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In a report published today (Monday 22nd November), IPPR North sets out 'five foundations' upon which genuine localism must be built:

A framework for decision-making which is efficient and effective - with powers being devolved down to the appropriate level of government.
Arrangements which give powers for much greater local financial autonomy. The target should be that local councils raise 50 per cent of funds locally through a reformed local taxation system which combines local income and property taxes.
A set of national minimum outcomes which mean that every citizen is guaranteed a level of service within a system of greater de-centralization and local flexibility.
An increase in the transparency and accountability of local decision-making through more powerful and democratic local government.
A formal constitutional settlement between central and local government enshrining the key principles of central-local relations for years to come.

Ed Cox, Director of IPPR North, said:

'The Local Government Bill will fail to bring the radical devolution the Coalition says its wants to see if ministers do not trust local councils with real powers, including over local taxation. At the moment, local councils get 80 per cent of their funds in the forms of grants - which makes them over-dependent on central government. In other countries, the percentage of funds raised locally is 50 per cent or higher - that is where we should be moving to, if we really want local devolution in this country.
'Localism is certainly not achieved simply by 'handing down the axe' and leaving councils to make cuts dictated by central government policy. But central government has a role to play in ensuring that local autonomy does not result in services dropping below nationally agreed minimum standards. All of this could be achieved if there was a clear constitutional settlement which formally established where the balance of powers lay between central and local government.'

Notes to editors:

Five Foundations for Real Localism sets out a series of foundations against which the Local Government Bill can be assessed.

The first foundation for localism is that it must be effective and efficient. Any approach to more local decision-making must carry with it a considered understanding of the most appropriate scale over which any given service, public investment or policy intervention can be efficiently and effectively delivered. A framework for efficiency and effectiveness needs to be developed to provide a clear and transparent rationale for decision-making at every tier of government.
The second foundation is that localism must be properly funded. Reform of local taxation is needed so that the Council Tax is replaced by a fairer mix of income and properties taxes. The level of at which these taxes are levied should be determined locally, without central government interference, at a level that local councillors believe their voters will be prepared to support. Local decision-makers should also be given a much wider range of fiscal instruments to build local financial autonomy and incentivise local economic development.
Thirdly, localism must sit at the heart of a drive for social justice. Central government's desire to iron out local variations needs to be managed through a set of national minimum outcomes and through a fresh, transparent approach to equalisation in relation to central-local finances.
The fourth foundation is that greater devolution of power and responsibility to the local level there must be accompanied by a step-change in the transparency and accountability of local decision-making across all service areas. Current proposals for growing local accountability look set to increase the complexity and obscurity of local decision-making. Solutions need to be focused upon a more simple solution centred upon more powerful local government operating within a framework of efficiency and effectiveness.
And finally, any new drive for localism should be framed within a constitutional settlement between central and local government that would create genuine autonomy and enshrine the key principles behind central-local relations for years to come. Local government should have constitutionally protected legitimacy as a tier of government, just as it does in other EU states.

ippr north gave evidence to the Parliamentary Select Committee on Localism on Monday 15 November and is developing more detailed work on each of these five foundations through its 'Localism Lab' throughout 2011.

Contact:

Tamsin Crimmens, Media Officer: t.crimmens@ippr.org / 0191 233 9051 / 07800 742 262