Hurrah! Osbourne in his spending review is planning to restore vigour and real accountability back into local government. By 2020 local government could be funded out of council tax, business rates and fees charged for services and the reliance on grants from central government will be drastically reduced.
Councils can increase council tax by 1.9 per cent per annum, more if approved by the local electorate in a referendum. Councils with responsibilities for social care, domiciliary or residential, will be able to raise a levy of two per cent annually on the council tax to help provide the comprehensive and affordable social care system the UK needs. Business rates will be allocated as now but directly to local government authorities. Councils will be able to vary business rates to support local existing businesses and encourage new businesses into the their district.
Most importantly, local government will be less able to play the blame avoidance game. “We have to cut services because the government is not giving us enough grant money”. Local councils will have to innovate, digitalise, outsource service provision, devolve responsibility to parish and neighbourhood councils or village clusters (special expenses areas and the right to approve small residential developments already exist).
A reliance on government grants turns local democracy into an arm of the civil service emasculating local accountability and encouraging the blame avoidance game.
Local government should change its focus to that of an enabling agency not a direct provider of services
Devolving more responsibility and accountability to local councils is freedom on a leash. An annual 1.9 per cent increase in council tax is below the Bank of England target rate for inflation of two per cent, which may become the ’normal’ average long term rate of economic growth. Councillors will have to become more engaged in explaining and justifying how and why they propose to spend your council tax and business rates and the fees for local services. Local councils will have to be more publicly accountable, be more innovative and smarter in how they deliver services that give value for your taxpayer’s money. Councils freedom to borrow will still be subject to some control.
A new era is dawning. Welcome it!