His approach to local government finances is classic Tony Blair. Smile a lot, announce something that sounds very impressive and don't mention the downside. He therefore chose to thrill his supporters at the party conference by announcing that local authorities will get lots of lovely money along with freedom to do with it as they wish because he was now going to allow them to raise their own business rates.
I wonder how many people in the audience thought. "Hang on a minute, businesses already pay rates, where does that money go at the moment?" If they did then it won't have taken them very long to work out the clever trick Osborne was pulling. He wasn't giving out any money he was moving it about to reward his supporters.
At the moment council's get their money from two prime sources. One is the rates that they set and the other is central government money some of which is effectively taken off the top of local rates and then distributed nationally in an attempt to even out inequalities between authorities.
The logic behind this is that it is an awful lot easier to raise business rates and rates on expensive homes owned by foreigners in Kensington & Chelsea than it will be in Redcar after the steelworks has closed down. For many years there has therefore been built into the funding system some help for less well off councils dealing with multiple challenging problems at the expense of those with many affluent residents.
Transferring all business rates to the local council therefore directly rewards the well off councils and punishes the ones looking after people in poorer areas.
The transfer of all business rates to local authorities also has an interesting impact on councils which neighbour each other. If one council sets a business rate higher than another in order to provide better services then any businesses that is mobile will simply move over the border and set up in an area that has cut services viciously in order to lower business rates. The result is that the meanest council attracts the most money in business rates and those that try and protect people from cuts lose out badly. So councils are now forced into a race to the bottom. They are free to set whatever rates they wish but punished if they use that freedom to try and maintain services.
This is almost an exact parallel for what has happened with tax and conditions of work in a global economy. A multinational company can choose where in the world it locates its production facilities. Logically it will do so where wages are lowest, taxes are lowest and workers rights are worst unless it is running a business that needs highly skilled self motivated workers or has high transport costs. The result has been that many third world countries have scrapped effective controls over these companies in order to attract the jobs. For the individual country this works to attract extra resources into the country. Collectively it results in bidding down rights at work and it has been one of the prime reasons why the working class in the states has seen no increase in its real wages since the 1980. Using global competition to discipline workers was one of Margaret Thatcher's most effective tools.
Osborne tactic stems from the same intellectual source. Classic divide and rule. It also has the impact of rewarding his many supporters in the south at the expense of the north. With all the skill of Tony Blair he is covering up this transfer of resources with much talk of the northern powerhouse and the importance of elected mayors to get things moving. Local democracy in action!
But once again it is all spin. We already have local government. Over many years a well thought out network of local authority geography has been established in this country. Every community in the country already has democratic local government. Most of us already know which local council we would ring if we had a problem or we can find out pretty quickly. The geographical areas they serve make sense.
That well known network of local councils has been steadily stripped of powers and funding by successive governments. For example, it is no longer able to exercise any democratic control over most of education and if you need the care service then you will quickly learn how short of funding local authorities are.
Since Osborne has no intention of providing them with an increase in funding, and indeed is planning massive new cuts, he has resorted to that other Tony Blair tactic. Reorganise the service and this will give you the space to announce that you are sorting out everything with great determination via your wonderful new initiatives.
Osborne is insisting that local authorities re-organise themselves and appoint a mayor. In London this made sense because London does need managing as a single entity and the local council boundaries are meaningless. For an area like Yorkshire it is a going to produce a mess of wasteful and unnecessary re-organisation of local government that nobody really wants. Some areas will be governed by the mayor, some by the local council and most people will be utterly confused.
By parcelling up existing money from national government Departments Osborne has managed to put together a package of cash and incentives to go along with his scheme that no local politician can resist. There isn't a penny of genuinely new money but the areas that go along with him first will get rewarded with more of what is going than those that hang about.
We have therefore had the sorry spectacle of Yorkshire councils utterly failing to agree how they should re-organise themselves to get their fair share of money they always used to have and Cameron laughing openly at them for this failure.
It is beginning to look as if this is the main difference between Cameron and Osborne. Cameron comes across as someone who doesn't take it all too seriously. As soon as he thinks the cameras are off he makes it very clear that he thinks this is all a huge joke at the expense of those buggers in the north. Osborne comes across as someone who is trying to be more sincere. He seems to genuinely believe his own propaganda. I leave it to you to decide which is worse!