Cash-strapped Labour councils have called on John McDonnell to commit to handing local authorities extra fundraising powers on “day one” of a Labour government.
The shadow chancellor was urged to abolish referendums for council tax rises, allow higher tax levies on empty homes and give authorities the ability to look at local taxes such as land value tax and a tourism tax.
The suggestions formed part of a package of measures produced by the Local Government Association’s Labour group in a report which sets out how to reverse the “destroying effects of Tory austerity”.
Sharon Taylor, who leads Stevenage Council and contributed to the On Day One report, said: “If John McDonnell wants to see an irreversible shift in the balance of wealth in favour of working people, then he must take steps to ensure a similarly permanent shift in the balance of power from Whitehall to local communities.
“By trusting in local government’s democratic accountability, understanding of communities, and experience of making every pound count, he can deliver immediate and visible improvements to people’s lives.”
The report also demands an end to the ringfencing of funding, to give local councils the “flexibility to deliver what works best and shift priorities as evidence emerges of best practice”.
Local Labour leaders are also urging the party leadership to give new powers to allow authorities to build council homes, open new schools and create a children’s centre in every community.
Councillor Nick Forbes, the leader of the LGA Labour group, said: “If the next Labour government wants to deliver immediate and visible change for the many, not the few then the fastest and most direct route lies through local government.
“Communities across the country are demanding change to fix the housing crisis and support young people. With sufficient funding and greater freedoms local councils can generate economic growth, build new homes and strengthen communities.”
The report has been given the backing of shadow local government secretary Andrew Gwynne, who in a foreword to the report writes: “The future of our country cannot be formulated by politicians in Westminster, but needs to be built in partnership with local leaders and local people.”