Councils advised to ‘prepare now for any kind of Brexit’

6 Dec 18

Local authorities need to be prepared for any form of exit from the EU and now is the time to “double down” on devolution efforts, a CIPFA panel discussion has heard.

Public services are “already feeling the effects” of Brexit and local government should not wait to see the details of a potential Brexit deal before preparing themselves for change, chair of CIPFA’s Brexit commission Julia Goldsworthy warned at a West Midlands conference. 

Goldsworthy, also director of strategy for the West Midlands Combined Authority, told the event in Birmingham last night: “Pressures are ramping up, and from a public sector point of view some places are already feeling the effects, especially with staffing issues.” 

She said the Brexit debate still had many “twists and turns” in store and those in local government needed “to get on with things that we can control”.

“Proceed until apprehended rather than try and understand the rules of the game would be my advice” she added.  

The event, with an expert panel, was organised by CIPFA’s Advisory Commission for Public Services and the Centre for Brexit Studies think-tank to discuss how Brexit is likely to affect the West Midlands. 

Jonathan Tew, assistant chief executive at Birmingham City Council, said that a lack of clarity of Brexit plans has made planning difficult. 

“We have almost made it up as we have gone along in due to the lack of clarity,” he said.

He said: “The next few weeks are crucial. The engagement between central government and cities has just not been good enough. We are only just about to begin discussions with central government and I’m afraid it’s too little too late”. 

Tew added: “Now is the moment to double down on devolution because this Brexit process has amplified how important it is.”

He said that economic voice of core cities in the UK have not been heard in the Brexit process and he deemed this “deeply unsatisfactory”. 

Tew cited the Bank of England’s analysis of the economic impact of a no deal Brexit, which suggested the UK economy could shrink by up to 8%. But Tew noted that Birmingham’s economy stood to endure a 13% hit. 

Goldsworthy agreed and said: “This is the moment to push the agenda forward. There is an opportunity for us to try and set the terms.”

The government has committed to creating a Shared Prosperity Fund to replace EU funding to regions in the UK, but panellists expressed concern about replacement funding. 

Goldsworthy said: “I am a bit worried about the Shared Prosperity Fund because it takes place in the context of a Spending Review.

“Rather than wait for government to say what the fund looks like, let’s create our own prosperity fund.The Spending Review is due to take place next year.”  

John Clancy, former Birmingham City Council leader and visiting professor with the Centre for Brexit Studies research group, suggested prosperity could be created by harnessing local government pension funds. 

He revealed that the grand total of the Local Government Pension Fund stands at £336bn, but said “the problem is that these are around about 70% in equities”. 

“We have to look at a way to get this wealth circulating around the economy. There has to be a way of rewiring the funds to do something different from what they are doing.”

Metro mayors have said that the Share Prosperity Fund should be handed out straight to them

Listen to the panel for this event share their thoughts on CIPFA's 'What does Brexit mean for public services?' podcast. 

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