Our changing state: the realities of austerity and devolution

our changing state: the realities

of austerity and devolution

From left to right

Sir Paul Jenkins, Former treasury solicitor (Chair)

Sarah Neville, Public Policy Editor, Financial Times

Alexandra Jones, Chief Executive, Centre for Cities

Paul Dossett, Partner, Grant Thornton

Jonathan Carr-West, Chief Executive, LGiU

Jane Martin, Local Government Ombudsman

Phil Horsfield, Director of Legal and Planning, Broxtowe Council

Rob Hann, Consultant

John Everitt, Chief Executive, The National Forest Company

Jeff Godfrey, Head of Legal, The Welsh Government

Tom Huggon, Deputy Lord Lieutenant of Nottinghamshire

Neil Timms, Treasurer, Nottinghamshire Fire and Rescue

John Tradewell, Director of Legal and Democratic Services,

Staffordshire County Council

Nick Olley, Legal Director, Department for Transport

Steven Bramley, Director, Department for Communities and

Local Government

Richard Medd, Partner, Browne Jacobson

Laura Hughes, Partner, Browne Jacobson

Richard Barlow, Partner, Browne Jacobson

Peter Ware, Partner, Browne Jacobson

Anita Bradley, Partner, Browne Jacobson

Our changing state: the realities of austerity and devolution page | 3

contents

About the roundtable 4

Introduction 5

Executive summary / key recommendations 6

Where are we now? 7

Relationship with central government 8

Follow the money 10

Bridging the gap 14

Accountability 16

The future - where is this going? 18

Conclusion 20

About Browne Jacobson 22

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The meeting was chaired, once again, by Sir Paul Jenkins and we are particularly grateful for his continued involvement and his support of our work in this area.

This report reflects the nature of the discussions held at the roundtable, however it does not necessarily reflect the views of any of the individuals who attended, or the organisations they represent.

The information and opinions expressed in this report are no substitute for full legal advice, it is for guidance only and, where applicable, illustrates the law as at the published date.

Browne Jacobson would like to thank the local and central government leaders, policy influencers and other stakeholders who joined us for our second annual roundtable discussion on the topical issues surrounding austerity and devolution at our London office.

about the roundtable

introduction

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The landscape in local government is going through a period of unprecedented change. We want to help the public sector develop awareness of the challenges ahead, and to explore possible solutions.

the realities of devolution and austerity

sharing services and delivering efficiencies

Our roundtable discussion brought together a diverse and knowledgeable group of stakeholders, to identify the realities of devolution and austerity and to look at practical ways in which the potential challenges could be overcome, including:

• accountability of local authorities and combined authorities

• sharing services and delivering efficiencies between public sector bodies

• finance and funding issues.

This paper addresses these questions and themes in more detail and makes recommendations for local and central decision makers who are involved at various stages of the devolution agenda.

Richard BarlowPartner and Head of Public SectorBrowne Jacobson

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• there remains some scepticism about devolution. Whilst most are excited about what it could mean, doubts remain about the manner in which agreements are being reached and the differing agendas of parts of central government. Greater transparency and clarity of what is ‘on and off the table’ would help deliver deals, persuade sceptics of the benefits that devolution can deliver and allow frameworks for governance, scrutiny and operations to develop

• there is no current standard model for devolution, and accordingly, future devolution is likely to also occur in a non-uniform manner. Thinking now about the future, and the aspirations of the combined authority model, will help decisions about the shape of governance and overview and scrutiny arrangements in combined authorities

• the ability of combined authorities to trade, collaborate and take over services from constituent members could truly transform local government and the delivery of public services and deliver significant efficiencies

• legacy contracts ‘inherited’ by a combined authority may be unsuitable for use in the new arrangements. Due diligence reviews of such contracts should be undertaken sooner rather than later so issues can be addressed within the restrictions imposed by law. From now, new contracts being entered into by public sector bodies need to be sophisticated and flexible to meet future structural and organisational changes, to the extent legally permissible

