Insights
In the budget last week, the government set out increased funding for public services and investment. The gamble is that increased public spending can successfully spur the growth needed to pay for it down the line. Impactful and cost-effective policies for growth will be crucial, which requires government to invest in the evaluation and evidence gathering capacity to know what works.
In local government funding, the budget confirmed some moves towards greater local control over how funds are spent and hinted at others.
The budget confirmed new integrated funding settlements for Greater Manchester and the West Midlands Combined Authorities, and that other Mayoral Combined Authorities —the North East, South Yorkshire, West Yorkshire, and Liverpool City Region – will be eligible for integrated settlements. This will see a shift towards more ‘departmental style’ pots of money across devolved policy areas. Greater devolved powers over spending needs to be paired with greater responsibility to robustly evaluate policies.
More broadly for local government, previous local growth funds like the UK Shared Prosperity Fund and Levelling Up Fund will be wound down over the next year to make way for a simpler funding landscape for local government. The next phase of the spending review will set out what that new landscape will be, but the budget hints at longer-term settlements and some grants being consolidated into the Local Government Finance Settlement.
In many respects these are potentially positive changes – greater stability in funding and more discretion over its use could allow for more locally tailored and longer-term approaches. But a move away from programme-specific grant funding comes with a risk that evaluation of interventions falls by the wayside. The biggest losers if that were to happen in a future of greater local discretion over spending would be local governments themselves. Good evidence on the most effective use of money will be vital for ensuring impact. Central government would lose out too— it would undermine the government’s central growth mission. For public investment to drive growth, it needs to be well targeted and designed, informed by evaluations of the effectiveness of new interventions.
The upcoming white paper on English devolution is expected to provide more detail on the government’s plans for local government reorganisation, including plans for greater devolution. It is important that these new structures include a clear plan for evaluation of local growth policies, including how to coordinate evaluation, ensure capacity to carry it out, and disseminate and learn from the results.
