A Labour government would seek to empower councils through greater devolution and a new brand of “municipal socialism”, the shadow communities secretary has told LGC.
In an interview ahead of this week’s Labour party conference, Andrew Gwynne said some of the deals agreed to date merely “paid lip service to devolution” and did not “give anything like meaningful powers back to those regions.”
Asked which deals he had in mind, Mr Gwynne pointed to the West Midlands and the disparity between the powers it has been awarded and those given to his home region of Greater Manchester, where the mayor is also the police and crime commissioner and has a housing budget.
The shadow minister said: “[West Midlands CA mayor] Andy Street is basically just a glorified chair of the integrated transport authority. Beyond transport powers the devolution deal is very limited.”
Mr Gwynne acknowledged it was the government’s confidence in Greater Manchester, where collaboration between councils has been longstanding, that led to its superior deal. However, he said “other city regions with devolution deals, like Liverpool, like the West Midlands need to be getting more powers from central government, much more in line with what Greater Manchester has got”.
Labour has set up a ‘constitutional convention’ to look at devolution within the UK, both to the devolved nations and to areas within England. Mr Gwynne told LGC an important part of this would be looking at devolving more power to counties and smaller city regions as part of a “devolved package for England” governed by some “overriding principles”.
Asked whether this would mean a Labour government would adopt a more universal approach than the deal making that has happened over the past few years, Mr Gwynne said he wanted to remain “flexible to some degree”.
“There is clearly a lot of catch up to be done in England compared with Scotland, Wales, Northern Ireland and London who are racing ahead, along with some of the big cities like Manchester,” he said.
On elected mayors Mr Gwynne, a former Tameside MBC councillor, said while it made sense for Greater Manchester he had an “open mind” on the issue.
“The level of public money that’s now in the direct control of the [Greater Manchester] mayor and combined authority [meant] it was absolutely necessary that there was some direct democracy involved,” he said.
“In other parts of the country it might not be appropriate. If we’re looking at a devolution settlement for the counties it might be that ministers consider that county councils are that directly elected input at the strategic level without having an additional tier.”
Mr Gwynne said establishing a fair funding system for local government would also be a priority for a Labour government, with work already under way to look at the issue. He said he was keeping an open mind on the localisation of business rates and further fiscal devolution but his priority was “tackling inequalities” and funding “good services across England”. The 2017 Labour manifesto committed to explore replacing council tax and business rates with a single ‘land value’ tax. Mr Gwynne said the party needed to “very quickly” work out how this could fit with fair funding for local government.
He said the manifesto commitment to increase funding to local government funding also remained as councils would be an “ambitious driver” of the party’s plans, with “chunks” of funding available from the centre for children’s services and the planned National Care Service.
He said the latter, which would not happen overnight, would be delivered through a partnership between local government and the NHS and stressed a Labour government had no intention of stripping councils of either adults’ or children’s services, a move he said would undermine the sector’s ability to provide services from “cradle to grave”.
“Everything local authorities do should be within that strategy of the health and the wellbeing of the citizen; if you take the two biggest parts of that out of the equation at either end [of life] you’re left with a mid-life local government crisis.”
He said conversely a Labour government would seek to put “capacity” back into local government and would be keen to see councils become the ‘preferred provider’ for council services. Preferred provider was a concept developed by Mr Burnham as health secretary intended to exempt public sector organisations from having to put services out to tender. However, lawyers disagreed over whether it would be legal under EU procurement rules.
Mr Gwynne said: “I’m very keen at looking at the ability of local authorities to directly run services again… What works should be the mantra.”
He highlighted the success of some council owned companies at making a profit to invest back into services. “That’s a good example of municipal socialism in action,” he said.
Asked about the increased costs providing services in-house would likely bring, particularly in care services, Mr Gywnne said the “jury was still out on the analysis that outsourcing always saves money”. He said the process could be gradual and councils would not be compelled to bring services in-house.
“You can’t reverse 30 odd years of competitive tendering, outsourcing and privatisation in one big bang. It’s about giving local authorities the option.”
Shadow chancellor John McDonnell recently pledged his support for striking refuse workers in Birmingham, saying they were striking against austerity not the Labour-run city council.
In August the city’s then Labour leader John Clancy agreed a deal with unions but this was rescinded after officers warned it left the council at risk of being unable to set a balanced budget and open to pay claims under the Equality Act.
Asked whether he supported strikers in Birmingham, Mr Gwynne said he encouraged “all sides to sit round the table and resolve this”.
He said the fact an agreement had been reached showed issues were “not insurmountable” and described it as “unfortunate that the deal had been rescinded”.
“Part of the problem is that the advice the council got legally they then refused to share either with the trade unions or with Acas so nobody could see whether it’s correct or not,” he said.
Asked whether it could ever be acceptable for a council to set an unbalanced budget, Mr Gwynne said: “The law’s very clear councils cannot set illegal budgets… I would not expect Labour councils or Labour councillors to break the law but what I do expect is Labour council and Labour councillors to try and bring an unfortunate dispute to an end.”