Abstract
Local government has faced critical issues since the 1970s. The case is made for local government as the government of local communities. Local government is presented as the government of difference, both responding to and creating differences between areas. The government of difference enhances the learning capacity of the system of government, a function not fully appreciated by central government. The role of local government has been weakened by the policies of successive governments. There has been a failure to recognise the need to strengthen local representative democracy. An almost continuous process of reorganisation has fragmented community government. These issues have arisen from a fundamentally defective relationship between local and central government. The government’s approach fails to recognize that the main barriers to the development of localism lie in central government. Centralism remains dominant in the Localism Act and in Whitehall departments, even the Department for Communities and Local Government. The government has failed to provide a financing system for local government that sustains localism: local authorities continue to be dependent on government grants. The way ahead is to change the culture of central government through a code on central–local government relations coordinated across all departments by a unit in the Cabinet Office and monitored by a joint committee of parliament; a genuine Localism Act; and a financial system in which local authorities draw most of their revenue from their own voters with taxes whose rates they determine.
This paper presents an assessment of the position of local government in the system of government. The first part draws out issues to be faced from past experience. The second part considers the present position, focussing on the policies of the coalition government for local government. The third part looks to the future, suggesting how the issues raised should be resolved.
Part I: The past
The authors have been involved with local government for the last forty years in education, training and research, visiting authorities and working with councillors and officers. This interaction between academics and the practitioners has enabled shared learning. We reflect on that experience, identifying themes relevant for present policies and future possibilities.
The role of local government
In those forty years governments have increasingly assumed that the role of local government is to be an instrument for the delivery of services in accordance with national policy. This assumption has underlain government legislation and policy on service delivery, on local-government finance and on the working of local authorities. Governments have intervened in the affairs of elected local authorities, often more readily than in appointed local public agencies.
Local authorities are more than mere agents of central government. They are political institutions constituted by election with a wide range of functions and the right to tax. These three fundamental features justify and legitimate their exercise of local choice on behalf of the citizens to whom they are accountable. Traditionally much legislation was drafted to give local authorities space for the development of that choice, including their level of expenditure and taxation (Loughlin, 1996).
Our approach to local government builds on its elected authority. It sees local authorities as local government with a responsibility for the well-being of the local area and its communities and citizens beyond the provision of services. This wider role was put forward over thirty years ago in the Bains Report: Local government is not, in our view, limited to the narrow provision of a series of services to the local community, though we do not intend in any way to suggest these services are not important. It has within its purview the overall economic, cultural and physical well-being of that community, and for this reason its decisions impinge with increasing frequency upon the individual life of its citizens. (Bains, 1972: 6)
This role has a longer history, recalling the nineteenth century when the civic gospel was proclaimed in Birmingham and other cities, or later by the municipal socialism advocated for the London County Council and elsewhere. In the twentieth century there were times when this wider conception of the role of local government appeared forgotten, as local government became absorbed by growing service provision. It was not completely forgotten by either local authorities or their citizens. Local authorities were turned to when public disasters or emergencies occurred or when there were threats to public well-being as local economies faced problems or local facilities were threatened by the closure of railway-lines or local hospitals. Local authorities responded to such public pressures and created a role in economic development that government eventually recognised by giving them new powers.
This wider role has been described as community leadership in the system of community governance – the network of organisations and agencies contributing to the government of local areas. It has gained some support in statements and actions by central government. Local authorities were given powers of well-being to promote economic, social and environmental well-being and a duty to prepare community strategies by the Local Government Act 2000. It led to the Labour government’s pilots for Total Place, giving a role to local government in leading the analysis and deployment of public resources to meet the needs of local areas (HM Treasury and Communities and Local Government, March 2010).
There is a tension between these developments and the still-dominant government concept of a local authority being an agent for the provision of services according to national policy. The former concept gives expression to local choice, while the latter seeks to limit or even deny it. This latter concept underlies much government policy and legislation.
Our approach is based on local government’s role as community leadership, expressing its concern for the well-being of its area and its communities and citizens that extends beyond the provision of services. Those services remain important as local government’s direct contribution to community well-being, deepening the authority’s understanding of its communities and their problems, and giving it status and weight in dealing with other organisations. The issue is whether local authorities have the powers and resources to support the local choice necessary to fulfil the role of community leadership.
The case for local government and the government of difference
The case for local government was set out in our book, The Case for Local Government:
diffusion of power in a society that cannot afford concentrating power in one central location; diversity of response that cannot afford the centralist risk of single solutions which may go wrong; economy of resource-utilisation in a society that cannot afford the waste of national standards unrelated to local perception of need; localness of knowledge and response in a society that cannot afford the remoteness, rigidities and limitations of centralised bureaucracy; democracy and self-government in a society that cannot afford to entrust control over bureaucracy to only 23 ministers and 650 MPs (Jones and Stewart, 1983).
