The £3 Billion Pound Question

Jason Lowther

The Institute for Fiscal Studies’ latest review of English council finances documents why so many chief executives and treasurers have been having sleepless nights since “whatever it takes to tackle Covid” transformed into “as little as we can get away with giving you”.

On Wilkins Micawber’s “income” side, Covid has hit councils’ commercial activities, notably around retail rents, as well as fees for facilities such as leisure centres, and revenue from local taxes.   On the expenditure side, councils are seeing persistent cost increases.  As Micawber predicted: “result misery”.

In social care alone, expenditure on the care of older people will need to increase substantially and quickly.  Adult social care has faced a combination of pressures arising from demographic change and increased costs, rising need and demand, and short-term funding settlements. 

The IFS recognises the huge uncertainties involved in predicting financial and economic issues at present, addressing this by analysing a range of scenarios.

The bottom line across all council services is a £3bn+ shortfall in 2020–21, with the IFS concluding this may well be an optimistic estimate, and a middle scenario projecting a gap of over £3bn a year by 2024-25.  Not surprisingly they conclude that “without additional funding and/or flexibility over council tax rates, it is highly likely that councils will have insufficient revenues to keep pace with rising spending needs”.

What to do about this?  Aside from yet more austerity, the IFS identifies changing the rules on council tax rises (which would increase inequalities between rich and poor areas), increasing government grants, or giving councils additional tax powers such as new local taxes.

Austerity, the sustained and widespread cuts to government budgets which characterised Britain’s public policy from 2010, has already shrunk the capacity of the local state, increasing inequality between local governments and exacerbating territorial injustice[ii].

Greater local freedom on taxation is well overdue in the UK, where a larger proportion of local government spending is financed through grants from central government, and much less use is made of local and regional taxation than in almost all other European countries[iii]

Although the body of existing academic evidence about the impact of devolving fiscal powers is inconclusive[iv], comparative research on how municipal governments function in a number of major international cities demonstrates that British cities have very low levels of fiscal autonomy[v] and lower productivity than these cities.  There are also positive effects on economic outcomes when powers are held at the appropriate level and when local authorities are incentivised to create pro-growth planning regimes[vi] 

It’s also worth noticing again that much local government funding is still distributed through competitions which place considerable pressures upon local authorities and partners[vii], and result in wasted effort and ineffective use of resources.  And, whilst councils and other public bodies can share resources and pool funds to deliver joint outcomes more effectively and efficiently, there are still legal, cultural, governance and other barriers to this collaboration. 

In the short term, government should cull competitive funding and address the barriers to resource sharing.  They must plug the £3bn+ funding gaps over this and the next few years.  And in the medium term much more local freedom on taxation and autonomy are needed to give local government a sustainable future.

Jason Lowther, Director – Institute for Local Government Studies


[i] Ogden, K. et al, 2020, COVID-19 and English council funding: what is the medium-term outlook?, Institute for Fiscal Studies

[ii] Gray, M. and Barford, A., 2018. The depths of the cuts: the uneven geography of local government austerity. Cambridge Journal of Regions, Economy and Society11(3), pp.541-563.

[iii] Loughlin, J. and Martin, S., 2003. Options for Reforming Local Government Funding to Increase Local Streams of Funding: International Comparisons. Lyons Inquiry into Local Government Funding.

[iv] London Finance Commission, 2013. Raising the capital: The report of the London Finance Commission. London, the Commission.

[v] Slack, E., 2016. International Comparison of Global City Financing: A Report to the London Finance Commission. Institute on Municipal Finance and Governance Munk School of Global Affairs. University of Toronto.

[vi] Cheshire, P.C. and Hilber, C.A., 2008. Office space supply restrictions in Britain: the political economy of market revenge. The Economic Journal118(529), pp.F185-F221.

[vii] Loader, K., 2002. What price competition? The management of competitive funding in UK local government. International Journal of Public Sector Management.

Simon Clarke – first his speech goes, then him

Chris Game

Boris Johnson didn’t start the modern trend of hyper-rapid ministerial turnover, but he did ratchet it up.  His election last July produced a larger ministerial cull than in any other recent transition between ministers of the same party, the Ministry of Housing, Communities and Local Government being no exception.

So, were you paying attention?  Can you recall who was the minister specifically responsible for English local government on the first day of Boris Johnson’s Premiership, and how many there have been since?

