1. Independent Commission on Local Government Finance Eamon Lally CIPFA North West Annual Conference 14 November 2014

2. The Commission Terms of Reference Identify the strengths and weaknesses of the local government finance system, Bring forward practical options for reform in the next Parliament and Develop and test those proposals against the key challenges facing the country – growth, housing supply, effective welfare provision, affordable health and social care, and early support to families and children. Timetable from here: 30 Oct: interim report published Nov-Dec: Engagement on Interim findings Feb 2015: Final report

3. Context: National tax and spend

4. Context: The path of future revenue funding – not including schools Total funding projected to fall to £43.4 billion by 2019/20 This includes £3.1 billion of Public Health funding which carries with it a new responsibility All figures are in cash terms In 2013/14, 38% of total funding is from council tax, 19% from retained business rates, and 28% from RSG Negative reserves figures when councils underspend and contribute to reserves Public health funding not new money as it comes with a new burden 4 Source: LGA's Future Funding Outlook 2014 - outturn data to 2012/13, budget data 2013/14. 2014/15 and 2015/16 based on settlement, 2016/17-2019/20 from LGA projections

5. The Commission’s vision The local government finance system should: Promote self-reliance and self-sufficiency Encourage entrepreneurialism and innovation Promote local decision-making on service delivery Transparency Maintain support for the most vulnerable

6. What the Commission has said it agrees with Self-sufficiency Greater freedom over council tax, including bands, rate, and discounts 100 per cent retention of business rates Devolution of skills and welfare to work funding More integration of decision-making across local public services 6

7. Pace and Scope of Change? Variable speed reform? Self-sufficiency over all local public services? New incentives? A new approach to equalisation? Integrated services? Bold approaches to housing supply problems?

8. Self-sufficiency?

9. Self-sufficiency at a sub-national level

10. Equalisation Not all Councils can grow economically at the same pace Not all Councils will grow their populations at the same pace Councils will face different Levels of demand

11. Challenges and questions What is the appetite for radical change? Is there evidence that integrating health and social care services will create savings? What incentives are needed if any? What should the balance be between incentives and equalisation in the system as it moves towards self-sufficiency? How would it work – the wiring diagram?

12. Independent Commission on Local government Finance enquiries@localfinancecommission.org Contact Eamon Lally: Tel: 07799768570 enquiries@localfinancecommission.org