These arguments recognise local government as the government of difference, responding to differences in the economic, social and environmental conditions between different areas. It is not sufficient to regard local authorities as only responding to difference. They help create differences which reflect the varied aspirations and demands of their citizens. Local authorities do not merely respond to local conditions but make differences though their initiatives and innovations.
Diversity develops because local authorities respond to and devise policies based on local choice. Diversity is a necessary consequence of local choice. It should not be condemned as a postcode lottery but welcomed as an expression of that choice.
Diversity should be welcomed for its contribution to the national system of government, enabling the learning essential for effective government. Society and government can learn more from the diversity that comes from local choice than from the uniformity imposed by central government. From uniformity society and government may learn merely that mistakes have been made everywhere, while from diversity they can learn from relative failure and relative success. The case for local government is enhanced by the learning that grows with the role of local authorities as the government of difference.
Recognising wicked issues
The need for learning by government and society gains weight from the recognition in public discourse given to wicked issues. The nature of wicked issues has not always been fully understood. Too often it is implied that problems are called wicked issues because they involve more than one organisation – usually many. While wicked issues are likely to involve different organisations, that is not their defining characteristic.
Wicked issues were described by Rittell and Webber as intractable issues whose causes are imperfectly understood and whose solutions are not clear. They drew a useful distinction between wicked and tamed issues. Tamed issues are problems that are generally understood, whose causes can be identified and whose solutions are clear. A tamed issue can be assigned to organisations whose tasks are clear and carried out by staff trained to apply the required responses. A wicked issue will have been assigned to a single organisation, but it cannot be adequately dealt with by that organisation alone (Rittel and Webber, 1973). A wicked issue could involve one organisation, although that is unlikely because of uncertainty about the required response. A tamed issue can involve different organisations, if the requirements of each organisation are clear.
Many issues faced by local communities, such as law and order or the environment, are wicked because their problems are intractable. Local authorities face such issues because of their functions and their role of community leadership.
Wicked issues set a high premium on learning. Diversity enables such learning in a search for understanding and provides scope for initiative and innovation through local choice. Local authorities learn with and from their citizens and their experiences, problems and aspirations. That learning is achieved through the interactions between a council and its citizens, which should express and sustain local democracy.
Local democracy – the condition for effective local government
Local choice is necessary for the achievement of local government’s role. That local choice is justified by local elections constituting the local council with councillors as elected representatives. Local democracy turns upon the role of the elected representative.
Too much discussion of the nature of local democracy neglects the role of representative democracy even though that is and will remain the basis of democracy in a complex society. The case for participatory democracy is often made as if it were an alternative to representative democracy. Yet the practical necessities of government make it inevitable that representative democracy in one form or another will remain the foundation of local as of national democracy. At community or neighbourhood levels representative committees are normally seen as necessary for effective action, even though community empowerment is discussed as if it were public participation rather than representative government involving citizens. The critical issue is, how can representative democracy at all levels be strengthened?
Strengthening representative democracy raises issues about the electoral system, including whether it produces a representative result, but also about the relationship between the elected and the represented. Their relationship should involve interactions between councillors and citizens, with councillors listening, hearing and explaining. These explanations should cover both actions taken and those not taken, even when the councillor’s judgment differs from those of many citizens. The councillor will be more respected if an unpopular decision is explained rather than left with no explanation, or citizens are not even informed of what has happened in the black box into which the issue has apparently disappeared. Participation should not be seen as opposed to representative democracy, but as strengthening representative democracy through interactions between representatives and citizens.
Strong representative local democracy requires active citizens and effective local accountability. Its potential is limited if the role of citizen is reduced to the act of voting and to the right to raise individual complaints with councillors as local welfare workers. Voting is vital but not sufficient. The local accountability of a councillor cannot be reduced to an action that takes place only every four years. Citizenship restricted to these limited acts remains relatively passive.
Active concepts of citizenship and of accountability are required to strengthen local democracy, as illustrated in Democracy Rediscovered by Margaret Simey. She reflects on her role as Chair of the Merseyside Police Committee, where she saw electors rioting against the police for whom the Authority was responsible. As chair she and the committee had sought to make the chief constable accept his accountability to the committee, but, she argues, the committee had assumed its own accountability based on its members being elected up to four years ago. She set out an active concept of accountability based on a sense of stewardship on behalf of citizens, requiring the councillor to give an account and to listen to what is said about the account (Simey, 1988).
There is a need to strengthen representative democracy by recognising the potential of local government as an arena for active citizenship through which local accountability can be achieved. The need has begun to be recognised in methods for public deliberation, participatory budgeting, and discussions between representatives and citizens. In such interactions, councillors can listen and explain, giving real meaning to representation.
