Local government cuts remain a key barrier to housing delivery
I’m sure I wasn’t alone in responding to a recent report from the Public Accounts Committee on the financial sustainability of local government with a depressingly familiar mixture of frustration and alarm. Their findings indicate that councils face an estimated funding gap of over £5bn by the end of the decade. By 2020, councils will have lost 60p out of every £1 the Government had provided to spend on local services compared to what they had in 2010, according to the Local Government Association. This at a time when demand for services is growing.
Whilst shocking, it was therefore not surprising when earlier this year Conservative-run Northamptonshire County Council issued a 114 notice, becoming the first local authority in over 20 years to effectively declare itself bankrupt. Somerset County Council has also been showing signs of financial stress; a report raising the possibility of it having to issue its own 114 notice in response to children’s services funding crisis went to Cabinet last week. Meanwhile, Torbay Council has announced that it’s considering abandoning its unitary authority status and handing over much of its work to Devon County Council. However, it’s far from certain that Devon would be able to absorb this additional pressure: since 2010, Devon has itself seen a 76% reduction in the funding it receives from central government.
This has very real implications for those of us working in housing and planning. With scarce resources being focused on statutory services such as education and social care, planning and development have been among the biggest casualties in local government’s efficiency drive.
Over recent years planning departments have been stripped of the skills and experience necessary to do the kind of strategic and proactive planning needed to foster economic growth and meet housing demand. Increasingly, planning departments lack the capacity to engage in positive, strategic planning to shape and encourage, rather than just react to, proposed developments. There are also many ambitious councils that are developing new homes, establishing housing companies to build. Sadly, the current funding environment is curtailing that ambition.
Local government has been undervalued by central government for too long. Councils are doing vital work: educating our kids, caring for our elderly relatives and delivering planning services that enable us to build the homes we need to tackle the housing crisis. With a spending review due next year, the government has an opportunity to demonstrate that it recognises this by changing tack and putting local government on a secure financial footing. It’s clear that the alternative doesn’t work – you only need to look at Northamptonshire, Somerset or Torbay to see that.
This article was written by Matthew Whittley, Account Manager at MPC.