Ride the Wave: Local Growth, Fiscal Responsibility and the Digital Future
- truthaboutlocalgov
- Nov 3
- 6 min read
In the shifting tides of local government reform, few reports have captured the moment quite like Ride the Wave, the latest research from Localis, supported by Core Cities UK and CIPFA. It’s a call to action for councils navigating the tension between ambitious growth agendas and the sobering realities of fiscal restraint. As Joe Fyans, Head of Research at Localis, put it in conversation on the Truth About Local Government podcast:
"We’re so close. If we could just sort out some capacity issues, we’d be far closer to achieving strategic placemaking than ever before."
This blog reflects on the key themes of the report and podcast: the evolving role of strategic authorities, the challenge of investment risk, the promise of digital transformation, and the urgent need to build institutional maturity across the sector. It also asks a deeper question: how can local government move beyond survival mode and embrace a future defined by inclusive, sustainable growth? The answers are complex, but the tools are emerging and the time to act is now.
Growth vs. Prudence: A Balancing Act
The government’s Plan for Change has placed local growth at the heart of its economic mission. With over £100bn committed to public sector net capital investment and the creation of institutions like the National Wealth Fund and the British Business Bank, the opportunity for regeneration is tangible. These initiatives signal a renewed appetite for place-based investment, infrastructure renewal, and economic stimulation across towns and cities. Yet, as Joe Fyans noted on Truth About Local Government,
“We’ve moved from commercial councils go forth and multiply to a pretty punitive regime when it comes to fiscal failures.”
The era of entrepreneurial localism has given way to heightened scrutiny, tighter controls, and a renewed emphasis on financial resilience.
Councils now walk a fiscal tightrope. The Prudential Framework demands that investment decisions prioritise security, liquidity, and then yield a hierarchy that often clashes with the ambition to deliver transformative growth. The pressure to build viable growth pipelines, attract private capital, and regenerate communities is intensifying, especially in areas hit hardest by austerity and economic stagnation. Section 151 officers, as custodians of financial stewardship, are increasingly caught between short-term solvency and long-term ambition. They must navigate the tension between balancing the books and enabling strategic investment often without the tools, flexibility, or political cover to do both effectively. The risk is that councils either retreat into risk-averse budgeting or overextend in pursuit of growth, with little room for error.
The Role of Strategic Authorities
Mayoral Strategic Authorities (MSAs) are emerging as pivotal actors in this complex landscape. With devolved powers over Local Growth Plans, Spatial Development Strategies, and Integrated Settlements, MSAs are uniquely positioned to lead regional transformation. Their ability to convene stakeholders, align investment, and shape long-term spatial visions gives them a strategic edge. The Localis report underscores how MSAs can act as investment catalysts, particularly when supported by mechanisms like Mayoral Development Corporations, the Office for Investment, and bespoke funding arrangements. These tools allow MSAs to unlock regeneration opportunities that transcend individual council boundaries.
However, this shift is not without friction. As Matthew Masters observed on the podcast,
“It’s not fair to expect the Section 151 officer, whose job is fundamentally to balance the books that year, to be thinking about the long-term strategy of place-shaping.”
The disconnect between financial governance and strategic planning remains a structural challenge. Without clearer delineation of roles and better integration between finance and strategy, the potential of MSAs may be constrained by the very systems meant to support them.
Digital Integration and the Capacity Crunch
One of the most under-discussed yet critical challenges in local government reorganisation is digital integration. As councils merge, restructure, or collaborate more deeply, legacy systems must be aligned, data migrated, and services digitised. This is not just a technical exercise it’s a foundational enabler of modern governance. Yet, as Joe Fyans warned,
“There aren’t enough enterprise architects in this country to do the work that needs to be done.”
The shortage of skilled professionals capable of designing and implementing large-scale digital transformations is acute. Many councils lack the internal capacity to manage complex IT transitions, and outsourcing often leads to fragmented solutions that fail to deliver long-term value.
