Unsettling times for local government
20 December 2012Follow @PwC_Midlands
By Andy Ford, Local Government
There is a definite feeling of ‘back to the future’ about the release of the local authority financial settlement so close to Christmas. The confidence of a few years back – when we thought we had entered an era of commitment to longer term certainty about council funding - has been blown out of the water. So local authority finance staff will be spending the final few days before Christmas eschewing the mince pies and mulled wine to focus on the details and implications of their grant support, including a new 'efficiency support grant', for the year ahead. Few approach the task with anything like seasonal cheer and even fewer will have expected any surprise presents from Santa Pickles.
In the current environment, it would be tempting to see councils as prisoners of a destiny that is characterised by doom and gloom. Certainly there will be no let up in the need for the sector to transform how it operates, how it engages residents and what it chooses to prioritise. Our current work supporting the NLGN looks at the implications of continued austerity beyond this spending review period. It is not for the faint-hearted and emphasises the need for a rapid acceleration in transformation across the sector.
But there is more to the settlement than just balancing the books. Hefty reductions in government support coupled with continued constraint on Council Tax rises mean that business rates are becoming more critical to the future financial stability of councils. And linking the retention of elements of business rates to economic growth does focus the mind on councils' role in getting UK PLC back to growth. That is certainly one positive, and increasingly important, agenda for all local authorities to embrace. Our recent report on Good Growth for Cities stresses how much value the public places on economic growth that impacts directly upon their daily lives - jobs, income and health as well as work/life balance, housing and travel to work. The smart challenge for local authorities is to embrace the opportunity to create good growth which delivers the outcomes that are priorities for both councils and their residents.