Take a look at your local council. It’s probably not a pretty picture. Some 15 years of austerity have left local government in pieces. Critical services have been reduced to a level where they are basically only available in the most extreme cases. Now image it trying its run the local hospital and the local prison, bringing schools back under their wing. Those are the plans being mooted this week by Steve Reed, Labour’s new Secretary of State for Housing, Communities and Local Government, and backed by Labour Together. Even for a local government enthusiast like me it’s a stretch – not because the theory is wrong per se, but the actual logistics and scale are enormous at a time when it can’t even fund basic services.
Underlying all devolution moves by government over the past decade is the assumption that, by bashing different public services together, savings and efficiencies will automatically be released and the quality of services improved. The logic is that public services can be reformed out of austerity. It’s wrong.
It takes time, effort and, importantly, money to transform services. We can look to Devo Manx, the programme to devolve, among other things, health spending to the Greater Manchester Metro-Mayor. The devolution programme cost an estimated £2bn, £450m of which was invested by the NHS Transformation Fund. The results have generally been positive, according to the published evidence showing fewer alcohol-related admissions to hospital, fewer first-time offenders and fewer school days missed. But Devo Manx hasn’t solved local government finance in Greater Manchester. Manchester City Council said last year that it was facing a “cliff edge” as it looked to make £50m in cuts, Oldham is facing a £14m shortfall (after a government bailout of £5m) and Bury £35m. Across the UK, local government has a collective debt of £122bn.
The NHS is not in any better shape. Labour’s reorganisation has created chaos, with soon-to-be-abolished integrated care boards unable to afford their redundancy payments. Taken together with prisons and schools, there is a £49bn repair backlog across public buildings alone. That’s just the buildings and not the cost of services.
The Reed proposals do mark a shift away from local government policy under his predecessor Angela Rayner, whose reforms had the familiar sound of a can being kicked down the road. Rayner’s council mergers were intended to save £1.8bn, reducing duplication and delivering those much-sought after efficiencies. Later, it was revealed that the government did not do its own costings, and that the £1.8bn figure was less robust than promised. The county council network, whose work formed the basis of the policy, said that in some cases, these reforms would end up making no savings and in others that they would cost more money. Rayner’s other move was playing around with the funding formula, proposing to cut funding from inner London boroughs with high levels of inequality and redistribute it elsewhere.
New devolution reforms seem naïve and misguided at best. At worst they could engulf more of the public sector in reorganisation chaos and drag services even further down. Public services need money and stability after 15 years of cuts and chaos. Let’s get them on their feet before we expect them to take on more.
[Further reading: Why Farage’s immigration plan is dividing Labour]
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