11 May 2007
The government's initial response to Sir Michael Lyons' report might have seemed muted, but the small print tells a different story. Ministers have not only accepted the core thesis, they have taken the first steps forward
Sir Michael Lyons' final report of his Inquiry into Local Government was published on the morning of Budget day. By the afternoon, we had the government's response: a cursory press notice issued by the Department for Communities and Local Government and a few words in the small print of the chancellor's Budget red book.
It was July 2004 when Lyons was asked to pick up former local government minister Nick Raynsford's 2002 Balance of Funding review. Lyons' final report runs to some 394 pages. One might therefore have expected some considered reflection on his analysis.
But perhaps the government was paying greater attention to the statement at the start of the report '… at least 75% recycled… when you have finished with it, please recycle it again'. The problems Lyons was asked to address are difficult, and keep on coming back. Reform of local government finance has been on the agenda for ten of the 19 years since domestic rates were abolished. Those who have attempted radical change richly deserve Sir Humphrey Appleby's accolade: 'Courageous, minister'. So are we seeing yet another retreat from serious reform?
Many press reports have claimed that the government put the report straight in the bin. But, as Lyons points out, if you read what the Treasury has written in the Budget documents, you find that many key recommendations are either still on the table or have been accepted.
Our view at the Local Government Association is that Lyons is right to assert that we need a stronger, more devolved, role for local government, with greater emphasis on the all-embracing responsibility for the 'place' and the 'wellbeing' of residents.
As Lyons says, any reform will involve political trade-offs and is likely to have widespread impacts. It will therefore require a strong case for change. But in terms of what local government is for, the government has already made public statements about both deregulation and devolution to improve public services and boost local economies. We simply wait for this to be turned into action in forthcoming legislation, the Sub National Review and the Comprehensive Spending Review.
Lyons uses the term 'place-shaping' to summarise what local government is for: 'the creative use of powers and influence to promote the general wellbeing of a community and its citizens'. This thesis, involving the use of real power to take a broad view of a locality's interests now and in the future, is one that the government accepts. The chancellor has said: 'It is right that local councils, not Whitehall, should have more power over the things that matter to their community… the empowerment and strengthening of local councils and local communities is what we must now do.'
Communities and Local Government Secretary Ruth Kelly has echoed this call for change, saying: 'I think that we are at a tipping point for our democracy where, working together, we can usher in a new and unprecedented era of devolution.'
And, in the Local Government Bill now before Parliament, the government has taken useful steps on the democratic issues and on deregulation, if not yet on devolution. Councils will have the power to convene partnerships in areas such as health and social care, joining up delivery of vital public services across a locality and enabling more effective public scrutiny and community engagement.
Alongside this, the CSR is offering the prospect of a considerable reduction in detailed central monitoring of what local government does, focusing on a much smaller number of genuinely national priorities. Councils have earned these freedoms through massive improvements in service delivery over recent years. As the emphasis switches to councils as leaders of place, it is not too much to expect that the next stage in the journey might include not only real devolution of powers, but also the elusive reform of local government finance.
Lyons suggests that such reform and greater public trust might be driven through closer engagement and a greater ability for councils to take local decisions. These are the challenges both central and local government must address if we are to move from recycling deeply ingrained structural problems of council finance to developing solutions that can command public confidence.
In all, Lyons' report has made a significant contribution to the debate. It is most definitely not dead and buried. Local government and central government must now build on this, and work together to agree the bold and radical reform that council taxpayers need and deserve.
Sandy Bruce-Lockhart is chair of the Local Government Association
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