Risky business? Analysing the challenges and opportunities of Brexit on English local government

ABSTRACT

Brexit is proving epochal in its impacts on Britain. Work exploring Brexit’s impact upon the structure, responsibilities and future plans of English local government is critical for anumber of reasons, from the sheer preponderance of legislation fundamentally altered in the context of the European Union Withdrawal Act of 2018, to changes in regional funding streams and alteration to the governance of local authorities. Based on the original research undertaken between 2015 and 2018 in South East England and the county of Kent, this article contributes to the body of research exploring Brexit’s impact on local government. To do so, it draws on acombination of stakeholder interviews, in-house analysis, regional Brexit impact assessment reports, evidence given in 2017 to the Housing, Communities and Local Government Committee, and the Committee’s final report of April2019.

KEYWORDS:

• Brexit
• local government
• South East England
• Kent
• EU legislation and EU budget
• devolution

1. Introduction

Brexit will prove epochal in its impacts on Britain. While trade, customs and regulations dominated the 2020 UK-EU negotiations, the changes to local government in England, while less publicised, will be equally important for a variety of reasons.¹ First, the sheer preponderance of legislation that local government enacts will be fundamentally altered in the context of the European Union Withdrawal Act of 2018, with the initial return of laws to Westminster. Second, issues connecting local government in England to the EU will undergo radical changes, from shifting local labour forces and skills training to regional strategies and funding streams for infrastructure. Third, the prospect of enhanced devolutionary powers by which local authorities could enact various changes in local governance, arising from pledges made during the 2016 UK-EU Referendum and the 2019 General Election. These and many other issues represent both losses and opportunities for local authorities.

Recent local government scholarship has begun to identify behavioural patterns in which Brexit represents a spectrum of externally derived risks and internal opportunities for local authorities in terms of their relations with European and national government, and local communities (LGA 2018; Billing, McCann, and Ortega-Argilés 2019; ; Liddle and Shutt 2019). Universities have a particular role to play in this regard. Supported by 2015 Erasmus+ funding exploring post-referendum challenges, and 2018 funding from various South East England local authorities, the research structure behind this article was designed to explore both the material impact of Brexit on Kent and the wider region, and the specific challenges facing local authorities preparing for Brexit. The resulting output draws on a range of highly original data gathered from intensive work with local government decision-makers throughout South East England between 2015 and 2018, assessing the material and perceived impact of Brexit upon local government from the perspective of local decision-makers. During this period – itself characterised by enormous national upheaval – three clear issues dominated local decision-making: Brexit’s impact the sources and application of post-Brexit legislation; on access to future funds; and devolutionary alterations to policy-making power. The article treats these three areas as discrete case studies, organising and analysing the range of views elicited from decision-makers on the basis of the above-mentioned three-phase chronology.

In doing so, the article contributes originally to the canon of English local governance in a trinity of ways. First, the findings themselves are contextualised within recent local government literature, whose overarching message is that ‘place-based dimensions of government policy are only weakly developed in comparison with sectoral interests’, thereby shedding light on the emerging policy opportunities for local government in their response to Brexit (Billing, McCann, and Ortega-Argilés 2019, 741; Shaw in Liddle and Shutt 2019). Second, obtaining primary data geographically specific to South East England, contemporary with the 2015–2018 Brexit time frame, allows for a robust analysis of the constitutive and causal links between national Brexit narratives and local government decision-making within the identified three phases. Further originality is obtained by a methodology that incorporates a Lowian typology to frame local authority interviewees' explanations of Brexit impacts as either explicit risks or available opportunities within three specific policy categories. This produces a more rigorous understanding of how localised decision making utilised an implicit ‘risk-opportunities’ spectrum as a consequence of their emerging views on Brexit, rather than a precursor to them (Heckathorn and Maser 1990, 1102).

2. Research approach

As outlined in the online appendix, the evidence for this article is drawn from seventeen group meetings, seventeen semi-structured interviews and thirty-five structured interviews conducted with a wide variety of individuals across Kent and the South East between 2015 and 2018, including businesses, national and regional cross-sectoral representatives, elected officials (both national and local), civil servants, trade body organisations and academics. At county level, interviews were conducted with twenty five local government officers at Kent County Council (KCC) drawn from the Directorates of Economic Development; Environment, Planning and Enforcement; Highways, Transportation and Waste; and Strategy, Policy, Relationships and Corporate Assurance, in addition to further twelve elected councilors. District and Borough engagement included regular interactions with twenty elected councilors and further twenty local government officers drawn from Thanet District Council, Sevenoaks District Council, Maidstone Borough Council and Canterbury City Council. Regional interviewees included ten South East Local Enterprise Partnership (SELEP) representatives drawn evenly from SELEP’s Strategic Board, Accountability Board, and Investment Panel, and a further ten from various federated boards (e.g., the Kent and Medway Economic Partnership). At the national level, interviews were conducted with a small number of Local Government Association (LGA) representatives.

To avoid the dominance of a particular viewpoint, and potential ‘lobbying’ of a particular perspective, both anonymity and equanimity in terms of representativeness were strictly adhered to. Individuals and groups alike were requested to speak purely in their capacity as authorities, regional decision-makers and national representatives on the merits and demerits of Brexit’s immediate impact on legislation, funding and devolution, rather than from an identifiably personal perspective. While such safeguards operated reasonably well, viewpoints were arguably starkly divided from the outset, and remained widely cast throughout 2015–18.

