Liverpool’s devo deal is welcome, but not enough to save services

20 Nov 15

The devolution deal we negotiated with government this week is no panacea.

That might sound like a flat note when describing the biggest transfer of economic clout from central to local government in a generation.

Indeed, the £900m package and raft of new powers over transport, planning and skills will help us develop our economy over the next three decades, in particular, helping us grow our private sector and generate higher value-added employment opportunities for a part of the country that sorely needs them.

In particular, the creation of a Single Investment Fund and Mayoral Development Corporation will see us gain greater control and influence over £3bn of national funding. Also, we secured a long term Special Rail Grant settlement for the Merseyrail network, supporting Merseytravel’s on-going procurement of new trains. Meanwhile, greater control of skills policy and the Work Programme will see us better able to address poverty, low pay and worklessness.

But despite this, we face a grim immediate future.

At the same time that government is devolving power and money for economic development, it is starving the local councils of our city-region of the vital funding needed to maintain frontline services. Here in Liverpool, we have seen our government funding collapse since 2010. By next year, it will have been reduced by 58%, some £330m.

Liverpool has taken one of the hardest hits, despite starting with more than our fair share of pre-existing social and economic problems. Still, though, we are doing everything government is asking.We are managing our finances prudently, (a fact recently underlined by our auditors). We are diversifying our economic base, growing our private sector, nurturing dynamic new industries and working with business wherever we can to be a reliable and responsive partner and encourage growth, jobs and investment.

We are the host city for the next summer’s International Festival for Business, following on from the first, highly-successful event in 2014. (In fact, an explicit commitment to remain the host city in 2018 and 2020 was part of our devolution agreement). We are open for business and I recently returned from a UK trade delegation to China, stopping briefly to exchange pleasantries with one of my cabinet colleagues who was off out to a different part of China to meet investors.

All of which is to say we are doing everything we can, both to run our city effectively and develop our economy. But we face the awful prospect of not being in a position to maintain our key statutory responsibilities after next year unless the government relents and provides the finance needed to meet our responsibilities.

Let me give you one example. In 2010, Liverpool City Council was spending £222m a year on adult social care services. Today, the figure is £172m. Next year, this will fall to just £150m. The number of people receiving care packages will fall from 15,000 now, to 9,000.

Whether this situation gets even worse will depend on what’s in next week’s autumn statement. Along with many other local government leaders, I have been consistently warning about the impact on services if our core funding is not addressed.

My plea to ministers is simple. Resource us properly to allow us to do our vital day job and I will work night and day to deliver the promise of devolution. But as Geoffrey Howe famously said about Margaret Thatcher, you cannot send us to the crease after breaking our bat.

Did you enjoy this article?