housing

80% of councils directly involved (again) in delivering housing

/ inlogov / Leave a comment

Chris Game

If you’re an academic – either a genuine intellectual, theorising one, or a more lecturing, popularising one like what I was – there’s a good chance that the week before Easter is Conference Week.

It’s easy to mock, and knock, academic conferences. Too many delegates reading, rather than ‘presenting’, their papers; no time for proper interrogation, discussion and debate; mediocre university campus food. And for overseas conferences, add in climate threatening CO₂ emissions.

However, I like them – conferences, that is.  Indeed, this recent Easter week I racked up a full half-century of attending, at least intermittently, PSA (Political Studies Association) conferences.

Like most such events nowadays, this one was ‘hybrid’ – with panels attended partly in person, partly digitally via Zoom. Which makes genuine discussion additionally problematic, and emphasises the importance of the written papers addressing subjects that ideally are appealing, topical and even newsworthy.

Happily, in the Local Politics Specialist Group this is almost the norm. And this year one paper especially – in addition, obviously, to that of the INLOGOV’s Director, Jason Lowther (from ‘Birminham’, according to p.25 of the evidently un-proof-checked programme!) – struck me as both sufficiently important and timely to bring it to the attention of a couple of slightly wider audiences⃰.

Timely because we’re fast approaching the May 5th local council elections, and, if these councils’ controlling parties choose to draw voters’ attention to it, many could boast something they might well not have been able to even four years ago when these same seats were last collectively contested.

Specifically, over four in every five should be able to claim that they are genuinely and actively involved in the business of delivering social housing.  And if that doesn’t grab you, or you’re thinking: “well, isn’t that one of the main things councils are supposed to do?” – or maybe, as a Birmingham resident, you’ve heard of the 4,000+ homes built by the Birmingham Municipal Housing Trust, the City Council’s housebuilding arm, and assume that it’s fairly typical, rather than really exceptional – then I politely suggest you’ve rather lost the plot in recent years.

When I used to lecture to particularly overseas students about housing in England or the UK, I would use a couple of very basic graphs, similar to those illustrated here. The first showed the changing relative importance of our main housing tenures since 1919 – private rented, owner occupied, local authority, and housing association.

Tenure1

At the end of the First World War, the ‘big picture’ was straightforward: roughly 90% of housing stock was privately rented, 10% owner occupied. Councils were empowered to build ‘corporation housing’, but few did.  But the War changed everything. PM Lloyd George promised not just houses, but “Homes Fit for Heroes’, and the 1919 Addison (Housing, Town Planning, &c.) Act facilitated it. Council housing committees sprung up, generous subsidies were provided, and council estates mushroomed.

By 1939 over 10% of the population lived in council homes, and the numbers increased steadily post-war, with the Labour Government’s Town and Country Planning and New Towns Acts. At their 1950s peak, under Conservative Governments, councils were building nearly 200,000 houses a year – one completion every three minutes, if you were wondering.

By the 1970s over a third of England’s housing stock was ‘council’. Private renting had plummeted to below 20%, with owner occupation over 50% and rising, and housing associations just beginning to take off.

The 1980s Thatcher Governments’ priorities, though, were very different: a “property-owning democracy”, with successive ‘Right to Buy’ policies – requiring, rather than allowing, councils to sell off their housing stock, if tenants, particularly of larger, better-quality properties, wished to purchase.

Coupled with Treasury restrictions on councils borrowing money for capital expenditure, there began the long-term shift from council housing to housing associations or ALMOs (Arm’s-Length Management Organisations): from 7% of all social housing in 1980 to over 60% today, including virtually all new social housing.

On my second graph, of ‘Housebuilding Completions’ – albeit scaled for dramatic effect – the local authority line by the mid-1990s was barely distinguishable from the horizontal x-axis. Council house building on any significant scale virtually stopped, new homes countable in the hundreds, rather than hundreds of thousands – until, if you peer extremely closely, you can just see the space between line and axis opening up in 2018.

Housebuilding

Sales meanwhile averaged well over 100,000 a year, re-boosted by increased discounts from the Coalition Government following the 2007/8 financial crisis. That same Coalition – or its Treasury – also imposed tightly restrictive ‘caps’ on councils’ ability to borrow against their own Housing Revenue Accounts in order to build affordable homes.