For a department not traditionally one of the most sought-after steps on the ministerial promotion ladder, 18 months in Marsham Street evidently did Rishi Sunak no lasting career damage. For he it was who was junior Local Government Minister when Johnson arrived and was promoted by him to Chief Secretary to the Treasury.

The number of Sunak’s successors is less straightforward, as, following Simon Clarke’s recent resignation, he is replaced by Luke Hall, the man he himself at least formally succeeded in the role barely six months ago. This was interesting, as back in February it had apparently been necessary for an MHCLG “spokesperson” to dismiss as “nonsense” rumours that Hall was being “quietly moved aside” because Secretary of State Robert Jenrick “does not rate him”.

Interesting, but marginal, for this blog, although again featuring MHCLG in a key role, is about Clarke’s resignation and its possible policy ramifications. In the BBC’s rather odd choice of library photo he himself looked positively delighted.  But his letter to the PM cited “purely personal reasons”, so, if distressing circumstances are involved, one must obviously sympathise.

I don’t know Clarke, but from a distance he seemed one of the more committed, interested and listening Local Government ministers (as opposed to Secretaries of State) we’ve had recently.  And, given the limited options, I felt reasonably positive about his taking lead responsibility for the local government part of the Government’s anticipatedly radical ‘Devolution and Recovery’ White Paper, long expected sometime this month, but now at the Conservatives’ virtual annual conference in early October – possibly, or possibly not.

I wasn’t expecting to like what the White Paper had/has in store for the future gargantuan structure of what we could once meaningfully call local government. Clarke, though, almost from the outset, enthused – talking of producing a “genuinely seminal document … helping the process of unlocking devolution everywhere and empowering communities on a scale never seen before.”

The ”everywhere” and “communities” seemed perhaps that bit more meaningful, given Clarke’s having apparently made a point of meeting personally with the National Association of Local Councils, acknowledging the role parish and town councils had played in responding to Covid, and talking of strengthening that role in the future – along, albeit, with the extensive unitarisation.

His departure does, therefore, leave several question marks.  First, the resignation’s sheer hint-less suddenness.  Second, Clarke’s personal – and very recently well publicised – centrality to both the content and presentation of the White Paper.  And third, almost inevitably, the ‘Was he pushed, or at least nudged?’ conspiracy theory – and ‘The Mystery of the Disappearing Speech”.

The Local Government Chronicle (LGC) recalled Clarke’s ‘ground-breaking’ July speech to a Northern Powerhouse audience, promising “a roadmap for establishing a series of new mayors within the next ten years – representing the greatest decentralisation of power in our modern history.”

The speech duly appeared on the Ministry of Housing, Communities and Local Government website … then suddenly disappeared.  A manifestly crass piece of business, whatever the motive, and, of course, guaranteeing immensely greater interest and speculation than it initially attracted.

Happily, therefore, LGC was able to satisfy this ramped-up curiosity by publishing the full speech on its website (see preceding link).  Which means, if any pushing from No.10 were involved in Clarke’s resignation, we can at least speculate about possible prompts.

“A new deal for the North”?  A £5 billion ‘New Deal’, rebuilding public infrastructure, creating thousands of new jobs, helping our regions “build back and bounce forward” – no, that rallying vagueness is almost straight Boris.

“New mayoral devolution”?  “Responsible and effective mayors representing 100% of the north of England.”  Again, Johnson playbook stuff.  He proved Londoners would elect a Conservative mayor, despite most boroughs being Labour-run, as have Andy Street in the West Midlands and Ben Houchen in Tees Valley.

Remember in December how voters in those North and Midlands ‘red wall’ – now ‘blue wall’ – constituencies elected Conservative MPs for the first time?  They should have a similar chance next April to elect a Conservative metro mayor in the new but traditionally very Labour West Yorkshire Combined Authority.

This is the Government’s apparent strategy: abolishing – sorry, combining – large numbers of already big city, borough and district councils into, by any traditional and international standards, huge unitary ‘Combined Authorities’ headed by directly elected and hopefully Conservative mayors, thereby simultaneously saving money and providing more ‘streamlined’, if hardly local, government.

All of which leaves at least as many questions as it answers.  Why the apparent rush, mid-Covid?  This seems best explained by the Winston Churchill/Rahm Emanuel injunction to “Never let a good crisis go to waste”.  Councils have been hit massively by Covid, with County Finance Directors especially warning throughout the summer of budget shortfalls and the looming necessity to issue Section 114 (Bankruptcy) Notices.

