The Dilnot report is a ‘1948 moment’ as it favours finding a centralist solution to social care rather than making it to a truly local responsibility, says David Walker.

If you think local government is going through the mill, try higher education. With universities, there is a not dissimilar pattern to what’s been happening to councils.

The Government established one big principle – competition – but then confused it amid a slew of often contradictory policy initiatives, which leave some universities facing a deeply uncertain future.

But amid all the turmoil, an oasis. Nuffield College Oxford sits comfortably on a fat endowment from William Morris, the carmaker (in the days when British manufacturing led the world).

Among college fellows are and have been some doughty champions of local government. There’s Iain McLean – the expert on distribution formulae; Laurence Sharpe, who wrote widely on local democracy and city government; and the former warden Sir Norman Chester, an expert on local government finance, who himself had started life as a council clerk.

Nuffield’s current warden is Steve Nickell, former member of the Bank of England’s monetary policy committee and now member of the Office for Budgetary Responsibility. Next year he is succeeded by Andrew Dilnot, former head of the Institute for Fiscal Studies.

Both are distinguished academics, lucid and dispassionate. Both have been examining pressing problems without any bias. Both turn out to be strongly critical of localism in two substantive areas of policy.

Nickell’s special subject is housing. In a recent lecture at the London School of Economics he pointed out just how extraordinary it is that despite the amazing rise in house prices and, despite the recession, the continuing buoyancy of house prices, so few new houses have been built. In this market, as the Kate Barker report told the Labour government, rising demand does not provoke rising supply.

In Spain, which has also had a housing price bubble, they built 660,000 new homes in 2006 alone. In England, housing is a scarce commodity. Yet population is continuing to increase, fuelled by migration, pushing the demand for housing up. Ahead, Nickell said, lie overcrowding and rent increases – unless we see house construction mounting to the levels it reached in the 1950s and 1960s.

For that to happen, he argued, we need ‘command and control’. Central Government needs to impose targets on local authorities for the allocation of land for housing and permission to develop.

Andrew Dilnot has just delivered his report on social care. A system where people with identical care needs in Lewisham and Langbaurgh are treated differently is not right, Dilnot said, both morally and in terms of the expressed wishes of the public. His report is a ‘1948 moment’. Health could have been made a local responsibility; the Attlee government chose instead to nationalise responsibility.

With social care public policy could in theory go down the localist road. Instead, Dilnot says, we need to add a welfare function to central government. If his plan were carried into effect – and some version of it looks likely, sooner or later – it implies the creation of a new national body to oversee it, and a subordinate role for councils. So here we have both Nickell and Dilnot, looking disinterestedly at pressing problems of public policy and coming up with centralist solutions.

Of course their prescriptions for housing and social care don’t exclude councils. Local government has willy nilly to be involved in planning, land use, housing allocation and possibly development itself.

Local government is and will remain involved in the provision of social care, needs assessment, regulation of quality and so on. But only within centrally determined ‘envelopes’.

In recent years some people have been carried away by an abstraction – ‘localism’. They have advanced the heroic idea that somehow councils could be autonomous, raising their own money, choosing their policy priorities. Nickell and Dilnot serve as reality checks. Neither policy nor public opinion will tolerate decoupling councils from national need.

Of course there is an argument to be had by local authorities about finance, the grants regime and the arena of local discretion. Councils are perfectly entitled – indeed obliged – to complain about the competence of central government departments in dealing with services that are principally going to be delivered at local level and to demand some re-equilibration of central-local relations. But that ‘practical localism’ is different from the highfalutin theory of local autonomy think tanks and some councillors have been peddling.

Housing will not be built in areas where people want to live and where they can find jobs without national or regional plans that are more than indicative: they will have to prescribe where the housing will go.

In other words, local choices have to bend before a national need. Communities have to adjust. Localism must be constrained. Steve Nickell is not alone in doubting whether the Government’s attempt to bribe communities into accepting development will have more than a marginal influence on supply. The alternative is, as he says, command and control.

Dilnot reasons that his commission of inquiry would not have been set up if the local solution for social care had been remotely acceptable. Instead, his work is necessary because people want uniformity. They want guarantees about cost and access to care, wherever they live in England.

Localism – in the strong ‘let’s do things differently’sense espoused by the theorists – is a non-starter. We should move on, accept that councils will always be subordinate in terms of finance and policy, and work on the details.

David Walker was former director of communications at the Audit Commission