Councils need fairer funding

Of course, given the loss of Britain’s triple-A credit rating following George Osborne’s failure to curb the steady growth of the nation’s debts despite almost three years of austerity – not to mention the fact that government spending is rising – it is tempting to ask what cuts the Chancellor is actually making.

The harsh truth, however, is that the full effects of the Government’s austerity drive have yet to be felt at local-authority level, while public-spending restrictions, as the Smith Institute think-tank explains today, are already having a disporportionate effect on the North compared with other regions. Nor is this surprising given that even the Government admits that successive administrations have prioritised London over the economies of northern cities. The answer, according to the Smith Institute/PwC report, is for the Government to reform council funding so that more money goes to poorer areas, with public-service providers in the North forming an alliance to ensure the more efficient delivery of services. However, while few would disagree that funding could be distributed on a far fairer basis, there is little point in throwing more money at councils until they demonstrate that they can spend it more wisely.

In spite of the Government recommending that councils work together through job-sharing and combined authorities, few have taken convincing steps in this direction. Yet, as the report points out, with councils collaborating more and more as city regions, the scope for making savings in this way is becoming ever greater.

Yet even without major structural reform, there are still too many signs that councils are not making enough effort to make savings. Only last week, for example, a TaxPayers’ Alliance report highlighted the slow progress at many authorities in reducing the number of officers who earn more than £50,000-a-year.

While so many areas of council waste remain glaringly obvious to the public – such as the publicity literature which too many authorities still turn out on a regular basis and which very few people actually read – voters will not take seriously claims that there are no other areas where money can be saved.

And although the overall funding of councils remains ripe for further reform, a more responsible attitude towards saving money can only enhance northern local authorities’ argument for a fairer distribution of Whitehall cash.