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Localism: let's read the small print

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Achieving greater power and freedom for local government often resembles a war of attrition. 

Whitehall’s instinctive reaction is to retain control and any case for power shifts loads a heavy burden of proof on local government.

The London Finance Commission and the city growth deals provide powerful and compelling cases for change.

And while devolution and greater autonomy can often appear to move at a glacial pace, this should not deter local government from its efforts to secure greater control over its future.

Promisingly, the government can act with remarkable alacrity when minded to do so.

However, recent government attempts at ‘localism’ teach local government to read the small print. 

There is no ‘get-rich-quick’ scheme in this financial climate; new powers do not necessarily mean new money.

In fact, the reverse is often true. Over the past few years we have seen a range of different approaches.

We have seen funding for council tax benefit localised with 10% less in the pot to pay for it.   

Funding for local welfare provision has been localised but will disappear completely in 2015-16, just as local government has made enormous strides in reforming the wasteful system delivered by the Department for Work & Pensions.  

In London, we will get our share of new homes bonus in 2015-16 and then have £70m top-sliced away to the local enterprise partnership. Oddly, this seems to count in our spending power nonetheless. 

The better care fund signals a promising new relationship between social care and health.

But a third of this ‘new’ fund comes from recycled or repackaged money that should already be with local government – most obviously for the new responsibilities from the Care Bill.

We have seen four different approaches to resourcing local government. Four different approaches that affect almost £2bn of local government money.

But they are all symbolic of an incoherent and short-term approach to funding local government. 

Perhaps most worryingly of all, they all take resources away from direct local authority decision making and control while increasing the levels of expectation.

Some might call this the price of localism. 

Others would argue that these are simply ‘cost-shunts’, leaving local authorities having to not only deliver their own savings, but those for central government too.

As ever with the funding of local government, there are always several versions of the truth.

For many, the new burdens doctrine – the policy to govern the transfer of new responsibilities – is often held up as the default starting point for discussions. 

However, there is a very real risk that it is deemed irrelevant by government in this age of austerity with local government seemingly always vulnerable to picking up the bill.

Hugh Grover, director of fair funding, performance and procurement, London Councils

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