Mayors to score wins in the budget after PM intervenes – but fears remain over councils facing bankruptcy
Mayors are set to be one of the big winners in the budget after Sir Keir Starmer personally intervened to ensure they have more freedom to spend cash and boost growth, Sky News understands.
England’s dozen metro mayors have been working together to push the prime minister, Rachel Reeves and Angela Rayner for more powers and cash after years of frustration at the way the Treasury allocates money for projects and salaries.
But there is deep concern that Ms Reeves, the chancellor, may only allocate money to some key areas but not others.
There is agreement among all the mayors who spoke to Sky News that the squeeze on local government budgets – which metro mayors work alongside – will cause further councils to go bankrupt and hamper their ability to regenerate their local regions.
In the budget on Wednesday mayors believe they will get:
- A so-called “single pot” of money allowing them much greater freedom to allocate funds where they deem most necessary;
- Greater flexibility to raise local taxes. In Liverpool City Region, metro mayor Steve Rotherham is pushing a “tourist tax” of £1 per night on the city’s hotels to fund local tourist projects. There are hopes among some mayors they will get more flexibility in the way they can spend locally raised taxes, known as precepts;
- Multi-year budget settlements to allow for longer-term planning.
- The mayors are pushing for more powers in a range of areas from transport, where they are hopeful of some success, to skills, where they see the Department for Education reluctant to release their grip.
Sky News understands that Sir Keir has repeatedly said in meetings that he believes metro mayors, who have planning powers and work with clusters of local authorities, must be put at the heart of the push for growth across England.
‘Massively frustrating’ Treasury
Mayor of Teesside Ben Houchen. Pic: PA
Liverpool City Mayor Mr Rotherham told Sky News that he has been told that mayors “can become the delivery arm of national government” across a whole range of projects, including retrofitting homes, improving transport and productivity and skills.
However, several mayors who spoke to Sky News sounded a warning that they need to break free from the Treasury’s way of deciding what should get funded if growth is as big a priority as the government says.
Liverpool City Mayor Steve Rotherham. Pic: PA
Mr Rotherham said the Treasury has been “massively frustrating to date” and “we are pushing to see changes.”
He called for urgent reform to the Treasury manual for evaluating the value for money of big projects – known as the Treasury Green Book.
He claimed that this way of measuring value is biased against more long-term projects, making true reform impossible.
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Sam Coates looks ahead to Westminster’s oddest budget tradition
Councils ‘on the brink of bankruptcy’
Meanwhile, Ben Houchen, the Conservative mayor of Teesside, said: “The Treasury is a very difficult department to deal with.
“The officials, I think, have a very narrow view – they know the cost of everything and the value of nothing.”
He warned the chancellor that if, as expected, she announces lots of big infrastructure and growth projects on Wednesday but also squeezes on the day-to-day running costs of government, then the initiatives unveiled next week may never happen.
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“If you allocate money for big projects like train stations or roads, or whatever it might be, big infrastructure – that’s one thing,” he said.
“But to deliver that, you’ve got to have the day-to-day spending to employ people, get through planning – all of that stuff in the background that takes money, revenue, day-to-day spending.
“So allocating a big cheque is one thing. That doesn’t necessarily mean that we’re going to see those projects come into fruition if the money isn’t there to develop those projects in the first place.”
Earlier this month Sir Keir Starmer met Tees Valley Mayor Mr Houchen (second right) and other regional leaders during the inaugural Council of the Nations and Regions in Edinburgh. Pic: PA
Mr Houchen said local councils in the Tees Valley were in a bad financial situation.
“You’ve got local councils, which is what most people interact with on a daily basis, in a very difficult situation.
“The quality and experience of the staff aren’t there. Money is extremely tight.
“Things like adult and children social services in Tees Valley for instance usually accounts for about 80% of a council’s entire budget, just on adult and children’s social services. So it’s in a very difficult state. I’m acutely aware, not just across the Tees Valley but across the country, there are lots of councils on the brink of bankruptcy.
“You’ve seen a couple of those already under the previous government. Without more revenue funding and funding for the types of departments like local government, that’s not going to change that outcome, and we could still see loads of capital spending, but we could still see governments going bust, services not improving and actually continuing to deteriorate.”
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If councils fail, communities ‘fall over’
Richard Parker, the new Labour mayor of the West Midlands, also agreed funding was squeezed for councils.
“Birmingham has lost £1bn worth of funding over the last 10 years… that’s been taken out of some of the poorest and most vulnerable communities, and it’s made those communities even more vulnerable.
