England & Wales Democracy, devolution and governance, Finance

What does the Autumn Statement 2013 spell for local government?


Photo Credit: HM Treasury via Compfight cc

This is a statement which recognises that growth begins on our local high streets. Business rates will be discounted for SMEs and payments scheduled over 12 months. In welcome news for finance directors across the land HM Treasury has pledged that 95% of the rate appeal backlog will be cleared by July 2015. This is great news for stimulating growth starting at home, however, with councils now responsible for collecting and growing business rates has the Chancellor just cut off tax receipts when local councils are already struggling with his previous efficiency savings?

The Chancellor’s statement has begun to place the role of growth in the hands of local government. A £300 million increase in the borrowing limit for the housing revenue account and a Treasury review into the role of councils in filling the housing gap is an acknowledgement from Mr Osborne that councils are key, not just to promoting growth but to get houses built.

Some will fear that the Chancellor has strengthened the hands of developers with announcements of a specialist planning court and a statutory requirement to put a Local Plan in place. Planning conditions will be considered approved where a planning authority has failed to discharge a condition on time. It is clear that Mr Osborne views the local planning system as the only route with which to create growth but there are questions about how local democratic decisions can be made with yet more powers for the planning inspectorate.

Here at LGiU we hoped for a very radical approach from Number 11 Downing Street. The statement is a step in the right direction but doesn’t go far enough. Ambitious for local councils as the LGiU is, we would have liked to have seen local authorities given the power to vary business rate levels, introduce real local tax competition, and the localising of stamp duty or land value taxes. This is a financial statement which has placed the responsibility for continued growth in the hands of town halls and local high streets. With Mr Osborne’s tacit acknowledgement of the key role that town halls play, LGiU’s ambition for councils is finally within grasp. The next step is to see the Treasury’s iron grip on local taxation relaxed.

You can read what Jonathan Carr-West, Chief Executive of the LGiU, asked for in the Autumn Statement on Guardian Local Leaders here.