What’s wrong with local government?
Alan Whitehead MP
Walking round such splendid monuments to municipal largesse from years
gone by as Manchester or Birmingham Town Halls, one is tempted to conclude
that there was a golden age of local government, where happy ratepayers
contributed to grand buildings, where large aldermen were respected figures
at the heart of the city or town, and where the town hall watched benevolently
over the fabric of civic life.
If that was true, where has it all gone wrong? Council tax payers revolt
at the very idea of paying council tax, councillors are seemingly powerless
and distant figures, and civic life is more likely to be watched over
by the local strategic partnership involving a number of local ‘agencies’
than seen to be flowing from the town hall.
As with all instant observations, there is some truth in both views.
Local councils do have substantial presence, extended responsibilities
and - remarkably - a continuing and high level of public approval for
the services they provide. But there is nevertheless a real sense of crisis
in the structure of local authorities and their relations with central
government.
In reality there was, of course, no golden age of local government in
quite the way suggested, although it is true that until the 1960s local
government was, effectively, far more independent of the centre. It was
able to take the sort of decisions that led to the building of town halls
and, historically, the establishment of municipal health and hospital
services, gas, electricity and transport services, and a host of other
local ventures. Indeed, until 1945 local government raised something like
45% of its revenue by municipal trading, and was substantially independent
of both ratepayers and central government for its revenue.
The flipside of this picture however, is that local government services
were a complete lottery. In some large cities ratepayers could expect
– well before the advent of the National Health Service - to receive first
rate medical attention and busses past their door to take them to hospital,
whereas in suburban and rural areas services were rudimentary to non-existent.
One could say the template for much of the paradox of local government
– gaining greater responsibility but exercising less discretion in its
discharge – was laid down by Aneurin Bevan when he decided that health
services should be available not only to everyone regardless of income,
but in equal measure ‘from Lands End to John O’Groats’. In doing so the
NHS nationalised the burgeoning municipal health services. The end of
the municipal utilities and their reappearance as nationalised bodies
did wonders for national provision but at the expense of municipal enterprise.
Thereafter, local government would enjoy diminishing autonomy in revenue,
as government grants for services were followed by implicit or explicit
expectations that services should be largely homogenous, and the capacity
to trade declined steeply. Less than 2% of current local authority revenue
comes from trading or associated income.
This has led to two dilemmas, which different governments in recent years
have sought to resolve in different ways. Firstly, should all services
really be the same everywhere in the country? And if they are, what role
does local government have in their operation, other than acting as a
post-box for central government service decisions? Secondly, even if local
government does have some autonomy in decisions relating to service provision,
can that autonomy really be described as genuine if central government
provides most of the money?
This latter dilemma is very disruptive of attempts to refashion the role
and legitimacy of local government. The continuing unpopularity of paying
for council services in a lump sum after you have apparently been taxed
already is perhaps a long term driver towards concentrating local government
finance in the hands of the centre; but there is also a perceived need
to ‘get bangs for bucks’ in a polity that holds central government responsible
for decisions reached at micro-level. In recent years the effective concentration
of some 75 per cent of local government funding into government grant
or centrally decided taxes has been augmented by ‘ring fencing’ within
those grants – allocating sums to local government with strings, or top-slicing
elements of the grant for competitive-bidding between local authorities
for specific purposes. Some 12% of local government revenue grant is now
tied up in this way.
What is perhaps surprising is the continuing public resentment of the
relatively small proportion they are required to pay from the locally
levied tax. But the very nature of the residual tax could provide an explanation:
if local authorities want to raise spending in an area still left to their
discretion, they have to decide to do so after their central grant allocation
has been announced. In order to raise its budget at that stage by 1%,
a council will have to impose a 4% increase in council tax to cover the
overall increase.
But there is a third dilemma, separate but impacting on the first two.
Nowadays, almost all councillors are elected on a party ticket. Although
we tend to assume this is ‘just how it is’, the phenomenon is a relatively
recent one. Prior to local government reorganisation in 1974, a tradition
of independent councillors continued even in urban areas. As late as 1955,
fewer than 40% of the 1500 local councils then extant could be described
as working along party lines. Now, even though on occasions ‘issue’ parties
gain a presence or even control councils, the number of independent councils
can be counted on the fingers of two hands.
There is not space to discuss whether this development is good or bad:
in larger authorities, certainly, the durability of decision-making achieved
by disciplined groups is probably a good thing. But what it has certainly
done is to throw into relief the competing claims to legitimacy of the
centre and the local.
Does the victorious party group in a council election have a ‘mandate’
for its proposals from the electorate? Or is this supposed ‘mandate’ somewhat
undermined by the apparent fact that party-based local elections are increasingly
treated as periodic opinion polls on the performance of the national government?
And do the still-remaining one-party states in local government have any
real right to pursue local service policies that completely contradict
the plans of the central government that is providing the bulk of the
local authority’s funds?
Strikingly, just as party groups have spread through local government
so membership of those same political parties has gone into steep decline.
Paradoxically, during the time parties have been expected to find more
and more candidates for local elections, so the numbers of people coming
forward have melted away. The experience is common across the parties.
While local ward parties were once able to choose from lengthy candidate
panels, there is now a mad scramble to locate someone - anyone – from
within the party to fill the quota of candidates before nominations close.
