Bringing power and resources closer to people is the key to recovery and improving quality of life.
The 2020 Comprehensive Spending Review comes at an unprecedented time as we battle to minimise the impact of a second wave of COVID-19 on people, the economy and public finances.
As first was going to press, the Budget had been delayed and there was speculation the review could cover just one year. However, it still presents an opportunity to shape the country. And on behalf of councils, the LGA’s submission makes the case that bringing power and resources closer to people is the key to improving people’s quality of life, tackling deep set inequalities and building inclusive growth across the country.
Recent polling by the LGA shows that 73 per cent of residents trust their local council to make decisions about how services are provided in their local area.
The detailed submission shows how, with the right powers, sustainable funding and enhanced flexibilities, local government can ensure our communities prosper for the future.
However, as things stand, many councils are in a precarious financial position. After a decade of reductions in funding and rising demand, councils have faced the impact of the COVID-19 pandemic on their citizens, staff, services and budgets.
Recent independent estimates by the Institute for Fiscal Studies (IFS) – commissioned by the LGA – suggest that another £2 billion might be needed this year to meet all the pressures and non-tax income losses that councils have experienced and will experience as a result of pandemic, but that this could rise to £3.1 billion.
Further funding to cover local tax losses, as well as one-off costs that will be incurred to help local areas recover from the impact of the pandemic, will be required as well.
But we also need to look beyond 2020/21 to the next few years.
Councils will continue to face demand pressures on their day-to-day services, some pre-existing, others made more significant by the lasting impact of COVID-19 – all against weaker prospects for income, such as local taxation, fees and charges.
According to further IFS analysis, taking the pressures estimated by the IFS together, councils face an estimated funding gap of £5.3 billion by 2023/24 – which could grow to £9.8 billion due to the uncertainty resulting from the continued impact of COVID-19.
In every part of the country there needs to be a re-think of public finances with a multi-year financial settlement. This must provide local government with certainty over their medium-term finances, sufficiency of resources to tackle day-to-day pressures and the lasting impact of COVID-19 on income and costs, and that recognises the benefits of investment directed by those closest to the opportunities for shared prosperity.
To achieve this, the Spending Review will need to move away from the traditional drivers of departmental spending towards a degree of fiscal decentralisation, in line with some of the world’s most productive economies.
We need to re-think how we fund public services – not try to fit new and bold ideas into old frameworks.
The LGA’s submission sets out how local government can act as the driver to achieve shared priorities between central and local government. Together, we can strengthen the UK’s economic recovery, level up economic opportunity, tackle social and health inequalities, improve outcomes in public services, achieve net zero carbon emissions and improve the value for money of public spending.
Key asks of the Comprehensive Spending Review
- Provide additional funding to shore up adult social care ahead of winter and a potential second wave, and to help address long-standing challenges.
- This funding to be a ‘down-payment on reform’ that will finally put social care on a sustainable, long-term footing.
- Restore the Early Intervention Grant to 2010/11 funding levels, at a cost of £1.7 billion, enabling councils to reinstate children’s social care services to tackle and prevent emerging problems and avoid higher costs later on.
- Provide long-term certainty over funding to support children with special educational needs and disabilities (SEND) and write off councils’ existing high needs block deficits.
- Provide sustainable core funding for public health, invest in transformation and strengthen local leadership through devolution.
- Rewire behavioural health incentives and raising revenue, for example by levies on alcohol, smoking and sugary products.
- Take an integrated and devolved approach to skills, with a multi-year, flexible, outcome-driven local funding pot combining careers advice, back to work, training support, some apprenticeship funding and UK Shared Prosperity Fund to allow local partners to make swift decisions for their local businesses and residents.
- Provide a national focus on homelessness prevention work and funding that enables councils to help residents before they reach a crisis point.
- Fully restore core, separately identified funding for local welfare schemes to ensure all communities are fairly and effectively supported.
- Allow councils to retain 100 per cent of Right to Buy receipts and give them the flexibility to set discounts locally to invest in new and existing housing stock.
- Properly support and resource councils to make locally-led planning decisions for their current and future residents – including being able to set planning fees locally and be involved in the design of any new system for securing developer contributions for infrastructure and affordable housing.
- Work with councils to bring forward the Government’s £3.8 billion capital Social Housing Decarbonisation Fund.
- Fully fund new requirements on councils arising from the Environment Bill, such as collecting a consistent set of materials for recycling and mandatory food waste collections.
- Allow councils to determine locally how waste is collected and to continue to charge for garden waste collection.
- Allocate the £3 billion outstanding funding announced in February for bus improvements.
- Provide additional funding to address the £11 billion backlog of road repairs.
- Provide councils with an extra £500 million to invest in supporting social prescribing facilities, including leisure centres and libraries which support community activities.
- Introduce a local, flexible £500 million Green Parks Fund to help unlock green space initiatives.
Funding and other
- Provide an additional £10.1 billion in core funding by 2023/24, to sustain 2019/20 service levels (on top of inflation and 2 per cent annual council tax increases) and to deal with other cost pressures and help councils improve their core service offer.
- Replace the existing, fragmented school’s capital funding arrangements with a single, locally held funding pot.
- At least maintain current activity and firefighter numbers. Further investment and council tax precept flexibility will be needed to build on existing improvement activity, particularly around technological innovation and culture change.
- Delivering Building Safety Standards across council housing stock is estimated at £8.1 billion over a 10-year period.
- The Building Safety Bill impact assessment estimates increased staffing costs for local fire and rescue services, such as building control, planning and environmental, of £10-22 million.
- Lift the legal requirement on councils to publish public notices in local newspapers, which costs taxpayers up to £20 million a year.