For professionals in or around the public service, and local government in particular, we are used to the new paradigms of fiscal austerity, efficiency and cuts.
There is a sense of inevitability about seeing our budgets shrink for the foreseeable future, with a pervading sense of managed decline in resources affecting the range and depth of our service delivery.
There is optimism that innovation can flourish, but in this environment it can be difficult to raise our eyes from the day to day management of shrinking funds to consider whether this is the best way to be doing things and to ask some more fundamental questions about our funding system.
In this context local government faces a challenging relationship with central government. It can be frustrating, especially for accountants and who like to base decision making on reliable data and empirical evidence, to see the presentation of opaque numbers that don't often provide a rounded picture of all the facts. Indeed it seems local government is often painted the worst possible light as a distraction from the real numbers.
Politicians of all parties are equally guilty of attacks on local authorities for the rational choices they make with the scarce resources they have.
Quite frankly, it is now ridiculous how little sensible debate takes place when the test for policy makers seems reduced to how it plays in the media rather than whether there is a sustainable and credible system of local government finance.
To move the debate to a more meaningful one, the Chartered Institute for Public Finance and Accountancy (CIPFA) and the Local Government Association (LGA) as organisations at the forefront of local government, have both long argued that the local government settlement and the relationship between local and central government are no longer fit for purpose.
It is time we cut away many of the preconceived ideas and ways of doing things and start to ask what the future shape of local government could and should be and how its finance system can best sustain this.
What should the citizen expect from local government and how best can this be funded in a way that is transparent, credible and acceptable to local people? Real devolution of localism means localities taking action or providing services unique to that place, rather than councils being reduced to a list of prescribed functions that is constantly being meddled with by disjointed government departments that do not share an understanding of the role of local democracy.
The current situation helps neither local nor central government in the long-term and certainly doesn't serve the interests of citizens in our districts, counties, towns or cities who deserve the right to shape their communities whilst attempting to make ends meet in tough times.
Therefore CIPFA and the LGA are soon to launch an independent commission into local government finance. We both believe that there is a clear need for an open and honest debate about the future shape of local government and its relationship with both the citizen and central government.
This independent commission will address a range of areas and seek to find a positive way forward for the financing of local government. It will hope to address at a fundamental level how we can achieve the fair funding of local government both through direct revenue raising and the distribution of resources from central government. It will also look at how those resources are allocated, not just how much can we spend, but how best can we spend and within this question, how can local government reach a new contract with its citizens about the services it provides.
It will also consider how we commission services and provide for those we serve. And to have any lasting impact it must also address the role of central government in its support for local authorities. Taking evidence from other systems, what is the role of central state in local decisions and service configuration?
Should local government have a wider role, especially that of promoting growth and community well being, than the services it directly provides, and how best could this be financed independently of the central state?
At the heart of this issue is whether political consensus is possible on a future form of local government finance that would be sustainable over many parliaments and governments. At present each political party claims it supports local government whilst they have allowed the system of local government finance to become further discredited over the decades.
It is time to revitalise the system of local accountability and the decisions made on taxation and spending.
Local decisions that have the ownership and backing of local communities will be far more effective in delivering what is wanted by them. There is a much more meaningful debate to be had than simply reducing local democracy to an argument about annual percentages.
So CIPFA and the LGA hope that the independent commission will be welcomed by all in the political arena. That as it works to produce impartial and balanced advice for both the government and the opposition, we can all agree on a future funding system that is fit for purpose and move towards a settlement that is fair, locally accountable and sustainable in the long-term.
Rob Whiteman is chief executive of the Chartered Institute for Public Finance and Accountancy
