Time to hand power across to the people

The financial crisis has led to 10 years of pressure on all levels of government, with people feeling detached from democracy and forgotten by politicians, writes Bill McClements.

There is a good argument for bringing more power down to the local level.

National politicians always hold on to maximum power, but living in the London bubble they inevitably get more influenced by the City than by the needs of the general public.

We have a fragmented devolution of power. Scotland, Wales and Northern Ireland have different set-ups with two lots of expensive MPs, while some parts of the UK have elected mayors – devolution needs to be overhauled with a reduction in the layers of politicians.

Since the financial crisis national government has put more pressure and cuts on local authorities than it ever achieved with its own departments. This is the natural tendency to give the problems to those at arm’s length – it’s someone else to blame.

Locally Telford & Wrekin Council will have cut £140 million by 2020, and has reduced its workforce by 1,532 posts saving about £30 million per annum. It has reduced the number of directors and middle managers by 60 per cent while making a 50 per cent cut to spending. The council has done a good job getting new businesses into Telford after taking over the management of the development land from central government. The council has invested in factory and business units and makes more than £7 million surplus income which goes back into local services – not dividends.

It is fair to say that what has been achieved by local authorities is variable across the country. What are the problems with finance? Good local authorities have, by now overhauled waste contracts, adult services and children’s services, leisure facilities and staff levels. There is limited scope for further cuts to be made. The financing of local government is in a mess, the way forward is not clear and needs a major overhaul. Business rates are under pressure due to the changing high street – shops going. How will services be paid for as business rates income declines?

Central government keeps all car and lorry fuel and road taxes in the Treasury and only gives a small amount back to maintain the roads. In Telford & Wrekin more than £90 million is paid in taxes each year, but the council only gets £6.2 million back to maintain the roads and pavements. The council does get some more for new roads, but central government keeps more than 80 per cent of these taxes for itself.

Funding of adult care is fragmented between the NHS and local government. This needs to be joined up and central government must agree future funding to recognise the ageing population.

Significant

Getting the funding for adult care sorted correctly would be a significant help to local authorities.

What changes need to be considered for local government? Give more powers across a range of services, fair and stable funding and less annual meddling by central government. Local government has to continue to be more business minded, stop petty politics and be more accountable to the public.

Areas where local government should be involved in are mortgages, local banking and pension provision. We need local savings plans to get our children on the housing ladder, joint bank accounts, flexible equity mortgages so that parents can safely help with deposits, and we need to take the high costs out of pension fund management and reduce the level of confusion.

More housing for rent should be managed and owned by local people through their local authorities so that the standards are maintained.

Councils should manage and develop a youth workforce – there should be no youth unemployment. Local authorities could use this workforce for adult and family care, environment, agency work for local businesses.

Adult services and funding should be managed by local authorities. Local authorities have lower salary and cost structures. The NHS is a big national body that already has too many areas to manage. There are several hundred local authorities which could manage adult services and good practice could be shared.

Central government must review the funding and functions of local authorities now and set up realistic funding arrangements for the next 20 years.