True, the 2011 Localism Act and other changes gradually empowered councils to work both like and with private sector companies. But it was really only when, several years later, Theresa May announced to her October 2018 Party Conference that she would ‘ditch the cap’ that councils’ widespread re-engagement with housing provision seriously took off.

There were and still are significant hurdles: tenants’ right to buy, planning constraints, the need for more grant funding. But the climate has indisputably changed, and at least some of the circulating local election manifestos will surely contain the evidence.

The reason I’m confident of this is that one of the York conference sessions I attended was presented by Bartlett School of Planning’s Professor Janice Morphet, who, with her colleague Dr Ben Clifford, recently completed the third of their series of biennial surveys of councils’ engagement in the provision of affordable housing.

I was aware of this work, but frankly had no real idea of its scope, depth, rigour or even of the sheer quantity of data the surveys produced and made available, in both the respective main reports and the separate desk survey reports. Seriously impressive – and obviously impossible to do any kind of justice to here.

Hence the focus on what has been one of the surveys’ particularly key and consistent findings, summarised here in a couple of quotes: first from Morphet herself, then from the recent third survey’s Executive Summary:

“The third wave of research shows how local authorities are directly engaging in housing provision [and] that this has moved from a marginal to a mainstream issue.”

“From the desk survey, we found that in comparison with 2017 and 2019, the number of councils with [housing and/or property] companies … has increased from 58% in 2017, 78% in 2019 to 83% in 2021 … From the direct survey, we have found that 80% of local authorities now self-report that they are directly engaged in the provision of housing, a notable increase from the 69% … in our 2019 survey … and the 65% from the 2017 survey.”

Who said academic conferences are an indulgent waste of time?

________________________

⃰ A slightly abbreviated version of this blog – “Candidates will be homing in on a growing council priority” – appeared in the Birmingham Post on April 28th –  https://www.pressreader.com/uk/birmingham-post/20220428/281951726382871

Photo

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.

Do shared services improve resilience?  Mixed evidence from district councils during the Covid-19 pandemic

/ inlogov / Leave a comment

Dr Thomas Elston and Dr Germà Bel

Inter-municipal collaboration, often referred to as ‘shared services,’ has gained a significant foothold in English local government over the last 10-15 years, bringing England into line with much of mainland Europe and the USA. 

This model of jointly providing public services across two or more local jurisdictions, whether through a ‘joint committee’ or ‘lead authority’ model, or by joint commissioning of a private contractor, was primarily intended as an efficiency measure through which cash-strapped councils might attain new economies of scale during the ‘age of austerity.’  Limited evidence to date unfortunately suggests that councils’ large cost-saving aspirations have not tended to be been matched by achievements, though more research is needed.

Nonetheless, when councils and management consultants were preparing their ambitious shared service business cases, typically in the early 2010s, improved service quality and better resilience in the face of unexpected adversity were also named as advantages of the shared services approach, alongside efficiency.  Since efficiency and resilience are often regarded as mutually incompatible (e.g., slack resources are inefficient but protective against shocks), and given that there are few if any empirical tests of the relationship between shared services and business continuity in existing literature, we set out to investigate.

Taking the first Covid-19 lockdown during the spring of 2020 as the sudden and severe ‘adversity’ against which local government resilience was tested, we compared levels of service disruption in collaborating and autonomous councils compared against pre-covid performance, controlling statistically for potential alternative explanations.  Our analysis focuses on revenues and benefits departments in district councils, since a significant proportion of these (ca 30% at the onset of Covid-19) are operated collaboratively.  And we focus on the administration of Housing Benefit specifically, for which robust, high-frequency (monthly and quarterly), and multi-dimensional (speed, quality and cost) performance data is available.

Our study found that disruption of Housing Benefit application processing speeds during lockdown was unrelated to mode of service provision.  For both shared and autonomous arrangements, performance worsened slightly during lockdown, before resuming its pre-pandemic trajectory over the summer of 2020.  However, collaborating councils did show less of a decline in service accuracy objectives during lockdown, measured as both the identification of new debt owing to benefit overpayments (not shown) and, particularly, the recovery of such debt from claimants (shown in the graph below).  These mixed results – no effect on speed, partial protection for accuracy – proved robust to various different econometric specifications.

