Allow councils to take over failing health and education services, says Respublica

6 Oct 15

Local government should be able to take over failing public services from Whitehall through an expansion of existing “right to challenge” powers, a report by the think-tank Respublica has said today.

The Missing Multipliers: Devolution to Britain’s Key Cities, launched at the Conservative party conference, called for town halls to be able to give a ‘red card’ to ineffective control of hospitals or education institutions.

This would allow councils to directly intervene in the direction and commissioning of services and, where appropriate, the way services are accessed.

The report said that this system would allow the group of 24 ‘mid-sized’ cities in England – the Key Cities such as Sunderland, Preston and Cambridge – to match services to the needs of their communities.

The current Right to Challenge, which forms part of a suite of community powers in the Localism Act, allows residents to bid to provide local services from local government.

Report author and Respublica director Phillip Blond said that extending this to central government services would provide a mechanism to pool central and local budgets by allowing local authorities to administer the funds across certain public services.

This could unlock growth across mid-sized cities, he added.

“With a combined gross value added of £163bn and a population of 7.9 million, the key cities make a vital contribution to their regions and to the national economy.

“Together they represent 11% of the UK economy and contain some of the fastest growing cities by GVA; Milton Keynes, Bournemouth and Cambridge, for instance, are all growing faster than the national average.”

To implement the plan, the report called on ministers to set out five-year funding deals for cities in next month’s Spending Review, which would allow for better planning of public services.

Responding to the publication, local government secretary Greg Clark said Key Cities were critical to the UK’s economic growth. “I would encourage them all, individually and collectively, to ensure that they continue to influence these negotiations to ensure they deliver the powers and flexibilities they need to maximise their future economic growth,” he added.

The report was published at a fringe meeting after Chancellor George Osborne announced yesterday that he would allow local authorities to retain all business rates from 2020, ending local government grant funding.

Speaking at a fringe meeting organised by the Local Government Association yesterday, Clark revealed the council finance reform formed part of his department’s Spending Review submission to the Treasury, and had been fast-tracked ahead of next month’s announcement.

Local government was dominating the party conference, he told delegates.

“The announcement today would not have happened without the leadership in the LGA. This is something that you campaigned for, you pressed for. You said that we could be trusted to get on and run our own authorities, just don’t make us send all the money back to the Treasury every year.

“We put this in our submission for the Spending Review, and so compelling and so persuasive was it that George [Osborne] was able to announce it.

“It is the first step towards a huge future for local government in all parts of England. You will have the benefit from the business rates that you’re going to retain.”

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