Leading Article: Loosening the lead on councils

KEEPING the electorate confused seems a characteristic of the local election campaign. It is a strategy upon which John Major may have to rely to prevent the results on 5 May from fatally damaging his premiership. Voters are unlikely to show his party much favour. Yet, given that the Conservatives can only improve on their abysmal performance in the 1990 contest, he should be able to make the best of what might otherwise be represented as a trouncing.

In this exercise even Mr Major's enemies within his party can be expected to collaborate, albeit temporarily. They could hardly return to the offensive just weeks before the European elections, in which a drubbing is likely to be far more apparent. Mr Major's divided party will not blow the gaffe on the leader, at least until June.

The main debate gripping the local election campaign is also confusing, but more difficult to disentangle. It has focused on the ritual Labour/Tory battle over which party offers the lowest council taxes. This may look like a core issue but is essentially a distraction. It is impossible to establish which party is the cheapest. The matter is in any case largely irrelevant to whether particular councils are giving good value for money.

This is because local taxation bears little relation to spending, be it on rubbish collection or schools: most of the cash comes from the Government. On average, local authorities rely on fixed grants for 80 per cent of their revenue. The only other way to raise extra money is through the council tax.

The result of that constraint is that small increases in spending produce rises in bills that are huge in comparison. Conversely, the loss of services required to cut council tax bills is disproportionate to the small savings that can then be offered to bill payers. In other words, most councils have little or no room for manoeuvre on council tax levels, even though these bills assume paramount importance come election time.

This state of affairs has arisen because successive Conservative governments have chipped away at the independence of local government finance. They had reason to do so. Local government was legendary for its profligacy, waste and lack of accountability. But much of the change had to do with Conservative governments acting out of jealousy against alternative sources of power. Solving the crisis over the poll tax required a further shift from local to central financing.

As a result, councils have been left with few financial freedoms and the Government has further undermined local democracy, giving voters little chance to influence the provision of services in their area. Some senior Conservatives argue privately that the balance has swung too far towards funding from central government. But they are understandably loath to remove the shackles from potentially spendthrift councils. It is time they, and other parties, devised some imaginative yet realistic means of giving councils enough freedom to provide electors with real choices.