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Local funding system finally scuppered by Lord Heseltine

posted 18 Dec 2013, 07:41 by Peter Webb   [ updated 31 Dec 2013, 03:39 ]

He said in his 2000 autobiography LIFE IN THE JUNGLE “...on the evening of 26th October 1989 I spelt out in a speech my proposals that local authorities should produce corporate plans and engage in a competitive bidding process to secure the funding necessary to implement them from central government. It would be a condition of their success that they attracted a wide degree of support from their local communities, including where appropriate private sector investment.”. (Unfortunately he went on: “The impact on the media of this speech was less than zero. This was not altogether surprising in the circumstances since, as I was delivering it, Nigel Lawson was resigning as Chancellor of the Exchequer.”)

Now 25 years later we have the new LEPs (Local Enterprise Partnerships) who bid for their funds to get cash flowing from the centre as proposed by them while flowing the same way are grants dictated by the centre for  local authorities. There is at least an overlap and certainly a muddled systemic conflict.

In the case of the LEPs  the centre has let go leaving them apparently accountable to nobody. A local authority on the other hand is the unit which (should)  account by Annual Report in advance of elections to inform at least it's local residents who have the equity interest in it's assets, liabilities and performance with public funds. Those funds comprise grants from central tax and state borrowing, council tax, rents etc. and charges.

Apart from the generally disorganised and wasteful process, LEPs are an invitation to local authorities to avoid harsh financial squeeze measures by 'back-door' cross-subsiding and/or cost inter-transfers.