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What we can learn from Liz Truss

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LGC’s essential daily commentary.

What can we learn from Liz Truss’s comments at the Local Government Association last week?

In normal times the chief secretary to the Treasury advocating greater devolution of powers to councils, including freedom to raise more income locally, would be music to the sector’s ears, especially in a spending review year.

However, as we well know, these times are far from normal. Given it is far from certain this government will be in office much longer, Ms Truss’s own position is inherently precarious.

Despite her recently revealed ambition to be the next leader of the Conservative party, unveiled in the Mail on Sunday yesterday with an attention grabbing proposal to build a million homes on green belt, her insistence that the spending review will be for three years is unlikely to be worth the air it was carried on.

Even if Theresa May is still doggedly hanging on in the autumn, when the spending review is due to report, no future Conservative prime minister would want to back plans that would tie their hands on major spending decisions until 2023. Amid constant complaints about a lack of ministerial bandwidth amid Brexit, one might query whether Ms May and chancellor Philip Hammond believe they have the capacity to work on a three-year deal which is unlikely to be fully implemented.

If there were to be a change of government before the autumn, this would probably lead to a general election which would leave little time for a spending review.

Most likely the spending review will launch its call for evidence ahead of Parliament’s summer recess, as planned; councils and their representative bodies will craft their arguments and compile the data to support them, only for Ms May to be toppled sometime between now and early autumn (will the Tories really go into another conference with her as leader?). Whoever enters Number 10 will, at that late stage, have little sensible option other than to set a one-year spending plan.

More encouraging was Ms Truss’s suggestion there would be more money available for special educational needs and disabilities funding and children’s services. While the same rules apply in terms of Ms Truss’s survival in post, the specific nature of this statement suggests the argument that these services are in desperate need of additional funding has been heard and accepted in the Treasury, increasing the likelihood it will survive a change in administrations.

The same goes for her reference to the £18bn business support budget as a potential area for cuts, and, let’s hope, her reference to simplifying the vast array different funding streams that councils can receive money from, as long as that is not just an excuse to cut them overall of course.

The Leeds born child of a Green party member, Ms Truss is not a typical Tory, and is a definite outsider in the overcrowded leadership race. Latest odds put her at 66/1, level with Mr Hammond and only slightly ahead of recently disgraced defence secretary Gavin Williamson. Nevertheless, she is clearly a player and is likely to pop up in any future Tory government, making her views on wider policy of more than a passing interest.

Ms Truss waxed lyrical about devolution during the debate on the spending review. Perhaps there was a little playing to the audience but at times she appeared genuinely enthusiastic for a pretty radical vision of “more freedom for local authorities and more powers to raise money” and for councils to “be held to account for the money they’re raising and the services they’re providing”.

She described business rates as a “not very good tax” that should be reduced. She didn’t have a clear answer on how that would be compatible with local government’s increasing reliance on the tax.

Her positive and unprompted mention of the Institute for Fiscal Studies recent report on fiscal devolution, which suggested three pence in the pound of income tax could be devolved to councils, did though cause a few finance types to prick up their ears.

However, barring any major turnaround in the fortunes of her leadership quest, the bigger question remains whether the Treasury is looking at the report with the same interest.

Sarah Calkin, deputy editor 


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