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First, we know a bit more about the Single Local Growth Fund. It’s still significant that the Fund exists at all, and conversations I’ve had suggest it was a hard-fought battle in Whitehall to get to £2 billion. But the SLGF is mainly made up of funds that local government already had; the breakdown is below. Also worth noting is a) that capital money cannot be moved to resource, meaning that the majority of the money is for capital projects, and b) that £314 million is already committed to transport projects for 2015-16, meaning that not all of the funds are unringfenced.
In forthcoming local government guidance, some of the big questions will be about whether funding sourced from a pot intended for one purpose can be used for another; for example, can local areas bid for FE capital money and use it for other capital projects? There are also unanswered questions about the proportions of the fund that are ringfenced rather than unringfenced and allocated by competition rather than formula.
Government guidance will need to tread a tightrope between clarity, transparency and brevity, giving enough information on the process, rules and the way in which Local Growth Deals – the basis on which Local Enterprise Partnerships will access the money – will be assessed without over-prescribing everything.
Second, we know that, despite very welcome rhetoric about greater devolution, there is more to be done to have a stronger place-based approach to budgets and services. The £3bn from the NHS budget to fund joint commissioning of health and social care, plus the £200 million for Troubled Families are very positive steps towards this. But far more needs to be done. Sir Howard Bernstein talks eloquently about spend in Manchester before and after the recession being exactly the same – £22 billion – but its composition changing, with more and more money being spent on benefits, troubled families and helping those suffering in recession.
To move towards this requires change in Whitehall’s culture, accounting practices and behaviours, as well as continued political commitment to driving the devolution agenda from all parties.
Third, the Spending Review needs to be just the beginning of a wider conversation about places, supporting economic growth and reforming services, looking towards the next election and beyond. Issues that need to be debated include the importance of devolution at different speeds, allowing the most able areas to take risks and innovate, while providing support for the areas with lower levels of capacity or facing greater economic challenges.
We need to talk about reforming the local tax system, and how we do more to link economic growth with reform of public services and reduction of dependency.
We need to talk about governance and how places can make challenging decisions across ‘real’ economic areas – and whether this means Local Enterprise Partnerships, Combined Authorities, or whatever is appropriate for a local area, provided it can take tough, democratically accountable decisions.
We also need to talk about how to ensure that there is multi-year certainty about this agenda; so many places struggle to use even the limited money available as there is no guarantee it will still be there in three years.
The LGA’s recent Rewiring Public Services report is an important contribution to the debate about changing current ways of developing policy and managing money. The Centre will be playing its part in its work on a Cities Growth Manifesto, on which more soon. In the meantime, we need to continue to focus the debate on how to make the most of the policies we have now, while shaping the conversations of the future to ensure we are far closer to having cities that can take their own decisions, increase their own tax revenue and manage their public services more efficiently and effectively.
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