Cut oversize councils before putting up taxes
Social care will bankrupt local authorities. The Government must take the lead with radical reform
We are being told to prepare for substantial increases in our council tax, because public services have become so expensive. According to a survey of 113 councils published last Thursday, 95 per cent plan to increase council tax in April. It seems to have escaped the attention of local authorities (and the Government, from whom a little leadership might be valuable) that, like individuals who face a squeeze, councils could start by trying to cut costs.
Most radical of all – but why not? – the Government could accept that there is too much local government, and resolve to reduce it. There used to be a debate about replacing the various tiers – district and county councils – with unitary authorities. It is better to re-open that debate, rather than milking the taxpayer to pay for the inefficiencies and duplications of the existing system.
When asked why their budgets were under pressure, 32 per cent of councils cited children’s services, 28 per cent adult social care and 19 per cent homelessness. On February 2, Tory-run Northamptonshire county council announced it was close to effective bankruptcy and unable to meet its financial obligations this year. It blamed social care costs. The largest increase in over-65s in England has indeed been in Northamptonshire, and the council claims it is taking record numbers of children into care. Lancashire says it fears bankruptcy by 2020. The Government has announced £150 million extra for social care in 2018-19, but that is a sticking plaster, and no substitute for wholesale reform.
Council tax raises just 15 per cent of local authority revenue. Since the cuts of 2010-11 (which were needed to restore sanity to a system that Labour had used as a job creation scheme for its clientele), the local authority grant has fallen by £16 billion. Therefore, 93 per cent of councils plan to raise other charges – parking, burials, cremations and so on – and are also looking at “commercialising” some services or engaging in commercial property developments.
Despite howls of justified complaints, the Government has merely tinkered with, but refused to reform, George Osborne’s disastrously flawed business rate system, which has had a profound effect on revenue-raising. With a child being referred to council children’s services every 49 seconds of every day, and a steep rise in investigations, a Government obsessed with grandstanding about historic child abuse manifestly lacks a strategy to deal with the present day.
But it is social care that will break local government. Seven years have now passed since the Dilnot report recommended an insurance system to cover its costs, and neither the Cameron nor the May governments have bothered to take such a radical step to tackle a problem that is set to become infinitely worse.
There is huge scope to cut costs elsewhere: 128 council employees in London earn more than the prime minister, and extravagantly wellpaid officials exist all over England. Fundamentally, the system is too big, and it causes more problems than it solves. For example, district councils control planning – and do it notoriously badly and sometimes corruptly – but in dumping huge new housing developments in rural areas, do so without properly considering road transport links, the province of county councils or even of Whitehall.
The avoidance of such farces is but one reason to establish unitary authorities at county level: the others are smaller payrolls and the chance to sell off assets. Also, the talent pool of local councillors is notably shallow. Many are unequal to the responsibilities they must discharge and some are too susceptible to doing favours, rather than discharging policy objectively, in accordance with procedure. At county level those who run portfolios are now called “cabinet members” and paid salaries. They should take on extra dimensions of responsibility that would come with the elimination of district councils, and the greater element of strategic planning.
The bureaucratic mindset is especially resistant to lowering costs in the easiest way, by cutting payroll. In recent years almost anything else has been cut – regular refuse collections, libraries, and above all police patrols, which are now non-existent in large swaths of England – in order to spare the jobs of office workers. So the Government must take the lead, removing huge strategic questions such as social care from council control altogether, and establishing a structure of local government that is efficient and streamlined. There are too many jobs for the boys, and girls, and it is a challenge crying out for a proper Conservative government to meet it.
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