Localis chief executive, Jonathan Werran, said:
“Local government and the local state will take some initial
heart from the central thrust of the spending review, especially
the promised land of multi-year settlements, improved needs
assessments and simplified funding landscape to return local
government to a sustainable financial position. This will provide
the sector with greater certainty in long-term financial planning
it has been yearning for.
“Looking at the settlement itself, attention must focus on the
implications of day-to-day revenue expenditure on frontline
services, the promise of a £113bn uplift in capital expenditure
for regional infrastructure projects and how changes to welfare
provision through annual managed expenditure (AME) totals will
impact localities.
“The review promises an increase in funding available for adult
social care of over £4 billion in 2028-29 compared to this year,
but until we have some fix on long-term funding of social care
upon completion of Dame Louise Casey's review, we will have to
reserve judgment on the sustainability of local public
services.
“Certainty is a virtue but does not in itself plug the funding
gap local government finance directors must hope to close nor the
expectation gap of residents paying more each year in council tax
for fewer visible benefits. Indirectly, revenue limitations
on other departmental areas such criminal justice and police,
flood defences and transport, will also have a direct knock-on
impact on place across the spending review period.
“Angela Rayner has secured a big win for affordable and social
housing with a £39bn funding boost over the next decade.
The quantum is not big enough on its own to make the sort of
generational shift in housing provision we saw in the immediate
post war era, but in the circumstances, and with an extra £10bn
for financial investments through Homes England to crowd in
private investment, it is a highly creditable bit of spending
review negotiating by MHCLG.
“Beyond this, and as Localis's recent report ‘New Stable' suggested,
there is a similar amount available from surpluses in the Local
Government Pension Scheme, some of which could be safely directed
to invest in critical local and regional infrastructure, which
should by rights also include affordable housing.
“In respect of the new changes to the Treasury ‘Green Book' and
place-based investment cases, again we will have to pay attention
to how many billions of projected capital expenditure escape from
the pages and into the wild to help pump up and provide
long-neglected regional infrastructure, energy and housing
schemes.
The revised ‘Green Book' will favour investment in particular
parts of the country rather than where it is easiest to secure
return on investment, and is potentially bad news for place
leaders in London and the greater South East.
“A further pressing question, regardless of geography, is how
government will work to uplift the severely depleted local
authority capacity in areas such as planning and economic
development, a gap which no amount of efficiency improvements is
likely to plug.
“Investing for sustainable and inclusive growth requires places
to be empowered not just with statutory instruments and capital
injections, but also day-to-day spend to help combat the
recruitment and retention problems currently facing local
government as an employer.”
