14 June 2002
The local government minister said he was committed to delivering all the freedoms and flexibilities that local authorities have been promised. Raynsford, speaking at CIPFA's annual conference in Brighton on June 12, pledged that the proposals in last December's white paper would be implemented in full.
He refused to be drawn on when the Local Government Bill would be laid before Parliament. But he told Public Finance that consulting on the draft over the summer would maximise its chance of being included in this autumn's Queen's Speech.
'By having the draft Bill ready and in an advanced stage we are very well placed, if we do get the go-ahead, to bring it in at the beginning of the next session,' Raynsford said.
The draft covers all the white paper proposals needing primary legislation and, as expected, financial reforms are the centrepiece of the document. It outlines plans for a prudential system of borrowing, which would scrap credit approvals for capital projects and instead allow authorities to borrow money without first seeking Whitehall approval.
But Raynsford dismissed the suggestion that the prudential system would lead to councils rejecting the Private Finance Initiative as a way of funding capital projects. He said the government saw the reforms as giving councils extra flexibility, but did not expect direct borrowing to become their principal way of raising funds.
'It will run in parallel with the PFI. We still see the PFI as a very, very important mechanism for financing projects in an innovative and cost-effective way. We certainly don't see it as a substitute,' he told PF.
The draft Bill, which was launched by John Prescott from the beefed-up Office of the Deputy Prime Minister, outlined plans for setting up business improvement districts. It also proposed business rate relief for properties with a rateable value of less than £8,000.
Other measures included a package of council tax reforms, such as revaluations of council tax bands every ten years. It also outlined wider powers for councils to negotiate trade agreements to provide goods and services, although these will be targeted at high-performing authorities, and to charge users for the discretionary services they offer.
The consultation exercise will run for ten weeks and closes on August 23. Local Government Association chief executive Brian Briscoe said the LGA would use this period 'to work with councils and government to shape the Bill, which we expect to see in the Queen's Speech'.
PFjun2002
