Autumn Statement 2014: more ambition please

2 Dec 14
Jon Rowney

We need to move away from a national funding system to one that responds to local needs and priorities. The Autumn Statement should give London government a greater stake in the performance of the regional economy and a greater say on how resources are invested

The National Audit Office’s recent report on financial sustainability paints a picture that many within local government will recognise – falling income, rising pressure on services and acknowledgement that local government has coped … so far.

But it warns that history may not be a useful guide to the future.

For those of us working in London, the figures are stark:

  • 44% real terms reduction in core funding
  • 24% real terms reduction in revenue spending power
  • a cut of £740 per household – the highest cut across the country.

The scale of the cuts are justified by government on the basis that local government represents a quarter of all public spending. But this includes welfare expenditure and non-revenue items. A more representative figure would be closer to 3%.

In the next two years London’s councils will have to deliver savings of around £2bn. This is more than currently spent in London on street lighting, libraries, culture, planning and environmental services combined.

We are entering a crucial phase for the public finances. Autumn Statement 2014 will be followed Budget 2015. We then have a general election followed by Spending Review 2015.

This will set the public spending tramlines for the rest of the decade. Undoubtedly, austerity and economic growth will be the dominant themes. We know from the NAO report that more of the same may not be sustainable for local government.

For London and many other areas, greater devolution of power and responsibility represents the most realistic opportunity to deliver savings and continue to function in the way people expect us to.

There is a pressing need to move away from national systems. The stubborn challenges faced by our communities demand local knowledge and local solutions. We in local government are well placed to drive more integrated and cost effective services. Employment and skills, housing investment, troubled families and those with complex needs, these are all areas of opportunity

In transforming public service delivery, funding reform is a necessity. Why not allow single pots of funding in areas such as employment support and offender rehabilitation; relax restrictions on borrowing for investment; devolve the full suite of property taxes.

Allow London government to have a greater stake in the performance of our regional economy and a greater say on how resources are invested.

By 2019, the government will need to make further savings of more than £38 billion. Incremental public sector reform will not deliver on this scale. A more ambitious approach is needed, and that approach needs local government.

Jon Rowney is acting strategic lead for finance, performance & procurement at London Councils

 

 

 

Did you enjoy this article?

AddToAny

Top