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Without local financial powers, Pickles' Bill is 'lipstick localism'
Responding to the publication of the Localism Bill, ippr welcomes the decentralisation of key powers to councils and communities but says that the Bill represents a cosmetic commitment to localism as it does not deliver new funding streams that give local people more control over how their taxes are spent.
Ed Cox, Director of ippr north said:
'Localism is not achieved by simply 'handing down the axe' and leaving councils to make cuts dictated by central government policy. Real localism will only be achieved by reforming local taxation so that council tax is replaced by a fairer mix of income and properties taxes.
'Currently, local councils get 80 per cent of their funds in the forms of grants, making them over-dependent on central government. In other countries, the percentage of funds raised locally is 50 per cent or higher – that is where we should be moving to if we really want local devolution in this country, not lipstick localism.
'While the idea of 'people power' is appealing, and neighbourhood powers – especially planning – are a positive step, the unfortunate reality of this Bill is that many local councils may end up being only too happy to offer voters the chance to fund and run services that they can no longer afford to support.
'The real risk is that already deprived areas will slip further behind as people with limited resources struggle to meet the complex needs of their neighbourhoods. We have argued that social justice must sit at the heart of the drive for localism. To achieve this, central government should set a broad framework of national entitlements and then allow local decision-makers to design and deliver services which are more tailored to their own local needs.'
Notes to editors
ippr north published Five Foundations for Real Localism in November. The report set out a series of foundations against which the Localism Bill can be assessed.
The first foundation for localism is that it must be effective and efficient. Any approach to more local decision-making must carry with it a considered understanding of the most appropriate scale over which any given service, public investment or policy intervention can be efficiently and effectively delivered. A framework for efficiency and effectiveness needs to be developed to provide a clear and transparent rationale for decision-making at every tier of government.
The second foundation is that localism must be properly funded. Reform of local taxation is needed so that the council tax is replaced by a fairer mix of income and properties taxes. The level of at which these taxes are levied should be determined locally, without central government interference, at a level that local councillors believe their voters will be prepared to support. Local decision-makers should also be given a much wider range of fiscal instruments to build local financial autonomy and incentivise local economic development.
Thirdly, social justice must sit at the heart of a drive for localism. Central government’s desire to iron out local variations needs to be managed through a set of national minimum outcomes and through a fresh, transparent approach to equalisation in relation to central-local finances.
The fourth foundation is that greater devolution of power and responsibility to the local level there must be accompanied by a step-change in the transparency and accountability of local decision-making across all service areas. Current proposals for growing local accountability look set to increase the complexity and obscurity of local decision-making. Solutions need to be focused upon a more simple solution centred upon more powerful local government operating within a framework of efficiency and effectiveness.
And finally, any new drive for localism should be framed within a constitutional settlement between central and local government that would create genuine autonomy and enshrine the key principles behind central-local relations for years to come. Local government should have constitutionally protected legitimacy as a tier of government, just as it does in other EU states.
Tamsin Crimmens, Media Officer – 0191 233 9051 / 07800 742 262 / firstname.lastname@example.org