A renewed relationship of trust and respect is needed between local and central government if we are to restore economic purpose and provide long-term and funded answers to key social pinch-points across the country, Localis has reported today.
In a report entitled ‘Hitting Reset – a case for local leadership’ the think-tank argues that providing financial resources for economic investment, freedom to raise local revenues to fund vital local services and a transfer of powers from Whitehall to local level are vital to rebuilding a strong local state capable of rebalancing the national economy.
Among key recommendations, Localis calls for the establishment of a British Investment Bank that would enable regional productivity to be democratically accountable and for the next Spending Review to set out a replacement to EU funding until 2025.
Localis also calls for a Royal Commission into fiscal devolution as the first step to providing long-term surety of resources, empowering the local state to drive vital place-based economic and social reforms. In the shorter term, the report makes the case for universal freedoms allowing local authorities to set council tax levels and keep full business rates revenues.
The report also argues local leaders should be given greater control to direct at a place-based level the shape of national reforms in areas such as health and social care, welfare, training and skills provision.
Localis chief executive, Jonathan Werran, said: “The country is sleepwalking into a second lost decade by default. Unless we reconfigure our political economy to give our localities the resources, powers and funding required to achieve their full potential, the last three years of Brexit water torture will have been in vain.
“A reset in how our localities relate to Whitehall and Westminster will be a vital first step to renewal from the ground-up and to restoring a sense of pride and purpose between our places, people and the greater nation.”
Localis head of research, Joe Fyans, said: “Polling figures and election turnouts are beginning to give empirical basis to the national mood of disillusionment with democracy and politics in general.
“Restoring and strengthening local government, so people can once again see the impact of their vote in their community is integral to repairing Britain’s social fabric.”
Paul Dossett, head of local government at Grant Thornton UK LLP, said: “The relationship between central and local government needs to be reset. For the sector to become sustainable, we need to move to a basis where councils are able to own their own future, support their communities and have the power to raise more income locally.
“Accountability and responsibility for local services needs to ultimately rest with town halls but, for this to be possible, we need to create a culture where local government is trusted to act in the interests of its residents and businesses and own its risk appetite.”
Chris Murray, director of Core Cities UK, said: “Core Cities UK has argued for decades that the relationship between the central and local state needs to be completely re-thought.
“Only by doing this we can reinvigorate our economy and make a massive difference to millions of lives. We welcome Hitting Reset as an important contribution to the great debate about Britain's post-Brexit economic future."
Jonathan Werran, chief executive, Localis
(Telephone) 0870 448 1530 / (Mobile) 07967 100328 / (Email) firstname.lastname@example.org
Notes to Editors:
- The report is being launched at RICS, Parliament Square, on Wednesday 15 May from 9.30 to 10.30. Panellists will include Sir Simon Jenkins and Professor Tony Travers, Director LSE and Rebecca Cox, principal policy adviser, Local Government Association.
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- A full copy of the report can be downloaded here: “Hitting Reset – a case for local leadership”
- Report recommendations:
Restoring Regional Productivity
• The UK government should commit to replacing the European Investment Bank’s function with a British equivalent.
• Loans in England should be handled and managed by LEPs and strategic, upper tier authorities (or consortia thereof) in consensus.
• The UK2070 commission on regional inequality should make a major focus of their enquiry how such a bank could avoid a political conflict with public sector debt through either open market borrowing or reformulating debt calculations.
Creating Capacity for Local Leadership
• A ten-year spending review window should be issued for local government, to create time and space for fiscal devolution, in line with the Independent Local Government Finance Commission from 2015.
• A Royal Commission should be established to establish the relevant criteria and develop a baseline funding formula which is resource rather than expenditure based.
• From this, central government should establish a self-sustaining financial system for local authorities so that local areas have the flexibility to plan long-term without relying on ad-hoc and politically-motivated grants and funding streams.
• This could include income, sales, road or corporation taxes and would be designed to eventually replace most of the revenue grants from central government.
• To support this long-term financial planning, councillors should be elected for a minimum of five years to match the parliamentary term and local government elections should take place as a single election campaign.
• In the short-term, and by the time of the next Spending Review, government should provide full details about the Shared Prosperity Fund, including:
– how it will allocate by end of 2020 and framework for 2025 distributing expenditure;
– how much will be distributed by end of 2020;
– support offer for councils and regions, such as Cornwall, who heavily rely on EU funding to help them plan for the long-term.
• Remove the need for local authorities to hold a referendum to raise council tax at levels greater than those currently set by the Secretary of State for Housing, Communities and Local Government.
• Reinstate stalled legislation allowing councils full business rate retention in the next Queen’s Speech.
Extending local state capacity
Health and care
• The NHS long-term plan should be reformulated to ensure parity of numbers between CCG leaders and local government leaders, with a view to further integration once parity is established.
• Once CCGs and local authorities are establishing at parity, they should be combined so that CCGs become an accountable arm of the local state.
• Local authorities should employ a dedicated liaison officer to maintain ongoing dialogue with the Department for Work & Pensions (DWP).
• The Job Centre Plus’s Flexible Support Fund should be expanded and devolved to give greater flexibility to local officers.
• The DWP should implement compensatory measures to sanctioning, where in the event of unjust sanctioning the claimant gets awarded a dividend the following month. This would give incentive for the DWP/LA/Jobcentre to stop indiscriminate sanctioning and pay more attention to the individualised cases.
• Each educational authority which hasn’t already done so, should set up Further Education board with major providers and employers.
• Collection and management of the Apprenticeship Levy should be devolved to these FE Boards to be used for local strategic aims.
Press release distributed by Pressat on behalf of Localis, on Wednesday 15 May, 2019. For more information subscribe and follow http://www.pressat.co.uk/