Housing, Communities and Local Government Secretary, Robert Jenrick, made it clear from the start that he saw no “long-term future” for two-tier local government and especially for all those pesky ‘lower tier’ Labour councils. Unitary councils with directly elected mayors would be “strongly preferred” by the Government in considering devolution deals – the major issue for debate being the preferred and maximum permitted size of said unitaries.

Minimum size seems likely to be 300,000.  The arguments will be over the maximum: the District Councils Network’s preferred 500,000; the 1 million+ that whole-county unitaries could involve; or something in between?  Clarke’s position seemed flexible, but not that flexible: definitely closer to the former than the latter.

These things are already under vigorous discussion, but, if elections to new authorities are to be held as early as 2022 or even 2023, the legislation needs to be in place by summer 2021. Without even mentioning the Br…. word, and Covid clearly not going away any time soon, could the departure of the key minister signal at least a slowing-down of the timetable?  Which would also postpone the point at which, along with all those Labour district councillors who would lose their seats, there would be plenty of disgruntled Conservatives.

On the other hand, and returning to the ‘Missing Speech Conspiracy’, could it be that Clarke was going just a touch too far for ultra-centralisers Johnson/Cummings and had started seriously to believe in his “greatest decentralisation of power in our modern history”?

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Chris Game is an INLOGOV Associate, and Visiting Professor at Kwansei Gakuin University, Osaka, Japan.  He is joint-author (with Professor David Wilson) of the successive editions of Local Government in the United Kingdom, and a regular columnist for The Birmingham Post.

Prime Minister, remember when you weren’t hell-bent on infantilising local government?

Chris Game

 

I should just have returned from Limpopo, northernmost South African province and home to a substantial chunk of the famous Kruger National Park.  I, however, would have been there not for the wildlife, or even the wild life, but for the eminently respectable annual conference of IASIA, the International Association of Schools and Institutes of Administration, of which I’ve been a participative, though non-officeholding, member for the past quarter-century.

And now, after opening two sentences with a first-person singular pronoun, I should issue a READER ALERT!  There is, I promise, a serious point underpinning this blog. The first part, though, will contain more of those F-PS pronouns than even my average blog – sorry, but you have been warned.

Coincidentally, my very first IASIA conference, in 1996, was also in South Africa – in Durban, in the newly created province of KwaZulu-Natal, shortly after its first, violence-delayed, post-apartheid municipal elections had finally taken place.  The conference and the whole visit constituted a huge learning experience – and one acquired almost fortuitously.

For, despite INLOGOV being almost a model of the kind of institution IASIA/IIAS seeks to embrace – “involving both public service and academe”, whose interests and activities “target the education and training of public administrators and managers” – it always seemed colleagues in the then Development Administration Group, now the International Development Department, were the more active participants.

Anyway, it certainly gave me insights, opportunities and contacts I would never otherwise have had. That first Durban conference, for example, led fairly directly, if years later, to my involvement in a research project for the South African Municipal Demarcation Board on the relationship between size of municipality and efficiency of service delivery in the ‘new’ South Africa.

More recently, an exceptionally successful and in its way historic Ramallah conference in the immediate aftermath of the Grenfell Tower tragedy led to a paper (and subsequent blog) on how the new generation of elected Palestinian women mayors might have responded rather more impressively than Kensington & Chelsea’s politicians had managed.

Appreciation expressed, indulgent paragraphs over – thanks for your patience.  One thing I’m not really sorry to have missed with the Limpopo cancellation would have been the almost limitless curiosity of delegates – most following UK politics from several thousand miles’ distance – about the antics of the man who, for many, is our still relatively new Prime Minister. It would have been wearing, but I’d have borne it valiantly, not least because those with decent memories might well recall when I too had had positive things to say about the two-term Mayor of London – an office generally presumed abroad to be more powerful and prestigious than it is here.

Johnson never made it easy. Many delegates, whether or not they knew anything of his chaotic public and personal life, could certainly recall the man celebrating Britain’s first London 2012 Olympic gold medal by limply waving a Union Flag while stuck embarrassingly on a zip-wire.

