Next steps for English towns

Last week I attended a conference entitled ‘Next steps for English towns’ organised by the Westminster Social Policy Forum. Grant Thornton’s Wayne Butcher, (Director Public Sector Advisory – Real Estate & Assets) was one of the contributors.

The range and quality of the speakers was impressive. There were interesting case studies from Barnsley and St Helens Metropolitan Borough Councils, the South and East Lincolnshire Councils Partnership and Cornwall LEP. The session concluded with an informative panel discussion to round off the event.

Most speakers referred to the Levelling Up white paper, which was anticipated to have been published by now and is eagerly awaited by all interested parties represented at the conference. We are hoping that this is released in early February for further examination.

When I attend an event such as this, I always challenge myself to capture three important messages to take away.

On this occasion the three themes I identified were:

1) The importance of seeing infrastructure as a system of assets rather than a series of discrete projects

2) Business Rate reform

3) Evaluation of the benefits of government expenditure

Theme 1 - The importance of seeing infrastructure as a system of assets rather than a series of discrete projects

Bridget Rosewell who leads the National Infrastructure Commission, led off the conference by outlining the priorities that the Commission has been tasked with. These are:

· Supporting the levelling up agenda

· Reaching net zero

· Climate resilience and the environment

The speaker then went on to discuss some of the main projects that make up the strands of the three priority areas and signposted attendees to the National Infrastructure Commission’s report entitled ‘Infrastructure, towns and regeneration. The report was published in September 2021.

Bridget Rosewell’s talk provided an excellent context for the other speakers and prompted the topics discussed by the panel. The message that came out loud and clear, was that infrastructure should be seen as a system of asset investments rather than a series of discrete projects.

Increased collaboration between agencies will lead to some larger pieces of work for Grant Thornton’s Public Sector Advisory practice, which often may be as part of a multidisciplinary team such as recent freeport business case projects. Aggregation is likely to play a part in this, not just for delivery but in creating the financial case to support the interventions.

Theme 2 - Business Rate reform

This was mentioned by several speakers and was identified as being crucial to the retail sector. The need for reform was argued particularly convincingly by Bill Grimsey, former CEO of several leading retail groups including Iceland and Wickes. Bill Grimsey advocated a system of a 2% sales tax to replace the current business rate regime based on rateable values.

There have been calls to reform business rates for many years now, but it does appear that these voices are getting louder. If there are reforms along the lines recommended, this has the potential to impact the business cases of regeneration projects Grant Thornton are asked to advise on, where often the investment case is underpinned against the forecasted incremental increases in business rates.

If there was a move to a sales tax approach, this would be better news for the accountancy profession than for property valuers with a likely focus on a more transparent approach to achieve a fairer way for business to contribute to covering their share of public services. It should be noted that this may create further uncertainty for local government hence clarity is required on any proposals put forward.

Theme 3 - Evaluation of the benefits of government expenditure

Ashley McDougall, from the National Audit Office spoke on ‘Applying lessons from the past to current funds’. The point was made that successive governments have been better at spending taxpayers’ money than evaluating whether the hoped-for benefits have been delivered.

Whilst this is undoubtedly true, it is pleasing to see that Grant Thornton has been engaged recently to carry out evaluations of initiatives such as the Towns fund and Freeports, where we will build on the revised Treasury Green Book and use our economics expertise to drive forward a structured approach to benefits frameworks.

We anticipate that there will be more opportunities for the firm to use its expertise in carrying out these exercises on a wide range of initiatives in the future, to respond to the need to evidence what the public purse is delivering.