• inherent conflicts of interest are likely to occur when members wearing ‘two hats’, representing both their local authority and the combined authority, are asked to make decisions which may be incompatible with both parties’ interests. This can be further complicated by existing collaborations. This needs to be recognised and addressed, not swept under the carpet

• the extent of proposed devolution seems, in some instances, to be inhibited by a reluctance to really transfer functions and the associated assets and funding and this is resulting in a new division of responsibility between central and local government, where it is very difficult to know if it will be effective or fairly funded

• the devolved administrations in Wales and Scotland have been through many of these challenges. Although there are key differences with English devolution, some comfort may be taken from the fact that similar complexities were worked through and resolved. However some key issues, such as accountability when things go wrong, have not been addressed satisfactorily to date

• so far, the government has resisted all calls for substantial fiscal devolution. The Communities and Local Government Committee Inquiry (CLGC) into the subject is likely to add further pressure for a change of position. It seems inevitable that the government will need to respond to the pressure to some extent. The question is, what do local authorities need to do, to ensure they can sustain themselves beyond 2020 and should they be lobbying more for this change?

executive summary / key recommendationsOur roundtable meeting, research and experience in this area, leads Browne Jacobson to make the following observations and recommendations:

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where are we now?

At around the time of our previous report, there was a mood of scepticism about whether all the talk of devolution would lead to anything of substance. In the last year or so, extraordinary work has been done to knock this cynicism on the head and nurture the seeds of real change. However there remains much more to do in order to convince everyone that devolution will create a genuine transformation in both local and central government.

Our perspective on this change and the future of the public sector is significantly informed by our relationships with clients who are living, breathing and enduring its reality. This period of unprecedented austerity has driven public bodies to explore every opportunity and, in some cases, to step outside of their comfort zone in seeking solutions to falling income. From use of the ‘Teckal’ exemption to provide services back to the public sector and profit-making trading companies to generate revenue, to exploring the boundaries of vires to charge for services and collaborating across area borders to share services and functions; localities have left no stone unturned in seeking to do more (or at least the same) with less. It is widely accepted that the ‘low hanging fruit’ has been picked and that yet more innovative solutions are needed if local government is to survive, let alone thrive, to 2020 and beyond.

The advent of combined authorities and devolution takes things in a new direction. A kind of regionalism combined with localism; a bottom-up process that is driven from the top down. The process of devolution is fraught with local and national politics and a lot of uncertainty, combined with a fear that areas that sit back and wait to see how it all turns out will miss the boat. This has driven the forging of new partnerships and the development of complex, ambitious proposals at a pace that might not have previously been thought possible. Indeed, this new model of cooperation, driven by devolution, was widely agreed to be a welcome collateral benefit from the early deals.

The Cities and Local Government Devolution Act 2016 (the Act) received Royal Assent on 28 January 2016, and provides a legislative (if not necessarily comprehensive) structure for the various devolution requirements, options and a statutory foundation for the existing and proposed devolution deals.

The lack of detail in the Act leaves a number of important issues unresolved, some of which formed the basis for debate at the roundtable.

Since the publication of our report ‘The path to greater regional devolution’ in March 2015, the devolution landscape has changed dramatically. Before exploring the current issues, we reflect on how we reached this point.

“There are too many authorities who have taken austerity as victims – there are few who have said they’ll redesign services, contracts and outsourcing arrangements.”

Neil Timms, Treasurer, Nottinghamshire Fire and Rescue Service

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relationship with central government

In order for devolution to be successful, it’s clear that there will have to be ‘buy-in’ from central government departments. The CLGC Inquiry into the Cities and Local Government Devolution Bill questioned whether some Whitehall departments, such as health and education, were really committed to the principles of devolution. There are some central government policies which appear to go against the principle, such as the Department’s for Communities and Local Government’s (DCLG’s) insistence on calling-in local fracking decisions or the Department for Education’s (DfE’s) regional approach to the oversight of academies. Comments made at our discussion indicated that some departments have only recently themselves accepted that devolution is here to stay, so perhaps over time commitment will start to grow in these departments.