Institutional change
For years there has been almost continual institutional change in local government and in the other public organisations that constitute community governance, covering both their external structure of functional and geographical boundaries and their internal structures for governing the authorities. The consequence of these changes has been that instability has become the condition of local government and of other local public institutions.
The structures created for local government in 1963 in London, and elsewhere in the 1970s, were rarely treated as designed to last. Central government made the structure of boundaries and functions a subject of continuous discussion and discord. After only a few years the Labour governments of 1974–9 proposed Organic Change. The Banham Commission and its successors set up by the 1979–1997 Conservative government brought counties and districts into continuing conflict. The abolition of the Greater London Council was less a rational change than an act of political spite. Although the 1997–2010 Labour governments at first appeared to have learnt the need for stability of external structures, this wise approach did not last. There was a failed attempt to create elected regional authorities and a confused establishment of so-called unitary authorities in some county areas. There have been major functional changes, with some being removed from local authorities with elected control replaced by appointed control. In some cases functions were changed more than once, from one appointed body to another and in a few cases returned to local government.
Internal structures have been subject to change, with legislation covering local government finance, political structures, methods of working, powers to deal with allegedly failing authorities and partnership working.
Changes in the remainder of community governance, covering health services, probation, police and regional structures, have been as great as or even greater than for local government. It has been common for structures to be created only to be abolished later, sometimes by a government of the same party.
Institutional change is a temptation for ministers. Once parliament has approved the change, it actually happens, which is not always so with other forms of policy. This institutional change may not achieve its aims, but at least it has happened, giving a sense of ministerial achievement. During the long period from the 1890s to the 1960s there was little change to local government structures. One wonders at the apparent ease with which institutional changes have now been made. One wonders also about what understanding there was amongst civil servants about the nature of institutions and the problems of organisational design, and what skills and experience they brought to the task.
The readiness to undertake institutional change shows little regard for the costs of the change. The financial costs are often underestimated (Chisholm and Leach, 2008), with limited estimated costs balanced by assumed savings, both of which often remained unrealised. Financial costs are not the main costs. Institutional change has opportunity costs in time taken from the main tasks of local authorities and in the uncertainties created amongst staff. Institutional change destroys organisational identity and established ways of working both for those within and outside the organisation. Cultures and organisational memory are fragmented. It was rarely appreciated by those designing new institutions how much – both good and bad – was lost. The undermining of institutions destroys known processes of government, and what is lost is not easily rebuilt.
Institutional change can be justified only when major issues are involved. The mistake is to believe the best way to bring about organisational change is through institutional change, yet organizational change can often be more easily achieved within a stable institutional framework rather than one disturbed by such changes – a lesson not merely for ministers and civil servants but for councillors and chief executives who often see change in internal structures as the best way of carrying through change in their organisation’s way of working
The fragmentation of community governance
The structure of community governance has been increasingly fragmented into different organisations without adequate means of integration between them. There is a need to differentiate activities according to the tasks and skills involved, although that differentiation does not require separate organisations, but can be achieved through separate departments within organisations where integration may be more easily achieved – at least in principle. The system of community governance combines local authorities as multi-functional organisations with single-purpose authorities. Recently many functions have been transferred from the multi-functional local authority to single-purpose appointed bodies, creating a more sharply differentiated structure.
Differentiation, or fission, creates the need for integration, or fusion, since there will be tasks that cross organisational boundaries. Yet increased structural differentiation has taken place when the need for co-operation between organisations has been increasingly recognised. Concern for the environment, the care of the aged and deprivation and many other issues involve tasks that are carried out by different organisations or can create gaps and unnecessary overlaps. The recognition of wicked issues has highlighted the need for integration, pooling experience, sharing understanding, enabling learning, developing policy and working together.
A system of governance is not fragmented because it is differentiated but because necessary differentiation is not matched by requisite integration. Fragmentation has increased because changes have been carried out by central government on a department-by-department basis without attention to the impact on the overall system of community governance.
There has been a limited recognition of the need for integration, leading to government intervention to create partnerships, which has created a new fragmentation between partnerships, and between partnerships and their sponsoring organisations. It has, however, led to recognition even by central government of the potential role of local government as community leadership, working with partners and involving local communities. This role is appropriate for local authorities as the only local elected bodies with a clear local accountability and as a multi-functional organisation involved in balancing different needs and objectives. Such recognition is important; although the separate departments of central government have still not faced up to the need for community leadership to be supported by powers to enforce that leadership within the system of community governance.
Some procedures were developed, such as community planning and local area agreements, with targets not merely for local authorities but encompassing other organisations. The most important development was the Labour government’s pilots for Total Place, focussing on the use of public resources in meeting shared needs within the system of community governance (HM Treasury and Communities and Local Government, March 2010).