“And I can’t afford our councils to fail because if our councils fail, the communities they support fall over.
“So I understand the criticality of the situation.
“I’m hoping the government will start, as they’ve been saying, to make longer plans for funding for local government, so they get an opportunity to plan ahead and plan for the future rather than working to short-term budgetary cycles of a year.”
Sir Keir also met regional mayors, including West Midlands Mayor Richard Parker (left), in July. Pic: PA
Mr Parker made clear that getting more powers over skills – which some other mayors think unlikely at the moment – will be a key driver for growth.
Read more:
Analysis: Growing storm over rumoured budget tax rises
Analysis: Labour’s muddle with messaging
Are Starmer and Reeves on the same page with budget?
‘Too many people in low-paid jobs’
“I actually then need some revenue support, some more powers over particularly post-16 education,” he said.
“We’ve got around a quarter of the workforce in the West Midlands with low skills in those skills, which means that too many people in work are in low-paid jobs.
“And I’ve got twice as many young people out of work than the national average.
“So I’ve got to help these people get access to the skills they need to build careers here and get access to better-paid jobs and indeed the jobs that investors need to fill who are coming into this region.”
Education Secretary Bridget Phillipson, deputy leader of Reform UK Richard Tice, former governor of the Bank of England Mervyn King, and director of the Institute for Fiscal Studies Paul Johnson will be on the Sunday Morning with Trevor Phillips show on Sky News from 8.30am this morning.
The crash involving a cargo ship and oil tanker off the East Yorkshire coast is bad news for the sea, fish and air in the area. What we don’t know yet is quite how bad it will be.
That depends on a few things – but the speed of the collision, clouds of filthy black smoke from the fires and the leaked fuel are certainly worrying.
Firstly, it matters what was on board those two massive vessels.
Follow live: Jet fuel spilling into sea after tanker collision
Analytics firm Vortexa estimates the 183m-long tanker was carrying about 130,000 barrels of jet fuel (kerosene), which is now leaking into the sea.
Jet fuel is not as sticky or viscous as heavier types of oil, thankfully, so it’s less likely to clog the feathers and fur of birds and seals. It can also be broken down by natural bacteria.
But it can still poison fish and kill animals and plants on the shoreline if it makes its way into the soil there.
The Marine Conservation Society has pointed out the site in the Humber estuary is close to some protected areas and is important for seabirds and harbour porpoises.
And both ships will have been powered by a dirtier, heavier kind of oil – likely marine gas oil or heavy fuel oil, though we don’t know the details yet.
Heavy fuel oil is nasty stuff.
Pic: Bartek Smialek/PA
Cheap, thick and tar-like, it can smother animals and is very dangerous if they consume it, and is extremely difficult to clean up. Let’s hope this isn’t creeping around the North Sea already.
We don’t know how much of either the jet fuel or the oil powering the ships has leaked, or how much will be burned off in the violent fires – which themselves are ploughing black smoke and filthy air pollution into the surrounding atmosphere.
And we don’t know for sure what was on the Solong cargo ship and if, or what, will go into the sea.
Cargo ship ‘had sodium cyanide on board’
It was carrying 15 containers of sodium cyanide among other cargo, according to a report from maritime data provider Lloyd’s List Intelligence.
The container vessel was also transporting an unknown quantity of alcohol, said the casualty report – an assessment of incidents at sea – citing a message from the local coastguard.
Plastic takes hundreds of years to break down, and potentially can choke or trap animals.
Many of us have seen that uncomfortable viral video of a turtle having a straw yanked out of its nose. Previous accidents on cargo ships have seen plastic Lego pieces wash up in Cornwall 25 years later.
Read more:
How UK North Sea platforms dump gas
Secondly, the impact depends on the sea and weather conditions around it.
Things like the wind and currents affect how an oil spill spreads in the sea. Scientists can draw up computer models to simulate how the oil could behave.
Thirdly, it matters how quickly this is all tackled and then cleaned up, if necessary, and if it can be.
Usually the slower the response, the worse the impact.
The coastguard has said the incident “remains ongoing” and it has started assessing the “likely counter pollution response” that will be required.
Such a response might need the help of numerous public bodies: the government environment department, the transport department, the Environment Agency and the Maritime and Coastguard Agency.
So for now the best we can hope for – aside from the welfare of the people involved – is that not all the oil is spilled or burnt, that conditions are calm and that rescuers and those cleaning up can work swiftly.
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