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Scottish referendum marks an era of change for local government

David Sparks
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The UK needs to be united by fair, needs-based funding, and not divided by the archaic Barnett formula, says the LGA’s chair

People in the rest of the UK could be fooled into thinking the Scottish referendum has little consequence for their lives.

They could not be more wrong. The referendum is a historic opportunity to revolutionise local government from Land’s End to John o’ Groats.

Whichever decision Scotland makes, independence or so-called ‘devolution max’ are the only two possible outcomes. The leaders of all three main parties have already signed a declaration promising Scotland further powers if a ‘No’ vote prevails.

As the gap between Scotland and the rest of the UK widens, a fuse is burning – ignited by the arbitrary differences between resources and powers for local authorities in different parts of the UK. Unless the government does something this bomb will explode.  

How can local government seize this opportunity? In the short term, the referendum could push the Barnett formula over the edge.

Public funding should not depend on whether you live in Gretna or 10 miles further south in Carlisle but on people’s needs and choices. In the year 2011-12, a family of four in Scotland received £5,000 more in public sector money than a family of four in England.

In total, England is losing out to the tune of more than £4bn. Wales is getting a raw deal too, short-changed by almost half a billion pounds. Unless we replace the Barnett formula, we run the risk of residents in parts of the UK becoming second-class citizens.

In the long term, the referendum could give councillors the financial independence to lead their areas, and not just in England. Many local representatives in Wales and Scotland are wary of replacing centralisation in Westminster with centralisation in Cardiff or Edinburgh.

Our common agenda as councillors across the whole UK is to push for more devolution to communities. This would allow councils to make more of their unique ability to draw together public services in their local areas. The outcome? Services that are more efficient, more joined-up and more in line with residents’ needs.    

We are calling on the next government to allow English and Welsh councils to drive services by letting them raise and spend money locally. That means letting councils keep 100% of business rates growth as well as set rates and discounts for council tax and business rates.

As Scotland votes, I hope that it decides to stay part of the UK. But this UK needs to be united by fair, needs-based funding, and not divided by the archaic Barnett formula. It needs to be united by financial independence and not divided by keeping power from local communities. We must seize this referendum to push our ‘common agenda’ and change the status quo.

David Sparks (Lab), chair, LGA, and leader, Dudley MBC



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