Everybody in local government knows that the current system for funding is broken.
Council tax does not work. Its inelasticity, compounded by ministers’ reluctance to pursue revaluation, means it cannot support responsive local government. For all sorts of reasons, not least the pressures on retail, the localisation of the business rate will cause a huge headache.
There have been many attempts to agree the way forward.
One of my most bizarre memories of my time at the Local Government Association was beginning one of 40 local radio interviews in two days with the DJ saying: “Hope you enjoyed that: Take Your Shoes Off by The Cheeky Girls. And now Phil Swann will explain why the way the town hall gets its money must change.”
And off I went in a bid to generate some public interest in the then minister Nick Raynsford’s review of council funding.
This memory was prompted by the current debate about the future of adult social care and how it should be funded in the future. The emerging local government line is that social care should remain a local service with closer integration with the wider health and care system, but that new national sources of cash must be tapped to pay for it.
It’s possible to argue the future of social care as a core local government function will determine whether councils funding is fixed. That would likely involve a combination of a reformed property tax, a local income tax and other funding streams. But this does not feature in the current debate.
On balance I think the arguments in favour of national solutions to the social care crisis, such as 1% on income tax, 1% on national insurance, or a social care premium, are robust. And the political realist in me realises that the whole subject of the reform of local government finance has been toxic since the poll tax disaster under Margaret Thatcher’s premiership.
But it’s important to note that if anything could force the pace on overhauling local government finance it is the social care crisis. If this crisis is tackled in other ways the chances of that wider reform being pursued in the next decade are slim. And the case for retaining adult social care as a council function in the longer term will be a tad weaker.
Phil Swann, executive chair, Shared Intelligence