The clearest finding was that while Kent-based views diverged clearly over the pros and cons of Brexit across all three categories, both the nuanced grasp of policy detail, and post-2020 strategic planning exhibited by local interviewees was generally at variance with regional viewpoints and those at national level. For example, individuals giving evidence to the Housing, Communities and Local Government Select Committee generally demonstrated a more granular and long-term approach to Kent-based issues and the wider South East than some local authorities during this time period. The second clear trend was the majority of district and borough councilors who identified a range of ‘Brexit positives’ in the areas of legislation, funding and governance, while county-level officers and national representatives generally expressed greater caution, and tended to identify Brexit in negative terms, identifying impacts largely as risks. Regional SELEP representatives were equally divided between Brexit’s pros and cons. Concerns were almost always material and short term in nature, including particular anxiety over the disruptive impact of a no-deal Brexit on Kent’s infrastructure arising from protracted congestion at the Port of Dover and the Eurotunnel in Folkestone as well as the disappearance of EU funding. There was also notable frustration at the perceived lack of interest or engagement by national government in specifically addressing local concerns (the exception being work undertaken by the Border Delivery Group).

As outlined below and illustrated in Table 1, the article’s originality therefore lies in analysing the three discrete phases between 2015 and 2018 by which attitudes to changes in EU legislation, EU funding and devolutionary options together established the ‘risk-opportunity’ spectrum routinely utilised by the majority of local decision-makers in South East England regarding policy choices to prepare for Brexit. During the first of these three phases (2015–2016), covering the period preceding and immediately following the EU Referendum, the data strongly suggest that local authorities were deeply uncertain about the sheer scope of Brexit’s changes to local government, with only a modest grasp of EU policy structures and legislation. Prime Minister May’s ‘Lancaster House’ speech (17 January 2017) initiated a second phase by gradually clarifying the scale of EU-UK legal, financial and regulatory decoupling. The data suggest that while some local authorities remained imprecise during this period regarding their specific knowledge of EU policies, most demonstrated increased awareness of potential policy changes in terms of general shifts to or away from given areas, consistent with Lowi’s four-fold typology of regulatory, distributive, redistributive and constituent policy categories. From late 2017 until late 2018 (from the completion of Phase One of the Brexit negotiations, followed by the tabling and withdrawal of Prime Minister May’s Brexit deal), local government decision-making then entered a third phase, comprising stark and embedded pro and anti-Brexit viewpoints as the preferred frame of reference for the host of impending decisions. This consequently allowed decision-makers to conceptualise Brexit-related changes as either ‘basic’ or more ‘significant’ opportunities, or alternatively, ‘basic’ or ‘significant’ risks. As outlined below and in Table 1, this range is subsequently consolidated into a basic risk-opportunities spectrum routinely drawn upon by local decision-makers in interviews in framing their perception of Brexit’s various impacts on both local government and the region.

Table 1. Local government risk-opportunity Brexit spectrum

	Phase One 2015–16: EU referendum and immediate aftermath	Phase Two 2017: Lancaster House Speech and completition of Phase One Brexit talks	Phase Three Late 2017–2018: Completion of Phase One of the Brexit negotiations; tabling and withdrawal of Prime Minister May’s Brexit deal
EU Legislation	Opportunity To create, enhance and deliver a domestic facing bidding process for services, in particular in regard to procurements, that widened opportunities available to local business and commerce.	Opportunity Recognition of ability to go further in environmental policy, including standards, projects and deliverability.	Opportunity Frontline counties like Kent to be at the forefront of a wholly new relationship with the EU, possibly benefiting from enhanced powers.
	Risk Frustration at extent of EU legislation influencing local government and lack of procedural and substantive clarity regarding its repatriation.	Risk The significant burden on both business and local government in recrafting a post-Brexit relationship with EU partners.	Risk The regulatory impact of the new trade relationship resulting in delays at pressure points like the Port of Dover and the material impact on Kent and South East England.
EU Funding	Opportunity Possibility for Local Government to continue to receive EU funding dependent on future relationship.	Opportunity The ability to replicate existing collaborative co-funding relationship with counterparts across the EU.	Opportunity A strong, domestic funding regime for local government prioritising local needs vs. regional ambitions and EU funding strictures.
	Risk Apprehension over the absence of future funds and the impact that this could have on local government finances.	Risk The creation of a funding vacuum at a time of perilous local government finances due to austerity and costly preparations for Brexit.	Risk The impact of a ‘Brexit shock’ to the national finances and delays in creating a domestic alternative could impact local government finances.
Devolution and Governance	Opportunity Possibility for some devolved powers, dependent on future relationship with the EU and desire from Westminster.	Opportunity Devolved powers that allow for more nimble policies dependent on local needs and the championing of more local government.	Opportunity Pledges by both the UK Government and key Brexit officials, including a White Paper on devolution, for increased powers at a local level.
	Risk The loss of the ability to influence legislation in the EU by way of local democratic forums, when compared to influencing Westminster originating legislation.	Risk Returning powers remain centralised, with substantive decision-making retained by Westminster rather than devolved to local government.	Risk Growing unease that any post-Brexit powers at local government level would be limited, coupled with the loss of representation at key UK and EU democratic forums.

The third phase saw two simultaneous outcomes. First, increasing bifurcation of local views between the risks and opportunities of Brexit upon local government. Second, the rearticulation of key Kent and South East-based views at the national level during the 2017–19 Brexit and Local Government Inquiry by the Housing, Communities and Local Government Committee, and in the Committee’s final report (HCLGC 2019a), representing more detailed and strategic appraisals than generally produced in the 2015–18 interviews. To capture these variables, the methodology utilises policy framing to categorise interviewees’ specific views within the three-phase/three category framework (Quattrone and Tversky 1988), and Lowi’s typology in order to draw out the finer details of how changes to local government would impact discrete policy areas.

