Thursday, 30 January 2014

My challenge for Eric Pickles - 35 ways the government can help councils save

Local Government Secretary Eric Pickles is always advising councils that they could save money by taking on board his 50 ways to save. Other groups, notably the Taxpayers Alliance, have produced even longer lists of ways that councils could save money.

But this is a two way street. Councils can, and should, be doing all they can to reduce the amount they spend on administration and bureaucracy. Some of the ideas advocated by Mr Pickles and by the TPA are fairly straightforward. Others are much more controversial. It is for each council (and councillor) to decide which, if any, they might like to take on.

But the government should also be playing its part in cutting bureaucracy and enabling councils to save. Below is a list of 35 simple changes that the government could undertake to make life easier, quicker or cheaper for local authorities. As with Mr Pickles’ own list, some of these ideas are controversial and won’t be supported by everyone. Introducing a tourist tax, for example, is not something that would be undertaken by any council without full consideration of the likely impacts, both positive and negative. It is not something that I am advocating for Cornwall. But it is a freedom that I think local councils should have. My thanks to everyone who has contributed ideas to this list.

So here’s my challenge to Mr Pickles. If you are serious about enabling councils to save money, how many of these changes are you prepared to make to help us?
  1. Further simplify funding from central government, including specific grants, end the Barnett formula and provide a 3 year confirmed rolling settlement to allow accurate financial planning.
  2. Introduce a proper timetable for funding announcements so that grant amounts are clear before authorities start the annual budget process.
  3. Introduce proper payback for money saving initiatives and investments made by councils. If the Council invests money and resource in, say, a scheme to help problem families and so saves the Police lots of money as a result, there has to be a real financial transfer from the Police to the Council.
  4. Reform the Bellwin scheme so that larger councils are not discriminated against.
  5. Loosen the restrictions around councils issuing bonds so that authorities have access to cheaper finance for capital investment.
  6. Change the timing regulations regarding council tax referendums so that they can be held before the bills are sent out.
  7. Even better, abolish council tax referendums altogether so that councils are properly accountable to their local residents.
  8. Lift the restriction on the Council building and/or operating affordable housing in its own right.
  9. Remove the need to set up companies to trade under S95 of Local Government Act – the Council has opportunities to trade and bring in income but having to set up a separate company brings with it a new set of overheads that could be avoided if more freedom on trading was allowed directly by the authority.
  10. Relax regulations around state-aid. State aid issues and having to ensure compliance is adding significant cost to projects.
  11. Give councils more control over council tax discounts, in particular the single person discount. This would allow councils to save money but also to allow authorities to balance the relative needs of different groups, such as the most vulnerable through the localised council tax support scheme.
  12. Simplify procurement legislation – complying with the current procurement legislation that only applies to the Public Sector adds a significant cost to the procurement process.
  13. Review all returns required to be made by councils to central government. These are time consuming and costly. Ministers should have to justify every return required.
  14. Loosen up legislation as to the profit element on some services – eg why should planning be at cost only? Why can’t we make a return on some activities if the market is prepared to pay? Let localism rule where public and the market influence the price.
  15. VAT partial exemption returns are time consuming and costly to calculate and can sometimes create issues when electing to tax on land transactions particularly with voluntary sector. Abolish them and let local councils claim back VAT.
  16. Abolish the tax differences between Health Service and Local Government – with areas like the Better Care Fund this makes no sense and can result in perverse costs dependent on whether the lead is the local authority or a health body.
  17. Follow Scotland & Wales in terms of devolved powers being giving to England local authorities.
  18. Give councils, and their electorate, total tax transparency through the introduction of a local income tax and move away from both council tax and central government grant.
  19. Give councils the freedom to raise or generate revenue e.g. tourism tax, voluntary charge for concessionary fare holders, at their own discretion with accountability to residents through the ballot box.
  20. Abolish restrictions on use of Capital Resources to fund one off costs – authorities should be bound by their own prudence & affordability.
  21. Restrict the amount of bureaucratic statutory returns councils have to complete.
  22. Abolish the requirement to produce statutory accounts compliant with IFRS which are meaningless to the average resident, are not to a true representation of how the council performs against its budget, requires significant resources to produce the accounts, interpret the standards, set the right chart of accounts in the ledger. The WGA return is probably all that central government needs from the Council. Public reporting could then be replaced by a shorter punchier out-turn statement against budget and a summary of the council’s key service performance for the year. Audit work could focus on WGA which should really just be the subjective analysis from the ledger and the reconciliation to the outturn statement.
  23. Change business rate retention rules to allow councils to benefit from all increases in business rates as was originally announced, including inflation.
  24. Provide more freedoms for authorities to use capital receipts to fund service change and/or to generate revenue savings.
  25. Minimise unnecessary top-slices that allow councils to better plan in advance the level of resources they have.
  26. Provide fair funding for rural councils on a par with urban authorities based on a clear set of criteria and transparent funding formula.
  27. Provide full funding for new burdens passed on the local councils and commit to continued funding of those initiatives.
  28. Allow councils to invest NHS monies where pooled with local authorities.
  29. Give councils greater freedom in the use of European Programme money so that they can maximise investment returns.
  30. Relax the number of statutory duties to give councils freedom to negotiate services that suit the local environment and communities.
  31. Remove the ring fence from the Public Health Grant and allow councils to be really innovative in their use of these monies.
  32. Put Unitary Councils in place across England this would save £millions and could be delivered relatively quickly. Joint projects such as those proposed by the Secretary of State mage useful in some cases but will take a long time to come to fruition and cost more and give an ad hoc pattern across the country. Lessons can be learnt from recent round of unitary councils such as Cornwall.
  33. Freedom to raise tolls in line with inflation without having to seek the permission of the Secretary of State and hold a public inquiry.
  34. Remove the requirement for expensive and cumbersome regulations surrounding consultation and advertising of Traffic Regulation Orders. Councils should be free to undertake consultation and publicise proposed changes in the way they think best.
  35. And while you are at it, abolish the requirement to publish expensive adverts in local newspapers which few people read to publicise highways, planning and licensing applications. Why not simply make it a rule that councils should publicise these things in the best way they see fit? 
UPDATE - Ideas 36-38 are listed here.

UPDATE 2 - Apparently it's all a bit complicated for the Leader of the Opposition on Cornwall Council, but these are simply ideas about powers which Cornwall Council (and other authorities) could be given. There is no commitment to actually doing any of them and before most of them happened (particularly any which would impose extra burdens on residents or businesses) there would need to be consultation, a proper debate and democratic vote.

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