Is Labour really serious about devolving power to local government?

A radical shift to where the power in Britain lies – away from Whitehall and to the people. This is what we expect Jon Cruddas to set out in a speech tomorrow at the New Local Government Network Annual Conference.

But for people to really have a say, there must be greater empowerment of local government and its public sector partners. And this environment must be truly free for innovation and real decision making around finances. This cannot simply be an exercise in devolving the axe and forcing local authorities to make devastating cuts locally, while the centre retains control.

It is expected that Labour will commit to a five year funding settlement for local government. This is a great step forward and will give local authorities more certainty to plan services over a longer period of time. They will be freed up to invest in early intervention, to address local need and will be better able to avoid political short termism.

But we must question whether this plan goes far enough.

In this system, local authorities will still be subject to central determination and decision making. Local government will still have to go cap in hand to Whitehall colleagues. This will not fundamentally change the relationship between local government and the centre. Whitehall will still be in charge.

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As a starting point, Labour needs to set out how the party intends to deal with the split between centralists and localists. There are still far too many people in the party that believe that Whitehall knows best, and find the concept of local determination incredibly difficult to reconcile. If we give councils, and in turn their communities, powers to take decisions for their own areas, including spending decisions, you won’t be surprised to hear that people will make different decisions. This could result in different levels of service provision across different areas, and people choosing to do things that the centre doesn’t agree with. Is Labour willing to accept post code choice?

And it’s not just service provision that might vary across different parts of the country. Councils will also decide to deliver things very differently. Some may choose to collect bins once every two weeks, some may choose to outsource and some might even decide that they want to invest in their workforce and pay their chief executive more than the Prime Minister. We should expect that in order to deliver their local outcomes, cities and regions must be autonomous and have the ability to make these sort of spending decisions without criticism from the centre.

The issue of finance must go much further than ability to spend. Councils also need to be able to raise more taxes locally. Up to now, the only indication that we have from Labour about local tax raising is the proposed freeze on business rates. This represents the exact opposite of devolving power down and is the clearest indication yet that talk about devolution may be hot air.

Ironically, the sort of localism that we need can only be achieved if changes are made first to the centre. The Whitehall grip, led by the Treasury, has to loosen and radically reform to ensure local determination and decision making. Most importantly, the culture needs to change and move away from the current paternalist and patronising attitude to local government.

If Labour is serious about giving power away and embedding this sort of change, the party needs to commit to making this one of the first projects of government. Change must start in the first year of office and be pursued at speed. Local authorities are now too wise to the promise of devolution in opposition, and the reality of clinging to power when in office.

If this is successful, it must be just the start. Local authorities too must commit to giving communities more spending choices. If central government devolves, local authorities must follow suit and give communities and neighbourhoods the powers they desperately want.

Laura Wilkes is Head of Policy and Research at NLGN

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