2.1. Conceptual foundations

Assessing Brexit perceptions by local decision-makers requires a workable conceptual foundation, the most appropriate of which is public policy analysis (PPA). PPA remains a progressive, if somewhat unwieldy area by which to explain the decisions of various policy actors, policy types and policy stages. Each of these areas represents a self-contained canon of scholarly work, providing a helpful interface for analysing local governments’ various approaches to the challenges of Brexit (Dunn 2017; Weimar and Vining 2017; Carlson 2011; Mackie 2010). While research applying this PPA trinity to the impact of Brexit and local government represents an exciting area of future research, the central-local dynamics of Brexit are perhaps best served via inter-related policy typologies as first set out by Lowi (Lowi 1972; Ripley and Franklin 1982; Hill and Varone 2017). To illustrate the argument that ‘policy may determine politics’, Lowi divided policies issues into four final categories (1972, 298).

First, regulatory policies which involve social costs and benefits, with organised groups on either side, dealing for example with social safety and civil conduct. Regulations, along with other ‘primary rule’ tools are geared to promote socio-economic order, underwriting the fabric of citizenry and the promulgation of public and private enterprise. Fine-grained socio-economic progress however rests on both ‘secondary rule’ privileges accorded via distributive policies enabling policy power and patronage exercised via contracts, grants and subsidies, and retributive policies reducing structural inequalities (arising from incomplete regulations or asymmetrical distributive policies) in economic, social and more recently environmental arenas via further rules. Lastly are constituent policies, establishing and impacting the composition of a given government organisation or structure at national or local level , including devolution. In capturing the majority of socio-economic inputs and outputs within a given contemporary political unit, Lowi’s four categories provide a sufficiently workable framework by which the benefits and challenges of a major change like Brexit can be measured.

Within a climate in which a host of models comparing Brexit’s various impacts was readily available to decision-makers (Clarke, Serwicka, and Winters 2017), the majority of interviewees framed their views of Brexit on a spectrum that ranged from significant risks at worst, to significant opportunities at best. As exemplified in the three case studies below however, this framing can be further disaggregated against Lowi’s categories to produce a far clearer sense of where in policy terms Brexit’s risks and opportunities relative to local government were located. ‘Basic’ Brexit risks (as opposed to significant) were largely associated with regulatory policies in which local government was perceived as weakened both in terms of its overall obligations (including changes to the provision of social care, procurement and antitrust, etc.), and in its ability to carry out more general public duties. Further basic risks were identified with the erosion of constituent policies enabling traditional forms of regional representation in EU, as well as the potential reduction of power at district and borough level. ‘Significant risks’ were connected overwhelmingly with retributive policies where the overall demands of recalibrating reduced post-Brexit budgets would pose serious short-term challenges (including budget, council tax, business rates, etc.), with little financial autonomy envisaged for the medium and long term.

‘Basic’ Brexit opportunities were understood in terms of distributive policies representing increased control over a range of legal alterations (e.g., procurement, waste management, partnerships) particularly in areas where local authorities felt they possessed a degree of entrepreneurship. ‘Significant opportunites’ meanwhile were identified in constituent policies enabling long-promised wholesale structural changes in central-local government power structures.

In approaching Brexit’s impact on local government, Lowi’s typology brings enhanced analytical rigour to the morass of repatriated policies from the EU, and the consequences of reworking them locally. While other PPA alternatives exist to shed light on the complex inter-related policy dynamics of local government (Mackie 2010, 358) Lowian typologies permit a more convincing in-depth classification of the four overarching changes identified by local government decision-makers as most fundamental in understanding changes to place-based governance in England.

2.2. Local government and place-based dynamics

The UK has a long history as a highly centralised state with only limited and conditional decentralisation (Pike in Gray and Barford 2018, 545; Kerley, Liddle, and Dunning 2018; Roberts 2020). Since the 1980s, local authorities in England have faced profound challenges. The greatest challenge for local government arose in 2010 in the immediate aftermath of the Global Recession. The 2010–15 coalition government committed to deep public spending cuts aimed at reversing Britain’s largest peacetime deficit (Lowndes and Gardner 2016, 359). Local authorities bore the brunt of these measures, with budgets reduced by approximately one-third, and the Department for Communities and Local Government losing half its budget (Gray and Barford 2018, 542; John 2014). Expanded responsibilities combined with austerity-sized budgets had a devastating local impact. Between 2010 and 2014, local authorities in the three most deprived quantiles² lost 21% of their spending power; those in the least deprived quantiles lost 16% (Bailey et al 2015, 574–75). Described by the Local Government Association as ‘the worst in living memory’, austerity cuts drove some local authorities like Northamptonshire County Council to declare themselves bankrupt, their services reduced to the legal minimum (Gray and Barford 2018, 571). Austerity budgets further impacted upon socio-economic inequality more widely, producing what Lowndes and Gardner refer to as ‘a distinctive geography of austerity’ (2016, 360–61).

After the 2016 Referendum, the UK government returned to the theme of localism, establishing a workable place-based approach to government policy based on financial support to poorer regions and enhanced local decision-making. Referenced clearly in key government documents including the 2017 Industrial Strategy (HMG 2017) and the 2018 Housing, Communities and Local Government report, the government’s goal is ‘to drive growth at a strategic economic geography, through place-based and locally controlled policies and funds’ (24), thereby ‘creating quality places’ (HMG 2018, 12).

