he said. “The situation now is dire and it’s not governance failures, it’s the lack of cash and investment. But we’ve got to recognise they’ve got to address years of additional responsibility falling on local government without the funding.
“That’s to our great credit, but also our detriment. Because when we look at other aspects of the public sector, we see more funding going there than ourselves, because we’ve dealt with [the challenges].”
Hall noted an “obvious change of emphasis” with the new government, and said that while it was not yet clear how much “substance” there would be to their plans, they would need to be “given a bit of time” amid the reality that “public finances are even worse than [the government] thought”.
He stated: “Because their agenda around people and growth in particular needs a local authority sector to deliver on what they want, I think there is a definite opportunity for us to make a compelling pitch to government about how we can help as a sector.”
Hall suggested that the government would have been “very strongly advised that what they cannot have is lots of authorities going under” so he anticipates some short-term fixes. These could include “more flexible use of receipts from capital disposals, and even general expenditure” and “more flexibility on council tax”.
“If we’re serious about devolving to local authorities, that means raising finance locally,” he added. Short term measures “will hopefully buy time so the longer term devolution plans they have can begin to kick in. And I hope that when they do that, they stop using devolution as a reason to pass things to us, but carving out half the budget before they do so.”
Wilkinson advocated for further devolution based on the success Manchester has had, and in the wider UK context of what he joked was a “level of centralisation Stalin would have been proud of”.
He said: “Manchester is probably ahead of a lot of the country due to its current devolution deal. I think it has genuinely worked. It has given us freedoms and flexibilities, and it has helped to drive growth, and we’ve been able to capture that through business rate mechanisms. Devolution is going to be key to driving growth at the right level.”
Wilkinson said it was “really important that different layers of government work together”, with strong leadership also key. In Manchester, for example, Andy Burnham has “taken the opportunities and flexibilities that the devolution deal has allowed” where “some Metro mayors haven’t necessarily done so”.
Hudson agreed that local government needed to “talk as one sector” on devolution. Looking at other long term plans, he noted that there were no proposals around children’s and adult care in the King’s speech.
“It was unrealistic to see something so early, but we do need that honest conversation with the public about what the NHS is going to look like, and what adult care is going to look like. And what is the parental role in all of this? That needs to be reset, and while that has to come nationally, we can support that locally,” he said.
Hudson also called for “radical reform” in the “broken” delivery of services for children with special educational needs and disabilities (SEND), noting a report by Isos Partnership commissioned by the County Councils Network and the Local Government Association that showed that educational attainment has not improved since the introduction of landmark reforms in 2014, despite councils projected to be spending £12bn on these services by 2026, up from £4bn a decade ago.
Audit and governance will also require attention and reform. “While it’s great to see the Auditing, Reporting and Governance Authority (Arga) finally being set up, I’m still not sure where OFLOG or the inspection agenda sits. We still have that lack of confidence from elements of the sector and from the public around our accounts not being signed off,” Hudson added. “Our peer reviews aren’t strong enough and that has to be addressed – we have to have a quick resolution.”
Room151’s Monthly Online Treasury Briefings take place on the last Friday of every month. Please click here to register.
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