A new account? Choices in local government finance

Gerry Stoker and Tony Travers

The debate over local government finance has become formal and stale, with central government maintaining its need to control local public spending and local authorities bemoaning their continuing loss of autonomy and the effect on local democracy.

This pamphlet aims to provide a way through this impasse.

The authors suggest that the future of local government finance can be broadly gathered into two camps: ‘new centralist’ and ‘new localist’. The new centralist perspective goes beyond simply control public spending by local government to how to buy better services. Local authorities in this scenario become less agents and more franchisees, authorised to produce a service subject to the achievement of certain standards.

The new localist perspective argues that what is required is a system of finance that can support local governance and provide local authorities with enough flexibility to act as good partners with other public agencies and the private and voluntary sectors. The authors conclude that it may well be possible to agree a compromise between these two models and therefore a way forward that will satisfy both local and central government.