08 December 2006
Sir Michael Lyons' Inquiry into the future of local government has been delayed once more – this time so that he can take into account the recommendations of the Barker, Eddington and Leitch reviews.
The decision, announced by Chancellor Gordon Brown in his Pre-Budget Report on December 6, drew a stinging response from town hall leaders who have been waiting more than two years for his conclusions.
Lyons, speaking to Public Finance immediately afterwards, said it was a sensible move that would allow him to consider the impact that the housing, transport and skills reviews would have on local government.
His inquiry's conclusions are due to feed into next year's Comprehensive Spending Review. But concerns have been mounting in recent weeks that publication of his report would be postponed or abandoned, preventing any meaningful debate beforehand.
Lyons refuted the notion that this extension was merely a delaying tactic by the government, saying the chancellor had given a commitment to publish his report around the time of the 2007 Budget.
'My concern was to get certainty over publication,' Lyons told PF. 'We now have a very clear statement [on that].' He added: 'I am full of confidence about the scope of my work and the fact that I'm going to be given a fair hearing.'
But Sandy Bruce-Lockhart, chair of the Local Government Association, poured scorn on the explanation for the latest delay. He told PF: 'It's the third time it has been kicked into touch [by ministers], which points to a remarkable inability to take tough decisions.
'One can only assume this has been done in order that the Budget will contain a bold package on devolution of funding, the return of the business rate, and the levers of local economic prosperity.
'That is now absolutely essential. If not, what possible reason could there be for the delay?'
Tim Thorogood, director of the Local Government Information Unit, was also sceptical. He told PF the decision laid bare the government's disarray over the reform agenda.
'The delay and lack of integration between the Local Government Bill, Lyons and the Treasury points to a lack of joined-up thinking by government on the reform of local government. I only hope that after this delay the review will make a real difference, in time to influence decisions on planning and spending.'
The news for councils elsewhere in the PBR was not much better, as the chancellor announced that in the 2008–11 spending round, local authorities and Whitehall departments will have to make cashable efficiency savings of 3% per year on their overall budgets. In addition, all central government ministries will have to cut their running costs by 5% in real terms per year.
Brown told MPs these measures would, along with the existing efficiency drive, 'release by 2011, for our priorities like education, the NHS and policing and security, an additional £26bn a year'.
He added: 'The purpose of all these savings is to ensure frontline services will have the resources they need.'
Among those services, the big winner in this year's PBR was education. The chancellor announced increases in capital investment for the sector that would, he said, produce a cumulative total of an extra £36bn over the next four years.
He said that would mean per-pupil capital investment levels in the state sector would match those in the private sphere by 2010.
Steve Sinnott, general secretary of the largest education union the National Union of Teachers, said: 'This is the best bit of news we have had since Labour came to power. The chancellor is to be congratulated. This investment will help schools meet the nation's need for a highly educated population capable of responding to the demands of the twenty-first century.'
PFdec2006
