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A Budget for Devolution?

A Budget for Devolution?

Cllr Paul Watson, Chair of the Key Cities Group | The Key Cities Group

4 min read Partner content

Sunderland City Council Leader Cllr Paul Watson, Chair of the Key Cities Group, writes for PoliticsHome assessing last week's Budget from a local and regional authority perspective.

The 2016 Budget revealed some harsh truths for the UK. The global economic outlook is serious, growth forecasts for the next five years have been cut, and productivity growth remains sluggish. For local authorities, this has meant deep budget cuts impacting further on vital services. Although councils have displayed great resilience and capacity for innovation, there are only so many savings which can be made, and this budget did not provide local government with any respite.  

There were some interesting ideas introduced, including new incentives for garden towns, a Starter Land Fund to bring brownfield land into use, and promises that it will be easier to bring public land into use for housing. Anything that helps us get more homes built is welcome, but an issue like housing is not one where the Government needs to lead every charge. That in a way was the most disappointing aspect of the Budget – there were lots of initiatives announced for the Government to solve problems, but not many new steps to help councils solve problems for themselves. Many local authorities, for instance, are desperate to raise the Housing Revenue Account, so they can borrow to build more homes. Many Key Cities members are also eager to take responsibility for how we manage developments, and willing to account for how we spend our constituents’ money. All we need the Government to do is let us to get on with it.

I was encouraged to hear news on city deals for Cardiff, Edinburgh, Swansea, Greater Lincolnshire, East Anglia, and the southern counties and cities. It is good to see local authorities gaining more control over the way in which they deliver services. I am afraid, however, that we’re falling into a standard, predictable, and unimaginative form of devolution. Cities and regions as diverse as Newcastle and Sunderland, East Anglia, Cardiff, and Birmingham are all being offered the same basic structure and spread of powers. In our attempt to loosen up rigid central control, we’re falling back upon a universal structure of devolved authority prescribed by Whitehall. Our cities, towns, and regions need structures built around their social needs and economic strengths, so we need to challenge the idea that the same offer will work for everyone.

We also need to consider what local authorities can do with new powers if they don’t have the corresponding resources. The announcement that the Greater London Authority will retain all business rates showed that the Government has realised that individual boroughs keeping their revenues would lead to gross inequalities. I hope that they consider further ways to make sure that business rate devolution doesn’t perpetuate these inequalities. The Government rightly wants councils to be accountable for the money they raise and spend, so I say to them, be bold and move further on fiscal devolution. Let councils which want to change their tax policies do that, and let them be held accountable.

Accountability is also the key to what was the Chancellor’s most surprising, if slightly off-brief, announcement: the compulsory academisation of schools in England. From a local authority perspective, I am afraid we would still be held accountable for the performance of our schools, without being able to oversee how they do. As The Guardian has stated, councils would still be required to make sure that pupils have a place, but couldn’t order academies to expand. There are also financial questions that must be addressed. Academisation involves a complex set of costs, involving legal fees, land transfers, and a whole range of other issues. Local authorities simply aren’t in a position to shoulder more costs like this. The final point is that academies may not be the best school structure in all places – like many things, academies work best as an option, not the only option. Calling a school an academy does not automatically improve performance. The idea of imposing another universal structure on all parts of the country runs against the current of the Chancellor’s “devolution revolution”, and I believe it could be reconsidered.

In all, this Budget didn’t improve the big picture for local authorities. We’re still facing huge budget cuts and rising demands for local services. Further devolution deals are welcome, but I would like to see some more imaginative thinking to free local government to solve the problems they currently face. New fiscal powers for example would be very welcome, both in terms of delivering for our communities and providing accountability for our new responsibilities. We are happy to be accountable, and to answer for the choices we make. Our local authorities are willing to cooperate with central Government, and I’d urge ministers to see us as such, and take up our offer of partnership.

Cllr Paul Watson is the Leader of Sunderland City Council and chair of the Key Cities Group

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