A resilient house needs strong foundations

September 30, 2022  

A new era begins. With the change of cabinet and a budget that had absolutely nothing ‘mini’ about it, this government appears to be doubling down on an economic strategy that history tells us has chaos at its heart. It’s uncertain as to whether this is the beginning of the end or the end of the beginning.

The chancellor has adopted a high-risk ‘shoot the moon’ strategy. Of course, it’s clear that a national crisis will demand a national government response – the financial crisis, the pandemic, and the energy crisis all required action to protect people in some form – and this will require significant levels of expenditure. High government expenditure will always come with trade-off risks, but the biggest challenge is how we fund it.

Conventional wisdom suggests the government has many economic levers at its disposal and it should try to move many by small amounts. This government is ignoring this advice and has bet the house on declaring regressive tax cuts in the hope that the trickle-down effect will cover its costs. It hasn’t just pulled on one lever, it has snapped it off.

Sincere decentralisation will give councils the ability to explore trade-offs that reflect their own needs.

This heroic, top-down, ‘all-or-nothing’ approach permeates all government policy at a time when local councils and public services have been stretched thin for over a decade. This latest policy experiment may be the last straw for community resilience.

The pivot from ‘Levelling Up’ to Investment Zones moves us away from a more holistic view of what people want from the place they live to a deregulated project line in a Treasury spreadsheet. The cancellation of the Health and Social Care Levy and the Green Levy shows how short-termism trumps longer-term planning and preparation, forcing us to hobble from one crisis to another. And the lifting of the ban on fracking and its potential allocation as a Nationally Significant Infrastructure Project may mean communities are circumvented entirely.

As we’re in a state of perma-crisis, resilience is the priority for people and the communities in which they live. The ability for communities to withstand shocks, recover, and build a better future can have transformational effects, but it’s not an easy thing to achieve. It would require a shift for most central governments, but it would need a huge leap for this one.

As the adage goes, the best time to prepare for shocks was the past, but the second-best time is the present. There are any number of issues coming down the track: ageing population, the health and social care crisis and the impact of climate change to name a few. While there will always be a significant role for central government during a crisis, investing in local places to build resilience will pay dividends in the future. Gambling on economic growth with significant tax cuts assumes that nothing will derail it – a bold assumption given the last few years and the global outlook. A more balanced, ‘pull-on-every-lever-a-little’ approach might be more prudent.

Central government needs to recognise that it can’t address individuals in abstract from their communities and the local services they use.

Our communities have a crucial role to play. People want more influence over decisions about the services they use and a stake in finding solutions to problems. Recent New Local research shows that the majority of people think national politicians don’t understand them or the places they live, they want more ability to shape services in their area and they want to work with councils to do this. People don’t want things done to them, they want decisions made with them. Let’s harness this enthusiasm and potential for improvement.

The cost of well-designed, long-term solutions, tailored by places, is proper (and more autonomous) funding for local councils and public services. Genuine engagement, co-designing solutions, and harnessing insight on local service needs can be intensive. Many councils already do this and play a significant convening role, but they are profoundly financially stretched and capacity poor as their attention ends up focusing on the unintended consequences of short-term national policy. Sincere decentralisation will give councils the ability to explore trade-offs that reflect their own needs. It would also help overcome some of the democratic deficit felt by their communities.

Central government needs to recognise that it can’t address individuals in abstract from their communities and the local services they use. The top-down focus of this government creates winners and losers at an individual level and loses sight of the importance of community and local public services. Ironically, this relentless focus on economic growth with central interventions at the expense of communities erodes the very things that would foster resilience, growth, and thriving places.

Change was needed before the ‘mini-budget’ but now it is imperative. Our house needs stronger foundations to withstand the coming challenges, not a bold but flimsy façade. Time to get to work.

This article was first published by the Local Government Chronicle, available here.

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