Reform UK's deputy leader holds news conference and Q&A

Key Concepts

Local Government Financial Crisis: Widespread financial distress in UK councils, with a significant percentage facing bankruptcy within years due to deficits exceeding reserves.
Local Government Pension Schemes (LGPS): Issues of overcharging by a factor of at least five and significant underperformance in LGPS, leading to substantial financial losses for councils.
Actuarial Valuations: Concerns about valuers potentially overvaluing liabilities and undervaluing assets to keep employer contributions high, benefiting asset management firms.
Contract Savings: Identification and securing of significant savings through renegotiation of various council contracts, including waste management and IT.
Property Portfolios: Potential for increased revenue and value through better asset management of council-owned properties.
Special Educational Needs and Disabilities (SEND): A crisis in SEND provision characterized by overdiagnosis, increasing EHCPs, and misallocation of funds, negatively impacting outcomes for children.
Educational Health and Care Plans (EHCPs): Concerns about the proliferation of EHCPs, their annual review costs, and potential misuse for tax avoidance and benefit qualification.
AI and Technology: Potential for AI to improve customer service and streamline processes in local government.
Council Tax: Expectation that council tax increases will generally align with inflation, with final decisions resting with elected councils.
Illegal Migration: A primary concern for voters, with criticism of the government's approach and a belief that Reform UK has set the mainstream debate.
Net Zero Policies: Reform UK's stance against current net zero policies, citing economic risks and job losses.

Summary of Key Points

1. The State of Local Government and Reform's Approach

The speaker begins by framing the current situation as being "12 minutes into a 90-minute match," acknowledging a challenging environment due to previous administrations but asserting progress. They use a football analogy to describe the current state, with a "soggy pitch" and a "wet and soft ball" due to an ineffective referee (establishment). Despite these challenges, the party is "in the lead," having scored 55 points against the opposition's 29. A recent council by-election in Boston secured nearly 66% of the vote, highlighting significant public support.

The core platform of Reform UK's campaign for these elections was "saving money, cutting waste, and identifying major major issues." The speaker candidly states that "one in five of all councils are in extreme financial support," and within four to five years, "almost 50% of councils will be basically bankrupt." This dire situation necessitates "fundamental change." If the current government does not enact reforms, a "reform government after the next general election will urgently bring in major reforms to local government."

2. Local Government Pension Schemes (LGPS) Crisis

A significant issue identified is the "significant overcharging" in Local Government Pension Schemes (LGPS), to a factor of "at least five," coupled with "massive underperformance." The underperformance over the five years to March 2025 is estimated at "2 billion pounds every year for the last 5 years" across councils alone. This is described as the "most significant sum of money" being examined.

Concerns regarding consultants and valuers: There are "genuine concerns" that some valuers are "deliberately overvaluing the future liabilities and undervaluing the future assets" to keep employer contributions unnecessarily high. This practice benefits asset management firms by keeping assets under management and fees higher.

Evidence of potential savings:

One council that adopted a similar policy to Reform UK's plans has "employer contributions now are almost zero."
A well-run council pension fund has achieved fees as low as "four or five basis points," contrasting with the industry norm of "50 basis points or half of 1%."

3. Contract Savings and Financial Efficiency

Reform UK has identified and secured "well over 300 million pounds" in savings so far. These savings are achieved through various means:

Waste Contracts: Renegotiating a waste contract despite officer recommendations led to a "long-term reduction of over 70 million pounds."
Property Deals: Intervention in potentially costly property deals, preventing significant financial losses for councils. For example, advising against a deal that could have cost "30, 40, 50 million quid."
IT Contracts: Renegotiating IT contracts to reduce notice periods from 11 years to "3 to six months."
Potholes: Addressing "136,000 potholes" has had a real impact on reducing council claims.
Road and Park Resurfacing: Significant progress in resurfacing and repatching, with "half a million square meters of roads and parks" addressed.
Charities and Community Interest Companies (CICs): Scrutiny of framework agreements allowing charities and CICs to draw down funds with "almost no accountability, no approval process, no responsibility."
Delegated Powers: Challenging officers who hold "large delegated powers, million pounds plus+ plus," and view councils as secondary.

