Keen to keep up the momentum on his big (or not so big) ideas, Andy Burnham will apparently announce on Friday that in future some revenue from income tax will be distributed directly to local government so that they, rather than Whitehall, can choose how to spend the money.
Will he really want to give up power and money to Reform-led councils who might be minded to do all they can to thwart Labour party policies? Or spend their money hanging the St George Cross from every lamp post?
In Britain, only around 5 per cent of total government revenue is collected by local government, which is markedly lower than many other countries. Councils will reportedly not be allowed to vary the rate of income tax, as the SNP has done disastrously in Scotland (its 3 per cent supplementary rate on income tax has cost it £20 million this year according to Dan Neidle, expert on fiscal policy). HMRC will simply give them a slice of existing revenues. What is not clear is whether this is extra money – and therefore yet one more unfunded spending commitment – or whether it is just a redistribution of revenues, in which case what is central government going to stop funding in future?
But there does seem to be something of an inconsistency in Burnham’s approach. At the same time as he is trying to devolve money and power to the regions and localities he is planning to create a National Care Service. That is a policy which pulls heavily in the opposite direction. In this financial year, £42 billion out of £139 billion budgeted to be spent on public services by local authorities will go on adult and children’s care. This is money which at present is spent on locally-commissioned services, in accordance with local decision-making, but in future it seems that Burnham wants a national-run agency to make these spending decisions instead. We don’t have many details about this National Care Service, but if the ‘National’ in it means anything it surely means a centralisation of decision making, a concentration of power in Whitehall.
