LOCAL GOVERNMENT CHRONICLE

31.01.03

If you’re not sure what you mean and don’t know what you want to do, stick “new” in front. That seems to be New Labour’s approach to local government and “new localism”.

Given the Government’s “new localism” lacks any real philosophy or clear policy framework, discussing it has to start with an attempt to agree terms. What I understand by the term comes from a mish-mash of different department initiatives.

The Treasury seems to think its about management structures. In other words, it’s about giving frontline staff more responsibility for decisions. That can even include decisions on spending the budget. Fine. But the budget is still set centrally. Oh, and there are a few minor performance targets you must meet before you do anything else.

The Department of Education and Skills seem to think new localism is about sending letters to headteachers. Letters designed to tell them exactly what the centre has told their local council what money to give their schools. But in the meantime, they are devolving running pensions from Whitehall - increasing local freedom to have more paperwork.

The Department of Health thinks new localism is about new structures too. Amazingly, ideas like foundation hospitals would indeed involve setting up new independent bodies, with some local accountability. Hospital management would be freed from Whitehall targets, but won’t, over the Chancellor’s dead body, have real freedom to borrow. Yet the interesting thing about new localism and health is – the centre gets to choose who gets the localism. “Earned autonomy” is not a contradiction in terms, apparently.

You would expect the Office of the Deputy Prime Minister to do a little better, as it is responsible for local and regional government. And there are some real if limited improvements. First, the new prudential capital regime for councils is genuinely better than credit approvals – though we have yet to see the linked revenue support proposals. Second, we have promises of “Freedoms and Flexibilities” – even if that takes us back again to the land of earned autonomy. Third, they have proposals for elected regional assemblies – scheduled to happen in year 1 A.B. (After Blair).

Overall, the best one can say for Labour’s new localism is that it’s confused, inconsistent and frightened of its own shadow.

The shame is, there are such clear alternatives, if you really want a rich, meaningful new localism.

Elected local government must be the first and key building block.

Liberal Democrats would reform and strengthen local government as a top priority. That starts by giving councils real financial freedoms – our long established proposals for replacing the council tax with a local income tax and abolishing national business rates with a locally-determined land value tax.

As councils become more free to raise and spend their own money, the incentive to work in and get elected for councils would rocket. A virtuous circle for civic renewal could then be created. Augment that by fair voting systems in local elections to replace inefficient political monopolies with more party competition and the incentives for dynamic reform are really set loose.

A meaningful new localism would need to go much further. We do need new types of structures to run many local public services – mutual models and the social enterprise movement generally are key. Yet these must be both up creations, not Whitehall’s chosen sons.

Above all, Britain’s political culture of seeing the centre as responsible for the paper clips in every Town Hall has to change. A shift in thinking on that scale can only start by Ministers letting go. When Ministers show they trust local politicians, local civil servants and above all local people, then we would have the makings of a meaningful new localism.