Memorandum from West Midlands Local Authority
Chief Executives (WM 33)
1. INTRODUCTION
1.1 Thank you for the opportunity to submit
evidence to the Committee. This is a high-level regional response
made on behalf of the region's local authority Chief Executives.
It is not exhaustive and is intended to add and complement evidence
submitted by individual local authorities.
1.2 At present all councils voluntarily
belong to the West Midlands Local Government Association (WMLGA),
whose cross-party membership is determined on a proportional basis.
It represents the broad range of local government interests at
a regional level, promoting and supporting constituent authorities
as well as influencing regional policies which affect the "economic,
social and environmental well being" of their communities.
1.3 In response to the Sub-National Review,
the councils have also established the West Midlands Leaders Board.
Local government has agreed to move quickly to a single representative
organisation under the Leaders Board which will include arrangements
for wider non-executive cross-party input.
2. SUMMARY OF
KEY POINTS
— Local authorities are working with partners
locally and sub-regionally and responding to the recession in
a wide range of ways.
— Councils are experiencing an increased
demand for their service eg increases in homelessness applications
and debt counselling.
— At the same time councils' finances are
being affected by the recession.
— There are concerns about the flexibility
and capacity of Business Link.
— Responses to the recession need to be
made in the context of existing activities, strategies and objectives.
— Task Force activity needs to be mainstreamed
as far as possible and connected to emerging regional decision-making
processes.
— Regionally, councils are successfully
working together and in partnership with other regional agencies,
for example on the Regional Funding Advice process.
— Government agencies need greater latitude
and encouragement to work collaboratively at the local level to
deliver outcomes on the ground.
3. EFFECT OF
THE FINANCIAL
AND ECONOMIC
SITUATION ON
BUSINESSES
3.1 The impact on businesses varies from
place to place and councils have set up various monitoring and
business engagement mechanisms to share intelligence and shape
responses. The impact is better documented elsewhere and it is
not the intention to duplicate this here.
4. IMPACT ON
COUNCILS
4.1 It should also be recognised that council
finances are being heavily hit by the recession:
— Councils are downsizing, freezing posts
and making redundancies.
— The fall in interest rates has reduced
income from investments.
— Income from commercial property, rents
and car parking has fallen significantly.
— The reduction in development and construction
activity has reduced fees from services such as planning, building
control, land charges as well as reducing developers' s106 contributions.
— Reduced capital receipts from sale of
land and buildings is affecting capital projects and asset rationalisation.
— Energy costs have been highly volatile.
— Councils' partners are also affected,
heightening the risk to achieving partnership outcomes.
4.2 At the same time there are increased
demands on services such as benefits, housing, adult social care,
children's services and business support. Some of these may increase
further in the longer term, as for example the reduced value of
personal assets makes more people eligible for council funded
social care, highlighting ambiguities between adult social care
and health responsibilities.
5. LOCAL GOVERNMENT
RESPONSE
5.1 It is not the intention of this submission
to provide an exhaustive catalogue of the response of local authorities
around the region. All councils are responding according to their
local circumstances with a wide range of activities to support
communities, individuals and businesses.
5.2 Such activities are being made within
the context of their existing long-term strategies and objectives,
and refocusing and reallocating resources in this context. There
is a clear sense of adding value to existing activity and avoidance
of knee jerk reactions.
5.3 Councils are working with partners to
ensure a joined-up local response using existing or bespoke partnerships
as appropriate. Through the normal discharge of their activities
local authorities have developed mechanisms to engage businesses
in a structured way. These are being put to full use during the
current recession.
5.4 Councils are also being flexible in
the geography of their responses working locally and sub-regionally
through variously titled task forces and economic response units.
5.5 Councils are playing a key role in signposting
people and businesses during the recession, directly by staff,
through their own recession websites and through newsletters and
mail-outs.
5.6 In terms of specific initiatives, councils
are working from a broad menu to support businesses including:
bringing forward capital projects to support the construction
industry, working with partners to bring forward affordable housing
schemes and rescheduling and renegotiating developer contributions
to improve the viability of new developments.
