Inside State Government’s Post

A potential incoming labour government proposes a legacy position - devolving powers in ways not seen previously. Legacy in the sense that the extent of reform will influence the nature of governing in the UK long after the adminstration has moved on - in the same way as the post war Labour government created a legacy position with the NHS. Central to its idea are local growth plans. But what is a local growth plan? It won’t (and can’t) be the same as a local (development) plan. The terminology is taken from business - the idea being to identify increased revenue from key business activities. Requiring local authorities to produce such plans will mean having to identify how local economies can expand and generate enhanced revenue. However, local communities that grow should expect to retain the increased revenues to support local investment and create positive cycles of investment. But how can local revenue streams be retained locally for local investment? That requires a major shift not just in the political landscape, but in the treasury-dominated one where spending is centrally controlled. Exciting times are ahead, but there are challenges to be faced. What do you think about the incoming labour government's plans for devolving growth? Share your thoughts in the comments below! #LabourGovernment #Devolution #LocalGrowth #BusinessGrowth #Investment #RevenueStreams

In order to rebuild the UK economy, the new Labour government has many challenges to overcome. While they have already made some changes to facilitate this, there is a lot more that needs to be done - including plugging the £20bn public accounts black hole - for the economy to grow. In his latest Vistage Economic Update, Roger Martin-Fagg shares his thoughts on whether growth is likely, and why there could be a light at the end of the tunnel... https://lnkd.in/ec4fTAsP #Vistage #Economy #UKEconomy #EconomicUpdate #LabourGovernment #EconomicGrowth

One of the most dispiriting Covid legacies is an expanded public service. As I write on Substack today, there were 242,000 Commonwealth public servants on the books in June 2019, the year before Covid. In June last year, there were 350,000, an increase of 44 per cent. State governments have not been idle in the field of job creation either. Victoria leads the way with an increase of 21 per cent in the size of the State public service, followed by WA (18 per cent) and Queensland (15 per cent). No wonder Commonwealth spending has increased as a share of GDP from 25 per cent before Covid to 27 per cent today. Big government comes at a price. As Milton Friedman once said: “Government cannot spend money at nobody’s expense.” Read the full article on Substack and subscribe to receive regular updates. https://bit.ly/43dM6Qe

Startling statistics on the increase in the number of public servants. If there's been an increase in numbers of 44% in just 4 years, one has to ask if there's been a corresponding increase in the level of service to the Australian taxpayer of the same amount? Meanwhile, there are weekly reports of private sector companies going out of business due to government policies, for example energy policy which is causing an unsustainable increase in energy costs. Something to ponder... #governmentaffairs

This is a sobering read about the spiralling growth of the public sector in recent years. While rising government staffing and spending were essential to get through the pandemic and stave off recession, continued public sector growth as a share of the economy is a threat to Canada's long-term productivity and prosperity. To use a simple benchmark, Canada's public sector should strive to look less like France's, and more like Germany's. This is not a time for populist rhetoric. It's time for political leaders to acknowledge the problem, and develop plans to change course - carefully and responsibly. Excerpts: "What worries economists is the possibility government hiring and spending is contributing to weakness in the private sector. For one, the public sector may have hoovered up employees who would otherwise be available to businesses, attracting them with the higher pay that is often available in government jobs, not to mention lucrative pensions and job security. “The government provides attractive compensation packages and it may be crowding out employees that other sectors would also need,” said Mr. Giroux. “Vacancy rates suggest the public sector is overpaid because they’ve had no trouble attracting workers, whereas private employers are having trouble,” he said, adding that health care is the public sector exception, since low pay is making it hard for the industry to fill jobs. Canada’s weak productivity levels may also partly reflect the public sector’s growing share of the economy and job market. Productivity is lower in general in the public sector, so to the extent that more of the economy is dependent on government output, that will weigh on productivity." #business #competitiveness #growth #canada https://lnkd.in/eXtwm5X6

New labour government urged to prioritise economic growth, say leading business groups The newly established Labour government must remain “laser-focused” on harnessing positive economic indicators and delivering growth, assert prominent business groups. In his inaugural press conference as Prime Minister on Saturday, Keir Starmer committed to chairing new “mission delivery boards” to “drive through change” and fulfil Labour’s manifesto promises. These include boosting economic growth, investing in clean energy, and enhancing opportunities through a revised skills agenda. Louise Hellem, Chief Economist at the Confederation of British Industry (CBI), commented: “Businesses view the general election results and the clear mandate given to the new government as a pivotal moment for the economy. The government must hit the ground running and remain steadfast in delivering growth. Early tough decisions are crucial to attracting investment, seizing growth opportunities, and enhancing our appeal to global investors.” https://lnkd.in/e8_V5Su8 #economy #growth #finance #biz #government