In terms of the nature of the relationship between local and central government, the devolution process is already driving changes in the relationship; the dialogue taking place is unprecedented. Councils are negotiating genuinely exciting packages directly with the Treasury and DCLG, often as part of barely-established collaborations with other local authorities. Yet some deals threaten to fall down as fast as they were made. Proposed combined authorities in Oxfordshire, Hampshire and North Midlands all came under threat as the government ratcheted up the pressure to agree deals in time for the budget. In the North Midlands, a number of authorities dropped out of the deal at the last moment, although the remaining authorities committed to continue with their bid. It is not difficult to argue that such situations could have been avoided if local authorities had had sufficient time to work out what was really important for an area, who were the preferred partners and what the deal would look like.

Amid all of this, there is the question of what happens if things go wrong. As lawyers, of course, we tend to focus on the risks on the basis that forewarned is forearmed. As far as we are aware there has been little contingency planning undertaken in parallel with the devolution deals, in the sense of identifying what could fail and how this should be dealt with. Will combined authorities be too big to fail? Will government be prepared or able to step in and deliver failing services? Or will other authorities be expected to step in and help, as happens with failing children’s services and academies? Perhaps more fundamentally, will Whitehall be prepared to accept that mistakes might be made and that those mistakes need to be learned from rather than intervening too readily?

We think there is a risk that the lack of long-term planning and rapidly evolving relationships could lead to confusion about who is responsible for what. In the event of failure of a combined authority or some aspect of a devolution deal, there may be no robust plan for addressing the failure and public services are potentially on the line. The mayor, where there is one, may become the focal point for complaints but will he or she have the resources, the time and the power to take any meaningful action, particularly if there is a fundamental failure of the concept of devolution to do what the government intends or what an area wants?

The role of central government will inevitably change but is it ready for this change and is there going to be a consistent approach across the various departments?

Devolution is likely to impact on the size of many central government departments but it will also have a huge impact on the nature of the roles being carried out. It will require central government employees to utilise different skills in assessing and considering bids and providing a necessary degree of oversight, and/or a minimum level of standards, to ensure that appropriate service levels are met. There will also, no doubt, be tensions that arise between local and national priorities, with central government needing the requisite skills to be able to influence local decision making and balance diverse approaches being taken within different geographical areas. With this in mind, central government will need to ensure that it has the appropriate people in place who can meet these challenges and adapt to a significant cultural change. Central government could therefore take steps to:

• understand the impact of devolution within individual departments and analyse the changing roles and tasks that this will require

• undertake a skills audit of the current workforce to identify how these roles and tasks can be completed, and any gaps in current skill levels

• assess whether redeployment or restructuring is required to ensure that the correct workforce is in place

• consider retraining, or if appropriate, recruitment, to ensure that any gaps in skills are filled

• communicate effectively with the workforce so that cultural changes are understood and embedded.

page | 9Our changing state: the realities of austerity and devolution | Relationship with central government

follow the moneyLocal authorities engaging in devolution have been advised to ‘follow the money’. This may be sensible advice, but it is difficult to observe given the complexities of the deals which are being considered and the lack of true fiscal devolution. With ever-increasing devolved powers there must be the funding to support service delivery, otherwise it will be simply unsustainable. At present, it is still unclear whether authorities will have the support that is required.

In our 2015 report ‘The path to greater regional devolution’, we advocated the use of each local authority’s powers to borrow, charge and trade as a means to increase income. Combined authorities have the potential to access powers at least equally as wide as local authorities, particularly if granted the general power of competence. It remains to be seen whether such powers will be equally curtailed, for example, will combined authorities be subject to the same restrictions in function-related activities.

