Reform of Local Government & Machinery

Council tax with grant funding fails as a concept.

  • Financial fact tells people what is spent locally. Council tax does not.
  • Council tax funds only a fraction of money spent locally
  • Council tax is locked into redistributive central grant funding. It is in practice a national property tax with divisive local undertows
  • Grant funding is based, not on local measurement of needs and differences, but theoretical calculations made at the centre (so as stealthily to retain central political control?). Subjective ministerial decisions have replaced some formulae.
  • It is not evidence for accountability. Stewardship accounting does that – or it would if good practice and timeliness was observed.
  • It does not reflect ability to pay (excepting Local Income Tax)
  • It is useless as a managerial tool
  • It is not a ‘price’ because cannot be withheld for failure as under a contract.
  • That it “bears down on cost” is because of controlling downward income pressure from above.  Its ‘locality’ is irrelevant. Only charges, on the increase, are local.
  • If local people (in what sense?) should fund local services (as defined how?)  - they already do, but which pound goes where?
  • It doesn’t need replacing if the timed reform programme needed  is big enough to simplify tax down to flat rate,
  • Why should local politicians (and the police) be given tax raising powers denied to health trustees and many others providing public services?
  • Even the LGA, towards the end of the Lyons Inquiry, spoke only of “assignment” of tax money.
  • In the case of Local Income Tax the most sophisticated variant gives no information advantages to the individual taxpayer over other existing information sources (Per CIPFA for Balance of Funding Inquiry) . The point applies equally to council tax.
  • Heath Robinson machinery has resulted from lack of attention to system architecture based on clearly stated objectives
  • Funding from central taxes is simple and easy to describe and needing only political will for delegation, and managerial know-how.
It is now planned to prepare a scheme with a jet-engine rather than propeller-driven machinery to give to government once a debate here has built agreement and support.
Note April 2011: I received a letter dated 31st January from a senior official in HM Treasury which included this "The Government has announced that it will shortly be launching a Local Government resource Review, and I have taken the liberty of forwarding your corespondence to the review team in the Department  for Communities and Local Government. I am sure that they will find your scheme (In a Nutshell as given to Sir Michael Lyons - see attachment) the sort of thought-provoking contribution that they are seeking, and I would urge you to contribute further as the review develops." This review is to report in July 2011 with the intention of settling new funding arrangements from 2013. Will this follow all the reviews etc over 30-40 years to be yet another half-baked failure to do the job properly ? Or will it be  a cover for increased council tax in line with more localism and/or to be taken for public deficit reduction ?

Peter Webb,
26 Apr 2011, 07:47
Peter Webb,
5 Feb 2012, 08:10