The Week 2 August 2024
Policy Director
Roughly one million years ago (which is to say… on Monday), the Chancellor made a statement which was practically a Budget speech in its own right.
Reeves’ statement triggered an extended debate about public sector pay, and whether or not she could legitimately claim to be surprised by the spending situation. It was also followed by confirmation that we will indeed be seeing tax rises when the real Budget rolls around in November. Nice to have something to look forward to.
In any other week, the big moves on planning reform and local audit that emerged on Tuesday would have been huge news for the policy world. But competing for attention against a ‘not-a-budget-honest', the Olympics, the start of recess, and riots, they deserve a second look. Not least because they represent areas where this Government, which has made much of its commitment to a “devolution revolution”, is essentially following the old playbook of bossing councils around from the centre.
Inconsistency aside, on this occasion, a bit of direction from the centre is probably warranted. The planning system in England has been in a terrible rut for a long time now. Housebuilding is a fundamental component in the Government’s plan for growth, and they have accordingly decided to move quickly to make their changes.
First, there are now extended, centrally-mandated housebuilding targets for all local authorities. This comes with commitments to weakening green belt protections, and revisions to the National Planning Policy Framework (including tracked changes which show that the objective of building beautiful houses has been ditched). Second, there’s a commitment to a new generation of new towns (stop me if you’ve heard this one before!) with plans in place to select sites by the end of the Government’s first year.
These are big moves, but the real challenge is still to come: will Labour MPs with smaller majorities be able to hold the line when the objections to new building start flooding in? Interestingly, this is a case where the scale of politics itself has a bearing on policy success. Hyper-local representatives will always have strong incentives to listen to the NIMBYs in their patch. Might a regionalised approach ultimately make more sense? Watch this space…
The changes to local government audit are a bit more wonky – but, believe me, it’s all that some folks working in the sector are going to be thinking about for a while. There is a massive backlog in the auditing of councils’ finances, and that’s a bit of a problem when you bear in mind there’s a full scale financial crisis sweeping through the sector. This is effectively the result of failure in the audit market that was supposed to fill the gap left after the abolition of the Audit Commission quango during the coalition years.
In response, the Government has a new plan to get a grip: a series of final deadlines (“backstops”) by which audits must be filed, or they’ll want to know why. By the end of this year, all audits up to the end of the financial year 2022-3 will need to be in – and Government is clear that it accepts that this will lead to “hundreds” of audits which will simply not be completed with the usual rigour.
This is one way to clear a backlog, but not a great way to ensure that local authority finances are well audited, or that the right early warning systems are in place to help prevent either the outright council bankruptcies or extraordinary interventions to prevent them, both of which are becoming more commonplace. The wait for a systemic change continues, with more announcements promised for the Autumn.
Read of the week…
On to our read of the week, and an opportunity to offer my genuine respect to Centre for Cities, who have been brave enough to stick their heads above the parapet and offer a redrawn, rationalised map of English local government in their latest report. It didn’t take long for the criticisms to start flowing online, but the reality is that this is a system in great need of a fundamental, structural rethink. Look out for Re:State’s take on this problem in forthcoming Reimagining the Local State reports. Centre for Cities’ work is well worth a read, not least for some strong ideas for fiscal devolution.