Layfield on London

Abstract

THE problems of local government finance, publicised in the main by householders' vocal resistance to continuously increasing rate demand is neither new nor is it restricted to London. When public resentment flared up after the 1963 revaluation, the then Conservative government appointed a Committee of Inquiry into the Impact of Rates on Households. In its report (Cmnd 2582) the Committee under the chairmanship of Professor (now Sir) R. G. D. Allen drew particular attention to the impact of the revaluation upon central London and its residents. Among other changes since that report appeared, the government has sought to formulate Exchequer aid to local authorities in such a way as to moderate the impact of rapidly rising local authority expenditure upon householders. The policy enjoyed considerable success in keeping rate increases to acceptable levels until the post-1972 inflation. The consequences of rapidly rising prices, coupled with the ill-timed reorganisation of local authorities and the creation of the new water boards in 1974, generated unacceptable increases in householders' rates in many areas of the country. On this particular occasion, due to a virtual overnight change in the distribution of grants by a new Labour government, London came off more lightly than many other areas. Nevertheless, the widespread protests which ensued compelled the government to appoint in June 1974 a new Committee of Inquiry into Local Government Finance under the chairmanship of Mr (now Sir) Frank Layfield, Q.C. Local authorities and their associations welcomed the opportunity to plead their case for a broader financial basis and, among the numerous submissions, was one from the Greater London Council. This article reviews the main financial problems of Greater London as seen through the eyes of its representatives and officials and considers the findings of the Layfield Committee insofar as they relate to the circumstances of Greater London. * Having been·reorganised in 1965 local government in Greater London was spared the disruption which ensued elsewhere in Great Britain upon 1974 re-organisation of local government. Nevertheless, the accelerated pace of inflation after 1972, high rates of interest and rising costs exerted the same impact upon local government finances in Greater London as they did elsewhere in Great Britain. Despite the raising of Exchequer aid to the highest levels ever, i.e. 66.5 per cent of rate and grant-aided expenditure, the financial year 1974-75witnessed son1eremarkably desperate increases in local rates. While the average increase was about 30 per cent, or three times the * Local Government Finance. Report of the Committee of Inquiry (Chairman: Frank Layfield Q.C.). Cmnd. 6453, 1976.494 pages. £5.75.