Austerity risks blunting the benefits of decentralization

The author of the upgrade white paper made a compelling case for local empowerment this week, but next Thursday’s fall statement looms large, writes LGC Deputy Editor Martin George .

Andy Haldane’s warning was stark. For the first time since the industrial revolution, health and well-being are in decline: “After having been an accelerator of growth and well-being for much of the last 200 years, health now serves as a brake on the increase of the growth and well-being of our fellow citizens. .”

It is perhaps unsurprising to someone who played such an important role in shaping the white paper on leveling up that the former chief economist of the Bank of England sees decentralization as an important part of the solution.

In his ‘challenge lecture’ at the Health Foundation yesterday, Mr Haldane cited Greater Manchester as a success story. Indeed, this was recently underlined by research from the University of Manchester which found that life expectancy had increased as a result of the decentralization of health and social care responsibilities – notably to parts of the city where the levels of deprivation are the highest.

He told his audience that “unsurprisingly, local issues, health or otherwise, usually require local agency and local information”, which strongly suggested “dropping haste and dizziness from the devotion agenda”. , not only for health but for other reasons as well”.

Indeed, his support took on religious tones: “I don’t think redemption will come by changing the Whitehall machine. I think it will come from the decentralization of power from the Whitehall machine to the local level. You won’t have a common conversation about health and the economy at Whitehall level.

We currently have a prime minister who has formally committed to the leveling up agenda. Rishi Sunak used his maiden speech to Number 10 to anchor his administration’s legitimacy in the Conservatives’ 2019 election manifesto and commitment to leveling off.

However, given today’s very different economic context, the depth of the Sunak government’s commitment to decentralization and the race to the top remains to be seen. Is the Michael Gove who appointed Mr Haldane to chair the Government’s Upgrade Advisory Council as one of his last acts as Upgrade Secretary the same Upgrade Secretary who returned in Marsham Street three months later?

Hopefully his appearance before the House of Commons Upgrading, Housing and Communities Committee on November 21 will give us a clue.

Of course, a much larger parliamentary event will take place four days earlier. The autumn statement is likely to signal the future of leveling in the hard currency of pounds and pence – a more concrete way than the eloquent words that Mr Gove will no doubt unfold during his appearance at the select committee.

And this tax event hung over the deliberations of the Health Foundation like a storm cloud about to break.

Jill Rutter, a researcher at the Institute for Government – and a former Treasury and Downing Street official – warned of the consequences of the near-certain protection of the NHS budget next week and the ‘real danger’ that “health care” is equated with “the NHS”.

While things have been ‘tight’ for the NHS, she said ‘other services, which might actually offer better long-term health prospects but don’t have health in the name, really do, really badly.” So budgets for things like children and youth services “are very vulnerable, even more vulnerable if provided by local government”.

She wondered if we were ready for some difficult political conversations, asking: “For people working in the NHS, are you prepared to go through a little more trouble in order to divert resources to places where there might be longer-term pain?

Probably not.

In the question-and-answer session after his lecture, Mr. Haldane highlighted the possibility of experimentation and evaluation as one of the great advantages of decentralization, allowing different fields to try different approaches so that others can learn from it.

But when it comes to spending public money, it is natural for advice to be cautious. After all, if an experiment goes wrong, they risk being accused on the front page of the local newspaper of wasting taxpayers’ money. This is all the more true when a crisis in the cost of living, which makes residents particularly sensitive to unnecessary spending, is combined with a dreadful compression of the finances of local authorities.

An optimist might see a crisis as an opportunity to innovate – a situation imposed on the sector during the pandemic, and the kind of hot platform local authorities have declared has forced them to rethink approaches to services like welfare to adults during Austerity 1.0. But it looks like the thinnest of silver liners.

If decentralization is really to realize its potential to improve citizens’ health and well-being, and therefore economic performance, Austerity 2.0 is more likely to be a hindrance than a help.

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