England & Wales Democracy, devolution and governance

UPDATED: Conservative green paper on localism

The Conservative Party today released a Green Paper on local government – “Control Shift”.

It includes plans to:

  • give councils the powers to levy business rate discounts
  • give councils financial benefits for new businesses and housing in their area
  • make the local government funding system more transparent
  • end capping powers in favour of referendums on council tax rises
  • cut ‘centrally imposed bureaucratic burdens’
  • give councils a general power of competence
  • abolish the Comprehensive Area Assessments
  • end all forced amalgamations of local authorities
  • give citizens the power to choose to have a directly elected mayor
  • give citizens the power to instigate referendums
  • introduce directly elected police commissioners
  • abolish the standards board
  • allow councils to devolve unlimited funding to ward councillors
  • let people choose the organisational structure of their local council
  • phase out ring fencing
  • make it easier for councils to issue bonds
  • abolish all regional housing and planning powers
  • abolish the government office for London
  • strip the RDAs of powers and hand them to councils

The headline proposal, as predicted on this blog, is a push for more directly elected Mayors, scrapping regional structures and planning beuracracy, all set within an overall tone of decentralisation and localism.    Significantly, David Cameron will launch the Green Paper, putting his weight behind it and guaranteeing more coverage of the proposals.   Perhaps, as Caroline Spelman told me last week, the Leader of the Opposition really is a localist?   The elected Mayor proposal in the Green Paper will promise referendums in 12 major cities to have a ‘Boris’ style Mayor.    There is also a proposal for Police Commisioners, something that will be unpopular amongst the Tory grassroots.     The Green Paper covers local government finance and council tax, with proposals to end capping and make council tax hikes subject to approval in local referendums.     

Below are further thoughts from my colleague Glyn Gaskarth, a Policy Analyst in our Centre for Service Transformation: 

” The Green Paper offers a valuable insight into how a Conservative Government would approach Local Government. The proposals are welcome and the mood music is pleasing. The Conservatives promise to devolve more powers to local authorities. They propose measures to make local authorities more accountable to local people rather than central targets. However, these policies will need to be further developed if they are to be effective in practice and the Conservatives commitment to them would be tested in Government. The Green Paper has four main themes, it promises:


1. A roll back of central government controls and oversight:

The Whitehall capping of council tax will stop and central inspection regimes such as Comprehensive Area Assessment will be abolished. However, the party pledges only to slim regional government not abolish it. The Conservatives seem to have ended their commitment to abolish regional development agencies (RDA’s) outright. However, they are seeking to strip the RDA’s of many of their powers. The logic of leaving regional assemblies and development agencies in place but with reduced powers is not evident. A full transfer of all their functions to the relevant local council bodies would be more cost effective.


2. The devolution of financial powers to local government:

It pledges devolving financial powers to local government allowing them to lower business rates, benefit from local housing growth, benefit from local business growth and tap the bond markets for money. It also pledges to reduce ring fencing by central government so local people can ensure funding meets local priorities. This devolution of financial powers to local government is important. The end of Whitehall capping is a brave move for which the Conservatives should gain some credit. However, there is no pledge to expand the local tax base. Thereby local government will remain dependent on just one tax – the council tax – to provide services. This tax will now be subject to local citizen’s direct control. The Conservatives are going further towards reforming local government taxation than at any stage since the poll tax. However, memories of the introduction of this tax mean that comprehensive reform measures are not being proposed.


3. A less tidy Local Government but one more responsive to local citizens:

Local citizens will be able to decide the structures of their local representative bodies. Larger cities will gain the right to choose elected mayors. All Local Authorities will be held to account by a massive increase in the use of referenda. These referenda will allow citizens to block council tax increases and raise other local issues. However, the paper does not propose the devolution of core central government functions to local councils or Mayors. Allowing local citizens to choose the structure of their local government will make the structure of local Government much less tidy. It stands in contrast to the unitary/regional approach currently favoured. It will make it much more difficult to legislate at a central level. Therefore there is the potential for conflict between central and local government as these new bodies search to find a role.


4. Move from promoting business growth in deprived areas to promoting business growth in all areas:

The proposed abolition of the Local Authority Business Growth Incentives Scheme and its replacement by a Business Increase Bonus will mean that all councils will get a bonus if they increase business growth in their area by more than the national average growth rate. It is not clear how this measure will honour the Conservative commitment to spread growth around the country. However, it rectifies a previous injustice where local authorities which had a record of successfully promoting local business growth were penalised by the Central Government awards process.


This Green Paper has some merit. If implemented in full Local Authorities would have much to celebrate. However, the answer as to whether the Tories are true localists will only come if and when they are in power. If local councils choose to exercise their new powers contrary to the wishes of the central government will the Tories overrule them? If the national press demand that parliament issue a new law or regulation will the Conservatives say this is a local concern or legislate to force local councils to implement their national will? The fear is that this is the sort of plan party’s outline when they are out of Government and have a large local government presence. We must hope they implement it if they are elected to Government and don’t backtrack if they begin to face a renewed threat to their local power base.”     

Editor:  These are Glyn’s views rather than those of the LGiU.  We will be consulting our member local authorities before responding to the Green Paper.   A detailed briefing will be sent to our member authorities shortly.