It’s that time of year again. Ministers insist their contribution
towards local authorities’ budgets next year is generous.
Meanwhile, councils claim the opposite, insisting that they have no
option but to cut services or impose higher-than-inflation council
The truth? Well, no one’s actually lying. When ministers talk about
a “real terms increase” – that is, above the rate of inflation –
they are not wrong. However, since much of local government
spending is increasing above the rate of inflation, councils are
not wrong to say that the settlement is not enough.
So I am deluged by heart-rending pleas from those running specific
projects under threat. The hardest plea is from a scheme helping
those with learning difficulties. The irony is that this scheme was
singled out for praise from those of us on a scrutiny panel.
A key problem is, of course, that local government relies on
central government for around 75 per cent of its funding. So
ministers still call the shots to a large extent. This causes a
range of problems, including too much short-term funding and a
desire by many local authorities to earn brownie points by
promising to introduce the government’s pet projects, irrespective
of their suitability.
Margaret Thatcher recognised that such a system of local government
funding weakened the link between elected representatives on
councils and the councils themselves, and sought a remedy. But
hush, do not mention the poll tax – a failure more in the way it
was introduced and administered than in principle.
Labour has remained faithful to its successor, the council tax.
However, the growing unrest about the 60 per cent increase in
council tax since Labour came to office, together with the protest
from older people, has driven them to look at the options.
Various journalists are being leaked the outcome of this review.
The party’s line is to hint at a local tax based on a mixture of
income and property valuation. Tony Blair, we are told, will
promise to introduce a fairer system of local taxation in his next
The reality is, of course, that Blair has enough sense to realise
that a commitment at this stage to impose yet another higher tax on
working families with reasonable incomes would be a step too far
for too many.
Sheila Gunn is a political commentator and a Conservative
councillor in the London Borough of Camden.