Category Archives: Government

Council Tax Reform

Reflections on the Future of Council Tax

GK Associate Hugo Tuckett assesses the likelihood of council tax reform amid rising concern about local authority financial resilience.

Is council tax reform on the horizon?

Amid rising bankruptcies in recent years, and growing concern about the sustainability of council finances, funding mechanisms for local authorities – and particularly council tax – are attracting growing political scrutiny.

In December 2023, the Local Government Association reported that almost one in five council leaders and chief executives it surveyed think it is very or fairly likely that they will need to issue a Section 114 notice this year or next due to a lack of funding. A Section 114 notice is issued by a council’s finance officer if they believe the council’s expenditure will exceed the resources it has available. Eleven Section 114 notices have been issued since 2018, with only five issued in the 30 years prior.

Given that council tax receipts now make up over half of local authority spending power (56.9% in 2023-24 compared to 49.1% in 2015-16), ensuring the council tax regime is operating effectively is critical to the long-term sustainability of local authority finances.

The Levelling Up Committee recently made a series of recommendations to the Government on council tax reform. In its report, the Committee reiterated its previous conclusions about the “unfairness and outdatedness of the council tax regime”.

The Government has since said it has no plans to conduct a revaluation of council tax bands (the Committee’s key recommendation) as, amongst other factors, “it would particularly risk those on a lower income, including pensioners, who have seen their homes appreciate in value”.

Here is the focal point of political discourse. A Conservative Government, aware that (according to recent YouGov polling) the Party is now the most popular only among the over-70s, will be aggrieved to conduct a revaluation of property bands which would hit the pockets of its core voter base. A Labour government on the other hand, with traditionally greater allegiances to younger, non-home owning voters and those on lower incomes could take a fresh look at this issue. One option likely to be under consideration is the introduction of new, higher bands of council tax.

Given the Shadow Chancellor, Rachel Reeves, has ruled out numerous tax rises ahead of the upcoming General Election, council tax reform represents one revenue-raising lever still available to her. While the details of any potential reform are still unknown, it is a near certainty that the council tax regime will only grow in political salience in the years ahead.

SEND and AP Improvement Plan

The SEND and AP Improvement Plan – A Year Without Progress

GK Advisers Noureen Ahmed and Felix Griffin evaluate the implementation of the SEND and AP Improvement Plan.

The Government and the Opposition face questions on their SEND policy plans

Nearly a year has elapsed since the Government unveiled its SEND and AP Improvement Plan, which reiterated its commitment to ensuring every child and young person with SEND receives the high-quality support they need. What exactly has changed since publication? The answer – not much…yet.

The plan outlined several key policies, including the long-overdue standardisation and digitalisation of Education, Health, and Care Plans (EHCPs), the implementation of new national SEND standards, and the introduction of a revised funding approach for alternative provision.

Although these policies were warmly welcomed by the sector, they’re not expected to come into effect on a national scale until 2025 at the earliest. This delay has raised concerns about the precariousness of the SEND landscape, prompting calls for a quicker implementation timeline.

A recent report from the Guardian, citing Freedom of Information (FOI) requests, revealed instances where children and young people in certain local authorities waited over two years to receive an EHCP. Moreover, insufficient funding for SEND services has put local authorities in a difficult position, exacerbating the existing strain on resources.

Questions have also been raised about what a Labour government might look like for the sector. At present, the Party has said very little on SEND but noted that interlinking services and improving data use” would help identify a child’s needs much earlier.

The Government has stressed its ambition to reform the SEND landscape. However, given the escalating crisis, doubts continue to grow as to whether the plan will suffice in addressing and alleviating the issues facing the sector.

GK Point of View- Spring Budget 2024

Spring Budget 2024_GK Strategy

The GK team react to the Chancellor’s Spring Budget, with GK Strategic Advisers offering their insight into what this means for the Conservative Party in the run up to the General Election, what the budget means for individuals, as well as the announcement’s wider impact on key British industries.

To read our briefing please use the link above or click here.

Internal strife muddying the waters for both the Conservatives and Labour

GK Point of View – View from Westminster

GK Associate, Joshua Owolabi, assesses Rishi Sunak and Keir Stramer’s recent struggles with rogue MPs. 

Internal strife muddying the waters for both the Conservatives and Labour 

Former Prime Minister, Harold Wilson, joked frequently about the frenetic pace at which politics could move. Over his long career, he became well-acquainted with the turbulence that intra-party politicking could bring. Keir Starmer and Rishi Sunak may be able to relate. Clearly, the last few weeks have been taxing for them both as they struggle to deal with internal conflicts. 

There has been scant opportunity for Starmer to enjoy the emphatic byelection result in Wellingborough, where the Labour Party overturned a Conservative majority of over 18,000 votes. It doesn’t matter that only a fortnight ago Starmer led his party to its largest swing in a byelection since 1994. Since then, the Labour Party has needed to clamp down on grassroots dissent over the decision to withdraw support for its Rochdale byelection candidate, Azhar Ali. Days later, Starmer was scrambling to avoid a rebellion and the potential resignation of Shadow Ministers, after the SNP brought forward an opposition day motion on the war in Gaza. 

