The Government is not in the business of delivering underpowered mayors, says Local Government Minister Simon Clarke MP.
It has been a baptism of fire for Simon Clarke MP, not yet six months into his tenure as Minister for Regional Growth and Local Government.
He moved to the Ministry of Housing, Communities and Local Government from the Treasury in February, as the pandemic broke.
“History will forever be dominated by what’s happened since March. It has been very full on,” he says.
He feels the Government’s funding package for councils, announced in July, will prove flexible enough to answer local government concerns about increased costs and lost income arising from coronavirus.
And with lockdown easing, he is keen to focus on economic regeneration and the Government’s forthcoming Devolution White Paper.
The estimated financial challenge councils face as a result of the pandemic could reach £10.9 billion, based on the Government’s own surveys of councils’ spending.
The funding package – providing a further unringfenced £500 million, reimbursement of 75 per cent of lost income, and repayment of council and business rates tax deficits over three years instead of one – is “capable of responding to whatever the true situation emerges as being”, says Mr Clarke.
“The guarantee around income from sales, fees and charges is precisely designed to allow us to support authorities depending on the extent of the recoverable losses that they experience.
“In that regard, it should give real comfort to local authorities that, if the situation is really adverse, that guarantee is capable of capturing them and supporting them.
“We also announced that the Treasury has accepted the principle that there will need to be a similar arrangement for irrecoverable losses from council tax and business rates. What we will get in the Comprehensive Spending Review is the precise apportionment between central and local government in that regard.”
If more of the income losses can effectively be allocated to the guarantee scheme, that in turn makes the £3.7 billion in expenditure pressures funding already allocated look more generous, he added.
“If you want the full suite of [devolved] powers and funding, it will need to be the mayoral combined authority route”
Mr Clarke spoke at the LGA’s virtual annual conference in July, where he flagged plans for a Devolution and Local Recovery White Paper in the autumn, connecting local recovery with levelling up.
Describing himself as a “convinced devolutionist”, he says: “I think we should be humble in terms of recognising the limitations of the central state.
“The idea that an overly centralised state – and England is one of the most centralised in the western world – can respond at speed to crises is flawed.
“We in the centre need to learn to let go and trust. In turn, there will need to be a robust accountability framework to make sure that the local areas to whom we devolve deliver against key benchmarks.
“Speaking to mayors and council leaders, they’re very eager to have the chance to do that.”
While he says the Government will consider other arrangements, Mr Clarke is clear that “if you want the full suite of [devolved] powers and funding, it will need to be the mayoral combined authority route” – ideally sitting over unitary authorities.
“We don’t want a second round of austerity, so we need very robust growth”
“We believe strongly in the merits of unitarisation,” he says.
“Obviously, we will be sensitive to what proposals emerge locally. But we will be setting out rational incentives for people to look seriously at that route. We believe the time has come where it could yield real benefits as an integral part of the process of creating mayors.”
Mr Clarke feels mayoralties are appropriate everywhere and is keen to create them in rural as well as urban areas.
“You may want to choose a different nomenclature for a mayoralty in an area that doesn’t have a city at the heart of it,” he says.
“But the principle of the combined authority with a directly elected figure at its head is something which we are keen to expand to rural areas because we believe it has very significant benefits for them too, if they can get the full package of powers and funding that accompanies the mayor.
“That’s linked to the fact that we repose the greatest confidence in a mayoral arrangement because of the heightened level of accountability.”
He continues: “We are really ambitious for what mayoral combined authorities ought to be able to achieve. There is still an open invitation to the sector to set out what it believes might sensibly be vested at mayoral level.
“We believe the powers that the mayors have, in particular around economic recovery, including key issues like spatial planning – those very important issues which span a wider geography than a usual council would – are capable of being addressed at an area level, allowing a city region to make full use of its hinterland and the whole area to play to its collective strengths.
“We want the new mayoralties to be fully empowered; we’re not in the business of creating under-powered mayoralties because what would be the point?”
But he adds: “What we do not want is for people to feel that this is a top-down process. Both the Secretary of State and I are really clear that this is something where we want to work with local communities to make sure that proposals that emerge are fashioned in accordance with local priorities, local geographies, and as far as possible in line with established units of political geography that make sense to people.
