Whitehall should pass more power to councils, says Truss

8 Jan 19

The government should relax its centralising tendencies and pass more powers down to local government, particularly counties, a Cabinet minister told the Local Government Association finance conference.

Chief secretary to the Treasury Liz Truss declared herself to be a “great supporter of devolution” at the conference today.

She acknowledged that the result of the Brexit referendum was due in part to a resentment of Whitehall decision-making and stressed that the government must now look to give authorities the power to make decisions locally.

“More decision making has to be done at a local level. When decisions are made at a distance, they take longer and can be less effective,” Truss said.

“We are now seeing better representation of cities but we need more representation of counties.”

She also praised local government successful track record on efficiency and driving economic growth.

Savings made in the face of rising demand from things like adult social care and children’s services should serve as examples of best practice for central government, the minister said.

“Many lessons could be learnt by Whitehall from central government,” she told LGA delegates.

Truss also claimed that local government was an “unsung hero in economic growth” and gave the example of the Tees Valley Combined Authority.

She suggested central government look at how it could work with local government to “make things better” ahead of next year’s Spending Review.

But a very different note was struck by LGA chair Lord Porter in an earlier speech.

He was pessimistic about the state of local government finance, telling the conference: “I can’t see that this sector will ever get near to the funding it will need.”

Porter’s thoughts were echoed in a separate panel discussion involving four separate local government treasurers: John Betts of Warwickshire County Council; Tony Kirkham of Newcastle City Council; Jason Vaughan for the Dorset Councils Partnership; and Gerald Almeroth of the London borough of Sutton.

Asked whether the sector could expect another Section 114 notice (as issued by Northamptonshire last year) almost all the agreed it was likely. Vaughan said he hoped not.

The panel outlined key factors that they saw as the biggest challenges to local government. These included rising demand in adult social care and children’s services and managing uncertainty post-Brexit.

On the fair funding review, Betts observed: ““We need to avoid in fighting about distribution and focus on the quantum of the fair funding review.”

Analysis published by Grant Thornton today warns that one third of councils are at risk of financial failure in the next 10 years, and almost one in five (17%) hitting crisis point as soon as 2021.

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