The Government has set out its spending priorities
According to ministers, levelling up is at the heart of the Spring Budget 2023, with measures “set to put powers and money in the hands of communities most in need” and “deliver more jobs, better services and more opportunities for local people”.
The Budget includes an expansion of free childcare to those over the age of nine months, reforms to support people into work, and greater responsibilities for local leaders over economic growth, among other announcements of note to councils.
In the LGA’s initial response, we say that it is good that the Chancellor used the Budget to act upon council calls to widen employment support, improve local roads, protect swimming pools from rising costs and fund vital regeneration efforts.
Lower borrowing rates for councils will also provide a boost for vital council house building projects.
Disappointingly, though, key local services that help support economic growth – including adult social care, public health and children’s services – saw no additional investment.
We want to work with the Government on a long-term funding plan that ensures councils have adequate resources to deliver local services for our communities.
Workforce participation
It is positive that the Government is addressing workforce participation as part of a wider effort to tackle high vacancy rates affecting the national economy and local communities.
Every local economy is different, and people can find themselves ‘economically inactive’ for different reasons.
With control over fragmented and disjointed national employment and skills funding or schemes, councils could build on their track record of helping get people back into the workplace – including those who are furthest from the jobs market – and plugging growing skills gaps.
The LGA’s Work Local provides a positive, place-based vision for an integrated and devolved employment and skills service that can support everyone with the wraparound support that is needed.
Early education, childcare and SEND
Good quality early education and childcare enables people to work, increase their hours or take on new opportunities, and to move out of poverty. Most importantly, it improves families’ and children’s long-term life chances.
Plans to raise the universal credit cap on childcare will make a significant difference to many families, as will reforming the system to ensure that parents and carers are not hindered by a complex process to reclaim childcare costs.
It is helpful that the Government has committed to increasing the hourly funding rate paid to providers to deliver the existing free hours offers in England.
To ensure these announcements have their intended impact, the full cost of delivering early years entitlements must be covered to enable providers to pay staff appropriately and give high-quality support to children in their care.
Furthermore, we need to secure the right support for children with special educational needs and disabilities (SEND).
Adequate funding, skilled early years practitioners and wider system support are essential to the early identification of need and support for children with SEND, as set out in the Government’s own SEND and alternative provision improvement plan (see Right support, right place, right time).
Social housing
The Government is bringing forward a new, discounted Public Work Loans Board policy margin to support local authorities borrowing for housing revenue accounts and the delivery of social housing.
This will provide much-needed additional support for vital council house-building projects. However, this will not mitigate the impact of the Government’s 7 per cent social rent cap for 2023/24.
The Chancellor also missed a key opportunity to give councils the power to set their own Right to Buy discounts and retain 100 per cent of sales receipts. This would have gone some way to supporting councils to replace much needed social homes.
Levelling up
A third round of levelling up funding and an extra £400 million for levelling up projects in England will give councils the opportunity to forge ahead with ambitious plans to transform their communities and unlock potential for more local growth.
The LGA remains clear that levelling up should be locally led by evidence of where crucial investment needs to go and not based on costly competitive bidding processes. Our recently published ‘Levelling Up Locally’ inquiry report looks into how this agenda might better strengthen local communities.
Devolution
‘Trailblazer’ devolution deals negotiated with Greater Manchester and West Midlands Combined Authorities include a long-term commitment to local authorities retaining 100 per cent of their business rates and to single multi-year funding settlements at the next Spending Review, as well as additional powers in areas such as affordable housing, transport and skills funding.
The Government’s ambition is to roll this model out to all areas in England with a devolution deal and a directly elected leader over time.
It is positive that the Government aims to further roll out the single place-based funding settlements, recognising the need to move away from the current costly, inefficient and fragmented approach.
We urge the Government to clarify the timelines for this, and to work with local government so areas that want to go further and faster can do so.
The Government’s ambition to extend devolution across England is also welcome. The LGA has long argued that decisions are best taken as close as possible to the communities they affect, and evidence shows that devolution leads to better outcomes.
However, it is important councils of all sizes are engaged in the devolution process, and that new deals are locally led, and reflect the range of options set out in the devolution framework in the Levelling Up White Paper.
Areas should be free to choose the most appropriate model for their community, and non-metropolitan areas should not be prevented from pursuing devolution if they have a clear proposition informed by good governance principles.
Local enterprise partnerships
The Chancellor’s commitment to transfer responsibilities from local enterprise partnerships to local authorities from April 2024 provides a helpful timeline for councils and combined authorities, and the LGA looks forward to seeing the updated policy position confirming next steps. Transfers of responsibility will need to be matched by sufficient funding and support for areas with capacity issues.
Swimming pools
The LGA has long called for support for leisure centres and public swimming pools, so the announcement of more than £60 million for public swimming pools across England is welcome.
It is recognition of the importance of our pools to the nation’s health, our communities and the safety of children.
This funding will enable councils to keep the doors open and continue the transformation of our pools to an energy efficient future.
Veterans
The Government is providing an additional £33 million over the next three years to increase the service provided to veterans, including support for those with serious physical injury resulting from their service and increasing the availability of veteran housing.
While this additional funding is welcome, it is short term and limited in nature. Given the other funding pressures local government faces, this means it cannot fully fund the local capacity needed to sustainably drive forward the Armed Forces Covenant Duty.
Councils must also continue to receive enough funding to support veterans and their families across a range of services that affect mental health, including housing, money advice, employment support and other public health and wellbeing services.
Investment zones
The Government is launching the refocused Investment Zones programme to catalyse 12 high-potential knowledge-intensive growth clusters across the UK.
English investment zones will have access to interventions worth £80 million over five years, and plans will be developed by mayoral combined authorities, working in partnership with local universities, councils, businesses, and central government.
It is good that the decision to refocus investment zones has seen a move away from costly competition between areas and towards a transparent selection methodology that goes with the grain of devolution and prioritises the UK’s path towards net zero.
Potholes
As part of the Government’s mission to improve roads, councils are seeing an additional £200 million in their pothole repair funding to meet some of this cost, although challenges remain if they are to tackle the nine-year road repair backlog.