5.7 More directly, they are diverting resources
to increase the support available to Small and Medium Enterprises
(SMEs) establishing business support forums, providing business
information services, holding advice surgeries and seminars for
businesses, supporting local trade through procurement initiatives
and campaigns, providing support for high-streets and markets
and working with businesses to increase the take up of small business
rate relief.
5.8 As an example, Dudley MBC is working
with local businesses to help contractors take advantage of public
sector contracts, while Sandwell have an online business network
for SMEs.
6. LOCAL GOVERNMENT'S
REGIONAL RECESSION
ACTIVITY
6.1 Regionally, local government undertook
a survey of council activities earlier this year.[54]
This work will be updated, looking to identify the interventions
that seem most effective and it will continue to be disseminated
widely within the local government family to inform practice and
encourage innovation.
6.2 Each council has also identified a lead
contact for recession issues and a recently established newsletter
provides a low-key but effective way of sharing and cascading
information between local authorities.
6.3 Councils are also working through existing
standing groups such as the Regional Chief Executives Group, Chief
Executive Task Force and policy specific forums such as the Economic
Development Officers Group to share practice and inform responses.
6.4 Predating the Regional Minister's 10 day
pledge for the public sector, a council led initiative in February
this year encouraged all local authorities to move towards paying
their SME and third sector suppliers within 10 days.
6.5 While it is a matter for each council
what actions they take, many have adopted Central Government's
practice of paying all their suppliers within 10 days rather
than 30 days and others are significantly reducing their
payment times.
7. LOCAL GOVERNMENT'S
REPRESENTATION ON
THE TASK
FORCE
7.1 Local government is active in the Task
Force with four representatives; two council leaders and two chief
executives.
7.2 At leader level, Cllr Roger Phillips
(Herefordshire) attends as chair of the West Midlands Leaders
Board and Cllr Ken Taylor (Coventry) as chair of the West Midlands
Local Government Association.
7.3 At Chief Executive level, Mark Barrow
(Newcastle-under-Lyme) acts as the regional Chief Executive lead
on the economic downturn and Stephen Hughes attends as the Chief
Executive of Birmingham.
7.4 Mark Barrow also chairs the Community
Support workstream for the Task Force, with its administration
provided by the West Midlands Local Government Association.
8. EFFECTIVENESS
OF BUSINESS
LINK WEST
MIDLANDS
8.1 Working regionally with Business Link,
local authorities have developed a template Memorandum of Understanding
to clarify roles and responsibilities. These vary from place to
place but can improve data sharing, establish a consistent referral
process and help each partner to identify their contribution to
delivering local priorities and LAA targets. It is understood
that these have been signed off or are in their final stages of
negotiation in all locations.
8.2 Councils are working closely with Business
Link and other partners, however, concerns remain that the potential
roles of councils in local co-ordination and delivery as well
as in creating the conditions for business growth and enterprise
is being underestimated.
8.3 Councils are the first port of call
for many businesses, providing advice, property information and
where appropriate, sign-posting grant assistance. More broadly,
among other things, councils also provide managed workspace, allocate
employment land and support regeneration projects.
8.4 There are concerns that Business Link
is unable to provide sufficient and appropriately differentiated
support for localities and businesses across the region. Its regionally
contracted output targets make it difficult to ensure that localities
are securing adequate support to meet the specific requirements
of local businesses. The target driven approach can have perverse
impacts on business survival, for example by encouraging new engagements
with businesses over short-term return support for previously
engaged businesses in need for further assistance.
8.5 Moreover, there are concerns about its
overall capacity to deal with the broad extent of the situation.
While many businesses have generic problems, more one to one support,
tailored to the specific needs of individual businesses is needed.
It is also important that Business Link is able reach those most
in need of support as well as those seeking it.
8.6 Of concern is the reduction in support
for new businesses through locally contracted providers. Demand
is likely to increase as more people contemplate self-employment
due to redundancy or concerns over job security.
