CCN News 2015 | 16 November 2015
Thank you Sally
A very warm welcome to the CCN Annual Conference 2015 here in Guildford.
Many thanks to our hosts Surrey County Council and also to our sponsors and our speakers who will address us throughout the conference.
It is a great privilege to be the new Chairman of this respected and successful cross-party organisation that represents 37 of the most significant authorities across England.
It could not be a more exciting and challenging time to be your Chairman against the backdrop of the constant challenges:
One of the immediate aims of the County Council Network must be to do our very best to help central government better understand the impact and consequences of their fiscal and legislative policies particularly applicable in the last few days leading up to the spending review on 25 November.
We all became involved in local government to improve the efficient and effective delivery of public services in our counties, and help and support our residents and businesses. Our councils have a proud track record over the last 20 years to spend public money efficiently and effectively.
In my view leadership and management has never been so strong and competent across our counties.
As Greg Clark said in his recent speech to the LGA conference “It reinforces my view that central government has more to learn from local government than vice versa, and that view will characterise my approach to working with you all.”
In recent years, CCN has built significant momentum and trust that has put its member councils at the heart of the debate on the future of local government and more broadly the transformation of public services delivery. I am sure we would all like to thank David Hodge, our previous Chairman, for all his hard work and endeavours in building this momentum.
The County Councils Network has a very small hard working dedicated team at Local Government House that punches well above its weight. We are enormously indebted to the team and I am sure that you would like to join me in giving them a very large thank you to Lisa Wood, Elizabeth Hunter-Gray, Michael Chard, James Maker and Simon Edwards. In the last year their work has been prodigious with the production of many excellent documents has hit the right spot and delivered many successful outcomes:
Good examples would be the work of CCN’s influential Care Act Implementation Group, the Team’s detailed research and consultation responses lead to increased funding to CCN members on a needs led basis for the early stages of Care Act Implementation.
Our County APPG report The State of Care in Counties, highlighted the unique challenges and barriers of delivering social care to our counties and the huge disparities in funding between counties and our urban counter parts – with relative needs funding for social care three times lower than inner london. The report’s core recommendation on ‘Health & Social Devolution Deals’ is now a core narrative of Government policy, something we should be proud of.
And our ground-breaking study with LaingBuisson into county care markets.
Not only did this contribute to the delay in the next phase of the Care Act, it has fundamentally changed the national conversation on social care funding, placing a major focus on the brittle state of the care market.
And let us not forget that a year ago cities dominated the devolution narrative, with little consideration of the opportunities devolution could bring to the 25 million residents in county areas, some 48% of England’s population.
Now, a year on, we can say that we have:
It is CCN’s campaigning through Our Plan for Government and County Devolution Reports that has helped put county devolution on the map.
However our counties in England are entering a critical period.
In just eight days’ time on 25 November the Chancellor will set out his full Spending Plans for this Parliament including local government expenditure. We already know DCLG’s budget will be cut by 30%, but the full extent of the fiscal pain to be imposed is yet to be revealed.
Over the past five years counties have delivered everything that has been asked of them and delivered extraordinary efficiencies and savings not matched by any other parts of the public sector.
We have broadly protected and improved frontline services, invested in growth, innovated and transformed local government services and unlike much of the public sector delivered balanced budgets year-on-year!
This is despite the fact that we have endured:
• Revenue Support Grant from central government reduced by 40% in real terms and have had new unfunded or part funded responsibilities thrust upon us – such as the growth in concessionary fares budgets as our ageing population grows.
• Unrelenting demand-led pressures across children’s services. For instance, children subject to child protection plans are up 54% in counties alongside school transport costs that continue to escalate as school roles rise substantially.
• In adult social care, the ticking time bomb of an ageing population has a shorter fuse, with counties already having almost double the percentage of over 65s compared to London. By 2020 the average CCN authority is projected to see a 10.6% increase in its older adult population, some 36% higher than the average Metropolitan Borough.
• And tough, new, inspection regimes for schools and social care, placing new cost burdens on upper-tier authorities.
Despite the impact of all of these significant issues we have delivered all that has been asked of us.
But can counties really be expected to deliver more of the same over the next five years?
I support the Chancellor’s efforts to ensure that, as a country, we must live within our means.
However, public sector funding cuts should be fair and proportionate and reflect needs and demands.
We have advocated for counties and put our case forward in recent meetings with both Greg Clarke and Jeremy Hunt, and I believe that they empathise with us – but does the Treasury?
