Tory referendum plans could create funding black holes

The Conservative Party policy to allow the public to call referendums on local issues where 5 per cent of the population sign a petition in support could create unintended consequences such as the suppression of minority rights and for councils to be burdened with unmanageable financial commitments says a new NLGN report.

While David Cameron today concentrated on restoring trust in politics by increasing the price of a pint of beer in Parliament, the New Local Government Network has published an analysis of another of his proposals to revitalise democracy.  Announced in their “Control Shift” policy document, the Conservative Party would allow the public to call referendums on local issues where 5 per cent of the population sign a petition in support.

On the surface the policy could have merit. Modelled on schemes in Switzerland and the US to ‘trigger’ local referendums, the Conservatives claim that it will deliver local residents a new and enhanced voice and ensure that councils are obliged to react to issues of importance. However, the proposal could potentially lead to the suppression of minority rights and for councils to be burdened with unmanageable financial commitments.

It is possible that the fuzziness of the Conservative proposal could lead to wealthy, vested interests pouring money into referendum campaigns that might benefit them, but not necessarily the local community. Could we see a situation where local businesses combine to order the council to scrap business rates, thereby leaving a black hole in council finances? Or could a group of residents vote to stop investment in social housing, thereby increasing the number of families waiting to be housed?

Instead of this proposal, NLGN is proposing an alternative model of a ‘community proposal,’ which would combine new rights for local citizens whilst upholding the legitimacy of locally elected government. It would work by allowing local residents to take a proposition to a full council meeting, assuming the requisite signatures are obtained, where it could be debated and then voted on. Councils would be obliged to put the issue to a vote, but would have the final say.

Our guest writer is James Hulme, NGLN

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