Tag Archives: local government finance

How to pay for local services?

For many years now, governments of all political colours have seen fit to centralise more and more powers to themselves. The result of this has impacted directly on the councils that once were the major providers of services that have improved the lives for generations of our citizens. Today, they are a shadow of their former selves, whose lack of influence is clearly reflected in poor turnouts in local elections.

There have been promises to reverse the centralisation of powers and to devolve many of the powers back from where they have been taken over many years. So far, progress has been painfully slow.

Whatever services that remain the responsibility of local government must still be paid for. Traditionally the bulk of the funding came from central government grant, based on a formula devised and administered in Whitehall. The rest (around 30%) came from revenue and a smaller contribution from the recipients of those services via the Council Tax.

The strains are now really beginning to show. The 2010-2015 Coalition Government used its austerity programme to cut its central grant progressively and used the so called ‘Council Tax Freeze Grant’ to bribe councils not to raise Council Tax, at least not above 2%. The result was that a council like Lincolnshire that accepted the grant was forced massively to reduce its staff and many of the services it provided, libraries being just one example, in an attempt to protect Frontline Services such as Adult Social Care. Interestingly, had the County not accepted the grant but had raised Council Tax by 1.99% for the duration of the grant, it would now be around £30 million better off.

Posted in Op-eds | 21 Comments

Local Government doing less to achieve more

Darlington Borough Council is skint. One of the smallest local authorities in the country, Darlington was created as a Unitary Authority in 1997. Since then, it has been governed (like many Northern councils) exclusively by Labour, and it now stands on the verge of bankruptcy (the two facts may not be unrelated).

Specifically, the Council have calculated the need for £12.5m in spending cuts over the next four years. To go: Darlington’s historic indoor market, the public library (both of which were donated to the town by the Pease family), the town centre’s Christmas lights and floral displays, several children’s centres, and multiple other social, environmental and cultural services. Streets will be swept less frequently. Charges will be introduced for blue badge holders.

Are these cuts to local services best blamed on central government, with its reduction in funding for local authorities, or on incompetent and profligate local councils? Certainly, cuts in central government funding have been made, with the provision of local services affected; certainly, other local authorities facing similar cuts are not broke. The truth of the matter is probably somewhere between the two!

Posted in Op-eds | Also tagged and | 11 Comments

David Cameron is hoist with his own petard

Hat-tip to Peter Black for inspiring the title

Here below is some fascinating reading. First, a letter which David Cameron sent to the Conservative leader of Oxfordshire County Council (bearing in mind the PM’s constituency of Witney is in Oxfordshire) and then the reply he got.

Via, it seems, a somewhat incautious researcher or adviser, Mr Cameron reveals an extraordinary ignorance of local government finance, coupled with remarkable arrogance.

Posted in News | Also tagged | 16 Comments

“Lib Dems veto Pickles’ Council Tax cuts”

From the FT:

One of the government’s main tax-cutting drives has been to encourage councils to keep tax rises to a minimum. Ministers have done this in two ways: firstly, by giving councils a cash incentive to freeze council tax; and secondly, by forcing any council that wants to raise tax by 2 per cent or more to put it to a local referendum.

Of course, any self-respecting council is going to set a rate that’s just below the threshold. Eric Pickles was not chuffed and wanted to lower that threshold to 1.5%.

He did not get his way, thanks to the …

Posted in News | Also tagged | 28 Comments

Caroline Pidgeon writes: Setting our cities free from the stranglehold of the Treasury

City Hall and Tower BridgeReforming local government finance – a phrase that is enough to send many of us to sleep.  But put a different way, devolving financial powers to our great cities, allowing local innovation and genuine localism, may keep your interest for longer!

May saw the launch of an excellent policy report called Raising the capital.  The report was produced by the London Finance Commission, an authoritative wide ranging group of experts from both inside and outside politics, but crucially including experts from Birmingham and Manchester.  The commission was chaired by respected Professor Tony Travers of the London School of Economics.

Posted in Op-eds | Also tagged and | 15 Comments

Next week in the Lords: 8-11 October

Yes, the moment you’ve all been waiting for, the House of Lords is back! And whilst I get to spend less time with my wife, legislation awaits. Will the death of Lords Reform change anything on the red benches? Just what are they going to discuss without it?

There are three Bills carried forward from before the summer recess;

As a gentle loosener after a summer of grouse shooting, light naps and memoir writing, Monday sees Day 6 of the Committee Stage of the Financial Services Bill, perhaps now …

Posted in News and Parliament | Also tagged , , , , , , and | Leave a comment
Advert



Recent Comments

  • User AvatarJoe Bourke 23rd Feb - 2:19am
    The Layfield Commission on Local Government Finance (Layfield Committee, 1976) came to the view that there should be major changes in the financing of British...
  • User AvatarJoe Bourke 23rd Feb - 1:18am
    A harrowing tale of real distress for these parents, Kirsten. I echo your conclusion that " We need a joined-up approach to disability provision –...
  • User AvatarJoe Bourke 23rd Feb - 1:00am
    Keynes did offer us some advice on how best to manage the public finances. To find out what is was it is best to go...
  • User AvatarJoeB 23rd Feb - 12:28am
    Layla, as she so often does gets to the heart of the issue in saying " the idea that university should be free for everyone...
  • User AvatarAndrew McCaig 23rd Feb - 12:27am
    nonconformistradical I said "people who did not pay fees". That is everyone who went to university before 1998. Lots of people. I did not say...
  • User AvatarRoland 23rd Feb - 12:26am
    Germany has managed to abolish tuition fees as they weren’t working for the economy. And they are also finding that having abolished them, that also...