At a time when so many people have doubts that pulling the levers of government actually makes any difference anymore, the way we organise and fund those levers which are closest to the public matters a great deal. After a decade of decay under the last Conservative government, council finances are strapped and Britain remains far too centralised.
London is a particular case study of this growing dysfunction, with too many levers in the hands of too few, and not enough cash in anyone’s budgets.
Its councils increasingly do more and more with less and less, and where powers are devolved – they are largely concentrated in the hands of the Mayor, with no meaningful framework for power-sharing with the boroughs like those that exist in other Mayoral combined authorities.
But rather than fix London’s council finances, the government is pushing ahead with a “fair” funding review that is anything but fair, and doing nothing to make sure that councils, and the London Assembly, have the powers they ought to share with the Mayor.
London has long had a unique settlement – and not just since the establishment of the GLA in the late 1990s. London Boroughs have been a unique category of local authority in this country since they were established in the 1960s. Their policy competencies always enjoyed a strange mix of devolved powers and powers that, really, should have been devolved but which have sat with a higher authority. First it was the GLC, then it was Westminster itself during the wilderness years, and now it is the overcentralised Mayor.
Despite this, London Boroughs have always punched above their weight and tried, sometimes collaboratively, to make long-term strategic decisions for the often multiple and diverse communities they include – almost always without the proper powers or resources to do so. You would forgive them then for hoping that a government bill presented after all these years, with the stated aim of meaningful devolution, would fix these problems. But the government’s English Devolution and Community Empowerment Bill does not do that.
Instead it continues to concentrate power in the hands of the Mayor – designating the GLA as an established Mayoral Strategic Authority and giving the Secretary of State the ability to keep plying that single point of failure with more and more responsibility whenever the whim takes them. This would perhaps be forgivable if at the same time the Bill strengthened the powers of the elected Assembly – which, let’s remember, enjoys a higher level of democratic legitimacy than the Mayor, composed as it is by a form of Proportional Representation – to properly scrutinise the Mayor and even determine a strategic direction of its own.
But it doesn’t even do that, instead maintaining the lop-sided relationship between the Mayor and the Assembly that is supposed to scrutinise them, and it fails to create a meaningful framework for the Mayor, Assembly and councils to work together in a way that resembles other strategic combined authorities in cities.
Earlier this year, the leaders of each of London’s 32 borough councils – from across the political spectrum – came together to demand a better power-sharing settlement with the Mayor. They aren’t asking for a wholesale rethink – just for a seat at the table.
To quote directly from their statement – London boroughs “have no formal decision-making role within the Greater London Authority, in contrast to Combined Authorities elsewhere in the country. Without a change to current arrangements, we could become the only upper-tier council leaders in the country without a formal say over the decisions of their region’s Strategic Authority.”
Not only has the government roundly ignored their plea with this Bill – they are actively undermining their demands with its proposed new funding model for council finances. The new model doesn’t just fail to fix the broader problem in council finances, it will actively disadvantage some London boroughs. By failing to take account of housing costs, the funding-per-head in places like Southwark will fall off a cliff. The IFS describes London as the biggest loser from the review. London as a whole would be left with a shortfall of around half a billion pounds, and some inner London boroughs could face real-terms spending cuts of 11-12%.
At a time when councils are already straining every sinew to continue to deliver good quality services despite profound financial pressures – this is completely and utterly wrong. It is particularly unconscionable when we remember that 1 in 50 Londoners are homeless or in temporary accommodation, that the national scourge of child poverty reaches its zenith in London, and that proper interventions for young people to stop knife crime are hampered by lack of council resources.
There are utterly unjust regional imbalances in this country – and the government is right to want to address that. But there is no path to economic growth and future prosperity without a strong and self-governing London, and therefore without well-resourced and empowered London boroughs.
London’s devolution settlement is a mess – and it could be about to get a lot worse
