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Why extra cash for councils could quell calls for devolution

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LGC’s essential daily briefing.

The silence from the Treasury and the Ministry of Housing, Communities & Local Government is almost deafening.

Exclusive LGC research today reveals how in 2018-19 English councils are receiving, on average, £1,423 to spend on services per person. This is more than a third lower than what their counterparts in Wales and Scotland are given to spend per person this year – £2,309 and £2,237 respectively.

While the amount of per capita funding made available to councils in Wales and Scotland has increased by 5.2% and 0.2% respectively in absolute terms since 2010-11, those in England have witnessed a 29.8% reduction in the last eight years.

A Welsh Government spokeswoman said its councils had been “protected from the worst effects” of austerity.

A spokesman for the Scottish Government said: “We have treated local government very fairly despite the cuts to the Scottish budget from the UK government.”

LGC asked both the ministry and the Treasury why they were not ensuring English local authorities were in a position to spend as much per head of population as their counterparts in Scotland and Wales.

We also asked if there was any evidence as to why English councils do not need as much money as Scottish and Welsh local authorities and, if there was, to see it.

The ministry said the Treasury would be “better placed” to respond as it is responsible for funding to all nations.

The Treasury said it “can’t comment” on the analysis as it would only respond to “anything officially produced by ONS [Office for National Statistics] or government”.

LGC will let readers draw their own conclusions on these responses.

Writing for LGC on this issue today Jo Miller, president of the Society of Local Authority Chief Executives & Senior Managers, said: “There’s often an attitude in England that we are the wiser elder sibling within the UK.

“But when it comes to local public services we had better think again. English councils are the infantilised, poorer cousins within the UK local government family.”

Based on our analysis, that certainly seems to be the case.

But it does not have to be that way – the devolved governments in Scotland and Wales are showing that.

Austerity is a choice, as is where governments choose to make the most drastic cuts.

Responding to the research, County Councils Network director Simon Edwards said on Twitter: “These shocking statistics demonstrate the need for both additional resources for English councils and genuine devolution from Whitehall.”

It is a point Ms Miller also made.

“What these figures show is that when there is real power over public spending choices outside of Whitehall, it makes a difference,” she said. “With a comprehensive spending review on the horizon, and the need for a preserved union of Great Britain and Northern Ireland post Brexit, the case for genuine devolution within England grows ever stronger.”

One fears, however, the Treasury and ministry will remain silent on this issue for some time to come.

The huge disparity in funding for councils in England compared to Scotland and Wales should spark outrage amongst councillors and MPs.

They should demand answers from ministers and civil servants as to why their areas are suffering disproportionately compared to the devolved nations. They should demand that this issue is addressed in the spending review.

Chancellor Philip Hammond did acknowledge in his Budget speech that English local government had “made a significant contribution to repairing the public finances” and signalled “longer-term funding decisions [for English councils] will be made at the spending review.” He just neglected to say whether those decisions will be for better or worse.

In an interview with LGC this week housing and communities secretary James Brokenshire pledged to be “championing the local government sector” in his negotiations with the Treasury in the run up to next year’s spending review. Based on Mr Brokenshire’s successes so far with persuading the prime minister to lift the housing borrowing cap and getting the government to find extra funds for social care and roads repairs, the sector will hope he can once again pull some (purse) strings.

In addition to arguing for more money for the sector, councillors and MPs should use research like this to continue to push the case for more powers and controls to be devolved to their areas.

If there is one thing the government likes more than money, it is power.

While devolution deals have been agreed with Cornwall and Cambridgeshire & Peterborough, Greater Manchester, Leeds City Region, Liverpool City Region, North of Tyne, Sheffield City Region, Tees Valley, West Midlands, and West of England CAs, the controls and powers passed down are relatively small fry. That is not to diminish the achievements to date of the areas mentioned above, but local representatives would no doubt argue they are at just the start of what they hope is a long journey to gain more freedoms.

Today the new chair of the Association of County Chief Executives (ACCE) Anthony May vowed to “reboot the devolution agenda in shire counties” which have, as yet, to witness any telling transfer of powers (albeit in part due to deals for Greater Lincolnshire, and Norfolk and Suffolk collapsing). 

False dawns and delays over devolution to the whole of Yorkshire in particular suggest Whitehall is nervous about giving a vast region a powerful base upon which to start determining its own future and, inevitably, from which to lobby government.

It is just possible, then, that if the government wants to quell calls for widespread, meaningful devolution in England and hold onto the powers it so dearly loves, increasing the quantum of cash for councils could turn out to be money well spent.

Everyone would be a winner then even if, as Ms Miller points out in her column, English councils continue to be treated like infants.

By David Paine, acting news editor

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