Time to devolve power?

Almost 20 years ago a brave band of councils in England were engaged in a huge rebellion against cuts being imposed on their communities by Margaret Thatcher and her Conservative government.

Then, as now, Westminster funding cuts left local authorities trapped between a rock and a hard place.

Councils can cut or privatise vital social and leisure facilities that thousands of people depend on or raise council tax rates in an attempt to bridge some of the funding gap.

Back in the 1980s some left-wing Labour councils attempted famous fightbacks.

Liverpool Council threatened to set an illegal budget in order to build thousands of new council houses and eventually won extra government money.

But the 15 councils which took part in the "rate-capping rebellion" were less fortunate. The councils initially refused to set any budget until Thatcher's government lifted harsh spending restrictions, but they were eventually forced to back down.

In an austerity-driven flashback this week, Derby Council's ruling Labour group joined a protest against their own budget which faces a £20 million black hole due, yet again, to Westminster's funding cuts.

This week the Star reported a warning from the National Audit Office that councils have only made half the savings they have been ordered to make by Tory Communities Secretary Eric Pickles.

Progressive councillors know that young and elderly people will feel the pain as services are stripped away and so scenes like those we saw in Derby this week are likely to be repeated in the coming years.

All of this is why the Westminster Parliament's constitutional reform committee this week insisted local government must be given responsibility for a share of income tax and get beefed-up constitutional powers to boot.

Labour MPs leading the calls believe the new powers should be handed over to councils to shield communities from government cuts.

Committee chairman David Allen MP says that councils should stop "holding out the begging bowl" and fight for powers which most councils across Europe already have.

And he insists that the powers wouldn't mean councils racking up huge debts - explaining that "local government has proved itself to be much more prudent and economically responsible than central government."

But we have been here before, when former Labour deputy leader John Prescott attempted to usher in fully elected regional assemblies.

Voters in north-east England overwhelmingly rejected their own assembly in a 2004 referendum - a decision which now looks very short-sighted.

Allen says he is a committed regionalist but admits that the idea is "now dead for the next 10 years." For him and others devolution of income tax, at least in part, to councils is the next best thing.

In support of its plans the committee insists that devolution has worked in Scotland, Wales and Northern Ireland and that England should no longer be the odd one out.

The first wave of powers were devolved to Scotland and Wales in 1999 and both countries have since voted for further powers in referendums.

The two countries' parliaments have allowed politicians to protect their nations from the worst policies of both Labour and Conservative-led governments and, to a lesser extent, chart a different and more progressive political course.

Former Labour first minister of Wales Rhodri Morgan wanted to put "clear red water" between the governments in London and Cardiff.

But the Welsh government currently has no tax-raising powers and no ability to borrow money which it could use to kickstart much-needed infrastructure schemes.

Wales's First Minister Carwyn Jones has however voiced concern that Con-Dem government plans to devolve some tax powers to Wales would force his Labour government to implement Tory cuts.

Labour MP Paul Flynn, who sat on the committee that made this week's proposals, also warned that "people are right to be suspicious that devolution is not devolution of resources, but devolution of blame and guilt."

But he told the Star: "It's ridiculous that the Welsh Assembly doesn't have the same powers that a local authority will have to raise its own money and therefore be responsible for its own spending."

Whatever the short-term difficulties posed by devolution, as Flynn and other progressive politicians argue, taking power closer to the people can only have positive results.

National governments everywhere would provide economic direction and remain responsible for national infrastructure in fields such as health, transport and defence.

But everything is local and when it comes to delivering services or protecting and creating jobs in communities then there's surely no body better qualified than locally elected councils.

And while this week's debate has remained political and economic, protecting and encouraging cultural diversity will be another important devolution dividend for England.

As Flynn sums up, "we have compassionate and reasonable people running our councils who have a clear idea of the needs of their constituents, unlike somebody remote at Westminster making savage cuts without ever being aware of the consequences."