Written evidence submitted by Bristol
City Council (L&CG 03)
1. Article 4 'Scope of local self-government'
of the European Charter for Local Self
Government states that 'Local authorities shall,
within the limits of the law, have full discretion to exercise
their initiative with regard to any matter which is not excluded
from their competence nor assigned to any other authority'. Yet
historically, England has been one of the most centralised democracies
in Europe. It can be argued that a significant element in the
weakness of English local government in comparison to central
government has been the lack of constitutional definition or protection
for local government. When examined on a worldwide scale England
is not alone in having minimal or no constitutional safeguards
for local government, but there are also useful examples where
relations are more formalised.
2. In Germany, the constitution (Basic Law) recognises
and offers protections for local government. Article 28 (1) guarantees
the existence of elected councils for counties and municipalities
(though not ruling out changes in their boundaries). Article 28
(2) guarantees municipalities "the right to regulate all
local affairs on their own responsibility, within the limits prescribed
by the laws." It also guarantees their "self-government"
within their areas of competence, and critically applies this
principle to "the bases of financial autonomy; these bases
shall include the right of municipalities to a source of tax revenues
based upon economic ability and the right to establish the rate
at which these sources shall be taxed." In Article 28 (3),
the Federation stands as guarantor that Land constitutions
will respect these rights. This is generally interpreted as giving
local government right to appeal to the Constitutional Court against
Land legislation which it believes is contrary to its rights
of self-government[1].
3. The Chairman of the LGA, Sir Simon Milton,
has, among others, argued "councils will only be free when
we can guarantee the rights of local councils, and the democratic
mandate of councillors, in a constitutional convention".
Much of the content of such a resolution could be drawn from the
Concordat signed by the Department of Communities and Local Government
(CLG) and the Local Government Association (LGA) in December 2007
and from the European Charter of Local Self-Government. To be
truly meaningful, however, any such resolution would have to address
the issue of finance. In this respect, provisions within the French
and German constitutions on self-financing, and on the diversity
and buoyancy of funding sources provide useful examples.
4. As we have noted in previous submissions,
English local authorities currently have quite a wide service
remit, yet a relatively limited and inflexible financial base,
particularly in relation to their European and Commonwealth counterparts.
There should therefore be a combination of local income sources
for local government, which could include:
- A reformed and more equitable property tax
- The progressive re-localisation of business rates
(similar to German model)
- The transfer of a proportion of national income
tax to fund local government directly, either initially as an
assigned revenue, developing into a local income tax or moving
straight to a local income tax;
- A reduction in grant to local authorities consistent
with this shift of national income;
- A basket of smaller taxes and charges, for example:
- Localised vehicle excise duty;
- Local sales taxes (not a general sales tax, which
would fall foul of the EU VAT regime);
- Localised stamp duty on property transfers;
- Land value taxes;
- Tourist (bed) taxes;
- More charging for services, using and extending
the powers in the 2003 Local Government Act;
- Charges for utilities' street works;
- Local congestion charges
- 'Green Taxes'.
5. Greater direct management of European structural
funding is also essential to ensure that the full potential of
the funds can be exploited. Previous experience with European
structural funds has highlighted the need to have greater local
involvement over the development and management of the programme,
ensuring that the policy fits local priorities and has greater
alignment with sub-regional strategies and national funding programmes.
2 December 2010
1 See Roger Gough, With a Little Help From Our Friends:
International Lessons for English Local Government, Localis/LGA
(2009)
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