It could sometimes be a tough gig, therefore, trying to persuade a predominantly overseas academic audience that, as London Mayor, the man had a record of some genuine achievement, if not on the scale of his hugely more experienced predecessor, Ken Livingstone.  But I tried, always starting with the headline statistics of his very election: twice, with over a million votes, to a post no other Conservative politician has come near to winning.

Evaluating his policy accomplishments was tougher, but, thanks to eventually effective delegation, there were, alongside the self-serving vanity projects, several tick-worthy boxes.  London’s homicide rate did fall dramatically between 2008 and 2016, by even more than it did nationally.  More so-called ‘affordable’ homes were built than during Livingstone’s two terms – though, in London especially, that A word is always debatable.

London Underground usage increased significantly, though ticket office closures continued and, by the time his planned night service finally arrived, he had gone. And it was bye-bye to fare-dodger-friendly ‘bendy buses’, hello again to environmentally friendly, double-decker Routemasters, albeit it at huge cost and some passenger discomfort.

Then there were the ‘Boris Bikes’ – nowadays the posher-sounding Santander Cycles – which, while not operating at the promised zero taxpayer cost, now constitute, I believe, Europe’s largest cycle hire scheme.

And, of course, like Paris for Bergman and Bogart in ‘Casablanca’, Boris will always have those undeniably memorable 2012 Olympics – notwithstanding that the idea and groundwork were Livingstone’s, the cost wildly over budget, and the legacy still debatable.

Over the years, then, I’ve felt able to talk – reasonably dispassionately, I hope – with international delegates about these things. But the topic I’ve always most emphasised, particularly in conference papers, has been finance: using London as a kind of headline illustration of how devolved government in the UK generally is centrally over-controlled and under-funded, compared to many of their countries’ systems.

In this I was much helped, unwittingly, by the man himself, who, as Mayor, professed similar concerns. For in 2012/13 he established a London Finance Commission, chaired by LSE Professor and finance expert, Tony Travers, which swiftly produced a neatly entitled report – Raising the Capital – with some seriously radical content.

Impossible here to summarise satisfactorily, the Commission’s conclusions were that London’s growing and changing population placed increasingly acute pressure on local services, while its existing sub-national governments lacked the financial powers to provide effective solutions.

A few illustrative stats: under 7% of tax paid by London residents and businesses was redistributed directly by locally elected bodies; 74% of London’s funding came through central government grants – compared with Berlin’s 25%, Paris’s 17%, and Tokyo’s 8%.

Taxation powers were merely one important part of the required reform.  But the Commission recommended (p.11) that “the full suite of property taxes” – council tax, business rates, stamp duty land tax, capital gains property development tax – be devolved to London government (GLC and/or boroughs), which should have responsibility for setting tax rates, revaluation, banding and discounts.

There was plenty more in the same vein – freedom to impose modest tourism and environmental taxes, planning fees and charges, and so on. My concern here, though, is less the Commission than the CommissionER.

Ever the catchy phrasemaker, Johnson launched his report by referring to tax-enfeebled London as “an economic and political giant but a fiscal infant …”.  However, while it was obviously the London Mayor’s Commission, making London proposals, the Mayor himself seemed more ambitious.

So, come the 2013 Conservative Party Conference in Manchester, there he was, leading a cross-party campaign with the London Councils and Core Cities Groups, arguing that England was much too centralised and calling for a comparable suite of fiscal reforms for England’s largest cities. An “historic and significant move …a partial but practical answer to the conundrum of English devolution … good not just for the cities involved, but for the country at large” … etc. etc.

Of course, nothing much changed substantively. London could still be tagged a “fiscal infant”, as could our whole local government system.

What changed was the man and his career: his personal political ambitions, the gift of Brexit, and the Johnson/Cummings project of running apparently the most unaccountable, centralist government of our age, in which the biggest city councils are mere marginisable infants.  A conference paper title for Limpopo 2021 perhaps?

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Chris Game is an INLOGOV Associate, and Visiting Professor at Kwansei Gakuin University, Osaka, Japan.  He is joint-author (with Professor David Wilson) of the successive editions of Local Government in the United Kingdom, and a regular columnist for The Birmingham Post.

Social care reform – comprehensive is good, but comprehensible vital

Chris Game

Cllr Ketan Sheth’s recent blog on ‘Local Government and the NHS Integrated Care System’ was, as he explained, timely for him personally – as an elected London borough councillor about to take on a novel scrutiny role in a new ICS.

