Local government in ‘uncertain place for 10 years’

2 May 18

Brexit is likely to hamper much-needed local government reform over the next 10 years, CIPFA chief executive Rob Whiteman has told a conference this morning.

Whiteman told delegates at CIPFA’s local government conference in London today that “local government is an uncertain place for the next 10 years”.

“Brexit is slowing down the restructuring of local government and I do not see any immediate solutions from central government to put it right.”

He added: “We have a government that is obviously very tied up in Brexit, and Brexit is not going to end next year.”

He described the Fair Funding Review - which will set new baseline funding allocations for local government - and the government’s business rates rentention plans - councils should be able to retain 75% of business rates by 2021 - as “sticking plasters”.

“At some point in the next 15 – 20 years local government needs to be reorganised. We need to be aware reorganisation would be a good thing.”

But he predicted there was unlikely to be “any meaningful local government reform” for some time.

Local government must rebuild trust with the public, Whiteman told his audience. “In its present form, local government is not perfect.

“I do not think that trying to maximise income purely from commercial revenues is what the public want.”

Don Peebles, head of CIPFA UK policy and technical, echoed this, suggesting local government’s commercial investments should be more about keeping council finances afloat rather than maximising profit.

He said recent changes to the prudential code - the statutory guidance for local government on borrowing and investments - reflected that “the priority is not maximisation of return but the protection of capital”.

Gareth Caller, head of local government capital finance at the Ministry of Housing, Communities and Local Government, told the conference the department hoped councils would be more “transparent” about their commercial activities following the prudential code updates.   

“What we want to ensure is that local authorities are being more transparent,” Caller told the conference. 

The revision to CIPFA’s own prudential code for capital finance – separate from the government’s prudential code - set out that local authorities should ensure their capital expenditure plans were “affordable, prudent and sustainable”, in the words of Jo Pitt, CIPFA’s policy manager for local government.

Both the government and CIPFA ran consultations on updating their respective prudential codes last year.

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