Change of tack over town halls

The breakdown of trust between local town halls and Whitehall which occurred under the Conservatives during the 1980s, is a problem that needs tackling, the Government admitted yesterday.

Summing up a formal White Paper statement of its policy on local government, the Environment Secretary, John Selwyn Gummer, said ministers now wanted "action to strengthen local democracy, to promote local authorities' local leadership role, and to improve further relations between central and local government." The weight of the document was underlined by its list of sponsors, including the Deputy Prime Minister, Michael Heseltine, and, curiously, the Foreign Secretary Malcolm Rifkind.

Mr Gummer said in a written Commons reply last night: "Our programme represents a significant further chapter in the continuing development of local government within our living constitution, a development which we aim to take forward in a spirit of partnership and collaboration."

But the immediate effect of the statement was spoiled by a press release issued by Conservative Central Office in which Eric Pickles, a party vice- chairman, said: "For too long, the reputation of local government has been tarnished by the bad practices of Labour and Liberal Democrat councils."

Mr Gummer also refused to pick up a number of positive suggestions made by a House of Lords Select Committee report, Rebuilding Trust, which provided the basis for the Government's statement.

The reported recommended specific measures to help rebuild the trust and "traditional relationships" that broke down under Margaret Thatcher. It urged ministers to review the need for compulsion in competitive tendering; called for an end to capping of local spending; and said that non-domestic business rates should be returned to local authority control.

On tendering, the White Paper said: "There is a widespread view that many local authorities have sought to avoid competition wherever possible and otherwise have simply sought to meet bare minimum competition requirements. The Government is consequently of the view that for the time being compulsion must remain."

On financial controls, it said spending was estimated at pounds 74.5bn in this financial year, just under a quarter of all general government expenditure. The power to cap council-tax increases would be retained.