Top councils exempted from ringfencing

28 Nov 02
Top-performing authorities will be exempted from ringfenced funding as part of the package of freedoms and flexibilities finally unveiled by ministers this week.

29 November 2002

Local Goverment Minister Nick Raynsford pledged that councils rated 'excellent' in the Comprehensive Performance Assessments, due out on December 12, will be able to allocate resources as they wish.

The only exception will be money earmarked to go directly to schools. Councils rated 'good' will be freed from ringfencing of capital grants. In addition, all authorities will see the proportion of their funding received through ringfencing fall from 12.4% to 10% by 2005/06.

Raynsford said the new freedoms, which were published on November 26, would end the 'Whitehall knows best' approach and lead to a 'substantial devolution' of power.

Top-performing authorities will be released from all plan requirements except for the Best Value Performance Plan and a community strategy, and will enjoy a three-year break from inspection. Ministers will also sacrifice their power to cap council tax increases.

An 'innovation forum', comprising the 20 to 30 councils expected to win excellent status, will be set up to negotiate possible extra freedoms.

Under the reforms in the Local Government Bill, released on the same day, all councils will have their plan requirements slashed by 75% and will be allowed to charge for discretionary services such as CCTV cameras and graffiti removal.

The introduction of the prudential borrowing system and of business improvement districts will go ahead. Reforms to the council tax system, including ending the discount on empty properties and a revaluation of the bands, were also included.

Ministers also pledged their willingness to intervene robustly in failing authorities and indicated they would be willing to 'draw on the expertise' of private sector companies to turn round poor services.

Local Government Association chair Sir Jeremy Beecham said the measures were 'ambitious' and would 'free authorities to improve services'.

Dan Corry, executive director of the New Local Government Network, said he was hopeful they would become 'a model for the whole of local government'.

But others were more sceptical. Dennis Reed, director of the Local Government Information Unit, which counts 150 councils among its members, warned of the risk of a 'two-tier' system.

'If it becomes entrenched it will be a disincentive to councils at the bottom. If the freedoms are shown to be doing a good job in improving services then the government should give them to all authorities.'

PFnov2002

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