The LGiU estimate that twenty per cent of the £6.2 billion in UK public spending cuts identified are in Local Government. This is just a taster. The question for the coalition is how to make the biggest peacetime reductions in UK public expenditure without losing popular support. The answer is to let the people determine where the public spending axe falls. To do this we need to take the following steps:
1. Reveal the scale of the problem. Local Authorities need to know the full scale of public expenditure reductions necessary in their area. If we are to allow the public to determine where to make cuts the public need to know how much needs cutting. The fact the coalition have not revealed the full scale of cuts needed is understandable. The government is relatively new. However, they need to proceed with all haste to provide clarity in this area.
2. Show me the money. The coalition requirement that local authorities publish expenditure over £500 is welcome. This will allow citizens to be given more precise options in public spending referenda. I don’t suggest this should be down to the £500 level. However, it is easy to imagine public spending referenda showing expenditure broken down by department or task if expenditure can be drilled down to the much lower level of £500.
3. Give local authorities more autonomy: Central Government should also review the statutory duties of local authorities to allow more flexibility for local authorities to cut spending. The citizens can then be given the maximum flexibility to determine the spending cuts they want to make.
4. Let the people choose: Councils should organise budget referenda. There are a range of options they could present. The people could be asked to:
- Approve a specific list of departmental cuts as identified by the local authority.
- Approve a specified council tax increase
- Determine cuts of their own choosing from a list of the major local authority spending items etc.
- Facilitate an across the board fifteen/twenty per cent reduction in all council budgets.
- Approve the privatisation/outsourcing of designated services (with a specified cost saving attached to each).
Voters would be free to specify their preferences concerning the level of tax they pay, the services they receive and how those services are provided and by whom. This would build on the work of local authorities who have already explored referenda on council tax increases e.g. Bristol and Croydon or the introduction of a congestion charge e.g. Edinburgh and Manchester. Even the previous Government began tentatively to advocate participatory budgeting. This mechanism allowed local citizens to specify “the spending priorities for a defined public budget” i.e. how money was spent. Thereby the will of the people has currently been confined within left of centre parameters i.e. how much do you want council tax to increase and where do you want the council to spend money. Citizens could now be asked where they want to make cuts.
The coalition administration should allow the people to wield the public spending axe. The choice between public spending reductions and tax increases should be made by the people in referenda. Politicians of all stripes from Local Authorities to Central Government should appreciate this opportunity to share the pain/blame for making cuts. If we do this we might just win the next general election by making Conservative cuts into the peoples public spending cuts.
The views expressed above are my personal views and not those of my employer or any other organisation with which I am associated.