• Home
  • About
  • Subscribe
  • Conference
  • Events Calendar
  • Webcast151
  • MOTB
  • Log In
  • Register

Room 151

  • Treasury
  • Technical
  • Funding
  • Resources
  • LGPS
  • Development
  • 151 News
  • Blogs
    • David Green
    • Agent 151
    • Dan Bates
    • Richard Harbord
    • Stephen Sheen
    • James Bevan
    • Steve Bishop
    • Cllr John Clancy
    • David Crum
    • Graham Liddell
    • Ian O’Donnell
    • Jackie Shute
  • Interviews

Agent151: Review of 2017-Brexit, social care, disappointing budgets, Grenfell

0
  • by Agent 151
  • in Agent 151 · Blogs
  • — 20 Dec, 2017

Councils started 2017 with increasing costs and diminishing funding and ended it with worse pressures and no financial relief.

The year was overshadowed by two events: Brexit and Grenfell Tower. But there were plenty of other issues keeping councils busy too, including business rates devolution, pensions pooling, MiFID II, social care overspending, STP’s, and investment in shopping centres to mention but a few.

Brexit was a source of worry for councils. Indeed, that was its main impact in 2017: causing worries about lots of things councils couldn’t do anything about. Councils worried about the potential impact of a hard Brexit.

No-one could really quantify what this meant, which made it even more worrying. What would Brexit mean for devolution, for local investment, and for the legal framework?

No answers here either, and consequently another set of worries to add to the first. Were there no answers because no-one knew, or because the government didn’t want to give away our negotiating strategy to the EU by saying too much? We don’t know.

A further impact for councils to fret about was that Brexit quickly became the ultimate excuse for the civil service to lighten its load. Can’t respond to an issue on time — or at all? Sorry, all our people are working on Brexit.

Explanations & Inquiry

MiFID II threatened to spoil the fun of local authority treasurers by relegating councils to the status of retail investors unless they could meet qualitative and quantitative tests and be accepted as professional clients by the end of 2017, and a race against the clock ensued.

No-one has yet managed to successfully explain why this European Directive was at all necessary, and at least one treasurer was overheard muttering something about Brexit couldn’t come quickly enough.

There is nothing at all amusing to say about the Grenfell Tower fire on 14 June 2017. A tragedy of national importance, it has led to a long overdue focus on fire safety in tower blocks, major change at the Royal Borough of Kensington & Chelsea, and an inquiry that may take years to conclude.

The names of all those lost in the fire may never be known. Many of the grieving survivors are still not in a permanent replacement home. There is so much left to do. Agent 151 doffs his cap in respect and sympathy to all those affected, and in pride to those in local government and the emergency services who stepped up when they were needed.

No show bill

The Queen’s Speech on 21st June set out 27 bills, of which eight related to Brexit, but there was little or nothing for local government. The promised Local Government Finance Bill, which was needed to implement 100% retention of business rates, did not feature, presumably because people would be too busy writing Brexit legislation.

This restricted the scope for business rates retention to an expansion of the number of pilots. Council treasurers, who had seen business rates retention as a welcome patch of blue sky in an otherwise stormy firmament, went back to grumbling into their favourite beverage.

There was no suggestion in the Queen’s Speech of any additional cash to help with social care overspending. The fact that it had emerged as the largest single pressure for councils proved not to be news to anyone, as it had also been the single biggest pressure in 2016 and for a while before that, and so the government was able to avoid committing to anything more than a green paper.

Property

As the year wore on, councils like Eastleigh, Kettering and Maidstone were accused of playing Monopoly with taxpayers’ money and operating in a market they didn’t fully understand because they had invested general fund resources in commercial property, seeking a return with which to prop up ailing revenue budgets.

There was a suspicion that the figures championing this anti-investment line had been lobbied by property investors who were miffed at councils being able to borrow cheap PWLB funding in order to invest; this being perceived as unfair competition.

It was not long before DCLG launched a consultation entitled ‘Proposed changes to the prudential framework of capital finance’.

By the time we got to the budget, which was in November for the first time, because the new spring report replaced the budget and the budget replaced the autumn statement, the green paper had been pushed back to the summer of 2018.

Indeed, there was almost nothing of interest for councils in the budget, other than some tinkering with business rates and council tax. The really bad news was that economic forecasts had been revised downwards, requiring more borrowing and ensuring that austerity would have to continue for much longer than anyone could possibly bear.

We have yet to see what the local government settlement will bring. Let’s hope against hope that it’s some Xmas gifts from the Chancellor. Merry Xmas everyone.

Agent151 is a senior local authority finance director and s151 officer writing exclusively for Room151.

Get the Room151 Newsletter

Share

You may also like...

  • Credit spreads in focus Credit spreads in focus 2 Apr, 2012
  • New realities of investing cash and liquidity: “What to do now?” 13 Jan, 2021
  • LGPS: Liabilities, regulatory pressure and de-risking LGPS: Liabilities, regulatory pressure and de-risking 18 Jul, 2016
  • Preparing the accounts Preparing the accounts 15 Apr, 2014

Leave a Reply Cancel reply

You must be logged in to post a comment.