Average value of debt recovered from Housing Benefits claimants as percentage of total debt outstanding, comparing ‘stand alone’ and collaborative provision, Q4 2018–19 to Q1 2020–21

There are a variety of possible explanations for this pattern. 

First is that the apparent resilience in debt identification and recovery is simply an artifact of the performance differential between shared and autonomous revenues and benefits departments pre-pandemic.  As the graph above indicates, and contrary to business-case predictions, shared services (grey dashed line) appear to be consistently associated with less debt recovery prior to COVID, meaning that autonomous councils simply had ‘further to fall’ during the emergency, producing their appearance of reduced resilience. 

Second, and more substantively, is that high-performing organizations can fall into ‘success traps’ or ‘competency traps.’  According to existing literature on organizational resilience, the low level of challenge facing high-performing organizations during ‘normal’ times can leave them complacent and ill-equipped to deal with unexpected adversity; whereas less-successful organizations are more familiar with confronting and managing adversity in their everyday operations, and thus better rehearsed for managing crises.

Third is that there genuinely is something about the shared services model – be it the increase in operating scale, the balancing of peaks and troughs in demand and resourcing across different partners, the greater experience of remote working prior to COVID, or the lock-in effects that arise when service operations are specified in contracts or service-level agreements – that enables collaborative arrangements to better withstand the challenges of service delivery during lockdown.

Finally, it is interesting to consider why the partial resilience revealed in our data is concentrated on debt identification and recovery, rather than speed – recognizing that bureaucracies often face a trade-off between speed and accuracy of decisions.

Studies of goal conflict suggest that organizations can cope with such split objectives by prioritizing those that are most valued by their largest or loudest constituency.  Benefit claimants and their landlords favour speedy service, whereas central government (which funds Housing Benefit) advocates accuracy.  But perhaps Whitehall overseers pursued this agenda less forcefully during the pandemic, when many distractions arose and when preservation of life and livelihoods was clearly better served by providing speedy financial support to vulnerable populations than by auditing prior applications.

Alternatively, goal conflict can also be address by sequencing – addressing one goal first, and then another. Whereas poor timeliness of benefit processing cannot be subsequently rectified (once a payment is late, it is late), poor accuracy can be corrected subsequently through greater attention to and resourcing of debt collection later in the year or in future years. The debt will still be owed, albeit the risk of debt write-off will be higher. Future research will be able to test this ‘catch-up’ hypothesis once data on debt identification and recovery during subsequent quarters of the pandemic is released.

Overall, then, in contrast to the questionable financial benefits of shared service adoption in the English context, this study has indicated that possible advantages may be gained in terms of service resilience.  We have just secured a research grant to replicate and expand this research agenda into additional service areas and over a longer time frame.

This blog is based on research recently published in Public Management Review.

Dr Thomas Elston is Association Professor of Public Administration at the Blavatnik School of Government, University of Oxford.  His research focuses on the organisation of public services, and particularly on questions of performance, resilience, reform and democratic control.  His work on shared services has been published in JPART, Public Administration, Public Management Review, and Public Money & Management.

Dr Germà Bel is Professor of Economics and Public Policy at the University of Barcelona.  His research deals with the reform of the public sector, with a special focus on privatization, regulation, and competition. His research pays particular attention to local public services, transportation, and infrastructure. His work on shared services has been published in JPART, Public Administration, Public Management Review, Local Government Studies and Urban Affairs Review.

The Leaseholder Cladding Scandal and When Ministers Direct

/ inlogov / Leave a comment

Chris Game

You probably caught at least something of the Commons ‘cladding’ debate last Monday (1st Feb), and almost certainly some of this week’s fallout.  Called by Labour on one of its designated ‘Opposition Days’, the debate sought “urgent” Government action to end the scandal of lease-holding flat owners, living in unsafe, unsaleable, uninsurable properties, being forced to pay unaffordable sums of money for the removal of flammable cladding.

And, if 43+ months after the Grenfell Tower tragedy qualifies as “urgent”, we finally got it this Wednesday, in the form of a statement from Robert Jenrick, Secretary of State for the whole thing – Housing, Communities and Local Government.

