During the past 10 years, while I have been at the Local Government Association, there have been radical and exciting changes in local government. Local government is now better, more important in the delivery of local services, and plays a much more respected role with central government. But, there are important challenges about how councils are funded and what role they play in their communities which will become ever-more urgent in the years to come. The first of these is Sir Michael Lyons’ review. Sir Michael’s interim report needed to shed light into the shadows of the complex world of local government finance. It is crucial for the health of local democracy that people can understand how local services are paid for and what happens to their council taxes. Before Christmas, Sir Michael announced that there needed to be a ‘public debate’ around these issues. It is not clear how such a debate can be conducted when understanding of the current system is apocryphally confined to two civil servants – one off sick and the other on holiday. Sir Michael seems to be saying that if there is no groundswell for change, then he would look at tinkering with the status quo, rather than proposing the fundamental reform of local government funding that is so desperately needed. So, the only way to get a radical overhaul is for councils, businesses, campaigners and the media to get out there and explain why it is wasteful, unaccountable and undemocratic for the UK to have the most centralised tax and decision-making system in the world. Our recently-published report Closer to people and places illustrates the point. Our proposals go to the heart of the debate about how public services are delivered – should a Whitehall department dictate how services are provided everywhere in the country or should local people, through their elected representatives, be able to ensure that the interests of everyone in a community are considered in making important decisions about what services people receive and how? Can choice and post evaluation be developed across all local public services of democratically-elected local people, or must we continue to have ineffectual, headline-grabbing stories about the latest intervention from Downing Street? A crucial challenge will be to help ministers recognise that the billions of pounds spent on much of the inspection and regulations that local authorities have to wade through could be better spent. Even those councils which have gained top marks are still dogged by burdensome red tape from the centre. By scrapping many of the unnecessary directives, inspectorates and performance indicators, £1.8bn of the £2.5bn spent on regulating local government and identified by the Gershon review could be saved or reinvested. This would enable councils to become more productive, to provide more frontline services, and reduce the burden on taxpayers. With increasing demand for services and rising costs across the public sector, scrapping this extra bureaucracy would help meet these extra pressures. Freeing authorities from unnecessary red tape, giving a stable and understandable funding agreement, and putting local democracy at the heart of the community is what the Government has been saying for the last few years. The question for the Government is whether Lyons, the local government White Paper and the inspection process can create the new localism to make ministers’ deeds match their words. The ball is in their court. Local government is up to the challenge. Can the same be said of central government? n
