The Guardian view on council funding: cheap politics, bad policy | Editorial

Editorial
‘This is a perilous way of funding the spending that covers not only social care and education but parks and libraries, swimming pools and Sure Start centres.’ Photograph: Joe Giddens/PA

The Guardian’s analysis of who in Britain is housing and educating the refugees and asylum seekers who should be shared across the country shows that the responsibility falls on fewer than a third of councils. That is not only a shaming example of how many prosperous local authorities have found ways to avoid the appeal to help, which is bleakly revealed in the raw numbers showing that Labour-led authorities have taken 11.6 asylum seekers per 10,000 population, compared with just 0.7 in Conservative-led ones (and only four refugees live in the prime minister’s Maidenhead constituency). Nor is it simply more evidence of how unequal Britain is becoming from city to city, and from inner city to leafy suburb. Nor merely a badly designed plan that urgently needs revising. It is a vivid illustration of how those councils that have rather than those that have not are being favoured by government policy.

Local government finance may be a strong contender for the most boring and complex subject in politics, but what it lacks in thrills it gains in its sheer impact on ordinary lives. That is why the current re-engineering of the way it is funded, trailed two years ago when George Osborne announced that councils would be allowed to keep all their business rate income by 2020, is both among the most important and the least discussed questions in a Whitehall dominated by Brexit.

The former chancellor wanted a powerful incentive for councils to do all they can to grow their economies and thus their income from business rates. But this is a perilous way of funding the spending that covers not only social care and education but all the activities that act as social glue in civic society – parks and libraries, swimming pools and Sure Start centres. It is also a philosophical departure from a system primarily based on ensuring that needs are met, regardless of income. It is the culmination of Margaret Thatcher’s mission to take apart the postwar settlement.

The element of council funding determined by local need is now frozen. A system to replace the old mechanism of transfers from rich councils to poorer ones is work in progress. Councils, which nominally have a four-year funding deal, are still ignorant of what they will get in the process of redistribution after 2019-20. They also face the uncertain impact of legal challenges to the business rate revaluation, which came into force at the start of April. The Tories already have a disturbing reputation for partisan decision-making in areas that ought to be considered more broadly. The poorer an area, the less a council can raise in taxes. To pretend otherwise is to condemn the voters who most rely on good services to bad ones. It will entrench division, and no one has yet shown how it will boost the local economy.

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