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It’s time for a new dialogue - a county view

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Economic growth and reducing the national deficit is as much a local priority as personalised social care and good schools. 

The measures in the government’s consultation provide greater incentives for councils to support economic growth, however strong or weak business rates are as a proxy for economic activity. 

Their intent should be welcomed as the ‘game changer’ they were intended to be (see LGCplus.com/5029948.article).  This is a start to a new dialogue with national government but not the end of the debate.

The freedoms are more limited than they may at first appear.  The consultation refers to a series of regular reviews and re-basing. 

The presumption should remain retention, not redistribution

These will soon take the place of the annual settlement, re-introducing the cycle of lobbying and December announcements. There will be enough uncertainty with predictions of business rate growth without having to watch out for regular changes to the mechanisms.

I was expecting this consultation on financing mechanisms to be closer to the spirit of the Open Public Services white paper. 

Councils will be bidding to retain more of the local taxation to become more involved in the delivery of new and different services that are important to their communities, that will support local economic growth and that will boost the council’s revenue base.  Transport infrastructure is an example of this. 

This new financing machinery should provide more mechanisms to re-invest local tax receipts instead of complications aimed at producing an artificial standardisation. 

The presumption should remain retention, not redistribution. For a county council the success of these proposals will be steered by the success of the pooling arrangements.  For West Sussex the new problem to solve is the relationship between this municipal coterminosity and our ‘Coast to Capital’ local enterprise partnership that is, rightly, organised according to how our local economy actually works and includes Croydon LBC.

It is difficult to say anything more definitive before reading the technical papers that support this consultation. 

That is not just because of our usual professional standards of understanding the detail before commenting on the whole. 

The current four-block model is largely discredited, the complications within it produce distortions that grow and amplify with each year.  The history of local government finance is one of perverse consequences that thwart and discourage the policy aims they were designed to delivery.

The data that will be used to generate a settlement should be made freely available as well as the formulae to which it will be applied.  Until there is such transparency I doubt that any council could say that they have a full understanding of how these measures will affect them.

And for the record, West Sussex CC does not consider its current settlement to be a fair one.

Richard Hornby is executive director finance & performance at West Sussex CC

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