As we shift closer to the next general election, there seems to be no clear cut answer to which party will form the next government.

And even less clear is what the party's policies will be on local government.  While the current coalition's recent pronouncements on big issues like fiscal devolution and Community Budgets seems to favour the status quo over further change, the Labour party is in full consultation mode.

Labour's local government innovation task force (headed by Manchester City Council leader Sir Richard Leese, with Hackney mayor Jules Pipe and Stevenage leader Sharon Taylor) is coming up with its proposals by the sector, for the sector – but as yet has not reported.

Sir Michael Lyons, former chief executive of Birmingham City Council and chair of the Audit Commission, has also launched his enquiry into housing growth – to come up with plans for Labour to increase housing supply, should the party win the next election.

And last month saw the launch of Labour and Localism: Perspectives on a new English deal, a Smith Institute report on how English devolution may work, with contributions from shadow ministers and councillors across the party.

In his foreword to the document, shadow communities minister Hilary Benn says: ‘A really radical transfer of power down to communities is essential if we are to rebuild confidence in our democracy.'

Speaking to The MJ in an interview in Westminster, he explains that a number of things have changed since his party was last in power – not least the finances. And a change in political control is not going to suddenly make extra money appear.

‘There's going to be less money so the need to make more use of the money available is crucial.'

He is confident that the sector is moving forward, becoming ‘more organised and more confident'.

But he adds: ‘The impact of the cuts has focused councils to be more innovative.'

While the party is still formulating its policies, the messages coming out seem to be firmly in the localist camp – and Mr Benn is no exception.

‘You can't run everything from the centre,' he says. But he adds that localism is ‘passing power not just to town halls from Whitehall but down to communities'.

He has ruled out top-down local government reorganisation, and quickly shifts the conversation from local authority reorganisation round to the benefits of combined authorities and city regions – focusing on the positives.

Returning to the localist mantra he adds: ‘The best people to decide what is better for the local area are at the local level.'

He cites them as good examples of where local authorities can reorganise themselves and work together. He sees a future with ‘flexible structures' of local partnerships which will cut costs.

Mr Benn adds: ‘We are not going for regional government because if you said to the public now do you want another layer of politicians we know what they would say.'

It would be a resounding no from a public that is disenchanted with the idea of democracy. He puts this down to parents seeing less opportunities and security for their children than they have had in their own lives.

When it comes to local government finance, he says it is an issue of ‘fairness'. As Labour unveiled figures showing the cuts in the 10 most deprived areas of Britain averaged 25%, compared with 2.5% in the least deprived areas, he hits out at the inequity.

‘It's shocking what the Government has done and they can't justify it.'  Liverpool, in particular has been badly hit – and the city council's budget revealed last week shows just how dire the situation is.

‘Cuts have hit the most disadvantaged areas more than the less deprived. That's not fair,' he says.

But his views on devolving finance are less defined. ‘I'm in favour of ‘county deals' because it should not just be confined to cities,' he says.

And while he accepts the London Finance Commission is an excellent piece of work, he suggests the ideas behind the devolution are just not that simple.

Stamp duty, for example, is increasing as a tax revenue, and he claims there is a ‘need to protect' the revenue of central government, and ‘there will always be a need for redistribution'.

There will, he says, need to be a reconciliation between devolution and redistribution. ‘Its not just about central government trying to work how its done,' he suggests.

Instead he says solutions should be designed in partnership between central and local government, and communities.

With little over a year to go until the general election, there is no telling yet what the outcome will be. But the future of local government pivots on what makes it into the manifestos.