For us Midlands readers it was timely too, for reasons most easily conveyed by the King’s Fund’s recent highly colourful Map 1 of ICSs so far established – highly colourful, that is, for some parts of England, including Cllr Sheth’s London, but bleak grey for others, like the whole of the Midlands, with merely our at least slightly more localised Sustainability and Transformation Partnerships (STPs).

This blog is not directly about either STPs or ICSs, which have only a late walk-on role. It is, though, about the future of social care and local government’s involvement in, or marginalisation from, that future, and it opens with one of Boris Johnson’s first Prime Ministerial broken pledges, in his very first speech as PM, to “fix the crisis in social care once and for all with a clear plan we have prepared”.

The ‘clear prepared plan’ bit was obvious fiction, and confirmed as such in the Conservatives’ December election manifesto.  60 pages, nearly 1,000 days working on a promised but still undelivered Green Paper, and no sniff of a plan.  One un-costed pre-condition (p.23) – that nobody should have to sell their home to pay for care – and a slightly desperate hope to build cross-party consensus on reform.

But last week, just eight months on, jostling with daily lockdown bulletins and courtesy mainly of The Guardian newspaper, saw a sudden small flurry of tantalising leaks. First came Ministers’ “radical plans for everyone over 40 to contribute towards the cost of social care in later life” – paying more in tax or national insurance, or insuring themselves against “hefty care bills when they are older”.

Broadly resembling the German and Japanese funding systems, it is variously labelled a ‘comprehensive’ and ‘compulsory’ insurance model, both of which, to be effective, it surely has to be.

But an even bigger question, I suggest in the blog’s title, is surely whether it can become a comprehensible and comprehended model, and pretty quickly – because the evidence is that our collective understanding of even the existing system is worryingly low.

With coincidental but near-perfect timing, the New Statesman magazine recently commissioned a poll by Redfield & Wilton Strategies asking a sample of 2,000 GB adults about their awareness of how social care is currently funded and organised. Its findings, for a topic dominating news headlines for several months now, were concerning.

Fewer than one in eight felt they were “significantly aware”, under half even “moderately aware”, and nearly a quarter “not aware at all”. They were then asked which of (1) the NHS, (2) private operators, and (3) my local council, they thought were currently providing community care in their locality.  Being a GB-wide sample, there are no precisely right or wrong answers, and ‘providing’ makes it almost a trick question – which personally I’d have opposed phrasing in this way. Still, there are better and worse guesses.

“My local council”, chosen by 55%, is a decent pick – if, by providing, you mean paying for.  But not, for decades now, if you mean actual care home beds.  As Covid has tragically demonstrated, funding is nowadays effectively separated from extremely fragmented provision, with only some 3% of beds directly provided by councils and at least 80% in over 11,000 homes by for-profit private companies, local organisations and charities.

As for payment – roughly £600 per week here in the West Midlands – just over one-third of residents have their fees met by their local authority; one in eight pay top-up fees, but the biggest fraction must find the full fees themselves.  Which, given our apparently limited understanding of the present-day system, must frequently come as a serious shock.

Exactly half the poll respondents ticked the “private operators” option. However, virtually as many (48%) nominated the NHS, which, note the authors, is nowadays “a very small player” indeed in providing social care.  It’s not totally wrong, but close – and that, in the proverbial nutshell, is Ministers’ social care problem.

The public generally have low understanding of how even the present care home system works, of how literally dis-integrated it has become, with home care provision twice as fragmented and considerably more expensive. But they love, clap for, and think they know ‘their’ NHS.

It was even more starkly highlighted in the crunch question: “Which of three options for the future of social care comes closest to your own view?”  Exactly half the respondents selected the ‘NHS model’ that many had just demonstrated they seriously misperceived: “Social care should be free at the point of use, regardless of whether individuals contributed taxation into the system during their working lives”.

Just over one-third preferred the ‘pension’ or ‘compulsory insurance’ model referenced in the Guardian story – or, rather, first story.  For, the following day, it reported Government plans to in effect merge health and social care services, taking the latter away from local councils altogether and handing them and their £22.5 billion annual funding over to the NHS.

The Department of Health and Social Care issued a routine denial, but the PM’s long awaited ‘plan’ appears, currently, to be that care services would be commissioned by, and funded through, the new NHS regional Integrated Care Systems (ICSs) gradually unrolling across England – although not, as yet, the Midlands, where we’re still in the Sustainability and Transformation Partnership phase.

