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Thursday, December 08, 2011

A revolution in local government

Nick Clegg's speech today on giving new powers to towns and cities is a very important landmark for this coalition and underlines Liberal Democrat influence in introducing a decentralising empowering approach to government.

According to the Telegraph, Clegg will tell Councils that they will be able to go into debt to fund new schemes by being allowed to borrow against future tax revenues:

The plans are expected to be published in a new Local Government Finance Bill in the next two weeks, with the powers in place by April 2013.

They will allow councils to borrow for the first time against future tax receipts from business rates through a new Tax Increment Financing scheme.

Eight “core” cities will also be helped through new “city deals” in which they will get greater control over the money they receive from central Government.

They will be allocated a single pot of cash to spend locally and end a current situation in which they go on “bended knee” for money from Whitehall for individual schemes such a new retail park or roundabout.

The “core” cities are Birmingham, Bristol, Leeds, Liverpool, Newcastle, Nottingham, Manchester and Sheffield, which collectively account for 58 per cent of England’s population and 61 per cent of its jobs.

The details appear to be quite revolutionary:

Mr Clegg will say he wants to unleash “an unprecedented transfer of power, to unleash city power, to boost entire regions, to get our national economy growing”.

He will say: “There will be no more going on bended knee to Whitehall department after Whitehall department to bid for different capital pots for individual schemes.

“Instead cities will get one consolidated capital pot to direct as they see fit. Whether that is on a new roundabout or a new retail park – whatever their area needs to boost economic activity.”

Councils will only “have to show that a specific scheme is feasible, achieves value for money, is transparent and accountable and contributes to growth” to qualify.

Isn't it time that the Welsh Government followed suit?
Perhaps the Local Authorities in Wales should do something about recovering their assets (council taxpayers money) that was lost to the Icelandic banks, before they go for a "payday" loan.

I was in Cowbridge the other day (nice place) and whilst in a shop I overheard a conversation; some guy was telling the shopkeeper about some event WG had organised for businesses and was handing out Carrier Bags! Any truth in this rumour?
Just saw a pig fly passed my window
Like you said, if it takes away the "on the bended knee approach" of local councils to Whitehall, and by doing this empowering local governments to invest more greatly in the local communities - then I welcome this news - on the basis that the Councils plans are properly financed, more than feasible and water-tight. So that examples like the Edinburgh tram situation are not replicated council after council, city after city, town after town.

The worry though that Council debt will skyrocket is a potent factor to consider - I am not sure what safeguards are in place to limit the over indebtedness of councils, or that could be put in place alongside these investment/borrowing plans. On the other hand there is a great chance here to boost the development of under-developed areas of England, and counter the immense pull of London, through regional development on a local level.
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