Important as that statement obviously is, neither its content nor even its questionable squareability with the PM’s most recent pledge that “no leaseholder should have to pay for the unaffordable costs of fixing safety defects that are no fault of their own” are the central concerns of this blog, which by comparison – Reader Alert! – are arcane verging on nerdy. For the record, however, Jenrick’s three key proposals are for:

  • a further £3.5bn of government grant to pay for the removal and replacement of dangerous cladding systems on buildings over 18 metres tall;
  • for buildings below 18 metres, a long-term “financing solution” of a government loan to the owner, repaid by leaseholders, with a payment cap of £50 per month;
  • a new levy for developers, to become applicable when planning permissions are submitted for high-rise developments.

Back, though, to last Monday. Labour’s motion, introduced by Shadow Housing Secretary, Thangam Debbonaire, called for the Government to establish a new, somewhat Starmer-sounding, cladding taskforce that would make buildings with dangerous materials safe and protect leaseholders from the costs. Initial respondent for the Government was, remarkably, the Minister of State for Europe and the Americas, Chris Pincher, not due formally to assume office as Minister of State for Housing for another 12 days. The so-called – and here so appropriately – wind-up was done by Eddie Hughes, Junior Minister for Rough Sleeping and Housing.   

As for the not generally publicity-shy Jenrick, he apparently “stayed away entirely”. Which inevitably reinforced the impression, conveyed by his being openly accused of “incompetence” in this matter by his own backbench ‘colleague’, that neither he nor the Government as a whole were any more bothered than they had appeared previously about even being seen to regard this scandal as a major priority.

For the record, Monday’s motion was passed by 263 votes to nil. The Ministers seemed unable to convince anyone that the Government was addressing the issues with anything like the requisite urgency. But Conservative backbenchers, increasing numbers of whom had already been seeking, without noticeable Labour support, to amend the Fire Safety Bill to avoid remediation costs being passed on to leaseholders, chose to abstain, rather than give HM Official Opposition unearned credit.  

At which point I must temporarily side-line cladding, while explaining how, almost by chance, I happened upon one of the latest updates in the Institute for Government (IfG)’s occasional series of ‘Explainers’ – on Ministerial Directions (MDs) – a topic about which previously, I confess, I’d bothered myself relatively little.  

Poor show perhaps, for someone actually endeavouring to teach students about British politics. My rationalisation would have been that, while broadly aware of what MDs were/are and their obvious importance, I sensed that their usage wasn’t that frequent, and that anyway, until “the rules” were changed and GOV.UK was launched in 2011/12, most such directions would indefinitely have remained state secrets.

Unwittingly, I was actually right about the numbers – as shown in one of the IfG’s several excellent graphics: an average of under two a year while I was teaching, compared to 31 in the past three years and 19 in 2020 alone. The explosion, and indeed MDs generally, seemed worth further inquiries.

min-explainers

First, then, what exactly are ‘Ministerial Directions’?  In this case, just what it says on the tin: formal directions from Ministers instructing their department to proceed with a spending proposal – and in so doing overriding the principled objection of the most senior civil servant: the Permanent Secretary (PS), who is also the ‘Accounting Officer’, accountable to Parliament for how the department spends its money.

And it’s not just a clash of wills, or opinions. There are specified criteria any spending proposal must meet: that it’s within both the department’s legal powers and agreed spending budget, meets “high standards of conduct”, constitutes value for money, and stands a feasible prospect of being implemented as specified within the intended timetable. If a PS has doubts about a proposal meeting any of these criteria, they must seek explicit direction from the Minister, who thereupon writes a ‘directing’ letter and takes accountability for the decision.  Interestingly, that’s often how it seems to work: less a Minister’s wanting to spend overriding the horrified protests of a cautious civil servant than the civil servant seeing or at least agreeing the need to spend but constitutionally requiring the Minister’s say-so.

British politics being conducted in the ‘civilised’/secretive way it generally is, even the traditionally rare occasions on which such clashes come to a head are rarely much publicised, but there are exceptions. Remember Joanna Lumley’s ‘Garden Bridge’ over the Thames – proposed as a largely privately-funded project, but taken up with characteristic enthusiasm by the then Mayor of London and given significant pre-construction funding by the Department for Transport?  At which point the Transport Secretary, Patrick McLoughlin, came back wanting more – arguing to the ‘Accounting Officer’ (the PS)  and in his Ministerial Statement that there were more than mere transport benefits to be considered and that the Department’s pre-construction commitment should be increased by up to £15 million.  It duly was, and of course the Garden Bridge is today the “iconic tourist attraction right in the heart of our capital city” that the Mayor and Minister predicted. Sorry, is it not?

