The summer is over, the holidays recede into the past and local government faces questions over the future of rates retention, restructuring and a debate over reserves.
So it is back to work after the summer break. I’d like to say that the path forward is clear and untroubled but I actually wonder if anyone knows in general where we’re going.
As we stand at present there seem to be no well developed plans to finance local government post 2020. Indeed, there seems to be much tooing and froing.
The long argued way forward—100% business rates retention—was thrown into doubt after the election when a local government finance bill failed to materialise in the Queen’s Speech. The participants of the joint LGA/DCLG steering group were thanked for their hard work and told that was the end. The exception being the fair funding group which is needed to allow for a re-setting of the 50% retention system we have at present. Their work will be key and controversial.
Local authorities then appeared to be gathering together to present their own proposals for what happens next. But last week, before that made any real headway, a fresh meeting of the original steering group was called for early October.
The excitement is intense but only time will reveal the eventual outcome.
Structures
In the meantime, local government is full of talk of structural re-organisation with councils banding together to present pitches to central government. The secretary of state has apparently promised to opine this month on the first two proposals to come his way. In the mean time, there are lots of secret council groups working behind the scenes at county level, all of them anxiously awaiting news of the progress of the first two in.
I was involved in ad hoc work on applying to be a unitary and I am no more enamoured with the current free for all. It seems to me that the current structure of local government is proving to be unsustainable and someone should be brave enough to go for a full-scale reorganisation so everyone is treated similarly. Having many different models is of interest but does confuse our customers.
No one has bothered to ask me what I read on my sun lounger this year so I will tell you. I acquired for my collection a commentary on the Local Government act 1888. This act, as you well know, created county councils and county borough councils. It was a huge re-organisation. What is very striking reading the commentary which was published that year was the depth of understanding about the problems faced by local authorities shown by MPs and those in The House of Lords. It is truly arresting. The level of debate was high and civilised. It was a huge transition from small rural and urban authorities, plus a variety of other providers, to a logical structure which stood the test of time. County boroughs became unitaries, but essentially the structure remained.
Elections and reserves
With the arrival of autumn comes detailed budget discussions made ever more gripping in several places by the prospects of elections. The budget process has not been easy for a long while but gets more difficult every year as the options for savings becomes more difficult.
There is quite an argument building between CIPFA and DCLG over reserves. Unusual for CIPFA to be quite so high profile but Rob Wightman needs all our support. The continual commentary about the size of local authority reserves is quite ridiculous. As Rob points out, the budgets have never been riskier and inadequate reserves will inevitably lead to a failing council. The DCLG consistently fails to understand that much of the total reserve is earmarked and is necessary to secure a legal budget.
Another source of concern—although it may be slightly longer term—is the difficulty over proper strategies for leaving Europe. The structural funding is a big issue as is the loss of considerable training and research funds. In addition the uncertainty over workers’ rights is a big worry for the care sector particularly as far as local authorities are concerned.
Richard Harbord is a former chief executive of Boston Borough Council.
