Gerald Nash (Louth, Labour)

Local authorities are starved of funding. The funding they do receive is so dependent on the commercial rates system and development levies that the funding model is completely unsustainable. The "significant contribution", as the motion puts it, made by business owners to the operation of local authorities is so significant because that is how the previous Administration determined it should be. Successive half-cocked attempts at local government reform over the past 14 years by the party moving the motion dodged the issue of local authority resourcing. It left local government with a funding base so narrow that local businesses up and down the country were left carrying the can to an unsustainable and disproportionate level.

The system of local authority funding is broken but it did not break down just last week, it broke down years ago. I am disappointed that the motion stops short of venturing into the realm of local government reform. Funding and future resourcing are inextricably linked to the programme of reform. I agree that an over-reliance on the commercial rates model for local government is not on any more. I first became a member of a local authority about 12 years ago. In that time the business community's contribution in my local authority area, through the commercial rates system, more or less doubled, and at a time of economic crisis. As the Minister points out, this Government will widen the funding base and further identify efficiencies in the system to bring about the savings we are all seeking. More importantly, this Government should, and will, approach the issue not just from the perspective of cost savings for the Exchequer and the business community, but also from the perspective of reform of local democratic structures, making the system much more responsive to the needs of local communities. I hope this approach will be informed by a desire to achieve a real system of local government and not just the maintenance of something more akin to a system of local administration.

See this speech in context