There is much pessimism about the state of local government finance, with a recent survey by the Society of Local Authority Chief Executives (SOLACE) reporting 83% of members thought it would decline over the next 10 years.

Authorities will face continuing cuts to budgets in the coming years. Business rates retention is the government’s only offering for fiscal devolution to date and the details are as yet unclear. The Act does not provide for fiscal devolution, giving only limited financial powers to local areas. By 2020, local authorities will no longer receive core grants from central government, however they will retain all revenue from business rates. We question whether

authorities will be able to become self-sufficient within this timescale and suspect that this will cause inconsistency between regions, with the most severe impact on the most deprived areas.

At this stage, there is little information as to how business rates retention will work in practice. The policy is likely to have other consequences; for example, impact on the successful leisure trust business model which has been set up in a number of areas to avoid the trusts having to pay business rates. It is also unclear whether charities will continue to benefit from discretionary business rates exemptions.

In its report into the Devolution Bill, the CLG Committee recommended greater freedom over business rates and other taxes to allow councils to apply increases where necessary. We anticipate this will be a key finding of its current inquiry. The committee made similar recommendations in 2014, to which the government responded: “there is a difference between policies which increase the burden of municipal taxation, and those which allow councils to share from the proceeds of enterprise and economic growth. The first ultimately hinders economic growth, the second encourages it”. It remains to be seen whether the government will move from this position given the pressure from the committee and across local government and think tanks alike to do so.

Once established and bedded-in, it seems likely that combined authorities will look at alternative delivery models as vehicles to increase efficiency and savings, or to generate income, whether through trading companies or partnerships with other public sector bodies. A collaboration between combined authorities would be

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“Without more powers to generate income or to innovate, local government as it is would become unsustainable and the current devolution exercises would prove a ‘meaningless sham’.”

SOLACE survey findings, 2015

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a powerful force indeed, perhaps coming close to recreating the metropolitan county council structure abolished by Margaret Thatcher, perhaps not necessarily the current government’s intention.

While alternative delivery vehicles have become more common for local authorities, they still require careful thought and planning. Providing services back to the parent council is one thing, but it is quite another to trade and become truly profitable in the mid to longer term. Councils want to sell their services so their own service delivery can be run on a cost-neutral basis, but who will trade with them? Such considerations and challenges need to be carefully thought out at both the planning and operative stages.

1. Section 10 of the Cities and Local Government Devolution Act 2016 adds s113D to the Local Democracy, Economic Development and Construction Act 2009 (1) “the Secretary of State may by order provide for Chapter 1 of Part 1 of the Localism Act 2011 (which confers a general power of competence on local authorities) to have effect in relation to a combined authority specified in the order as it has effect in relation to a local authority”.2. http://www.solace.org.uk/knowledge/reports_guides/Transforming%20Services%20Transforming%20Leadership_Final.pdf3. But note that the Chancellor announced in the budget on 16 March that the threshold for small business rate relief is to increase from £6,000 to £15,000 meaning that from April 2017 600,000 small businesses will pay no business rates.4. http://www.publications.parliament.uk/pa/cm201516/cmselect/cmcomloc/369/369.pdf CLG committee 5. http://blogs.ncvo.org.uk/2015/10/06/what-osbornes-business-rates-devolution-means-for-charities/6. https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/407480/CM8998_Web_1.pdf (see responses to recommendation 4).

In our experience public bodies that are looking at alternative delivery models need to consider amongst other things:

• establishing a clear vision for what they want and why they want to achieve it

• working through how the various models will sit together, acknowledging that one solution will not fit all problems but as a whole it must work

• ensuring that the proposals are grounded in sound decision making and are within the powers of the body in question

• whether the models can be used as a genuine catalyst for change, not just an opportunity to shift a problem

• employment issues including pensions must be thought about at an early stage, this includes engaging with staffing groups to try and ensure that they understand proposals and are as on board as possible.



