Big Challenges for Local Government?

by Gurjit Bains

As uncertainty looms over the timing of the upcoming General Election in 2024, one certainty is the occurrence of a number of local elections scheduled for May 2024.

These elections are set to take place both at a local and regional level with the possibility of once again redrawing the political map in the UK. The last time these specific local authority elections took place was in 2021, with the Conservatives performing strongly at the expense of the Labour Party. However, recent setbacks in local elections and persistently lacklustre national polling indicate that the upcoming May elections will present yet another formidable challenge for the Conservative Party.

Adding to the complexity is the backdrop of significant financial challenges in local government, with many teetering on the edge of a precarious financial abyss. A decade of continuously squeezed budgets has depleted the reserves of numerous councils, resulting in substantial cutbacks in services and staffing levels. The dire situation has led to an unprecedented surge in the filing of Section 114 Notices, restricting all new spending except for statutory duties. At least 26 more councils are contemplating this option, highlighting the severity of the financial crisis that is looming.

Surprisingly, both the government and the Labour Party have avoided directly addressing the predicament faced by financially strained councils. The Conservatives, in particular, point to bankrupt Labour councils to criticise their broader economic approach. However, this narrative is losing its effectiveness, especially given the number of Conservative councils grappling with similar financial difficulties. As a result, councils are now compelled to engage proactively with businesses within their jurisdictions. At the same time, the competitive nature of regions across the UK is intensifying, with each vying to attract large business to bolster their local economies.

In the realm of devolution, Keir Starmer's leadership places a spotlight on a significant shift of power away from Westminster and towards communities. Starmer envisions a transformative impact on the economy, politics, and democracy through a 'Take Back Control Act,' set to be announced in Labour's first King's Speech. Devolution emerges as a prominent theme, promising to redefine the balance of power in the UK's political landscape. With devolution comes more power, and no doubt more financial asks from those that are then elected, and the forming of further political power bases across many regions. Should Labour win and drive forward this agenda, the Mayoral elections in 2024 could signal the start of a shift towards greater regional power.

The Mayoral elections will provide insightful narratives into the broader picture of UK politics. Andy Burnham, Manchester's Mayor, has effectively utilised the power and platform of his mayoralty to both administer the city and build a national personal brand. Seen as having been an effective example of regional politics, Burnham has made no secret of having grander national ambitions, but should win another term in Manchester come May.

In the West Midlands, the long-standing face of Tory regional politics, Andy Street, faces uncertainty in his bid for re-election. Street, an effective and highly regarded Mayor, was on the brink of resigning due to the government's decision to cancel the HS2 branch onwards from Birmingham. The challenge to Street comes from a relatively unknown Labour candidate, Richard Parker, whose background at PWC rather than in politics adds an intriguing dimension. Whether Parker can replicate Street's successful narrative from 2017 remains uncertain.

London presents an interesting scenario where the assumption is that incumbent Mayor Sadiq Khan will secure re-election against Conservative candidate Susan Hall. However, the city's traditionally Labour-leaning landscape does not guarantee Khan an insurmountable lead in the polls. The change in the voting system to First-Past-the-Post adds an element of unpredictability, potentially leading to a closer race than anticipated. While Khan himself is unlikely to lose, an overall poor showing by Labour could have implications for the simultaneous GLA elections where Labour hold a slim majority.

Housebuilding is likely to take centre stage, whether it is the national, regional or local elections taking place. With the Conservatives aiming to present a clear plan amidst a challenging track record and declining approvals we will see Labour seeking to position itself as the Party of homeownership, attempting to assert dominance on the Conservatives' traditional turf. The timing of a General Election becomes crucial, as any party proposing targets on councils will no doubt face resistance at the polls.

In summary, 2024 carries profound implications for the political trajectory of the UK. The challenges faced by councils, the dynamics of Mayoral races, and the overarching themes of devolution and housebuilding all contribute to the intricate tapestry of political developments set to unfold. The Mayoral elections present opportunities for business, in particular newly established ones in the North East and in North Yorkshire who will be keen to work with business to drive investment and put their new region on the map. The poor state of local government finances presents challenges as well as opportunity. While authorities will be seeking inward investment more than ever, a reduction in services will increase delay, uncertainty and risk.

Gurjit Bains is a Director at 5654 & Company, she is an experienced local government and planning communications specialist and an elected local councillor.