18 May 2010
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A coalition of possibilities


Heather Jameson

The details of the coalition government revealed a finance review of local government, and hints at the shape of things to come. Heather Jameson considers some of the headlines

As the politics unfolded in Westminster last week, it quickly emerged that the new coalition government had been won at a cost to the Conservatives.

The coalition negotiation agreement revealed a huge number of concessions required to get the Liberal Democrats on board. It was not just the much-hyped review of the voting system, as some key local government issues emerged.

The fact that local government was mentioned at all comes as something of a surprise. While both parties talked of localism in their manifestos, the centralist version of localism often by-passes councils in favour of community groups. This government looks set to devolve to both.

Funding Already

The Government has started to rake through the public sector books in a bid to save its £6bn. The finance settlement, due to be unveiled in the autumn, is set to be eye-wateringly tight for local government – as has been widely anticipated. But, as the coalition has agreed to some spending priorities, such as a real-terms increase for NHS funding for the life of the Parliament, the public sector spending pot – or at least local government’s share – will be squeezed even further. One local government insider warned The MJ that cuts would be ‘quicker and tougher’ than expected.

Local Government Information Unit chief executive, Andy Sawford, warned the ring-fenced NHS budgets ‘may lead to reductions in other vital and related areas of spending, such as social care, which is notably not mentioned in the document’.

Finance review

The real cynicism in local government, though, has been saved for the pledge to review local government finance. A rather unexpected development, the review could spell good news for the sector, putting changes to the current system back on the table. But, most commentators are not expecting any real change. As one insider said: ‘Yeah, right!’ We have been here before.

The Labour Government’s finance review, conducted by Sir Michael Lyons, was delayed and extended in a bit to avoid making decisions over the future of funding. But the review – which is now gathering dust on the shelf – is still relevant. Mr Sawford has claimed the first ‘efficiency’ the new government could make would be to abandon a costly finance review in favour of dusting down the Lyons report, and getting on with the job.

Sir Michael himself has always maintained the report was apolitical and suitable for any political party.

NLGN acting director, Anna Turley, was more positive and keen to work with the new government. ‘Political devolution, as advocated by both parties, can only occur alongside financial devolution, and it is more apparent that the current system of local government finance is broken,’ she said.

She has called for the reform of business rates, the introduction of council tax bands, and an end to capping.
However, a local income tax, favoured by the Liberal Democrats, has always failed to gain any real momentum within local government.

Secretary of state

Rumours of a restructure within Whitehall, potentially scrapping the department of Communities and Local Government, have not come to pass.

New communities secretary, Eric Pickles, is an old hand as far as local government is concerned. The former leader of Bradford City Council has held the shadow brief twice before.

One local government insider claimed working with the political heavyweight would be ‘a bit of a challenge’, due to his reputation for a slash-and-burn approach to councils. He is keen to scrap large swathes of managerial posts – perhaps due to his experience in his Essex constituency, where Joanna Killian runs both Essex CC and Brentwood BC.

However, he is well respected in the sector as a politician who knows his brief, and has largely been welcomed into the post.

Total Place

So far, there has been no mention of the Total Place agenda from the new government, but that has not stopped the sector from speculating on where we go next with the policy.

One local government insider told The MJ he was expecting a ‘more ambitious and less wordy version of Total Place’ to come out of the coalition.

By handing powers over to local government, central government could transfer the risk of failure, an appealing offer to a government with bigger issues to deal with, and it comes alongside a potential cash saving to boost the empty coffers.

Queen’s Speech Under a purely Conservative Government, we could have expected a Local Government Bill in the Queen’s Speech, outlining a move to directly-elected mayors in the big cities, directly-elected police commissioners, free schools, and a power of general competence.

However, very little of the Bill that would have been is reflected in Liberal Democrat policy. One of the first tests of the coalition will be to hammer out a policy plan that both sides can agree. Local government insiders are predicting a rather fudged Queen’s Speech as the parties thrash through the detail in private. Local government will have to wait to get the finer detail of where the sector is going in the autumn.



Your comments

In his speech to the House of Commons on 21 March 1991 prior to the introduction of Council Tax in April 1993, Michael Heseltine said, "...the system should ensure that regional variations in property values do not lead to disproportionate bills in high price areas." Something has plainly gone badly wrong. What is the new government going to do to put this matter right?

Christine Melsom, Chair Isitfair, Added: Wednesday, 19 May 2010 06:15 PM



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