Communities secretary Eric Pickles has delayed making an announcement on the local government finance review amid ongoing coalition discussions over its scope.
Mr Pickles had hoped to make an announcement on the review at the New Local Government Network (NLGN) think-tank’s conference tomorrow (26 January), although the secretary of state’s team had not set a firm deadline.
Two Whitehall sources today confirmed an announcement at the NLGN conference now looks ‘unlikely’ - but one source described the review as ‘imminent’.
It was reported last week that Liberal Democrat deputy prime minister Nick Clegg and Conservative Mr Pickles held different views over the scope of the finance review, which forms a key part of the coalition’s long-term plan to overhaul local government and to reduce councils’ heavy reliance on central government funding.
A leaked letter from Mr Clegg to Tory prime minister David Cameron and chancellor George Osborne last week revealed the deputy prime minister wants a root-and-branch review of local tax-raising powers - including the consideration of American-style local sales and fuel taxes, reformed parking levies and wider borrowing powers – to help councils become increasingly self-sufficient.
However, following years of sharp rises in council tax, it is understood Conservative Mr Pickles and the chancellor appear keen to limit the number of new taxes and would be happier kick-starting a finance review that is more narrow in scope – looking into the capacity for councils to keep a greater share of locally raised business rates, as Mr Pickles has already suggested, for example.
While they remain committed to a review of local government finances, many influential senior CLG officials and politicians are keen to avoid entering into a long-term project that ends with few new policies. They point to the 2007 review of council funding by Sir Michael Lyons, former Birmingham City chief executive, which considered a wide range of options – including the politically controversial issue of Council Tax revaluation – but ultimately introduced limited reforms.
