Policy Analysus

Edge Foundation Critiques Government's New Growth and Skills Levy Proposal

The Edge Foundation's new report critiques the Government's plan to replace the Apprenticeship Levy with a Growth and Skills Levy. Authors Holly Papworth and Sorah Gluck express concerns that this change could reduce funding for apprenticeships, particularly at lower levels, and hinder the Youth Guarantee and Growth Mission policies. Edge Foundation CEO, Alice Gardner, emphasises the need for careful policy design to avoid further limiting apprenticeship opportunities.

The report proposes several modifications to improve the apprenticeship system, including:

• Building on best practices for SME support in hiring apprentices.

• Fully funding apprenticeship training in SMEs for under-22s.

• Enhancing the advertising and application process for apprenticeships.

• Piloting a modular apprenticeship model tailored to employer and learner needs.
  

Finance & Policy

Councils Accumulate Costly Data Storage Debt, Urging Digital Transformation

Local authorities are incurring significant costs to store hard copies of documents, potentially costing taxpayers millions annually. Freedom of information requests reveal that councils and the Government spend over £1.25 million each year on this practice, with eight councils in England alone spending approximately £400,000 annually.

Damien Andrews, Managing Director of Dajon, questions the rationale behind continuing to store hard copies in the digital age. He urges the new government to prioritise digital transformation to save public funds and improve efficiency. Andrews calls for a shift from traditional document storage methods to more cost-effective and accessible digital solutions.

Local Government

Further Funding Cuts Could Lead to Council Financial Collapse, Warns LGA

The Local Government Authority (LGA) warns that further funding cuts in the Autumn Budget would be disastrous for councils, which face a £2.3 billion funding gap in 2025-26, rising to £3.9 billion in 2026-27. Key cost pressures include rising costs in adult social care and homelessness services, exacerbated by inflation and wage increases.

The LGA highlights that 18 councils required Exceptional Financial Support to balance their books in 2024-25, and many are depleting their reserves unsustainably. The LGA calls for immediate government action, including increased funding, multi-year finance settlements, and a shift towards preventative spending to ensure financial stability and protect vital local services.

Legal Insights

Key Challenges in Local Government Reorganisation: Lessons from Unitary Councils

Local government reorganisation (LGR) offers potential financial benefits and improved service delivery but requires sustained commitment from senior stakeholders. Key challenges include:

• Appointing senior management during the shadow period to build leadership teams.

• Establishing a programme management office and a well-resourced finance team.

• Ensuring a safe and legal transition while agreeing on the operating model.

Financial sustainability hinges on:

• Focusing on financial culture and communication.

• Building constructive relationships with legacy councils.

• Early disaggregation and aggregation of resources, including social care budgets.

• Harmonising council tax and robust medium-term financial planning.

• Governance and performance management are crucial:

• Developing a corporate risk strategy and ensuring legacy accounts are produced.

• Implementing a clear IT strategy and transformation plan.

• Mapping key strategic partners and developing partnership governance arrangements.

Council News

Halton Council Faces £20m Budget Overspend Crisis

Halton Borough Council faces a potential £20m budget overspend this year, necessitating urgent action. The executive board has been warned of the "great concern" and immediate measures required to curb spending. The overspend, at £6.6m by July, could escalate to £19.8m by year-end.

The Children and Families Department, recently rated inadequate by Ofsted, is the primary source of overspending, with a forecasted net spend increase of £8.8m. Contributing factors include the high cost of agency social workers and rising expenses for residential care.

Measures to address these issues include a recruitment working group, a new Social Work Academy, and spending restrictions on non-essential items.

Council News

Cornwall Council Unanimously Backs Call for Fairer Funding from Government

Cornwall Council has unanimously backed a call for fairer funding, demanding at least the national average for services like housing and education. Cllr Colin Martin emphasised, "Cornwall is not asking for a hand out, but for a hand up." The vote saw 78 councillors in favour, with none against.

Council leader Cllr Taylor highlighted the need for a funding formula that considers population profile, sparsity, deprivation, and socio-economic factors. A Ministry of Housing, Community and Local Government spokesperson stated plans to provide councils with more stability through multi-year funding settlements and reforms to ensure value for money. A draft financial statement is expected in December.