RoeCllr Philippa Roe, the Leader of Westminster City Council, says the Chancellor doesn't need to open his cheque book to help local government deliver better services

The Government’s localist credentials are much debated. The rhetoric of the early days is perhaps not as strong as it once was but there are many big achievements that can be pointed to in the areas of planning, education and housing. However, some ministers and departments have not found it easy to hand over real power and responsibility to local communities and councillors representing them.

Unfortunately, the conventional view across much of Whitehall is that local authorities act as a brake on economic growth thus making councils an easy target when departmental budgets come to be handed out. The implementation of Greg Clark’s City Deals and the tentative experiments with Community Budgets are notable exceptions and mark a change in this attitude but much more still needs to be done.

Local government has largely responded well to the challenge to rebalancing the economy and playing a role in driving down the deficit. I would though now urge that the Chancellor uses his Budget on 20th March and the Spending Review on 26th June to entrust councils around the country to help address the big tests facing the country. As well as boosting the economy, the Chancellor’s influence could be put to great use in helping achieve effective public service reform more swiftly across Whitehall that again would deliver efficiencies and save taxpayers’ cash.

There are six things that Chancellor should do in his Budget:

  • Incentivise innovation in public services: Only by working together can public services tackle high levels of dependency in some of our communities that continue to threaten the nation’s economic competitiveness. However, new innovative approaches bring with them risks that mean under the current incentive structures it is simply not rational for local government to innovate and to invest time and resources in addressing problems where the costs are attributable to another council or public service.
  • Share and share alike: Many of the costs that come with more integrated public services involve the complexities of data sharing. In 2008 Westminster City Council invested in a project to better co-ordinate information amongst council departments, police, schools, NHS and others to achieve exceptional results in tackling anti-social behaviour and supporting troubled families to turn their lives around and in saving cash – this was the model for the now national troubled families work but could be replicated in other areas.
  • Accept Lord Heseltine’s central recommendation for a single funding pot: devolving more resources will allow LEPs to flourish, deliver on ambitious sub-regional economic strategies while breaking down obstructive Whitehall silos. More modestly, simply allowing local authorities to plan effectively with four to five year budget settlements would encourage long-termism and make ‘invest to save’ projects more realistic.
  • Be bold on Community Budgets: The four whole place community budget pilots have put an enormous amount of time and effort into finding radical solutions to entrenched problems. Introducing local funding and new freedoms around offender management, getting people into work, housing reform and by integrating health and adult social care could save up to £5 billion per annum.
  • Reinvigorate local authority house building: If the Coalition adopted similar local government accounting rules to other countries and remove caps on councils borrowing against the Housing Revenue Account, tens of thousands of new homes could be built and many jobs created. It is entirely sensible instead to rely on existing safeguards to curb council borrowing. If the government turn down that proposal they could look at creating a marketplace for trading headroom within the overall cap levels to maximise the number of new homes being built and better match investment need with capacity. This could help build around 10,000 new affordable homes without incurring more debt.
  • Bolster and expand City Deals: 28 cities and surrounding areas have already or are in the process of negotiating City Deals with government around devolving functions and additional powers. These should go further, not just in number but also in their reach to include a wider range of public services in their core packages focusing not just on jobs and growth but also on reducing dependency and other major social problems.

The Chancellor need not open his cheque book to make this happen. Much relies, instead on trusting and empowering councils and the communities they serve, offering them the right incentives to work across local authority boundaries and with others public services to deliver real change.

The experiences of the first two years working with Tri-borough colleagues in Kensington & Chelsea and Hammersmith and Fulham show that substantial savings are achievable and that problems that would otherwise have been impossible to tackle alone can be dealt with efficiently by working in partnership. And there are numerous examples of this type of work going on across the country.

Given the state of the party’s opinion poll ratings and with elections this year for 27 county councils and eight unitaries and next year for most local authorities, there is a possibility that by the time the Chancellor delivers the 2014 Budget his allies in local government may be greatly reduced in number.

The result of the general election in 2015 depends largely on the government’s success in addressing the huge economic and social challenges of our day. It may take a great leap of faith but Mr Osborne could well be surprised how much we in local government can do to give both the economy and the party’s electoral hopes a shot in the arm. Now is the time to trust Conservative local government to deliver.