In English local government we often look overseas to compare our positions to those of our peers.
The local taxation powers of American cities and the responsibility for major economic functions of German city-states feel a distant dream in our hypercentralised context. But there is a stark gap opening within UK local government that we don’t seem to have picked up on.
“Devolution” outside of England may not have reached a truly local level. But both Holyrood and Cardiff have made choices about the local government funding that Whitehall could learn from.
When I was in Cardiff recently, it was pointed out to me that the total revenue support grant for the 22 Welsh local authorities next year will be more than the amount the 400-odd English councils will receive. I had to look it up. Sure enough, in Wales the grant will be £3.2bn next year, compared to £2.2bn in England.
That prompted me to look at the Scottish figures. Scotland has a general resource grant instead of a revenue support grant, but the broad principle is the same. The 32 Scottish local authorities were provided £6.9bn in such grants this year, a figure likely to be roughly matched next year.
I recognise it is tricky to compare local government funding across the UK. Both Scotland and Wales provide local government significantly higher core funding, but those councils are also expected to fund schools out of that. Still, taking local government services and schools together, per capita spending in England is £1,423, in Scotland about £2,230 and in Wales just over £2,300.
Put another way, both devolved administrations have ensured that there is over a third more spending going into council services and schools than in England.
Our Scottish peers would point out that local government budgets have been hit 10 times as hard as the overall budget for Scotland. Cuts have been disproportionately passed to them.
In Wales, the decision not to protect the NHS at the expense of all other local services in the early years has also been reversed. Financial sustainability in the face of mounting pressures is an issue we all wrestle with at local level across the UK.
But it’s clear to me that the more manageable funding reductions, alongside a commitment to maintaining central contributions to local services, implies a different esteem given to local public services in Scotland and Wales than here in England.
That’s a principle that applies in other respects. I’m often struck by the level of ongoing dialogue that happens between Scottish and Welsh councils and the devolved administrations.
What’s more intriguing to me are the discussions opening in both Scotland and Wales about finance reform. Compared to England, Welsh council tax is based on slightly more up-to-date property values. The Welsh Government undertook a revaluation in 2003 that saw about a third of households go up at least one band. The world did not stop turning.
Sir Michael Lyons, who conducted a review of the exercise, said that as overall council tax revenue increased residents generally accepted it. Sadly, I’m unaware of any attempt by the Treasury or the Ministry of Housing, Communities & Local Government to learn anything from the Welsh experience and apply it to England.
Both Scotland and Wales are now considering even bolder finance reforms. The Welsh government will be exploring the feasibility of a land value tax and local income tax as replacements for current domestic and business property taxes, while considering whether some redistributive mechanism might still be needed.
Scotland’s 2015 commission on local tax reform wasn’t acted on by Holyrood, but its findings are worth studying and are still informing debate up there. It concluded that instead of looking for a single tax to deliver both equity and autonomy, what is needed is a system involving multiple forms of tax which, making local tax fairer as a whole.
Whether we are prepared to admit it, there’s often an attitude in England that we are the wiser elder sibling within the UK.
But when it comes to local public services we had better think again. English councils are the infantilised, poorer cousins within the UK local government family. What does that mean for the future strength and cohesiveness of the union and any renewed calls for parity of devolution within England?
Those may be questions we are forced to confront soon.
Jo Miller, president, Society of Local Authority Chief Executives & Senior Managers, and chief executive, Doncaster MBC