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Simon Edwards: Hammond must deliver funding based on real need

Simon Edwards
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This year’s County Councils Network conference comes at an important time, concluding on the eve of the Budget with the local government finance settlement following hot on its heels.

Sandwiched between those two set pieces will be plenty of stories and announcements exploring and debating not only the financial plight of local government but the future structure and role of councils in growth, public service reform, and devolution.

The conference presents its member councils with the opportunity to set out their stall on the big issues facing local government.

Top of their agenda will be how they face up to further major funding reductions, coupled with unprecedented demand on services, at time when there is continuing uncertainty over the future of local government finance, including the fair funding review.

This is why the theme of this year’s conference is ‘a new deal for counties’. There is a growing feeling within the county family that while there are serious financial challenges facing our member councils, there are also opportunities if the government provides sustainable and fair funding, coupled with new powers to drive growth and place-based public service reform.

The immediate goal of the ‘new deal’ is to secure additional resource for counties in the Budget or settlement. CCN’s budget submission shows its 37 members collectively face a £2.54bn funding black hole by 2021.

Whilst local government, unfortunately, tends to find itself at the back of the queue should public money be found, we have seen debates around the financial sustainability of social care infiltrate the mainstream. The government risks sleepwalking into another social care funding crisis, not only in adult care, but in children’s services too.

CCN has also been advocating other solutions to help ease the pain for counties such as the extension of transition grants, but the focus of the conference will be on the long-term future of local government finance too.

While there is much talk on the future of business rates retention, the fair funding review is beginning to pick up some momentum and our members won’t let up on making their voices heard.

There is a near unanimous view across local government of the need to rebalance funding, but there is a debate on what reform could look like.

For CCN, a fairer funding formula for counties should be a simple, cost-driver formula, which funds councils based on need. This need should be based on the cost of delivering present and future services, not regressively focused on past spending.

Importantly, the review must it be undertaken in tandem with the publication of the Social Care Green Paper and business rates reform.

The additional quantum must be used to plug existing gaps and facilitate a quick transition to the new formula. Whether this is through 100% retention, or greater retention combined with grant funding, it is essential funding reaches the areas and tiers most in need.

Moving away from local government finance, the conference will explore the vital role counties will play in an effective industrial strategy.

Last week, Localis and CCN published a report, In Place of Work. It explored how local areas can have new powers to influence their local labour markets, better matching supply to demand and allowing them the tools to train the workers of tomorrow, in collaboration with local partners.

Importantly, Localis put forward a practical and achievable framework. It didn’t skirt around the contentious issues of geography and governance in advocating ‘strategic authorities’ based on 47 areas, which, in county areas, would see the county placed as the lead authority.

As Liam Booth-Smith recently wrote, this isn’t out of love for counties but of what is recognisable to the public and business, acknowledging the need to harness counties’ size, capacity to deliver, and their knowledge of local economies.

Recent suggestions that the forthcoming industrial strategy whitepaper will back local enterprise partnerships and their geographies as the lead bodies for implementing local industrial strategies will be a hot topic at CCN conference.

Counties have good relationships with their LEPs and they make them work in their areas; despite many of their illogical overlapping geographies and their records on accountability and capacity to deliver.

But if the industrial strategy is to deliver place-based growth, then it needs to embrace this strategic authority model, built around existing county boundaries, underpinned by a much broader devolution settlement.

Next week at our conference another major think-tank, ResPublica, will back the case for devolution to counties.

ResPublica analysed two-tier county areas, putting forward compelling new evidence for devolution to these areas, concluding that new forms of local government are needed to break the devolution deadlock, whether that be reformed and retained two-tier or single-county unitary status.

With the recent decision on Dorset hot off the press, I’m sure this report and the wider agenda at this year’s conference will generate robust debate on some of the biggest challenges and opportunities faced by county authorities.

We look forward to welcoming the great and good from local government and beyond at the weekend.

Simon Edwards, director, County Councils Network

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