Local government faces a policy logjam, with reforms to social care and council finance probably thwarted, after the Conservatives failed to win the general election outright.
The minority government outcome, with no agreement between ministers and the Democratic Unionist Party has already plunged the legislative programme into uncertainty with the Queen’s Speech, due to take place on Monday, set to be delayed.
LGC has spoken with a series of senior figures in the sector of whom only former civil service head Lord Kerslake (Crossbench) expressed hope that social care funding could be reformed.
Jo Miller, president of the Society of Local Authority Chief Executives & Senior Managers, said she was “not sure that this parliament has the wherewithal” to reform social care.
She said Ms May’s administration will have “less time for local government” but warned the sector’s finance system is facing an “abyss” in 2020, when revenue support grant and the better care fund are due to disappear. The Local Government Finance Bill, which was set to pave the way for the national rollout of 100% business rates retention, was dropped before Parliament dissolved and it is not yet known if it will be revived.
Sean Nolan, head of local government at the Chartered Institute of Public Finance & Accountancy, said the Tories’ handling of the social care policy had “made the topic quite toxic”. He said the challenge of having an open discussion about social care reforms had got “a bit harder and that’s not good for local government”.
A Conservative manifesto commitment for a £100,000 capital floor on the amount people would pay towards social care, initially presented without a cap and labelled a ‘dementia tax’ by critics, is widely viewed as the turning point in the election campaign.
In an interview with LGC, Local Government Association chairman Lord Porter (Con) warned the social care issue, along with concerns about schools funding and the housing crisis needed to be tackled.
“Just because the national Parliament is in a bit of a state it doesn’t mean to say the problems have gone away – they still need to be fixed,” he said.
Lord Porter said resolving how councils will be financed in the future “needs to be addressed as a matter of urgency”. He said the fair funding review, which will reallocate resources between authorities, should go ahead “at pace” even though it will be contentious.
Any plans for local government reorganisation would “be off the table”, Lord Porter warned, due to the issue being too “politically toxic” for the government to deal with.
The LGA chair described the election result as a “surprise” but refused to call on Ms May to step down as prime minister.
He said: “If the Conservative party lose their sense and replace their leader, that [incoming] leader is going to have to go to the country again. You won’t find anyone who wants to have another election out there, particularly not in the Conservative party.
“They need to realise there are some big problems that need to be solved and they need to put the resources into solving them.” He said the sector should present “solutions to problems”.
One senior local government source expressed hope the minority government offered councils some scope to influence policy and to “get on with the domestic stuff” while ministers were “tied up with steering Brexit through a difficult Parliament”.
Ms Miller suggested local government could offer regional alternatives to centralised welfare policies that were currently having an overall negative impact on public finances.
Lord Porter said he was “massively happy” Sajid Javid – who has a lukewarm relationship with the sector – had been reappointed communities secretary as “we’re hitting the ground running straight away”. Mr Javid was due to reconvene his weekly meetings with LGA representatives on Wednesday.
The very centralised nature of Ms May’s leadership has held up many reforms and made it hard for ministers to shine in the past year. Ms May has, however, lost her two closest aides, Nick Timothy and Fiona Hill, who resigned on Saturday in a move which could enable her to reappraise her approach to power. Former housing minister Gavin Barwell, who lost his seat in Croydon Central, has been appointed the prime minister’s chief of staff.
Lord Porter said Mr Barwell’s appointment “can only be good news for local government”. Former Foreign Office minister Alok Sharma, a qualified chartered accountant who worked for 16 years in banking, has been appointed the new housing and planning minister.