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By Kerry Lorimer ...
By Kerry Lorimer

The government has warned it may not adopt any of the options now being examined by the balance of funding review.

The review, chaired by local government minister Nick Raynsford, is to look at four alternatives to the existing funding system - the reform of council tax, the introduction of some form of local income tax, relocalisation of business rates and a mixture of smaller charges and taxes.

But Mr Raynsford said the government was not committed to implementing any one of these options.

'I want to make it very clear that the fact the group is looking at how each of these might work does not mean the government endorses them or is planning to adopt them, whatever you may read in the newspapers,' he said.

'It makes sense to find out more about the case for change, and to analyse the proposals carefully and thoroughly.

'The group needs the chance to find out how different taxes would really work in practice and what their advantages and disadvantages might be.'

But the Local Government Association said it was inconceivable that the status quo could be retained following the conclusion of the balance of funding review.

'My view is that no change is not an option,' said Sarah Wood, director of economic and environmental policy at the association.

'The review must produce options which lead to substantive, sustainable, long-term change in the funding of local government. We must be careful not to tinker at the margins.'

One of the main lessons to be learned from the Layfield report into local government finance in the mid-1970s was that opportunities to make significant change cannot be squandered, said Ms Wood.

'We must make sure we don't miss this chance,' she said.

'The balance of funding review is an important opportunity for local government to put forward its case for strengthening local democracy.'

Evidence on all four options under review will be considered by the review group in the new year.

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