Government must empower district councils with freedoms and flexibilities to stimulate local economies
3 min read
Former district councillor, the Conservative MP for Rugby Mark Pawsey, writes ahead of his Westminster Hall debate on district council finances, in anticipation of this week's local council elections.
Ahead of this week’s local elections, it is very timely to be discussing the future of District Council finances.
District Councils are home to 22 million people and provide front-line services to thousands of residents and businesses. This unique local insight means districts have a vital role to play over the next few years in shaping and delivering the government’s modern Industrial Strategy, supporting local growth, housebuilding and providing the preventative services necessary to give greater sustainability to health services. But in order to do this, district authorities must have suitable and sustainable levels of funding.
This is why last year, the District Councils APPG, which I chair, held a formal inquiry into district council finances and published a report ‘Delivering the District Difference’.
We heard compelling evidence of Districts identifying innovative and efficient way of doing things differently. For example, a recent LGA report found that district councils have saved £224 million through sharing services, far more than any other type of council. Such innovation and enterprise should be particularly welcomed given that NAO figures showed districts seeing the most significant real-terms reduction in spending power between 2016/17-2019/20, which is the largest cut in spending power compared to other types of councils in the current spending review period. I am proud to say that my local council, Rugby Borough Council have set out their plans to be financially self-sufficient by 2020.
The outcome of the inquiry in District finances was a report with seven key recommendations on measures, flexibilities and incentives to stimulate local growth. I’m delighted that the government has already acted on two of the recommendations - the removal of the negative Revenue Support Grant and the lifting of the housing borrowing cap. The removal of negative RSG has meant an average saving of over £350,000 for every District Council facing this challenge. The APPG is pleased to see the voice of districts taken into the account in this way and I would like to thank the government for recognising the need for change and listening to the voice of districts.
However, today’s debate is an important chance to press the government on what other steps it is taking to act on the rest of the APPG’s recommendations. These include allowing further freedoms and incentives to stimulate local economies, such as greater flexibilities to raise revenue and maintain incentives.
We also called for Districts to receive greater freedom to deliver health prevention services. A sustainable NHS requires a sustainable social care system and prevention services must see more investment to ease pressures further down the line. The Chief Financial Officer at Rugby Borough Council outlined in her evidence to the APPG that districts are well placed to support in the delivery of social care, particularly at the prevention end of the spectrum.
Finally, as the Government looks at the technical detail behind the future funding formula and business rates retention the APPG will be looking for reassurance from MHCLG that Districts will receive their fair share of funding going forward, reversing the decline in spending power identified by the NAO.
The recommendations made by the Districts APPG build on the spirit of innovation and enterprise that characterises how district authorities adapt to challenging circumstances. The government should act to harness this and deliver on the rest of the APPG’s recommendations to ensure districts can keep on delivering a difference in their local area.
Mark Pawsey is the Conservative MP for Rugby & Chair of the APPG for District Councils
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