2015 Review: Questions but few answers for business rates, devolution and elderly care

It is difficult to find much of great good for local government over the last year. The year has raised more questions than it has answered.

There are a number of matters of interest which need either more work or resolution in 2016.

There is one issue which just never gets seriously discussed and that is the future of Council tax. It is an outdated and discredited tax as things stand. Members of the public fail to understand why there property is valued so low and using 1990 values is clearly not a good idea. The tax needs reform and there should be more bands using 2015 values.  But there is no political will to sort this out.

Appeals

However, we do have proposals on the reform of business rates. The greatest difficulty about business rate (and this will become much more difficult under proposals to devolve rates to local authorities) is the uncertainty caused by the appeal system.

Local Authorities found in 2015 that large reductions in values can be disastrous and involve a number of years of backdating.  The volume of appeals is higher than in any other country and following the next revaluation will create an unworkable situation for local authorities.

There is a consultation paper out at present offering some partial solution but this is not popular with businesses and their agents. If nothing is done almost every increase following revaluation will be appealed and the process will take so long to resolve that local authorities will not achieve certainty over their resources.

The new proposals need the detail that is currently is currently lacking about safety nets or equalisation or whatever. It is a fact that growth in business rates will not be universal and this proposal replacing grants with business rates will seriously disadvantage some authorities.

Age concern

There has been no move to resolve the long term difficulties of financing care for the elderly. The proposed additional 2% precepts will only be a partial solution.

There are difficulties in guaranteeing that the money raised is ring fenced and the role of districts also needs resolution.

There are, however, other issues in care including the living wage and the resulting increase in costs. It is everyone’s interest to resolve the longer term as currently providers of care homes have a limited future and that will impact on choice and cost for local authorities.

Currently, the difficulties around care of the elderly are used to justify the causes of overspending in the NHS, which obscures the need for change necessary to secure the future of a viable NHS.

Devolution resolution

There has been a huge amount of discussion and preparation on the devolution project but there is much to be resolved on this as the year ends.

What is lacking is a cohesive and holistic approach to the future of local authorities. The proposals to replace grant with business rate are interesting but incomplete .

We must know how this will work. We do not know which grants will disappear. There has been discussion that for instance the police grant would go with forces looking to local authorities for their finances. It is fine to look at total figures and see what works, but there needs to be an understanding of reforms will effect individual authorities.

Although I have always been opposed to further reorganisation I am beginning to think that this will return to the forefront of discussion in 2016.

Richard Harbord is a consultant
and former chief executive of Boston Borough Council.

Photo (cropped): Herry Lawford, Flickr.