Some councils are taking a more entrepreneurial route. East Hampshire for example has aspirations of zero council tax by 2024 by relying on “money making business ventures, selling its services to other local authorities and through investment”. The council has already begun to buy commercial property to generate income and has reduced council tax by two per cent in 2016, one of the only councils in the country to do so.

Combined authorities may present further opportunities for innovation and it would be pertinent for combined authorities to consider what innovation is possible. Local authorities (and combined authorities which are also expected to be given the same power) can utilise the general power of competence to think outside of the box. It could enable any manner of initiatives from development companies to community empowerment models, through to supporting business, not just to develop new technologies but to actually be involved in helping to solve some societal challenges. This could unshackle local authorities so they can achieve place shaping transformation, although this will inevitably be different from area to area.

power of competence to think outside the box

further opportunities for innovation

7. http://www.lgcplus.com/politics-and-policy/finance/district-bucks-trend-with-plans-for-2-council-tax-cut/7002079.article

“It is a really important cultural piece, trying to get authorities to think about how to develop and deliver services better.”

Paul Dossett, Grant Thornton

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8. See sections 18 and 19 of and Schedule 4 to the Cities and Local Government Devolution Act 2016

The majority of current devolution deals do not include health functions. How combined authorities engage the Clinical Commissioning Groups (CCGs) and other health commissioning bodies will surely have an impact on how services are delivered. Our discussion considered the issue of savings achieved by integration of services, specifically that the savings are not always realised by those making the investment. This creates perverse incentives in the system, particularly where savings go back to central government. There is also a lack of evidence as to whether integration leads to savings at all, at least in the short term and particularly where there is no initial set-up investment. It may be that health is not yet ready for devolution, given the significant and complex issues with the NHS. This certainly seems to be reflected by the government’s late amendments to the Devolution Bill which introduced a ‘devo-lite’ option for health functions to be shared with local authorities, rather than devolved. Health integration could be considered critical to proper and effective devolution, but there are other options for integration of health services such as section 75 agreements which, although not perfect, are at least a tried and tested path.

bridging the gapSince the onset of austerity, public bodies have sought increasingly creative ways of improving efficiency and finding savings for the public purse. How will this work with bodies that are not part of a combined authority structure? How will the devolution deals fit with existing arrangements?

Section 75 agreements...

Section 75 agreements are made under powers set out in the National Health Services Act 2006 between a local authority and an NHS body in England. Section 75 agreements can include arrangements for pooling resources and delegating certain NHS and local authority health-related functions to the other partner(s). Such arrangements can only be agreed if it would lead to an improvement in the way those functions are exercised. However, they have proved an invaluable tool for NHS and local authority collaboration and integration.

To make necessary savings, combined authorities will have to drive efficiency. There is an opportunity to create centres of excellence for the provision of certain services. Provided that the authorities have robust codes of conduct and protections in place to prevent conflict between the parties, this could go a long way towards making the combined authority self-sufficient.

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“It feels like devolution is being used as a driver for change… a ‘total place’ scenario is being forced through to compel organisations to sit together in a room and work together.”

Richard Barlow, Partner,Browne Jacobson LLP

Many local authorities use shared services of some form or other, as well as outsourcing services to the private sector. The formalities of such arrangements vary, from letters of intent to fully negotiated contracts. Outsourcing contracts in particular are often incapable of flexing as the customer organisation goes through structural or organisational change; EU procurement rules are a significant barrier. It is feasible that combined authorities may come under pressure to take on the PFI or other strategic contracts from their constituent members, which may allow greater leverage with suppliers, but there are difficulties in making the contracts fit the new organisation. We think that compatibility between the combined authority model and existing collaborative arrangements and service contracts is an issue that will raise its head in the future. Early due diligence is advisable to identify potentially problematic contracts and assess what, if anything, can be done with them. New contracts should be carefully drafted to maximise flexibility and match the evolving context of local authority structures as much as possible within the limitations imposed by law.

