CLG has reduced the local tax base by taking income from council
tax benefits away from local councils, requiring them to
go cap-in-hand to their district, borough or unitary (principal) council for a share of the government's council tax support
grant. There is the very real possibility that the princip council will say,
"sorry, we need all we can get to deliver our own statutory
responsibilities".
All this comes after CLG gave clear indications in the summer of 2012 that they will take local councils out of the equation on the
council tax support grant and that they would receive funds as always. Then suddenly in the winter of last
year the department changed their mind and left local councils with holes in
their budgets.
Quite
rightly local councils are astonished by the brazen disregard of the majority
opinion on this by the Government.
On the consultation on this, 94% of
respondents said that local councils should be exempt from the impact of localisation of council tax support, but CLG decided they should not. This has caused uproar among
England's 9,000 local councils.
Eric Pickles MP, secretary of state for CLG,
speaking at NALC’s Larger Local Councils Conference in November 2012 (http://audioboo.fm/boos/1093989-eric-pickles-speech-at-nalc-2012.html) brushed off
the questions, saying it was up to local
councils to negotiate with principal councils. But why should
local councils have to negotiate with principal councils on this, it is monies
that belongs to them by right.
The new system changes over a hundred years
of financial independence of local councils as they will no longer be in charge of their own destiny in
setting their budgets and precept. For the first time ever local councils will
be reliant on a principal council for an element of their funding. The risk of the new system is at best local councils will receive
100% of grant due, or they may only receive a proportion, and at worst no grant
at all. Depending
on the scenario, the impact may be mean local councils increasing their precept
or cutting back on service delivery.
As practical example of this. In Milton Keynes, the five most affected
local councils are Woughton,
West Bletchley, Bletchley and Fenny Stratford, Campbell Park and Wolverton and
Greenleys. Based on figures calculated in September 2012, the potential loss to these
local councils would be £169,000 if Milton Keynes Council were to distribute
grants at the cumulative level suggested by the Government. This would
represent 68% of the total loss to Milton Keynes local councils and have a huge
impact on service delivery in those deprived communitiesm
Now to be
fair and balanced, it has not been all disastrous from
CLG towards local councils.
In the same speech in Novemeber, Eric Pickles described local councils as "localism's magic wand". This is very supportive but like in magic acts, sometimes you need to
look beyond the 'smoke and mirrors'.
Since the Localism Act became law last year, the Government clearlys sees a role
for local councils to be leaders of their communities. So we have had the
recent announcement of more money going directly to local councils who have put
neighbourhood development plans in place from the Community Infrastructure
Levy, as well as the community rights to build, bid and challenge and the
encouragement of more devolution of services to local councils.
But all of this new responsibilities and service delivery opportunities does
not happen by magic, it needs capacity, skills building and resources. This is where there is a head on collision possibly
between rhetoric and reality. This is a dilemna that the Government needs to
solve as soon as possible. But at the grassroots level of democracy the anger
towards the Government's recent decisions on local government is growing.
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