Headlines: June 14th, 2002

The Government’s shift away from central control and towards a new localism in public services is taking shape in local government on similar lines to changes in the health service. Ed Balls, Chief EconomicAdviser at the Treasury, told a Chartered Institute of Public Finance and Accountancy conference why power was being devolved and how it would affect councils. Publication of the draft Local Government Bill reveals how new localism is to be put into effect.The old-style centralization and command and control approach to delivering public services no longer works because of a combination of increasingly demanding consumers, information technologies, greater competition, a premium on skills and innovation, a wide-ranging media, and varying local needs.

The draft Bill sets out a range of new freedoms for councils which include replacing the system of credit approvals with freedom to borrow capital without prior approval. There is also provision for setting up Business Improvement Districts. District schemes will allow councils and businesses to work together to put in place local projects to improve their area. The schemes will be funded by a levy raised through an addition to the business rate agreed to by local business.

Ed balls told the conference that the Government is ready to go even further to enable local people to do more and to consider further radical options to ensure devolution of power and responsibility. A high level working group involving ministers and senior figures from local government is to be set up to look at all aspects of the balance of funding, reviewing the evidence and looking at reform options.