It is as yet uncertain what the market’s response will be to combined authorities. Will it be willing to engage with them without requiring additional guarantees from the constituent members? From the combined authority’s perspective, as a larger client it should expect to be able to drive economies and benefit from improved bargaining power as long as it does not suffer from undue bureaucracy and fragmented decision making.

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accountability

There are growing concerns about the lack of transparency and scrutiny in devolution negotiations. The Act could be considered to have missed a vital opportunity to establish a governance framework to increase public confidence in the new structures.

When decision-making is devolved, whether to mayors, combined authorities or both, how will the public know who is accountable? The legislation offers little clarity on where responsibility will sit. This is confusing for all concerned, even more so for the public.

There is no reason why combined authorities cannot engage with the public in their areas about the key decisions to be taken through consultation. Indeed, a consultation may be required in some cases where it is required by legislation or there is a legitimate expectation that one will be undertaken. A consultation must: be undertaken at a time when any proposal is still at its formative stage; provide sufficient information to enable an intelligent response to be given; allow sufficient time for a response to be given and must consult all of those potentially affected by the proposal. Consultation results must be conscientiously taken into account in reaching the relevant decision, which does not mean that the preferred outcome of those consulted must be adhered to, simply that the results must be considered.

The dual role of those representing their organisations as members of the combined authority will inevitably give rise to conflicts. It is important that combined authorities have strong governance structures, constitutions and codes of conduct to ensure that the risk of conflict is minimised and robust procedures are put in place. In reality this is likely to be difficult, given the local authority and party politics that will also play a role. It will become more of a challenge, the greater the range of services that are passed to the combined authority. In a recent survey, SOLACE members said they supported combined authorities taking on significant levels of service delivery, including health, social care, welfare, education and housing. If this is the direction that we are heading in, it is essential to put in place proper accountability and governance structures now.

The following issues are key for governance of combined authorities:

• it is important to be clear about the limits of the powers of the mayor as opposed to those of the authority

• the extent to which any decisions of the authority require anything beyond a majority

• there is a need for clarity as to how far a combined authority can go to ‘co-opt’ or otherwise involve non-voting representatives of stakeholder organisations

• how minority parties have any opportunity to participate in combined authorities if their party does not control any constituent council?

9. http://www.themj.co.uk/CAs-top-choice--to-deliver-services/203283

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“We need to have the conversation about where things are taking place. We aren’t having that conversation at the moment. There is already a postcode lottery and unequal outcomes, it’s just unspoken.”

Alexandra Jones,Centre for Cities

10. https://www.ipsos-mori.com/researchpublications/researcharchive/3645/Public-knows-little-about-the-devolution-revolution-but-supports-local-decisionmaking.aspx

Combined authorities should also look to demonstrate accountability through consultation on local issues and make it clear where complaints should be directed. This should go some way towards increasing public buy-in to the devolution deals which has been lacking (an Ipsos Mori poll in October 2015 found that over three quarters of those questioned knew “little” or “nothing” about devolution).

The impact of devolution on regulators and ombudsmen is similarly unclear. The government have proposed a ‘no wrong door’ policy to redirect complainants who approach the wrong organisation, but there are concerns about the burden this could place on ombudsmen, particularly given the complexities of combined authorities. A multi-layered strategy towards accountability is one option, with complaints dealt with at a strategic, commissioning and provisional level in order to make the system as efficient as possible, increasing the accountability of providers of local services, which in turn should increase the quality of that service. There appears to be no good reason why accountability should stop at the feet of public bodies – why shouldn’t providers and commissioners be equally accountable?

Our discussion group considered to what extent the general public would and should be able to understand which part of local government dealt with what. There is an argument that the individual taxpayer does not need to know the innermost workings of his or her local authority – and does not at the moment. Instead it was

suggested that authorities should “hide the wiring” and simply make it clear who is accountable and to whom complaints should be directed. This may simply be the office of the mayor. At the same time, it was noted that there is no regulator of local government – is this the answer?

