Examination of Witnesses (Questions 274-279)|
TUESDAY 9 JULY 2002
274. Can I welcome you both to the third session
this afternoon. Would you like to introduce yourselves for the
(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.
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
timeas I say I do not want to concentrate on the last ten
or 20 yearsis 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 timeit is not for me to
say this with politicians of all parties sitting in front of meto
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.