Lyons Inquiry - First Extension of The Inquiry's Remit

First Extension of The Inquiry's Remit

In September 2005, the Government announced its decision to delay the revaluation of domestic properties by 2007, citing the ongoing Lyons Inquiry as a key reason for the delay. At the same time, the Government agreed an extension to his Inquiry with Sir Michael, "to cover questions relating to the functions of local government and its future role, as well as how it is funded."

The Inquiry published an interim report in December 2005, which detailed the work conducted on local government funding and invited views on the future form and function of local government. The report included detailed analyses of possible council tax reforms; conclusions on other potential local government revenue streams were not included in the document.

Following the extension to his remit, Sir Michael launched a year-long, multi-stranded consultation exercise with a wide range of groups, as well as commissioning new research.

In April 2006 the Government introduced the Dedicated Schools Grant, a ring-fenced grant to local authorities which could only be spent on schools. This marked a significant change in the structure of local government funding, as education was by far the largest service for which local authorities in England were responsible.

Sir Michael Lyons published his second report in May 2006. In this report, he concentrated on the form and function of local government in England. Key points included:

• an analysis of future pressures on local government
• the need to clarify the role between central and local government
• the concept of 'place shaping', and the role of local government in promoting economic, social and environmental well-being of communities

In October 2006 the Government published a White Paper on the future of Local Government. While the White Paper took on board some of the Inquiry's recommendations - for instance the concept of place-shaping - it was criticised in some quarters for being published before the Inquiry had finished its work on local government funding arrangements.