These approaches recognised the need for integration and went a little way towards developing procedures to meet this need. Local authorities were, however, expected to take the lead in developing these procedures at local level but were not given powers to ensure they were effective and secure integration. For other public agencies these processes were not priorities compared with pressures from “their” central-government departments. The system of community governance remains fragmented because of the lack of requisite means of integration within a necessarily differentiated system. This challenge needs to be faced.
The defective relationship
A dominant feature of local government has been the defective relationship between local authorities and central government. That relationship has changed as central government has sought to control aspects of local government previously left to local authorities to decide. The main changes have been in the extent of control over local-government finance and over ways of working both in the nature and operation of political structures and in the way services are organised and provided. Legislation and regulations have changed as central government has moved from setting out powers and duties to setting out how those powers and duties should be implemented (Loughlin, 1996), exposing fundamental weaknesses in the central–local relationship.
The relationship has an unrealised potential to enhance government learning. Local authorities have responsibility for many public services and are aware of public responses to other public services. Councillors have multiple contacts with citizens. Officers, operating at the front line, are in daily contact with the public. The experience of local authorities is a rich resource whose potential has not been appreciated by central government, because it has not been based on mutual respect and shared learning. The centre is isolated through its lack of understanding of local affairs where many policies and practices have to be worked out.
The defective relationship reflects the limited concepts of centralism dominant in central government. Central government knows no other way of working than through detailed prescription, well-illustrated by almost endless pages of guidance and the large number of regulations and directives governing the political structures of local government following the Local Government Act 2000. Central government has a “what if?” approach. What if local authorities do not follow exactly what central government wants? They must be stopped. What if X or Y happens? All eventualities must be covered by guidance. The relationship does not value shared learning or show mutual respect.
Growing prescription has limited the capacity for initiative and innovation, especially on internal ways of working. Even more, it has led to a culture of deference (Lyons, 2007) in too many local authorities. They wait for guidance from central government and even ask for it rather than working out what is required in their area. Guidance has become another form of control. Such prescription can undermine the morale of local authorities and their confidence in their own capacity. Local authorities should have an assertive role, challenging any culture of deference.
The centralist culture at its worst reflects an elite contempt for local government. The main activities of central government are carried out by departments which have scant concern for local government. The Department for Communities and Local Government is the only department with a general responsibility for the role and working of local authorities. Other departments focus on their own services without regard to their effect on local government’s role and ways of working, or even for the government’s stated policies for local government. Fundamental change has taken place in the central–local relationship as the cumulative effect of the ever-growing series of departmental initiatives focussed on their individual merits. The changing nature of central–local relations has occurred without any adequate overview of how it was changing.
The relationship between central government and local authorities is a constitutional relationship, since it involves the local authority as an elected body interacting with both the elected House of Commons and central government, each with its own basis for accountability. Yet there has been no constitutional protection or even monitoring of the relationship, which has meant changes have happened without any constraint or even awareness of what was happening.
Conclusion to Part I
This part of the paper has identified problems facing local government, preventing it from realising its potential to be the government of localities and weakening the effectiveness of the whole system of government and damaging the health and strength of democracy. Many of the problems derive from the defective central–local relationship, dominated by the centralist culture of central government and its departments.
A new approach for localism is required to enable the full potential of local government to be realised. This approach should be based on recognition of the importance of local government, both in its own right and for its role of community leadership within the system of community governance. Powers are needed by local authorities to enable them to play that role and overcome the fragmentation of community government. There is a need to strengthen the representative base of local government through interactions between councillors and their communities and citizens, in effect strengthening representative democracy by participatory democracy.
Genuine localism will be achieved only if there is fundamental change in central–local relations brought about by change in the workings of central government and recognition of the constitutional position of local government. The next section discusses the coalition government’s avowed policies for localism to establish the extent to which they meet these requirements.
Part II: The present
Present policies considered
Consideration of the present must focus on the government’s policies for local government, which it claims reveal its support for localism. The main expression of those policies is the Localism Act, on which this section concentrates before considering other aspects of the government’s policies.
Two criticisms of the Localism Act 2011
The first main criticism is that the government’s approach fails to recognize that the main barriers to the development of localism lie in central government itself and that localism will not develop its potential unless there is fundamental change in the working of central government. While the Localism Act contains a limited number of proposals for localism, they are set in a centralist framework based on attitudes and practices embedded in the workings of central government. The need for change in central government is not even recognized. Rather, centralism is entrenched by many new, or reaffirmations of existing, powers, regulations and orders proposed for ministers to exercise. Central government advocates localism, but only if it can ensure local authorities do what it wants. The Act is so dominated by this centralist culture that it could well have been called the Centralism Act.
The second main defect of the Localism Act is that the government’s policies involve both decentralization to local authorities and decentralization to local communities and citizens, but it has failed to clarify the relationship between these approaches, with the danger that the latter undermines the former.
