The use of large up-front fees and disproportionate deposits has already resulted in significant cost consequences for one care provider.
Other than that, things start to become less certain. There is an effect upon the economy, but we don’t know what that will be in the longer term. There will be changes in legislation, but certainly the details of what they are cant yet be known. The new Prime Minister certainly has a changed Cabinet; and hence we will have changed policies, but what that will amount to we don’t know either.
In that climate, what is the mood of local government? I attended the middle day of the Local Government Association Conference last week. My impression, checked out with a number of other delegates, was that the mood across local government is quite up beat. Not complacent at all, and the financial issues faced by councils’ are a chronic and so ever present challenge, but compared to the mood two or three years ago a straw poll would probably reveal that the glass is now half full at least. Thinking about what councils have coped with over the last few years, their achievements have been outstanding. Councils have coped amazingly well with challenges of an order that most of them would never have dreamt they could manage three or four years ago, and have managed to do so by innovation, partnership and sheer hard work. Massive cuts in the finances allowed by the centre have led to changes in services which would almost never have been contemplated in times of relative plenty, and these have, on the whole been managed with little deterioration in satisfaction levels. That’s not to say that everything has been done perfectly, nor that there haven’t been casualties along the way, but councils are the most efficient part of the public sector by quite some way, and have weathered the storm with remarkable fortitude and success.
I think that this attitude, linked with the climate of uncertainty described above, puts councils in a very strong position to have some real influence on both the legislation that will be necessary as a result of Brexit, much of which is closely tied in with the role of local authorities; and also on the legislation councils may require to take forward the next stage of, for example the devolution agenda. On this, the parameters are generally known, but much of the detail isn’t there yet. Given that the demands of the Brexit will be likely to take up a tremendous amount of time from a Civil Service that has been much reduced since 2010, (and with the quality of legislation undoubtedly suffering as a result) its likely to be a good time for Councils to work out what they want and put forward acceptable and worked through proposals which show strong analysis to support their position and clear political commitment, in effect taking advantage of the situation to move forward with proposals that will lead to sustainable growth in their areas through the devolution of powers already agreed at least in principle.
Other than that, the Brexit vote will have other issues. Whilst its apparent that there will be technical areas such as procurement and environmental law affected by the Brexit vote, it certainly is too soon, in my view to worry over much about those right now. How those areas change will depend upon the terms of the negotiation to leave, although frankly, anyone who believes that we will get a better deal than we have at the moment is almost certain to be disappointed.
What is more important is the effects on the economy and its knock on effects upon the strategy of councils. Speaking at the LGA, Greg Clarke confidently assured delegates that local government would have a seat at the Brexit negotiating table and that government accepted the need to confirm the continued availability of structural fund monies, speaking of the importance of a move to the subsidiarity principle upon which , ironically one may think, much EU policy is based. All that is good to hear but requires to be seen in reality, especially with the advent of a new Prime Minister and Cabinet.
In the meantime therefore, some initial work in the Council around what assumptions around growth, new business expectations, investment decisions, the impact of Brexit on private sector partners and potential investment by them and what flows from that, job creation for example, grant aid, borrowing and housing decisions is well worth doing, as that is what the authority’s future is based upon. Looking at EU grant in particular, whilst the UK as a whole isn’t getting anything like as much from that as it was, some authorities are still benefitting from this to quite a degree. Where that is that case, authorities would be well advised to make sure that the commitments given on the grant spend are such that it is difficult to claw it back, and I’ve heard of councils who are searching for “oven ready” projects to start on immediately to prevent just that, as they foresee that if the grant is foregone it is going to be a very long time before similar funding arises, if ever. Obviously the terms of the Grant Aid have to be considered, but at present there is an envelope of opportunity that is unlikely to come again. Other things to consider are the likely effect of a slowdown and what the impact of this on the councils strategy will be. This involved asking questions such as, are our ambitions still deliverable within the same timescale? What commitments do we have and how can these continue be met ? What might we do to speed up or possibly, slow down projects?
Yes, the Brexit vote was unexpected and the planes for it are as a consequence in their infancy. But the mood of local government, its ability and innovation, could mean that this is a very good time for councils. And one final thing. People got very interested in the Brexit vote, to the extent that they turned out to vote. Wouldn’t it be a wonderful thing if that interest could be translated into one for local democracy as well?!
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