Luke Bevir says that multi-year single funding settlements for local authorities will provide local areas with more certainty and an ability to focus on place-based strategies and prevention.
Earlier this month, a survey of County Council Network members found that one in ten local authorities in England are not confident that they will be able to balance their books this financial year, including those having already taken steps to make significant savings. This figure increases to four in ten next year, and six in ten by 2025. This comes hot on the heels of Birmingham City Council’s Section 114 notice and the well documented financial challenges being experienced in Slough, Croydon, Thurrock, and Woking.
But local authorities’ room for manoeuvre is extremely limited, with a large proportion of fixed cost and rising complex needs increasing the need for investment in targeted and crisis services. Whilst the case for investing in preventative services is stronger than ever, the value and annual nature of financial settlements means that immediate priorities take precedence.
The response by councils to their financial situation has been a combination of increasing thresholds for services, asset disposal, reducing or refinancing capital programmes, reserves use, spending moratoria, and voluntary redundancies. While this goes some way to addressing immediate pressures, the focus on high end demand rather than preventative support will ultimately fuel increased demand in the future.
At a time when current forecasts predict ever-increasing NHS waiting times (which has a direct impact on council services), increasing numbers of children entering the care system, and an ageing population putting pressure on adult social care, our public services need certainty so that they can effectively plan to meet these challenges.
More certain funding settlements
Local authority finances are complex and there is no silver bullet to funding pressures. However longer-term funding settlements could provide a platform to support investment in coherent place-based strategies focused on prevention.
The recent multi-year single funding settlements signed between the Department for Levelling Up, Housing, and Communities (DLUHC) and the West Midlands and Greater Manchester Mayoral Combined Authorities (MCAs) provides a blueprint for the future.
Where in recent times local authorities (including MCAs) have been reliant on multiple funding streams tied to specific policy areas, projects and performance targets, the settlements for West Midlands and Greater Manchester bring together disparate streams and will last for a whole spending review period, potentially up to 4 years (the current 2021 Spending Review Period lasts from 2022/23 until 2024/25) (Trailblazer devolution deals | Institute for Government). This gives them independence and flexibility to spend in line with local needs, and provides the medium-term financial certainty required to plan effectively and meaningfully.
These arrangements are enabling both city regions to develop coherent longer-term investment strategies, removing the necessary short-termism that comes with annual settlements.
Prevention at the heart of place-based strategies
Effective place-based prevention strategies do not fit neatly into single policy areas or one-off projects: they are complex and interconnected. For example, tackling the systemic challenges that result in health inequalities requires input from housing, education and adult skills, businesses and leisure providers, as well as social care and healthcare services.
There are scattered examples of brilliant work – but if we are to see more of this, national policymakers will need to understand the importance of long-term planning. With greater certainty local government will be able to invest more in addressing the root causes of inequality and view issues holistically rather than through a single lens.
My optimism for the future of public services
The settlements agreed with the West Midlands and Greater Manchester provide a blueprint for future funding arrangements for the delivery of wider public services locally. Certainty is key – how else can local authorities meaningfully engage with partners, communities and businesses with the confidence required to bring about sustainable change?
As my MV colleagues have noted at the recent the Solace Summit and the Co-operative Councils Innovation Network conferences, there is no shortage of appetite for longer term thinking. Central Government just needs to give local leaders the space and certainty they need.
Read more about Mutual Venture’s work on developing place-based strategies here.
To hear more about our work contact Luke Bevir luke.bevir@mutualventures.co.uk.