George – you have lost it

George Osborne

George Osborne

I have had considerable regrets to find myself opposing DC over the Europe issue but I have no regrets in opposing almost everything George Osborne proposes and I really wonder about his credentials as a Conservative. His budget speech today confirms all of my concerns.  I will start with schools and then look at business rates and small businesses.

There is a huge problem with our state schools and our education system has failed a huge number of children for far too many years.  This is just too obvious for denial.  The question is “what has gone wrong?”  I have no doubt it is Michael Gove’s “Blob” that lies at the heart of the problem.  I understand “The Blob” to comprise the educational establishment (Department for Education), the teacher training colleges and the teacher unions.  This Blob has consistently opposed just about every reform proposed by government whether of left or of right.  I also have no doubt that the right direction is in school vouchers.  Education should be free to all but there is no reason why schools should be run by the state.  The result over the last fifty years has been excessive political correctness, a lack of customer (parental) input and a paranoid resistance to change, led by most of the teacher unions whose primary role is protection of the provider and not the user.

So, Osborne is right to free schools but utterly wrong to blame local council bureaucracies and to remove from them residual control of the education market.  As that market is freed up with all state schools to become academies, this is a useful step towards the eventual goal of creating a school system that is competitive, responsive to the needs of customers and not bogged down in trendy teaching styles that fail children wholesale. There is a problem with school places: not enough in many areas and too many in a few.  There will always be a problem with failing schools and the closer our education system gets to a real market, the more important that this is handled well.  No-one worries overly if an estate agent or hotel goes bust but parents would be very worried if their child’s school was failing. Someone needs to manage the education market; to ensure there is proper planning for population growth and to be alert to potential failure and have measures in place to handle it.  It seems that Osborne believes this is best done from the centre, by the Department for Education – part of “The Blob”.  He is wrong.  It would be much better handled locally and sensitively by local authorities: county councils in two tier areas and unitary councils everywhere else.  They are democratically accountable.  Their members are in touch with and available to local people.

I think Osborne is guilty of double-speak here.  He is lauding the concept of the Northern Powerhouse, modelled on Manchester and devolving power from the centre to local councils.  Yet, in the same breath, he is denouncing local councils for the failure of state education.  You can’t have it both ways, George; either you trust local government and you believe in the devolution of more power to them or you don’t.

Now let’s look at another piece of jiggery-pokery in the budget.  Small businesses have been promised a reduction in business rates.  In fact, some 600,000 will pay no business rates from April 2017.  What a wonderful, generous measure from the Chancellor and how welcome this will be to many small businesses that have struggled to pay what is often the largest single cost.  But wait a moment.  Who will bear the cost of this measure?  Hasn’t Osborne juggled the local government funding system by handing business rates back to local councils and withdrawing revenue support grant that central government used to pay to councils?  He has boasted that local councils are now entirely funded by locally raised taxes and this is surely a good move?  He has also allowed councils to increase their council tax demands by 2% without having to institute a local referendum and by a further 2% for councils responsible for social care to support this cost.  Well, how generous, to allow local government to do what central government has always been free to do!  But wait a moment!  It sounds to me as if George has slashed the business rates burden on small businesses and handed the bill for this to local government!  A bit like having a slap up meal with your friends in an expensive Islington restaurant and handing the bill at the end of the evening to the people on the next table!


About Keith R Mitchell CBE

Qualified as a Chartered Accountant in 1967. Pursued a successful career in financial training and publishing until selling his interests in 1990. Elected a County Councillor for the Bloxham Division in 1989. Leader of Oxfordshire County Council 5 November 2001 to 15 May 2012. Chairman of the South East England Regional Planning Committee July 2002 to July 2005. Chairman of the South East England Regional Assembly July 2005 to July 2008. In HM the Queen’s 2007 Birthday Honours, appointed a Commander of the Most Excellent Order of the British Empire in recognition of services to local government.
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