Brexit will have a real impact on local government
—For an institution as large as the European Union it would be all too easy to assume the implications of Brexit would be largely felt at the national level. Yet, the relationship between the EU and local government is closer than many realise, with councils even benefiting from direct representation in EU structures through delegates to the Committee of the Regions.
The most obvious risk of Brexit for councils is the potential loss of regeneration funding. The EU has allocated £5.3bn from the European Regional Development Fund and European Social Fund for English councils to spend between 2014 and 2020, and in the immediate aftermath of the referendum result the Local Government Association has led calls for the government to protect this funding. With programmes focused on supporting employment, regenerating struggling economies and promoting social cohesion, the loss of this funding would be felt especially hard in economically deprived communities.
Councils are also bound by various EU laws, covering everything from recycling targets to strict rules around procurement procedures. In theory Brexit means that the UK government, no longer bound by collective agreements, could overturn these rules. However, the immediate regulatory impact is anticipated to be limited, with rules for local government in the UK only diverging from EU states over time. This is partly due to many of these rules making a good deal of sense but also the complexity of unravelling four decades’ worth of regulation, particularly given that EU directives are only given force through inclusion in a member state’s own legislative framework.
The indirect consequences of Brexit for councils are harder to unpick but potentially more significant. Over the last six years local government finance has been turned upside-down with government grants being phased in, preference for measures such as retained business rates and, temporarily, the New Homes Bonus. Not only has this reduced council revenue considerably but it has meant that the remaining income is much more vulnerable to recession and the slower economic growth which Brexit may well entail.
Labour councils are defined by their ambition for their areas, but here too Brexit carries risks. For those of us trying to regenerate town and city centres, how will we adapt to the impact of a weaker pound and the risk of tariff barriers on consumer spending when retailers are already struggling? How will we provide housing when the developers are already pulling back from projects over fear of the economic consequences of Brexit? How do we prepare to provide new sources of employment if foreign investors no longer feel that the UK is the best place for them?
The LGA has called for local government to be included alongside the devolved bodies in the team which develops the exit plan for Britain, both here and in Brussels. Local government is well placed to see the practical implications of Brexit and the steps which can be taken to mitigate the effects upon our communities. While I hope the government follows through this call, given the lack of leadership on the national level, it is for those of us on the ground to start preparing right now for the worst so that we can go on delivering the best we can for our residents.
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Peter Lamb is leader of Crawley borough council