Rob Merrick: Paying the price

Jan 30 2008 by Rob Merrick, Liverpool Daily Post

REPORTS condemning the Government for shackling power-starved local authorities arrive with a depressing frequency in this job.

Opposition parties and think-tanks all make the same criticism – councils are stripped of any meaningful muscle and ministerial pledges to restore it are a mirage.

So, what makes the latest study so notable is not its line of attack – "most disappointing", "lacking vision", "hobbling" – but the people firing the shots.

Because, this time, it is a Labour-dominated select committee, led by a normally ultra-loyal backbencher – so the Government must be behaving badly.

Worse, this time local authorities are being betrayed over the funding mechanism that was supposed to throw a lifeline to the likes of the axed Merseytram scheme.

Last October, Chancellor Alistair Darling announced that town halls would be able to levy a "supplementary business rate", to raise tens of millions of pounds for key projects.

The idea is aimed specifically at accelerating transport schemes such as Merseytram, which appeared doomed in 2005 when the Government pulled the plug on £238m of funding.

But, in the face of protests from the CBI and the British Chambers of Commerce, Mr Darling pledged "four levels of protection for business".

Most notably, the rate will be limited to 2p in the £ – half the figure recommended in an independent study.

Firms with a rateable value below £50,000 will be exempt, and a ballot required if the supplement is funding more than a third of the cost of a project.

Now the communities and local government committee has delivered its verdict – and it pulls no punches.

The committee is clearly furious that its own recommendations – no compulsory ballots, no cap on the SBR rate, exemptions to be decided by town halls – were dumped.

Chairwoman Phyllis Starkey said: "It is in this failure to trust local authorities to take effective decisions, in partnership with local business, about the levying and use of local funds that the Government demonstrates its lack of vision.

"We are dismayed that it proposes to hobble local authorities’ ability to raise sums which would enable them to make a meaningful contribution to the economic development of their area."

Remember, this is the verdict of a Labour-dominated committee. Once again, ministers bow down to business – and local councils pay the price.

* WITH anger mounting over the cost of the London Olympics, the Government is eager to deny it has short-changed the Capital of Culture celebrations.

When it was suggested that Liverpool had received just £5m, outgoing Culture Secretary James Purnell quickly replied: "Actually, that is not correct – we found £11.2m."

The Olympics, by the way, will cost £9.3bn.