Funding cuts and new rights for citizens could affect councils’ ability to provide services within a decade, the New Local Government Network says.
The think-tank’s report, Future councils, says the new powers for communities over planning and service provision could lead to ‘Californication’, with councils experiencing the same difficulties as the US state of high demand for services, low income and increased direct democracy.
This is one of the possible outcomes foreseen for town halls as councillors navigate budget cuts in the years ahead. The predictions in the report are based on discussions with senior figures from local government, analysis of existing plans for change and anticipated and emerging trends in government policy.
Among the forecasts are that councils will take on substantially less direct responsibility for service provision. In particular, more will introduce commissioning of services, and there will be more devolution of power to neighbourhoods and individuals.
Although the report predicts that some more traditional authorities will remain, greater tendering of services could lead to the introduction of ‘pay as you go’ public services. A handful of local authorities might even commission most of their services, becoming ‘residual councils’ that provide very little directly. Councils in the south of England are most likely to take this approach.
In areas such as the English Northeast, councils could cluster together into new ‘regional federations’ to share their services. These could also have London-style ‘metro mayors’.
The report states that although none of these scenarios might happen in full, ‘it is likely that elements of all of them could'.
NLGN director and report author Simon Parker said: ‘Local authorities are quietly preparing to transform the way they work in response to budget cuts. Some services will change radically as councils become commissioning hubs. Expect councils to redesign everything from social care to street cleaning, more delivery by the private and voluntary sectors, and an increased reliance on personal budgets.’
He added: 'This is a time of risk and possibility for local government. Town halls could find themselves becoming less relevant as direct democracy and consumer-led services start to bypass local democracy. The key for councils who want to remain at the heart of their communities is not just good service delivery, but strong political leadership to drive economic and social growth for their residents.'
Speaking at the launch of the report today, the director general of localism at the Department for Communities and Local Government, David Prout welcomed the report, adding that there would be a lot of ‘fundamental’ differences between councils in the future.
He highlighted the issues that are leading councils to change – cuts in budgets and the increased accountability for their funding that will follow the Local Government Resource Review. These changes include the devolution of business rate revenue, a greater impact of democracy through the government’s localism plans, and the increasing availability of information about services.
Prout said these changes gave him an ‘optimistic view’ of the future of councils. ‘I think they will continue to try and provide the best local partnerships and [that] will lead to many different kinds [of council]. I think there will be a great deal more outsourcing and commissioning.’
Tony Travers, director of the Greater London Group at the London School of Economics, added that the scenarios outlined in the report could change councils ‘very substantially’ from the current model, established in the 1960s and 1970s, of them being ‘big enough in terms of population to deliver a full range of services’.
• Read Simon Parker’s blog for Public Finance on the report here.
