These are, to state the obvious, uncertain times. Everyone, from Mervyn King and Alistair Darling to ordinary mortals fearing for their jobs, homes and pensions, has good reason to feel jittery about the current stockmarket turmoil.
This sense of unease extends to local authorities, which currently face a triple whammy. First, the fragile state of the public finances means that there is no relief in sight after local government’s worst settlement for a decade – and the liabilities incurred through bailing out Northern Rock can only make a bad situation worse.
Second, local authorities are themselves vulnerable to the vicissitudes of the markets. Their investments, whether in property, other assets or pension funds, will all be affected.
Third, recent moves towards greater local autonomy are threatened by these fiscal constraints, especially when councils are already struggling to keep within council tax thresholds.
In these circumstances, it’s not too surprising to find local government minister John Healey pushing the line – backed up by an Audit Commission report – that councils must do more to raise revenue from local charges.
Currently in England, charges for swimming, parking, school meals and other services raise half as much revenue as council tax, and the government is looking for more. But it has met with a frosty response from Local Government Association chair, Sir Simon Milton, who argues that councils are the best judges of when and how they should impose charges. These should be exercised through a reformed local tax system, not by ‘arbitrary national charging policies’, he says.
Communities Secretary Hazel Blears’ plan for ‘community contracts’ has received an even cooler response. ‘Central diktats’ are ‘mechanistic’, and no way to involve local people, says the LGA. Clearly, ministers have hit a sensitive spot.
In fact, there may be some merit in councils becoming more accountable to their citizens. And there is clearly a need for a national debate on charging.
But charging and contracts cannot be panaceas for the budgetary problems bearing down on councils. Local people will not tolerate excessive charging for services they feel they have already paid for. And no amount of community consultation will sweeten the pill.
It almost makes running the world economy look easy.
