Lord Heseltine suggests scrapping district councils to help growth
District councils across the West should be scrapped to help in the fight for new jobs and investment, Lord Heseltine will say today.
The former Deputy Prime Minister will anger many in his own party with his suggestion that all local authorities should become one-tier councils. The senior Tory also suggests handing local enterprise partnerships a huge spending pot and control over skills budgets, infrastructure funds and job creation schemes.
Prime Minister David Cameron asked him to report on wealth creation; now he will challenge the PM to end decades of power-grabbing by Whitehall and let cities drive their own destinies.
The plans for a massive shake-up of local government will cause the most controversy, considering the uproar five years ago when Labour announced a similar scheme. It wanted to axe district and borough councils in a series of counties, and replace them with one-tier local authorities. In the West, Wiltshire went ahead with a unitary authority, but the Somerset lower-tier councils were reprieved after a fierce battle.
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Now Lord Heseltine recommends: “All two-tier English local authorities outside London should pursue a path towards unitary status. The Government should encourage this and work with authorities to clarify the process and enable it to happen.”
His weighty 228-page report says the cost of creating the single Wiltshire Council was £18 million – compared to a saving of £68 million between 2009 and 2013.
He argues: “Back office costs now only comprise nine per cent of Wiltshire Council’s budget as opposed to 19 per cent for its predecessor bodies. The new authority has achieved procurement savings of £36 million through increased buying power and stronger market position.”
Lord Heseltine admits: “Changing to a unitary model of local government will not be easy. It will naturally be uncomfortable for those involved, it may be disruptive in the short term and it will take time. But it would be a mistake not to persevere. The costs of a two-tier system are simply unsustainable. The advantages of increasing effectiveness and freeing resource for the benefit of communities will outweigh the pain.”
That pain would be felt in Somerset, Gloucestershire and Dorset – the former Avon already has four unitary authorities.
Lord Heseltine says it is important that new authorities align with the boundary of the relevant LEP. He calls for LEPs, which replaced the old regional development agencies and are seen by many as toothless talking shops, to control budgets worth £14.5billion a year across England. Every Whitehall department would be forced to hand over funding streams that support growth, delivering annual budgets of hundreds of millions of pounds to each LEP.
Speaking ahead of today’s launch, Lord Heseltine said: “London didn’t make this country – the provincial cities were a vital ingredient. Now, we have an economy run in this country – unlike in any other advanced capitalistic economy – in the capital city. The point of these reforms is to bring back, in partnership with local authorities, the role of the wealth creators.”