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Former Birmingham council chief exec Stephen Hughes joins local government finance reform thinktank

Former Birmingham council chief exec Stephen Hughes joins local government finance reform thinktank

🕔02.Jun 2014

Former Birmingham city council chief executive Stephen Hughes has been appointed to an independent commission investigating the reform of local government finance.

Hughes, who took early retirement in March, will join an influential body which has a remit to find better ways to fund local services and promote economic growth in England.

The Local Government Finance Commission is to be chaired by Darra Singh, partner in the Government and Public Sector team at EY (Ernst & Young) and previously Chief Executive at Job Centre Plus.

Its recommendations will be presented to all of the main political parties with the aim of shaping the debate on the future of local government finance and influencing the next government ahead of the 2015 General Election. The Commission has been established by the Local Government Association (LGA) and the Chartered Institute for Public Finance (CIPFA), the professional body for public finance professionals.

Mr Hughes has been an outspoken champion of radical reforms to the way councils are funded.

Last year he urged the Government to scrap the revenue support grant – worth more than £700 million a year in Birmingham’s case – and replace it with a proportion of locally collected VAT receipts.

The scheme would bring stability to town hall budgets because councils would know in advance each year how much money they would be getting, Mr Hughes claimed. However, he admitted it was unlikely that any government would approve such a radical idea.

The commission will examine the need for reform of local government finance and the ways in which “the current system stands in the way of the transformation needed to tackle real world problems from the need to create more jobs and grow local economies to tackling the housing shortage”. It will explore how an improved local government finance system could help to address five key challenges facing the country within the context of lower public spending:

– Promoting economic growth and investment in infrastructure
– Ensuring sufficient housing is provided in every place
– Integrating the health and social care systems to promote independent living, including preventing unnecessary health interventions
– Achieving a welfare benefits system that promotes work and protects the vulnerable
– Supporting families and developing young lives through early intervention.

Mr Hughes is now a strategic adviser to Cipfa.

Other members of the Commission include academic Prof Tony Travers, Zurich Insurance chief executive Stephen Lewis, and Jonathan Portes, Director of the National Institute of Economic and Social Research.

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