A letter councils should send today
To: The Right Honourable Robert Jenrick MP, Secretary of State for Housing, Communities and Local Government Ministry of Housing, Communities and Local Government
Dear Secretary of State
Sustainable Communities Act 2007: A Proposal relating to the Covid 19 Public Heath Emergency
This is a Proposal made by xxxx Council in response to your invitation under section 5A(b) (subsequent invitations) of the above Act. Legally speaking his proposal can only relate to this authority , but I trust you will see that any freedom to act according to this council should be extended countrywide, given the current situation. I expect other authorities to make similar moves.
Our proposal is:
That the government temporarily suspend the provisions set out in section 114 of the Local Government Finance Act 1988 which effectively impose expenditure limits upon local authorities which, by their nature and through the potential for enforcement by the Secretary of State, require that local authorities maintain substantial reserves;
That this suspension be maintained for the duration of the Could 19 public health emergency, with an initial suspension of at least three months;
That normal accounting and auditing methods be used to establish whether or not funds dispensed have been used in accordance with the authority’s duties in relation to the maintenance of its statutory duties and its emergency responses;
That central government commits to the refilling of reserves, in due course, in line with the levels to which they have been spent down during the period of suspension of the provisions.
The rationale for such a move by yourself is clear.
It takes account of the government’s own “whatever it takes” promise in respect of the public health emergency, and recognizes that in many instances local authorities are best suited to the meeting of local needs through direct and through indirect provision.
Such provision might include disbursement of funds to known and trusted charities engaged in emergency response, as well as locally targeted support for struggling business through the introduction of a share purchase scheme, under which businesses with pre-COVID underlying profitability are supported by the local authority but retain a buy-back option as part of the support arrangement.
Such steps may be held back by what, in normal times, might be seen as reasonable provisions within the fiscal framework under which the Local Government Finance Act 1988 came into being, but which now act as an impediment to urgent action.
The proposal also recognizes the risk that, given the deeply embedded culture of centre-local government relations, central government will be tempted to draw back on any promises it makes for support of local government, unless they are set out in legal form, even as council costs are soaring during and and beyond the main pandemic period, and instead move towards calls on local government to manage within their existing budgets.
We recognize that in normal times we would be expected to provide evidence of prior consultation with local residents and business about this proposal, but we trust you will understand that such steps are not feasible in the current circumstances. Local people expect this local authority to act quickly and to do “whatever it takes” to both maintain services as far as possible and to respond to the crisis, especially in respect of meeting the needs of the vulnerable.
It is our belief that you can effect the suspension of the sections needed immediately by ministerial comment, and we urge this. Should primary legislation be needed, we urge that you reach out to all parties to ensure it is “nodded though”
We look forward to your immediate response