An independent commission into local government finance is to be undertaken by the Local Government Association (LGA) and the Chartered Institute of Public Finance and Accountancy (CIPFA).
The Commission, launched at the LGA's General Assembly, will explore how reforms to the local government finance system can help address the challenges facing the country such as promoting economic growth, reforming the welfare system and integrating health and social care.
Sir Merrick Cockell, chair of the LGA, said:' We hope to put a proposal to whoever forms the next government which is a practical and supported basis for making our financing understandable and transparent not only to us but also to our residents.
'One which devolves to us the powers or gives us the levers to radically and more efficiently transform public services for the benefit of all our communities. It is right that we are transparent on how we spend public money but it is as right that anyone - armchair auditors included – can understand how their council’s grant is arrived at.'
Rob Whiteman, CIPFA’s CEO, said: 'We have argued strongly for some time that the funding mechanisms for local government are now found wanting in a number of ways. In the current climate of fiscal constraint it is vital authorities are able to plan effectively for the medium term.
'It’s clear that we need to eliminate the uncertainty of an annual hand to mouth settlement when unexpected marginal changes mean a real difference to front line services.
'The independent commission will produce impartial, balanced advice for both the government and the opposition on how best to ensure that funding system for local government can move towards a settlement that is fair, locally accountable and sustainable in the long-term.'
Sir Cockell also said the LGA is set to launch a new commercial operation to help councils generate revenue and additional income, with work on a new bonds agency well under-way.
He said: 'In the next few months I hope we will start a commercial operation which could benefit the sector and make us far more self-sufficient. When I visited our sister LGA in Australia in October I found an organisation that had been far behind us in contracting services but that had seen the benefit of using their collective strength to save money and launch new technologies. I’m sure you will hear more about this as the year progresses. It will be a very exciting departure for the LGA.'
