Jonathan Werran, chief executive, Localis looks at what the Spring budget means for local government.
This was hardly a budget for the age, let alone perhaps the year. At the end of the Chancellor’s statement, the widely telegraphed additional 2p cuts in National Insurance felt as baked in as a flaccid supermarket baguette picked up on the way home from work.
As possibly the last significant fiscal event before the balloon goes up on the next general election, Jeremy Hunt was hemmed in by the growth and borrowing forecasts issued by the Office for Budget Responsibility, seemingly limiting his fiscal headroom for cutting tax and reallocating public spending.
Like a limbo pole remorselessly descending, the headroom for the next government is a shade under £9bn, and amid a litany of borrowing forecasts which will see national debt at 94.3% of GDP by 2028/29. By way of comparison, at the start of the century the national debt dropped in relative terms to a mere 29% of GDP by 2002.
At least Mr Hunt was able to boast that inflation was being tamed. When he became chancellor, it raged at 11% but had fallen to around 4% and on course to fall below 2% in the coming months, according to independent public finance experts the Office for Budget Responsibility.
And possibly with an eye to an autumn election, the Household Support Fund, which allows local councils to help families cope with the cost of living through food banks, warm spaces, and food vouchers, will be extended for a further six months beyond the end of March. This must be seen as a highly creditable lobbying outcome for the sector, including Core Cities, London Councils and SIGOMA.
This Budget might well be the final hurrah for Levelling Up as a totemic domestic policy agenda with money attached. Will we miss it when it’s gone? It did sound like last call in the bingo hall. Announcing a shift to economic growth that is not based on net migration, and that raises living standards and wages and boosts GDP per head, one felt the pang of missed opportunity. Wasn’t it the operating assumption that reducing geographic inequality and improving higher paid jobs across the country had been the stated intention of the whole levelling up shebang from 2019 onwards?
But the levelling up show went gamely on, and with a nod to the role of local leadership, the North East was granted a trailblazer devolution deal with £100m funding attached. And from metro to retro, Hunt shared good news of devolved powers to a trio of counties with strong local economies, Buckinghamshire, the chancellor’s native Surrey and Warwickshire.
Michael Gove’s decision to double down on growth around Cambridge’s life science and knowledge economy was reflected with an announcement of long-term future development to unlock transport blockages.
And as with previous budgets and spending reviews, there were genuflections towards Conservative metro mayor Andy Street, and a ragbag of funding announcements to the four corners of the realm. News of further levelling up funding for cultural projects, including Coventry, 20 new places, and Darlington – home of the Treasury campus - getting a share of Towns Fund money as well as a separate cashpot for repairing the social fabric, community centres and the like in our localities.
Institutional investment choices from the Local Government Pension Scheme and other public pension schemes were given a reference point, with an admonitory call to check levels of international and national outlay to ensure best practice.
Hunt’s call for reform of public services and a landmark plan that promises to change the Treasury’s approach to public spending and boost lagging public sector productivity was declared amid a litany of AI and apps, the promise of technology and drones to cut costs in the NHS and criminal justice.
Unlike Thatcher’s call for the Rayner efficiency review or Gordon Brown’s appointment of Lord Gershon to overhaul public sector commercial practices, there is no time or space for a totemic industry figurehead to deliver a transformation in how the public sector goes about its business. Instead, the National Audit Office’s recent call to deliver cash-release savings will be the off the shelf bible from which a blueprint for public sector productivity will be delivered. For this we can read savings from spend in major infrastructure projects; asset management; procurement; digital transformation and reducing fraud and error.
How much this is reform is directly translatable to local government, when not preoccupied with staving off financial collapse or splurging on the kinds of egregious extraneous ‘woke’ consultancy the chancellor has been harrumphing about on the eve of his budget remains to be seen.
With public spending increases pencilled in at 1% in real terms – presumably until the next Spending Review fills in the reality gap on day-to-day expenditure between now and the end of the decade – there might be a case for a humble central government, wearing its listening ears, picking up certain aspects of best practice from a continually adaptable and transformative local government sector.