A more specifically local governmenty Ministerial Direction was that the MHCLG should not recover from councils £36 million that, through an error in civil servants’ methodology, they had been overpaid for participating in 100% business rate retention pilots (2017/18). Nice one, Sajid Javid!

What had particularly caught my interest, though, was that noticeable rise in MDs over the past 2-3 years and the positive explosion under the Johnson Premiership, certainly since the arrival of Covid.  In fact, the IfG’s graph reminded me almost immediately of the well-known view of one of the ugliest buildings in London – the Vauxhall Tower overlooking St George Wharf – and, as it happens, just two bridges down-river from the IfG.

tower

There have already been 14 Covid-related Ministerial Directions – worth possibly a blog in their own right – but I’d gone in looking for cladding business, and there it was, in May 2019 – two months pre-Johnson. James Brokenshire, Jenrick’s predecessor as Housing and Communities Secretary, had made clear both his and PM Theresa May’s view that leaseholders should not have to pay – even assisted by the kind of loan scheme announced this week.

It’s worth reading the full exchange of letters between Secretary of State Brokenshire and the Permanent Secretary, but the following extract from Brokenshire’s will convey at least the flavour:

“I  understand  that,  in  making  these  choices,  the  taxpayer  will  pick  up  the  vast  majority  of remedial costs.  However, I have considered that against the safety implications for residents and the need for pace.  I consider those two factors to be more important.”

The only thing, however, seemingly throughout this whole wretched business, to have happened at any pace was Brokenshire’s own departure, like that of Theresa May herself, to the backbenches. A pity – somehow I don’t feel he would have taken last Monday afternoon off, or that nearly 20 months later there would still have been no Government policy.

Photo

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.

    The disparities in housing and public health within the BAME community and the pandemic crisis

    / inlogov / 1 Comment

    Cllr. Ketan Sheth

    Public Health is important: it prolongs life. A fundamental quality of Public Health is its preventative nature; prevention is far more effective and far less expensive than cure. Public Health is important because we are constantly striving to close the inequality gap between people and encourage equal opportunities for children, all ethnicities and genders. Health is a human right and we should be ensuring no one is disadvantaged, regardless of their background, their ethnicity or where they live. Becoming the voice for people who have no voice is our collective duty. Simply put, our influence on the improvement of someone’s health is a fundamental act of kindness.

    Poor housing and living environments cause or contribute to many preventable diseases, such as respiratory, nervous system and cardiovascular diseases and cancer. An unsatisfactory home environment, with air and noise pollution, lack of green spaces, lack of personal space, poor ventilation and mobility options, all pose health risks, and in part have contributed to the spread of Covid-19. The disparities in housing and public health within the BAME community have persisted for decades cannot be doubted, and is underscored by a raft of research over the past six decades as well as highlighted by the recent analysis of the impact of Covid -19. The death rate among British black Africans and British Pakistanis from coronavirus in English hospitals is more than 2.5 times that of the white population.

    What are the possible reasons? A third of all working-age Black Africans are employed in key worker roles, much more than the share of the White British population. Additionally Pakistani, Indian and Black African men are respectively 90%, 150% and 310% more likely to work in healthcare than white British men. While cultural practices and genetics have been mooted as possible explanations for the disparities, higher levels of social deprivation, particularly poor housing may be part of the cause, and that some ethnic groups look more likely than others to suffer economically from the lockdown.

    Homelessness has grown in BAME communities, from 18% to 36% over the last two decades – double the presence of ethnic minorities in the population. BAME households are also far more likely to live in overcrowded, inadequate or fuel poor housing. What’s more, around a quarter of BAME households live in the oldest pre-1919 built homes. And their homes less often include safety features such as fire alarms, which is striking given the recent Grenfell Tower tragedy. Over-concentration of BAME households in the

    neighbourhoods in London, linked to poor housing conditions and lower economic status all ensure negative impacts on health, all of which means lower life expectancy. The roll-out of Universal Credit is having greater effects on the living standards of BAME people since a larger percentage experience poverty, receive benefits and tax credits, and live in large families.
    Larger household size also means that ethnic minorities are far more vulnerable to housing displacement because of the Bedroom Tax or subject to financial penalties if they do not move to a smaller home.
    These stark facts, sharply bring to our attention the health, social and economic inequalities among our minority ethnic community, all of which are critical to understanding why some ethnic minority groups are bearing the brunt of Covid-19. In this time of reflection, it is not enough to observe; we must think about what more we can do, right now, to reduce the health, housing and economic vulnerabilities that our BAME communities are much more exposed to in these fragile times. Let’s act and prolong life together, as a flourishing community.

