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FRONT LINE FIRST - FINANCE

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The draft local government bill should be welcomed by the local government community. It provides the opportunity t...
The draft local government bill should be welcomed by the local government community. It provides the opportunity to iron out any glitches in the bill's provisions, and also begins to deliver on the promised additional powers and freedoms.

The bill contains a number of worthwhile provisions on local government finance. Councils will be free to borrow for capital investment without consent. They will be given the freedom to establish business improvement districts and fund projects through an increase in the business rate.

A number of other measures appear to put more constraints on the collection of business rates, but also give greater freedom of manoeuvre over council tax.

The bill seems to be the final nail in the coffin of the Local Government Association's campaign to reintroduce local control over the business rate. By suggesting the merger of revenue support grant and the National Non-Domestic Rates, the bill confirms the rate as a centrally distributed tax.

With new freedoms come new responsibilities. Councillors will have duties in budget monitoring and councils must ensure they budget for adequate reserves. Council tax revaluation will be set to a fixed 10-year cycle. The bill also clarifies the right of councils to hold advisory polls.

So will there be dancing in the town, city and county hall corridors? The bill deserves to be greeted with at least a modest boogie. But is it enough?

There are other measures that could follow, although these must await the outcome of the Raynsford review.

What is not yet clear is how many councils will be able to use the new freedoms in imaginative and powerful ways. Some have shown they can perform but if the battle for further freedoms is to be won, more need to show that capacity.

Professor Gerry Stoker

Chair, New Local Government Network

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