Last week the Chancellor released his Comprehensive Spending Review. While the key figures in his speech made the headlines, the reality is that it takes time to unpick exactly what the impact of the announcements will be on actual services, particularly when it comes to excessively complicated local government funding structures.
The picture already looks stark. As I previously warned, the retention of Business Rates still leaves central government considerable opportunity for cutting council funding. Even with rates factored-in councils are facing a real terms cut of 31% to their budgets, probably more.
Councils have already suffered cuts of over 40% since 2010, it’s a miracle services are functioning at all. With a further 31% cut to be made, we’ve moved beyond what can be achieved through efficiencies and the long-term impact of decisions councils are being forced to make will eventually come home to roost.
The irony of the situation is that while the Government preaches devolution, they are systematically stripping councils of the resources necessary for it to function and continuing to impose new restrictions at every turn. Councils are prevented from having real control over the level of local Business Rates, even if infrastructural improvements would benefit those companies. Meanwhile, the Government is providing an opt-out to their own limit on council tax increases, just so long as it gets spent on their preferred schemes. It seems local taxation is fine, so long as it’s spent on Westminster’s priorities.
The Government’s approach to devolution is incoherent. Local government is sufficiently trustworthy in Manchester that they can devolve Health, but Education apparently has to be re-centralised through Academisation. They treat devolution as if it were a flat pack, you can have devolved government, so long as you only follow our detailed instructions…and, by the way, we’re just giving you half the bits you need to do the job.
Local government is more efficient than central government, and devolution and combining services can save money and improve outcomes, but not with the Conservatives’ approach. Instead, we’re left with a Government without a strategy for both councils and public services.