Uncertainty remains across the public sector, and is unlikely to be resolved any time soon. Those responsible for local government finance can expect another frustrating and testing year ahead.
New Year messages are traditionally upbeat and full of optimism, which largely comes from too much enjoyment over the Christmas break. The intention is to inspire and rejuvenate through the uplifting content.
I looked to the leader of our government for inspiration and noted that his key message was that we are in a much better place at the beginning of 2022 than we were this time last year. Boris Johnson was, of course, talking about Covid. I wonder if many of those involved in local government finance would say the same.
Uncertainty remains wherever you look and is getting worse by its lack of resolution. There are, in addition, new factors that make things even more difficult.
It is not helpful to medium, let alone long-term planning, to have one-year settlements and delays in completing external audits. Meanwhile, Brexit has also created instability as it meant losing the draft legislation on devolution of business rates and also disbanding the working group on the Fair Funding Formula.
These are areas still not resolved. In addition, the government has promised a thorough review of business rates, which many businesses would like to see abolished. There has been an interesting study in Wales on alternatives to land taxes and business rates. Indeed, in Wales there has also been an insightful study published on the reform of council tax. This is another area that desperately needs updating and improving.
Backward steps on business rates
With business rates there lurks a threat that central government would like the collection to be centralised and perhaps collected by HMRC. I will not outline the reasons why it would be for the best if this did not happen. There is a model in Northern Ireland, but that has not always worked seamlessly.
We have not had clear statements about the process of levelling up, which clearly means different things to different people normally based on their own interests. Apparently, levelling-up secretary Michael Gove is now too busy on the pandemic and all announcements have been delayed. From what has been said so far, it is difficult to see a coherent and sensible policy emerging. Indeed, there are a lot of new initiatives and one-off announcements, and it is hard to follow whether they are new, additional detail or a re-run of previous announcements.
22 March 2022
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Keeping services on the move
Currently, there is a new difficulty involving public sector sickness and self-isolation and keeping public services moving. As I write, there are 10% absences across the board, but this is predicted to rise and planning is urged for 25% absences later in January. There is particular concern about keeping education and social care going, and the need to use more agency staff, if that is even possible, will lead to considerable increases in cost.
A special eye needs to be kept on children’s services. Not only because overspends have become the norm, but also because there is a review under way that could bring major change. Moreover, the increase in youth and domestic violence, particularly in London but also across the country, will lead in to a number of serious case reviews that will have major ramifications for the services and the people running them.
I suspect I can safely predict that this year will not bring an end to the debate over adequate social care for the elderly and others. The partial solution given to date is not even a starter for ten in reaching an acceptable service outcome. There ought to be reports and recommendations on further moves on integrated care between health and local government, but the pandemic has not been helpful in moving this along.
There are other problems, of course, in terms of income from leisure and associated services.
I feel it would be appropriate to end with a series of clear predictions in the style of Nostradamus. However, I’ll avoid predicting an asteroid colliding with the Earth, another pandemic or the fact that Elon Musk has so clogged the atmosphere with satellites that there are likely to be more major incidents in space than on the M25. I would just say that I expect a frustrating year. Initially, 2022 will be dominated by health concerns and Brexit and then a return to levelling up and refocusing. But I foresee no radical changes until 2023, by which time it will be getting near an election and nothing much will happen.
Happy 2022!
Richard Harbord is the former chief executive of Boston Borough Council
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