General Election: Manifesto pledges for local government finance

With the launch of the Scottish National Party’s 2015 general election manifesto this week, all the main parties have now made their pitches to voters. But a hung parliament is odds on, making it difficult to work out which policies will survive the post-poll horse trading. Room151 takes a look at the main pledges affecting local government funding which could end up on the statute books.

Labour Party
Labour’s manifesto is desperate to convince the voters that it can be trusted with the nation’s finances. Anyone in local government hoping for easier times under Labour may be disappointed – the party has already committed to slashing £500m a year from local government budgets from 2016/17 through initiatives including shared services and scrapping the New Homes Bonus. The manifesto confirmed that the Department of Communities and Local Government will be one of the departments facing cuts in spending.

Key pledges

• Multi-year budgets to allow authorities to “plan ahead on the basis of need in their area and protect vital services”
• Devolving power and £30bn of funding to “city and county regions” over schools, health care, policing, skills, housing and transport
• Scrapping the Free Schools programme
• Private schools required to form partnerships with state schools as a condition of continued business rates relief
• Powers for councils to introduce higher council tax on empty properties
• A new generation of garden cities to help reach housebuilding target of 200,000 a year
• Incentivising councils to work with police and probation services to identify and deal with young offenders
• Introducing a  ‘mansion tax’ on properties worth more than £2m to help raise £2.5bn a year for the NHS
• Creating public accounts committees, so that every pound spent by local bodies creates value for money for local taxpayers.

Conservative Party
The Tories’ document is a mix of boasts about their record in coalition government, promises to finish the job of fiscal consolidation and a few goodies lobbed in for good measure. Chancellor George Osborne’s Budget earlier this year has already indicated that times will continue to be tough for local authorities, and there is no reason to change that assessment in the light of their election manifesto.

Key pledges

• Funding new council housebuilding, a new brownfield regeneration fund and discounts to enable housing association tenants to buy their own homes by forcing councils to sell their most expensive homes
• Devolving powers over economic development, social care and transport to large cities choosing to have elected mayors. More skills and planning powers for the Mayor of London.
• Allowing councils to retain a higher proportion of business rates revenue
• More growth deals with local councils
• Reviewing ring-fenced grants “to give councils more flexibility to support local services”
• Major review of business rates by the end of 2015 to institute a new system by 2017
• Opening at least 500 new free schools
• Continuing to co-locate public bodies and sell off surplus property, giving councils at least a 10% stake in public sector land sales in their area
• Funding 200,000 new “starter homes” by removing requirement for developers to provide affordable housing as part of planning permissions
• Supporting garden cities “in places where communities want them”
• Encouraging shared services between and within councils

Liberal Democrats
Despite getting into some well-documented trouble over its 2010 election promises, the party has released the most detailed of the three main parties’ manifestos. It is positioning itself as an ideal coalition partner for either the Conservatives or Labour. Of the three, it is the most positive in terms of promises on local government spending.

Key pledges

• Introducing land value tax to replace business rates, and potentially other taxes.
• Extending the principle of “digital by default” to local government
• Creating a ‘mansion tax’ on homes worth over £2m with a banded structure, like council tax
• Working with local authorities to tackle fraud and error
• Introducing a “community trigger” to enable the public to require a review of poorly-performing services
• Pooling of personal budgets to bring local services together
• Full pooling of NHS and council budgets by 2018
• Five-year investment plan for bus funding
• Building at least 10 new garden cities, with five linked by a new Cambridge to Oxford train line
• New government-backed housing investment bank to provide long-term capital and attract finance for major new settlements
• Reducing powers of ministers to interfere in local government decisions
• Removing the requirement to hold local referenda for council tax rises
• More city deals to devolve more funding to local authorities and local enterprise partnerships
• More financial responsibility for councils, building on the work of the Independent Commission on Local Government Finance
• Pay increases for public sector staff

Other parties

Key Green pledges

• Returning further education colleges to control by local government.
• Introducing a “right to rent”, where councils step in to help those in difficulty with their mortgage to rent their home
• Providing 500,000 social rented homes by increasing social housing budget from £1.5bn a year to £6bn a year, removing borrowing caps from councils
• Ending the Right to Buy programme and opposing new arm’s length management organisations
•  Two new council tax bands for higher value properties
• Replacing council tax and business rates with land value taxation
• Removing requirement for council tax referenda and allow councils to conduct revaluations
• Ensuring grant funding is sufficient to pay for all statutory services
• Allowing councils to set local business rates and then distribute council and business tax receipts between each other on a basis decided by an independent commission
• Allowing local authorities to levy new local taxes, such as local tourist taxes, empty homes levies, supermarket taxes or workplace parking levies, and to set rates for and keep part or all of some taxes collected locally, such as income tax and VAT.
• Allowing local authorities freedom to set local fines, fees and charges.
• Scrapping the New Homes Bonus and add the money to the Revenue Support Grant
• Setting up a fund of up to £5 bn over the Parliament to buy out existing PFI projects

UKIP key pledges

• Bringing health and social care together under the control of the NHS
• Allowing councils to keep the New Homes Bonus beyond six years on brownfield sites
• Identifying long-term dormant land held by local government so it can be released for affordable developments
• Funding for regeneration in coastal areas
• Providing government loans to allow council to renovate poor housing stock and convert empty commercial property into residential accommodation
• Scrap the cabinet system of governance in favour of committee systems
• Cutting excessive allowances for councillors, slashing “excessive” pay deals and limiting the number of highly-paid council employees

SNP

Despite an overall pledge to end “austerity” the SNP manifesto has nothing specifically to say about local government funding.