Erosion of local government powers must cease, says report

Sir Charles Carter, who has chaired a ten-year JRF research programme examining relations between local and central government, calls for a long-term commitment to keeping responsibility for core services including personal social services, education, economic development, planning and a significant share of social housing in the hands of elected local councils. He further argues that there is a case for increasing local authority responsibilities, reversing the trend of the last half century.

He also calls for measures to improve local accountability, including a reduction in the proportion of council spending funded by government grants so that 60 per cent or more of revenue can be raised through local taxation.

"A vital change of attitude is needed to recognise the democratic right of a local community to tax its own citizens in order to ensure the adequate performance of the activities which it wishes to undertake," said Sir Charles. "For the right to do your own thing has no meaning if it is frustrated by central determination of the cash available. There can be no complete freedom of finance - the need to compensate for differences in taxable capacity prevents that - but I believe that at least 60 per cent of the revenue requirements of local authorities should come from locally determined taxes."

Sir Charles identifies a pressing need to restore stability and trust to the relationship between central and local government. He calls on policy-makers to acknowledge publicly that abolition of local government is not a serious option and that local democracy can be best served by giving councils more freedom to innovate and to reach different solutions suited to local circumstances.

Among his specific proposals, are that:

• Local government should have a source of taxation in addition to Council Tax. Local Income Tax could be considered in the long-term, but limited local control over business rates should be restored in the interim.
• Central government controls over local capital spending should be simplified and relaxed.
• Local authority responsibilities should be wide enough to give them an overall view of social needs within their area.
• Contracting-out should not be pushed to the point where local authorities completely lose their hands-on experience as service providers.
• Councils should be free to develop new services possibly by being given a statutory power of general competence.

The report concludes that there is a good case for devolving central government powers to elected assemblies in Scotland, and possibly Wales. But it views structural reform as largely irrelevant to strengthening local government although the role of parish, town and community councils could be sensibly enhanced.

Sir Charles Carter said: "It is often difficult to remember, as the rebukes fly between central and local government, that the policy-makers and officials in both sectors are doing their best, within severe limitations, to serve the public good. The long years of rancour and mistrust must be brought to an end through measures that strengthen democracy and allow local diversity to flourish."