Within a few weeks of the referendum, responses from local government likewise indicated the intrinsically place-based nature designated by key local authorities as their response to Brexit. Some took a proactive attitude. The leader of Cornwall Council for instance wrote to the European Commission the day after the referendum, demanding that Cornwall’s EU funding be guaranteed (BBC 2016). Others moved swiftly to argue for a place-based focus. Southeastern Councils for example defended the need ‘to work with Government to help secure the best possible future for Britain outside the European Union and to make the case for continued investment in the South East’ (Heslop 2017).

Local authorities in northern England similarly showcased the government’s own ‘Northern Powerhouse’ programme as a way of addressing both domestic requirements and the anticipated impacts of Brexit in what ultimately became a core governmental message following the 2019 General Election (Walker 2019; Headlam in Liddle and Shutt 2019). Some have since argued that the north-south divide laid the groundwork for future ‘blame games’ should target regional improvements prove unsuccessful (Bailey and Wood 2017, 982; Cabras in Liddle and Shutt, 2020). For others, Brexit raised the prospect of ‘refining funding rules in areas like state aid, and VAT to ensure that programme priorities, such as the new UK Shared Prosperity Fund can respond more flexibly to local and regional needs’ (North East Brexit Group 2018, 8). In addition to place-based responses, issues of regional collaboration and repatriated funds underwriting local infrastructure were raised. Local authorities referred repeatedly to the routinised use of EU funds to facilitate direct region-to-region trade links, as well as investment networks between themselves and their European counterparts.

Place-based scholarship has largely kept pace with these trends. Nurse and Fulton for example provide insights on Brexit’s impact to EU funding via European Structural and Investment Funds (ESIF), including the delivery of the Northern Powerhouse programme (2017).³ Olivas Osuna et al (2019). explored how ‘EU-funded initiatives, such as Boost Growth for Lancashire, and Lancashire Skills and Employment Hub provide assistance to SMEs and promote social inclusion and sustainable employment’ (2019, 15) while recent work by Liddle and Shutt explores changes to public sector agencies in shaping the post-Brexit northern economy (2019). In the canon of place-based analysis, Kent and the South East play a unique role within specific forms of European engagement. Initial work undertaken by Church and Reid (1999) mapping the cross-border relationships between local authorities in South East England and their European counterparts was recently revisited by Huggins (2018) illustrating both the high degree of transborder commitment, and the standout role of Kent as the single most active county in pursuing substantial cross-border relationships.

Views remain divided as to whether regions that are economically stronger or weaker will be harder hit post-2020, depending on their level of integration or disassociation with European economies and supply chains (Carter 2018; Billing, McCann, and Ortega-Argilés 2019). What the findings make clear however is the extent to which local authorities made explicit use of ‘place-based uniqueness’ to frame their perceptions of Brexit’s changes to EU legislation, funding and devolution options at the local level. As argued by Carter:

If Brexit leads to the Government further centralising power at the national level, the already difficult issue of tweaking national policies to meet the needs of increasingly diverse cities will only get worse. On the other hand, if Brexit leads to the wholesale devolution of policies, allowing local politicians much more control over the issues that affect the daily lives of the people they represent, then bridging the stark political and economic divides within the country might be possible (2018, 11).

From labour to legislation, from budgets to long-term infrastructure, the political economy of ‘place-based issues’ have since 2015 emerged as a key means, and devolution a possible end to profound transformations of English local government (Lemprière and Lowndes 2019; Townsend 2019). As the following three appraisals reveal, the panoply of changes necessitated by Brexit was seized upon by some local authorities as an opportunity to refashion themselves as discrete ‘constituencies articulating a post-EU regional policy’ in legislative and budgetary terms, even opening the door to enhanced devolution. For others however, the scale of the change was perceived as simply overwhelming, with outcomes both unmanageable and unwelcome (Carter 2018, 12).

3. EU Legislation

A central message within the Brexit discourse was enhancing Britain’s ability to establish and enforce more of its own legislation beyond the purview of EU law. Observations generated in the first phase (2015–2016) highlighted the broadly beleaguered state of local government decision-makers in grasping ‘the sheer range of EU legislation conceivably affected by Brexit’ before the referendum (2015, 1A) and especially afterwards (2016, 2 C). Semi-structured interviews suggested deep uncertainty as to how ‘the Working Time Directive, procurement and waste disposal would impact UK legislation and changes to the governing scope of local councils’ (2016, 5E) generating ‘only a general sense of the wholesale legislative impact on local needs’ (2017, 6A), with decision-makers conceding to ‘simply not being knowledgeable enough about EU law and European policies to map out decent options’ at that stage (2018 12/35). In terms of the legislative implications of Brexit on local government, while the second, post-‘red lines’ phase clarified some aspects, decision-makers continued to highlight their ‘abiding difficulties in grasping the practical implications of the UK’s altered position on regulations, customs and trade status with the EU’ (2017, 3B), and the ‘short and long-term effect on our ability to provide public services’ (2017, 6B).

Framing this feedback against the Lowian typology illustrates how decision-makers began to conceptualise Brexit’s legislative changes within discrete policy categories. In terms of policy redistribution, basic risks were associated from the outset with regulatory policies, in which local government was perceived as weakened both in its overall obligations (procurement and antitrust, etc.) and its ability to carry out mandated public duties. Basic opportunities however were largely understood in terms of distributive policies where increased control over a range of legal alterations (e.g., Procurement, waste management, partnerships) encouraged local authorities to explore new forms of entrepreneurship. Perceptions ranged from ‘opportunities to recraft much of our economic, social and distributive structures’ (2017, 3A) to concerns that the sheer challenge of remaking distributive and redistributive policies including ‘procurement, social care and infrastructure planning’ could produce ‘short-term economic damage or even long-term financial impairment’ (2017, 3B).