Centralism triumphant
The Act is based on the assumption that empowering communities and local government requires central-government prescription in orders and regulations – because it distrusts local government. This centralist approach could aggravate the problems of decentralising to local communities, because central government is remote from the actual issues being faced locally.
The prospect is that local authorities will be constrained by a plethora of central-government controls, by a mountain of regulations and orders, as well as by almost endless pages of guidance, as central government seeks to determine what should be done locally, rather than the local authority, which knows local conditions and is accountable locally.
Decentralisation to entities below local government can be achieved only at local level by the working together of local authorities and community groups, who share an understanding of their areas and communities.
Signs of a change of mind?
Some might think that during the summer of 2011 central government showed it had changed its attitude to local government. Mark Conrad in TheMJ of 18 August 2011 reported Department for Communities and Local Government (CLG) Secretary of State Eric Pickles as praising local authorities for their swift and decisive response to the riots by both their own actions and by mobilising volunteers in the clean-up (Conrad M (2011) Exclusive: Pickles praises councils for riot response, TheMJ, 18 August 2011). Other recent statements from his department seemed to be evidence of a real commitment to localism. In the House of Lords debates on the Localism Bill Baroness Hanham announced the withdrawal of the proposal for shadow directly elected mayors and for mayors becoming chief executives. The first stage of the Resource Review produced a consultation paper (Proposals for Business Rates Retention; CLG, 2011d) offering local government a share of the business rate, which Mr Pickles told the House of Commons was a way of increasing local financial control and restoring councils’ financial autonomy. Another consultation paper (Localising Support for Council Tax in England; CLG, 2011c) offered to localise council tax support, following the demise of the national scheme for council tax benefit. The paper said it would reinforce local control over council tax. Another consultation paper, Implementing Self-Financing for Council Housing (CLG, 2011a), predicted that the new scheme ‘will give council landlords direct control over a very large rental income stream’ (para.3.22). A White Paper on the whole public sector, Open Public Services (Cm 8145; HM Government, 2011), declared at paragraph 7.3 that ‘
Centralism in the Localism Act and in CLG
Although the government claims the Localism Act gives local authorities new freedoms and flexibilities – abolishing regional strategies, dismantling the Standards Board regime, introducing a general power of competence, removing centralist regulations governing how local authorities should promote democracy and respond to petitions from citizens, and ending an array of planning regulations – such relaxations of central control are outweighed by a range of proposed new central controls.
The Localism Act contains many measures that curtail local authorities’ discretion and constrains them from acting as the government of their areas and local communities. It imposes on them a mound of government regulations and rules.
General power of competence
The usual wording of this power for years has been the ‘power of general competence’ – why the change? It was also usually seen as conferring on local authorities the power to do what they liked for their citizens and areas as long as that power had not been expressly forbidden or granted to another body; now it is to give councils the ‘power to do anything that individuals generally may do’ (Part 1, chapter 1, 1 [1]). A key test for assessing its effectiveness will be whether the courts will accept this widening of the powers of local government. Will they see it as about only new powers beyond present statutory provisions, and not about existing statutory provisions? Probably the general power of competence will be limited by existing statutes and regulations.
Alteration of a local authority’s internal political structures is specifically excluded from the general power of competence. One would expect a competent authority to be able to determine its own internal political arrangements (Part 1, chapter 1, 2 [3]).
A glaring weakness in the Act (Part 1, chapter 1, 5 [3]) is that it gives powers to the secretary of state to make orders that prevent local authorities from doing anything specified in the orders – which negates the whole point of the general power of competence. The power should enable local authorities to determine their own purposes, but Eric Pickles told the Commons at second reading that he ‘needs to retain residual powers just in case’ (HC Debates, 17 January 2011, Col. 561). This reserve power is justified by the “just-in-case” argument, similar to the “what if?” question mentioned above – central government needs the power to overrule a local authority just in case it wants to do something the government dislikes.
Some key tests of the general power of competence will be whether local authorities can devise their own ways where central government has its own agenda, for example, to tackle worklessness and provide adult social care, and whether they can abolish the remaining grammar schools or add to them.
Excessive council tax
Through complex procedures and calculations the secretary of state will, in effect, decide whether the rate of council tax proposed by an authority is excessive, thus triggering a referendum. This capping is an affront to localism. It undermines the authority of the local council to determine its own budget (Part 5, chapter 1, 74–76, and Schedule 5, 52ZB & 52ZC).
Community right to challenge – expressions of interest
Local authorities must consider whether an expression of interest by a community group in providing one or more of its services would promote or improve social, economic and environmental well-being. But it can be rejected only on grounds to be specified by the secretary of state by regulation. The spirit of localism is absent when a local authority is allowed to reject an expression of interest by a voluntary or community body only on grounds to be specified by the secretary of state (Part 5, chapter 2, 83 [11]). Localism is again controlled by centralism. Should not localism also mean local authorities have the right to challenge central government and national and local quangos if they think they can run their services better?
