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There has been a succession of local government finance reviews over the years, but the one announced by the coalition government will be the most important, if it delivers on localism. I remember going for an interview for a trainee post back in the days of flared trousers, platform shoes and dodgy sideburns. The big debate then was about what the findings of an inspection of local government finance would be. The review in question involved the Layfield Commission. If I remember rightly, it recommended steps be taken to increase the accountability of local government. The commission saw raising the proportion of expenditure financed by local taxes as the way to achieve this. Since then, we have seen many reviews of the system. Some were radical, such as the introduction of the community charge and subsequently, council tax. Others were less far-reaching, including changing the system of grant distribution. The most recent was the introduction of, frankly, the almost unfathomable four block model. Now we have to face up to the possibility of another couple of years of complex models, exemplifications and discussions about how the national cake will be divided. Don't get me wrong. This will be readily taken on board, if the review does lead to the devolution of power and greater financial autonomy for local authorities which the coalition government says are its aims. Certainly, councils have relied too much on central grant funding, and been dependent on council tax to raise money. In Surrey, more than 80% of services are paid for through residents' contributions – and this has impacted on their ability to shape their local economies. Up there with those two aims should be a commitment to finding ways to reduce spending to help tackle the public debt problem. Phil Walker is director of finance at Surrey CC

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WHITEHALL

Money Matters

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