Some interviewees argued the need ‘to determine our own procurement policy for goods and services, reducing the burden of EU-wide advertising, and widening the options for local services and suppliers’, with transformations to legislation regarded by many as either a source of budgetary savings, or the foundation for enhanced local governance (2016, 2 C). In other areas, altered regulatory policies were understood to yield ‘enhanced opportunities for greater local [government] control over licensing, food and product safety, consumer rights and service regulations alongside business rates, investment, and even VAT’ (2017, 3 C). Semi-structured interviews were less sanguine, echoing the thrust of the Parliamentary evidence given by the East of England European Partnership:

“It is almost certain that a separate, domestic, regime will need to be established following Brexit. This, therefore, introduces the possibility of exporters (and importers) having to comply with two systems of compliance on standards, verification methods, etc. This would not only introduce additional operational and transactional costs for the private-sector but also for the local authorities charged with local regulatory enforcement” (2017, 3).

Stakeholder meetings continued this theme, with suggestions that legislative shifts could create a regulatory backlash with ‘ironically more stringent regulations [to] allow local businesses and local government to adapt, but causing red tape in the process and restricting the UK’s ability to grow post-Brexit’ (2017, 3A). During the third phase, the opportunities and risks of Brexit in legislative terms became more clearly identified as distinctly positive or negative. Kent and East Sussex decision-makers for instance identified ‘clear positives within the complex range of environmental legislation’; SELEP’s insights were of ‘dramatically improving our say in local standards for air, water, road congestion, waste, storage and recycling targets’ (2017, 3D).

Viewpoints shifted from positive to negative in this final phase when considering the full ramifications of the Repeal Bill, with dramatic legislative changes representing ‘a potentially disjointed post-Brexit UK strategy wholly inappropriate for local levels’, compounded by ‘doubling up the current top-heavy regulatory regimes for standards, inspection methods’ (2018 22/35).

Kent County Council interviewees also understood positive-negative dynamics in largely material terms, with increasing references to Kent as a ‘frontline county’ in tackling Brexit, based on successfully or unsuccessfully managing new regulatory and customs checks at the ports of Dover and Folkestone. They further referred more frequently to Parliamentary evidence, including that given by CEDOS in 2017, which argued that ‘the impact of customs delays could be significant not only on the operation of the ferries but could also have a knock-on effect on Kent the roads outside the port’ (CEDOS, 5). By 2018, Kent and South East England interviewees alike referred more frequently to the logistical impacts of customs and regulatory changes, employing a clearer use of figures, including the 4.6 million HGVs travelling the county each year, with approximately 16,000 per day through the Port of Dover and Channel Tunnel (CEFEUS 2018, 32). Clarity had its limits however; as of late 2018, both Kent County Council and Port of Dover officials still remained unclear on the precise number of HGVs requiring customs processing, with one interviewee suggesting that ‘despite some long-term benefits, there may be dire consequences in and beyond Kent [arising] from immediate transport, health, and food scarcity issues, to businesses relocating out of the county, reducing business rates and local economies’ (2018, 29/35).

Regulatory policy is the most applicable Lowian category by which to understand the supervening shifts to large bodies of legislation from within an EU framework to a largely UK one. As this section has illustrated, local decision-makers envisaged both ‘Brexit positives’ associated with reworking key policies like procurement and waste management to benefit the authority of local business and local government alike, and the risks of more stringent regulations in areas like social care and investment proving ultimately more restrictive for post-Brexit local growth.

Post-2018 developments have subsequently shifted the categorical focus on areas of EU legislation to broader concerns over customs and tariffs, contextualised by the 2019 furore over the New Protocol on Ireland/Northern Ireland, and the 2020 impasse between market access and regulatory alignment between the UK and the EU. Concluding observations in late 2018 indicated that if ‘parliamentary vicissitudes continue for much longer, local government will have even less sense of which place-based interests to preserve in terms of legal alterations’ (2018, 35/35). Kent in particular became something of a microcosm for UK-Ireland border arguments, conflating customs, tariffs, immigration and security challenges with issues of port access at Dover and the Folkestone. An observation by a long-serving Kent County Council employee put the scope of envisaged legislative changes in perspective: ‘I would reckon about 40% of all EU rules are British, so the impact of not being able to tweak the damn thing every single time is difficult to judge … I just feel that we’ve never admitted to just how much EU legislation we in Britain are actually responsible for’ (2017, 7 C). As predicted by many local decision-makers, the various custom-specific issues impacting the Port of Dover and Kent in late 2020, including the hasty requirement for a Kent Access Permit (KAP) for HGV drivers entering Kent from 1 January 2021 (further complicated by Covid-19 border restrictions) indicate that the 2020 transition period was not used expeditiously to prepare for the local challenges of Brexit.

3.1 EU funding

Prior to 2021, local authorities in England received a complex tranche of funding from the EU, including European Structural and Investment Funds (ESIF) co-financing non-infrastructure schemes within local enterprise partnership (LEP) boundaries to assist less developed regions and reduce regional disparities.⁴ The UK received €41.5 billion ESI funds within the EU’s 2014–2020 budget in addition to Regional Funds including European Territorial Co-operation co-financing based on transnational partnerships, alongside direct funding from the European Commission for major consortium-driven higher education/industry research.⁵ Local government views generated in the first pre/post-referendum stage took two forms. First, distinct confusion over the strategic nature of the various funding streams, with decision-makers ‘frequently struggling to fully understand what we’d actually received from the EU in the past few years in funding terms’ (2016, 2A). Second, anxieties over whether EU funding would ‘likely be excluded from Brexit and remain untouched’ or vanish altogether (2016, 5A).

