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Matthew Taylor: the politics of local government as a whole will also be affected by the election result

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The Conservative general election victory will, of course, have many impacts on local authorities.

The local government role in schooling is likely to diminish to vanishing point; there will a greater expectation on councils to reform local services through contracting, spin-outs and digitalisation; there will be more money for affordable housing but not for social housing; and centrally funded efforts to improve collaboration between local health and social care providers will continue.

These and other policies have important implications but two issues stand out: money and economic devolution.

Many commentators questioned the political realism and economic sense of the deep cuts in public spending unveiled in George Osborne’s last autumn statement. Since then, we have had new Conservative assurances about protecting school spending and a pledge not to raise tax levels for the next five years. Taken together this means a further cut of at least 11.2% over the next five years in unprotected spending areas, which includes local government grant.

This is likely to be catastrophic for those Labour urban authorities that have suffered the brunt of the past five years of austerity. Councils need to prepare for worst. The issue is no longer whether hard pressed councils can do anything that isn’t statutory; it is whether they can even fulfil their legal duties.

The only crumb of comfort – and it is a crumb – is that if the economy grows faster than expected, it may be possible for the government to soften the cuts while still meeting its borrowing targets. Conversely, if austerity seems to be dragging the economy back towards stagnation, Osborne may repeat his U-turn of 2011-12 and again let his targets drift. In either case, if the past is anything to go by, local government will be well down the list of priorities.    

The grimness of the spending story contrasts with a genuinely radical commitment in the Tory manifesto and repeated by the chancellor the day after the election to devolve new powers and freedoms to cities and city regions, especially those that opt for mayors. The need to pacify the Scottish one-party state with more powers will only add to the case for English devolution.

The RSA hosted the City Growth Commission and is now working with local government to explore how to make effective use of greater autonomy so this commitment from the Conservatives is important and encouraging.

Indeed, taking the cuts with the commitment to allow councils to keep more of the local business rate and pilots to explore 100% of rate growth being retained locally, a new model of local government finance may at last be emerging. Less grant but more freedom to keep rising rate receipts may be an acceptable, albeit very tough, deal for places confident about their economy but will offer little but pain to those that can’t see a path to local growth.

Data shows the north-south divide closing slightly but the divide between economically successful and stagnant areas will grow wider and harsher. Whether the Cameron government will be able or willing to continue to ignore the evidence of extreme local hardship remains to be seen.

Councils will hope a ministerial refresh will mean a more sympathetic ear at the Department for Communities & Local Government and a louder voice in the Cabinet but they are unlikely to get much comfort from what appears to have become a more Thatcherite Tory parliamentary party.

7 May was also the date of local government elections and although not many places saw significant shifts in control, the politics of local government as a whole will also be affected by the election.

On the one hand, the collective voice of local government may become even more outspoken about the impossibility of balancing the books and providing basic public service. On the other, back in the big cities, pragmatic and ambitious Labour leaders will be putting ideological differences to one side as they seek advantageous deals with the Treasury. Also, over the next two years will local authorities, traditionally keen on international engagement, adopt a shared position on the EU referendum?

By 2020 English local government is likely to have changed profoundly. With a fair wind more autonomous, strategic and self-sufficient cities may be transforming the tradition of English centralism. But one thing is crystal clear: on the journey there will be much pain and many blameless victims.

Matthew Taylor, chief executive, RSA

 

 

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