Written evidence to be reported to the House
Local Government and Public Involvement in Health Bill
2:16 pm
Phil Woolas: There is a wide spectrum of opinion in academia about costs. One of the obvious points in local government finance is the ability to compare like with like. We set our policy of inviting proposals within two frameworks. I described the first in the previous answer. The second framework ensures that thenewly created financial regime benefits the counciltax payer and does not jeopardise but indeed supports the Government’s overall macro-economic policy, particularly the famous golden rule.
The invitation therefore contains five criteria, including that proposals must be self-financing within five years; must be met from within the resource envelope of the local authority or authorities concerned—in other words, they must be self-financing through efficiency savings or through reserves; and must result in a council tax that is equalised down if it is across district borders, and cannot be greater if it is in a single transfer. The context of that is that the up-front costs contribute towards local government total borrowing because of their impact on reserves and assets. When one asks, “How can you say that there can only be a limited number and make sure that they are self-financing?” the answer is that we have to look—as my colleagues and I do anyway—at the total local government borrowing position.