The government’s proposals for ‘free councils‘ are disturbing at best. Essentially, councils will no longer be pressed to distribute their income from business rates to poorer councils, helping the richer councils as over 300 poorer councils rely on the redistribution. Apparently, the Orange Bookers and co. believe such a change would help usher in a new level of local democracy, you could call it the ‘big society’ in action, even.
The simple thing the government seems to have forgotten, or casually ignoring, is the need for redistribution because of the way differences between residential and business areas effect the business activity. Dan McCurry has a great article on this over at Liberal Conspiracy, illustrating the centrality of Vince Cable to the plans – which has led to divisions between the government over the remit of the review. Cable wants councils to set their own business rates, something that could see some areas having business rates as low as zero creating a ‘race to the bottom’ if residential areas tried to use the mechanism to attract businesses.
What’s even more disturbing is that it was Thatcher who introduced the redistributive rate of the business rates. However, some believe such a move would be essential for councils to move towards establishing real financial power – dependent on the government keeping their word re maintaining an ‘element’ of redistribution of income across councils. Right, if you actually believe that.
Financial power will not be enhanced for the residential councils. Furthermore, if we consider these proposals in a broader context, many councils are making serious cut backs. Yes, the government (and even anti-government activists) may argue that the Tax Incremental Financing powers will help councils set this aside, but this is arrogant to the severity of cuts and the ability such measures have for sustaining existing services and long-term provision (see here).
As it was in France, the UK’s ‘decentralisation’ process is largely governed by the desire for productivity re cutting expenditure. The French reformed their 1982 decentralisation process through a series of reforms in 2003 that, even though providing local authorities with more financial independence, actually lead to the state imposing more stringent rules upon what could be done alongside encouraging merges and cooperation to reduce costs, whilst often failing to transfer enough resources in accordance with the increase of local authorities’ responsibilities.
The UK, whilst different, has strong parallels with the ‘big society’ being little else than a cost cutting exercise. The ‘free councils’ are just another example of the government’s desire to increase private companies, reduce public spending and instil free market values of greed and unsustainable (economically and environmentally) profit seeking. This goes alongside the promotion of naked short-selling, cancellation of plans to stop the offsetting of loses by future corporation taxes and reductions in corporation tax set to be the lowest in the western ‘advanced’ economies.
The government is making fast inroads in poisoning the current structures of governance, spreading fear, conflict and damage (I have an article coming up addressing the development of these informal structures and the UK Uncut movement).
Decentralisation should not be driven by the desire to cut and enforce a neoliberal sadist project; councils need more autonomy but the government’s ‘free councils’ are just another thorn in fairness’ side.