I conclude with what seems a bit of a personal dilemma. Having worked for over half my life for an ‘Institute of Local Government Studies’, I instinctively deprecate both the fact and implications of elected and accountable local authorities losing a major function for so long integral to their existence.

On the other hand, if that’s what most people reckon they want, and the Government fundamentally misunderstands, distrusts, and already wants to diminish and/or abolish local councils ….   The question is: would the public be prepared to pay the cost of NHS-style “social care, free at the point of use”, largely unaddressed in the New Statesman questionnaire?  But that’s for another blog.

 

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Chris Game is an INLOGOV Associate, and Visiting Professor at Kwansei Gakuin University, Osaka, Japan.  He is joint-author (with Professor David Wilson) of the successive editions of Local Government in the United Kingdom, and a regular columnist for The Birmingham Post.

Can democratic renewal help us ‘build back better’ from the COVID-19 crisis? Key recommendations from the Newham Democracy and Civic Participation Commission

Elke Loeffler and Nick Pearce

Newham has seen one of the highest rates of COVID 19 mortality in England and Wales. Being one of the 10% most deprived areas in the UK (according to 2019 deprivation indices) the crisis has exposed wider social and economic inequalities – in health, housing, access to services and income – particularly for the Black and Minority Ethnic population.

At the same time, Newham has also seen a flowering of community support and creativity in response to the crisis. The local council has pioneered new ways of working with the voluntary and community sector. A new COVID-19 Health Champions network has been launched to empower thousands of Newham residents to remain up to date on the latest advice about COVID-19, and a new digital initiative  ‘Newham Unlocked Community Broadcasts’ showcases the creativity of local artists.

Newham is also one of a relatively small number local councils in the UK which have a directly elected Mayor. In 2018 Rohksana Fiaz took over from Sir Robin Wales, after his 23 years in the post, as London’s first directly-elected female mayor. In her election manifesto Fiaz promised to hold a referendum on the direct elected mayoral system before the end of her third year as Mayor (i.e. 2021), although the impact of the COVID-19 pandemic will affect this timeline.

The Democracy and Civic Participation Commission

In this context the Mayor and the Council of Newham set up an independent Commission in autumn 2019 to examine both the Council’s current directly elected Mayor system of governance and the alternative approaches that exist in English local government, and to make recommendations on the best system of governance for Newham’s future, and to explore ways in which local residents can become more engaged and more fully involved in local decision-making and the Council’s work.

The Commission was led by Professor Nick Pearce. Extensive evidence gathering took place between November 2019 and February 2020.

A key concern of the six Commissioners was to make bold recommendations to reduce inequalities in public participation and bring citizen power into the Council to improve public services and the quality of life of local people. The COVID-19 crisis, which occurred during the latter stages of the Commission’s work, gave a dramatic glimpse of the huge potential resources in the community and the willingness of local people to make a contribution to improve the quality of life in their neighbourhood.

The “Newham Model” for more inclusive public participation

The resulting “Newham Model” aims to provide checks-and-balances to the way in which Newham is governed. It provides new participatory governance mechanisms. In particular, the Commission Report proposes the creation of a permanent Citizens’ Assembly, selected like a jury – the first of its kind in England. It suggests strengthening the accountability of the executive Mayor to local people and the main stakeholders of the Council, while also limiting the mandate of the executive Mayor to two terms, so that there is a frequent impulse for innovation and creative thinking at the centre of the Council.

Other key recommendations for strengthening public participation and co-production of public services and outcomes with local people are:

  • Extension of participatory budgeting – an increase in the resources allocated to areas or neighbourhoods for expenditure which is determined by local people from the current level of £25,000. The aim should be to spend a minimum of 20% of the Community Infrastructure Levy (CIL) resources through neighbourhood or area-based participation.
  • A new framework for area-based decision-making – allowing powers to be drawn down to the most local level – along with the piloting of an ‘urban parish council’ in one of Newham’s communities.
  • A new “Mayor’s Office for Data, Discovery and Democracy” to provide expertise and leadership on the democratic use of data, digital tools for resident engagement, and learning from digital champions such as the government of Taiwan.
  • Wider use of co-production with residents and people accessing services, including area regeneration, which means that the local council needs to become much better at mapping what local people are doing, and want to do in the future.
  • Enabling local councillors to play the increasingly important role of ‘community connectors’, mobilising local people and their enthusiasms.
  • Support for an independent, community-owned local media organisation.

