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Vince Cable warns on Treasury's devolution motives

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The chancellor’s ‘devolution revolution’ could be the prelude to another round of cuts to council budgets, the coalition heavyweight and economist Vince Cable has warned.

Writing in an exclusive comment piece in LGC, the former business secretary signalled his support for a devolution agenda that reversed the trend towards “central control” and “infantalisation” of local government.

Local authorities should however take note that the offer to pass extra power and control down from Whitehall had come from the Treasury, he says.

“I worry…that this initiative is Treasury-led and the Treasury has little interest beyond creating a pretext for another top slicing of funding.”

Vince Cable

Former business secretary Vince Cable warns devolution could be a front for further cuts

Mr Cable’s fears for the devolution agenda are spelled out in a wide-ranging article setting out his views on his party’s future, the government’s housing policy and the chancellor’s approach to the economy.

He predicts the Lib Dems are due for a “big rebound” in their political fortunes, following the party’s recent huge losses of parliamentary and councillor seats.

“There is a mood of defiance and resilience after what was felt to be an undeserved hammering in May,” Mr Cable added.

“Unlike Labour, we now have a new leader chosen by a convincing majority.”

The former coalition secretary hits out at chancellor George Osborne’s redefinition of “deficit” to justify deeper and “disproportionate” cuts to public spending.

“Critics can reasonably argue that the scale of cuts now envisaged is disproportionate and ideologically driven rather than an economic imperative”, he added.

Local government would soon have “little left to spend on activities beyond statutory service”, according to Mr Cable who lost his seat as MP for Twickenham at the 2015 general election.

The respected economist also described the Conservative Party’s housing policy as “seriously damaging”.

“There is now the potentially devastating set of initiatives which will weaken social housing provision: right to buy for housing association homes; enforced sale of council houses and rent cuts on councils and housing associations,” he added.

Housing would become an “increasingly divisive issue” in local government, according to the former secretary of state.

“There will be mounting pressure on councils’ homelessness obligations and …aggravated tension between those demanding and resisting new build.”

The Lib Dems would champion “social housing” and “genuine decentralisation”, Mr Cable writes.

“The rhetoric is running far ahead of concrete plans to repatriate powers to local authorities,” he added.

Mr Cable’s full comment can be read here.

  • 2 Comments

Readers' comments (2)

  • Was there ever an "economic imperative", Mr Cable, or is it that the Lib Dems were unable to budge the Chancellor in his Kamikaze austerity mission focusing exclusively on expenditure cuts?
    Yes he has seen that devolution is to turn 'powerhouses' into branch offices of Whitehall Austerity HQ. When councils whether combined authorities or not cannot even set rent levels or choose not to sell off empty dwellings amid a worsening housing crisis shouldn't they question Osborne's motives!

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  • Osborne's motives are fairly clear and well publicised ,they are hardly hidden . But to believe that walking away from Devolution would somehow protect Local Authorities from his motives or intentions is delusional .As an "unprotected" area of expenditure it is unlikely that the" Austerity Hounds " would be reigned in as far as LAs are concerned devolution or no devolution ,the last 5 years speak for themselves and his plans for the next 5 are equally draconian But despite this do we really want to maintain the most politically and financially centralised state in the western world where central / local interactions are characterised by an ingrained parent/child relationship and the latter has developed a severe case of the "Stockholm" syndrome or do we want a "re-calibrated" relationship where there is much greater local control and determination over Budgets and Tax Raising . Whatever Osborne motives devolution is worth pursuing and this process is already well under the way and I cant see any LAs wanting to stay on the sidelines as we are now well beyond the point of no return . Once the genie is out of the bottle Osborne may not be able to be the puppet master especially if the puppets have grown into adult beasts with minds of their own

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