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Cameron's localist green paper

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David Cameron was certainly talking a good game when he launched the Conservatives’ green paper on localism.

“Decentralisation is an absolutely essential component of our progressive Conservative philosophy,” he told the audience in the Coventry Transport Museum .

“I strongly believe our vision of an empowering state offers a path to the good society, the good life we all seek.”

Mr Cameron has long extolled the virtues of devolution of power from the centre, and there are few who doubt his claims to be a localist are heartfelt.

That said, eyebrows will have been raised by Mr Cameron’s assertion that “decentralisation, devolution and empowerment should be part of a naturally Conservative approach”.

After all, this is the party that under Margaret Thatcher abolished the Greater London Council and the metropolitan counties.

So how much should we buy in to the notion of the Tories being the natural party of localism? And to what extent do the proposals in Control Shift , their latest green paper, mark a decisive break from the present government’s policies?

In truth, it is not hard to fashion an argument that Tory ideology should be better aligned with a localist cause than Labour’s.

Taking Mrs Thatcher as an aberration, a Conservative is more likely to believe in a small state, while a social democrat is likely to find the goals of redistribution and equalisation easier to achieve through a centralised system.

Phillip Blond, director of the Progressive Conservatism project at thinktank Demos , believes Mr Cameron has the opportunity to tap into a deeper conservative tradition extending back to the Whig Edmund Burke, whose vision of conservative radicalism was founded on “little platoons” of family and civic association.

And he claims the green paper, when viewed alongside other policy proposals, will add up to a compelling localist vision. “I think the paper is to be hugely welcomed, it’s extremely innovative,” he said. “It outlines and begins to fill in what a truly localist vision looks like.

“The localism agenda doesn’t just apply to local government,” he added. “There are other green papers due out that will devolve power to individuals and civic society. This is just the first instalment. Future green papers will demonstrate further acts of devolution.”

Even without ideological debates about which party can lay claim to the mantle of being the natural party of localism, the green paper is still a tricky one for the government to respond to, as many of the proposals are simply natural extensions of its own policies.

For example, on elected mayors, both parties share the same ambition to see more authorities adopt the mayoral system.

But while communities secretary Hazel Blears faces a battle to get even minor legislation in place that would make it slightly easier for residents to force referendums, the Tories have simply pledged to hold ballots on the issue in England’s 12 biggest cities.

On freeing councils to innovate, the Tories have simply heeded councils’ protestations that the government’s wellbeing power is unclear. They have pledged to introduce a power of general competence to settle the issue once and for all - something the government could have acted upon at any time.

The Tories are stealing Ms Blears’ clothes on petitions too. The green paper proposes allowing local people to force a referendum on any issue by collecting the signatures of 5% of the electorate.

There are similar proposals in the government’s Local Democracy, Economic Development & Construction Bill , although the same number of signatures will only get you a full council debate.

Elsewhere, the Tories share Ms Blears’ enthusiasm for ward budgeting and even appear to have softened their oposition to local government reorganistion by refusing to rule out locally devised proposals.

All in all, not much for the government to attack, and a briefing note posted by Ms Blears on the blog mainly focused its criticism around a theme of “little new”. So where do the substantial differences lie?

Well, for a start the Tories plan to dismantle Labour’s regional government apparatus. Regional development agencies will lose their just-acquired housing and planning functions to the local level.

They could even lose their economic development powers, where clusters of councils can convince the business secretary that their ‘enterprise partnerships’ are robust and well-led.

This is definitely a clear distinction from the government’s economic development policies. But even here, the proposed enterprise partnerships bear an uncanny resemblance to the multi-area agreements councils will soon be able to put on a statutory footing.

Perhaps the biggest shift from current government policy proposed by the green paper lies in the idea of building in rewards for councils that encourage housing and business growth.

Granted, the government tries to do that through Housing & Planning Delivery Grantand the Local Authority Business Growth Incentive scheme . But these are hard to predict and are very much based around the government choosing to reward councils that behave in a way it deems desirable.

The Conservatives’ plan is different. Quite simply, for each new home a council builds in the first six years of a Tory administration, it will have the extra council tax revenue created matched by the government. Crucially, this will mainly be funded by transferring around£1bn from formula grant.

A similar system - called the Business Increase Bonus - will mean more of the proceeds of growth are retained by the fastest growing areas. More money for incentives inevitably means less available for equalisation between different areas.

A move away from equalisation is clearly distinctive from the current financial system and was not a move the current administration is likely to make.

It was an issue recognised by Sir Michael Lyons in his landmark report on local government.

He identified that any attempt to increase the amount of incentives without affecting the amount available for equalisation would mean relaxing the damping mechanism that prevented large rises and falls in the amount that councils ultimately received in grant - an approach he endorsed.

This is not what the Tories are doing. They are retaining the stability of the current system, which means less cash will be available for equalisation.

Tony Travers , director of the Greater London Group at the London School of Economics, believes such a change is overdue. “This would definitely be a move towards a winner-takes-all system,” he said. “But there is currently more money in the system than is necessary for equalisation.”

A move away from equalisation would not necessarily be at the expense of areas commonly assumed to be the most deprived and in favour of Tory heartlands.

Research conducted by the Lyons Inquiry shows the areas with the largest growth in council tax and business rate tax bases between 1999 and 2004 (ie, those that would benefit from incentives) would mainly be urban, inner city areas.

Even Sir Michael didn’t consider this move to be particularly radical. “I want to find space at the margins, but with enough weight to change local government behaviours,” he wrote.

Ultimately, the biggest similarity between the green paper’s proposals and current government policy is the lack of real devolution of those public services not delivered by local government, and the lack of movement on the balance of funding.

Demos’ Mr Blond will argue that the former will be tackled in different green papers - with the solutions perhaps not including local government - while David Shakespeare , leader of the Local Government Association’s Conservative group , believes the offer of a two-year council tax freeze will give a new government breathing space to tackle the latter.

Aligning yourself to a localist cause is easy to do in opposition, and harder to implement once in power. The latest polls suggest Mr Cameron will get the chance to have his localist credentials tested.

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