Some really interesting bits in the #LabourManifesto for local authorities… If elected, Labour say the party would introduce a new statutory requirement for Local Growth Plans to be developed by 'local leaders' in partnership with 'major employers, universities, colleges, and industry bodies'. They also outline that they would 'review' combined authority governance arrangements to to 'unblock decision making'. Still unclear on what this may mean in practice but in many ways feels like a continuation of the current policy on #devolution with 'integrated settlements' for Mayoral Combined Authorities judged to be high performing. Interesting read! https://lnkd.in/e-N3TGQ5

New research from Dr Amr Saber AlGarhi and Dr Konstantinos Lagos looks at whether Labour or the Conservatives have run the UK economy better in the past 50 years? "The two ideologically divided dominant parties have always promoted alternative approaches to managing the nation’s economy, each promising a better economic outcome. But have their social, ideological and policy differences actually led to divergent effects on key indicators such as GDP, unemployment and inflation?" "Firstly, evidence suggests no meaningful differences in economic growth between the periods of the left-leaning and the right-leaning governments. The same was true for levels of unemployment, indicating remarkably small differences between how the two major parties’ governments performed on those two key issues over the past five decades. "This result goes against the conventional partisan narrative that rightwing policies of the past 50 years have caused high unemployment while leftwing welfare state policies have hindered economic growth. "However, there was a difference on inflation control, where a meaningful divergence appeared." Read the full outcomes of the research in The Conversation UK https://lnkd.in/eSnKQWHY #Economy #GeneralElection

‘Devolution deserts’ targeted as Labour plans new Take Back Control statute. The Secretary of State for Housing, Communites and Local Government, Angela Rayner, has written to the leaders of local authorities asking them to “take the plunge” and play their role in a “new revolution” that will drive the decentralisation of decision-making away from Westminster into the regions. The #TakeBackControlBill is expected to be announced in the King’s Speech on Wednesday and will create a presumption for devolution for all communities. According to the Local Government Chronicle the government will present a new Devolution Framework that "moves away from a deal-based approach" with local authorities given until September to opt into the new framework. At the moment, according to the Institute for Government, only 48% of England's population (54% of its economic output) live within Combined Authority area. The remainder are characterised as being in “Devolution Deserts” and missing out on opportunities which come from having a Combined Authority led by an elected Mayor. As an incentive to participate in devolution, the Bill will give the #MetroMayors greater powers and funding in areas such as transport, skills, adult education, job support, energy and planning. The UK remains one of the most centralised western economies, with 95p out of every £1 controlled by Whitehall and just 1% of GDP spent by local government on economic affairs, according to data published by IPPR. Therefore this push towards greater devolution is likely to be welcomed by many people. The full FT article can be found at https://lnkd.in/eJ67GraG #News #Devolution #TakeBackControlAct #MHCLG #LocalGov Jonathan Branton #CCS #Regeneration #LevellingUp #KingsSpeech

The new Labour government has an opportunity to improve the lives of people up and down the country, but only if it is willing to invest in public services and paying workers properly. In the wake of Labour’s general election victory, here is what the New Economics Foundation's Chief Executive, Dhananjayan Sriskandarajah, had to say: “While the political implications of this election will be pored over in the weeks to come, the economic ones should be abundantly clear - Labour must now drastically improve the lives of people in the UK, and to do this it must be willing to invest. “For decades, government after government has failed to invest in the people, public services and national infrastructure that are vital for a thriving economy. As a result, today, more than four in 10 households cannot afford life’s essentials.  “Sir Keir Starmer has said it is now time to deliver. To achieve this, his priorities should be ‘investment, investment, investment’.  “This new government has many tools at its fingertips to raise money, including replacing our outdated borrowing rules and raising taxes on the wealthiest. “Investing in paying nurses properly, repairing our crumbling schools, or building new social housing will more than pay for themselves in the long term. And investing in meaningful devolution and democratic ownership will increase trust in politics."  Full statement: https://lnkd.in/dcYAf-8V