    Cllr. Ketan Sheth is a Councillor for Tokyngton, Wembley in the London Borough of Brent. Ketan has been a councillor since 2010 and was appointed as Brent Council’s Chair of the Community and Wellbeing Scrutiny Committee in May 2016. Before his current appointment in 2016, he was the Chair of Planning, of Standards, and of the Licensing Committees. Ketan is a lawyer by profession and sits on a number of public bodies, including as the Lead Governor of Central and North West London NHS Foundation Trust.

    Where next for England’s city regions? How will the new government and Brexit impact devolution and combined authorities?

    / inlogov / Leave a comment

    Dr. Max Lemprière & Professor Vivien Lowndes 

    If you’re a local authority leader today you will doubtless be considering opportunities to gain devolved powers and funding from central government as part of a Combined Authority (CA) deal. Or perhaps you are already part of the joint leadership of a new Combined Authority (CA)? Since the emergence of the Greater Manchester Combined Authority in 2011, a further nine have been formed, with eight in total holding elections for directly elected mayors. New deals are in the pipeline, and those who have yet to strike one fear being left behind.

    We’ve spent the last few years following these developments, asking what their emergence tells us about the nature of devolution and central-local relations. We’ve highlighted the role of well-defined leadership, existing institutional structures that favour joint working, and a range of locally specific factors, like shared identities and partnership culture.

    But what is also clear is that English devolution policy is constantly evolving, responding to (and seeking to capitalise upon) broader political and economic trends. It is that which we want to discuss here.

    CAs are voluntary collaborations between elected local authorities in England that have received devolved powers and funding from central government to support infrastructure and economic development, on the basis of negotiated settlements. Since 2010, central government has championed CAs as a vehicle for stimulating regional economic growth and rebalancing the economy away from London and the South East. They vary in terms of their powers, funding, priorities and governance. New CAs have been formed at different points since 2010, and are working to different deadlines for performance reporting to central government and negotiating follow-on packages of additional funding and devolved powers

    We have argued elsewhere that the devolution policy underpinning CAs represents a noticeable shift in central-local relations. Rather than imposing a ‘one-size-fits-all’ model of devolution, the policy has been based upon bespoke negotiated agreements between groups of local authorities and Whitehall. The policy is also morphing in response to developments in Westminster and beyond.

    The most significant developments are the arrival of Boris Johnson as prime minister, in the context of the 2019 Conservative landslide, and the ongoing Brexit agenda.

    What these highlight is that the political saliency of the CA agenda varies depending on the will of political leadership at the national level and their existing policy priorities. What’s more, they show that, as CAs become more empowered and begin to bed-in and develop trajectories and momentum of their own, a tussle emerges between the CA and national level, particularly in the on-going battle for a further devolution of powers and funding.  For example, the Greater Manchester CA has made vocal appeals for repatriated powers and funding over transport and skills training to land at the regional rather than national level.

    Boris Johnson is a former directly elected mayor of London. In the 2019 general election, he based his claims to be able to ‘get things done’ as PM on his record at London mayor. Johnson’s power and influence in that role, and personal visibility, owed everything to New Labour’s devolution policy, which had created the mayorality and Greater London Assembly in 2000. He has now promised to ‘do devolution properly’, signalling an opportunity for existing CAs to expand their capacity and influence, especially in the North of England. Many CAs represent areas in the former ‘Red Wall’, where support for Labour crumbled and voters ‘lent’ their support to Johnson’s Conservatives. Now, many see an opportunity to call in the favour and make demands for further devolution.

