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Why a new Tory leader will not change the game for councils

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Commentary on Conservative leadership speculation

The spin before Theresa May’s Conservative conference speech heralded an era-defining breakthrough on council housing. In the end, it is entirely plausible that the prime minister’s cough, a prankster and some faulty stick-on letters will have more impact on local government than anything she said.

Vultures have been swirling around the prime minister since her general election disaster. She needed to use her speech to reassert her authority and show that a Conservative party subsumed by Brexit has purpose and vision.

Through little fault of her own her message was upstaged and the re-launch thwarted. Ms May – six months ago invincible – is a luckless laughing stock.

The newspapers agreed it was a devastating blow. “May on final warning after speech shambles,” said the Times. “Coughing and spluttering – May’s British dream turns into a nightmare,” added the Guardian, while the Daily Telegraph described it as “Luckless May centre stage in tragic farce”. “May endures ordeal in speech aimed at reasserting authority,” was the Financial Times’s front page headline and “Stunned Theresa handed P45,” was the Daily Star’s unusually un-sensationalised take.

It is widely reported that at least some Tory backbenchers are plotting a coup. Ex-culture minister Ed Vaizey has said “quite a few” are seeking her resignation. All eyes are on Boris Johnson and David Davis.

Speaking of eyes, our own Lord Porter was probably feeling pretty chuffed to have nabbed himself a prime aisle seat to watch his Conservative party leader’s speech, right at the front of the auditorium. Little did the Local Government Association chairman know he would be obliged to make awkward supportive eye contact with the prime minister as she walked past during the obligatory standing ovation following her humiliation.

Lord Porter, like everyone else in local government, would probably greet a Conservative party leadership contest with a certain amount of trepidation. It is not so much that many people in local government are happy with the current failure to address council finance or social care, and the collapse in devolution momentum, more that it is hard to believe that any other potential leader of the Conservative party will follow a markedly different course. Why rock the boat, disrupting any central/local relationships that have developed, if little can be gained?

For better, or (more likely) worse, we are on the path to Brexit. Even if the government fell tomorrow, Jeremy Corbyn’s grip on Labour is such that we will inevitably end up with a PM who takes us out of the EU. So it will be the case that it is the Brexit negotiation process that entirely dominates the thoughts of the prime minister for the next two years. And, of course, the economic turbulence that goes with this.

The FT has today reported that the Office for Budget Responsibility will on Tuesday publish an analysis showing how weak growth in the Brexit period, combined with persistently low productivity over the past seven years, has wiped out any war chest Philip Hammond might have hoped to use to sweeten his Budget next month.

“As much as two-thirds of the £26bn of headroom in the public finances that the chancellor created last year as a buffer for the economy through the Brexit period is likely to be wiped out,” the FT’s report stated.

In these circumstances it is hard to see how local government’s financial lot can improve. Distracted ministers, no Commons majority and no money are hardly the ideal ingredients to tackle the reform of local government finance or social care. Even sticking plaster solutions look increasingly far-fetched.

The content of the PM’s speech yesterday illustrated this perfectly, following a pattern we have seen already in which Ms May shows a strong ability to analyse a problem but fails to follow through on the delivery. This was the case with social care in the election campaign – she understands intergenerational unfairness and gets that the young cannot be expected to shoulder further burden. She also appreciates the care system needs more resources. However, she devised a solution in secret that would have left the families of dementia suffers excessively penalised, had not been robustly financially tested, and delivered her plan at entirely a wrong time – the middle of a highly-charged election campaign.

Likewise, Ms May is aware that home ownership is beyond the dreams of so many in society: her party needs to offer more than unfulfilled promise of home ownership. Too many people, especially the young, are being exploited by private landlords. Council housing should be a very big part of the answer. However, as LGC reports, the £2bn extra that Ms May announced yesterday for social housing is a drop in the ocean. It will mean that just 2% of the 266,000 homes the government estimates are required each year will be additional council homes. This is not going to prevent young people falling under Mr Corbyn’s spell – or enthuse councils who will continue to face borrowing caps on their housing revenue accounts.

There is currently little evidence that any of the likely Tory leadership contenders would have an attitude to public spending that would mean local government fared differently under their premiership. Unless of course they were brave enough to call a general election and get a mandate and majority for change. That of course would run the risk of a Corbyn premiership – and a very, very different path.

For local government there is a risk that any new Tory leader before Brexit, and reshuffle, would be akin to rearranging the deckchairs on the Titanic. Yes, perhaps there could be movement on something like universal credit, but hopes of this should be counterbalanced by the likelihood further political turbulence will lead to yet more delay on providing clarity on councils’ Homelessness Reduction Act responsibilities. It might just be that councils should hope that some incremental good can be derived, for instance, from Greg Clark’s continued stewardship of industrial policy in a continuing May premiership.

Until the Brexit process is complete the government’s attention will be elsewhere whoever is in Number 10. There will be relatively little support from above and little central policy inspiration. Councils will have to rely on their own guile – and luck – whoever is prime minister. And there are more councils than Birmingham City Council and Northamptonshire CC that are stuck in a cycle of coughing fits. Any Conservative party leadership election, made more likely by yesterday’s mishaps, will be an inconvenient distraction for councils, and not much more of a game-changer than Ms May’s housing announcement.

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