TRL Insight newsletter – May 2023

TRL Insight’s first newsletter is now available here. This issue covers:

  • Summaries of reports by Demos and New Local;
  • Policy and funding announcements on Community Ownership Fund and Right to Buy receipts;
  • Mini-case studies on a) tourism taxes in Manchester, Edinburgh and Wales, and b) Community Land Trust housing in Lewisham;
  • Announcement of the shortlist for the LGC 2023 Awards;
  • Two forthcoming events: ‘Stronger Things 2023 – Community Power: Making it happen’ and the Social Research Association (SRA) annual conference;
  • Outputs produced by TRL Insight;
  • Other outputs to which I have contributed;
  • How TRL Insight can help you;
  • How you can be added to or removed from the mailing list for these newsletters.

Further career developments

Time to bring readers properly up to date.

From September 2021 until December 2022 I was employed as a consultant (again, part-time) by Pragmatix Advisory. During this time, I contributed significantly to a report for the Local Government Association (LGA), Creating resilient and revitalised high streets in the ‘new normal’ and co-authored a report for the County Councils Network (CCN), Improving infrastructure funding and delivery.

In a freelance capacity, I wrote a briefing for the Children’s Services Network (CSN) of the Local Government Information Unit (LGiU): Regional analysis of cost trends in children’s social care in England. (This briefing is available to LGiU members only.)

I also devoted time to my interest in theoretical physics.

Having now left Pragmatix Advisory, I am now exploring options for making TRL Insight more proactive, focused on the projects I am most keen to do, and balanced within a wider portfolio career.

Inclusive economies and healthy futures—case studies for Local Government Association (LGA)

TRL Insight was commissioned by the LGA to develop a set of case studies on the relationship between health and economic prosperity. TRL Insight worked up six of these, together with a substantial introduction. These were published with a short foreword in December 2021.

These case studies demonstrate how English councils understand that helping people into employment and to progress in their careers goes hand-in-hand with supporting healthy, enjoyable lives. By highlighting innovative policies and interventions, they provide inspiration for other areas.

The introduction has the form of a wide-ranging briefing on the subject, containing further examples of good practice.


Fragmented Funding – report for Local Government Association (LGA)

TRL Insight was commissioned by the LGA to look into the fragmentary nature of central funding to local government. The final report, published in 2020, identifies over 400 grants issued over a four-year period. It presents new analysis based on a wide range of publicly available governmental data; it also draws on interviews with twelve senior council officers working across four key service areas. It highlights:

  • how many of these grants are very small in total value;
  • how many of them required councils to submit bids;
  • how short-term many of them are;
  • how many government departments and agencies the grants are channelled through;
  • how much of the total funding is for services over which councils have very little control;
  • the resulting impacts on the four service areas (adult social care, homelessness, children and families, and public health).

Response to Fair Funding Review consultation

My response to the Government’s consultation A review of local authorities’ relative needs and resources, as submitted today.

Some minor amendments were made since a draft was uploaded here yesterday, in relation to the measure of council tax collection rate.

The consultation marks a key stage in the first full review of the local government needs formulae for around seven years. This review stands out from previous ones for its impressive level of collaboration between central and local government. This consultation appears to have resulted from a genuine partnership between the two sectors on the Fair Funding Review (‘the Review’) and the wider review of business rates retention. It is to be hoped that in future reviews of needs formulae, local government will again be engaged as an equal in policy development, or ideally take the leading role in it.

Key points raised in the response include:

  • Transitional arrangements and use of tax base projections have a huge impact on incentives (financial rewards) for building homes and business premises. The nature of this impact depends on a) where in the calculation the transitional mechanisms are applied, b) what mechanisms are used and c) how the projections are calculated.
  • Use of ‘lagged’ values for council tax deduction could provide an ‘incentive’ very similar to New Homes Bonus and allow NHB funding to be better focused.
  • The MHCLG focus on simplification could be at the expense of accuracy and fairness. In particular, the proposed Foundation Formula covers very diverse services with very different drivers. There is a risk that this could leave some services in some areas significantly under-funded. The response proposes an approach to ensure this is avoided.
  • It would be helpful for the Government to provide further detail in several areas, including the analysis it has done to date on highway maintenance expenditure. Reliance on two variables has risks for accuracy and robustness.
  • The formula for concessionary transport for the elderly and disabled is already very simple, as it is based only on modelled boardings data. Actual boardings data is now available for almost all relevant authorities.
  • It is worth considering whether regressions against service spend as proportion of total council spend could avoid perpetuating systematic biases. The response proposes looking into whether this is a statistically robust technique.


Building Freedom

Announcing the publication of my new report, Building Freedom.

Front page of Building Freedom report. This is a clickable icon.

In next week’s Budget, the Chancellor is expected to set out the details of the removal of the HRA borrowing cap. He will be looking ahead to next year’s Spending Review, in which he will want to pull out all the stops to boost growth across the whole country, in case of short-term (or even long-term) economic shocks caused by Brexit. He will also want to demonstrate that the UK is emerging from a decade of austerity. He will want to show that the Government is serious about tackling the housing crisis by making the lifting of the HRA cap permanent. And he will want to achieve all this without letting the deficit grow again.

The Spending Review should allow investment which will bring benefits in the long term. It should put citizens and communities at the centre and build a country that works for everyone, ready for life after Brexit. The proposals in this report will help the Chancellor to achieve just that.

This report looks in depth at the way the Government treats local authority financing as its own in Budgets and Spending Reviews. It shows the problems this has caused for councils across the country wishing to invest in housing and infrastructure and grow local economies. It looks at other countries’ measures of deficit and debt, such as Denmark, Sweden and Canada, but also the wider context for these, such as the presentation of fiscal documents and the country’s local government finance system.

It recommends that:

  • Spending Review and Budget documents should be reformed to reflect the financial autonomy of local government:
  • These documents should focus primarily on the finances of central government and bodies which are answerable to it (such as the NHS and Non-Departmental Public Bodies);
  • Corresponding statistics should be presented for expenditure, income, in-year balance and debt – excluding local government;
  • Financial and fiscal data estimates or projections relating to local government should only be included in these documents in a separate section providing a reconciliation for the whole public sector. These should be agreed through consultation with representatives of local government;
  • The Government should immediately set up a panel of experts, as described in this report, to consult on the details of these changes. As part of their deliberations, they should consider the presentation of public finances in other countries. The details should be agreed in time to implement these changes in Spending Review 2019;
  • In future, the Government should not impose any constraints on borrowing or investment on local government other than those contained within the prudential system. Neither should the Government reduce revenue funding for local government as a “cost” of greater borrowing or investment by local authorities.

Revised on 28/10/2018 to include text on Housing Infrastructure Fund, further detail and clarification on TIF, and reformatted references