The imminent decentralisation and localism bill is in danger of feeling like a grim joke to many in local government right now. And potentially a real disappointment for communities.

Heralded as the most radical bill of the coalition government’s programme, it will pledge to give individuals and communities more say over their local area through greater control over the planning system, local referendums and a veto over council tax, and through initiatives like the ‘right to bid’ to take over local services. To councils it gives a general power of competence and greater financial autonomy.

But right now is it a good answer to the wrong exam question? If you are a council facing frontloaded cuts of up to 40 per cent, then greater freedom in how you spend it means little but a devolved axe. When you have seen the cost of child protection go up by 10 per cent in the last year, waste set to rise by a billion pounds a year and demand for adult social care set to reach £20 billion by 2015, then the localism bill will provide you with few solutions. If you are a resident concerned about vital home care for your elderly parent, or living in fear of antisocial behaviour on your estate, you will expect action from the your council. This bill provides few relevant tools for these really difficult issues.

Now is a crucial time for Labour to show it is on the side of local people when it comes to the issues they really care about, and thereby to redefine itself as the true champion of local communities. This is hard when we know the cuts will impact disproportionately on those areas that are already the most disadvantaged – predominantly Labour areas. Central government grant is weighted to areas with higher deprivation and so, combined with the loss of ringfenced budgets usually targeted at specific issues linked to poverty, these cuts are likely to be inequitable in their impact.

Labour must respond by ensuring it applies its own values in making decisions about prioritising in a difficult climate – as Islington council are currently doing with their fairness commission. Labour authorities must lead the charge to strip out waste and bureaucracy, and ambitious Labour authorities should take the initiative themselves and drive forward the last government’s Total Place approach to secure the best outcomes for citizens in the most efficient manner, with real local accountability. The community budgets announced in the CSR are a poor relation to Total Place, and need to be expanded.

And Labour local authorities should be bold and ambitious in transforming their relations with local citizens and the services they use. They must be ready to let go to allow communities and individuals more control. They must be radical in their pursuit of outcomes for citizens, ready to experiment. Many are looking at commissioning from a range of public, community and voluntary, and private sector providers. They are pioneering personalisation. Labour in Lambeth is looking to develop the first cooperative council, where the relationship between the citizen and the council is transformed. Other Labour councils such as Sunderland are leading the way in developing social enterprises and employee cooperatives to empower their workforce. The role of local government is changing, becoming more than simply a deliverer of services, to the leader of local places. And it is bold and innovative political leadership at local level that is key.

The issue is that this government’s commitment to a smaller state also means smaller local government, where the state is viewed more as a barrier than a facilitator. Some policy proposals, such as directly elected police commissioners and the open source planning policy in the bill, seem to circumvent local representative democracy rather than reinvigorate it.

Yet while these concerns are real, Labour must take care. Criticising the ‘big society’ narrative will enable the coalition to paint Labour back into old stereotypes of being ‘big statist’, protective of bureaucracy or proponents of an era when the council controlled the colour of your front door. Labour must be good employers and governors but not be trapped in a provider prism. Many of the attributes of the ‘big society’ should be claimed by Labour – traditionally the party of the community and of mutual action.

Similarly Labour has to be careful not to be drawn into unquestionable defence of the old local and regional architecture at the expense of the public interest. It is hard not to feel aghast at the gusto with which the government has ripped out local public service architecture such as regional development agencies and primary care trusts, as well as the national performance management regime without any tested accountable alternatives.

But Labour has to accept that much of this had become too top-down and overly proscriptive. The left cannot look backwards and there will be some opportunities from the new landscape which will be down to Labour councils themselves to create. The left must set out its own reinvigorated view of democratic localism; one that is rooted in the community, which builds on its proud traditions of mutualism, friendly societies, support for the community and voluntary sectors, and municipal socialism. It should seek to use the tools this government is giving, such as the power of general competence to pursue its own progressive agenda and strive for social justice in our localities.

If the left doesn’t reshape its own view of progressive local civic society, a minimalist vision of the ‘big society’ wins, with no role for local government. If local government doesn’t engage better with citizens, it will be bypassed. If services aren’t responsive they will feel distant from their users. Labour can enable local coalitions to defend services and communities – political action coupled with community action.

In the meantime, Labour should ensure this bill does not become a clever distraction from the real agenda. Local government is the perfect place for democratic renewal of the Labour party; to enable it to become Ed Miliband’s new movement – the ‘vehicle for people’s hopes and aspirations’. That’s true localism in action.

Photo: ktylerconk