In recent months CCN have done our very best to lobby and help Ministers, MPs and civil servants in Westminster better understand the difficult decisions we will potentially have to make over the coming years and get them to realise that importantly our ‘budget tank’ is now running on ‘reserve’ and the engine is close to stalling.
Faced with substantial further reductions in grants, council tax restrictions and inflationary cost and wage pressures, we face a £2.6bn black hole in our finances before we add in increasing demand for our services and the consequences of the living wage.
We don’t expect a thank you but the facts are the facts, endorsed by the National Audit Office, the Commons Public Accounts Committee, Local Government Association and London School of Economics.
And, of course, the bravery of our esteemed leader in Oxfordshire through letter ‘gate’, and the detailed response that laid out these facts to government.
Let’s hope that our Spending Review evidence submitted to the Treasury and advocacy across Whitehall pays off on 25 November and that our messages have hit home. There is a real danger of collapse in social care markets. Reducing our investment in social care enablement and preventative services which reduce hospital admissions and support timely hospital discharge must be avoided. Health and social care funding is inextricably linked. Substantial funding reductions will lead to the withdrawal from many of the non-statutory services that are highly valued by our residents and businesses, and this must be avoided given that the majority of our budgets support a small minority of our populations.
The entrepreneurial county
Despite all these financial challenges we should not lose sight of the big opportunities the devolution agenda presents to us. Both bespoke devolution deals invited through the Cities and Local Government Devolution Bill and what I call generic devolution through the recent announcement from the Chancellor on the Business rate retention by the end of this Parliament. However as we set out on the road which will inevitably lead to the reform of local government finances, great thought and careful consideration must be taken if we are to deliver our joint aims.
I believe there are three critical issues that we must focus on in the coming months and years:
1. The reforms must deliver sensible baseline financial stability for counties with fairness and equity across the country and within tiers of local government. This should involve a full needs led review before baselines are set. Many of our recent publications have highlighted the massive funding anomalies in the current system which are to the massive detriment of fair funding to county council budgets, allowing London councils to have councils tax rates a third lower than county areas.
2. With evolving policy suggesting that local authorities will have devolved by 2020 some additional £12b of business rates in return for accepting additional responsibilities. It is essential we engage in serious discussions about the scope of these responsibilities and functions and make sure that funding is appropriate to the new responsibilities coming our way and we are not short changed. Generally we very much welcome the opportunity for taking on additional responsibilities from Whitehall – it’s what we have always asked for and government is starting to deliver.
3. And the final point, the government must free up councils – it should not restrict additional business rate levies to help fund infrastructure making them conditional on directly elected mayors. In addition, we need a wider set of fiscal freedoms, including increased borrowing capacity, greater control over EU funding and, the freedom to set our own Council Tax levels.
And finally to the other half of the devolution equation – bespoke devolution. The September 4th submissions have been much publicised and discussed – others will follow.
The opportunity for bespoke ‘devolution deals’ to deliver substantive change with reach and influence, freedoms and flexibilities on how the totality of public expenditure is expended within our areas is an exciting opportunity and has enormous potential to change and transform the efficient delivery of public services. Common themes being:
• Health and social care integration
• Skills/welfare reform
• Spatial planning/Infrastructure delivery all designed to support and accelerate growth
CCN’s concept of One Place, One Budget, springs to mind.
County governance has led the way in showing the rest of the public sector how to deliver change and has been modernising and transforming service delivery through successful partnership working.
The success of the Troubled Families Programme – counties producing the best outcomes in the country, the success of Local Area Agreements of old and more recently effective use of the Better Care Fund are just examples of successful public sector partnership.
However, despite this track record I still remain concerned over a one-size-fits all approach to county governance. What may work for metropolitan cities and authorities is a very different kettle of fish in two tier counties.
While a few counties will take the decision for their local areas and agree to an Elected Mayor, this model is unpopular with the vast majority of counties and may not work in practice.
The Government must be open to developing alternatives models that allow all areas to agree truly transformative devolution deals, including robust and accountable combined authorities.
Let’s hope that we can take forward the devolution agenda in county areas with government agreeing on appropriate, flexible, governance arrangements, tailored to local needs.
I finish where I started, an exciting and enormous challenging time ahead. It is up to us all as a collective to work together, to be constructive and innovative in helping government to shape and deliver an empowered network of counties that supports the delivery of modernised and improved public services in our area, makes the public pound go still further and we continue to improve the outcomes for the residents and businesses we represent.