The forthcoming Connected Evolution project, supported by TechnologyOne, aims to explore how technology can drive successful integration. It will examine how digital infrastructure can underpin smarter service delivery, better data use, and more agile governance. But the sector faces a capacity crisis. Retaining staff with institutional knowledge especially in IT, finance, and systems is proving increasingly difficult amid budget pressures and competition from the private sector. Without sustained investment in digital skills, infrastructure, and leadership, the promise of streamlined services and smarter governance may falter. Integration must be seen not just as a technical challenge, but as a strategic priority one that underpins the future of local government itself.
Public-Private Partnerships: Risk and Reward
The report offers a nuanced view of Public-Private Partnerships (PPPs). While PFIs left a legacy of caution, models like Wales’ Mutual Investment Model (MIM) show how risk can be shared more equitably. MIM excludes soft services, includes public equity shares, and aligns with long-term sustainability goals.
Yet PPPs remain complex. Contractual risks, negotiation failures, and institutional immaturity can derail projects. The report calls for clearer guidance, structured frameworks, and a focus on smaller-scale PPPs to build confidence and capacity. It also highlights the importance of transparency, robust procurement processes, and long-term political commitment. Without these, even well-intentioned partnerships can falter. Moreover, councils must be equipped with the commercial skills to negotiate and manage these partnerships effectively. This includes understanding risk allocation, lifecycle costing, and performance-based payments. The Welsh MIM model offers a blueprint, but adaptation to local contexts is essential. Building internal capacity not just relying on external consultants is key to making PPPs work for communities.
Institutional Maturity: The Missing Ingredient
Perhaps the most compelling insight from Ride the Wave is the need to build institutional maturity. New strategic authorities, fresh from reorganisation, often lack the processes, relationships, and long-term vision needed to attract investment. The report recommends maturity models that progress from initial awareness to optimisation, helping councils benchmark their development and identify gaps.
Institutional maturity isn’t just about structure it’s about culture. It’s about having the right people in the right roles, supported by systems that enable strategic thinking, collaboration, and accountability. Mature institutions are better able to manage risk, engage stakeholders, and deliver complex projects. They are also more attractive to investors, who seek stability and clarity.
To accelerate maturity, councils need support in developing leadership, governance, and commercial acumen. Peer learning, regional collaboration, and shared services can help. But without a clear national strategy to build capacity, many authorities will struggle to move beyond firefighting.
As Joe Fyans put it, "What we need to drive improvements is to create a bit of headroom. People want to be doing stuff that makes the local area look nice. They want to fix up the high street."
Evaluating Success: Beyond GDP
Traditional metrics like GDP and Real Household Disposable Income offer limited insight into the quality of growth. The report advocates for outcomes-based frameworks like the Local Government Outcomes Framework (LGOF) and Integrated Settlements Outcomes Frameworks (ISOFs), which focus on inclusive, sustainable growth.
But measuring success in local government is more than just tracking economic indicators. It’s about understanding whether interventions are improving lives, empowering communities, and building resilience. The UK Shared Prosperity Fund offers a model for evaluation that goes beyond performance monitoring it focuses on learning, evidence, and long-term impact. The report suggests harmonising LGOF and ISOFs into a single, tiered outcomes framework. This would allow councils and strategic authorities to align their efforts, share best practice, and evaluate success in a way that reflects the complexity of place. It also proposes giving neighbourhood governance units a role in scrutiny acting as citizen juries to assess whether growth is truly inclusive.
Final Reflections
Local government stands at a crossroads. The tools for transformation are emerging strategic authorities, digital integration, PPPs, and outcomes frameworks. But without the capacity to deliver, the wave may crash before it lifts us.
As Matthew Masters concluded on the podcast: "Our house is on fire, and we’re being asked what subscription we want for our TV."
So here’s the question: In a system built on short-term survival, how do we create the space for long-term vision?