From 2017, the second post-Lancaster speech phase yielded greater clarity as to how EU funding changes represented alterations to both distributive and redistributive Lowian policy categories in three possible forms. First, the overall question of a funding vacuum, raising the prospect of ‘how to deliver local projects we otherwise would not have been able to afford absent EU funding’ in the short term (2017, 6B). Second, how to replicate the inherently collaborative nature of these projects, many ‘deeply woven into the fabric of our shared infrastructure here in the South East, providing significant “added value” beyond funding’ (ibid). Lastly, the likelihood of new UK-based post-Brexit funding reliably reproducing ‘regional and cross-national connectivity with visible, positive results’ (2018, 19/35).

Council strategies confronting deprivation were described as large, seven-year projects with ‘a wealth of fine detail on our diverse and varied local economies, much of which relies directly on broad funding via European Structural Funds, as well as sector-specific regeneration from ETC projects including Interreg’ (2018, 7A). Translating the perceived loss of funding and collaboration into distributive and redistributive policy areas subsequently elicited views of both short-term loss and, to a lesser extent, long-term regrowth ‘across infrastructure, connectivity and research areas’ (2017, 3D). Stakeholder meetings largely supported the views of the East of England partnership that ‘the most direct, and immediately visible, risk for local authorities in the East of England, is a loss of EU funding post-Brexit’, arguing that the ‘overall volume of funding’ was less important than ‘the collaborative character of EU funding programmes which local authorities in the East of England have found particularly beneficial’ (East of England European Partnership 2017, 2). South East England stakeholder responses highlighted similar concerns, including tackling areas of chronic poverty and unemployment by ‘removing bespoke EU funding just at a time when we will need it the most’ (2017, 6 F). Further second-phase data suggested that the UK government’s own Shared Prosperity Fund ‘would have neither the carrying capacity to replace broad structure nor locale-driven regeneration requirements’ (2017, 3E). Semi-structured interviewees argued the need ‘to shift from EU to local and regional funding sources’ and exploring ‘domestic financing to permit co-financing with European regions, particularly on the basis of “like-for-like” socio-economic indicators, and existing research and investment links’ (2017, 6D).

The final phase revealed increasingly entrenched pro and anti-Brexit viewpoints, framed in terms of clear opportunities and outright risks. Opportunities were generally explained in budgetary terms, with meeting participants arguing that Britain would ‘no longer be required to contribute to the EU Budget post-Brexit, allowing major chunks of funding to be freed up’ (2018, 4A) meaning that ‘funding policy will have a strongly domestic flavour, driving place-based priorities more strongly’ (ibid). Others suggested that ‘the regeneration funding we relied on from Brussels could be better used to create thousands of new UK jobs, roll out broadband and build new roads and bridges’ (2018, 4 C). Indeed, retailoring domestic funding to support enhanced localism remained the leitmotif of ‘opportunity-oriented’ viewpoints regarding changes to EU funding for local authorities, producing suggestions for new ‘place-based requirements enhancing our water quality, agriculture, health and social care, infrastructure and the knowledge economy’ (2018, 4D). Observations from the final structured interview of September 2018 however accepted that such opportunities ‘could take a while to rebuild after the initial change enacted by the shock of Brexit’ (2018, 35/35).

Risks viewed as outright threats to local government also emerged more clearly in this final phase. Interviewees supported CEDOS’ view that ‘EU Structural and Investment Funds are a major source of funding used by local authorities for economic development’ (CEDOS 2017, 2), the absence of which ‘could have a serious impact on people who are “just about managing” (estimated as households earning less than £20,000 per year)’ (CIOS 2017, 5). As one decision-maker suggested, the disappearance of ‘specifically collaborative regional projects with EU partners’ represented a ‘major risk in terms of Brexit’s impact’ (2018, 4E), with another arguing that the loss of EU funding constituted a ‘major negative for English local governments everywhere of Brexit (2017, 6 F).

In terms of funding, both Lowi’s distributive and redistributive policy categories provide helpful methods in framing the positives and negatives of Brexit’s impact at local level. From the benefits of the initial re-distribution of spending from EU to UK sources to potential distributive losses arising from a net shrinkage to the overall available budget, the associated range of contracts, grants and subsidies operated as something of a double-edged sword. It provided serious leverage in recrafting local asymmetries, but with the associated risk of guaranteeing little place-based impact in terms of net local spending.

The 2020 Spending Review indicates that the UK Shared Prosperity Fund retains place-based dimensions, targeting deprived areas with a budget commitment commensurate to EU funding. Much material planning however has changed radically as a result of the 2020/21 Covid-19 pandemic, placing local authorities at the forefront of an unparalleled national crisis, with revenues declining while costs both traditional (social care) and new (protective equipment, cleaning) increase. By late 2020, the national government had released more than £10 billion in the form of local authority grant payments⁶ to enable local authorities to survive both the lockdown and its consequences, though the Local Government Association was clear that much more would be needed (LGA 2020). How local authorities will manage post-austerity recovery, Covid-19 rescue, and Brexit changes is perhaps the greatest challenge of all.

