The Policy Review: reviving local government?

A couple of weeks ago LabourList gave details of Jon Cruddas’ speech on earning and belonging, and with this revealed the Policy Review timetable and priorities. Since reading this, something has been troubling me. The concept of ‘reviving’ local government doesn’t seem quite right. Revival suggests restoring the local government that we had before austerity. But I’m not sure this approach is where we want to be. As Steve Van Riel rather pointedly asks in the Purple Papers; did Labour really get dramatically better results from the dramatically better resources that were given to the public sector? Evidence would suggest that the answer to this is no.

Take poverty as an example. In 2007 when compared with the 20 other OECD countries, including poorer ones, Unicef put the UK at the bottom of the league table of child well-being. This was after 10 years of Labour government investment to pull people, particularly children, out of poverty. The number of children living in poverty has risen over the last 30 years and we missed the target of halving child poverty by 2010 by 600,000 children. By 2008 13m people were in poverty; 5.8m of these people were in households one-third below the poverty line – the highest proportion on record. Of course, these statistics don’t tell the whole story, and many would argue that the huge investment in the public sector did deliver very some important outcomes. But Van Riel’s question can’t be ignored – the massive investment didn’t deliver the dramatically better results that Labour hoped for.

Yet we also know that the approach we have now isn’t working either; Labour councils do not want the future that is approaching. One where the most basic services are being cut and the most vulnerable people in communities are struggling. In times like this, when communities are faced with such tough times, Labour councils want to be able to support the most vulnerable and deliver fairness. At the moment, this is becoming impossible as the government forces councils to make unmanageable savings. The impact that this is having on communities is devastating.

Despite this, I’m still troubled by the Policy Review concept of ‘reviving’ local government. So this leaves us with the real question – if Labour policy shouldn’t be about local government revival, what should it be about? Where does Labour’s local government approach need to be, coming out of the Policy Review?

I suggest that part of the reason that councils didn’t get the dramatically better results for the money invested was because too many of the services provided or commissioned by councils were focussed on response. Too often councils focussed on tackling problems at the acute end of the spectrum rather than investing in prevention. Not only did this lead to very expensive services in areas like health, but it has also led to dependency and increased demand. For instance, not investing in decent quality and affordable housing is estimated to cost the NHS £2.5bn a year.

At the moment making efficiencies is a necessity for all councils and the reality is that they have little room for invest-to-save models of service. The challenge for Labour and for the Policy Review then, is not to revive what we had, but to create a different local government model where councils can move people from needing highly expensive acute services, which often lead to dependency, to a system of prevention and self-support.

I recognise that many Labour councils may instinctively feel ideologically opposed to this approach. But I am not suggesting that councils remove services from those who need them most. Instead, I suggest that the services councils provide should shift dramatically towards prevention and to tackling the underlying causes of demand that are placed on the system. Effectively Labour should move towards managing problems out of the system, through prevention.

We have seen some great examples of this recently from Labour councils. Barking and Dagenham announced that it will be introducing a living wage of £9 per hour. This demonstrates what pre-distribution looks like in practice. Islington are building 2,000 new affordable homes by 2015. We all know the role that housing plays in stimulating the economy, tackling the causes of troubled families and contributing to public health outcomes. These examples show the role that Labour councils can play in gearing the system to invest in prevention, manage down demand and move people out of dependency.

Thinking this through will be a challenge for the Policy Review. It will require substantial ideas on reform of local government funding, which should include looking at tax raising powers for councils to fund preventative work. Council tax is often cited as out of date and not fit-for-purpose; but what, if any alternative is there that won’t lead to electoral suicide? We need to look at how local government and other public sector agencies work and commission local preventative services together and the role that government funding plays in this, particularly the way that it is allocated and shared across the public sector. Labour’s Total Place started to do this in 2009/10, and it should be explored again. We also need to think through what ‘localism’ means for Labour councils and the wider movement and how this translates into practice. Too often Labour’s approach was too centralist and left little for local councils to determine; but we need to reconcile this with what the movement understands by fairness and universal services, statutory duties and the ‘postcode lottery’. For the Policy Review this will be a huge challenge, but Labour must look beyond a revival of what was in place previously, and instead focus on radically reshaping local government policy for the future.

Laura Wilkes is a Policy Manager at Local Government Information Unit. She writes here in a personal capacity