LSE academics Professor George Jones and Tony Travers, along with Professor John Stewart from the University of Birmingham, have come together to argue that genuine localism can never be realised until and unless central government gives up its 100 per cent control over all tax sources in the UK.
Local government finance must be rebalanced so that local authorities, instead of receiving the bulk of their revenue from central grant, obtain it from taxes levied on their local voters and where the rate of tax is determined by the council. Without this fundamental rebalancing, local government will remain dependent on the whims of central government, the academics contend.
The academics make the points in an article, Genuine localism – the way out of the impasse, in a report by the Public Management and Policy Association, Redefining local government, due out in April 2011.
For genuine localism, central government must make seven reforms, the authors advocated:
A true commitment by central government to genuine localism;
Rebalancing local government finance so that local authorities obtain finance from taxes levied on their local voters;
Allocation of the smaller grant should be carried out according to a comprehensible and transparent formula;
Statutory protection for local government in a law which codifies the central-local government relationship;
Adherence to the codified rules should be monitored by a joint committee of the Commons and Lords;
The executive should create within itself a capability and incentives to ensure that departmental policy proposal impinging on local government conform to the codified rules; and
Use of a Total Place approaches galvanising its full potential, beyond that of the Government’s current community budgets.
They concluded centralism, rather than localism, was the overriding basis on which recent cuts were made. Without the possibility of raising their own finance and being held accountable by voters for that, local government is always at the mercy of boom and bust spending trends of central government.
Tony Travers said:
"Councils cannot appeal to their voters for tax revenues to finance local services they might have wanted to maintain. This reduces councils to little more than central government’s delivery arm, rather than real government for local communities."
Other contributors to this report are Dominic Campbell of FutureGov, Colin Talbot of Manchester Business School and Daniel Ratchford of the London Borough of Sutton.
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Notes to Editors:
1. About the Public Management and Policy Association (PMPA)
The Public Management and Policy Association (PMPA) stands for the highest standard of public management and policy, developed within a framework of vibrant democratic governance, in order to deliver the very best public services to the citizens of the UK. The PMPA promotes these values by:
Encouraging public managers and policy-makers from across all sectors to share their experience, to reflect and to learn together in order to improve public services.
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2. George Jones is an emeritus professor of government at LSE, where he was Professor of Government from 1977 to 2003. He served with John Stewart on the Layfield Committee on Local Government Finance (1974–76).
John Stewart is an emeritus professor at the University of Birmingham where he was Director of the Institute of Local Government Studies and Head of the School of Public Policy.
Tony Travers is director of LSE London, a research centre at the London School of Economics. He has been an advisor to a number of Parliamentary select committees and was a member of the Audit Commission from 1992 to 1997. He is a board member of the New Local Government Network and a member of the research board of the Centre for Cities. He writes and broadcasts in the national media about local government and public finance.
3. PMPA’s report, Redefining local government, is published in full at the beginning of April 2011.
4. About CIPFA
CIPFA, the Chartered Institute of Public Finance and Accountancy, is the professional body for people in public finance. Our 14,000 members work throughout the public services, in national audit agencies, in major accountancy firms, and in other bodies where public money needs to be effectively and efficiently managed. As the world’s only professional accountancy body to specialise in public services, CIPFA’s portfolio of qualifications are the foundation for a career in public finance. They include the benchmark professional qualification for public sector accountants as well as a postgraduate diploma for people already working in leadership positions. They are taught by our in-house CIPFA Education and Training Centre as well as other places of learning around the world. We also champion high performance in public services, translating our experience and insight into clear advice and practical services. They include information and guidance, courses and conferences, property and asset management solutions, consultancy and interim people for a range of public sector clients. Globally, CIPFA shows the way in public finance by standing up for sound public financial management and good governance. We work with donors, partner governments, accountancy bodies and the public sector around the world to advance public finance and support better public services.