Posted by:29 June, 2011
At the LGA conference in Birmingham today Nick Clegg received a warmer greeting than the Prime Minister did yesterday.
Where David Cameron was, on occasion, ever so lightly heckled, Mr Clegg was greeted with polite silence, applause – and at one point, a whoop of joy.
His reception was no doubt due to being the bearer of good news – but also because he was there to actually speak to the local government audience, unlike Mr Cameron, who used his speech to address the country about public sector pensions.
There was also substance to Mr Clegg’s speech - the red meat of policy annoucements that give delegates a healthy glow. First there was confirmation that the government will drive through reform of business rates, with a bill to be introduced in this parliamentary session (it was this that prompted the whoop); and then there was the announcement of a new push on community budgets – as LGC revealed last week (£) – with two local authority areas and two neighbourhoods to pilot “real” pooling of funding across their areas (Mr Clegg even uttered the two words that, it seemed, had been banished forever from ministers’ lips: Total Place).
Both announcements should be rightly applauded. They are wins for local government and Mr Clegg should be praised … well sort of, for there are, as we have come to expect, important caveats.
With business rates reform it seems clear that the government is only considering allowing councils to keep, rather than set the rates –it is retention of the rates, rather than full localisation. With a business lobby trenchantly proposed to measures that would let councils raise rates, it seems that has been a bridge to far.
This is a loss for local government, and it would seem, a loss for Mr Clegg. As LGC revealed earlier this year, Mr Clegg had been pushing for the local government resource review to extend to allowing councils to set the rates, with business secretary Vince Cable also in favour of the measure, despite the business lobby’s opposition.
In letter to communities secretary Eric Pickles and his cabinet colleagues, leaked to LGC in January (£), Mr Clegg said he wanted reform of local government finance to be wide ranging in scope.
“He wants a fundamental root and branch review in order to reduce as much as possible the need for local government to come back whinging to central government,” one Lib Dem source told LGC at the time.
The reform, the letter made clear, should start from the assumption that, with the exception of the schools grant, local authorities are self-funding, and should “work back from that goal”. The review, Mr Clegg said, must “demonstrate the full scale of our ambition” and ensure local authorities “have the greatest range of revenue raising powers and freedom from central government constraints”.
This would have included, among other measures, a full range of local taxes, charges, and borrowing powers (for full details see my blog here). This would have been radical reform indeed. But despite praise from the Tory right (Harry Phibbs, from Conservative Home, gave Mr Clegg a “cautious two cheers”) the truly radical reform never made it onto the agenda, blocked by Treasury and, I’m told, Mr Pickles.
Meanwhile, on the roll out of the community budgets pilots – billed as the second phase of the resource review - the Department for Community & Local Government’s terms of reference make it clear there is an enormous amount of room to wriggle back from Mr Clegg’s commitment that the two local authority pilots would “pool all budgets relating to all public services”.
Firstly, the community budget “Total-Place-style” pilots will need to “operate alongside national spending decisions” and take account of existing commitments”, the DCLG says. They will also need to “fit with the government’s on-going reform agenda”.
What might that mean? Well, for a start it means that the Department for Work & Pensions, with its centrally administered Work Programme, will unlikely be involved: Iain Duncan Smith’s horse has had long since bolted out of the localism stable. Community Budgets without DWP funding will immediately be less able to deliver what Total Place once promised.And what of education? How will Michael Gove’s centralising reforms fit with a single budget agenda? The same question can be asked of the health reforms.
Clearly with out those three departments on board, the pilots will full far short of what Mr Clegg says – and seems to believe – they will be. This, then, is where local government, as Sir Merrick Cockell says, needs to continue to make its case and push for real localism.
“To be truly successful [the pilots] must have the support and financial backing of all relevant government departments,” the new chairman of the LGA says. “Without that it will be difficult for councils and their public sector partners to achieve the kinds of changes to service delivery which will be of lasting benefit to their communities.”
So whoop if you want to - and Lord knows there’s been precious little to cheer about of late - but there is still some way to go before councils will be free from central government’s shackles.
From Fit for Purpose
LGC’s chief reporter Allister Hayman blogs about politics, economic development, localism, housing and planning and the ‘Big Society’.Twitter- @ajrhayman. Email- firstname.lastname@example.org