WIREDGOV

NLGN cautiously welcomes Budget’s local government policies but warns that hard work remains

Localism Think Tank the New Local Government Network (NLGN) has welcomed the creation of Enterprise Zones, ‘land auctions’ and investment in green infrastructure announced in yesterday’s Budget. However it also warned that to truly improve the financial future for councils, Government must make good on its promise to create a stable financial footing for councils through its Local Government Resource Review.

Commenting on the package’s overall impact on local government, NLGN Director Simon Parker said:

“Today’s budget is modestly positive for local government. It’s particularly encouraging to see the chancellor giving councils more incentives for economic growth. If implemented properly and with sufficient community engagement, then liberalizing planning laws and bringing in revenue from ‘land auctions’ could help councils encourage development where it is desperately needed and complement other strategies for promoting local growth.”

“Today’s announcement was supposed to be all about growth, and LEPs remain the best prospect to achieve that. Enterprise Zones are a good idea in principle, but Government must make sure that the new zones work within the overall framework of LEPs, rather than becoming detached from them. In the end, LEPs are the best opportunity for local growth and they must be given the space and power they need to get on with the job of co-ordinating regional economic development”

“But the biggest issue for local government is all about creating a stable framework for funding local services and rejuvenating local economies. This relies on a really radical look at how councils could raise revenue locally – not only through business rate reform, but through fees and charging and ideas such as local income taxes.’

On Enterprise Zones:

“We’re pleased that LEPs have been invited to play such an active role in setting up Enterprise Zones, their involvement will be vital to stimulating growth. We’d like to see even more powers given to LEPs in making the new zones work, for example in developing skills and infrastructure planning. Opportunities such as these, as well as new investment mechanisms such as Tax Increment Financing (TIF) should be open to all LEPs.”

On Land Auctions:

“Land auctions’ could be a great way for councils to make best use of their land, stimulate employment and development, and ultimately, increase their income through planning gain. We would also urge Government to be more ambitious in its outlook by extending the scheme to include privately owned land. By limiting the scheme in the first instance to the public sector, the scope for income and generation and much needed development is drastically reduced. Government must also be clear about how it intends to make sure development happens where it is most needed, that money raised works alongside councils’ broader strategies for local growth and that community engagement is not sidelined.”

On Green Infrastructure Investment:

“The Green Investment Bank is a great idea in principle. The extra £2 bn of investment announced today is to be welcomed, as is the decision for it to begin lending in 2012. However, the devil is in the detail. If the scheme is not to properly take off until 2015-16, there needs to be some serious thought given to investment in the next few years. Additional funding measures, such as Green ISAs and local bonds, will be necessary to support local government efforts to generate green growth.”