Howard Davies - Lyons' lack of bite

An unusual feature of Gordon Brown's Budgets is that they are accompanied by a flurry of publications of reports by the great and the good, commissioned by the Chancellor. I wrote one myself a few years back, on enterprise education.

Last Updated: 31 Aug 2010

Sometimes they attract rather less attention than they deserve, precisely because they come out under cover of the Budget speech. This year, with Michael Lyons' report on local government finance, I suspect that suited the Treasury quite well.

The Lyons enquiry, which has been under way for three years, was billed as a comprehensive reassessment of the government's relations with local authorities, leading to an opportunity to show that there was some reality behind the rhetorical support for localism.

The outcome is rather different. Lyons has not produced a plan to restore local discretion over income or expenditure, which has been greatly reduced over the last 20 years. There is to be no new tax base for councils (though there is a vague reference to looking at the case for a tourist tax in the future), no repatriation of the business rate (though maybe minor local discretion to levy a supplement) and no new delegation of functions.

The only significant changes proposed are two new council tax bands at the top and the bottom, and a revaluation. That is the sting in the tail for the government. A revaluation will produce big winners, and big losers - the latter mainly in the prosperous South East. Yet, at the end of it all, there will be no more money raised by councils than before, and no relief for the Exchequer. Is it worth it? The Lyons proposals may prove another casualty of the 'good day to bury bad news' school of government.


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