News from the Local Government Association conference held on July 4-7

13 Jul 06
Political acceptability will dictate Sir Michael Lyons' proposals to reform local government finance when he concludes his inquiry later this year, he has told Public Finance

14 July 2006

'Politics will decide' Lyons' outcome

Political acceptability will dictate Sir Michael Lyons' proposals to reform local government finance when he concludes his inquiry later this year, he has told Public Finance.

Speaking at the Local Government Association's annual conference in Bournemouth, Lyons told PF that his role is to reconcile the competing demands ministers face from the electorate over town hall funding.

'It's not a question of me just saying “here is the solution”. I have to try to help government to see a way that, if it's minded to make changes, it can make them in a way that is acceptable,' he said.

He indicated the extent to which realpolitik will influence his conclusions when he delivers his report in December.

'One of the reasons the government was very anxious about revaluation was because it inevitably brings a change in who pays what, and those who lose are perhaps strong voices. These issues have to be balanced,' he said.

In comments that will dismay many in local government, Lyons also questioned whether there was 'any public appetite to go towards more local taxation', generally considered to be the means of changing the balance of funding.

Lyons suggested that 'revenue-sharing' models could be an alternative way forward, where funding continues to be raised nationally but there is greater local flexibility over how it is spent.

'Effectively, that's what we have at the moment but we see it all as grant coming from central government,' he told PF. 'If that income was seen to be raised nationally, but [it was] agreed between central and local government how it would be used, it might be part of the equation for the future.'

Lyons' comments will stoke suspicions that wide-ranging reform of the town hall funding regime is now a distant prospect.

Earlier, he told delegates that all the possible options on reform had already been made public. The options still considered to be in contention are a reformed council tax, greater powers to charge, and a relocalised business rate.

But Lyons made clear his doubts about the last of these options. 'I'm clear that it is not the golden key, it is not the one thing that will solve the balance of funding issue,' he said.

Cameron promises more local decision-making

Conservative leader David Cameron vowed to scrap ring-fenced funding regimes and the other 'paraphernalia of the Whitehall control-freak regime', in a speech designed to break with his party's centralising past.

Declaring himself 'not quite a repentant sinner but… an enthusiastic disciple of the localist cause', he admitted that past Tory administrations had made mistakes, drawing many powers from the grassroots to the centre.

He vowed to dismantle the restrictive frameworks imposed by the government in recent years.

Cameron told delegates: 'We need a bonfire of the directives, audit systems, Best Value regimes, ring-fencing… that tell local authorities what they can and can't do.'

Cameron also spelt out his opposition to a reorganisation of local government, arguing that it would merely distract councils from 'the real task of improving services and increasing efficiency'.

He also reiterated previous pledges to abolish councillors' watchdog the Standards Board for England, which has attracted considerable criticism, and to do away with the unelected regional assemblies, returning their powers to councils.

These, Cameron said, were a 'costly and unnecessary bureaucratic barrier between local government and local people'.

He also argued that local government was in the front line of the battle against climate change, generally considered to be a global issue. 'In renewable and decentralised energy… councillors of all parties can lead a revolution in the way that Britain is run.'

Too many children are locked up, says report

Youth custody for the under-18s should be abolished for all but the most violent offenders to reduce the rising number of children locked up each year, the LGA is urging.

Research commissioned by the association has found that 6,500 children receive custodial sentences each year, up from 4,000 in 1992. Jailing only those convicted of violent offences would cut that figure to around 2,500.

The LGA's report, Children in trouble, launched at the conference, argues that non-violent offenders should instead be subject to tough community-based penalties. This would allow programmes to be established to tackle reoffending, which stands at 82% for those leaving youth custody.

Reducing the number of children sent to prison would also save up to £70m a year of the £245m spent annually on custody, it concludes, since even intensive community sentences are cheaper.

Les Lawrence, chair of the LGA's children and young people board, said: 'Thousands of young people are caught in a vicious circle that condemns them to a life of crime and does nothing to make the nation a safer place.'


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