    Overshadowing all of this is Brexit. Voters in these regions shifted their allegiance towards the Conservative Party in order to ‘get Brexit done’, but Brexit itself presents opportunities and potential pitfalls for existing and proposed CAs. Many see an opportunity emerging for CAs (rather than Whitehall) to claim some of the powers being repatriated to Britain. Could Brexit lead to regions ‘taking back control’ as well as the national government? Johnson’s premiership represents a critical juncture for the devolution policy, which had stalled between 2016-19 in the face of struggles over Brexit, and an ideal opportunity for regional leaders to strengthen their calls for further powers

    Johnson is on record as supporting the CA agenda. New CAs are currently being negotiated with the Treasury (for example in Yorkshire and Lancashire), and Johnson has advocated for further devolution of funding and powers to existing CAs, particularly over transport and infrastructure, in line with his government’s broader domestic agenda. The commitment to a Northern Powerhouse Rail programme suggests the agenda may be gaining traction. Regional leaders are hoping that Johnson has learnt about the benefits of locally controlled infrastructure from his experience at the helm of the most well developed regional transport body, Transport for London.

    This new breath of life for the devolution policy follows a period of uncertainty following the departure of Chancellor George Osborne in 2016. Under David Cameron’s government, Osborne had been the architect of the CA agenda, personally pushing the agenda and getting the deals signed off the deals. Following the Brexit referendum, Theresa May’s government let the devolution policy flounder, preoccupied with the fall-out from the ‘leave’ vote.

    The CA agenda may well be gaining new traction, as a result of both bottom-up and top-down demands. Recent years have seen many success stories, from the Greater Manchester poster-child, to ongoing negotiations with Lancashire, to further rounds of devolution for some of the UKs biggest cities. As time goes on, CAs are likely to gain the confidence they need to challenge central government in the on-going tit-for-tat that has characterises UK central-local relations. This isn’t to say that there haven’t been failures; our own research for example has shown how the North East Combined Authority failed to negotiate a meaningful devolution package with central government due to poorly constructed economic and political geographies and a lack of congruence or leadership. Having said that, a new North of Tyne Combined Authority has arisen from its ashes and negotiated a successful deal with central government.

    But this also points to the way that CAs will continue to evolve in the future. Brexit was, to some extent, a product of social division, and a distrust amongst those at the local level about politics and priorities driven by Westminster and Whitehall. Beyond London and the South East there was a particularly powerful distrust of elites and a feeling among many that they had been ‘left behind’ by the dominant economic model. Indeed, the CA agenda itself was an attempt to alleviate growing regional discontent in England in the aftermath of New Labour’s devolution to the Scottish government and Welsh. Renewing the CA policy provides an opportunity to decentralize responses to the demand to ‘take back control’. English devolution has the potential to rebalance the economy whilst also reducing social division and mistrust in Westminster politics.

    It remains to be seen whether combined authorities are able to capitalise on these opportunities, and indeed whether Westminster is serious about pursuing them. What we also need to watch out for is whether it is only those existing CAs, which have already proved themselves to be adept at bidding for power and funding (Greater Manchester and the West Midlands come to mind), that will be able to win the tussle for extra post-Brexit powers, or whether the bounty will be shared more evenly. The danger is, of course, that what is already seen by some as an uneven distribution of powers and funding away from Westminster will be aggravated further.

    lempriere

    Max Lempriere is an Associate at INLOGOV. His research interests lie in local governance, institutions, sustainable development and urban planning. He completed a PhD in the politics of sustainable urban development.

     

     

    Vivien Lowndes photo

    Vivien Lowndes is Professor of Public Policy at INLOGOV.  She undertakes research, teaching and knowledge transfer on local governance, political institutions, citizen participation, gender and migration.  Professor Lowndes is Chair of the Politics and International Studies Sub-Panel for REF 2021, the UK’s periodic assessment of research quality. 

     

    The tax so popular it has its own song

    / inlogov / Leave a comment

    Chris Game

    A good crossword anagram should have real meaning, ideally laced with a bit of humour. Like my personal long-time favourite, “I’m Tory Plan B”, which many Labour supporters still reckon fairly describes their three-time election winner, Tony Blair MP or PM.

    As Labour leader, his latest successor looks like being ‘Mr Streaker’, aka Keir Starmer, with eliminated Emily Thornberry left ruing “my horrible entry”.

    Switching to ministers, this week’s headlines are all about Home Secretary, Priti Patel – a clearly sensitive soul, and I entirely understand her feeling that “Rip it, petal”, was inappropriate advice from a senior male civil servant.

