Scope for a public spending revolution?

One seemingly obvious question – who spends most on local services – has in this country a rather disappointing answer.

It is not just that we always suspected central government in this overcentralised country spent more than local government – the astonishing thing is how much more.

We already knew that the Government Office for London actually spends more than the London Mayor, despite some real devolution of important responsibilities. But recent research shows that for an average of £7,000 of spend on public services in any one place, only £350 is discretionary spending by local authorities.

Clearly this doesn’t feel right. But it is helpful to be able back up our natural instincts in favour of localism with some facts.

Research by the Local Government Association shows that this overcentralisation is in practice a recipe for chaos. In one area looked at there were 25 social housing providers for 19,000 homes using 47 different funding streams, 18 of which came from one funder.

This country has long been the most centralised in western Europe but there is potentially some light.

There are currently 13 pilot areas where the concept of ‘Total Place’ is being examined – namely the total public spend is being assessed, with Government blessing, to see where there are overlaps, wastage and contradiction.

This has uncovered some of the figures mentioned above and also shows (but we knew this) that the different funders tend to operate within their own policy silos rather than in the interests of the community as a whole. Ring-fencing exacerbates this.

There is clearly potential here for a major win-win: more democracy, more accountability, and major efficiency savings. The danger is that the Government (this or future) will grab the financial efficiencies to bale out the national debt and forget the arguably more important issue of accountability and effectiveness.