Assets of community value
The secretary of state will define community value in the bureaucratic procedures proposed for local authorities when compiling lists of local assets of community value, although what is of community value should be a matter to be determined locally rather than at the centre.
These examples are only a few of the powers initially included by the secretary of state in the Localism Bill. The Local Government Association calculated it contained at least 142 order and regulation-making provisions (or 126, a figure used throughout the second reading debate on the bill for “new powers”) and the Act still has over 100. It is ironic that a Localism Act contains so many means by which central government can prescribe how local authorities’ powers are to be used and the criteria to be applied by them, including the ways they are to respond to community groups.
Imposition of directly elected mayors
While the Act allows all authorities to adopt the committee system previously available only to authorities with a population of under 85,000 (Schedule 2, chapter 1, 9B), at the same time the largest 12 city local authorities will be compelled to hold referendums on elected mayors – in practice 11, since Leicester elected a mayor in May 2011 without any referendum. The CLG’s A plain English guide to the Localism Act on page 9 states that ‘using powers in the Act [Schedule 2, 9HB], the Government intends to trigger a referendum in the largest cities outside London, inviting local people to decide whether they want to have an elected mayor. Referendums are being planned for May 2012’. But before the Localism Act these same local authorities had not chosen to hold a referendum, which they could have done, because there had been no demand from their citizens, only 5 per cent of whom needed to sign a petition to secure a referendum; and in a majority of referendums that took place, the propositions to have a mayor were lost. But central government thinks it knows better than the local authorities concerned and their citizens.
The centralist assumptions of the bill were evident in its proposals enabling central government to appoint by order the leader of an authority as shadow mayor, and to add to the role of the directly elected mayor the role of chief executive. These provisions were dropped during the passage of the bill through the Lords. That these proposals were in the bill initially shows how steeped in centralism is CLG.
Planning and housing
CLG’s responsibilities cover planning and housing. The Localism Act contains provisions that reduce the amount of regulation from the top, putting power into local communities to drive planning from below (Part 6, chapters 1, 3 and 4). A furore has arisen because the secretary of state’s proposed national planning framework embodies a strong presumption in favour of sustainable development, with incentives for local authorities to agree to schemes of development (CLG, 2011e) Draft National Planning Policy Framework, July 2011, pp. 3–5, paras. 13–14). Ostensibly the Act puts localities in charge, but the reality could well be that developers have been handed the opportunity to bypass local objections.
The sham nature of the government’s commitment to localism is revealed in its CLG (2011a) consultation paper Implementing Self-Financing for Council Housing. It lays down that borrowing by local authorities for housing is included in the Public Sector Borrowing Requirement (para. 3.22). Whitehall will set a Council House Borrowing Requirement for each council. There will be no scope for an authority to spend on housing beyond the precise number of pounds set in Whitehall.
Both the planning and housing policies of the government are inconsistent with a decentralising localist approach. They reflect the objectives of the central government, which seeks to encourage development and economic growth, and ensure that local authorities serve the will of central government and not that of their localities.
An unresolved issue
An unresolved issue in the government’s localism policies is that the relationship between localism for local authorities and localism for communities is not clear. This ambiguity arises because of confusion about the meaning of localism. Localism is the opposite of centralism: that is, the concentration of governmental authority in one place. Localism is the decentralisation of governmental authority to local government: that is, to many elected local authorities. But the government abuses localism by extending it beyond local elected institutions. The result is a tension between devolution to local authorities and devolution to communities. (We explore this tension in George Jones and John Stewart, ‘Some unanswered questions’, TheMJ, 15 September 2011, pp. 26–27.)
Unless this relationship is clear and understood at the local level and at the centre, confusion and conflict between communities and local authorities will undermine aspirations for localism, whether to local government or to communities.
In addition to this fatal ambiguity the government’s centralist approach undermines the scope for cooperation between local authorities and communities. A healthy relationship between local authorities and communities can be built effectively only at the local level. Central government should enable that approach, not obstruct it in the unrealistic belief that issues can be resolved by central government through national legislation, regulations and guidance. Central government should recognise how inadequate is its understanding of the reality of community involvement and empowerment. The government’s aspirations for the Big Society will be undermined if it insists on controlling decentralisation to communities. Responsibility for involvement and empowerment of communities should lie unambiguously with local authorities.
CLG’s influence
CLG is widely regarded as more of a friend to local government than other Whitehall departments. Yet in its Localism Act are many centralist features, and from its ministers have streamed a number of statements reflecting an anti-local government attitude. The secretary of state has expressed views inconsistent with a localist agenda. He has interfered in the pre-eminently local issue of how to collect household waste, even introducing a new specific grant for weekly bin-collections. He has declared his line on how local authorities should inform their citizens; the salaries they should award their senior officers; and where councils should make or not make cuts. Eric Pickles described his expressions of annoyance over local authority cuts in support for vulnerable adults as ‘guided localism’ – it is really centralisation. (The CLG select committee’s report Localism [HC 547, page 28, para 52, June 2011] and the government’s response of September 2011 on pages 13–14, paras. 33–35 referred to ‘guided localism’.)
