17 January 2003
Local Government Association chair Sir Jeremy Beecham told Public Finance that he would be writing to Nick Raynsford 'in the next few days' to accept the draft outline for the review, which the LGA received last week.
'I have had a letter from Nick Raynsford setting out the proposed terms of reference and the proposed membership for the review group,' he said. 'There are one or two terms we wish to raise, but they are broadly acceptable to us.'
Beecham refused to divulge the precise remit or the likely membership of the panel. But it is expected to include representatives from all the LGA's political groups. Local government academics, professional organisations and policy experts are also likely to feature.
They will examine whether there is a case for increasing the proportion of council funding raised locally. It is currently 25%, while 75% comes through central government grant.
The review was first announced by Gordon Brown's chief economic adviser, Ed Balls, at CIPFA's annual conference last June. Since then, despite the LGA's attempts to spur ministers into action, little has happened.
Beecham expressed confidence that the review, which should have its first meeting some time in February, would be a meaningful exercise, and not just a stalling tactic to keep local authorities quiet.
'The Treasury do support this review and I would certainly expect them to be involved. That doesn't mean I am making any easy assumptions about the outcome.'
The review was one of a range of issues arising from the provisional finance settlement that were discussed at a meeting between senior LGA officials and six government ministers, including schools minister David Miliband, on January 13.
Beecham used the meeting to press the case with Miliband for the 13 authorities with an education 'funding gap', where their increase in education formula spending share is higher than their overall increase in grant.
If the councils were forced to pass on the full increase, the LGA argued, they would have to hike up council tax bills or cut other services to balance their budgets.
Beecham told PF he was 'quietly optimistic' that ministers would not use their reserve powers to 'passport' through to schools the rises in education funding.
'Miliband did emphasise that the phrase "in exceptional circumstances" still held, so we wouldn't expect them to activate the powers. I am reasonably confident about that and I would certainly not expect them to use them in the case of the 13 authorities.'
PFjan2003
