Council Chiefs Sound Alarm on Brexit

  • Nationwide survey finds overwhelming majority of Council Leaders and Chief Executives think Brexit will damage local economies.
  • Large majority also say they are receiving inadequate support from Government to plan for Brexit.
  • Weaker local economies would lead to a lower ability to raise business rates – something that local services will increasingly come to rely on.
A survey of all council Leaders and Chief Executives across Great Britain has found exceptionally strong pessimism about the impact of Brexit. The survey, conducted by the New Local Government Network, found that 61% of Leaders and Chief Executives believed Brexit would have a negative or very negative impact on their local economy. Only 12% believed it would have a positive impact or very positive impact while 26% felt Brexit’s impact would be neutral.
The survey, which secured responses from 185 council chiefs, also found widespread dissatisfaction with the help provided to councils by central government in preparing for the UK’s withdrawal. 68% disagreed or strongly disagreed that their councils were receiving adequate engagement and support from Whitehall to plan for Brexit. Only 4% felt they were receiving adequate support and 27% neither agreed nor disagreed.

Adam Lent, the Director of the New Local Government Network, said:

“Whatever you think of Brexit, it has to be a concern that the most senior local government figures charged with keeping their local economies buoyant feel so pessimistic.

“The Government needs to move very rapidly to address this striking loss of confidence by engaging much more closely with council Leaders and Chief Executives as they prepare for the UK’s withdrawal from the EU.”

The sense that council chiefs feel both pessimistic and unsupported is likely to raise further questions not just about the likely impact of Brexit but also about the extent to which the Government has a grip on preparations ahead of the UK’s planned leaving date from the EU of 29th March 2019. The Government’s failure to engage with councils on Brexit has been underlined by the fact that Sajid Javid, the Secretary of State with responsibility for local government, sits on only one of the five Cabinet Committees dealing with Brexit and has no seat at the Committee addressing “domestic preparedness, legislation and devolution”.

Councils are already under increasing financial pressures following years of ongoing funding cuts and uncertainty regarding their future funding. Weaker local economies would lead to a lower ability to raise revenue through business rates – something which local services will increasingly come to rely upon. Investment for local services and support is also impacted by the loss of up to 10.5 billion Euros (£8.4bn) in EU structural funds, which goes direct to local communities UK-wide, and most of which are used to stimulate growth through measures like job creation, skills for young people and infrastructure. While the government have promised that this funding will be replaced, there is no clarity over how it will be allocated. This provides further uncertainty to local areas, and potential changes to existing funding risks damaging local economic growth potential.

Additionally, many frontline staff are EU citizens, whose residency status post-Brexit is still unknown. This particularly affects social care for the elderly, where 7% of the already stretched service are from the EU. There is a risk this will impact on the ability of councils to deliver those services, as well as create additional costs in training new staff. More broadly, uncertainty around immigration may have a damaging impact on local labour markets, university student intake and public sector workforces.

The survey also highlighted differences of opinion between the various regions of the UK. Chief Executives and Leaders in the South East were the least pessimistic about UK withdrawal with 48% believing Brexit would have a negative or very negative impact on their local economy. The North East proved the most pessimistic with 100% of council chiefs expecting a very negative or negative outcome. Interestingly, 93% of London Chief Executives and Leaders foresaw a negative impact – this is notable given that most economic forecasts expect the capital to meet the economic challenges of Brexit better than other parts of the country.

The findings are part of the New Local Government Network’s quarterly Leadership Index which assesses the health of Britain’s economy and society by surveying Council Leaders and Chief Executives. The outcome of the full survey is due to be published in March.

Notes to editors
1. For further information please contact Claire Porter on 07743065875 or cporter@newlocal.org.uk
2. The New Local Government Network Leadership Index was sent out to 803 Council Chief Executives and Leaders across the United Kingdom in the last two weeks of January. 185 respondents replied giving a response rate of 23%.
3. The New Local Government Network is a think-tank and network of fifty local councils and their partner organisations developing innovative policy and practice for the public sector.
4. Survey figures may not total 100% exactly due to rounding.

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