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Clegg and Pickles in battle over councils’ right to raise taxes

There is a struggle going on at the heart of Government about how local councils should be financed. Over the past 40 years or more the proportion of council spending financed by local taxation has declined and been replaced by grants from the centre.

Now, according to the Local Government Chronicle, Nick Clegg is battling Eric Pickles, the local government secretary over this issue.

I have long believed that real local decision making and democracy depends on raising taxes to pay for local services. In Wordblog’s days as a jounralism blog this is what I wrote in 2006:

Part of the problem is that local news seems less relevant as local decision-making has been stripped away by centralising governments. Councils have become little more than administrators of central decisions and reorganisations in the name of efficiency have removed much of the cut and thrust of local politics.

The Local Government Chronicle reported last week:

… a chasm has opened up between Mr Clegg and Mr Pickles over the breadth and scope of the imminent local government resource review, with the communities secretary fiercely resisting the former’s calls for a much wider-ranging inquiry than that currently planned.

Mr Clegg is pushing for the introduction of local sales and fuel taxes and parking levies to be considered alongside a number of other measures, while Mr Pickles believes the review should not extend much further than the localisation of business rates and the introduction of Tax Increment Financing (TIF). Mr Pickles managed to block Mr Clegg from announcing the expanded review at a speech last week.

The LGC’s chief reporter, Allister Hayman writes in his blog that he is told by sources close to Mr Clegg that he has become increasingly concerned about the government’s lack of ambition in its decentralisation agenda. Clegg wants to “free local government from its overwhelming dependence on Treasury’s purse strings,” says Hayman.

We may question whether many councils, including SCC, are up to having such a large say over taxation. I feel we would be in for a bumpy ride but real power should revitalise local democracy with voters being more careful, insisting on better quality candidates from all the parties.

If the policy of localism is to have any real meaning eth power to tax enough to pay for the services must be devolved from the centre.

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