A commentary on today’s Queen’s Speech
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Today’s Queen’s Speech really brought home the impact of Theresa May’s failure to win a majority. Whatever your personal political views, from a policy perspective a government too weak to risk upsetting anyone will remain paralysed on the big domestic issues of the day, resulting in deadlock.
The biggest news today, as revealed by LGC this afternoon, was that plans to abolish revenue support grant and hand local government 100% of business rates have been suspended indefinitely. This provided clarity of a sort, although not for those areas that have already embarked upon piloting the new arrangements. It also leaves big questions over the shape of local government funding beyond 2020, although thankfully the government is to continue with the much-needed fair funding review promised alongside the reforms.
It has long been far from certain whether Ms May would seek to press ahead with business rates reforms - a flagship policy of her bête-noire George Osborne - that were likely to prove controversial when the winners and losers emerged. Ms May’s administration has never exhibited any enthusiasm for the policy, despite a vague promise in the now rather redundant Conservative manifesto to “continue to give local government greater control over the money they raise”.
When it was first announced many in the sector had hoped the move to 100% business rates retention would herald the beginning of real fiscal devolution to local government. Other than in relation to the current power-sharing crisis in Northern Ireland there was not a whiff of a mention of devolution, fiscal or otherwise.
On social care the government committed to consult on future proposals. It would have been difficult for Ms May not to mention the issue given its prominence during the campaign but in the event they said about as little as it was possible to say about it.
Richard Humphries, senior fellow at the King’s Fund, told LGC the row over the so called ‘dementia tax’ policy announced in the manifesto, which would have seen the introduction of a £100,000 asset floor below which people would not have had to contribute to care costs, meant it would be back to the drawing board for the green paper.
The apparent abandonment of manifesto commitments to make more money available for social care by means testing the winter fuel allowance and ending the state pension triple lock will only add to the challenge. No date has been set for the publication of the green paper, although even if it had the current chaos in government and dominance of Brexit would not fill one with confidence it would be met.
There were no signs of the end of austerity that has been widely heralded in the wake of the shock election result. In notes to the speech on public finances the government says it will “reflect on the message voters sent at the General Election – while always remembering that we have to balance the books”. Growth, driven by the “new, modern industrial strategy”, is apparently the magic wand that will deliver improved public finances and low taxes.
On housing there was no mention of a bill to follow the housing white paper earlier this year but the government has reiterated its commitment to the proposals in the document, suggesting they may try and bring forward what they can without legislation. It is hardly the drastic action needed to tackle the country’s housing crisis.
Meanwhile on schools funding, the notes to the speech say the government is committed to changing the way schools are funded but does not elaborate on whether it will attempt to press ahead with plans to introduce the controversial new funding formula.
For the thorny issues local government desperately needs to see resolved – social care, future funding, the schools formula and housing – clarity feels even further away than before the general election was called. The past two months, it seems, have been a colossal waste of time; the more worrying propsect is the next two years might not be much better.