By Richard Johnstone | 17 September 2014
Local government finances are at risk of becoming unsustainable unless there is ‘radical’ devolution of powers, including full retention of business rates growth, county authorities have warned.
The County Councils Network said a package of additional funding powers were needed to meet the pressure of maintaining vital statutory services in the long-term, including social care.
As well as an expansion of Community Budget initiatives in county areas to increase the effectiveness of public spending, reviews of the allocations of funding for school places and social care are also needed, the group’s Plan for Government stated.
Such a system should give counties the chance to become financially independent of Whitehall by setting local business rates, as well as ending the government’s policy for all council tax increases above 2% to be subject to local referendums, and reviewing the operation of the New Homes Bonus.
In addition, local authorities should also be given specific freedom to issue bonds through a municipal bonds agency like that being founded by the Local Government Association.
CCN chair David Hodge said that, following the offer from UK party leaders of enhanced powers for the Scottish Parliament in the event of a no vote in the Scottish independence referendum, ‘the logic that local decisions are best made by local communities does not stop at the Hadrian’s wall’.
He added: ‘We hope all parties will embrace the vision outlined in our Plan for Government and free counties to do their best for their residents.’
