Local Government sector responds to Labour general election win

Local Government Lawyer looks at the reaction from the sector as Kier Starmer is to form a Labour Government following a landslide general election victory.

The change in Government means Angela Rayner will likely become the Secretary of State for Levelling Up, Housing and Communities.

In its manifesto, the Labour Party promised to widen devolution to more areas, abolish Section 21 'no fault' evictions immediately, restore mandatory housing targets to the planning regime, and introduce a 'National Care service' setting minimum standards for quality, among a slew of other changes.

Following the election win, the local government sector has been reacting to the party's manifesto pledges and highlighting reforms it would like the new government to tackle, including local government finances, planning law, devolution, social care services, audit and housing.

Cllr Louise Gittins, who has become the new chair of the Local Government Association (LGA) after the previous chair, Shaun Davies, stood down upon being elected as the new MP for Telford, said her "immediate priority" is working with the new government on a fundamental reset of the relationship between central and local government, "one of trust and mutual respect".

She added: "As we have set out in our Local Government White Paper, it is councils which hold the local levers to the national challenges facing the new government, whether it is building more affordable homes, reducing homelessness, improving care for adults and children or boosting inclusive growth.

"Councils are under pressure like never before, facing a funding gap of more than £6 billion over the next two years. It is important we find a sustainable and long term financial solution, as well as the powers and levers required so we can deliver on the priorities of the new government."

Cllr Claire Holland, deputy chair of London Councils, said: "As a new government takes office, London boroughs remain committed to close collaboration with national government to deliver on our shared priorities.

"We share many common goals: driving sustainable and inclusive growth, delivering new homes and infrastructure, tackling homelessness, and improving people's health and wellbeing."

She added that ensuring the financial stability of London boroughs is "crucial" and that addressing the "acute funding challenges facing local authorities must remain a top priority".

She also called for a revised devolution settlement, which could "unlock new opportunities in the capital and ensure that the boroughs and the Mayor of London are suitably equipped to deliver at pace, working in partnership with the government to tackle the challenges we face".

Cllr Tim Oliver, chairman of the County Councils Network (CCN), said: “As CCN’s Manifesto for Counties outlined, our member councils will be key in delivering the government’s key priorities in economic growth, planning, and public service reform. But this requires the new Prime Minister to fulfil his pledge of ‘no return’ to austerity, whilst putting forward a radical agenda for reform of public services.

"With non-protected government departments projected to have a real-terms reduction, councils are at a crossroads: facing a very precarious situation with their finances, where even the most well-managed authorities are approaching breaking point.

“The agenda for reform is most desperately needed in children’s services and special educational needs and disabilities (SEND) provision. The new government must work with councils to set out a substantial roadmap for change over the next 18 months in both areas. A failure to do so will mean costs continue to spiral out of control. Equally important is a swift and decisive decision on the future of adult social care charging reform and greater detail on the government’s commitment to introduce a ‘national care service’, ensuring any reforms do not pile further unfunded costs on councils at a time of severe demand."

Cllr Oliver added: "As the Prime Minister has acknowledged, it will be vital to grow the economy to create the wealth to invest in public services over the next five years. Government can secure some quick wins in boosting local – and therefore national – productivity by maintaining the strong momentum on devolution and giving local leaders key powers in transport, infrastructure and skills.

“The government’s pledge to widen and deepen devolution is therefore extremely positive, but it is crucial that ministers build on what has demonstrably worked in securing no fewer than 20 devolution deals over the course of the last two years. Using county geographies as the building blocks for deals, retaining the county combined authority model, and offering flexibility in governance will be key in devolving powers to local residents in the remaining 17 county areas.

“We are also encouraged to see the government signal its support for strategic planning, something which CCN has long campaigned for. A long-term plan for housing is welcome but planning reform must be done with local government as equal partners, not to councils. Irrespective of whether housing targets are introduced, reform must ensure we have enough infrastructure to mitigate development as well as focus on differing types of homes”.

Local government think tank Localis, meanwhile, said: "We can certainly look forward to a rebranding and repurposing of the [Levelling Up] department. And on the basis that there is stability in the transition from team led by deputy prime minister Angela Rayner, there will be an immediate chance to bed in pre-prepared plans to redefine the National Planning Policy Framework (NPPF) and reintroduce strategic planning, moves which could be a gamechanger for housing supply.

"On devolution, there will be some mopping up to do in finalizing the devolution deals in train for Lincolnshire, Hull and Lancashire that didn't get over the line before the general election was called.

"The greater task will be to deliver on the very ambitious constitutional and economic reforms that would among other things, if enacted, see English mayoral combined authorities enjoy parity with the devolved governments in the Council of the Nations and Regions."

