City Deals, new local government and the LGA

Steve Bishop is Strategic Director for South Oxfordshire and Vale of White Horse District Councils

City Deals, and other funding initiatives, are changing local government in a way we’ve never seen before. With that change, characterised by a move away from a collective, family way of operating in local government to more direct negotiations with Whitehall on an individual or tailored group basis, comes a shift in relevance of some long standing and arguably cherished institutions. Chiefly, I’m thinking of the LGA.

Recently we saw the Core Cities group serve notice of their intention to leave the LGA. It marks the beginning of a new era in some ways but for the vast majority of us, the LGA remains, at least for the time being, a vital ally in our dealings with Government.

It’s really no surprise though that this announcement came from the Core Cities. The pace and complexity of development going on among the first wave of City Deals is genuinely ground breaking for local government. Whitehall has said ‘everything is on the table – if you want something just ask for it and we’ll see what we can do’ – and large concessions, from what I understand, are being granted.

So on a regular basis now, these cities are hammering out deals with Government that the LGA can’t be expected to keep up with. I think the Core Cities are just recognising, in a completely non-arrogant way, that they’re different in so many ways now and they don’t really require the kind of mainstream representation the LGA does best.

As a representative of one of the groups bidding in the second wave of City Deals (Oxford/Oxfordshire), I’ve had a chance to look at some of the proposals coming from the first wave cities and we’re talking about some pretty radical stuff. Take earn-back, for example, which is similar to the business rate retention scheme but applies to other taxation revenue streams such as VAT and income tax. At least two of the first round cities have said ‘if we generate a lot more business and do our bit for the economic recovery we want some of that back’. If councils are investing in infrastructure, using Compulsory Purchase Order powers, regenerating tired sites, attracting new business to their areas and creating new grant pots for start-ups with their own money, as well as some Government money, then they need to be rewarded for taking those risks. Accessing VAT and income tax revenue, for example, requires complex negotiations and it isn’t clear how an association or professional body would really add value to that process, particularly when they have so many other members to represent who have very different needs.

All that said, during the 12 months leading up to the financial reforms that kicked in on April 1st of this year, including the very late settlement over Christmas, we think the LGA has fought as hard as we’ve ever seen them fight for local government generally. So much so, that one of my council’s, Vale of White Horse, decided to remain an LGA member having served notice around 18 months ago.

With all the work they did in 2012, and in particular, for us, with my pro-LGA/DCN Chief Executive, whose role is shared across the Vale of White Horse and South Oxfordshire, we were able to demonstrate to our Leaders that the LGA were really adding value for us. And with the uncertain road ahead in local government, it actually wasn’t a difficult choice for us to remain with the association.

I’m not sure if the LGA rallied a little after a few councils served notice on them in 2011/12 – the chances are they’d have done the same sterling work they’ve done anyway – but it was a shot across the bows and they responded well to it.

In particular I think they’ve got better at being seen to be doing a good job as well as actually doing the hard bit behind the scenes. That’s something we’ve all had to get to grips with in local government in recent years – we’ve had to learn to sell ourselves and sell our successes to demonstrate we’re doing a good job. The LGA is doing that much better.

It could be that in a few years’ time the second wave cities may feel the same way as the first wave cities do now but in the meantime the LGA are doing a great job for us in a very difficult time for local government.

I think the LGA’s recent ferocious funding cut by Government will engender greater solidarity among the local government family.