By Richard Johnstone | 27 October 2011
The government’s localism plans are simply ‘cover for the cuts’ it is imposing on councils, Labour’s new spokesman on local government has told Public Finance.
In an interview with PF, the party’s shadow local government secretary Hilary Benn also said that Labour could support plans to localise business rates, but emphasised that the case for the government’s specific proposals had not yet been made.
Benn was given the communities and local government brief in Labour leader Ed Miliband’s shadow Cabinet reshuffle last month.
The former minister told PF that, while he backed the idea of localism, the cuts being imposed on local government this year and next were ‘unfairly’ taking resources away from poorer councils.
Benn, a former environment secretary, said that there was a need to ‘strike a balance’ between government taking central decisions and the potential for localism.
‘The question is: what are the things that we think should be the same outcomes wherever you live in the country, and what should be down to local decision-making.
‘I think that enabling decisions to be taken as close as possible to those that are going to be affected is a good principle. But it seems to me that the government is using it, in part, as cover for the cuts that it is imposing on local government services.’
However, Labour could not promise that ‘if we won the next election, what [funding] local government gets would be restored just like that,’ he said. ‘That just won’t happen.’
This creates a need for new policies, he said. ‘The challenge is how they deal with having less money, which is extremely difficult. What do councils do with less money while looking to provide good services?
‘That’s one of the things I will be taking time to think about, that’s going to be a very big challenge.’
Benn indicated that Labour could support plans for councils to retain parts of their business rates. His predecessor Caroline Flint had previously said that Labour would support a system that ‘genuinely incentivises local growth’, and Benn confirmed: ‘In principle if we could find a way for local authorities to be able to, when there is economic growth, hold onto some of the business rates, then people would support it.’
But the specifics of the government’s plan to allow councils to retain rates from an equalised point of tariffs and top-ups in 2013/14 were condemned as ‘extremely regressive’. This plan could see some councils becoming worse off over time as rates grew quicker in some parts of the country. ‘We have redistribution in the system for a reason,’ Benn said.
The shadow minister also criticised the plans to localise council tax benefits. Under government plans, the amount of money set aside for the benefit is to be cut by 10% and decisions over distribution left to councils, although pensioners are having their entitlement protected. Benn predicted the move would see working people on low incomes losing out.
Asked what his early priorities were, Benn identified ‘standing up for local government and holding the government to account’, and also looking at how more houses can be built in the UK. The nation is facing a ‘housing crisis’, he said.
Local government expert Tony Travers told PF that the appointment of Benn, ‘one of the more thoughtful members of the shadow Cabinet’ and a former councillor, would be welcomed by local government.
Travers said that Benn’s most significant challenge was to ‘come up with a Labour plan for local government, particularly around local government finance’.
He said: ‘The last government supported localism but it just didn’t lead to any. It would be a good test for him to set for himself to come up with a more convincing set of polices for local government than the coalition.’
This would look at ‘devolving beyond central government to local government and a number of institutions’, Travers said. ‘It’s a good challenge, and they will have to come up with something.’
The government’s localism plans are simply ‘cover for the cuts’ it is imposing on councils, Labour’s new spokesman on local government has told Public Finance.
In an interview with PF, the party’s shadow local government secretary Hilary Benn also said that Labour could support plans to localise business rates, but emphasised that the case for the government’s specific proposals had not yet been made.Benn was given the communities and local government brief in Labour leader Ed Miliband’s shadow Cabinet reshuffle last month.
The former minister told PF that, while he backed the idea of localism, the cuts being imposed on local government this year and next were ‘unfairly’ taking resources away from poorer councils.
Benn, a former environment secretary, said that there was a need to ‘strike a balance’ between government taking central decisions and the potential for localism.
‘The question is: what are the things that we think should be the same outcomes wherever you live in the country, and what should be down to local decision-making.
‘I think that enabling decisions to be taken as close as possible to those that are going to be affected is a good principle. But it seems to me that the government is using it, in part, as cover for the cuts that it is imposing on local government services.’
However, Labour could not promise that ‘if we won the next election, what [funding] local government gets would be restored just like that,’ he said. ‘That just won’t happen.’
This creates a need for new policies, he said. ‘The challenge is how they deal with having less money, which is extremely difficult. What do councils do with less money while looking to provide good services?
‘That’s one of the things I will be taking time to think about, that’s going to be a very big challenge.’
Benn indicated that Labour could support plans for councils to retain parts of their business rates. His predecessor Caroline Flint had previously said that Labour would support a system that ‘genuinely incentivises local growth’, and Benn confirmed: ‘In principle if we could find a way for local authorities to be able to, when there is economic growth, hold onto some of the business rates, then people would support it.’
But the specifics of the government’s plan to allow councils to retain rates from an equalised point of tariffs and top-ups in 2013/14 were condemned as ‘extremely regressive’. This plan could see some councils becoming worse off over time as rates grew quicker in some parts of the country. ‘We have redistribution in the system for a reason,’ Benn said.
The shadow minister also criticised the plans to localise council tax benefits. Under government plans, the amount of money set aside for the benefit is to be cut by 10% and decisions over distribution left to councils, although pensioners are having their entitlement protected. Benn predicted the move would see working people on low incomes losing out.
Asked what his early priorities were, Benn identified ‘standing up for local government and holding the government to account’, and also looking at how more houses can be built in the UK. The nation is facing a ‘housing crisis’, he said.
Local government expert Tony Travers told PF that the appointment of Benn, ‘one of the more thoughtful members of the shadow Cabinet’ and a former councillor, would be welcomed by local government.
Travers said that Benn’s most significant challenge was to ‘come up with a Labour plan for local government, particularly around local government finance’.
He said: ‘The last government supported localism but it just didn’t lead to any. It would be a good test for him to set for himself to come up with a more convincing set of polices for local government than the coalition.’
This would look at ‘devolving beyond central government to local government and a number of institutions’, Travers said. ‘It’s a good challenge, and they will have to come up with something.’
