Roger Marsh: North must not lose out over public services

So what’s happening to public services in the North? And is it time to establish a more financially secure footing for the public sector as it faces the difficult years ahead?

This is the subject of our new report, Public Services North: Time for a New Deal? in association with the Smith Institute. It follows our previous work in 2011 with the think tank on the implications of fiscal austerity for the North.

The requirements and expectations of the population are increasing. Today’s pressures on public services significantly impact the way services can and will be delivered in the future. For areas harder hit by unemployment and slow economic growth, particularly in the North East, North West and Yorkshire, a new way of thinking is needed.

With austerity continuing into 2017/18, and the prospects for sustained growth remaining some way off, the face of the public sector needs to change.

Northern councils and other public service providers have so far been able to mitigate the worst effects of the cuts due to efficiency savings.

But the evidence suggests that the scope for this is running out and, in the absence of sustained economic growth, local government’s capacity to support investment via increased tax revenues or borrowing is limited.

The report suggests a new financial settlement for the North to provide a fairer balance of public funding. A wider debate is needed to reconsider how to allocate the resources available to deliver public services in disadvantaged areas – in line with need.

We also need to continue to think about how to rebalance the economy, releasing the untapped potential that exists in the North for the good of the country at large. We need to up our game in our cities which are the engines of growth in the North and use City Deals and other mechanisms to forge a new path towards growth which is financially, socially and environmentally sustainable – “good growth”, as it has been coined.

But as well as growth we need to 
move the dial on from how public services are delivered to which services are to be delivered and at what level of provision beyond just what is required by statute.

Put quite simply, in terms of the absolute cost of public services, the North is presently facing steady 
demand pressure without the economic uplift being enjoyed in London and the South East. Nor do we have the special fiscal benefits of such as Scotland. The North is being squeezed from both ends.

This is undoubtedly a challenging agenda and not all of this is in the gift of those delivering services in the North to address.

But it’s time to lead not plead. Indeed, one of the key recommendations of the report is for us ‘up North’ to take the lead through the creation of a Public Services North, comprised of northern councils and health bodies, and empowered to shape the future of public services with a view to designing and implementing a new financial settlement.

Another recommendation is to create a Northern Centre for Public Services focused on collaboration and the exchange of ideas and best practice as a means to accelerate productivity and improvement in our key public services.

Of course, there are ongoing challenges that austerity is posing for all of us, whether in the public or private sector, but we must remain confident (although not complacent) about the future and take the lead in the creation of the future we seek. It’s not just about doing things differently, but doing different things.

Those commentators who use language like “it’s grim up North” 
are missing the significant unused capacity and potential outside London and the South East to allow all our cities to do well and improve the whole economy.

This is not just about the North. Improved northern prosperity will be a significant contributor to enhanced national prosperity.