9. WEST MIDLANDS
TASK FORCE
9.1 The Task Force was an essential early
response to the recession, bringing together key partners in order
to come to a common understanding of the situation, discuss key
issues and co-ordinate and join-up individual agency and partner
responses. It is important that it delivers a way forward and
does not default into a "talking shop".
9.2 A wide range of actions to support businesses
and communities are being progressed through its workstreams.
Much of what is happening is an essential alignment of actions
and a cataloguing of activity. Useful as this is, many of these
actions would have been undertaken by the individual organisations
as a result of government initiatives and are not specifically
tailored, regional initiatives.
9.3 To date there has been an understandable
focus on immediate actions. However, there is scope to take a
more strategic regional overview and assess systematically the
potential risks and vulnerabilities of different economic sectors,
places and communities to improve the region's preparedness and
resilience to further shocks.
9.4 In order to respond flexibly to West
Midlands priorities the Task Force needs to be capable of mobilising
the resources; changing ways of working and bending and altering
the priorities of government departments and agencies to deliver
specific local and regional outcomes.
9.5 Lord Mandelson's request for RDAs to
reshape their spending priorities in the light of the recession
is an important recognition of this. Such refocusing should fully
engage with local government and partners in the Region and reflect
the views of the Task Force and its workstreams in determining
this future focus.
9.6 The Task Force provides a forum for
communications between partners. It is also an important conduit
to the higher levels of government via the Council of Economic
Advisors, the Regional Council of Advisors and the Regional Council
of Ministers. It is important that there is clear and timely feedback
from government on the issues raised at the Task Force so that
partners are connected and their contributions valued.
10. COMMUNITY
SUPPORT
10.1 It is understood that Task Forces elsewhere
in the country have a restricted focus on the impacts of the recession
on business. It is welcomed that the West Midlands Task Force
has recognised the importance of identifying and addressing the
wider impacts both through the membership of the Task Force but
also by establishing a Community Support workstream.
10.2 This workstream, chaired by Mark Barrow
on behalf of local government draws together partners such as
CAB, JCP, LSC, WM Police Authority, TUC and Business in the Community
and is considering a number of activities which will add value
to the work being undertaken locally and individually by the partners.
A key piece of work will be the regional mapping of areas likely
to be vulnerable to the recession which should enable better regional
targeting and prioritisation.
10.3 Following deliberations by the Task
Force, this workstream will merge with the one on Workforce Retention
and Redundancy. It has been agreed that local government will
chair this new arrangement.
11. MOVING INTO
THE MEDIUM
AND LONG-TERM
11.1 It is clear that this is a much deeper
and protracted recession than was envisaged last winter when the
Task Force was set up. In the context of this and the long-standing
social and economic issues in the Region there is a need for the
Task Force to take a longer perspective than at present.
11.2 In many ways the recession has not
created new issues but illuminated and exacerbated existing weaknesses.
Despite real progress, many places for example, particularly in
the Black Country and in North Staffordshire are still suffering
the consequences of earlier recessions.
11.3 These deep, long-standing problems
need to be tackled in a concerted way over the long-term. The
Region has determined its priorities in this respect and the implementation
of the existing Regional Economic, Spatial and Housing strategies
will play an important part in addressing these issues over the
long term.
11.4 It is critical that there is a strong
link between regional activities and local priorities and intelligence.
Both informing and working within the context of these strategies,
councils are continuing to deliver their strategies and services
to improve the economic and social future of their communities.
11.5 There would therefore be benefit in
mainstreaming as much of the recession related activity as possible,
working towards integration into regional strategy making and
delivery decision-making processes.
11.6 At present Task Force meetings are
held in private and their deliberations are confidential. While
it is recognised there are some issues of commercial sensitivity,
there is a need for transparency and systematic feedback to stakeholders.
11.7 It is possible that the Task Force
will want to consider regionally significant matters such as prioritising
particular economic sectors to support or identifying particular
sectors to lead the Region out of the recession. It is understood
that the Regional Minister in chairing the Task Force has a clear
accountability to government and through the Regional Select Committee
to Parliament. However, matters which involve regional prioritisation
and have long-term implications for the Region need to have a
clearer engagement and accountability within the West Midlands.
