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An Interesting Autumn and Year Ahead for Local Government

Submitted by on 16 Sep 2011 – 10:23

Sir Merrick CockellSir Merrick Cockell, LGA Chairman

Late June would appear to be the perfect time to take the reins at a lobby organisation, with the supposedly quieter summer period offering a couple of months to come to grips with the brief before the frantic action of Parliament’s Autumn session and the chaos of the party conference season.

Not this year, it would seem, with a flurry of legislation and consultation documents spilling out of Westminster and into the in-trays at Local Government House.

So far this summer we have responded to a consultation on how much money should be transferred from local government budgets to cover the cost of new academies, and begun work on two other major consultations the Government published just before the summer break: on localising business rates, and on localising council tax benefit.

These are major reforms that need a lot of work to get right. On the localisation of business rates the key is to ensure that all councils, and their businesses and residents, get a fair deal. Councils must receive some measure of reward for promoting and generating growth but those areas less blessed by economic prosperity can’t be left behind. We are particularly keen to avoid the situation contemplated in the consultation in which the Treasury, rather than local businesses and people, reaps the bulk of the rewards of growth.

Localising council tax benefit is perhaps even more challenging, especially as the government is seeking to cut the budget by £500m in the process. We are concerned about how the numbers will add up whilst ensuring that the promised protection for pensioners is delivered. Delivering the change safely from April 2013, when the underlying policy will not be fully settled until shortly before implementation, is likely to be a real challenge, as will be the transfer to local government of major financial risks currently borne centrally.

Schools funding is a similarly tricky issue. Academies obviously need funding and, as they will be operating largely independent of local government support, it is appropriate that some money is transferred from councils to them. But simply cutting a council’s budget by the same amount as you propose to offer schools which become academies ignores the many complex factors at play, such as economies of scale and the statutory duties a council has to carry out regardless of how many schools in its area convert to academies.

Councils of all political control and irrespective of their enthusiasm for the academies programme are quite rightly concerned about the significant pressure the current proposals could place on council tax or other vital local services.

The proposals contained in these consultations have their merits and flaws and the beauty of Westminster government is the numerous opportunities it provides for legislation to be debated, amended and hopefully improved. We are currently involved in this process in relation to the Localism Bill, which has just cleared Committee Stage in the House of Lords.

There is much which is good about the Bill, particularly a desirable intention to place more power in the hands of local people and areas. However, with amendment much could still be improved. We have already successfully lobbied for a number of amendments to be tabled which we believe would help deliver true localism.

So far we have fought for and won the deletion of the “shadow mayors” provision which would have allowed the Secretary of State to force a council to change its governance arrangements and create a shadow mayor role. And we have achieved the deletion of the power for the Secretary of State to decree what constitutes a “local issue” with regards to local referendums. We opposed both measures on the grounds they undermined local autonomy.

We have also achieved vital concessions which will prevent Ministers arbitrarily passing any EU fines onto councils in circumstances where the UK is sanctioned for failing to meet its national targets on things like improving air quality.

This is a good start but there is still much to do if the most is to be gained from this important Bill.

We are still seeking the reversal of measures which give Ministers hundreds of new powers to issue costly guidance and regulation. And we want measures introduced which would let councils keep 100 per cent of the receipts from the sale of council homes. Currently local authorities keep just 25 per cent, which saw an estimated £4.9 billion go to the Treasury in the past six years. A change could be introduced in the next spending review and would ensure local money is put back into local housing. At a time of chronic and growing housing shortage this would prove invaluable.

Autumn offers no let up to the busy summer, with debate over proposed changes to the National Planning Policy Framework really starting to fizz, the listening period for the Health and Social Care Bill drawing to an end, and the Police Reform and Social Responsibility Bill prompting some heated exchanges. Meanwhile the future provision of aged care and public sector pensions reform rumbles in the background, and we continue to explore the possibility of councils entering the bond market to raise funds for public works.

It has been a busy, exciting start to what promises to be a busy, exciting job.