Localis added: "The manifesto promised a much-desired multi-year financial settlement, an end to the tournament bidding for local growth funds that bedevilled the levelling up years and served as an enemy of long-term prudential planning.

"It is unlikely in the sequence of fiscal events new chancellor Rachel Reeves will deliver this before December, let along unblock the glut of audits from a system that needs the regulatory equivalent of Dyno Rod."

Matthew Gregson, partner and head of local government at Anthony Collins, also called on Starmer's Government to stick to its promise to implement multi-year funding settlements and called for a "clear timetable for early implementation".

Gregson also commented on housing and proposals for GB Energy: "The urgent need to build more homes has been much talked about, but action must now be taken. The new Government will need to make it clear at an early stage how it intends to achieve this and how local authorities will be equipped to assist.

"More information is needed about the new Government's proposals for a publicly owned clean energy company. Clarification about how infrastructure will be developed and its impact in local communities will also assist local authorities in planning for the future and what this new initiative will mean."

Matthew Tucker, senior associate at Burges Salmon, meanwhile raised questions over the Labour Party's planning policy.

Tucker said: "The Green Belt has long been a constraint throughout the history of the planning system; tapping into the potential Labour sees in releasing 'Grey Belt', i.e. low-quality or neglected Green Belt land, will provide some additional flexibility in the use and development of that land, which will be welcomed by many developers and local authorities.

"However, the practical impact of the new designation will largely depend on how those terms are defined, and the ease or difficulty of the process of designation."

He added: "There is a risk of unintended consequences, particularly where landowners are now incentivised to allow their land to become poorer quality and uglier with a view to achieving release from Green Belt status. There is also a question around how "poor quality" and "ugly" areas intersect with biodiversity net gain, and how other elements of value in those areas will be properly protected.

"Labour has also set a 50% affordable housing target for developments on the Grey Belt, a move welcomed by many, but also one that presents a significant viability challenge for many developers, given contamination and remediation costs associated with building on this type of land."

He also commented on Labour's plans to re-introduce mandatory targets housing targets as part of its revision of the National Planning Policy Framework, noting that: "There is an inherent tension between the centralisation and imposition of 'top-down' targets and supporting local planning authorities in the discharge of their functions, where the local focus of those functions intersects with the delivery of other policy expectations, including infrastructure and affordable housing."

Jonathan Carr-West, chief executive of the LGIU, said: "We know that local government stands ready to work with the new government and we offer a reminder that national success has local foundations. Labour has set out clear missions for government but these can only be achieved in partnership with local democratic institutions.

"We congratulate the new government and we urge it to set out a new relationship with councils across the country based on genuine collaboration and parity of esteem."

Amardeep Gill, Head of Public Sector at Trowers & Hamlins: "Given the Labour party's success at the ballot box, what next for local government? With the system weighed down under the financial strain of social care and councils increasingly unable to balance budgets, more money and reform are the immediate answers to the growing problems of the sector.

"The Labour manifesto gave an indication of that reform in terms of multi-year funding settlements (much requested by the sector), an overhaul to the business rates system and the widening of devolution to more areas – but the estimated £6bn black hole in council budgets was not directly addressed.

"There is no denying that reform is essential, especially in the manner that social care is delivered, but it needs to be radical and backed by adequate financial resource, otherwise it will fail to deliver the meaningful impact that will ensure the continued resilience of the sector."

Peter Ware, Head of Government at Browne Jacobson, said: “The future role of local government, and how it’s funded, will be a key issue for the new Government, which must get to grips quickly with the acute and wide-ranging challenges facing the sector.

“With a significant proportion of councils in financial distress and many facing Section 114 notices, new ideas on driving efficiencies and generating revenue will be required in the absence of increased funding.

“Fundamental reform is also desperately required to adult social care, which commands huge amounts of council budgets, after this has fallen by the wayside during successive previous governments.

“A continued commitment to devolution in the Labour manifesto will be welcomed as this provides certainty for the roadmap ahead. Cross-boundary collaboration between devolved and non-devolved areas on areas such as planning must be incentivised to support delivery of new homes.

“With Sir Keir Starmer's ‘decade of renewal’, he must identify how to revitalise public services by delivering new infrastructure, whether it’s schools and hospitals for local areas or major road and rail schemes.

“Too many projects have been cancelled or delayed in recent years due to costs and while changes to infrastructure delivery governance and the introduction of a National Wealth Fund will prove beneficial, ultimately we still haven’t identified an alternative way of financing public infrastructure since the public finance initiative (PFI) ended six years ago.

“It’s clear that some form of public-private partnership will be required and the new Government must find a new model that hits the sweet spot between economic reality and political idealism during a time of challenging financial constraints.”

Adam Carey