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Lyons Review into Local Government Funding

Final submission made by the Retired Members Section

This was made on 3 Aug 06* (105KB).

Finance & General Purposes Committee: 9 May 06

The Retired Members Section made a submission (pdf file*) to the Lyons Review* last year and a summary of its views were reported to this Committee. Subsequently, Sir Michael Lyons obtained the Government's agreement to extending his remit to cover the structure and functions of local government.

[* these links open in new windows]

This second stage consultation centred around 7 questions:

• The definition of the strategic role of local government
• The tools that Councils need, to perform the strategic role more effectively
• The importance or otherwise of local government being elected in relation to ability and legitimacy to perform this strategic role
• The services (or parts thereof) which should meet national standards in all areas of the country, those which meet minimum standards and those down to local choice
• The impact of the Government's approach to devolution and decentralisation, on the local area and local services
• How to manage, more effectively, pressures on local services
• How responsibility for local services can be made clearer between local government, central government and other agencies.

We answered each of these questions, but also referred back to the concerns we had raised in our submission (pdf file*). Our conclusions were:

• The Government, through national taxation, should fully fund those services which it requires to be taken locally and to the national standards it sets
• Services undertaken by local authorities where they have discretionary powers should largely use locally derived funding sources; local authorities should be able to benefit from the use of local business rates but these should no longer be pegged to inflation
• Any form of local income tax must address the issue of resource equalisation, otherwise poorer areas will be disadvantaged
• Police and fire authorities, which are not directly elected, should be fully funded by Government; this is even more important given the moves towards rationalisation of police forces
• Regional assemblies in England should be abolished
• There should be no change in the current structure of local government; reorganisation reduces productivity, costs money and goes against one of the fundamental strategic roles of local government, building and shaping local identity
• There needs to be greater certainty in term of Government funding and greater clarity as between funder and services provided
• Income and Corporation Tax represent the two main sources of national taxation which are based on fairness and ability to pay; these must be used in preference to any property based tax
• The Inquiry must come up with an alternative to Council Tax which is based not on residential property ownership or occupation, but which relates to ability to pay.

Colin Lomax
Retired Members' Secretary