Local Government
Local government funding in England is dominated by politics rather than need. The Labour government has consistently given more aid to constituencies and councils, which are more likely to remain Labour or vote Labour in any future general election.
The present system is both cumbersome and unfair. Many people on the lowest income, pensioners for instance, pay a disproportionate amount of their income in local rates. A single person living in any building pays the same as 5 people living in a similar type of building. Businesses contribute hugely towards the cost of local authority yet don’t even have a vote as to how the money is spent. It is not even guaranteed that the money businesses pay in rates is spent in their area. This is because central government takes all the money raised from business rates and re-distributes wherever it pleases.
Funds should be spread evenly across the nation rather than given out in the political way mentioned above. Councils have to keep their rate rises below the level central government states is an acceptable level of increase. On a level playing field, this policy would be fine, however by starving many councils of money and then forcing them to only increase rates by the government rate it means that many councils, mostly well-run Tory and Liberal councils can only balance the budget by reducing services.
The government spin machine ensures that the public perception of these cuts in services is not because of the lack of government money but from an inefficient council.
A radical rethink is required on all central government grants to councils. For starters, we could take a real look at the Liberal Democratic Party’s policy of introducing a local income tax. Unfortunately we have checked the Liberal Democrats policy booklet and all they say is they will replace council tax with a local income tax. No mention of how they will do it. More political puff.
The other form of this tax would be a local sales tax, rather like the scheme operated in the USA.
Let’s have an experiment. Pick out 20 councils all over England and introduce a local sales tax rather than personal rates. As part of this experiment all business rates raised in these councils would stay within these councils. If we run the experiment for 2 years we should have an idea whether it works more fairly than the current system and whether the amount of revenue raised will sustain the local services required. If it works and we think it will then it can be rolled out across the country.
Funding will still be required from central government in respect of education, roads, police and security.
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