Party conference campaign seeks answers to fixing broken local public finances

Party conference campaign seeks answers to fixing broken local public finances

A campaign seeking to build cross-party consensus on how to restore stability to a broken local government finance system will be taken to the conferences of the three main political parties this autumn.

The independent think-tank Localis, alongside partners CIPFA, the Norse Group and Public Finance magazine will be running a programme of events, entitled ‘Running out of gas – is it too late to fix local public finances?’ at the Liberal Democrat Party conference in Bournemouth, the Conservative Party conference in Manchester and the Labour Party conference in Liverpool.

Amid growing concern over the stability of council finances in England following high profile failures and interventions, the party conference programme will involve a series of panel debates to help establish a cross-party consensus on the nature of the challenges facing local government, and to promote possible solutions which could be adopted in manifestos for the 2024 elections.

Dame Meg Hillier MP, chair of the influential Public Accounts Committee will be speaking at the Labour Party conference leg of the debate and Cllr Abi Brown, who is chair of the Local Government Association’s improvement and innovation board will speak for Conservative local government in Manchester.  Cllr Bridget Smith, leader of South Cambridgeshire District Council will speak at the Liberal Democrat leg of the programme, all three of which will also involve roundtable discussions with national and local leaders.

Localis chief executive, Jonathan Werran, said: “The state of local public finances and their management, and the impact which longstanding squeezes on revenue spending and constantly rising service pressures have had on the quality of daily life has clearly reached a tipping point.

“The fear is that there may well be a longer tail of councils, that have either been swept up into casino finances for the sake of bridging revenue gaps or whose existing population and service pressures will make them financially unviable.

“The spectre of widespread council failure is politically untenable, regardless of party or ideology, and the issue must be faced down by actors and institutions across the spectrum.  Our panel fringes will face down the uncomfortable home truths around local government finance and canvass views for practical reform either side of the political cycle.”

Justin Galliford, CEO, the Norse Group, said: “The combination of spiralling costs, new legislation and continuing political uncertainty is pushing more and more local authorities to the brink. And this is before we factor in the eye-watering costs of achieving net zero – which pretty well all councils have signed up to.

“At the same time, recent polls have shown that communities trust their local authority, and value their services. I believe that local government urgently needs to look at new ways of delivering essential services, and embracing a more commercial culture.

“The question is how they do this – traditional outsourcing doesn’t seem to hold the answer, and self-delivery looks highly risky (particularly with Oflog looking over their shoulders). Councils need to look at bolder solutions – such as commercial partnerships.”

Iain Murray, director of public financial management, CIPFA, said: “The underlying financial resilience of the local government sector is a huge and growing concern. In the last decade, councils have seen significant drops in their real term funding and increased pressures in areas such as adult and children’s services.

“While some of the high-profile financial collapses within the sector can be attributed to poor decisions, the majority of local government has continued to deliver services to residents as well as making ends meet.

“We are hearing increased discomfort from local authorities who are approaching another difficult budgeting round. At some point we need to be brave enough to ask the question about whether local government is being given the funding it needs to deliver the services that are essential to the public.”

Chris Smith, editor, Public Finance, said: “Two local authorities have already this year signed over control to commissioners and revealed eye-watering debts. Others have relinquished control of their finances because they are unable to meet the costs of delivering services within their budgets.

“More are likely to follow and, ultimately, it’s vulnerable people who will suffer the consequences. With another tough winter ahead of us, communities need certainty now and assurances about the future. The party conferences are a vital moment for the three parties controlling councils to give their answers.”

Find more about the party conference panel events: