Rt Hon Liz Truss MP
Prime Minister
10 Downing Street
London
SW1A 2AA
6 September 2022
Dear Prime Minister,
As senior representatives of the Local Government Association (LGA), we would like to congratulate you on your appointment as the nation’s new Prime Minister. We are pleased that our new Prime Minister is a former councillor, who has experience as a representative of local communities and understands the issues facing councils and the challenges which lie ahead. As the organisation working on behalf of councils across England and Wales, the LGA has enjoyed a constructive relationship with government as we seek to achieve our shared vision to improve people’s lives, provide value for money public services and stimulate economic growth.
Local government is the fabric of our country, delivering over 800 services to improve lives and livelihoods. Councils are best placed to help your Government achieve its ambitions to boost local economic growth, revive town and city centres, build more homes, improve our transport infrastructure, boost the life chances of children and young people, support older and disabled people to live well, drive improvements in public health, and equip people with the skills they need to succeed so no one is left behind.
The pandemic highlighted what can be achieved when government empowers councils and works with them as equal partners to innovate and create new services locally, to support residents and businesses. Councils ensured tens of thousands of rough sleepers and homeless people were helped off the streets; millions of the most vulnerable were shielded from the virus; and billions in vital grants were provided to businesses forced to close. Most recently, councils have quickly mobilised support for vulnerable families arriving from Ukraine, as well as continuing our work with those fleeing Afghanistan and elsewhere.
As more households are impacted by increased cost of living pressures, local government continues to provide communities with vital support. Councils have worked hard to process the council tax energy rebate, as well as other support measures announced by the Government and will continue to make sure that residents and businesses in our communities are protected. At the LGA, we have created a Cost of Living Hub which shares best practice and resources to help councils to support their residents who are facing higher costs with examples of how councils have targeted assistance at those facing complex challenges. We are keen to take a more collaborative approach and work in partnership with your government to develop a long-term solution to address financial resilience, tackle concentrations in deprivation, reduce inequalities and level up the country. This will require investment in both the national benefits system and a longer-term system of local welfare support.
COVID-19 and Russia’s war on Ukraine have had an unprecedented impact on the country’s economy and as part of our highly valued sector-led improvement work, the LGA offers a wide range of support to help councils address the issues of economic recovery. Councils stand ready to deliver an ambitious programme of financial stimulus and have the knowledge and expertise to direct funds where they will be able to deliver immediate impact to protect jobs and support long-term transformation of the economy, infrastructure and services in every locality.
Local economies each need different interventions to ensure they can thrive in the future. Understanding the exact nature of an effective and sustainable stimulus can only be carried out locally. We were therefore pleased to hear your comments in recent weeks on the importance of decentralisation, and moving away from a system where Whitehall directs what happens in local communities across the country. Councils equally want to see a real transfer of powers and funding from Whitehall. We are pleased that the Levelling Up and Regeneration Bill proposes to offer all of England the opportunity to benefit from a devolution deal by 2030, alongside the commitment in the Levelling Up White Paper that reorganisation will not be a requirement for a devolution deal. We believe that all councils having greater fiscal freedom, the power to raise more money locally and having greater control over how this money is spent in local areas is a crucial part of the future devolution process and ensuring all parts of the country are able to prosper.
Empowering councils to play their full part as leaders of place, can streamline resources, reduce bureaucracy, boost productivity, level up the country and improve outcomes for people. We know that competitive bidding for short-term, small pots of funding creates uncertainty and uses up vital resources in both councils and the civil service, which would be better spent on direct action in communities. For example, our analysis shows that joining up nationally fragmented national employment and skills schemes and delivering these locally could move an additional 3,850 people into work across a large combined authority area, bringing an £80 million boost to the economy and a £52 million per year saving to the taxpayer. Facilitating a more ‘joined up’ and strategic approach to apprenticeship spending locally by enabling local areas to pool levy contributions would allow councils to better plan provision across local areas. Similarly, analysis by the University of York suggests that the expenditure through the public health ring-fenced grant is three to four times as cost-effective in improving health outcomes than if the same money had been spent in the NHS baseline.
Adult social care plays a crucial role in enabling people to live the life they want to lead, with councils playing an essential role in delivering an effective health and care system. Councils and care providers are struggling to deliver the care and support people need. We therefore welcome the promise you have made to prioritise adult social care. As you recognise, demand for services is increasing, budgets are not stretching as far, unpaid carers are facing further strains, and recruitment and retention of staff remains a huge challenge. As we move into winter, social care can expect to face even more requests for support and growing waiting lists. At the same time, the Government is planning to implement a range of reforms which 98 per cent of councils say will be unaffordable. This will only compound the funding challenges facing the adult social care sector. Adult social care is already facing a funding gap for current services, increasing each year due to inflation and other costs. Without adequate funding, some councils will face a battle to balance budgets, worsening existing pressures and running the serious risk of impacts on the ability to deliver timely and quality care to those to those who need it. To address this shortfall, we agree that a greater proportion of national funding equivalent to that which would be raised by the health and care levy, which you have identified as £13 billion, should go directly towards social care upfront. This would reflect the urgency of the situation and help deal with these immediate pressures.
We also believe that the implementation of the care cost cap, changes to the financial means test thresholds, and the implementation of Section 18(3) of the Care Act, should be deferred. These proposed reforms seek to tackle the issue of self-funder cross-subsidisation of care costs (for example, enabling self-funders to access care at the council-commissioned rate). However, the incoming charging reforms will make income projection more difficult, and the implementation of Section 18(3) will make medium-term spend forecasting much harder. We would welcome the opportunity to discuss how this deferral could significantly ease the pressure on councils’ adult social care teams as they tackle immediate pressures and prepare for what is widely expected to be an extremely challenging winter. This would also allow for a longer period of reflection and deliberation on the crucial learning from the work being conducted by the social care reform trailblazer sites.
