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OPINION - CENTRAL CONTROLS KILL OFF PROGRESS

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There are tens of thousands of energetic, even visionary, people in local government, and millions in our great pub...
There are tens of thousands of energetic, even visionary, people in local government, and millions in our great public services. But they are frustrated that the snowstorm of paperwork from the centre stops them from doing their job. It is a universal complaint, and there are three reasons for it.

Part of it stems from Margaret Thatcher's concern about how poorly public spending was monitored. Taxpayers, she thought, should have the assurance that their money was being spent wisely.

A slightly different form of accountability is the threat of litigation that the 'no win, no fee' system ushered in. Schools, hospitals and police have to provide more and more evidence that they have acted correctly. More paperwork.

The third source is the 'postcode lottery' argument: if people across the country are paying the same taxes, they should get the same services. Fair enough; but the only way to eliminate the local variation is to control everything from the centre.

Centralism alienates those who work in public services, and those they serve. Why should local people get involved when decisions are made elsewhere? Why should they turn out to vote when councils are largely agents of central government?

If we are to ditch centralism, and all the Napoleonic bureaucracy that goes with it, we have to accept local variation - not merely in outputs, but in inputs too. If the centre lets go, some health trusts will finance new treatments, some won't. Some police forces will prioritise mugging, others burglary.

Is that a bad thing? And is it a bad thing if local people decide to spend more on one service than another - putting more money into social services, or into police, to respond to local needs?

Of course, this gets us into immediate issues of how to replace the council tax, which by any standards would not be up to the job. A local income tax would have to be collected through the national tax system - if people had to fill in two tax forms, there would be riots - so it wouldn't really be regarded as 'local'. A sales tax is not so good in non-commercial areas, and raising business rates is bad for local enterprise. Re-casting VAT into a local tax is a reasonable option, but it does require more thought.

But until we pay locally for local services, they will always be under the thumb, and local electors will be, quite rationally, disengaged. Until councils are able to raise and allocate revenue for the police, most police chiefs will remain dependent on the Home Office, following whatever agenda it has at the time.

One solution is to have locally-elected boards running schools, hospitals, the police and social services - with direct elections for police chiefs, for example. Some object that this would politicise public services; but actually, such local involvement will free them from politicisation by the centre. Others say that local people would not bother to vote - but if they are paying locally, I am sure that the interest would be intense.

We can gofurther and put the payment directly into the hands of the customers, through such mechanisms as an education voucher. Even if national (or even better, local) government has to pay for education, it does not have to provide it. In Sweden, the state pays more or less the same, whether you use a municipal or an independent school. As a result, nearly 1,000 new schools have sprung up in the last decade, many of them founded by teachers and parents fed up with municipal provision.

So there is a sustainable future for local government. Devolve the finance. Devolve the management. Then, as far as possible, encourage independent provision. That also means encouraging diversity. But diversity allows innovation, and innovation brings improvement. Some people may complain that a particular service is available in one place but not another. Only diversity and innovation, however, will in the long term raise the standard of service for everyone.

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