4. Special Educational Needs and Disabilities (SEND) Crisis

SEND is described as being in "crisis," with an "overdiagnosis of children with neurodiverse issues." Key indicators include:

EHCPs: Educational Health and Care Plans (EHCPs) are "three times the level they were 8 to 10 years ago" and are increasing by "8 to 10% a year" in many councils. The speaker argues this rate of increase is not reflective of children's needs.
Financial Impact: The SEND budget is "10 billion a year and counting and rising," yet "outcomes have got worse."
Misuse of EHCPs:
- VAT Dodging: Middle-class parents are using EHCPs to "save the VAT on independent school fees." Solicitors are employed to file these claims.
- Benefit Qualification: EHCPs qualify individuals for PIP, which in turn provides access to mobility vehicles, insurance, and servicing, while children are still transported by taxi.
Inefficiency in Reviews: Annual EHCP reviews, costing "between 2 and 4,000 each one," are deemed unnecessary. For a council with 9,000 EHCPs, this amounts to "25 to 30 million quid." Experts suggest reviews are only needed "once every key stage."
Taxi Firms: Concerns about taxi firms making significant profits, with one example of a "4.2 million contract" for a firm with only "10 drivers."
Therapists and Psychologists: Educational therapists and psychologists are spending too much time on "reviews and assessments and reports" and not enough on "intervention and the thought and the support and the therapy."

Proposed Solutions:

Legislative Change: Reform UK advocates for changes to legislation.
Cross-Party Trial: Proposes a trial in one or two councils from each party to suspend annual EHCP reviews and disallow taxis for school transport for a year or 18 months.
School Transport Review: A review of the "School Transport Act was 1944" is suggested.
Trusting Teachers: Empowering schools and teachers, devolving responsibility and power to those in the classroom.
Partnership Approach: Moving away from an adversarial relationship between parents, councils, and professionals towards a partnership at the classroom level.

5. Future Opportunities and Economic Outlook

Artificial Intelligence (AI): AI is seen as a tool to "improve customer service" and enable "smarter processes."
Property Portfolios: Billions of pounds of property owned by councils can generate increased revenues and values through "better asset management."
Inflation and Council Tax: Council tax increases are expected to be "give or take the rate of inflation" (around 3.7-3.8%), with final decisions made by elected councils.
Economic Concerns: The country is facing a potential "bust" with no GDP growth, significant borrowing, and market concerns about the government's economic strategy. Reform UK aims to "get this country and this economy growing again."

6. Q&A Session Highlights

Council Tax: Reform UK's stance is that elected councils make the final decisions on council tax, with advice focused on identifying savings. They are not ideologically opposed to council tax increases but aim to keep bills as low as possible through savings.
Home Secretary's Asylum Proposals: While acknowledging the Home Secretary's intentions, the speaker believes her proposals will fail due to a lack of support within her own party and continued membership of the European Convention on Human Rights and the Human Rights Act. Reform UK claims to have "become the mainstream of the debate" on migration.
Second Homes: Individual councils will make their own judgments on issues like council tax on second homes, emphasizing democracy over dictatorship.
Illegal Migration: This is identified as the "number one concern" for voters. Reform UK believes they have the courage to discuss it and are trusted to address it.
Consultant Fees: While acknowledging the need for savings, the speaker defends the use of consultants in Leicester for a cost-cutting review, stating that if they save "tens and tens of millions of pounds," the price is justified.
VAT on Private School Fees: Reform UK advocates for scrapping VAT on independent school fees, arguing that the current policy is not generating significant revenue and is increasing pressure on schools and the SEND system.
Seizing Assets from Migrants: Reform UK supports the idea of not using taxpayer money for legal aid for illegal immigrants who can afford people smugglers, suggesting they can find alternative legal support.
Overdiagnosis of SEND: The party advocates for pushing responsibility back to schools and teachers, stopping the labeling of children, and questioning the vested interests behind overdiagnosis and overmedication.
Adult Social Care: Reform UK is open to working on a cross-party basis to find solutions for adult social care, emphasizing trying new approaches and changes to practice.
Austerity Economics: The speaker fundamentally disagrees with the diagnosis that local government is suffering due to austerity. They attribute the issues to "callous waste of money on processes and things and reports and reviews and assessments that are not needed" and "gold-plated defined benefit pension schemes."
Net Zero Policies: Reform UK believes their stance against current net zero policies is moving the debate and that voters are increasingly concerned about the economic impact, citing potential job losses and rising energy bills.
Reform UK's Internal Dynamics: The speaker acknowledges internal debates and discussions within the party but states they are best handled "behind closed doors." They emphasize that voters are speaking at the ballot box, supporting Reform UK.
Matthew Goodwin's Views: The speaker defends Matthew Goodwin, head of Reform UK's student organization, stating that free speech and challenge are important and that Reform UK has moved the debate on immigration.

7. Conclusion and Future Outlook

The speaker reiterates that there is "a long way to go" and "a lot to achieve," but Reform UK is "absolutely resolute" in its commitment to reform local government for better value. They plan to provide an update in three months. The overall message is one of candidness about the significant challenges facing local government and the country, with a strong belief in the necessity of fundamental change and Reform UK's ability to deliver it.