It is not yet clear which one of the new ministers appointed to work with Eric Pickles at the Department for Local Government will be handed responsibility for local government.
However, if it is Nick Boles, who has been given the planning brief at the Department for Communities & Local Government, then the new man has already given some clear signals about his priorities for public spending.
Newly promoted ministers – or those with their eyes on a post – usually go to great lengths to avoid making overly bold political statements. Who knows which policies you’ll be called on to defend or oversee?
However, in the case of Mr Boles - a former Westminster City Councillor and director of the Policy Exchange thinktank – he recently delivered in crystal clear terms a personal manifesto for prioritising public spending in a time of austerity.
In a speech given just six weeks ago, Mr Boles outlined a series of principles that would appear to sit uneasily with some of his new department’s most contentious policies. And he plainly stated that universal free bus travel for the elderly should be revoked while the proposals of the Dilnot Commission to introduce a cap on individuals’ care costs should be deferred until a way can be found to pay for them by making cuts elsewhere.
Mr Boles said that the clear focus of the Treasury should be to boost the productivity of British workers and the competitiveness of the British economy. To this end, four principles should guide the prioritisation of public spending:
- That growth in public spending as a percentage of GDP should be restricted to those programmes with measureable impact on the productivity of working people and the competitiveness of the British economy
- That spending on other priorities should be restrained so that spending on all of them combined is gradually falling as a percentage of GDP
- That spending programmes that have enjoyed the most rapid growth in recent years and that do not contribute to improved productivity or competitiveness should be the first targets for substantial cuts
- And that new public spending commitments should be ruled out altogether unless they can be funded entirely by diverting spending from other existing programmes
Mr Boles did not shy away from some of the conclusions these principles led him to.
“My fourth principle would imply that the government is right to defer full implementation of Andrew Dilnot’s solution to the future funding of social care until the next comprehensive spending review,” he said. The go-ahead should only be given if sufficient savings can be achieved through the integration of health and social care or changes to benefits for older people.
His third principle, meanwhile, meant cuts should be targeted at benefits and tax credits – and universal benefits for the elderly were again in his sights.
“Spending on universal benefits for the elderly (the winter fuel allowance, free prescriptions, free bus travel and free TV licenses for the over 75s) reached roughly £4bn in 2010-11,” he said. “Does anyone here think it would be responsible for a country in our financial position to go on giving a free TV license to Michael Winner, free prescriptions to Lords Sugar and a winter fuel allowance to Sir Paul McCartney after 2015?”
Now there will surely be some councils that would like nothing more than to be freed from the obligation to fund concessionary travel for the over-60s. But Mr Boles’ position also raises some interesting questions on where he stands on reforms to council tax benefit. The government’s decision to protect pensioners from the changes means the effect of the 10% cut falls disproportionately on working age claimants, potentially damaging work incentives. Furthermore, his new department has vehemently resisted any proposals to give councils the freedom to be flexible over whether, say, all single people continue to receive a 25% discount on their council tax bills. This, after all, was the only way that a 10% cut to council tax support could be delivered whilst mainly protecting the working poor, according to a recent piece of research by the Institute for Fiscal Studies. Will Mr Boles quietly fall in step with current departmental policy on this issue if he’s handed the local government brief? You never know, he could equally want to see further cuts made to funding for council tax support.
Mr Boles does not believe that spending on the NHS should begin to fall in real terms and should perhaps by kept constant as a percentage of GDP. This means the cuts should fall on other areas.
“We will have to hold down spending on policing, defence, the prison service, the environment, agriculture and the arts so that the overall budget for government programmes that do not make a big contribution to the improvement of productivity and competitiveness gradually falls as a percentage of GDP,” he said.
Lastly, Mr Boles makes clear that all departments should be asked to identify those programmes that contribute to improving productivity and competitiveness and to submit detailed evidence of their actual or potential impact. In making a bid for more money, a department would be opening itself up to a disproportionate budget cut should it fail to convince.
How Eric Pickles’ £250m fund to encourage a return to weekly bin collections would stack up against that measure is likely to remain a moot point.
But should such a philosophy hold true for councils – no reason why it shouldn’t – it’s possible the queues of councils lining up to meet the ministerial team at Eland House following the announcement of the local government settlement this winter are a touch shorter than usual.
- To read Nick Boles’ speech to the Resolution Foundation, click here