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Central timidity transfers the risk to councils

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Boris Johnson’s call for an extra £5bn to be spent on the NHS may have partially been down to self-promotion. Nonetheless it surely constitutes an admission that he believes the government risks political oblivion by standing by as public services decline.

Conservative parliamentarians, like the wider nation, are seeking bold ideas from an administration that eschews radicalism.

The astonishingly lame answer from Theresa May to the 90 MPs seeking to develop a cross-party consensus on care funding – a prerequisite to reform at a time of minority government – encapsulates the current ‘head in the sand’, ‘business as usual’ attitude.

Rather than taking two months for Ms May to waffle that she was “committed to engaging with all parties on these key issues”, why was the government not convening a summit including its political opponents? Ms May’s unambitious approach to cross-party talks undermines any faith that she possesses the political nous to bring about reform of sufficient radicalism to prevent the system’s collapse.

There is some irony that the government’s failure to be bold is forcing councils to take greater risks

We must hope for greater bravery in the government’s response to this week’s Commons Treasury committee report, which called for the borrowing cap to be lifted to “unleash” councils to build homes. This would boost housing supply without impacting on national debt. Councils in the many places where the market fails to meet need are crying out to build, only to be held back. Ms May – who at times has talked big on housing – has so far failed to deliver.

Typical of government housing timidity is how the chancellor spoke of getting councils “building again” in his Budget speech. However, the small print showed councils must leap through hoops to bid for their borrowing cap to be lifted, up to a nationwide maximum of £1bn over three years. Peanuts.

And now LGC has uncovered that the Treasury has set aside a mere £880m for this on the assumption that its requirements will be sufficiently onerous to dampen enthusiasm. Even fewer peanuts.

The government has failed since 2010 to take the decisions required to place local services on a sustainable footing, leaving it to councils to innovate to avoid watching services decline as needs grow. Creativity is required to operate within central constraint. Haringey LBC, for instance, is seeking to transfer £2bn of assets into a joint venture with a private company because it believes this is the only way estate regeneration can proceed amid austerity and central shackles. Meanwhile, Northamptonshire CC spun out nearly all services in a bid to save £65m (the first of these companies was last week brought back in house). And some districts are borrowing significant sums to invest in property as an investment to fund services.

All such proposals come with risk, be it financial or political. Some of these councils may have chosen a different course had they greater freedom or resources. There is some irony that the government’s failure to be bold is forcing councils to take greater political and financial risks.

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