Last week began with Andy Burnham setting out his vision for what he called the “biggest rebalancing of power our country has seen”. Speaking to a crowd of supporters in Manchester on Monday, the likely next Prime Minister promised a rewiring of British politics that would shift far more resources out of Whitehall and into the regions.
Having spent nine years as the mayor of Greater Manchester, Burnham is expected to give greater responsibility to metro mayors around England – including our own Kim McGuinness, whose demands for new power to tackle the North East’s youth unemployment crisis have already won the Makerfield MP’s backing.
He promised a council housebuilding boom, greater public control over essentials like water and energy, and a decentralisation driven by a new No 10 North operation based in Manchester.
Delivering his pledge for “good growth in every postcode”, Burnham said: “The stark imbalance in resources between national government and local government is holding back growth. If councils can’t fix potholes, what chance do they have of bringing forward major regeneration schemes to get growth going?”
If he needed any reminding of the scale of that imbalance, the Local Government Association provided it on Friday.
Funding gap
By 2029, the funding gap faced by councils across England is expected to become a £7 billion black hole. For the seven councils in Tyne and Wear, Northumberland, and County Durham, that number tops £200 million.
That giant number is more than the current annual English council spend on roads, transport, homelessness and housing services put together.
And the LGA warns that it would cost councils 22% more than their current bills just to keep services at today’s levels by 2028/29, never mind start improving things in the way that Mr Burnham spoke out so optimistically.
There has been a very clear worry around local government for a very long time now: that the spiralling price of and demand for social care services and support for children with special needs will continue to grow at such a rate that it eats up an overwhelming amount of town hall capacity, leaving authorities unable to do anything other than provide the basic things they are required to do by law.
Across the country we have seen huge cuts to council budgets since 2010 which have resulted in mass layoffs, community assets like leisure centres being closed or handed over to private operators, and infrastructure being left to crumble.
There have long been calls for a serious rethink of a council tax system which leaders in our region say is “broken”, subjecting residents in the North East to growing bills every year and paying more than wealthy areas like Westminster, and for sweeping reforms to put social care and SEND services on a sustainable footing.
36 councils have needed exceptional financial support from Whitehall in order to balance their books this year.
Newcastle City Council leader Colin Ferguson, whose council has slashed more than £400 million from its spending since 2011, has called for an end to those “sticking plaster bailouts”.
He said this week: “Andy Burnham talked about greater devolution for regions, which we would welcome, but it can’t just be funding for regional mayors. Local councils, and cities like Newcastle, must have a seat at the table, better funding, and greater freedom to act.”
There will be no shortage of urgent challenges on the new PM’s desk once Keir Starmer’s successor is in place. But if Burnham’s devolution dream is to become a reality, addressing the state of council finances is something his administration will have to reckon with.
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