Nick Cuff: Does social responsibility equal local responsibility?

The buzz word of this year’s conference was “social responsibility”.  What we didn’t learn from a local government context, was whether more social responsibility would mean more real local responsibility.

Yes, the rhetoric was positive with numerous front benchers taking swipes at Labour’s “centralisation” of the state both in the hall and in the fringes.  However, it became increasingly apparent as the conference wore on that outside the quick wins of binning the Standards Board or removing regional assemblies, the Party has still to resolve the most significant issue: local government finance.   

Without meaningful reform of finance, councils will always be reliant on Whitehall purse strings no matter how you tinker with structures.  Currently, the balance of funding for local councils is based approximately on 75% central funding with the remainder raised through council tax.  Labour has been hesitant to address this largely because there is no silver bullet to tackling equalisation i.e. how do you ensure poor areas of the country receive adequate levels of funds.   

The result of this inertia has been an increasingly complex funding formula to ensure that finance is distributed evenly across the country.  It is here where the law of unintended consequences lures her ugly head.  The status quo means that efficient councils actually lose money to Whitehall, and inefficient councils have an incentive to carry on doing what they are doing – or not doing anything as in many cases.

The Party line is to hold off until Sir Michael Lyons’ long awaited review of local government publishes its findings in December.  This is the right line to take as the report’s recommendations will steer and inform the debate over the next year.  It would be foolish to pre-empt what has been a genuinely in-depth review of an issue where all the main parties should be developing a political consensus.   

Unfortunately, it looks increasingly likely that we cannot leave this to Labour.  Many are now beginning to fear that despite the length of time taken, Sir Michael’s review will not provide a long term solution to the balance of funding.   

Labour is simply not prepared to swallow a bitter political pill and give up the current powers they possess over Town Halls.  With Sir Michael based in the Treasury – the bastion of centralism – he will be hard pressed not to contradict Whitehall’s over arching stance.  Worse still, DCLG will publish a White Paper next month on local government structures, this is likely to take the wind out of the sails of any gutsy announcements Lyons may wish to deliver.   

The result is that Labour will continue to be socially irresponsible.  Their policies are creatures of the long grass.  There in the tall thickets, you will find local government finance lurk alongside its long-term neighbours, pensions reform and energy policy.  No labour hand will touch a stinging nettle.

Therefore, it will be up to us to take the responsible decision and hold a serious debate on how we reform local government finance.  This of course was never likely to happen in Conference 06, but as we drift rapidly towards the next election, I hope Conference 07 and 08 will prepare the ground for meaningful change which will put an end to a decade of centralisation. 

Comments

[NigelC]

I am not sure the abolition of Regional Assemblies is a quick win as the stautory planning powers they have will have to be unwound as will any regional spatial stratgies that have been published.

Many Tory councillors sit on this bodies and collect allowances for any special responsibilities they hold. They may have to be dragged from the table.

[Adrian Owens]

Interesting then that the Scotish Tories have pre-empted the Lyons report and called for a slashing of council tax for pensioners.

As this will be funded centrally this will reduce further local council independence through increasing central grant.

Does any Scottish Conservative (Oberon Houston?) want to post on here and defend this position?

[Phil Taylor]

This may seem harsh but sheltering pensioners from council tax is really bad policy for lots of reasons. There is little enough connection between local voters and local government and this move will reduce that connection still further.

We have a real problem with overpriced housing in the UK and real issues with labour mobility being driven by Brown's rises in stamp duty. It really helps our economy if we can move easily and cheaply and as you get older you need to think about trading down. Trading down is one mechanism by which the supply of housing can be increased. Council tax is a cheap and efficient tax to collect and one that quite appropriately makes people review the size of their home.

There is a green angle too. Older people do need warmer homes and smaller, modern homes are much cheaper to heat. Otherwise we get to the idiocy of people in over-large homes arguing that they need protection from council tax so that they can afford to heat them.

Older people are big users of local services and for that matter big complainers. They need to pay their share too.

I hope that not too many of my voters are reading this!

[anon]

One of the great policy problems governments will face over the next 25 years, is the temptation to pander to the increasing numbers of non-working old at the expense of the shrinking numbers of working young, to the inevitable detriment of the economy as a whole, and therefore the welfare of everyone, young and old alike.

I hope this move by the Scottish Conservatives is not a harbinger of things to come. Please, please do not applaud it because it looks like a tax cut - to me it appears to be nothing less than blatant redistribution of the worst kind.