Select Committee on Transport, Local Government and the Regions Fifteenth Report


The Transport, Local Government and the Regions Committee has agreed to the following Report:



The Government promised to redress the imbalance between central and local government. This Bill fails to achieve that. It makes some small steps in the right direction but at the same time increases the power of the Secretary of State. Central Government seems to be terrified of trusting local authorities and allowing them their independence.

We welcome the new prudential regime for local authority capital finance. We are concerned that the detailed Clauses in the Bill undermine that prudential regime with Clause 4 giving the Secretary of State power to restrict local authority borrowing as he sees fit and Clause 10 allowing the pooling of capital receipts. We are also concerned that the Government's control of local authority revenue funding effectively restricts borrowing.

The draft Bill is far too reliant on regulations. The Government should set out its intent on the face of the Bill, not through secondary legislation. When the Bill comes forward for consideration, all the secondary legislation should be available in draft.

We do not object to the Government bringing forward a revised version of the Bill, which gives greater emphasis to giving greater freedoms to local authorities. But there is a need not only for a Bill which makes minor modifications but which would constitute a major re-appraisal of how the aim of bringing about local government and local democracy will be achieved. If we are to have effective local government, the centre must let go-not just the Office of the Deputy Prime Minister but Government as a whole.

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Prepared 24 July 2002