To centralisers within Whitehall this is a gift – why devolve power and
authority to local government when, it can be argued, it contains rag-bag
groups of squabbling local politicians who bear little resemblance to
the grand frock-coated figures of local government mythology?
Governments have attempted to resolve some of these dilemmas in different
ways but arguably with the same outcome - the continued enfeeblement of
local government as a local decision-making body.
The last conservative Government, it can reasonably be claimed, attempted
a resolution of the local government problem by radically reducing the
sphere of activity within which local government could work. It introduced
a raft of measures which all faced in the same direction: the boiling
down of local government to a core function of peripheral local service
provision. The Education Acts of 1988 and 1992 would, if they had been
successful in completing the process of schools ‘opting out’, have removed
the entire function of the local education authority. ‘Right to buy’,
voluntary stock transfer and ‘pick a landlord’ legislation reduced and
in many instances dissolved the function of the local authority housing
department. The wide ranging ‘compulsory competitive tendering’ legislation
aimed to replace the direct service-providing authority with one that
chose which of a competing number of private companies would provide the
service. Although local government did not in reality arrive at Nicholas
Ridley’s famous vision of ‘a council that would meet twice a year, give
out the contracts, have a good lunch and go home’, the trajectory of local
government was clearly in that direction: councillors would have a decreasing
amount to do, while what was left would be clearly local and no challenge
to central government decision-making.
Under Labour after 1997, compulsory competitive tendering, ‘opting out’
and ‘pick a landlord’ were out: indeed, in the most recent Local Government
Act there appears to be a not insignificant degree of devolution of decision-making
and some new powers, such as the power to trade and to use capital more
freely and without recourse to the centre for permission.
But these modest steps back towards local authority ‘localism’ have arguably
been overshadowed by a wider trend away from a notion of local government,
and towards that of local ‘governance’. ‘-Ance’ for ‘-ment’ may not look
significant, but in terms of resolving the dilemmas previously discussed
it is. For Labour has largely interpreted a move away from privatisation
and towards community empowerment as one that, in its implementation,
largely bypasses local government altogether. Thus in Labour’s first term,
a number of local initiatives were placed geographically inside the ‘territory’
of individual local government units. Single Regeneration Budget schemes,
‘Sure Start’ initiatives, Neighbourhood Action Zones, New Deal for Communities
and others were all relatively well funded by central grant. Some required
financial contributions or a bidding process from local authorities, but
all contained a stance towards community consultation and participation
that required a direct approach to community groups and micro local ‘leaders’
rather than the traditional structures of local authority decision-making.
Where Labour has paid attention to traditional local government structures
it has been to revise their internal workings – through establishing cabinets
and (sometimes) mayors to replace the old committee system, and developing
seemingly onerous systems of declaration and ethical scrutiny to overcome
perceived weaknesses in transparency and decision-making standards.
In its second term Labour has gone further or rather, at the time of
writing, is set to do so. In its efforts to attach a degree of local accountability
to reformed and devolved service institutions, Labour is seeking legitimacy
through election – but not through the local council.
One result of all this is that the local council is cast as a partner
with a number of other, usually unelected, local agencies in the provision
of services: the police authority, the primary care trust, the local learning
and skills council and a host of voluntary organisations sit alongside
the local authority in the Local Strategic Partnership. Local government
is just one among many, all with an equal seat around the table.
A result may be that the actual or would-be local councillor asks himself
or herself ‘why bother?’ Why, they might say, go to the trouble of joining
and participating in the party process, becoming selected for a seat,
fighting an election and winning it, then being vilified for being ‘on
the take’ or ‘only in it for yourself’ - only to find that someone who
has done none of that is sitting round the table claiming to be representative
of the local community, and wielding apparently much more power than local
councillors do? Why not, if one is pubic service minded, be that person
instead? We are, as a country, making assumptions about the inexhaustible
willingness of people to volunteer for representative posts without providing
any accompanying reasons for them doing so, and as a result are collectively
on thin ice.
It may be that the outcome for local government is, as time passes, one
of local governance. Certainly, it is unlikely in the extreme that we
will return to the days of local government that saw the building of Birmingham
or Manchester town halls. But even so, that envisages a substantial and
long-term role for local councils. Addressing the problems of local government
without also dealing with the issue of how local government works within
this milieu seems a poor way forward.
Two questions among many others stand out: do we want to continue with
a system of electing councillors according to a winner takes all process
buttressed by a party system that at local level is decreasingly able
to service it? Do we want to fund that system by requiring those councillors
to fudge the issue of genuine local decision-making by conniving to raise
their small proportion of the funds needed through one rather oddly constructed
tax?
The resolution of these issues would put local government back in the
ring rather than win the contest, but they seem key to its revival. Changing
the voting system for local government might, for example, lead to different
routes to becoming a councillor being established, as well as bestowing
far greater legitimacy on those elected. It would profoundly alter the
role of parties in local government, and probably end for ever the ‘group’
system as it now exists.
Changing the way we finance local government would lead to similar challenges
– a more localised system of tax-raising would inevitably mean greater
geographical inequality in service provision and, if a wider palette of
taxes were countenanced, a deep intake of collective breath to sell such
a system to an already sceptical public. But without such measures, we
can surmise, the ‘problem’ of local government will eventually become
the problem of central government. Local government is the least worst
way of delivering and providing accountability for local public services.
If we want those services, we need active healthy local government.
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