Memorandum by SOLACE (LGB 10)
1. SOLACE is pleased to see the publication
of the draft Local Government Bill and believe that a number of
the finance proposals will be positive in their effects.
2. The Bill contains a number of significant
deregulatory measures, the most important concerned with capital
finance and with powers to trade and to charge, all of which we
3. The most welcome feature is the new system
that will allow local authorities to raise capital finance (without
specific Government consent) provided they can afford to repay
the debt. This is significant because it marks a sea-change in
Government attitude towards the financial prudence of local government.
Perhaps for the first time the sins of the very few are not being
visited on the overwhelming majority of Councils which have robust
records of financial management.
4. We believe that this Bill has been a
long time coming and that the stick and carrot approach to local
government service improvement has been characterised by the absence
of carrots. We hope that this Bill can significantly help redress
this balance. In order for the effect of this Bill to be maximised
we believe that it is imperative that a slot is found for it in
the crowded Parliamentary timetable.
5. However there is some disappointment
here, for local government. There are welcome features, but generally
the Bill fails to lay the foundations for a successful framework
to encourage modernisation and improvement.
6. The prevailing attitude of mistrust of
local government, however, is revealed once again in the Bill's
clauses on financial administration. Outside a handful (at most)
of Councils, there is no evidence that general reserves are run
at dangerously low levels or that necessary in-year budget corrections
(to reflect underachievement of income or prospective overspending)
are not made as a matter of routine. The reasons for even more
prescription around financial administration are therefore a mystery,
7. For the rest, the Bill presents a variety
of disparate provisions that will do little to drive forward a
mainstream agenda of modernisation and improvement. That is an
opportunity missed. The discretionary charges and powers to trade
are hardly powerful incentives for stimulating the sort of quantum
shifts the Government says it is looking for. It could have used
the categorisation of local authorities under the Comprehensive
Performance Assessment to free the "excellent" from
many more controls except monitoring service/community outcomes,
while justifiably prescribing inputs and process as well as monitoring
outcomes for those Councils judged "weak".
8. The draft Bill has missed the chance
to rationalise Inspection services in the wake of Comprehensive
Performance Assessment. That failure seems to reveal a "silo"
mentality within Government departments. A Government with a real
desire to achieve modernisation and improvement by making local
authorities more effective may well have used a draft Bill to
say so in a more comprehensive manner.