  • Register to become a Room151 user

  • Latest tweets

    Room151 9 hours ago

    Budget 2021: A missed opportunity while bidding could prove a strain: The chancellor delivered the budget this week giving councils the opportunity to bid for funds but offering no resolution to long-term issues such as business rates retention, adult… dlvr.it/Rv2llw pic.twitter.com/8RwHboQAnL

    Room151 2 days ago

    ESG presents LGPS with investment innovation opportunities: Sponsored interview: Dawn Turner of Quinbrook talks about the opportunities in environmental, social and governance issues for LGPS. LGPS has the opportunity to innovate in its investment… dlvr.it/RtyK3Y pic.twitter.com/swAksOAXYQ

    Room151 2 days ago

    The opportunity in the UK renewables and grid support market as UK looks to ‘build back better’: Sponsored article: Mark Burrows and Rosalind Smith-Maxwell examine infrastructure opportunities emerging from efforts to meet the UK’s net zero target.… dlvr.it/RtyJyz pic.twitter.com/BQCYQZQpi2

    Room151 2 days ago

    McCloud consultation ends with “greater security” for LGPS members: The government’s consultation on LGPS, Catherine McFadyen argues, closes with a decision which avoids forcing members to make choices that could be “financially disadvantageous”. But… dlvr.it/RtxhL6

    Room151 3 days ago

    Could 2021 be less eventful for LGPS, please?: Barry McKay looks at McCloud, the 95k exit cap, employer risk and investments to see what to expect for LGPS in the coming year. On one hand, 2020 was in[...] dlvr.it/RtslFd pic.twitter.com/H4debuPmGG

    Room151 3 days ago

    Fixed income investing can help target both financial and sustainability targets: Sponsored article: Adam Whiteley offers a guide to the ESG benefits of investing in fixed income. Investing responsibly in fixed income can be crucial for local government… dlvr.it/Rtsl9h pic.twitter.com/khJL1xNfGh

    Room151 4 days ago

    Going beyond the standard metrics for climate change: Sponsored article: With climate change an investment imperative and an imminent reporting requirement, Ritesh Bamania argues UK pension schemes should look beyond today’s standard metrics. With… dlvr.it/RtnpLS pic.twitter.com/6ABaFHyS9I

    Room151 5 days ago

    LGPS webinar: Governance the key to TCFD implementation: LGPS funds have been warned that governance is it at the here of Whitehall plans to impose a new climate reporting regime on pension funds. In January the Department for[...] dlvr.it/RtjwNq pic.twitter.com/YMiMdmRyzU

    Room151 5 days ago

    LGPS webinar: Central bank management of bond purchasing could affect all asset classes: When the government debt caused by the pandemic is eventually tackled there may be a huge impact on assets of all classes, according to a leading investment expert… dlvr.it/RtjwJx pic.twitter.com/7v8K5vMYHo

    Room151 5 days ago

    #LGPS readers...what to do about #bonds? room151.co.uk/blogs/lgps-web… @BrunelPP 's new CIO, David Vickers tackles a problematic area #centralbanks #assetallocation #fixedincome pic.twitter.com/yUJr0azbKv

    Room151 5 days ago

    LGPS Challenges: Balancing Realpolitik and responsible investment: Elizabeth M. Carey warns of the perils of an ESG echo chamber as countries outside the West continue to invest in fossil fuels. Anyone working with the LGPS probably feels[...] dlvr.it/RtjMpq pic.twitter.com/MykIYxuYri

    Room151 1 week ago

    How can local government ‘build back better’?: Beverley Gower-Jones looks at the options for driving small business entrepreneurship in clean technologies. Innovation is essential for local authorities to save money and reduce emissions, it is the… dlvr.it/RtT3nS pic.twitter.com/bSMB6OG70t

    Room151 1 week ago

    Helen Randall: Spelthorne report places spotlight on ‘controls’: Fresh criticism of Spelthorne Council raises the question of what “good” controls look like when negotiating a property deal. Spelthorne Council’s continuing debacle over property… dlvr.it/RtSPhy pic.twitter.com/9uCOJgBcH6

    Room151 1 week ago

    Step-out strategies: Hitting the sweet spot between liquidity and ultra-short duration: Sponsored article: Jemma Clee describes how an ultra-short duration strategy can help local authorities enhance returns. Despite the expectation of a low, and… dlvr.it/RtSPZb pic.twitter.com/pdXPpv5lcN

  • Categories

    • 151 News
    • Agent 151
    • Blogs
    • Chris Buss
    • Cllr John Clancy
    • Dan Bates
    • David Crum
    • David Green
    • Development
    • Forum
    • Funding
    • Graham Liddell
    • Ian O'Donnell
    • Interviews
    • Jackie Shute
    • James Bevan
    • Jobs
    • LGPSi
    • Mark Finnegan
    • Recent Posts
    • Resources
    • Richard Harbord
    • Stephen Fitzgerald
    • Stephen Sheen
    • Steve Bishop
    • Technical
    • Treasury
    • Uncategorized
  • Archives

    • 2021
    • 2020
    • 2019
    • 2018
    • 2017
    • 2016
    • 2015
    • 2014
    • 2013
    • 2012
    • 2011
  • Previous story Business rates and council tax offerings in Javid settlement get mixed reception
  • Next story James Goudie, QC: Council commercial investments and treasury management

© Copyright 2021 Room 151. Typegrid Theme by WPBandit.