A Japanese view of Jeremy’s budget

29/03/202328/03/2023 / inlogov / Leave a comment

Chris Game

I had an interesting Budget week. I was part-hosting a Japanese academic colleague – Prof Toshihiko Ishihara (Kwansei Gakuin University) and his wife, Midori – making their first overseas trip since Covid. They briefly visited Birmingham, where Toshi was an erstwhile INLOGOV Associate, but were based in London, where I’d agreed to organise a theatre visit.

I’d booked tickets for a well-reviewed modern-day play, Romeo and Julie, loosely based on one of Shakespeare’s. Single-sentence synopsis: Julie – a bright, Cambridge University-bound, aspiring astrophysicist – is emotionally torn between uni and her affection for young single dad, Romeo, effectively sole carer for his baby daughter afflicted with Poonami.

No, the Poonami doesn’t feature in Shakespeare’s version, but, researcher that I am, I’d discovered it’s a real medical thing, meaning affected babies’ sudden, massive, uncontrollable bowel movements. Better still, that etymologically Poonami derives directly from the Japanese tsunami – a sudden, volcanic, unstoppable wave. My guests were delighted – and the play too was excellent.

The following Wednesday, however, was Budget Day – followed by the Birmingham Post’s impassioned coverage of our region’s “Power grab”, the “seismic shift in devolution as West Midland leaders take more control from Whitehall”, etc. (pp.1,7) – guaranteeing some amused but tricky questions from someone who both lives with and studies serious mayoral governance.

It was the national news headlines, though, that I was obliged to address first, and the UK’s “unsustainable … biggest since the war … tax burden” – characterised by Chancellor Jeremy Hunt as something horrendous and to be avoided, certainly by a Conservative Government, at almost any costs.

We’re not Basil Fawltys, but my Japanese friends and I tend not to mention ‘the war’ that much. Anyway, the timescale wasn’t really the issue. It was that highest-level tax forecast of 37.7% of Gross Domestic Product (GDP) – and yes, we do make life harder by colluding in almost invariably labelling it a “tax burden”, rather than, say, the “quality-of-life price” that the tax helps pay for.

What Toshi and other Japanese students of these things invariably query is: why the excitement/horror over a tax-to-GDP ratio currently almost identical to theirs? Yes, ours is indeed a higher ‘burden’ than those of, say, the US or Switzerland. But, as shown in the Office for Budget Responsibility’s Chart A, both we – at roughly 34% of GDP – and Japan are currently in the bottom third of “advanced economies”, and even at a forecast 37.7% we’d still be mid-table and some way BELOW both most sizeable West European countries, plus bits of Eastern Europe too.

It’s interesting. Pollsters never ask us if we prefer NOT being an ‘advanced economy’ – you know, one with fully staffed and functioning health and social services, decently funded schools, reliable public transport, etc.? And I’m not sure how collectively we’d answer. Clearly, these things do cost money, yet we obviously like visiting these higher-taxed places for our holidays. Not Denmark perhaps – top, with its 47% tax ‘burden’ – but France, Austria, Italy, Scandinavia, Greece, Spain, Portugal, etc.

It’s presumably at least partly these countries’ ‘quality of life’ (QoL) that attracts us – which, unsurprisingly, correlates broadly with ‘tax burden’. There are several QoL indexes, one being Numbeo’s. It’s not the most methodologically sophisticated, but it does produce nice maps, collectively summarising its measures, which include purchasing power, safety, health care, cost of living, and pollution.

Netherlands, Denmark and Switzerland are currently top, scoring nearly 200 QoL points. Then the usual suspects – Finland, Iceland, Austria, Australia, New Zealand, Japan (13^th) etc. – down to No.21 – UK 166.4, just ahead of Croatia. Disappointing, but could be worse – bottom at 84^th is red Nigeria, not with ‘nul points’ exactly, but only 40.

The underlying, systemic problem, obviously not mentioned by Chancellor Hunt, is precisely his Department: His Majesty’s Treasury – first time I’ve typed that! – and its overbearing central funding control, currently exercised politically and communicated by him. And formerly by, among others, one George Osborne – which is where the irony starts. When Chancellor of the Exchequer, Osborne launched, and currently chairs, the Northern Powerhouse Partnership (NPP) – self-described as “the leading voice of business and civic leaders across the North”.

