Monetising Goodwill

What services will the general public pay more to fund, and by how much?

Work in progress

Monetising Goodwill

The question of what happens if a council goes bust is increasingly coming across the lips of senior leaders in local government. Privately central government is now lending serious consideration to how it might respond to the prospect of more frequent local government equivalents of the ‘3am phone call’.

The collapse of a council due to financial pressure represents a potentially catastrophic social failure for vulnerable people. Withdrawal of services, private contractor relationships collapsing, industrial action, and the increased burden this will place on partner agencies locally are but some of the most obvious short term challenges. Many services are already stretched to breaking point; the adult social care market is teetering and children’s services are being driven towards a high-cost model by an aggressive regulator.

Whilst it is unthinkable government would let a council go to the wall, the reputational damage to both councils and central government, politically at least, would be significant. For all considered, solving a crisis before it occurs is preferable.

As red lights flash ever more frequently across the local government sector – just in the past few days budget deficit warnings have been forecast across England – we have started this new research project looking at political attitudes to taxation reform, considering what services and desired outcomes the public are willing to pay more to fund. As part of this, we are looking at the ways in which new approaches could be created to ensure councils can fund services in the future. This includes devolved fiscal powers, new local taxes and voluntary levies. And it includes how ‘goodwill’ can be enhanced and curated, and potentially monetised – be that via the state or through separate community-based organisations.

The research project will focus on five areas:

  • The current financial state of local public services. What factors are causing uncertainty? What are the dashboard signals that something might be dangerously wrong? And what are the plausible scenarios central and local government should be planning for?
  • Have we reached a point at which the public is willing to pay more? What issues carry the most salience with the general public? To what extent would the public be willing to support new forms of revenue raising and by how much?
  • Enabling policy mechanisms. What revenue-raising mechanisms are within the legislative capacity of the local state and what would require new legislation? How have places across the world introduced new revenue-raising mechanisms? What role can community organisations play in monetising goodwill?
  • Monetary value by place and person. What could this be worth to places across England, hypothecated by council area? How does goodwill vary by person – their politics, age and class?
  • How places can use extra funding. What financial impact would new taxes and have for a council and its partners? How would this impact the relationship between the citizen and the state, between the community and the market? How does extra funding stay ‘rooted’ in the community, as opposed to just being seen to backfill service deficits?

 

FURTHER INFORMATION

For more information on this research project please get in touch with jack.airey@localis.org.uk.

 

PROJECT KINDLY SUPPORTED BY