The Week 1 March 2024

The parlous state of English local government finances remains a huge story in the policy world this week, with?new reports?once again?confirming?that a recent injection of around ￡600m of additional funding will, at best, only postpone what amounts to a major crisis for the sector (and therefore for locally delivered public services in general). But with Budget day just around the corner, the deep structural challenges facing local and regional government should get some attention, too.

Yes, focus will now shift to?next week’s Budget, widely suspected to be the last major, formal economic policy milestone before the next general election. Conditions remain difficult, with the effects of high inflation still being felt, and the Treasury is going out of its way to dampen down expectations of any kind of dramatic giveaway, even given the vast envelope afforded by current fiscal rules.

One thing to look out for will be any significant reference to Levelling Up. Once the central domestic policy agenda of the Government, complete with a renamed Whitehall department, Levelling Up received only a minimal mention in last year’s Autumn Statement.

It’s nevertheless a good moment to remind ourselves – as the Department for Levelling Up, Housing and Communities?has just done?with its legally mandated regular statement of Levelling Up missions and metrics – that this government has at some points placed a huge amount of emphasis on the reduction of regional disparities, and that swathes of this flagship Levelling Up policy agenda places demands on local government.

Even without a financial crisis, local government would struggle to contribute to the accomplishment of these ambitious levelling up missions. Part of the reason is that, as the original Levelling Up White Paper noted, there is a distinct need for strengthened local leadership.

This Government has made greater strides toward the establishment of genuine regional governance in England than any other. But the current approach, built around deal-making with clusters of local authorities to establish Combined Authorities, is unlikely to provide the needed capacity to help regional economies build on local strengths and flourish. Combined Authorities are not present everywhere, and where they are they do not always have the power to drive change.

A?timely report?from the Mossavar-Rahmani Center for Business & Government at Harvard, co-authored by Ed Balls, sets out a principled case for a more powerful form of regional government: present everywhere in England, and able to insist on economic strategy even when constituent local authorities might object.

This is an idea with merit. It is also essentially incompatible with Combined Authorities as they are currently organised, and the report ?offers its recommendation without a plan (though there is an indicative timeline for implementation at the end!), either for places without any progress toward the establishment of regional governance or for places where regional governance is currently nowhere close to being able to play the role that the report describes.?Reform’s new programme,?Reimagining the Local State, will seek to provide answers to the practical questions about how to achieve consistent, clear, and capable local systems throughout the country… watch this space!