And currently a very shouty voice. For, within days of Hunt’s Budget pronouncements, along came Osborne with his NPP ‘wrecking ball’ – a clumsily titled but potentially headline-making report: Fiscal DevoNation – The Blueprint for How to Devolve Tax to the Regions of England. The Treasury, he and his Powerhouse chums now reckon – and as local government has complained for years – far from being the provider of solutions, is itself the problem. Its voice is the overwhelmingly dominant one in what Osborne nowadays sees as a damagingly over-centralised fiscal system. Just like when he was boss.

The NPP’s solutions involve, at least eventually, full-scale fiscal devolution. The “most unfair” council tax – with its outdated property values – stamp duty (paid on purchasing residential property), and business rates should all go, eliminating the Treasury’s all-powerful role altogether. The at least eventual replacement, following a comprehensive revaluation of all homes, would be a locally set land value tax, plus three new council tax ‘super bands’ for the most valuable properties, with revenue to be shared across the country.

Yep – that’s radical, but there’s more – like the localised hotel tax that numerous other countries already have, which NPP reckons could raise an annual £5.5 millions for the Lake District alone.

But I digress – from what my Japanese visitors really wanted to talk about: that Budget highlight of a “seismic shift” in devolution, to the West Midlands and Greater Manchester regions, and their elected Mayors, Andys Street and Burnham, who will get new multi-year devolution funding deals, and be allowed to retain business rates – to be followed by further such agreements across England.

At the time of writing, there hadn’t been a direct response from Northern Powerhouse as to how far down the ‘full-scale fiscal devolution’ road this might take us. As for a Japanese reaction, well, this blog is already overlong; but their response would probably start with the country’s written constitution, and the local government chapter guaranteeing its role and “the principle of local autonomy”. It’s an ultra-crude summary, but basically the national state does currency, diplomacy and defence, and pretty much everything else is left to the 47 prefectures and 1,700 or so municipalities. And heading those municipalities … directly elected mayors!

As the American phrase puts it: ‘Way to go’ – in both senses.

_____________________

This is an adapted version of an article that appeared in the March 23^rd edition of the Birmingham Post.

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.

Forging an alliance with the NHS

21/03/202320/03/2023 / inlogov / Leave a comment

Cllr Ketan Sheth

If local councils and the NHS do not work together as trusted equal partners, our residents are the ones that lose out.

In Brent, our local communities were among those most affected by the first and second waves of the Covid-19 pandemic, with the local hospital, Northwick Park, making the national headlines having been caught in the eye of the storm, which acutely demonstrated the terrible impact of health inequalities on real lives.

We are, of course, particularly reliant on our NHS partners to provide emergency services, planned elective care, and a full and complex mix of outpatient and specialist services, including mental health and community services.

Likewise, NHS staff are reliant on local councils (and other local partners) playing their part in delivering a seamless patient pathway, that can go from a first GP visit right through to a tailored social care package.

Delivering high quality, equitable health services take detailed planning and a solid grasp on the needs of local communities.

In Brent, we have seen increasing levels of partnership working with the local NHS trust. Collaboration is made easier because London North West University Healthcare NHS Trust (LNWH) shows a refreshingly genuine commitment to gaining a deep appreciation of the views, concerns, and perspectives of our local populations. This is reflected in the development of the trust’s new five-year strategy.

In addition to undertaking vast analysis of public health, demographic and other data relating to our communities, LNWH sought engagement right from the start. The trust co-created a strategy with the help of almost 900 local community members and 40 representatives from local authority and partner organisations. Over 2,300 staff also contributed, many of who live locally and reflect the diverse population of our local communities and are frontline NHS staff who know all too well the importance of good partnership working.

I hosted one of the open forums for the trust where the local residents had an opportunity to say what they felt should be the trust’s priorities. Working in partnership with local communities and improving the quality of care came out as key themes.

This is not surprising. In Brent, our communities experience significant health inequalities when compared with regional and national levels. Local councils like Brent can only provide so much support to address these issues, so we must work with NHS partners to combat health inequalities right across our health and social care system. Indeed, we are now seeing an increased trust present at place-based and neighbourhood meetings.

One of the biggest challenges facing LNWH is the level of emergency activity. As a local council, we must work collaboratively to address systemic issues like this that the trust cannot resolve alone. Indeed, the emergency pathway is a key touchpoint for the most deprived people in Brent and partnership working presents us with a real opportunity to connect them earlier with more appropriate support in the community.

