Council finance chiefs to get employment protection

Protection from dismissal for council chief financial officers was among the measures outlined by deputy prime minister John Prescott last week in a radical shake-up of local authority finance.

Billed as the most far-reaching changes to the sector in a decade, a white paper on local government also promised an enhanced role for the Audit Commission, which will operate a new best value inspectorate, power for district auditors to refuse to hear vexatious objections, and the restriction of surcharges to cases involving personal financial gain.

The white paper, ‘In Touch with the People’, also backs proposals from Lord Nolan to extend the protection currently given to council chief executives to chief financial officers as they, too, deal with disciplinary matters. In future, a council wishing to dismiss its finance chief will have to appoint and receive the backing of an independent assessor.

Other measures that the government says will restore local democracy include: replacing ‘crude’ budget capping with reserve powers; replacing compulsory competitive tendering with best value, which will reward the best performers with more freedom; limiting subsidies for council tax increases through council tax benefit; allowing local authorities to vary business rate locally; allowing councils more freedom for managing assets and spending capital; and strengthening internal and external auditing and inspection arrangements.

‘New safeguards will mean more responsibility locally for council spending and taxation, and protection for local people from excessive council tax rises through new reserve powers,’ Prescott said.

Best value will ‘give councils the flexibility they need both to be fair to the many dedicated people who work to provide our public services and to guarantee the best deal for those who use and depend on those services,’ he added.

But Conservative local government spokesman Tim Yeo warned: ‘The replacement of CCT by best value is in danger of being a smokescreen behind which the discipline of competition is removed.’

The Commons environment committee published its own report on best value the day after the government’s white paper appeared. Backing the proposals, the MPs said the government should provide more clarity on what incentives or rewards will be available to those authorities which are successful in delivering best value to their communities.

They called for consultation between the Audit Commission, CIPFA and local government on the development of best value performance indicators.

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