CLG has not successfully exerted much influence on behalf of local government on the other departments, where the spirit of centralisation is even more deeply embedded and permeates their actions towards local government.
CLG is not, compared with the other spending departments, a big hitter. In the Comprehensive Spending Review process of deciding the spending cuts, the cabinet cut CLG more sharply than any other department, which is understandable given that the departments battled to protect and promote their own departmental spending, and cared much less for the spending of bodies like local authorities whose expenditure was outside their responsibility. CLG’s Secretary of State, Eric Pickles, was also keen to demonstrate his political weight by cutting local government’s spending disproportionally – he gained political kudos by settling first.
This bias against local government continues. Recent statistics of total government spending show that local government is cutting its expenditure, while central government departments are pushing spending upwards (Travers, 2011).
CLG has not been able to persuade other ministers in Whitehall to deliver localism consistently across government. The high hopes of Total Place, with place-based community budgets corralling all local public-sector spending, fizzled out into 16 pilots (the government hopes 50 by April 2012), two whole-place community budgets, and a few areas to try out neighbourhood-level community budgets (Compare HM Treasury and Communities and Local Government, Total Place: A Whole Area Approach To Public Services, March 2010 and CLG, Community Budgets Prospectus, October 2011). The pilots were narrowly focussed on problem families, because Whitehall departments have refused to decentralise and pool their budgets under local authority leadership locally. They are unlikely to succeed as long as silo-based departments maintain their anti-local government stance. The recent CLG select committee report on Localism is worried that current efforts will be a ‘damp squib’ (HC 547, page 63, para. 156).
Centralism in Whitehall departments
The Department for Work and Pensions gives little attention to decentralising to local authorities, despite their key role in tackling worklessness in their localities, which should be fused with DWP’s Work Programme.
The Home Office is bypassing local government by promoting directly elected Police and Crime Commissioners, not local authorities. During the August riots it seemed as if policing was a central government responsibility, to be directed from Whitehall by the Home Secretary and Prime Minister operating from the COBRA committee room in the Cabinet Office. Local authorities, however, were to the fore in the clear-up.
The Department for Education is openly seeking to reduce the powers of local authorities over schools with the creation and expansion of free schools and academies, and the Education secretary announced a specific grant of £500 m to fund additional school places, at the same time as the government claimed to be reducing ring-fencing of grants.
While the Department of Health made a major contribution to localism by restoring responsibility for public health to local government, it is placing the commissioning of health care not with local government but with consortia of GPs, because it wanted to decentralise to professionals, not elected councillors. Its grants to local authorities for their public health responsibilities are to be ring-fenced by yet another specific grant, inconsistent with the government’s rhetoric about removing specific grants.
The Open Public Services White Paper, covering the whole public sector, called for centralised procurement and contracting, and the requirement for at least three bidders – hardly consistent with localism. The paper also shows that an array of regulators will ensure that ‘individual service providers are licensed or registered by the relevant regulator for each sector’ (para. 3.6)”. There will be numerous minimum standards, or entitlements: in paragraph 3.22 they are called ‘stable’ but there will be special premiums to go above the minimum. For schools, standards are called ‘floors’ which ‘will rise over time’ (para. 3.23). The government will intervene if schools fail to meet these minimum standards or make adequate improvements (‘coasting’) (para. 3.24). Central dominance is assured. It will be disseminated by ‘national accreditation bodies for public services’, which will spread ‘what works’ (para. 5.5).
Even the Prime Minister has come out as an enemy of localism. On 31 October 2011 he criticised diversity in local authority practices towards adoption, and launched a national adoption and fostering campaign, with league tables to expose allegedly bad performance and with tough action against failing local authorities (http://www.number10.gov.uk/news/pm-launches-adopting-and-fostering-campaign/).. On 15 December 2011 he announced the funding by a specific grant of a national network of trouble shooters to tackle troubled families (http://www.number10.gov.uk/news/troubled-families-speech/)..
His centralist assumptions had been revealed in May 2011, when, explaining why the government was going to appeal against the court’s judgment in the case of Sharon Shoesmith’s dismissal by Haringey Council, he said, ‘It does seem to me important the Government are able to manage their organisations and provide accountability when things go wrong, which is why this appeal is important’ (Bennett, 2011). But local authorities are not central government’s organisations – they are set up by parliament with their own electoral accountability to their own voters.
The Prime Minister, ministers and civil servants see local authorities as the local arm of central government, not as the governmental arm of local communities – the centralist assumption that underlies the approach of central government to local authorities. Yet localism will develop only if centralism in the culture and processes of central government is effectively challenged an issue ignored in the government’s localism policies.
