Sir: Before we get too excited about the idea of directly elected mayors as a means for revitalising local government, remember that central government exercises direct and very tight control over more than 90 per cent of each local authority's budget.
A mayor dancing to central government puppet strings will look remarkably like a council doing the same thing. To make local government more genuinely accountable to the local electorate, local authorities must have greater control over their finance. Three reforms are needed. Reduce the proportion of local government funds derived from central government (currently about 80 per cent). Remove the capping of expenditure. And, third, remove the council tax from public expenditure as defined for control purposes. This is the necessary condition for the first two reforms.
Given the absolute control over local authority borrowing and capital expenditure that exists, there is no macro-economic justification for the Treasury insisting on controlling the level of council tax. The Audit Commission and other mechanisms exist to ensure that the tax is set at reasonable levels, and if these plus periodic elections are not enough, how about local referenda?
One could cynically say that the proposal for elected mayors is yet another structural diversion while the steady centralisation of power continues.
13 DecemberReuse content