Local government needs major reform, independent commission concludes

Local Government Finance commission sets out £200bn plans

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Local government is no longer sustainable in its current form in England without urgent reform, ministers are warned today.

Services such as adult and child social care face crisis unless town halls are given the freedom to decide their spending priorities, according to a group of economists, business, finance and public service experts.

The Independent Commission on Local Government Finance set out plans for a 10-year programme of devolution under which more than £200bn of public money is put in councils’ hands.

Its call comes amid a continuing spending squeeze on council budgets by the Government.

The commission also called for town halls to have more freedom over increasing housing supply, health and social care and reforms on council tax and some national taxes such as VAT and income tax.

Darra Singh, the commission’s chairman, said the report “set out a path to English devolution which we believe is the only way to save public services in an era of reduced public spending and rising demand”.

Lord Best, the president of the Local Government Association, said: “To build the housing the country needs, provide the quality of care that our elderly deserve and support businesses, it is clear that local authorities need much greater freedom from central government.”

Kris Hopkins, the Local Government minister, said: “There is certainly scope for decentralising more funding to councils, by extending the successful introduction of incentives like local business rates retention and the New Homes Bonus. Such measures allow councils to increase their revenues - not by higher taxes, but by growing the pot through supporting job creation, construction and enterprise.”