BusinessCompany NewsBrown boosts spending powers of local councils

Brown boosts spending powers of local councils

Chancellor Gordon Brown, in remarks delivered on a visit to Hull, said all local authorities will be made responsible 'for deciding how much they can prudently borrow' and be given greater freedom to invest in local services.

Link: Audit Commission sidelined over failing councils

The borrowing powers will not – unlike within the NHS – be restricted to the best-performing institutions.

But what Brown called ‘high performing councils’ will receive ‘substantial extra freedoms’ including a dramatic reduction in the amount of funding which is ring-fenced, with the withdrawal of reserved powers over capping ‘as a first step towards dispensing with the power to cap altogether’.

Brown also raised a question mark over local government auditing with the remark: ‘inspection will be cut by around 50%’ for the best performers.

He said that for all councils, ‘we are developing a more co-ordinated and proportionate inspection regime to generate real performance improvements for all local authorities’.

A compromise deal allowing the foundation hospitals to borrow subject to review by an independent body and within borrowing targets was thrashed out at a Downing Street summit chaired by prime minister Tony Blair earlier in the week.

It is all part of Labour’s determination not to be upstaged by either the Tories or the Liberal Democrats in devolving power to local levels.

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