Councils must be more than the government’s administrators

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In what ought to be news to almost no-one, last Tuesday the government was castigated for its attitude to local government finances.

The House of Commons Public Accounts committee, presenting its report, stated that the government “is in denial about the perilous state of local finances”.

This came in the week in which MPs voted by 298 votes to 240 to approve the final local government finance settlement for 2019/20, which provided a mere 2.8% cash increase at a time when inflation is running at above 3% – in other words, yet another real terms cut.

Joining in the criticism of the miserly and damaging settlement were:

  • the Local Government Association, which warned of the “growing risk to vital local services if the government does not take action to secure the financial sustainability of councils”;
  • Tory MP Anna Soubry, who refused to support the government, highlighting cuts to her county council, Nottinghamshire, which has had its funding cut by 52% since 2013 and has a projected deficit of £34.1 million;
  • the Chartered Institute of Public Financial Accounting (representing local authority finance officers) which called for “the Government to enter into meaningful engagement with the local government sector to seek genuine long-term sustainable solutions”;
  • and accountants Grant Thornton, who said that “councils are at breaking point and in need of long-term sustainable solutions”.

CIPFA went further, saying that “no business could operate effectively without clarity on their finances beyond 2020 and local government is no different. … it is widely accepted that the current funding model for local authorities is no longer viable, and without bold policy solutions vital public services will continue to be eroded in order to balance the budget.”

Thus it seems that everyone except the government recognises that without significant fundamental change local authorities will be at risk of failing to be able to deliver even the core services with which they are charged, let alone the ancillary services which their residents may need or vote for.

Our own council is bracing itself for the impact of multi-million pound reductions in its budget over the next three years, which has in any case barely shifted in “cash terms” over the past 10 years, remaining resolutely stuck at around £16 million while inflation has eroded the real value of that money and cuts to services have got successively worse.

In this context, the culpability of our councillors is worth mentioning, since the previous Tory administration under John Gilbey – which included the current council leadership – voted twice to freeze Council Tax, effective reducing the total available by around £640,000 a year. How we could use that money now.

On top of that, of course, they’ve thrown money at the failing Serco refuse collection contract, wasted £150 million buying Whitefriars just before the retail property market fell off a cliff, and decided to buy existing properties for conversion to council homes rather than the much more cost-effective solution of building new ones.

We might also make the not unreasonable presumption that, as Conservatives, our leading political group approves of the government’s approach to both the management of the economy and the persistent whittling away of local government funding. 

All this boils down to one thing: you cannot have effective local government services without paying for them. As a nation we’ve refused to face that fact for too long, and we’ve been partly sheltered from it by the way in which, prior to 2010, central government in effect bankrolled much local government spending.

That was never democratically healthy, since it broke the link between what people vote for and how they paid for it – in effect, creating representation without taxation, in a cruel twist on the principles of sound democracy.

Indeed, if the current trend continues and local authorities are deprived of any discretionary spending funds at all, there will be almost no point at all in voting in local elections, since there will be no scope to change anything they do.

This has to change. Local government that is genuinely accountable to its voters must have both the right to raise the money needed for its programmes, and the responsibility to justify that expenditure.

The current system denies the former and makes the latter meaningless. People – specifically, local taxpayers – may or may not accept the idea of their local authority spending more to deliver the services that it promises.

Yet only a direct connection between the commitments made in party manifestos and allowing councils to raise the funds needed to meet those through taxation can recreate a meaningful and healthy local democracy.

That’s a change that must be made, before we find ourselves with councils which are nothing more than administrative agencies doing central government’s will, regardless of the wishes of their residents.

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