The proposal, which followed a roundtable discussion among 36 English senior finance offices, would allow three emerging models of finance reform to be tested, today’s Creating a sustainable financial future report stated.
These range from the implementation of the Independent Commission on Local Government Finance’s proposed financial freedoms to the Greater Manchester devolution deal, including NHS spending, and the “Cambridge model” of a City Deal and increased retention of business rates.
Grant Thornton director Mark Stocks said the roundtable had made clear that rapid change was necessary given the financial pressures council now face as a result of cuts from government.
Pilots of these three models, including integration with health, would allow for testing of how local need should be built into any future financing models, he said. It could also provide a basis for examining the effectiveness of longer-term “place-based” financial settlements, of at least five years, for public services.
Development of these models of local government financial reform would put authorities’ financial future in their own hands while also developing ways to addresses the dual needs of resource equalisation and incentivising growth, Stocks added.
"There is a growing call for devolution of finance in English local government. Pilot schemes have been agreed in Manchester and Cambridge.
“Other incentive mechanisms such as business rate pooling and Enterprise Zones are also available. Beyond this the pace of devolution and of delivery model developments such as combined authorities and shared services has varied. In reality, some areas have not changed while others have evolved significantly.
“A more balanced relationship is needed between central and local government in England. To achieve this, the government needs to make a number of changes in both the devolution of power and finance to local government."
