Tory devolution plans - more details

I saw the rather jolly Bob Neill this week - MP for Bromley & Chislehurst, and one of the key players behind last week's Tory decentralisation green paper. 

Bob repeated the general thrust of the Tory paper - the UK is far too centralised, this is "fundamentally unhealthy", and local government needs far more discretion (especially over finance). More usefully, he then explained how the green paper would be implemented by a new Conservative government.

The Tories plan to take "lots of incremental steps". Despite Cameron's rhetoric last week about "radical decentralisation", Bob said there's "no big striking measure" and they won't do this in "one big leap". Here's what he said:

• They will get rid of RDAs "in their current form" - because regions are "wholly unnatural" and RDAs are undemocratic. But they've stopped short of abolishing RDAs altogether, because they want local councils in each region to decide the fate of their RDA themselves. In reality, they expect most RDAs to disappear - but "one or two" RDAs might survive in some cases, like the North East - where support for One North East is relatively strong. A Tory Business Secretary would play the role of "institutional liquidator", and oversee the transition from RDAs to these new sub-regional and local arrangements. This will probably need primary legislation, but they want to avoid a prolonged transition.

• They want to see the "organic growth" of more city-regions, through the "general competence" power - which will make it easier for councils to collaborate across boundaries. They're not interested in any more restructuring, and will not impose any more new unitaries. But they are very interested in encouraging councils to save money by sharing back-office services and chief executives.

• They will "scrap the whole of the regional spatial strategy" - so all RDAs will lose their planning and housing powers. Instead, the focus will be on Local Development Frameworks.

• They want local councils to be able to "harness the proceeds of growth" (when that starts again). So new housing will be incentivised, by allowing councils to keep the whole of the increase in council tax revenues from new housing developments (for six years). But it's "not practical" to return the whole of the business rate to local councils - instead, councils will keep the increase in business rate revenues from new commercial development. 

Bob promised a freeze on Council Tax, for the first two years of a Tory government. Tony Travers was talking about that this morning.

Council Tax bills will rise by an average of 3 percent in the coming year - the second lowest increase ever. There now seems to be a cross-party race to limit future increases still further - just as demand for local services goes up. The Tories want a freeze, and John Healey has made clear he will cap any excessive rises.

Lower Council Tax is obviously attractive politically, but it does mean that councils will be much more strapped for cash in this recession. Councils have already started to lay off staff, and are expected to shed 40k jobs over this year. On top of that, the next Spending Review will probably freeze central grants to local councils - which means they may need to start dipping into their £38 billion reserves. Tony reckons councils will have to start spending some of that.

Comments

[Frank Spencer]

All of these plans are going to go up in a big puff of smoke due to the parlous state of the public finances. If the Conserative Party gets in, they will be cutting RDAs, sure, but not handing the money back to local authorities.