Local government spending is now 30-40 percent lower than in 2010, with few signs so far that the financial outlook will improve significantly over the course of this Parliament.
Authorities therefore face the choice of continuing to manage decline and dwindling budgets – or instead define for themselves a new strategic role in which they not only deliver essential public services, but also have wider responsibility for enabling and facilitating growth in their communities.
A report this week by Centre for Cities - supported by Bevan Brittan and Turner & Townsend - says there is now a critical role for authorities to play in unlocking the latent potential of cities, promoting them as places of investment and regeneration, and constructing new models of delivery and income generation to sustain front line services.
With ongoing uncertainty over the direction of public policy and spending, there is an opportunity for authorities to ‘seize the moment’ – by clarifying their role and identity to create a sub-regional sense of ‘place’, employment and growth.
Local government leaders are the chief custodians of our cities. With 54 percent of the population and 60 percent of jobs, much of the responsibility for increased prosperity lies with the metropolitan areas they control.
The considerable public assets they manage give local authorities the leverage to take the lead in driving local economic development. The Centre for Cities report highlights how there are now significant options for authorities to collaborate with each other, the private sector and other partners and agencies.
Local government leaders are already working across public, private and administrative boundaries for the simple reason that by doing so they can amplify their influence over economic development and achieve far more with partners than they can alone.
West Midlands, Greater Manchester - and other combined authorities with new directly-elected Mayors - are taking the lead. Collaboration means leaders can call upon the full range of assets within their cities - as well as draw in assets, scale and expertise from the wider city region, expanding the opportunities available and raising the level of development.
Partnerships bring the experience, expertise and opportunities of other organisations to the table, improving ways of working. This helps to deliver greater long-term returns and reduces the risks for councils.
But in having a clear and shared vision for the future local economy, it is important to choose the right model to deliver the desired policy objectives and outcomes.
Critical, is linking the need for improved housing with economic development and a local industrial strategy. With any housing growth, better economic and social infrastructure is required to support expansion and the development of homes that people want to live in – and also meet modern safety standards.
An economic regeneration strategy identifies the businesses and jobs to be attracted; a similar coordinated approach should be required to the quality of housing available to those workers.
A range of other models is available to support authorities to achieve the strategic change they desire – including corporate structures, joint ventures, private sector partnerships and procurement – all of which can leverage investment into local economies.
Whether or not public sector austerity has been ditched following the June election, authorities can tackle historic financial difficulties by better management of their estates to create value. As centuries-old governance models start to break down, embracing change and making the most of working in partnerships would seem to be the right way forward.
If you would like to discuss this topic in more detail, please contact David Hutton.