Councils unmoved

The Society of District Council Treasurers has accused the government flexible. of making too many concessions to businesses in its local government finance review.

Finance chiefs from 36 borough councils, who were attending a Price Waterhouse local government conference last week, attacked the proposals to modernise the sector’s financial structures, and said the review was aimed at appeasing the business community rather than supporting and improving local authorities.

The society’s members called the proposals ‘lukewarm and half-hearted’ and said they were disappointed by the government’s climbdown on its initial proposal to offer full control to councils to vary uniform business rates (UBR).

Roger Scott, treasurer for Mole Valley district council, said: ‘There is an argument for change but it needs to strengthen local accountability and increase effectiveness, rather than reduce it.’ He said radical changes would include fundamental changes to council tax, an end to capping and more flexibility with UBR.

Neil Newton, finance director for Hammersmith & Fulham, agreed. ‘The government needs to strike a balance between local discretion and its own priorities,’ he said. He criticised the capital finance system and said the government had to be serious in its long-term objective of making local government effective.

‘The existing system of capital finance is seen as effective in the control of expenditure and borrowing, but it was criticised by the Audit Commission for paying insufficient attention to the aims and objectives of local government.

That clearly indicates the system needs a complete rethink,’ Newton said.

Brian Bailey, FD of Wolverhampton borough council, said the review’s changes were not significant. ‘The government says the proposals will assist financial forecasting, bring stability, increase local government accountability and deliver best value. But I can’t see the radical changes promised,’ he said.

Bailey urged councils to express their views frankly in their replies to the government. ‘Letting the government know how we feel about these proposals might go some way towards getting improvements.’

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