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Seize the tools

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Devolution of financial powers is a timely opportunity and the key is collaboration, says LGC editor Karen Day.

Eighteen months ago, local government minister John Healey conceded that his sub-national review (SNR) would be a slow burner.

Back then just a handful of authorities could see the potential of collaboration.

Little did any of us know just how crucial local government’s role in economic development was to become as the economic downturn set in.

Now the SNR has become a timely blueprint for the role councils should assume in managing their economies and tackling longer-term problems like worklessness and skills shortages.

This week the widely trailed Queen’s Speech unveiled the legislative strands to breathe statutory life into local authorities’ economic role.

And they take on the most powerful message in the SNR: that socio-economic problems never correspond neatly with council boundaries so the key is collaboration.

Seven multi-area agreements have been signed, with several more expected by the end of the year. Yet this week’s legislation moves this further with proposals for statutory city regions governed by economic prosperity boards.

There is already an appetite to take this step and these regions can expect greater devolutionary powers, including pooled and un-ringfenced budgets, to take them into a whole new sphere of local government.

For those that collaborate the future looks a lot less gloomy. The Treasury estimates just 1.1% growth in local government funding from the next spending review period, while efficiency pressures are likely to increase.

In such a tight economic climate the SNR message rings even louder and is a huge opportunity to overcome traditional political obstacles and create powerful sub-regional networks.

This week local government has been given a real framework: with primary legislation to enact the SNR, the return of 16-18 education to councils and a bill to create a business rate supplement.

The tools are there to reach the parts of society others have failed and it’s up to councils to seize these opportunities.

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