by danielbarker on 12 January, 2021
Published on Local Government Chronicle BY JESSICA HILL
The communities secretary has confirmed the government’s widely anticipated reviews of the business rates system and the fair funding of councils will be further delayed until at least next year, while its proposals for devolution are now not expected to surface until the second half of this year.
But Robert Jenrick also claimed the sector’s handling of the pandemic “builds the case for devolution” and assured councils of a “very strong role” in two large funding pots unveiled at this year’s spending review, the UK Shared Prosperity Fund – worth £220m this year, when it is being piloted – and the £4bn Levelling Up fund.
The Treasury’s consultation on the business rates system ended last October and the review had been scheduled conclude in the spring. But Mr Jenrick told council representatives on a Local Government Association finance conference session yesterday that he thought it would be unwise to proceed with a new settlement for business rates within the next financial year.
Similarly, he confirmed that the government’s commitment to reassess the baseline need for spending in each council through its Fair Funding Review has been pushed back again to 2022-23 at the earliest. This had originally due to be implemented in spring 2020.
He said: “We recognise the importance of building a broad coalition behind any future reform…When there is a clearer path ahead after the pandemic, we will work with the sector to find a new consensus for the broader reforms of local government.”
However, on a recent ministerial call Mr Jenrick was more cautious about taking the fair funding review forward, stating that “there might be an opportunity to do it next year, and my department will work with the Treasury to review that”.
Mr Jenrick claimed the pandemic has shown the sector “in a very good light” and highlighted things local government “does better than the centre” such as “being closer to communities and able to respond swiftly in a more tailored way”.
“I think that does build the case for devolution,” he said, adding that he hoped to bring forward the “long overdue” devolution white paper “probably in the second half of this year”. This had been scheduled for autumn last year.
He also expressed hope to bring forward more detailed proposals with respect to “decentralisation as much as devolution” – “the ability to give local councils in particular greater discretion”.
“You can see that feeding through in UK Shared Prosperity Fund,” he added. “You will see there is a deliberate decision there to work with local government directly.”The government will “very soon indeed” launch prospectuses for the UK Shared Prosperity Fund and the Levelling Up fund, which he claimed would build “on the success” of the £3.6bn Towns Fund.
Both funds will allow local areas the opportunity to invest in culture, transport infrastructure, culture and town centre regeneration and will involve a “very strong role for local government”, Mr Jenrick said.
There would also be a “direct relationship between local and central government in deciding what these initiatives should be and then getting on and delivering them”.
“I think when both prospectuses are published they will be welcomed by you and others in local government,” he added.
Last week, MHCLG announced the 72 areas in which it would invest up to £830m from the Future High Streets Fund and Mr Jenrick said he hoped high street regeneration would be something councils “really concentrate on” this year as the country recovers from Covid. But he acknowledged that the interim period could be “very challenging indeed” for town centres.
MHCLG has just announced a Urban Centre Recovery Task Force, which includes West Midlands CA mayor Andy Street (Con) and Manchester City Council’s leader Sir Richard Leese (Lab), as well as its former chief Sir Howard Bernstein.
Mr Jenrick said the new body would consider whether there are “further planning reforms or other things we can do together in a sensitive way to give local government the levers it needs to bring about transformative change”.
The communities secretary also revealed his department’s desire to work with councils to “reduce the present complexity in grant funding, cut red tape and alleviate the financial burdens that inevitably go with managing hundreds of different grants”.
The National Audit Office’s director of local government value for money Aileen Murphie criticised the bureaucracy around government grants as an “additional burden” on finance directors who are “exceedingly busy” with other things, and Mr Jenrick acknowledged the “unprecedented demands” placed on councils during the pandemic in this regard.
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