The Report of the Commission was launched on 6 July 2020 in a virtual public meeting, with presentations from the Commissioners, followed by responses by the Mayor and Vice-Mayor on behalf of the Council. Newham Council’s cabinet members will formally consider the commission’s report and recommendations at a later meeting.

Clearly, councils need to adapt the ‘Newham Model’ to fit their local circumstances, while simultaneously learning from democratic innovators in the UK and internationally.  Moreover, research institutions such as INLOGOV have an important role in sharing learning on new local governance models to help local government to ‘build back better’ from the COVID-19 crisis.

 

Nick Pearce is Director of The Institute for Policy Research (IPR) and Professor of Public Policy at the University of Bath. He was formerly director of the Institute for Public Policy Research (IPPR), as well as Head of the No 10 Downing St. Policy Unit between 2008 and 2010.

Elke Loeffler is a Senior Lecturer at Strathclyde University, and INLOGOV Associate. She is author of ‘Co-Production of Public Services and Outcomes’ and co-editor of ‘Palgrave Handbook of Co-Production of Public Services and Outcomes’, both of which will be published in autumn 2020.

Central Government, Evidence and Short-Term Strategies in the Support to Businesses and Local Economic Recovery in the Age of Covid

Tom Collinson

If there has been one mantra by which government policy has claimed to have lived by during the COVID-19 crisis, it is that it has been led by, guided by or that it is following the science. Intended to strike a reassuring tone, the claim to evidence was routinely emphasised by the government as either the Prime Minister or a deputy was flanked by a member of SAGE. When questioned on his previous disavowal of experts by Sky News at the beginning of the crisis, the Chancellor of the Duchy of Lancaster, Michael Gove, noted that these were economists he had referenced in the past, it was not established medical facts; suggesting that this time was different and that this science was different.

One article by the New York-based magazine The Atlantic even went so far as to claim that ‘Britain Just Got Pulled Back from the Edge’ as ‘the institutions and positions of state were…clicking into gear.’ While it appeared to be a rosy picture at the start, with the government publishing the scientific advice online, with a gesture that it would continue to do so, this tone quickly unravelled as the Guardian reported that non-scientists seemed to be advising government; there was no list of who exactly was in the SAGE group and why there were no (publicly available) minutes of the meetings and government advice was no longer transparent. Some of this has now changed.

All this has provoked an interesting question of the relationship between science, evidence and data-analysis with policy-making in the UK. How does one affect the other? Is it possible for one to distinguish between various forms of evidence in the policy-making process and make a judgement on which is the most appropriate? To distinguish between mathematical modelling, so-called evidence-based policy-making (that which traditionally elevates the role of Randomised Controlled Trials) and place-and-people contextualised policy? Is it possible to have what Kant called a constitutive judgement in public-policy? (I.e. a judgement which is not based on any further assumptions, hypothetical conditions or suppositions, such as values, narratives and aesthetics). For the past decade or so, there has been a growing literature on all of these questions and the urgency of the current pandemic has enlivened them.

These questions are of increasing interest to academics, journalists and opposition parties in the Anglosphere. With regards to the United Kingdom, the establishment of an ‘Independent SAGE group’ has been indicative of some dissent from the government’s claim to scientific unity.

For local government, these issues have taken on another interesting dimension, one that examines the relationship between governance and the collection and application of evidence in policy responses. In a report on the global picture of city-governments, the OECD has distinguished between two types of evidence-led responses. The first discusses local governments as instruments or ‘implementation vehicles of national measures such as confinement’. The second acknowledges the experimentation of ‘more bottom – up, innovative responses while… building on their unique proximity to citizens.’

Building on this insight, we can begin to describe a temporal framework, which provides further detail to the OECD’s report on the times when local government have been able to articulate their own evidence-based response and when the information and decision-making lies more in the hands of central government.

While it is still unclear where we are on the timescale of the virus or the response to it – which indeed make the articles in this post preliminary – this framework can be outlined on the basis of the short, medium and long term response to the epidemic. Such an approach is based on how councils themselves are articulating a response (using similar language such as the ‘rescue’, ‘recovery’, ‘rebuild’ or, ‘hammer’, ‘dance’ and ‘reconstruction’ as distinct phases in the plans).