As part of councils’ commitment to supporting people of all ages, councils want to see every child and young person kept safe and have the best start in life. The LGA, working alongside councils, want to work with the Government to transform the care system, building on the Independent Review of Children’s Social Care, to address fundamental issues in the system and improve outcomes for all children. The recommendations in the Independent Review of Social Care will require significant funding to deliver and this will need to be delivered swiftly to address urgent challenges. In particular, we have significant concerns around placements for children in care who have the most complex and challenging needs; placements for unaccompanied asylum-seeking children; workforce capacity and the increasing reliance on agency staff. These issues cannot wait for the delivery of long-term reform and increasingly risk the ability of councils to support children.
Boosting education and tackling the attainment gap will be vital to levelling up the country, and councils support your vision to create a high-performing school system that gives every child the tools they need to succeed. Councils have an excellent track record in providing a high-quality education for pupils, with 92 per cent of maintained schools rated by Ofsted as outstanding or good – a higher proportion than any other type of school and we welcome measures that would allow councils to set up and lead their own multi-academy trusts (MATs). Moving forward, councils need long-term sufficiency of, and certainty over, funding to support children with special educational needs and disabilities (SEND). This cannot wait until the implementation of the SEND Review and must include developing a plan that eliminates every council’s Dedicated Schools Grant deficit.
In their role as place shapers, councils play a vital role in steering economic development, delivering a quality supply of housing and addressing homelessness. Local government will continue to play a key role in helping the nation to level up and recover from the pandemic, and that includes meeting our joint ambition with government to build the homes we desperately need. Councils playing a leading role in housing not only tackles the shortage of suitable accommodation, but ensuring it is energy efficient and bringing together the infrastructure that helps to build strong and vibrant communities and local economies. Analysis by the King’s Fund and LGA shows that every £1 spent on improving homes can save the NHS £70 over 10 years. Some housing development is currently delayed by the impact of the development on water levels and quality, which needs to be recovered and maintained.
Councils are ambitious for housing in their areas, and want to make sure it is accompanied by transport networks, access to employment opportunities, healthcare and education, as well as unlocking economic opportunities in tourism and leisure. Councils are ambitious for their areas with statistics showing that 9 in 10 planning applications are approved by councils, yet more than 1.1 million homes granted planning permission in England in the last decade are yet to be built. We would welcome the opportunity to discuss with you how the Levelling Up and Regeneration Bill can ensure councils are empowered to incentivise developers to build more housing more quickly through a genuinely plan-led system that supports local democracy and community engagement. To support councils’ wider role as leaders of place, we would also like to discuss with you how reducing local government borrowing costs could allow councils to play their part in driving economic growth, through investment in sustainable housing, infrastructure including projects to achieve net zero, and schools vital to levelling up the country.
The Government previously signalled its intention to create a new Office for Local Government to strengthen innovation and the use of data. Through our public benchmarking tool, LG Inform, the LGA already makes financial and performance data for every council publicly available, and users are able to compare their council with any other council or group of councils. LG Inform received over 750,000 unique views in 2021/22 alone. At a time of resource constraint across government, it is questionable what additional value the Office will provide and suggest there are better ways to achieve the same goal.
Councils want to work as partners with Government to support and advance on the UK's net zero target by 2050. Many councils have a target of 2030. Local action will be key to our nation’s success, with councils able to influence over 80 per cent of emissions. Our position as place-shapers, convenors of communities and local partners, housebuilders, asset-owners, problem solvers and significant purchasers puts us at the forefront of delivering real, tangible reforms to tackle climate change. Our analysis shows that taking a place-specific, rather than a centralised, approach to working towards net zero would provide six times the return on investment as energy savings, make significant savings in duplicated bureaucracy in local and central government, and provide wider social benefits over the next 30 years.
Finally, councils could make decisions which not only provide the services communities rely on, but provide better value for money for the taxpayer by making longer term investments that deliver savings, if they have adequate, certain, sustainable and long-term funding. In November 2021, when councils were setting their budgets, the OBR forecast was that consumer price index (CPI) would be 4.4 per cent in 2022/23. Since then, energy prices, spiralling inflation, and National Living Wage pressures are set to add significantly increased costs to councils’ budgets. At the point when CPI was expected to be 8 per cent in 2022/23, our analysis shows this led to £2.4 billion in extra cost pressures this year alone, and a funding gap of £3.6 billion in 2023/24 rising to £4.5 billion in 2024/25 based on inflation coming down to much lower levels in future years. As you know, inflation figures published since then show that inflation in July 2022 was 10.1 per cent and the Bank of England predicts inflation will be 13 per cent in the autumn 2022. It is only by addressing this significant funding gap that councils can protect services, invest in local services and employ the necessary skilled and motivated workforce and deliver for our communities and level up all parts of the country. Alongside this, greater devolution of funding and powers will allow councils to fulfil their ambitions as leaders of place.
We would welcome the opportunity to meet with you to discuss how the LGA can, on behalf of local government, continue support your Government’s ambitions for our nation. Alex Saul at the LGA ([email protected] or 07919304993) would be happy to work with your officials to find a suitable date for a meeting.
We wish you the best of luck in your premiership.
Yours sincerely,
Cllr James Jamieson, LGA Chairman
Cllr Shaun Davies, LGA Senior Vice-Chair
Leader of the LGA Labour Group
Cllr Izzi Seccombe OBE, LGA Vice-Chairman
Leader of the LGA Conservative Group
Cllr Joe Harris, LGA Vice-Chair
Leader of the LGA Liberal Democrat Group
Cllr Marianne Overton MBE, LGA Vice-Chair
Leader of the LGA Independent Group