put an interesting contribution she made in the House of Commons on her blog - although it has to be said a good sub might have found a punchier headline than "Local Government Finance Debate (House of Commons – 11/01/2012)"
She's clearly talking sense when she says
Whether how she continuesWe were told that the current arrangement whereby central Government redistributes national business rate income to councils based upon levels of local need is a complex and opaque system that does little to encourage an authority to foster economic growth.
Mr Deputy Speaker, I put it to the House today that the partial business rate retention scheme proposed in this Bill will simply replace one complex and opaque system with another.
makes sense depends on whether you think Councils are ultimately responsible parts of government. Ultimately, I would say, governments do have to collect revenue from businesses - and individuals employed by businesses - to pay for the public goods of a welfare state. So her view only makes sense if Councils are just agents of general government. And in this I think she is largely correct.The idea that a council’s ability to fund child protection or elderly care should be determined by the number of businesses it boasts is ridiculous.
She goes on to say
She goes on to lamentI’m not suggesting that councils have no role to play in helping to create the right conditions for local economic growth – far from it – but I am realistic enough to know that the actions of an individual council will only ever be one part of the jigsaw.
Let’s take Lewisham as an example.
Lewisham has one of the smallest business bases in London. 70% of Lewisham’s working population leave the borough every day to go to work.
...
Prior to becoming an MP I was Lewisham’s Cabinet Member for Regeneration. Economic development was one of my responsibilities, alongside planning policy and transport.
Despite what the Government Minister might think, I did not to sit around twiddling my thumbs, thinking if only we could retain growth in future business rates, then we would do x, y or z to stimulate development.
No, funnily enough, I remember doing quite a lot to try to grow the local economy – not because it would mean money for Lewisham council but because it was the right thing to do for Lewisham people.
Planning permission was given for mixed use developments, sometimes despite opposition.
We had a team of town centre managers to act as a conduit between the business community and the public sector.
I chaired regular partnership meetings with local business representatives.
It's easy to sympathise, but there is no attempt to explain why Lewisham has one of the smallest business bases in London. Instead, some rather feeble excuses - "We don't have land, like they do in Swindon". Excuse me, but the rest of London also has that problem, and its economy has done better than the rest of the UK. "We don't have tube lines". Well, I hate to encourage our local obsession with East Dulwich, but nor do they.So what does my experience in Lewisham tell us?
In my view, it exemplifies how an increase in business rate income may have very little to do with the actions of the local authority, how economic growth may be encouraged by a council but unless a range of other positive factors coalesce, businesses may not grow, start-ups may not emerge.
Old Street’s Silicon Roundabout was always more likely to develop in Old Street than say Catford. Why? Old Street is on the tube map – Catford isn’t. Extend the Bakerloo Line to Lewisham and onto Catford and we might have more of a chance.
Why else? Shoreditch has got that up and coming vibe of a young, dynamic neighbourhood – in all honesty, Catford hasn’t. Don’t get me wrong Catford has a lot going for it, but it simply can’t compete with somewhere like Old Street.
Even with the council’s plans to regenerate Catford town centre, it is still unlikely that they would be able to woo high tech start ups from Shoreditch. Why not? Because businesses like to locate next to other similar businesses – the agglomeration economies we all learnt about in our Geography lessons – success breeds success. It was the reason why the City of London developed in the first place.
Different places have differing potential to attract business. Twenty years ago Honda was always more likely to open a new production facility in Swindon than say Lewisham. Why? Land. Swindon had plenty of it, Lewisham didn’t. Why else? Swindon is on the M4 corridor, it’s within 45 minutes of Heathrow and within 2 hours of sizeable markets and suppliers across the UK, it has a history of car production.
What we do have is a Council which, for all its regular partnership meetings with local business representatives, doesn't seem to have much of a clue about economics.
