In this Blog, David Brown, Project Consultant at Engage Planning and Local Councillor on Bournemouth, Christchurch & Poole Council and former Cabinet Member for Finance, discusses the challenges facing local government.
Local Government and the challenges ahead
As for much of the Public Sector, the COVID-19 pandemic has had a dramatic effect on local councils and will be a challenge for years to come. This is not the only challenge, though, and Local Government across the UK has much to contend with.
COVID & Public Health
Since the reforms of the NHS in 2013, upper tier local authorities have been given responsibility for running local Public Health services under the remit of Public Health England. Many have responded admirably to the unprecedented challenges of the pandemic with local responses to support hospitals, care homes and schools, those in the community particularly impacted by shielding and self-isolation, the introduction of testing centres and the vaccination programme.
As the country emerges from the pandemic, the challenge for councils will be to structure their services and organisation to respond to the longer-term shifts caused by the pandemic in terms of ongoing demand for public health services, the care sector, education and the changes in ways of working with the impact that may have on public transport and travel.
Council finances have always been under pressure, especially since the financial crisis and subsequent years of austerity bringing about reductions in central government funding and more pressure on Council Tax to fill the gap. These perpetual pressures are continuing but are now exacerbated by the pandemic, which has fundamentally shifted the areas of income and expenditure for councils and brought about significant uncertainty for future finances.
Many local authorities rely on income from car parks and service charges which have dropped dramatically during the pandemic and may never recover to pre-pandemic levels. This includes lost income from running leisure centres, museums, arts venues and tourism services, which have all needed financial support to survive.
In addition, income from Council Tax is likely to be under pressure as more families experience financial troubles, adding to pressures on the benefits bill which Councils administer and support.
Local Economic Recovery
High Streets and the retail trade have hit the headlines as they suffer the impact of lockdowns and the accelerated shift to online shopping, but all sections of the economy have been impacted. Local councils will need to have strategies and plans in place to support the recovery of businesses.
The business impact is having a knock-on effect for council finances, with potential holes in their forecast business rates income. Many councils have also made significant investments in commercial and retail property as a reliable source of future income but may now have lost millions in value.
As the economy has slowed, and in particular house building and development, Councils will be under pressure to get this back on track to achieve their targets for delivering new homes and the financial contributions from developers and the New Homes Bonus money from central government.
Adult Social Care
With the pandemic placing unprecedented pressure on care homes and services, it cannot be forgotten that there was already a crisis in Adult Social Care due to increased demand caused by demographic changes outstripping funding. National government still needs to address this long-term issue which remains a significant pressure for local government in delivering the services and funding demanded by their communities.
Many local authorities have declared a Climate & Ecological Emergency in the past couple of years and made commitments to become Net Zero. Whilst the pandemic has distracted some from this priority, it cannot be ignored and is now a greater challenge to maintain focus and deliver the necessary carbon reductions.