As new ministers this week set out devolution proposals for councils – including a power of general competence – plans for a full finance review have been dismissed by local government's top finance expert.
Chief executive of the Chartered Institute of Public Finance and Accountancy (CIPFA), Steve Freer, claimed now was not the right time.
Speaking to The MJ after the Government's coalition agreement revealed the Conservatives had conceded a review of the current council funding system, Mr Freer said: ‘Now is not the right time to be contemplating new funding streams for local government. Rather than change, we ought to be creating as much stability as possible.' In the current financial climate, he said local government should be focusing on the challenges ahead, and on delivering services for citizens with reduced budgets, rather than wholesale change.
Other local government finance experts have claimed the Lyons review into finance, which was published in 2007, should be ‘dusted down' and used, rather than having another costly investigation into the options.
Mr Freer said: ‘Clearly, Lyons covered a lot of ground and I would hope any review would start with Lyons in the middle of the table.'
The finance chief claimed the new government could revisit some of the options in the Lyons review which would improve the relationship between central and local government, such as cutting council tax capping, and an independent committee to distribute local government funding.
But he ruled out changes to the business rates and the possibility of a local income tax in the current climate.
Prime minister, David Cameron, has kicked-off his pledge to devolve significant new powers to local authorities by outlining plans for a ‘power of general competence' for councils.
Following a meeting at Number 10 on 18 May, Mr Cameron emerged to declare he would ‘extend powers for local government by giving a general power of competence to local councils, and conduct a comprehensive review of local government finance in order to help remove restrictions that limit the work of councils'.
Mr Cameron last year promised a wide-ranging general power of competence would allow councils to do anything locally that wasn't already prohibited by law, providing it was in the best interests of the locality. While it is not yet clear exactly what restrictions would apply to councils, Whitehall insiders claimed the policy could be ‘historically significant'.
