Councils told to embrace the `new era'

The love-in between England's predominantly Labour-controlled councils and the new government reached new heights of passion yesterday when both the Deputy Prime Minister, John Prescott, and the Chancellor of the Exchequer, Gordon Brown, arrived in Manchester to tell the first annual conference of the Local Government Association (LGA) of their "key role" in realising its objectives.

The last time a serving Chancellor addressed a council conference, also in Manchester, was 16 years ago when Sir Geoffrey - now Lord - Howe came to tell them that the Prime Minister, Margaret Thatcher, was severely displeased with them and the rate support grant was to be cut.

This time, the two senior ministers went out of their way to extol a new era of partnership between central and local government.

For example, over the environment. Councils are in the front-line of securing Tony Blair's promises at the recent New York United Nations Environment conference, Mr Prescott said. A joint Whitehall-local authority plan would set out the ways in which councils could carry forward Agenda 21, the plan for sustainable development adopted at the Rio Earth Summit in 1992.

But Mr Prescott kept an iron fist in his glove when he also warned that despite the Government's wish to end "capping" of council budgets it would keep reserve powers to veto excessive increases in council tax in order to protect residents.

Mr Brown said that capping would continue through 1998-99. He defended Budget changes affecting pension funds, which have had significant knock- on effects on council spending, by appealing to councillors to examine the longer run justice of his reforms rather than "short-term tax privileges".

Since May, the 18-year "cold war" between councils and central government has given way to a warm summer of mutual appreciation.

Last week, Mr Prescott inaugurated a series of open-door sessions involving senior ministers and local government leaders, and the Government recently signed a European Charter guaranteeing local government rights of consultation.

The LGA is itself a recent creation, formed in April from the separate associations representing the shire counties, the districts and the metropolitan areas. London boroughs belong, but retain their own separate organisation.

The Prime Minister sent a message to the inaugural conference praising councils for providing leadership to local communities, acting as a voice for citizens and delivering a range of vital services.

But the LGA's chairman, Sir Jeremy Beecham, former Labour leader of Newcastle upon Tyne Council, while delighting in the new friendly atmosphere, told the conference that the Government has yet to scrap the many restrictions on council freedom and finance imposed by the Conservatives. "It is time for a bonfire of controls," he said.

He warned that negotiations over next year's council spending were going to be tough, though he threw an olive branch to the Chancellor, by pledging that any "freedom of manoeuvre" given to councils on the financial front would not be used to increase council workers' pay. He identified special problems in paying for home helps and other assistance for the elderly and for the fire service.