Osborne’s Local Government Bait and Switch

October 6, 2015

How can the Guardian parrot this trash?

Here they are talking about George Osborne at the Tory party conference where he “used his speech to the Conservative party conference to reveal the biggest transfer of power from central to local government in recent history.”

This, the same week that the Tories announced that they would be telling councils how to invest their pension funds, so as to avoid any nasty boycotts of rights abusing regimes or defence companies.

Westminster has also forced local authorities to bear the brunt of the costs of bailing out the financial sector, requiring cuts of between  25 and 40 percent in their budgets – decimating public sector employment and some essential services. In previous budgets, the Chancellor has been happy to tell councils how much they can charge for social housing rents as well.

Robert Peston also notes that the scale of Osborne’s “devolution” of powers over taxation to local authorities is extremely limited. Council’s will be restricted to tinkering with business rates, and will only be able to cut these rates (to attract businesses in a race to the bottom). Directly elected mayors may be able to raise business rates by 2p in the pound, if it’s put a vote amongst local businesses. Some chance.

Osborne will also be phasing out grants from government to LAs, and the money will be replaced by revenues from business rates. Peston notes that “that may be best seen as an administrative reform, rather than one of huge economic substance.”

Peston also makes the astute observation that “t could also seriously widen the gap between rich and needy councils” as “councils with the most serious social problems, and therefore the biggest costs, may find it hardest to woo businesses to their areas, and therefore may find it hardest to increase their revenues.”

What a surprise.

The fact is that any comprehensive program of devolution to local authorities would accelerate inequalities between different communities. By all means hand power over schools and services (and pension funds) to town halls, but this is a policy area where national planning and redistribution are essential. As I’m sure Osborne realises.

This is just another Tory bait and switch. The bait being the promise of devolution and northern “powerhouses” or councils that are creative entrepreneurial, innovative [insert buzzword here]. The switch will be to continually pass on new responsibilities and costs to local government and chip away at their budgets, while forcing them to compete with each other for the crumbs that are available.

Let’s not be fooled by this.


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