Local Government Reform - On Hold
The article on page 2 of Today's Times seems to indicate that Local Government Reform is being put on the back burner.
I'm not really surprised. The ring-fencing of education budgets, Council Tax capping and the Gershon agenda are significant recent changes in their own right. Sutton Council's revenuce expenditure has risen by £100 million in the last 9 years, a 30% real terms rise. This has mainly gone on salaries of extra staff. Over the next few years we will see a focus on how we can use new technology to make better use of the extra staffing levels we have now got compared to the early 1990's. That is the big modernisation challenge we need to address over the next 5-10 years.
In a London context I suspect any future reform will continue to focus around the issue of extra powers for the Mayor of London. In many ways this will be good as there will then be a longish period of relative stability after the upheavals of the 80's.
In terms of finance, I think business rate will stay nationalised (except for Business Improvement Distrcts - BIDs) and council tax in effect remain capped, though local government may be given the ability to levy some small scale green taxes in return for good performance.
Whilst I think the Lib Dems will at their national conference next week, drop their 50% income tax rate for green taxation, it will be interesting to see if they continue to support local income tax or instead go back to something like site value rating.
The main problem with local income tax, is not its practicality, but the fact that the Lib Dems tried to pretend there were no losers from it. Even their own optimistic assessment on their Axe the Tax website showed at least 30% net losers, so why didn't they ever say "there will be losers from it, that just tough." The reality is with any local tax change (remember the 1990-1993 period)there would likely be a 50% losers and 50% winners and that is why the earlier 1990's pain will put people off changing the Council Tax. If the Lib Dems were more honest about this pain maybe it would be worth a principle worth promoting, but I suspect the Lib Dems will continue to pretend that it would be a painless change.
I'm not really surprised. The ring-fencing of education budgets, Council Tax capping and the Gershon agenda are significant recent changes in their own right. Sutton Council's revenuce expenditure has risen by £100 million in the last 9 years, a 30% real terms rise. This has mainly gone on salaries of extra staff. Over the next few years we will see a focus on how we can use new technology to make better use of the extra staffing levels we have now got compared to the early 1990's. That is the big modernisation challenge we need to address over the next 5-10 years.
In a London context I suspect any future reform will continue to focus around the issue of extra powers for the Mayor of London. In many ways this will be good as there will then be a longish period of relative stability after the upheavals of the 80's.
In terms of finance, I think business rate will stay nationalised (except for Business Improvement Distrcts - BIDs) and council tax in effect remain capped, though local government may be given the ability to levy some small scale green taxes in return for good performance.
Whilst I think the Lib Dems will at their national conference next week, drop their 50% income tax rate for green taxation, it will be interesting to see if they continue to support local income tax or instead go back to something like site value rating.
The main problem with local income tax, is not its practicality, but the fact that the Lib Dems tried to pretend there were no losers from it. Even their own optimistic assessment on their Axe the Tax website showed at least 30% net losers, so why didn't they ever say "there will be losers from it, that just tough." The reality is with any local tax change (remember the 1990-1993 period)there would likely be a 50% losers and 50% winners and that is why the earlier 1990's pain will put people off changing the Council Tax. If the Lib Dems were more honest about this pain maybe it would be worth a principle worth promoting, but I suspect the Lib Dems will continue to pretend that it would be a painless change.
posted by Charlie Mansell at 4:52 pm
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