3.2 Devolution and post-Brexit governance

The practicalities of recrafting the governance of Britain are something of a paradox. Brexit represents a convergence of narratives which could militate simultaneously in favour of either further centralisation, or enhanced devolution. The question is from where? Divergence from the EU alone – as per the national narrative – or dual divergence from the EU and the national government to revitalise local authorities? As Travers argues, local governments established long ago that ‘influencing that kind of legislation is much easier in Brussels than in Whitehall’, and that Brussels, being ‘a much more open bureaucracy’ has historically worked more consultatively than national capitals in formulating directives directly impacting on regions (Travers 2016, 6 and, 16). However, arguments over enhanced or diminished UK sovereignty post-Brexit have failed to shed light on the loss (and consequences) of various democratic forums for local authorities across the UK (including membership of the EU Committee of the Regions) or identify a reworked formula for central-local policy redistribution. Indeed, the first pre/post-referendum phase highlighted only basic pro/anti-Brexit perspectives on recrafting local government, with viewpoints containing both ‘deep misgivings over the eventual and permanent Westminster power-grab’ and ‘the challenge of shifting key patterns of authority to local level’ (2016, 2A).

The second mid-2017 phase produced greater clarity regarding the potential redistribution of Brussels-Westminster-local authority structures, including how regulatory and especially constituent policy categories could emerge more robustly. The most ambitious devolutionary changes envisaged a parallel approach: preventing renationalisation of London, while retaining strategic bilateral toeholds with European partners and lobbying for enhanced local powers (2017, 3 C). Semi-structured interviews yielded particularly robust views, suggesting that ‘Brexit should be a springboard to championing local government, not an excuse to downgrade it; we ought to fight tooth and nail for an actual roadmap towards enhanced devolution from a structural, legislative and budgetary perspective, starting with business rates’ (2017, 6E). SELEP representatives referred explicitly to evidence from Staffordshire County Council who argued that decentralisation ‘will give the county the tools they need to drive growth nationally, and make the best out of the opportunities Brexit affords’ (2017, 3; 2017, 6 F). The overarching rationale within this third case study is therefore that of subsidiarity-led governance in establishing the most appropriate level of authority to oversee post-Brexit reconstruction. Decision-makers spoke frequently of balancing ‘the challenge of repatriating legislation, and thus power’ to Britain concomitant with ‘opportunities to develop a new legal base for local government’ (2017, 6E). Others identified the need to bring local authorities firmly into the reconstructed post-Brexit landscape, ‘allowing us to play a key part in those major forms of readjustment, both procedural and substantive’ (2018, 7A). At the national level, the ‘devolutionised business rates’ option emerged as a key ‘Brexit bonus’ for local government, with CEDOS arguing that:

“Devolution, including the opportunity for fiscal devolution, with the appropriate powers, freedoms, flexibilities and resources, will not only enable local authorities and their partners to tackle the Brexit related risks and opportunities of their local areas, it will also help to take some of the pressure off Government Departments, which are inevitably pre-occupied with Brexit” (2017, 11).

Sceptical views however emphasised to the unlikeliness of ‘Westminster eschewing hard-won powers in the teeth of public referendum’ and transforming ‘the democratic and legislative authority of local authorities from within either a formerly European or British landscape to positively reframe “local logics”’ (2019, 7A). The second phase promoted clearer views regarding the most suitable forum by which to ensure the democratic accountability of such changes, including “a vastly expanded cross-party Local Government Association, new associateships with devolved administration in the UK, and renewed relations with European networks, including the Committee of the Regions, Eurocities, the Assembly of European Regions, and European Regions Research and Innovations Network seen as most vital (2017, 3E). Framed within the context of Lowian policy categories, local government changes were either regarded as key to augmenting – or in some cases reducing – the authority underwriting regulatory policies, and the form of constituent policies representing the electoral makeup of councils, borough and districts in England.

The final 2017 to late 2018 phase produced distinctly pro and anti-Brexit viewpoints regarding the bonuses and problems facing local governments in terms of devolutionary changes. Set against the backdrop of increasing Parliamentary turmoil and a Westminster-Whitehall impasse over the preferred method of achieving Brexit, viewpoints hardened around long-standing demands to ‘hold the government to account on the unpaid debt of devolution’, Brexit-specific pledges to ‘enhance place-based authority’, and promises pursuant to the Government White Paper on devolution by ‘ensuring power sits closer to the people of the UK than ever before’ (2017, 6E).

Opportunities for local government subsequently crystallised around these three areas, with opinions ranging from ‘enhanced opportunities for local government to influence EU-UK dialogue via key ministries’ to ‘enacting locally led resilience strategies and medium-term community and business support’, including the establishment of a Brexit Compliance Officer (2017, 3D and 6D).⁷ Risks of devolutionary options sharpened as the post-Brexit landscape of 2018 appeared increasingly bereft of EU-based forums of representation for local authorities, and the ongoing preoccupation of national government in the parliamentary fracas entailed in passing Brexit legislation. As Lowi’s policy typologies reveal, partial or wholesale changes to existing local government provide a viable structure for framing positives and negatives associated with post-Brexit shifts to new modes of government. From a domestic perspective, adjustment to constituent policies were regarded as essential to newly devolved ‘forms’ of local government and the place-based content that such changes would help promote. In UK-EU terms, devolutionary options suggested both winners and losers. For some, even the benefits of devolution would not compensate for the loss of formal representation of local authorities at domestic or European levels, including the formal advisory role played in developing EU legislation, via the Committee of the Regions, or the consultative role via the European Commission on all legislative proposals having a direct impact on local/regional level. From these perspectives, interviewees argued that Brexit ‘undoes at a stroke the practicalities of subsidiarity, and our statutory right of consultation on legislation proposed in those areas that directly affect us, and our citizens’ (2018, 25/35). Others predicted ‘a marked shift between an EU that has generally been more receptive to local concerns, than Westminster and Whitehall; the latter will likely resist devolutionary attempts, in favour of enhanced centralisation, despite the promises of the White Paper’ (2018, 29/35). Even prior to the impact of Covid, SELEP representatives conceded presciently that ‘devolutionary proposals will likely take a back seat until 2025’, displaced by initial economic downturns, service provider gaps driven by labour drop-offs, shifting regulatory requirements and transport and logistics issues associated with a hard or no-deal Brexit (2018, 14/35; 27/35). Given the potential impact on Kent of short-term Brexit impacts, the likelihood was of ‘more, rather than less national involvement in the county’, resting on wholly centralised guidance, and few if any decentralising strategies (2017, 6 F). Both the anticipated ‘hard Brexit’ outcome in 2021, and enormity of ongoing Covid-19 impacts will likely see this trend continues despite probable changes in the White Paper on devolution post-2020.

