Graeme McDonald: New Prime Minister should make investing in local government a priority

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Appropriate support will help the sector play its part in leading the nation towards a better future, writes the chief executive of the Society of Local Authority Chief Executives & Senior Managers.

If a potential candidate could choose his moment to become Prime Minister, the summer of 2022 would not be it; the problems facing the country are enormous.

Graeme McDonald, Managing Director of Solace

Economic growth is slow (to say the least) while inflation is soaring – and is expected to rise further – and as a result most households across the country are struggling to cope. to the impact of the cost of living crisis. head of the consequences of the unprecedented events of recent years.

Whoever the new Prime Minister is will need to act quickly and decisively to avoid long-term damage to our communities and the country as a whole. We should therefore expect an emergency budget in the coming weeks and a likely spending review before the end of the year.

The new Prime Minister will no doubt talk about wanting to pull the nation out of this thicket of problems, but the UK is set to experience the slowest growth in the G7 next year and our productivity performance continues to disappoint.

Productivity is 30% lower than it would be if it had followed the fairly reliable growth between 1970 and 2008 – this is a huge blow to the size of our economy, and therefore to our collective wealth and ability associated with paying even minimum levels of public spending. services that we need and deserve, and that enable us all to live more satisfying and productive lives.

Losing the talent battle

That’s why our residents face the highest tax burden since the 1950s as they watch grimly as the public services they rely on crumble, unable to invest upstream and prevent the future state demand.

Those tasked with providing the safety net and support to our communities are also struggling

While the state of the NHS frequently makes headlines, many other public services, already in extremely fragile condition after a decade of austerity, are also under strain. Inflation means that by 2024 actual spending on public services will be at least £18bn lower than forecast, and if you think the financial outlook is bleak now, that’s before you factor in the impact of the growing demand for many services triggered by the financial whirlwind we are experiencing.

And yet, those tasked with providing the safety net and supporting our communities are also struggling. After more than a decade of stagnant wages, most public sector workers are being offered wage increases that amount to even more pay cuts in real terms. It’s no wonder we are seeing waves of strikes that only exacerbate recruitment and retention problems in the sector. Local government is in a battle for talent and it is losing a long-running war.

Be ready to do more

The answer is not simple. Wage increases must be weighed against the already difficult financial situation in which most councils find themselves and the ability of residents to pay more in municipal taxes or other charges. Even the below-inflation wage offers far exceed what was budgeted, so in the absence of new funding from Whitehall, further Section 114 notices seem inevitable.

However, investing more in local government – ​​providing councils with the funding and powers to support the successful and efficient delivery of public services and support sustainable local growth – is exactly what our communities and the country as a whole need.

Councils are certainly ready to do more and at next month’s Solace Summit in Birmingham, October 12-13, we will hear examples from across the UK of local authorities pushing against the prevailing winds and making important interventions in their regions.

But most often it is in spite of the circumstances they find themselves in and not because of them. For councils cannot fully take on the role, on a large scale and in a coherent way, of helping our people and places not just survive but thrive if we have the right talent and a workforce with the right skills. in the right places.

Long-term growth and prosperity

Solace has worked hard to advocate for appropriate, multi-year, targeted funding and investments to address the severe capacity and workforce capacity crisis facing our sector. Our presentation on last year’s spending review outlined a wide range of interventions to support the sector’s workforce that are long overdue. You can be assured that we will reaffirm this with the new government in the coming months.

Hopefully the new Prime Minister will seize the opportunity presented by a properly supported local public sector

There is no minimization of the perfect storm facing our places. But with increased investment in local areas, a reinvigorated commitment to meaningful decentralization and a particular focus on increasing productivity, our next Prime Minister has an opportunity to change the course of the country and bring us back on the path to long-term sustainable growth and prosperity. .

Prime ministers may not be able to choose when they ascend, but they will be able to choose their priorities. Hopefully the new Prime Minister will seize the opportunity that a properly supported local government sector presents to play our part in leading the nation towards a better future.

LGC is the media partner for Solace Summit, taking place in Birmingham on October 12-13. See www.solace-summit.com to consult the program and reserve your place.

Graeme McDonald, Managing Director, Solace

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