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Council finance question cannot be dodged if political crisis is to end

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Sir Michael Lyons’s claim that failure to reform council finance contributed to the vote in favour of Brexit should jolt the ministers who perennially place the issue in the ‘too difficult to tackle’ box.

In a rare interview, 10 years after his landmark report on local government’s role, function and funding, Sir Michael accuses national decision makers of turning a blind eye both to the huge gains in wealth made by many home owners over the past 20 years and the excessive bills paid by those whose homes have not increased in value.

He also offers a reminder that it is the areas which have suffered most from deindustrialisation that have experienced the biggest cuts since 2010.

While no one would claim council finance was necessarily Brexit’s biggest driver, it has been a significant factor in bringing about the inequality that led so many neglected communities to stick the finger up to their nation’s pro-EU government, a government which had ignored their plight.

Fair funding and more equal opportunity for all areas to thrive are prerequisites for healing our division

So the lack of local government funding reform therefore helped bring about a political crisis of epic proportions: a country divided; a business community unsettled and a government that has failed to make any meaningful progress on Brexit negotiations being utterly paralysed and unable to govern.

It is hard to chart a path out of Britain’s current political mess. However, when a national politician finally emerges with the wisdom, stature and support to offer real leadership, they must heed Sir Michael’s analysis of the past decade.

Fair funding for local services and the offering of a more equal opportunity for all areas to thrive are prerequisites for the healing of our nation’s division. They are not some kind of luxury add-on that some hypothetical government might finally get around to in its fifth term. And they are objectives that must be at a core of a government’s agenda, not either some kind of PR puff or, alternatively, a half-hearted bid to smooth the edges of the impact of your wider policy agenda.

The devolution offered to councils so far has fallen into the latter category. Former chancellor George Osborne correctly noted that the north, in particular, was falling behind. But the devolution he was prepared to offer had so many strings attached that it has failed to remotely come close to counteracting the impact of the cuts for which he was responsible.

Meanwhile, there is a strong likelihood Theresa May’s warm words around inequality and intergenerational unfairness fall into the PR puff category. They count for nothing unless, for instance, the funding crisis stymying social care and children’s services is addressed, and huge numbers of genuinely affordable homes built.

Brexit Britain is at a crossroads in grim and inhospitable surroundings. While the road to prosperity and fairness might currently be obscured, the route there has to involve local government’s biggest problems being addressed as part of an overall drive to make society fairer and more prosperous.

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