Rethinking local government

Councils are already providing support to local businesses through their prudential borrowing powers, supporting existing capital expenditure projects, supporting existing financial institutions and stimulating demand through a number of high street schemes.

Following on from the recent Audit Commission report on the Icelandic banking collapse, councils are also reviewing their risk and investment strategies to ensure as fully as possible that investments are not put at such high levels of risk again.

This is important, but need any more be said on the subject?

Well frankly, yes. This is a perfect opportunity for local government to critically self-evaluate their local service remit.

Councils are too often seen as simply service providers, whereas in fact they should be looking to work with residents and a whole range of organisations from businesses to the third sector in order to establish innovative new working models for service delivery.

The debate over whether services should be outsourced or kept in house is the wrong one.

A more intelligent new framework revolves around how we ensure the best outcomes for local residents, giving them freedom and choice which goes far beyond pure financial savings.

This then also allows councils to focus on their important strategic role of supporting development and strengthening the wider local economy.

We at Localis are exploring a number of mechanisms through which councils to exploit the economic crisis and turn it into an opportunity for the long-term strength of local economies.

Councils should use their trading powers and powers of wellbeing in innovative new ways by engaging the public and staff in a debate about new opportunities for local development.

So, are there innovative ways to link local government investments directly to the improvement of the wider local economy, including social and environmental development?

There are a whole swathe of potential investments which simultaneously have the potential for a financial return, and are socially and environmentally beneficial.

Once the broader strategic role of local government takes effect, it is not difficult to envisage a completely new market to emerge.

For example, capturing the savings to the public sector for the provision of home foster care or youth reoffending prevention schemes could potentially reap huge financial savings which could be shared between public, private and third sector partners .

In its strategic role to improve the wider local economy, local government is perfectly placed to provide such investment.

What is needed is a sensible mechanism for spreading risk, and a financial infrastructure to encourage market growth. While this is no small task, the potential rewards for local development are enormous.

With a refined vision for the future role of local authorities, we can begin to lay the groundwork for a radical new system of strong and independent local government, with the potential benefits that could bring.

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