Richard Harbord: Parliament’s back, but where’s the agenda for local government?
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Richard Harbord
As parliament returns (albeit briefly before the party conference season) it is worth considering the big ticket agenda items affecting local authorities.
The great concern is that the current major changes effecting local government will falter and be delayed. Not least because of a widespread belief that a number of able civil servants are being moved from their current departments to help the effort to remove Britain from Europe.
Brexit
There is clearly a problem in this process: before you can negotiate you need to have some idea of where you want to end up and it just doesn’t feel like that at present. Recent speeches have been pure waffle with no substance.
And the uncertainty regarding the future because of Bexit is going to be difficult for local authorities. Before 2020 there is around £5.3bn of regeneration funding at stake.
Commitments made by the chancellor are not enough, but there is hope that there will be more certainty in the Autumn Statement on November 23.
Pensions and business rates
The major changes that are at stake elsewhere in the local government world are particularly in pensions and, of course, business rates.
The changes in the Local Government Pension Scheme are far reaching . Local authorities are being forced to pool their funds in a number of pools.
Local authorities have been free to choose their future pools but they are not very happy with the current governance rules being imposed on them. They feel that decisions that should continue to be made locally will be made at pool level.
Central government underestimates the attachment local authorities have to their pension arrangements, and the proof of the pudding will be in the returns that the new system produces. That said, the Treasury feels that the success will be measured in the reduction of management fees paid to investment managers.
The meetings of the joint DCLG/LGA steering committees for business rates continue. Responses to the first discussion paper should be in by now but there will be a more technical discussion paper in late autumn. There are many many items still left for decision which have yet to be put to ,inisters and also need comment from the LGA elected members.
This discussion paper will contain items not needing primary legislation so there is time to resolve issues there.A further issue with business rates, however, is timing. The Bill with the substantive matters is expected in spring 2017. Local authorities, therefore, won’t have any certainty until late 2018. Much depends on the outcome of the fair funding work being carried out by another subgroup. But the work here will not be complete until 2018.
There are still some authorities with high expectations that they will be retaining nearly all their own business rates. I fear there may be a degree of disappointment.
There are still big question marks over safety nets and top-ups and whether local authorities will still have to provide for losses on appeal, or whether a system can be devised which meets these losses centrally.
Remember the change is to be fiscally neutral and the money, if found, will come in some way from the quantum.
Then there is the recent consultation paper on the introduction of a new system for dealing with appeals for business rates. We had expected more frequent revaluations but will the replacement for the current freedom to appeal have the desired effect?
Appeals currently run at 67% of the list. The government believes a dramatic reduction is possible, perhaps to around 20%. Many doubt that this will be so.
The same consultation paper if agreed would see local authorities have no chance to be involved in proposals themselves.
Devolution
Then there is the concern of the future of devolution deals. It has been said that the new prime minister does not have the same attachment to the Northern Powerhouse which was, of course, very much a concept pioneered by the previous chancellor, George Osborne. And there is also some doubt over elected mayors.
I will return in a future article to the publication of the 2015/16 outturn. It shows that local authorities reduced their reserves but I fear it shows rather more than that.
Richard Harbord is a former chief executive of Boston Borough Council.