11.8 To this end there should be scope to
develop a clear relationship with the wider, emerging regional
governance arrangements for the Single Integrated Regional Strategy
(SIRS), which will provide the framework for future economic prosperity
and community well-being.
11.9 In this respect, regard should be had
to the local government leaders/AWM Board members' dual key approach
to decision-making for the forthcoming SIRS. The Joint Strategy
and Investment Board (JSIB) being set up for this purpose has
been successfully tested in shadow form in developing the West
Midlands Regional Funding Advice (RFA) submission. The JSIB are
supported by a Regional Advisory Group of senior executives from
AWM, Regional Assembly, HCA, Highways Agency, LSC and Government
Office.
12. REGIONAL
DELIVERY
12.1 Positioning the Region for the recovery
should be an integral part of tackling the recession. This will
increase business certainly and help create conditions for development
and investment. The existing regional strategies and forthcoming
SIRS should provide the long-term framework for this.
12.2 The RFA process has enabled local government
and regional agencies to give government clear joined-up messages
on regional priorities for funding. Drawing on locally identified
schemes and priorities and building on the existing regional strategies
it identifies a number of Impact Investment Locations for economic
development, housing and regeneration, transport and skills projects.
12.3 Importantly, partners are committed
to the delivery of these schemes and will be working together
to bring them forward in as timely a way as possible.
12.4 To assist, government has been asked
to:
— Sanction the creation of a Regional Infrastructure
Fund to unlock strategic sites.
— Provide a range of powers in managing
and delivering transport investments.
— Discuss how departmental and agency programmes
can be better aligned to the Region's strategic priorities.
— Support for the current proposal for
an Accelerated Development Zone.
12.5 It is hoped that government will respond
quickly to the RFA proposals and be able to fast track project
appraisals to speed up implementation.
12.6 On a broader level, is important that
centralised decision-making is effective and recognises regional
priorities and supports wider regional objectives. The recent
problems of the LSC capital programme have been damaging not only
to FE colleges resources, the wider skills and learning provision
but also to the economic performance of the Region particularly
where college proposals formed part of a wider regeneration scheme.
12.7 There are important lessons from the
Foster Review of the Capital Programme for DIUS in developing
new roles for the Skills Funding Agency, not least in how such
programmes are prioritised within a regional economic and spatial
context.
13. DELIVERING
LOCAL OUTCOMES
13.1 To more effectively tackle the recession,
Government needs to deliver on its commitment in the Sub-National
Review to delegate and devolve economic decision-making to the
appropriate spatial level. The recent announcement by Lord Mandelson
that RDA funding will not be delegated as previously indicated
is understood but we will work in close partnership with the RDA
to develop an effective joint strategy.
13.2 The Task Force has an important role
to play in high-level joining-up of responses, but it should be
recognised that delivery occurs on the ground in specific places.
Through their important convening and leadership roles, Councils
have a key role in this and have established mechanisms and structures
for engaging partners and determining priorities, not least through
their Local Area Agreement arrangements.
13.3 With an increased premium on the effective
use of public spending it is increasingly important that organisations
are able to jointly determine priorities and pool funding accordingly.
Perhaps as importantly, to enable this to happen, Whitehall departmental
targets need to reward their agencies for interagency working,
integrating services and the achievement of local and regional
outcomes. Within the LAA context, it may be that a duty to deliver
outcomes would be a more effective than the current duty to co-operate,
which places no emphasis on the end result.
13.4 Similarly, the greater allocation to
the Area Based Grant vehicle by other agency and public service
funding streams should be encouraged. This would enable resources
to be used in more imaginative ways, allowing monies to be moved
to agents able to deliver innovative solutions.
13.5 Such joining-up should enable the more
complex issues of community support issues for example around
health, education, community cohesion to be properly integrated
in measures to tackle the economic situation.
13.6 In addition, local government should
have greater authority and power to commission public building
and regeneration schemes using the recession as an opportunity
to build an imaginative series of public service hubs in preparation
for the upturn.
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