Budget 2015: Call for more devolution after 'disappointing' deal

By Dan Peters | 18 March 2015

Local government leaders called for ‘greater levels of devolution’ after the West Yorkshire combined authority was left ‘disappointed’ with its deal.

Local Government Association chair Cllr David Sparks said the Budget failed to protect funding or deliver the ‘bold approach to English devolution which will be essential to the survival of our libraries, children’s centres, parks and local buses in the next few years’.

Cllr Sparks added that the Chancellor did also not address cuts to social care budgets.

He said that the announcement of pilots that would give Greater Manchester, Cheshire East, Cambridgeshire and Peterborough a greater share of business rates should ‘not just be limited to a handful of areas’. 

He added: ‘All parts of the country should be able to reap the benefits of having a thriving local economy. 

‘This should be implemented as soon as possible in a way which ensures areas with fewer businesses do not lose out.

‘Central government needs to seize the opportunity presented by the review of business rates to create a more effective local tax where rates and discounts are set locally and councils have much more freedom to support small firms. 

‘Economists, business leaders and councillors all agree that a much bigger and faster approach to devolution for all places – both inside and outside our big cities - is essential for the economy and survival of good quality public services.

‘Local areas having autonomy over their local services should no longer be dependent on incremental concessions from Westminster. 

‘The future of local services depends on this becoming the default.’

Economic prosperity and housing spokesman for the Society of Local Authority Chief Executives (SOLACE), Martin Swales, who is also chief executive of South Tyneside MBC, said: ‘We must ensure that local authorities have all the necessary powers to create prosperity at a local level and support growth of the national economy.

‘Devolution provides longer-term certainty and wide-ranging powers to establish strategic investment models, stimulate jobs growth, build new homes, structure local skills solutions and create long-term transport infrastructure plans.’

SOLACE’s spokesman for local government finance Paul Martin, who is also chief executive of Wandsworth LBC, called the Chancellor’s Greater Manchester and Cambridge announcement a ‘positive step towards creating a future finance system for local government that is sustainable’.

Chief executive of the Local Government Information Unit think-tank, Jonathan Carr-West, said: ‘This Budget offers further evidence of a welcome momentum towards devolution and takes us one step nearer to a localist tipping point from which future governments will be unable to row back. 

‘The devolution deals we have seen so far are the result of a dynamic Treasury negotiating directly with local authorities, often on a cross-party basis - the first time in a generation this has happened. 

‘We urge the Chancellor to make good on his promise of an open door to negotiate similar deals for other councils but if this door is open then the onus is on local government to walk through it.’

Chair of the Key Cities group, Cllr Paul Watson, who is also leader of Sunderland City Council, called on the Government to ‘go further and approve further powers for cities to control public services and pursue economic development’. 

He added: ‘If we unlock the potential of cities across the UK, we can build a new and more competitive economy that delivers better jobs and better services for our residents.’

Director of the IPPR North think-tank, Ed Cox, said: ‘The West Yorkshire devolution deal is another incremental step in favour of city devolution, but it falls a long way short of the Greater Manchester deal and appears to have faltered on Treasury’s unswerving commitment to directly elected mayors. 

‘In truth, devolution in England is progressing far more slowly than in Scotland and all political parties need to use their manifestoes to set out a clear blueprint for devolution beyond one or two big cities. 

‘Allowing Manchester and Cambridge to retain 100 per cent of the growth in business rates is another small step towards giving English cities much-needed revenue raising powers, but, with the announcement of a wholesale review of business rates, more radical options must be considered which allow local authorities in England the kind of fiscal autonomy seen in most other developed nations.’ 

Director of public sector at Zurich Municipal, Andrew Jepp, said: ‘Despite the Office of Budget Responsibility revising its growth projection up to 2.5% this year, local authorities across the country are still trying to cope with the effects of earlier budget cuts. 

‘Council chiefs should, however, feel reassured that Britons are yet to notice any fall in standards in the delivery of council services. 

‘This is a huge testament to the work that our councils have carried out over the last five years.

‘Of course, as the funding cuts continue to bite, the challenge now is to retain this public satisfaction.’ 

British Property Federation chief executive Melanie Leech said: ‘The infrastructure funding challenge is one of the greatest obstacles to growth, but the package of business rates announcements this week – greater retention by local authorities and a fundamental review of the business rates system – may provide part of the solution by allowing cities to finance new projects against a secure stream of rates income.’

Chief executive of the Chartered Institute for Public Finance and Accountancy, Rob Whiteman, said: ‘Local services are already stretched thin and while many councils have dealt well under the pressures they have faced, there are increasing instances of them struggling to cope under the strain of their finances. 

‘The impacts of these cuts are now feeding through into pressures for other areas of the public sector, such as the NHS and the criminal justice system.’

County Councils Network chairman, Cllr David Hodge, said: ‘The Chancellor offered an open door to any part of the country looking for a devolution deal to match that of the provisional agreement with Greater Manchester. 

‘I know many counties will be keen to take up the Chancellor’s offer but they will be making the case for greater fiscal freedoms than simply retaining local business rates.’

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