Categorising policy responses in this way has a lot of precedent in the field of economics. With regards to the economics of a crisis, the same typology has been outlined by Professor Andy Pike, who’s presentation to the ‘Major Economic Shocks Workshop’ at the What Works Centre for Local Economic Growth addresses the types of policy responses available with regards to the local economy, businesses, supply chains and labour markets in the three different time periods. The important point here is that in the short-term responses are direct, and contingent on the problem, whereas long-term responses are open-ended and rely on change. Short-term employment issues for example are addressed through subsistence allowances, while (re)training and entrepreneurship should be leveraged in the long-term. The same applies to supply chains; the short-term goal is to secure capacity and jobs through say refinancing, while in the long-term diversification and innovation is required.

Focussing on short-term strategies during the current epidemic and lockdown, the measures taken have exhibited the direct qualities that Pike addresses. However, these have often been delivered by way of decisions and information collected in the devolved governments and Downing Street. While there have been ongoing efforts by local authorities to assess immediate likely impacts – as seen in Cardiff and the West Midlands – the role of councils has largely been to act as something of a lightning rod (or courier, depending on how you judge their efficiencies) for UK government policies. While there has been some contestation around these matters from local councils, for example in the early closure of parks, the wide picture has been one of convergence throughout the country in a number of areas of practice, including areas of communication and awareness rising, social distancing, confinement and taking targeted measures to help vulnerable groups. In many cases, this has been guided by national government regulations and the ‘dos and donts’ policy responses, financial backing of £3.2bn to be awarded to councils in England to ensure a continuation of services, as well as some financial restrictions or ring-fencing.

The reliance on central government publications and financial backing has characterised the issue of supporting businesses and economic recovery too, where councils are in the front line for conducting policies made primarily in London but also Cardiff, Edinburgh and Belfast. While there may be some differences between the England and the devolved assemblies – for example on the differences in the administration of business support in Wales and England, or the degree of discretion councils are exhibiting when it comes to business support, the general theme of subsistence pay to employees, business relief and grant funding through councils has taken the same shape throughout the country, as we can see from the following examples:

  • In England, the business relief announced by the Chancellor is being paid for by councils through the Small Business Grants Fund and the Retail, Hospitality and Leisure Grant Fund, and reimbursed to local authorities should the guidance published by the MHCLG be followed.
  • There is £6 billion in local authority payments of the Central Share of retained business rates that were due to be made over the next three months.
  • A £500 million Hardship Fund ‘of new grant funding to support economically vulnerable people and households in their local area’ administered through existing ‘local council tax support schemes’.
  • In Wales, the Welsh Government are offering a years relief on business rates to shops, leisure and hospitality businesses, and also offering small grants. Local councils are calculated to have distributed £508m to 41,000 businesses by the end of April.
  • In Scotland, Local Authorities are administering Small Business Support Grants as well as Retail, Hospitality, Leisure Support Grants of up to £10,000 and £25,000 respectively.
  • Similarly, in Northern Ireland a grant scheme of £25,000 for Retail, Hospitality, Tourism and Leisure has been offered, should the criteria outlined by the Northern Ireland Executive be followed.

In one of the foundational texts of modern political science, Alexis de Tocqueville describes the governance structure of the ancien regime, whereby all administrative corridors in French political life led back to the King. Intendants hired by a King to administer a province in-turn hired a sub-delegate to administer canons, where the happiness or misfortune of individuals depended entirely on ‘the whole operation of the central government’. The argument for arranging matters in this centralised manner was a financial one – to levy taxes in order to guarantee the State’s safety. But this ultimately led to the downfall of the regime itself. While I’m not comparing the UK Government to the House of Bourbon, modernity offers a number of examples where centralisation – justified because of finance and security – tends towards political and social disintegration. Further examination will do well to determine whether there is a different path forward in the long-run response to this crisis.

 

Tom is a postgraduate researcher with an MA in Political Thought and a BSc in Economics and Politics from the University of Exeter. His main research interests are in modern political thought, with particular expertise in the political philosophy of Hannah Arendt and Karl Jaspers, on whom he wrote his thesis, rethinking the concept of political participation and civic action in modernity. Tom is now researching the role of local and central government responses to the Covid-19 pandemic, inspecting how they complement and contrast one another. He tweets at @tzcll.