This report, supported by Zurich Municipal, sets out to understand what factors could affect the future of local public services over the next two decades and what new roles for local government could exist by 2040.
The research starts in Chapter 2 by exploring six dimensions of change that are likely to dramatically impact the demand for, and supply of, local public services in 2040. These trends, which present both opportunities and challenges, include:
- An ageing population that puts increasing pressure on social care and health services, but that brings new resources of its own through healthier pensioners.
- More fragmented families, living in highly urbanised and more dispersed communities, with housing quality and affordability remaining a problem in some regions.
- Prosperity driving higher expectations of public service quality and convenience, but growing disparities across regions and across generations demanding an adequate response.
- Huge opportunities to apply innovations in technology and big data to improve the productivity of public services, alongside the task of managing the disruption to jobs that is likely to accompany this.
- Localised environmental risks around flooding and air pollution to heighten, and the need for communities to display resilience.
- Greater fiscal devolution presenting huge opportunities to councils to control their destiny as well as risks around the resilience of their local tax bases.
The challenges come at a time when the sector already faces huge financial pressures. The report shows that employment in local government has fallen by a quarter or 800,000 employees between the start of 2010 and SOCIAL MARKET FOUNDATION 6 2017.
Meanwhile, analysis reveals that local government net borrowing has been increasing since 2013/14. The last time local government ran a fiscal surplus – with revenue exceeding expenditure – was in 1996. In the 2016/17 fiscal year, local government net borrowing stood at £8.6bn.