LGA - Deadline day should spark £60 billion devolution deals

8 Sep 2015 10:52 AM

At least £60 billion of central government spending should be devolved to local areas over the next five years, council leaders urge.

The Local Government Association said cities and county areas across the country are set to meet today's preliminary devolution deadline and submit deals to the Chancellor.

Local areas are calling for greater local powers and funding for skills, housing, transport and health and social care. Deals already submitted and offers being finalised include: 

• Derbyshire and Nottinghamshire – includes call for 10-year transport settlement and fully devolved housing investment.
• Gloucestershire – includes control of all health care budgets, fully integrated health and social care and a single vision for health and wellbeing for the county.
• Liverpool city region – retention of 100 per cent of business rates income and the ability to franchise all local bus services.
• Leicester and Leicestershire – devolution of funding and ability to commission skills programmes locally.
• Hampshire, South Hampshire, Isle of Wight – calling for further investment in world-class marine and aerospace clusters and university research centres.

The LGA, which speaks for more than 370 councils in England and Wales, is now urging George Osborne to match this ambition and use the Spending Review to devolve, or hand greater local control over, at least £60 billion worth of funding down to local areas.

It argues that taking decisions closer to where people live can achieve up to £20 billion in potential public sector savings as well as creating at least £80 billion in economic growth and 700,000 new jobs.

Cllr Gary Porter, LGA Chairman, said: 

"Local people know best how to spend money and run services in their local area. Taking decisions closer to where people live is key to rebalancing the economy and improving the services which bind our communities together and protect our most vulnerable. 

"Councils and their partners have worked hard to get devolution deals in and produce innovative proposals to use public spending more effectively to meet local needs. Ministers have invited councils to continue coming forward with ambitious and innovative proposals and we hope they will maintain recent momentum over the course of the Parliament.

"In the negotiations that follow today, we urge the Government to match the ambitions shown by cities and county areas and ensure the benefits of devolution are extended to residents and businesses in all parts of the country. 

"It is time to spend smarter on infrastructure to get maximum value from every public pound. This starts with a much more effective and efficient approach to investing in local growth and regeneration. With devolved decision making and funding, local areas can also better gear the skills system to tackle unemployment and underemployment and close skills gaps. 

"Devolution is not an end in itself. If our public services are to survive the next five years, councils also need fairer funding alongside the freedom to pay for them."

Notes

1. In 2013/14, councils and Local Enterprise Partnerships only had influence over how 25 per cent of the Government's total £17 billion funding for local growth was spent. There were also more than 100 local growth and regeneration funding pots worth more than £22 billion managed across more than 20 central government departments and agencies.

A fragmented and inefficient £13 billion employment and skills system is also currently scattered across 28 national schemes.

2. Instead, the LGA's Spending Review proposals include: 

• Expanding the Local Growth Fund to at least £19 billion over the course of the Parliament. It should include the £291 million of the Bus Services Operator Grant, £976 million worth of maintenance funding and influence over Highways England's £15 billion spending. All broadband and digital connectivity funding, flood protection infrastructure funding and regional growth funding should also be pooled into the expanded LGF.
   
• Giving local areas full control over England's 2014-2021 £5.3 billion European Regional Development and Social Funds in order to get hundreds of integrated infrastructure, employment and skills projects off the ground.
   
• Replacing the £620 million Work Programme with two locally influenced programmes – one for mainstream Jobseeker's Allowance claimants and the other fully devolved for up to 2.55 million claimants facing multiple disadvantages into work, including Employment Support Allowance claimants.
   
• Fully transferring the annual £4.2 billion EFA post-16 budget, allowing local areas and employers to control the annual £2.4 billion Adult Skills Budget and devolving funds, including Apprenticeships Grant for Employers, Trailblazers for higher apprenticeships, Employer e-vouchers, and a proportion of the apprenticeship levy to boost high-quality apprenticeships. 

3.'Spending Smarter: A Shared Commitment', the LGA's 2015 Spending Review submission, focuses on proposals to help councils drive efficiencies, transform business rates, create a partnership between central and local government to deliver targeted skills and employment initiatives, and prioritise the radical devolution of power within England.

4.The LGA's fully-costed White Paper 'English Devolution: Local solutions for a successful nation' outlines the benefits of devolution across all parts of England