Magazine article Public Finance

A Big Ask

Magazine article Public Finance

A Big Ask

Article excerpt

These are, to state the obvious, uncertain times. Everyone, from Mervyn King and Alistair Darling to ordinary mortals fearing for their jobs, homes and pensions, has good reason to feel jittery about the current stockmarket turmoil.

This sense of unease extends to local authorities, which currently face a triple whammy. First the fragile state of the public finances means that there is no relief in sight after local governments worst settlement for a decade - and the liabilities incurred through bailing out Northern Rock can only make a bad situation worse.

Second, local authorities are themselves vulnerable to the vicissitudes of the markets. Their investments, whether in property, other assets or pension funds, will all be affected.

Third, recent moves towards greater local autonomy are threatened by these fiscal constraints, especially when councils are already struggling to keep within council tax thresholds.

In these circumstances, it's not too surprising to find local government minister John Healey pushing the line -backed up by an Audit Commission report - that councils must do more to raise revenue from local charges.

Currently in England, charges for swimming, parking, school meals and other services raise half as much revenue as council tax, and the government is looking for more. …

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