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John Sinnott: We need an independent body to recommend funding reforms

John Sinnott
  • 1 Comment

Reports from the Local Government Association finance conference, including LGC reporter Robert Cusack’s commentary, make for depressing reading.

The images are of senior local government officers throwing up their hands in despair or surrender at the problems for the sector caused by the fair funding review.

From the top down there is an acceptance that the LGA will not be able to present a worthwhile view on behalf of the sector. That should not come as any surprise given the nature of the LGA, but it is regrettable if protective views take priority over the financial wellbeing of the sector.

All this comes at a particularly challenging time for local government. Within all the funding uncertainties:

  • The Northamptonshire inspection is underway, with other struggling authorities wondering who may be next. What might be the immediate and longer-term outcomes for Northamptonshire and beyond? What might happen if cost effectiveness becomes a criterion for change?
  • Post-Carillion, a range of issues around public/private partnerships, joint ventures, contracting out and the impact on frontline and support services will present both problems and opportunities. There will be policy consequences and a domino effect will bring financial consequences.
  • The scale of the problem of children’s social care funding is finally receiving the attention it deserves, but still seemingly in the queue for attention behind adult social care funding.

Sustainability and transformation partnership public consultations are due soon. How genuinely involved has local government been and what has gone through its decision-making processes? It will be interesting to see if the plans are a co-production with local government or NHS-focused, if the proposals are costed and risk assessed, if the plans carry political support, and if they meet the longer-term test of NHS sustainability and transformation when funding dedicated for that purpose has instead been spent on fire-fighting. To that test, social care sustainability should be added.

Brexit implications, housing deliverability and other challenges can be added to the list but the fair funding review dominates and local government needs to face up to the choices it has. If the sector is split, hand-wringing will elicit no sympathy from people unable to access a decent level of service. The sector also needs to take some responsibility for accepting the long-standing, inequitable allocation of government funding across classes of local authority. It also needs to recognise, as do those who speak on its behalf, the dangers of a government-imposed funding system.

The funding of local government is so broken that fixing means rebuilding. That ministers and the civil service seem prepared to grasp that in a way the LGA is unable to match is something on which to reflect. The system is now so skewed that someone must lose out in a fair or fairer system, even if there is a transition period. To dismiss that is unhelpful.

Whilst special interest groups of councils will continue their lobbying of ministers and MPs, at the same time keeping a close eye on the fair funding review’s technical stage and the LGA’s input, it would do the sector no harm to put other options on the table, particularly if those groups believe their own cases are so strong.

The deepest well of knowledge of local government finance is within the Chartered Institute of Public Finance & Accountability. Alongside that is an understanding of politics and the history, at least from Layfield to Lyons and since. The Institute can also claim a degree of independence. It is a fair question as to who might request it, but a report from Cipfa analysing the current funding regime and recommending a way forward and what that would mean for local authorities and taxpayers could only be a valuable contribution to the debate and consultation.

Recognising the interests of its members, how Cipfa would compose such a report would have to be for it to determine. As sensitive as that could be, the idea that Cipfa contributes directly to the debate seems both logical and desirable.

Then there is the commission option. Ruled out for taking too long (they can be time-limited) or for giving voice to experts with unwanted views, commissions are now spoken about, royal or cross-party, in the context of adult social care. Why not children’s social care? Indeed, why not the whole of local government funding, given social care is the majority and under strain, with the rest, not just the non-statutory services, being left behind?

There would be risk and a commission would have to be time-limited but since no one really believes local government in its current form is sustainable, the sector should be looking at this sort of option. To dismiss that as well would confirm that the sector would prefer to maintain a system so unfair that its beneficiaries admit the reality. Whatever that shows, it isn’t leadership.

John Sinnott, chief executive, Leicestershire CC


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Readers' comments (1)

  • In the latest fair funding for schools formula all schools were promised 'stability' - despite its often manifest unfairness and vast expense.

    Surely similar fair funding for councils can be achieved?

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