“We should be humble in terms of recognising the limitations of the central state”
“This is a process that is intended to be constructive and helpful rather than the 1974 process, which is certainly not what we are going to embark upon. It’s important that I provide that reassurance to people now that we understand fully the sensitivities that go with any kind of new era and we are really not going to be difficult or aggressive partners in that.”
Mr Clarke believes there are “real savings” to be made from local government reorganisation that could be reinvested in local areas, but says the primary objective is improving the quality of local government and “making sure the British state is as resilient and effective” as possible.
This is in part to help support economic recovery following the pandemic, and Mr Clarke is clear about the key role councils have to play.
“It is absolutely vital that all local authorities give thought to how we deliver the strong pro-growth agenda that the Prime Minister outlined in his [‘Build, build, build’] speech…We don’t want a second round of austerity, so we need very robust growth. Councils sit at the heart of that process,” he says.
“The department genuinely is interested in getting feedback from local government about what it is that would be most helpful in terms of supporting growth, what new powers would be of most interest.
“We’ve got to get into the most pro-growth mindset possible. I’m struck that so many of the council leaders I work with are incredibly clear sighted on the importance of this.
“The country has been through the worst economic shock in any of our lifetimes, and we badly need to rebound from it with a very strong economic recovery. We absolutely have to make it a green recovery. And that is what we are trying to engender.”
He references the Chancellor’s proposals in his Summer Economic Statement for government funding for home improvements that save energy, such as installing double glazing and cavity wall and floor insulation.
“That obviously is partly job creation, it’s partly because it reduces energy bills, but it also massively impacts on our carbon emissions,” he says.
More generally, Mr Clarke flags the need for flexibility when it comes to supporting businesses – for example, by helping promote an outdoor drinking and eating culture this summer to support restaurants and cafes.
He also references the Government’s plans to “liberalise the planning system”, and get more homes built “to ensure that a generation aren’t shut out from the dream of home ownership”.
That means making sensible use of brownfield land and of new permitted development rights, including to make it easier to convert shops into homes as the high street changes.
The LGA and 19 other organisations have signed an open statement calling for retention of a local planning system, which enables councils to deliver resilient, prosperous places and better homes that meet the needs of their communities.
Mr Clarke insists the Government is “trying to make sure that there is an appropriate balance struck” – for example, in respect of extending permitted development rights to build upwards, by requiring developments to be in keeping with the wider character of the street.
“That will be for councils to determine what is or is not in keeping…we’re not removing that important element of local discretion as to what is, in practice, suitable in any given area.”
More generally, there is often resistance to new homes being built, he acknowledges, “because they are seen as of no benefit to the existing community”.
“There is common purpose across the department that we should build more, that there obviously should be the right rewards for those communities who actually choose to step up to the challenge on this,” says Mr Clarke.
“Ensuring there is a clear linkage between greater resources for the council, between new community facilities, be they schools or doctors’ surgeries or whatever it might be, is absolutely vital to maintaining popular consent to house building.” He wouldn’t be drawn on the specifics of such rewards – “that’s for [Housing Minister] Chris Pincher and I to continue to flesh out”.
But he added: “We certainly are very supportive in principle of the idea that councils should see real benefit from greater home building. That is a theme we will continue to develop over the months ahead, that we want to see a strong linkage between people doing the right thing and seeing the rewards for that.”
Meanwhile, the long wait for another White Paper – on adult social care – looks set to continue. Mr Clarke says he and Secretary of State Robert Jenrick are in regular contact with their counterparts at the Department of Health and Social Care, who are leading on this area, but that it’s “not going to be to the same timetable as the Devolution White Paper”.
“Social care is one of the big issues at any time, and the events of recent months have thrown into sharp relief how important this is and how important it is to deliver a sustainable long-term settlement,” he says.
“We’re keen that when we do come forward with proposals that they are absolutely grounded in the maximum possible degree of consensus and that they are fully developed and reflect all the different aspects of this very complex debate.
“We do need to make sure that there is a properly funded, compassionate and effective model of social care that doesn’t threaten individuals with a lottery. And that is absolutely at the heart of our thinking. We need to create something which, not just for the next few years but really for the next generation, is a model capable of holding water and providing care and dignity in old age.”