The trust’s discharge processes are perhaps the most reliant on partnership working — the NHS isn’t just its hospitals. It’s vital that we work collaboratively across organisations — the rest of the local NHS like GPs, district nursing, mental health and social care — to help the trust improve the flow of patients through its hospitals.

LNWH has called its new five-year strategy ‘Our Way Forward’. It sets out a welcome commitment to local authorities, communities, and people. We must take joint responsibility for Our Way Forward, because by working together we will forge a far better health outcomes for our residents than we can alone.

Cllr Ketan Sheth is Chair of North West London Join Health Scrutiny Committee

Mission Possible?

10/03/202308/03/2023 / inlogov / Leave a comment

Jason Lowther

With under 700 days to the next UK general election, political parties are busy developing their manifesto documents. In February, Labour leader Keir Starmer made a major speech laying out his “five missions for a better Britain”. How do these five missions relate to local government? And is the turn to “mission driven” government likely to work?

The five missions vary in their level of specificity and challenge. Securing “the highest sustained growth in the G7, with good jobs and productivity growth in every part of the country…” is a little vague but likely to be difficult, especially given we are currently ranked 6 out of 7 in terms of output per worker. Mission #2, “make Britain a clean energy superpower”, accelerating the move to zero-carbon electricity from 2035 to 2030, is specific but very challenging. Mission #3, reform of health and social care and reducing health inequalities, will require a re-focus from secondary (hospital) care to social care and addressing the social determinants of health. Mission #4 is about community safety, and likely to involve more community policing. Finally, mission #5 is to “break down the barriers to opportunity at every stage” through reform to the childcare and education systems.

Local government potentially has important roles in each of the five missions. Local education, skills and economic development functions will be critical to improving productivity. On energy, Net Zero requires at least a doubling of electricity generation by 2050, from decarbonised sources. Decarbonisation strategies need to be place-based, taking account of the geography, building types, energy infrastructure, energy demand, resources and urban growth plans. We’ve recently argued here for the key roles of councils in this area.

Turning to health and care services, local government clearly has leading roles – including ensuring place-based planning to address the social and behavioural causes of health inequalities. Analysis by the Liverpool and Lancaster Universities Collaboration for Public Health Research in 2021 concluded: “investment across the whole of local government is needed to level up health including investment in housing, children’s, leisure, cultural, environmental, and planning services”. Similarly community safety, child care and education are areas where local government could be enabled to have much greater positive impact.

Perhaps as important as the specific “missions” is the approach to governing which the party is proposing. Labour’s document characterises this as a move from top-down, target-led, short-term, siloed approaches, to government which is more “agile, empowering and catalytic”, working across the public and private sectors, and civil society. This, it argues, requires organising government around a shared vision, focusing on real world outcomes, concentrating on ends with flexibility and innovation concerning means, devolving decision making from Westminster, increasing accountability including central and local data transparency, and adopting long-term preventative approaches including greater financial certainty for local areas.

In some ways the idea of mission-driven government echoes the 1990s thinking of Ted Gaebler and David Osborne’s book “reinventing government”, which argued for a more entrepreneurial approach to the delivery of government. Their work pointed to entrepreneurial companies setting overall missions and goals, and then leaving managers to figure out how best to deliver these – for example, by providing an overall budget for a service rather than detailed line-by-line budgets which disappear if not spent by year end. The focus on managers rather than considering the perspective of politicians is one of the problems identified in subsequent evaluations of the reinventing government model, together with difficulties in sustaining the approach.

Mission-driven policies addressing ‘grand challenges’ of society are increasingly common, for example in the UN Sustainable Development Goals and various EU policies. Mazzucato et al recently argued that addressing such challenges requires strategic thinking about: the desired direction of travel, the structure and capacity of public sector organisations, the way in which policy is assessed, and the incentive structure for the private, public (and I would add community) sectors. Labour’s paper makes a start (albeit at a very high level) on thinking through these areas. The litmus test, though, will be in developing the detail and how far this engages with local areas.

Over the next few months, we will be contributing to the debate on the upcoming party manifestos with some research-informed thoughts on a variety of local government related policy areas. If you would like to be involved in developing these, please get in touch.