4. Conclusion: fillip or foil?

As illustrated, local government in England will inevitably see significant changes in the short term arising from loss of EU funding, transformations in EU legislation and representated forums, as well as medium-term devolutionary changes. Consolidating these views within a three-part phasic approach and drawn against Lowi’s typologies reveals clear distinctions between risks (e.g., authority, budget and regional representation) classified within regulatory, redistributive and constituent policies respectively, and opportunities (e.g., legislative changes and devolutionary changes) categorised as distributive and constituent. Additional conclusions can further be drawn in terms of local government’s strategic responses to the consequences of the 2019 General Election, the UK-EU negotiations of 2020, and post-Covid recovery and the post-Brexit strategies post-2021.

Between 2017 and 2019, evidence was provided to the Housing, Communities and Local Government Committee enquiry by individual, conjoined and associational LGs (HCLGC 2019a). Entitled ‘Brexit and local government’, the committee’s report produced five priorities for urgent action to be completed prior to Brexit (HCLGC 2019a, 3). These include continued mechanisms between national and local government; comprehensive ‘no-deal’ guidance at local level; improved use of Brexit networks to address challenges, including workforce shortages, and increased Ministry leadership regarding ports and funding (HCLGC 2019a, 3–4).⁸ Even if implemented post-2020, these remain arguably as tardy as ‘pre-Brexit’ requirements. This makes doubly difficult the local authorities’ ability to ensure the UK government upholds the ensuing five post-Brexit policy actions, which connect directly to the themes of this article in terms of legislative, budgetary and devolutionary shifts. This second batch of actions requires – among others – the UK Shared Prosperity Fund to ‘match or exceed the equivalent levels of EU funding’, congruent with urgent decisions on major infrastructure projects in light of lost regional and local EIB loans, allocated on the basis of local need. While the anticipated White Paper on devolution may address the Committees demanded that the Government ‘urgently make clear its plans for the further devolution of powers to local authorities post-Brexit’, much remains in terms of identifying how local authorities are to be worked into a ‘post-Brexit domestic policy’, both in terms of altered governance, and via consultation regarding legislation and budgets transfers ‘from the EU back to the UK’ (4–5).

The leitmotifs of the evidence gathered between 2015 and 2018 for this article, and the findings of the Commons’ final report are remarkably similar. Options for wholesale, potentially innovative place-based transformation exists, but require the government and local authorities to work together clearly and reliably on agreed goals. The Commons report however is less sanguine about the loss of EU funding and the national government’s responsibility to replace it, and the connection between repatriated legislation and enhanced devolutionary powers for local authorities. Further research will therefore be required to track the outcome of all ten policy actions, in determining whether Brexit will prove a fillip or a foil for English local authorities.

Disclosure statement

No potential conflict of interest was reported by the authors.

Additional information

Funding

The work reported here was funded by Canterbury Christ Church University, UK, the European Commission Jean Monnet Centre of Excellence and Kent County Council; Canterbury Christ Church University [Faculty Funding]; European Commission [Jean Monnet Centre of Excellence]; Kent County Council [Ad Hoc Funding].

Notes on contributors

Amelia Hadfield

Amelia Hadfield is Professor of European and International Relations, and Head of the Department of Politics at the University of Surrey, UK, as well as Dean International. Her research interests include EU foreign, security and defence policy, as well as EU-UK relations, including the impact of Brexit on UK national and local government.

Christian Turner

Christian Turner is a junior fellow at the Centre for Britain and Europe at the University of Surrey, UK. He has worked extensively on Brexit in recent years as both a researcher and civil servant. His research interests include post-Covid recovery, foreign policy, Brexit, and global governance, including both multilateral organisations and sports governance.

Notes

1. Local government in England represents sub-national authorities in various forms (unitary authorities, county councils, cities, districts, boroughs, parishes, etc.) administering a range of public services in a defined area (e.g. social care, business and housing, waste disposal, etc.

2. Quintiles represent any of five equal groups into which a population can be divided, according to the distribution of a particular variable, e.g. income, age, etc.

3. In total, local government in England has received £8.4 billion between 2014 and 2020 through EU’s Structural, Social and Regional Development Funds.

4. ESIF funds include European Regional Development Fund; European Social Fund; Youth Employement Initiative; European Agricultural Fund for Rural Development.

5. Between 2014–2020, the UK was the second-highest funding recipient from Horizon 2020 (€3 billion) and the third highest recipient of funded Erasmus+ students.

6. https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/914,040/200,901-local-authority-grant-payments.csv/preview.

7. CEFEUS SME and Rural Economy Report, July 2017 in regards to Brexit Compliance Officers.

8. Both written (BRX 013) and oral evidence (HC 493) was submitted to the inquiry, drawing on expertise gathered across four Brexit Impact Assessments, in particular on Labour, and knowledge on the local area, in particular in regards to ports, and challenges to local government.