Select Committee on Transport, Local Government and the Regions Minutes of Evidence

Examination of Witnesses (Questions 274-279)




  274. Can I welcome you both to the third session this afternoon. Would you like to introduce yourselves for the record, please.

  (Professor Stoker) I am Gerry Stoker, Professor of Political Science at the University of Manchester. I am also Chair of the New Local Government Network.
  (Mr Travers) My name is Tony Travers. I am Director of the Greater London Group at the London School of Economics.

  275. Do either of you want to say anything by way of introduction or are you happy to go straight to questions?
  (Professor Stoker) I am happy to go straight to questions but I think Tony wants to say something.
  (Mr Travers) No more, Chairman, than to re-emphasise briefly what I said in the introduction to my paper which was simply to reinforce the point that this Bill comes, as we all know, after many years of decline in the power and financial independence of local government. I think on any legislation, particularly one that has come out of a process of consultation where the Government undoubtedly has pointed in the direction of greater local autonomy, the Bill needs to be considered in those terms with hopes to increase and improve local autonomy seen as a major objective of the legislation.

  276. So you put the 2000 Act into that category of reducing local government autonomy?
  (Mr Travers) I am not sure, to be fair to that, that I would see that as a major step in that way. I think I am talking about the great sweep of legislation in the period since 1945 rather than the most recent legislation.

Mr O'Brien

  277. Following on the comments that you have made, Mr Travers, and the fact that you do say in your introduction that over the last 30 years there has been this imbalance of financing between central and local government, what do you see as the main points in the central/local funding debate?
  (Mr Travers) There is no doubt that the main points in that debate in recent years have centred on the balance between the proportion raised locally and the proportion that is provided by Central Government through grants. There is more to it than that because the nature of the grants as well clearly influences the extent of autonomy and what we have seen in a long sweep of time—as I say I do not want to concentrate on the last ten or 20 years—is a gradual move away from local government's capacity to raise its own money. Not only that, the grant system in addition has given ever greater powers for Central Government to determine how the money is used. I have to say in the last few years this has significantly increased as the present Government has rather more than previous governments used the power to determine how grants shall be used, specific grants and other ring-fenced grants, even more than previous governments. The question of the balance between centrally and locally raised resources, there is no doubt that has been a key political issue and where there has been a significant debate. Gerry Stoker sitting alongside me here has taken part in that debate, I have, many people have, to try to get to the bottom of the question of whether it is possible to have greater local autonomy without greater local freedom to raise resources. The evidence, I think, is highly mixed. If you take the Scottish case, to take one of the latest and biggest changes, there is no doubt that Scotland's government is relatively free and seen as autonomous and it gets a single block grant from Government. It has not used tax raising powers at the margin. On the other hand, in the debate within the British local government system I think it is difficult to get away from the idea that local councillors and local government feel that robbed of a significant capacity to raise their own resources they do feel robbed of autonomy, so there has been a powerful belief that without the capacity to raise more money locally autonomy will suffer, but it is very difficult to prove one way or the other.

  278. Where do you see the National Non-Domestic Rate fitting into that scenario?
  (Mr Travers) Personally I have always believed that although the National Non-Domestic Rate is not a wonderful local tax, it is the lesser of many evils and, therefore, the return of the NNDR to local control, although not a perfect local tax, would be a better step than maintaining it as a central tax, and it is becoming ever more a central tax.

  279. Can you move on a little further and give us your view as to the Government's commitment to look at all aspects of the balance of funding?
  (Mr Travers) I am very glad that the Government is prepared to consider that balance. I think it would be naive to imagine that the Treasury are going radically and instantly under any party in power to make a big change to this balance, but I think in the longer term it would be possible for us as a country to imagine moving to a different balance. I did quote in the paper the fact that overall only four per cent of all taxes paid in the United Kingdom are raised through council tax by local government. This is a very small figure by international standards. I think there could be a consensus over time—it is not for me to say this with politicians of all parties sitting in front of me—to move to a higher figure of locally raised resources. This is, after all, money that taxpayers in each area pay and it is then sent to the Treasury and recycled back through various mechanisms.

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