    Next week, though, is still scheduled as Budget Week, when the headliner will be the new Chancellor, Rishi Sunak. Potentially another anagrammatical pain, with only ten letters to juggle, but saved by the extreme haste of his appointment and some flashy punctuation: “Ask? I rush in!”

    By long established Budget custom, the Chancellor reveals little of any planned tax proposals in advance. It gained attention, therefore, when Sunak deliberately pre-announced his intended “fundamental” review of business rates, and their replacement with a Land Value Tax.

    “A riski hunch” perhaps, and yes, I know it’s not a perfect anagram, and yes, I promise it’s my last effort.

    The political rationale was clear enough. Scrap an unpopular tax, paid not by landowners, but on rental values by small businesses and potentially Conservative-voting tenant retailers, and earn credit for enabling your Leader to claim he is saving struggling high streets.

    But here’s the thing. Sunak chose not just to use the provocative T-word, but actually to call it a Land Value Tax (LVT – which a certain person I know thinks stands for Luxury Vinyl Tiling).

    The idea – the tax, not the tiling – has been around for literally ages, advocated by, among many others, the 4th Century BCE Confucian philosopher Mencius, 18th Century classical economists, Adam Smith and David Ricardo, the then Liberal MP, Winston Churchill, and the very up-to-the-minute Institute for Fiscal Studies.

    It’s also possibly the only tax with its own song – or, more precisely, 19th century hymn. Entitled ‘God made the Land for the People’ and too long to quote extensively here, it is available on Wiki and includes:

    “Why should we beg work and let the Landlords take the best? Make them pay their taxes on the land, just like the rest; The Land was meant for the People!”

    Now try it to the tune of ‘Marching Through Georgia’, it really is a bit better.

    So there’s no shortage of pedigree, or of possible alternative labels that might make it sound a bit less communistic to some of Sunak’s own party supporters. ‘Levy’ and ‘site-value’ both sound a bit vaguer, so why not try ‘site-value rating’ or – possibly my own choice – Location Value Rating?

    Yet Sunak chose the very term that his actual political enemies – Labour, Lib Dems and Greens – had all used in their 2017 manifestos and that the Greens especially outlined in some detail in 2019:

    “Our Green plan to transform land and property taxes will abolish Council Tax and Business Rates, replacing them with an LVT. The LVT will also absorb National Non-domestic Rates, Stamp Duty and Inheritance Tax on land, Capital Gains Tax on land sales, and Income Tax on land for owner-occupiers. The new LVT will charge the landowner a proportion of the capital value of the land each year (estimated to be around 1.4% of current values.)”

     I doubt Sunak is thinking on this scale, but the key point still holds. Long-term simplification and rationalisation take time – which most councils’ finances don’t currently have.

    Anyway, on this topic at least, Labour’s 2019 manifesto was even more cautious than 2017’s. That manifesto pledged to “initiate a review into reforming council tax and business rates and consider new options such as a land value tax, to ensure local government has sustainable funding for the long term” (my emphases).

    It may sound an open-minded, evidence-driven approach to policy development, but to the Tory ‘Red Top’ media it was raw meat, and they eviscerated it.

    Re-badging it a ‘Garden Tax’ – misleadingly, with garden values already included in council tax – they reckoned it would cost the average home (in South-East England, that is) an extra £4,000-plus, treating the unlaunched review as if it were Commons-ready legislation. I expect Sunak’s proposal will receive similar treatment – no, just kidding!

    Labour’s 2019 manifesto was more tentative still, restricting any review to business rates and emphasising that any LVT would apply to commercial landlords. Politically understandable, but it undermines much of its full potential, as outlined by the Greens.

    So why do I prefer Location Value Rating? Because I feel it’s easier to understand. Land’s true ‘location’ value derives considerably less from the actions of individual property owners than from the wider, longer-term efforts of the community in creating transport links, schools, hospitals and other infrastructure.

    It is therefore the community that should benefit from this ‘value added’ or ‘unearned betterment’, not frequently absentee landowners who currently have no incentive even to put their properties on the market.

    Next Wednesday, though, those actually in local government, rather than bossing it, want to hear about the immediate, not medium-term, future. Above all, what is the Government’s policy on further, and ultimately full, business rates retention, that it’s been piloting for nearly three years now? And is this LVT talk just a distraction?

     

    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.