800 Words (9 minutes reading time) by Colin Weatherby

I was reading the latest Local Government Information Unit (LGIU) newsletter from the UK and the news item in the image above caught my attention. Although the cause of the problem is central government cutting funding to councils, not imposition of a rate cap, it has the same effect on council finances and reinforces the view I expressed in my posts about the effects of the rate cap (‘Il comune povero- ‘The poor municipality’ and ‘Rate Capping – the final words (from our future))’. Councils in Victorian can respond by trying to improve current services and increase revenue, find efficiencies and reduce waste in operations, and they will still be unable to meet community needs and expectations within their available resources.

In Victoria, councils cannot issue a section 114, which in the UK means that all spending, apart from on protecting vulnerable people and providing statutory services, will be suspended. Instead, the Victorian government sends in Monitors to oversee council decisions, and then, if the council doesn’t respond as the State requires, they can dismiss the council and appoint Administrators to run the council. In the past, this has resulted in decisions being made by the unelected Administrators to sell community assets, cut services and make whatever changes they think are necessary to get the council back in the black. This tends not to meet community needs and expectations either.