“We should be asking, is devolution on offer to achieve costs savings or to make things more effective?”

Dr Jane Martin,Local Government Ombudsman

Finally, we should remember that things are not perfect now. Even though devolution will create unfamiliar large structures that are not entirely transparent in their workings, it may still be a step in the right direction and this point should not be lost.

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“Comparing this to the first phase of Welsh devolution, it was extremely complicated, difficult to trace where the powers had transferred, but this didn’t prevent it from working… it remains difficult to trace where the powers are but it doesn’t prevent them from being exercised properly.”

Jeff Godfrey,Welsh Government

11. http://www.publications.parliament.uk/pa/cm201516/cmselect/cmcomloc/369/369.pdf

the future - where is it going?

Whilst on one hand the dream of devolution is championed by the government, the lack of fiscal devolution results in ‘partial’ rather than ‘total place’. Chancellor George Osborne has been the driving force behind the changes to date. When he moves on, will the devolution revolution continue to have the same level of impetus?

Our discussion considered the need for a new philosophy for delivery of public services. That philosophy can be conceived at a national level, for example looking at how to design services so as not to overload the health sector, but it needs to be implemented at a local level.

Whilst the future seems uncertain, there is certainly a way through it and it is clear that many local authorities are approaching devolution with enthusiasm and commitment. Devolution in Wales was by no means straight-forward, however it worked because it had to. The opportunities offered by it can ultimately outweigh the difficulties.

We are told that the Act “should be seen as a first step towards a more comprehensive devolution” although it is not clear what the next steps will be and how far they will go. The government declines to provide a template for current deals, although there are distinct similarities which suggest there is an unofficial starting point.

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“I think we’re moving to a place where local authorities are having their own ownership of the challenges.”

Paul Dossett,Grant Thornton

conclusion

The devolution deals being brokered between combined authorities and central government are incredibly varied, resulting in a patchwork quilt of functions to be discharged at local, sub-regional and national level. This adds to the existing complexities of local government, rather than doing anything to simplify it. Whether these deals will stack up to be effective and financially robust enough to allow local government to overcome austerity, and provide the local areas they serve with the same (or better) level of services, will be revealed in time. It is exceptionally difficult to predict the outcome, but prudent to expect further announcements and change between now and 2020.

We believe that the combination of austerity and devolution will drive more shared and reduced services and that this will form a key part of the future landscape for local authorities. Over the previous years, austerity has forced local authorities to become much more commercial, entrepreneurial entities. We think that this will continue, indeed that it is essential to achieve the necessary cost savings and still deliver services.

We would recommend any local authorities involved in devolution deals to take informed legal and financial advice at every stage. However, as devolution in Wales has demonstrated, whilst there is initial complexity and difficulty, the public sector is able to adapt in order to find a way through and that things will work out in the end. It has to, given that central government has not indicated what the alternative is.

Devolution as both a political and a policy goal is not going away, it being a core part of the current government’s plan to reduce the size and extent of the state.

allow local government to overcome austerity

prudent to expect further announcements and change between now and 2020

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“My experience in government is that somehow it all works through, eventually clarity emerges.”

Sir Paul Jenkins

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• adult services• business transfer agreements (including TUPE & LPGS pensions issues)• children’s services & social care• collaboration agreements• commercial & regeneration• contracts• corporate governance• corporate insolvency & restructuring• data protection• employment• EU competition• freedom of information• information technology• intellectual property• inter-authority agreements• internet & e-commerce• joint venture agreements

• judicial review• litigation & dispute resolution• major projects• mergers & acquisitions• outsourcing• PFI/PPP• planning, highways & infrastructure• public procurement• property, construction and related litigation• regeneration• regulatory advice• shared services• social housing• state aid• supply of goods & services• tax• vires.

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