The Prime Minister has been blindsided yet again by some of the more outspoken Tory MPs. Lee Anderson, who had been Deputy Chairman of the Conservative Party as recently as January, had the whip suspended following his incendiary remarks about the Mayor of London. Various Tory MPs have either defended or criticised Anderson since his outburst. Sunak has attempted to placate both sides, calling Anderson’s comments ‘wrong’ while also refusing to label them as ‘Islamophobic’.  

However, Anderson doubling down on the comments has left Sunak with a problem to solve. Can he deal with the Anderson situation in a way that keeps the right-wing of his party happy, but also heeds the calls from ‘One Nation’ MPs for Anderson to be disciplined? Unfortunately for the Prime Minister, the answer to that question seems obvious.  

Meanwhile. a speech from Sunak’s predecessor elicited the response “err… who is Liz Truss?” from a perplexed American audience at a conservative political conference in Maryland. Despite the criticism that Truss’ speech has received, Sunak will be concerned by her decision to lean into conspiracy theories about the ‘deep state’ and her call for Nigel Farage to rejoin the Party. Along with the Lee Anderson headlines, it highlights the way in which Sunak is struggling to control the narrative.  

As Tory factions battle each other for control after the election and the Labour leadership works to limit self-inflicted wounds before it, the approaching Spring Budget hasn’t received much attention. Sunak, Starmer, Hunt and Reeves will need their MPs to get back on message as they set out their economic visions. They’ll be hoping that the infighting of February gives way to a renewed focus on policy in March. 

 

The Fallout from the Horizon Scandal

GK Point of View – The Fallout from the Horizon Scandal

GK Adviser Rebecca McMahon assesses the potential impact of the Horizon scandal on the Labour Party’s procurement plans.  

How will the Horizon Scandal influence Labour policy? 

The renewed focus on the Post Office’s procurement of Fujitsu’s Horizon software has brought to light procurement issues which are pertinent to the Labour Party. 

Labour has already committed to increasing oversight of government procurement – Shadow Chancellor, Rachel Reeves has proposed a “covid corruption commissioner” watchdog to recover taxpayer money lost due to the Government’s VIP “fast lane” for contract delivery during the pandemic. Evidently, the Party is keen on a system where both the Government and individual suppliers are held to greater account. The Horizon scandal only adds to its case. 

The Party is not just set on preventing bad outcomes from government procurement; they are also aiming to use it as an actively positive instrument, with Deputy Leader Angela Rayner placing an emphasis on “social and environmental factors”.  

She also urged the Government to ensure that “contracts do not always automatically go offshore” and instead are awarded “to businesses creating local jobs, skills and training”. Labour has also said it would “make social value mandatory in public contract design”, introducing measures to promote “decent work” and strengthen supply chains. 

Labour to lean on procurement to digitalise services? 

As well as encouraging more ethical procurement, Labour is also keen to use procurement to further digitalise public services. This is especially true of the NHS, where key figures like Wes Streeting, Shadow Health Secretary, have been vocal about the need to invest in innovative health technologies and make more effective use of health data. 

However, in the wake of the Horizon controversy, any efforts to radically digitalise the NHS will be caveated by important questions about accountability. 

Whether or not digitalisation will be a quick fix for the UK’s declining health provision, it is likely to be a key area for procurement under a Labour government. UK healthtech has expanded nine-fold since 2016, and the sector’s future could be bright under a future Starmer government. 

 

GK Insights- Student visas reform

GK Point of View – The impact of student visa reforms

GK Associate Hugo Tuckett assesses the recent student visa reforms, and what they mean for the higher education sector.

With the Government continuing to struggle in the polls, Rishi Sunak has launched a full-frontal assault on the immigration system aimed at bringing numbers down and cutting into Labour’s seemingly unassailable lead. 

Following a record net migration figure of 745,000 in 2022, the Government has undertaken a series of measures to tighten the UK’s immigration system. As they are the largest group of non-EU migrants, international students have come into the firing line. 

In May 2023, the Government introduced new restrictions to student visa routes by preventing international students from bringing family members on all but post-graduate research routes, as well as banning people from switching into work routes until their studies have been completed. These measures officially came into force on 1 January 2024. 

The Government expects this to result in an estimated 140,000 fewer people arriving in the UK. However, with years of frozen domestic tuition fees and reductions to teaching grants stemming from Britain’s exit from the EU, it is unclear whether the UK will retain its attractiveness to international students, the very group who have been covering the sector’s budgetary shortfalls. 

Notably, the Government’s own impact assessment refuses to consider the effects of preventing international students from bringing dependants on all but post-graduate research routes, given the lack of available evidence to determine how many students (who bring dependants) will be dissuaded. On a more positive note, the impact assessment finds that only 2% of total students with an expired student visa would be affected by the ban on switching work routes until their studies had been completed. 

Given the distinct possibility that numbers of international students arriving in the UK drop because of the changes, financial pressure will grow on higher education providers who have made over-optimistic assumptions about future growth in international student numbers as a means of balancing the books. 

As we enter an election year in which the Conservatives will be reluctant to loosen immigration controls, the likelihood that some providers collapse under the financial strain cannot be overlooked.