Former Tory deputy prime minister Lord Heseltine has told councils to focus on the opportunities offered by devolution of central government power rather than the cuts being made to their budgets.
Heseltine, who championed the regeneration of Britain’s inner cities in the 1980s and is now an adviser to the government, acknowledged that council budget reductions would be significant, but said cuts must not obscure the huge opportunities presented by the government’s plans to devolve greater powers to local government. He told delegates at this week’s Local Government Association annual conference in Harrogate that they should be prepared to negotiate with central government to design local structures that will reflect their citizens’ needs.
In a 2011 report for the chancellor, George Osborne, Heseltine proposed that £49bn administered by central government and £9bn in EU funding should be put into a similar pot. Osborne used that report as the basis for his “northern powerhouse” agenda, which has led to Greater Manchester negotiating to get greater powers from Westminster.
Heseltine said deals might not be perfect and many regions might not want elected mayors – one of the government’s conditions for giving away more powers to local government – but if councils want big change they need to step up and put together their offers to government. “Manchester did not want a mayor, but it did a deal,” he said. “The prize is worth it.”
Heseltine also said the opportunities presented by greater devolution of powers away from central government will be available to all parts of local government, including rural areas and county councils, which have expressed concern over being excluded from Osborne’s northern powerhouse plans.
On 26 June, the LGA published a report that forecast councils in England could face cuts of up to £3.3bn in central government funding for local services in 2016-17. The organisation has also published a report, A shared commitment: local government and the spending review, calling for radical devolution of powers and funding to local areas to help councils build new homes, increase employment and support elderly and disabled people.
In his speech to the conference, LGA chair Gary Porter called for councils to be able to set their own discounts for tenant right-to-buy schemes and keep 100% of the money raised in order to replace housing sold through the scheme quickly.
Writing for the Public Leaders Network, Porter also said an adequately funded adult social care system is essential to a sustainable NHS. “The social care funding gap – growing by at least £700m a year – needs to be closed to protect services,” he said.
Porter said councils are ready to work with government and are key to delivering its goals of building hundreds of thousands of new homes, finding £12bn of savings from working-age benefits, creating 2m jobs and abolishing youth unemployment. He added: “But without reform, we predict councils will face a funding gap of £9.5bn by the end of the decade.”
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