Select Committee on Transport, Local Government and the Regions Memoranda

Memorandum by SOLACE (LGB 10)

  1.  SOLACE is pleased to see the publication of the draft Local Government Bill and believe that a number of the finance proposals will be positive in their effects.

  2.  The Bill contains a number of significant deregulatory measures, the most important concerned with capital finance and with powers to trade and to charge, all of which we support.

  3.  The most welcome feature is the new system that will allow local authorities to raise capital finance (without specific Government consent) provided they can afford to repay the debt. This is significant because it marks a sea-change in Government attitude towards the financial prudence of local government. Perhaps for the first time the sins of the very few are not being visited on the overwhelming majority of Councils which have robust records of financial management.

  4.  We believe that this Bill has been a long time coming and that the stick and carrot approach to local government service improvement has been characterised by the absence of carrots. We hope that this Bill can significantly help redress this balance. In order for the effect of this Bill to be maximised we believe that it is imperative that a slot is found for it in the crowded Parliamentary timetable.

  5.  However there is some disappointment here, for local government. There are welcome features, but generally the Bill fails to lay the foundations for a successful framework to encourage modernisation and improvement.

  6.  The prevailing attitude of mistrust of local government, however, is revealed once again in the Bill's clauses on financial administration. Outside a handful (at most) of Councils, there is no evidence that general reserves are run at dangerously low levels or that necessary in-year budget corrections (to reflect underachievement of income or prospective overspending) are not made as a matter of routine. The reasons for even more prescription around financial administration are therefore a mystery, and unhelpful.

  7.  For the rest, the Bill presents a variety of disparate provisions that will do little to drive forward a mainstream agenda of modernisation and improvement. That is an opportunity missed. The discretionary charges and powers to trade are hardly powerful incentives for stimulating the sort of quantum shifts the Government says it is looking for. It could have used the categorisation of local authorities under the Comprehensive Performance Assessment to free the "excellent" from many more controls except monitoring service/community outcomes, while justifiably prescribing inputs and process as well as monitoring outcomes for those Councils judged "weak".

  8.  The draft Bill has missed the chance to rationalise Inspection services in the wake of Comprehensive Performance Assessment. That failure seems to reveal a "silo" mentality within Government departments. A Government with a real desire to achieve modernisation and improvement by making local authorities more effective may well have used a draft Bill to say so in a more comprehensive manner.

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