Hot trends for local government in a general election year
Jes Ladva, Odgers Interim Managing Partner and Head of Practice for Local and Central Government, explores six major issues facing local authorities in 2024.
As I noted towards the end of last year, local authorities are complicated organisations responsible for delivering a mind-boggling array of services. Many of the statutory duties they are called upon to meet are bound up with the great challenges of the era, and implementing workable, effective solutions requires ever more nimble and sophisticated leadership.
Now that 2024 is several weeks old, the time is ripe to look at some important trends confronting local government. This is all the more pertinent given that with a general election due to take place within the coming 12 months, the political temperature is rising and decision-making in the public sector will come under even greater scrutiny.
Here are six hot issues:
The housing crisis is seldom far from the headlines and homelessness charity Shelter says that over 1 million households are waiting for social homes. Yet funding constraints mean local authorities build far fewer houses than was once the case – according to the Local Government Association, when Council building was at its height in the 1950s, Councils developed around 147,000 homes a year, whereas the average over the past 10 years is a mere 1,400 homes a year. A drop in the ocean with respect to tackling the housing deficit.
Despite the shortage of newbuild activity, social housing remains high on the agenda. The new Social Housing (Regulation) Act comes into force in April. A response to tragedies such as the Grenfell Tower disaster and the death of two-year-old Awaab Ishak due to a respiratory condition caused by mould, it is designed to ensure social landlords provide safe, homes and a high standard of services for their tenants, and to give tenants more influence over decisions that affect them.
In a recent interview, Angela Holden, Director of Regulatory Engagement at the Regulator of Social Housing, said she expects Councils and Housing Associations will “need to go on a journey before they achieve the top grades” in terms of the regulator’s governance and viability standards. Regarding inspections, the RSH will give notice then request relevant information (e.g. data on repairs and maintenance), observe meetings and speak to key people including relevant elected cabinet members and tenants, and assess a range of evidence (including Tenant Satisfaction Measures results, which it expects all social housing providers to be collecting already). Undoubtedly, some local authorities will experience a smoother ride on their journey than others.
Councils play a vital role in supporting refugees, asylum seekers and unaccompanied children. Indeed, according to Taking Care, a report which examines how local authorities can best address immigration issues relating to children in care, there are non-British children in care and care leavers in every local authority in England.
But you don’t need me to tell you that immigration is a sensitive and divisive topic. Local authorities must tread carefully in this emotive area. It is often far from easy to strike a balance between the needs of different groups, in particular with respect to social housing which as we have seen is in short supply.
According to an MJ investigation, last year tens of millions of pounds from a £500m Local Authority Housing Fund (LAHF) set up by the Department for Levelling Up, Housing and Communities to support English councils in obtaining housing for those fleeing conflicts was not taken up. Authorities choosing not to access the LAHF did so for a variety of reasons. Some felt the Government set an unrealistic timetable for spending the money, others without an existing housing stock shied away from creating a Housing Revenue Account purely for this fund. There was also unease among some Councils who felt the LAHF was unfair to the thousands of desperate families already on the housing waiting list because it prioritised refugees over existing residents.
Attempting to square the circle while addressing tensions of this kind are an ongoing challenge.
The trend for unlocking community power through greater engagement and enablement of residents will continue. Around 70 Councils are now part of the New Local network which aims to put more decision-making into the hands of local communities.
Katie Kelly, who recently succeeded Donna Hall as chair of New Local, was previously Deputy Chief Executive of East Ayrshire District Council, where she developed and oversaw its Vibrant Communities initiative to give the local community more power and spark more community-led regeneration. East Ayrshire completed more than 60 successful community asset transfers, including the biggest one in Britain – a high school building now being run by a local social enterprise and theatre company. Kelly is a firm believer that community power costs less and asserts that when communities run things for themselves, they often do a better job than local authorities.
As noted in the Local Partnerships Renewable Energy Good Practice Guidance, updated last year, changes in the lending criteria for Public Works Loan Board (PWLB) make it increasingly important that the scale of local authority schemes (typically solar PV schemes) is proportionate to their electricity supply and decarbonisation goals. Where a local authority has already secured a decarbonised electricity supply, there is still scope for ‘in area’ schemes which contribute towards wider decarbonisation goals, and private wires which can provide price certainty for local businesses or utilities.
There are four main options for local authorities looking to own a renewable energy asset: develop a project on owned land; develop a project on third party land; acquire project rights (land agreements, planning consent and grid connection offer) from a commercial developer; acquire a fully built and commissioned project. Clearly, local authorities must carefully assess which options best fit their needs, budget and circumstances – and ensure they manage and mitigate risk.
It’s most certainly not all about fixing potholes, but as a £14bn backlog in road repairs is in the headlines together with the formation of a new Pothole Partnership, let’s start there. In response the LGA has called on the Government to award council Highways Departments five-yearly funding allocations to put them on a par with National Highways. A move of this kind would bring greater certainty that would help in developing resurfacing programmes and other highways improvements.
Greener, more sustainable transport is obviously a pressing issue and there is intense competition to secure funding. A case in point is ZEBRA 2, a single-stage funding competition for zero emission buses open to local transport authorities outside London. The deadline for submissions closed in December and the Department for Transport is expected to decide where to award funding in March.
From leisure centres to local parks, Councils play a central role in the provision of community sport and recreation facilities. For some authorities, sports strategy also encompasses attracting major events to their region. For example, Liverpool – through Sport Liverpool, which has assembled a very impressive independent Board – is very active in this respect.
On that note, if you are a local authority Chief Executive interested in entering the world of sport, we are holding an event in January about transitioning into non executive and executive roles in sport.