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

3 Responses to “Tory referendum plans could create funding black holes”

  1. Shamik Das

    RT @leftfootfwd: David Cameron’s referendum plans could create a funding black hole:- http://tinyurl.com/tory-referendum-plans

  2. Max

    The Californian budgetary crisis shows what can happen when detailed decision-making is removed from the hands of those responsible: the elected representatives. http://en.wikipedia.org/wiki/California_Proposition_13_(1978) As the Economist states, these referendums are the “crack cocaine of democracy”, which have left only a quarter of the budget in the hands of the elected officials – and the public routinely vote down tax-raising measures to close the $26 billion black hole! http://www.economist.com/opinion/displayStory.cfm?story_id=13990207&source=hptextfeature

    Exactly the same happened in the UK when Bristol gave voters the same opportunity in 2001 http://news.bbc.co.uk/1/hi/uk_politics/1170631.stm

    NGLN’s proposal fits representative democrcy better – councillors vote on matters specifically raised by the public, and can then be held accountable. Cameron’s plans would probably lead to fiscal chaos – and that’s without considering the social harm of public votes on vicious or discriminatory measures… http://en.wikipedia.org/wiki/California_Proposition_8_(2008)

  3. The Earl

    Oh, stop your whining. Yes, local referendums might be a bad thing.
    Let us see that for ourselves.
    But we’ve had 12 years off utterly atrocious, neurotic centralised control from Nu Lab.
    Don’t you people think it’s time for a bit of localism?
    Oh, of course you don’t.
    You all love power being concentrated in the hands of the executive, which leeches off the taxpayer and sucks oodles of cash from the productive sector of the economy.
    What a racket.
    PS. Your comment about David Cameron and beer is yet another One Of Your Great Distortions. In that SAME SPEECH he said it was a small effort, but at least admitted his proposals were part of a longer process. Unlike that blithering ditherer Brown, the Tories can actually use the word ‘cut’.

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