Richard Harbord: The ‘indecent haste’ of devolution
0Clearly the hot topic in local government at present is devolution. The government gave a short deadline for submissions over the summer and this has led to frenzied activity. It all needs to be settled before the public spending review.
However, I find it all very confusing and with so many models being put forward with apparent endorsement from the DCLG, Prime Minister etc., I just hope it is not all going to end in tears.
Local authorities started to get excited about the possibilities offered by devolution the night of the Scottish referendum when it was obvious that there would be greater devolution to various parts of the United Kingdom.
The starting point has to be that we are in austerity and that resources are finite and diminishing. According to published information at present local authorities will experience further cut backs over the next two years at least.
Devolution is not going to increase the resources available although it will redistribute what is there and, in some cases, give more local authority control over EU monies etc.
There is obviously much commotion to sort out partners currently and that is not all going smoothly and there is a worry for districts about how they will fare in all this. Some counties are better at including districts in their bids than others.
There are also other agreements being reached with DCLG over other parts of the future funding. A local authority has just concluded a deal whereby it agrees to give up all its government grant in return for retention of all of its business rates.
Deals like this are, I think, worrying. As I’ve said before, business rates form a finite national pot and finances various reliefs and also the safety net. Arrangements like this obviously effect the total available and will distort the position for others. It is argued that that was the original intention to retain all business rates but there are reasons why that is not fair for all authorities.
Also, if you as an authority agree this sort of deal you have got to be pretty sure that your business rate will grow and that there are no large ratepayers who could get a big reduction on appeal, or go bankrupt and leave you in a difficult position. We have just heard how the success on appeal of EDF on power stations has removed 20% of an authority’s total rateable value.
There are other difficulties which I think are fundamental. Clearly there is a big difference between delegation and devolution, and authorities will be looking for autonomy over the way funds are used. I think that central government do not see the distinction quite as clearly. There still hovers the question of elected mayors. Cornwall escaped this in their agreed deal mainly it is said because of the simplicity of their structure, one unitary, one LEP and one CCG.
A big part of the deals announced to date is the integration of health and social services. Although there are models around and being developed and there is good experience of pooled budgets, there have been no real suggestions about the acute sector and other specialities. The government is in big trouble in funding the NHS and local authorities need to be wary about what they are signing up to in health where they have no experience at all.
There is a very large disparity of types of combined councils being worked on involving mixtures of all sorts of unitaries, counties and districts, ensuring everyone is dealt with fairly is going to be difficult indeed.
In London the leaders are resisting attempts to merge into super boroughs. In their proposals some money would go to individual boroughs, some to several boroughs in a group and others London wide. Previous attempts at pan London offerings have not always been successful.
It is said that because of the major change there will be a House 0f Commons debate this autumn. It may be that this will not be easy for George Osborne to manage given the slender majority the government has.
This is all being done with indecent haste and I just hope when all the individual deals are added together they still align with austerity.
