Taxing councils - Telegraph The prize for the most fatuous political comment of the week must go to the Labour leader of Birmingham city council, who called the financial constraints imposed on English local authorities "the end of local government as we know it." If anything, it should be on the threshhold of a renaissance. Eric Pickles, the straight-talking Communities Secretary, yesterday confirmed a range of reforms that have the potential to reinvigorate municipal governance in England, making it more independent and self-reliant. Where half of all money spent locally has previously been raised nationally, in future that will fall to 30 per cent. Councils will be able to retain £11 billion of business rates rather than return it to the Treasury and will therefore benefit directly from attracting new enterprises. For the first time, grants will be paid as rewards for making efficiency savings; and if councils want to increase taxes by more than 2 per cent, they will have to put the decision to local voters. However, this should be unnecessary as they are hardly strapped for cash, boasting combined balances of £16 billion. It is a sign of how bloated local government had become that councils have shed 230,000 jobs without hitting front-line services. Vast sums were wasted on creating pointless posts, which councils said were crucial to the well-being of residents - who have not even noticed they have gone. It is also extraordinary that more than 4,000 councillors - occupants of supposedly unsalaried posts - are in the local government pension scheme on the same basis as employees, a racket that is being ended. A further funding reduction of 1.7 per cent next year should not cause hardship, let alone the riots on the streets predicted by one town hall boss. As Mr Pickles told MPs, councils must try to earn their way in the world rather than rely on central hand-outs.