Blog 2nd July 2019

Blog 2nd July 2019

In this week’s blog, I refer to: Local Government Association; HM Treasury; Institute for Fiscal Studies; Brexit; Philip Hammond; Boris Johnson; Jeremy Hunt; Donald Trump; The Queen; Cumberland & Westmorland Herald; Cumberland News; the New European; the UK Labour Party; the European Union; Housing Finance; Seminars and Training.

The Local Government Association has been holding its conference this week and took the opportunity to release the results of a survey that reveals the extent of the financial crisis in English local government.

Local Government Association offices in Smith Square, London.

The survey found that a third of councils fear they will run out of funding to provide their statutory services – such as adult social care, protecting children and preventing homelessness – by the end of this Parliament in 2022. That number increases to almost two thirds of councils by 2024/25. The Local Government Association estimates that councils face an overall funding gap of £8billion by 2025.

Almost a fifth of councils are not confident of realising all the savings they have identified to make this year (2019/20). An unprecedented rise in demand means many councils are having to spend more than they planned for in adult social care, children’s services and homelessness support. These overspends have seen councils forced to make in-year budget cuts to try to balance their books.

Between 2010 and 2020, councils will have lost 60% of the funding they had received from central government to run local services. The next Spending Review is scheduled for later in 2019 and the Local Government Association consider that it will be ‘make or break’ for vital local services and that securing the financial sustainability of councils must be the top priority.

However, national political uncertainty and an unresolved Brexit means the chances of HM Treasury carrying out a three-year Spending Review in 2019 look increasingly unlikely. Instead, councils may face a one-year roll-over settlement.

Further information about the Local Government Association’s survey can be found on their website at: https://www.local.gov.uk/about/news/one-three-councils-fear-funding-legal-duties-will-run-out-within-three-years

Information about the work that I do for local government including the Local Government Association can be found by clicking here.

The Institute for Fiscal Studies has published its annual report on ‘Living Standards, Inequality and Poverty in the United Kingdom’. Key findings include:

• Median household income stalled completely in 2017/18 (the latest data), the key driver for stalling income overall has been employee earnings growth being lower than inflation in 2017/18.
• Reductions in the reported amounts of working age benefits pushed down incomes of poorer households in 2017/18.
• Absolute child poverty rose by 1 percentage point in the latest year as working-age benefits and tax credits were reduced in generosity.
• Social renters account for a larger share of those in severe poverty than they do those in headline poverty – but severe poverty is increasingly becoming about private renters
• Compared with headline poverty, severe poverty is more concentrated among workless households than working households – but again this is a pattern that is changing

Further information about the Institute for Fiscal Studies’ report can be found on their website at: https://www.ifs.org.uk/publications/14193

Clearly the United Kingdom government is failing to address many pressing issues including poverty and the financial crisis in local government because of its obsession with ‘Brexit’. Financial responsibility appears to have been abandoned with the spending review likely to be postponed and Philip Hammond, the Chancellor of the Exchequer warning that both candidates for the leadership of the Conservative Party – Boris Johnson and Jeremy Hunt - are putting forward tax and spending proposals that would be unaffordable.

President Donald Trump visited Britain for a state visit during the first week in June – that coincided with the anniversary of the D-Day landings. While here, he attended a banquet at Buckingham Palace that was addressed by the Queen, who said that:

“After the shared sacrifices of the Second World War, Britain and the United States worked with other allies to build an assembly of international institutions… To ensure the horrors of conflict would never be repeated. While the world has changed, we are forever mindful of the original purpose of these structures: nations working together to safeguard a hard-won peace.”

The Queen’s comments have been widely seen as a defence of the post-war international settlement – including the European Union - that Donald Trump and many of his admirers in the British government see as obsolete.

However, the Queen is not the only person who has been thinking about Britain’s role in the world. Ross Brewster, who writes a regular column in the ‘Cumberland & Westmorland Herald’ made an interesting observation about Brexit in a June edition:

“As a result of Brexit, we’ve insulted the Europeans. And now we’ve upset the Americans over the Huawei business and ignoring their security advice. To be honest, we don’t have a lot of friends left. Even the Scots are fed up with us. If this goes on, we’ll be a shrinking little island, isolated from the rest of the world, while arch-Brexiters assemble on the white cliffs of Dover singing a quick chorus of the football chant ‘no one likes us, we don’t care’.”

I have written a letter about the Labour Party and its policy on the European Union as it has evolved since the establishment of the European Coal & Steel Community in 1948 that has been published in the ‘Cumberland News’, ‘Cumberland & Westmorland Herald’ and ‘The New European’. In it I argue that Labour has moved from a preference for ‘socialism in one country’ to one of supporting Britain’s membership of the European Union to one of ‘constructive ambiguity’. I end by asking whether this ‘constructive ambiguity’ represents a return to ‘socialism in one country’ or a reluctance to engage.

A copy of my letter can be viewed or downloaded by clicking here.

A fortnight ago, I was in London to present an in-house session of 'Developments in Local Authority Housing Finance 2019' for a London Borough Council. Delegates said that the information provided was relevant, the quality of the presentation was good and that the training met their needs fully. They described the seminar as: Useful, Practical, Clear, Interesting and Thorough. Specific feedback received included:

“Thank you for the insightful seminar”.

Information about in-house training that I provide can be found by clicking here.

Council Houses in Gateshead, Tyne & Wear.

Our next seminar will be ‘All You Want to Know about Local Authority Housing Finance and will be held in Leeds on 16th July.

This seminar will give an introduction and overview to this important subject and is fully up to date with all developments. It explains how the housing revenue account, housing general fund and housing capital programmes work and considers the threats and opportunities facing local authority housing especially in view of the government's recent policy initiatives including the lifting of the 'borrowing cap'. As always, this seminar is proving popular, but we still have a few places left.

For more information or to make a booking, please click here.