Only 5% of council leaders optimistic about Brexit, as planning eats up resources

Key Findings:

  • Councils are increasingly pessimistic about the impact of Brexit. 71% of council chiefs expect it to have a negative or very negative impact on their local economy – an increase of 16% since March 2018. Those who expect Brexit to have a positive or very positive impact has halved to 5%.
  • Among Conservative-led councils, almost half (46%) expect Brexit to have a ‘negative’ or ‘very negative’ impact on their local economy and only 11% thought it would have a ‘positive’ or ‘very positive’ effect.
  • More than three quarters (79%) of respondents have had to divert resources from key public service to prepare for Brexit.
  • Optimism in the local business environment has continued to decline and is now the lowest since the first Leadership Index survey in March 2018.

Only 5% of council chiefs feel positive about the impact of Brexit on their local economy, with 71% expecting Brexit to have a ‘negative’ or ‘very negative’ impact on development, a survey by New Local Government Network (NLGN) has found.

The proportion feeling optimistic has fallen by 54% since NLGN first asked the question in March 2018. Among these, almost half of Tory-led councils (46%) expected Brexit to have a ‘negative’ or ‘very negative’ impact on their local economy, while only 11% thought it would have a ‘positive’ or ‘very positive’ effect.

Meanwhile more than three quarters said they’d had to divert resources away from key services like healthcare, adult social care and children’s services to prepare for Brexit.

This is against a backdrop of decreasing confidence in the local business environment – respondents scored this at 55 (0 being lowest and 100 being highest) this quarter, the lowest since NLGN began measuring this in March 2018.

132 council leaders, chief executives and mayors took part in NLGN’s survey, which showed the effect of Brexit uncertainty varying between types of council, region and service type. For example, in Yorkshire and the Humber, 92% of council heads said they’d had to divert resources towards Brexit planning, while in the North East only half had to do the same.

Across key services, those from upper-tier councils (including county councils) felt more confident than those from district councils. For example, overall under half of all councils said their health and wellbeing services (45%) and adult social care services (44%) were prepared for Brexit whereas around three-quarters of respondents from upper-tier councils (who provide social care) felt their children’s services and adult social care were ready for Brexit.

Most councils’ planning efforts focused on reassuring businesses, with some supporting EU-national staff to remain in the UK and others stockpiling goods. One council described “endless scenario planning and testing of emergency and business resilience plans”. However, as one respondent noted, “Practical acts are difficult [when the] type of exit is not yet known.”

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

“As the Brexit saga roles on, hope is being drained from the people in the driving seats of our local areas, with optimism hard-to-come-by even in Tory-led councils. Wherever you stand on the UK leaving the EU, it is clear that Brexit has already exerted an economic toll, stripping resources from vital services that are already eroded by years of cuts.

“The survey shows examples of the tenacity of local government, who are putting efforts into preparing local businesses and residents. However, the bottom line is that while the nature, timing and true impact of Brexit is unclear, planning remains a vague endeavour, which is sucking energy and resources from our communities.”

Notes to editors

1. The full report can be downloaded HERE.
2. For further information, please contact Katy Oglethorpe, Head of Communications at NLGN, on 0207 148 4605/ 07912161536 or at koglethorpe@newlocal.org.uk.
3.The NLGN Leadership Index is a quarterly survey of council leaders, chief executives and mayors of local authorities across the UK first published in March 2018. It asks about their level of confidence in delivering key services, alongside a topical set of questions. In October 2019 these topical questions focused on Brexit.
4. The NLGN Leadership Index survey was sent to 761 council leaders, chief executives and mayors across the UK. It was open between 3 October 2019 and 17 October 2019. This latest survey received a total of 132 complete responses, which translates to a 17 per cent response rate. Survey responses were received from all UK regions.
5. Preparations for Brexit are estimated to have cost the UK government at least £900 million in 2018/19. The cost for local government has not been calculated.
6. It is estimated that Brexit will leave UK local government with a £8.4 billion funding gap following the removal of funds from the EU.
7. The total funding allocated by the government to help local areas prepare for Brexit comes to £77 million. In September, the Chancellor announced plans to distribute ‘Brexit guarantee funding’ of £4.3 billion, rising to £16.6 billion by 2029, in the event of a no-deal Brexit.
8. Full analysis of the survey, including questions and responses, can be found in the PDF version of the press release and the accompanying report attached.

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