Against the backdrop of a slowdown in the economy and the prospect of a general election in May, the financial pundits say that the chancellor has between£6bn and£10bn to play with in the 2001 budget.
The Local Government Information Unit offers Gordon Brown a prudent set of proposals costing less than£3bn in a budget for local communities. These are in addition to the proposals stemming from last November's pre-budget statement.
While local authorities have had a 14% increase over the last four years, much of this has come as ring-fenced special grants and has been absorbed in extra costs. The result has been that revenue support has not been sufficient to maintain all service levels.
A further£600m in revenue support grant would help social services meet the extra costs of caring for children. Local authorities would use£400m of this to support cost-effective measures that prevent children entering care and that stop elderly people becoming dependent on residential or nursing care.
The teachers' pay settlement is welcome but another£200m is needed to fund it
While the spending review 2000 funded the major repairs allowance to prevent further deterioration to local authority housing, it did so by reducing housing basic credit approvals from a planned£2.305bn to£0.705bn. Increasing housing investment by local authorities by£1.6bn would provide an important boost to the economy at a time of potential slowdown. The budget also needs to signal an intention to move rapidly on the introduction of a prudential framework for capital spending in general.
In addition to these large budgets, we offer the following innovative ideas which will cost little in the short-term and save money in the long-term.
-New steps to crack down on housing benefit fraud and tax avoidance. These include investment in a system where local authorities provide the Inland Revenue, electronically, with details of the housing benefit payments made directly to private landlords.
-An 'invest to save' programme of£200m to support the costs associated with the development of mobile CCTV. This will enable local authorities to tackle 'hotspots' where vandalism, fly-tipping, criminal damage, graffiti etc lead to 'wasted' expenditure.
-An additional£100m for crime prevention work with young people.
-Clarification of the capital finance regulations so local authorities can install central heating systems using lease finance, as part of a national strategy to ensure that no-one on benefits is denied central heating.
-Fiscal changes that encourage the minimisation of waste and the development of sustainable markets for recycled goods.
Dennis Reed, director, Local Government Information Unit.