Parties must set councils free from central government

Author: Tom Shakespeare, The Times   |  

Almost 80 per cent of council leaders and chief executives in England and Wales, surveyed by Localis, the think-tank, believe that this year’s Budget was not good for local government. This incredibly large figure, which on the face of it reflects a deep scepticism towards central government, is also heightened by the fact that 70 per cent also thought that the Budget was not good for the country either. These levels of concern at least partially reflect what, in localist political circles, is a commonly known fact – that England is the most centralised nation in the developed world, and local government is still ring-fenced-in to delivering central government targets.

But the truth is that the Budget could have been much worse for local authorities. Grant allocations remain unchanged until 2011, and there is additional funding available for areas with high unemployment and risk of family homelessness as well as for new social housing. So why is there still such hostility from local government?

One telling statistic to emerge was that 80 per cent of respondents believed that the Budget should have “recognised a greater role for councils in dealing with the recession”. This tells us two things.

First, councils believe that they are better placed to help local economies through the recession than central government. This is being played out across the country, with councils such as Essex and Birmingham stepping in to provide innovative locally tailored financial support to small businesses and individuals where government-backed loans have failed.

Second, it tells us that councils want more power, responsibility, resources and independence. This is also reflected in the finding that more than 60 per cent of councils believe that £5.5 billion of efficiency savings are possible by 2011 – on top of what they have achieved so far. Those councils that cannot make efficiency savings are district councils, which we already know run a very tight ship, making the remaining figure even more significant. Furthermore, 55 per cent of councils also thought that the Budget did not go far enough in supporting councils to achieve a low-carbon economy. Combined, these statistics reflect a call from local government for reform. It can be summarised by the Churchillian adage: “Give us the tools and we will finish the job”.

This, however, leads us to the elephant in the room. Local government finance is probably the greatest stumbling block to revivifying our ailing democracy. The dependence on central grants and taxes detaches revenue source from destination, and fundamentally undermines the accountability of public spending, allowing it to spiral out of control. If the recent expenses scandal has taught us anything, it is that the public must have much more scrutiny over public spending.

The current system hobbles creativity, stifles innovation and undermines accountability. If these are the things we value, then localism is the solution, and local government the conduit for reform. Only a radical overhaul of the current funding system will help to recover an overcentralised country, and the main political parties need the courage to take steps to make local government independent again.

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