Proposed changes to local government finance guidance aimed at regulating councils’ commercial activities may be inconsistent with other government policies, according to a new report. Accounting firm Grant Thornton said that the move to limit investment outside of councils’ own area seems to be at odds with a desire to see local government pension pools invest in infrastructure “which by its very nature is likely to be ‘out-of-area’.” The report added: “Furthermore, an over emphasis on commercial property may be out of kilter with the full range of other asset classes which councils are trading in.”
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Conrad Hall: a central/local tension is the cause of the financial crisis – not funding
The local government financial crisis has not been caused by a lack of funding: that’s just a symptom of the inherent conflict of having independent local authorities within a highly centralised state, argues Conrad Hall.
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