Local Government Funding

Debate between Graham P Jones and James Morris

Monday 6th December 2010 Commons Chamber

[James Morris]

They will need to make clear arguments to the Department for Business, Innovation and Skills and the Department for Communities and Local Government about why there should be a local enterprise partnership. However, local politicians should be arguing in favour of making applications to the regional growth fund because, even outside the LEPs, businesses, the voluntary sector and local authorities can make applications to the regional growth fund.

Local authorities will now be given back responsibility from central Government to start making real decisions about how they spend their money. As the Secretary of State said, the Government have freed up, or un-ring-fenced, grants worth £7 billion from 2011-12 onwards, which the Local Government Association described as

“an important move towards a simpler funding mechanism that will help councils do their job”.

However, that should be only the beginning. There is huge scope for the introduction of other levels of financial innovation in local government. For example, hon. Members have talked about the potential productive use of tax increment financing. This lack of ring-fencing, this devolution of financial autonomy to local government, should be only the beginning. We also need a systemic reform of the services delivered and a re-evaluation of how local people can influence the way services are run. This transformation, with the coming presentation of the localism and decentralisation Bill, is at the heart of Government policy. A bottom-up approach to service provision is vital.

[Graham Jones]

Does the hon. Gentleman agree that a bottom-up process involves cost, and local authorities are worried now that such a process, which he has suggested, will double the pain following the cuts in the comprehensive spending review?

[James Morris]

Over the past 13 years, as I said, we have had centralised policy dictated from Whitehall. At a difficult time for local government, it is even more important that we invert that pyramid and have a bottom-up decision-making process in which local government can take more control of its decision making.