The gap in the Act: financing local government
There is a huge gap in the Act. A Localism Act that lived up to its name would have dealt with the financing of local government, and not left this key topic to another later inquiry, the Resource Review, that was initially confined to business taxation and later to community budgets.
Business rates retention [Local Government Resource Review: Proposals For Business Rates Retention, a Plain English Guide; CLG, 2011b]
Far from being a means of increasing local financial control and restoring financial autonomy, the main objective of the ‘repatriation’ of business rates is to create a substantial incentive for local authorities to drive central government’s goal of economic growth. This partial retention of business rates is not really a way of ‘putting power back in the hands of local councils and communities’, since they are not to be able to determine the rate of the tax. Rate-setting powers will remain under the control of central government. Business rates continue to be an assigned revenue, essentially a grant from central government, not a local tax.
The government’s proposal is to give special benefits to local authorities adopting ‘renewable energy projects’ – which is really a specific grant, as is the New Homes Bonus of 2011 – ‘an incentive on local authorities to deliver housing growth in their area’. Specific grants are inconsistent with the government’s localisation rhetoric.
Localising support for council tax
Another specific grant appears in the government’s proposals for localising council tax support. Paragraph 3.2 of its CLG (2011c) consultation paper promises ‘a new Government grant to local authorities who will be able to take this into account when setting the local scheme’, for instance ‘to fund support for both pensioner and working age claimants’ (para. 5.4). The Government calls it at paragraph 11.5 ‘an unringfenced special grant’. It is a specific grant, to serve the purposes of central government.
Open public services
The Open Public Services White Paper states that ‘the money to fund the services to which they are entitled will flow to providers in response to the choices that people make’ (para. 2.6). This funding will flow from central government. Local authorities will not be able increase their range of taxes to provide the finance for the services they and their citizens want. The government believes ‘there is a particular benefit to government playing a stronger role in setting limits on how public funding should be used’ (para.3.10).
Financing Local Government
The government seems to think that democratic accountability for local government can be achieved by transparency and scrutiny, both focussed on the spending of money. It neglects the critical issue of where the financing of that public spending comes from. Most of local government’s resources will still come from central government. There will be no decentralisation of taxation to local authorities. They will remain dependent on Whitehall, whose departments show no desire to relax control over their programmes that impinge on local areas. In the aftermath of the riots the usual ritual began of local authorities alleging that central government had not allocated them enough funding for their work. The focus was on the centre not the locality handling its affairs.
There will be no genuine localism until the government follows the approach of the Layfield Committee (1976) – the Business Rates Retention consultation paper called its chairman ‘Lord’ not ‘Sir’ (para. 1.4). The Layfield message was the need to reduce local government’s dependence on high levels of central grant and for an extension of local government’s own tax base, bearing on local voters. Without such financial decentralisation, centralism will prevail. Because local authorities are so massively dependent for their resources on central government, they become supplicants for funding from central government rather than engaging in a dialogue with their citizens about local priorities. A real Localism Act would establish the principle of genuine financial accountability, with grant reduced to that required for equalisation, and containing provision for additional sources of local taxation, so that local authorities would draw the bulk of their resources from their own voters through taxes whose rates they determine.
The present priority: dealing with the cuts
The most immediate and pressing problem facing local authorities is having to make unprecedented cuts in their expenditure. Councillors and officers taking the key decisions in local authorities should follow two precepts.
First, they should take the initiative, making their own plans, and not wait to be told what to do by central government. Now is the time for local authorities to show they are not merely the delivery arm of central government but the government of their local communities. It is not enough to protest and organise protests: that is wholly negative. There is a need to be positive. Local authorities should not miss this critical window of opportunity.
Second, they should involve their citizens, community associations, and voluntary bodies in considering the consequences of cuts, where they should be made, where the pain should fall, and how their effects can be mitigated. When resources were more plentiful, many local authorities used the methods of participatory budgeting to allocate extra pots of money in projects worked out in close discussions with people and associations in parts of their localities (CLG, Communities in the Driving Seat: A Study of Participatory Budgeting in England – Final Report, August 2011). Now in the era of restraint and cutbacks the same methods should be used, to assist councillors in making their hard decisions. Local people know better than can central government where cuts should be made in their local areas, and they are better placed to recognise where there is real hardship and how it can be relieved. That is the localist approach.
Part III: the future
We do not claim to forecast the future of local government. We fear the future will continue past experience and that present problems will remain. Government rhetoric will continue, but the reality will be the continuance and even the intensification of centralism, ever reducing the capacity for local choice, local initiative and local innovation. However this future need not happen. Policies could and should enable local authorities to realise their full potential in governing their local areas and communities. That should be the priority for the future
The longer-term priority: changing the centralist culture
The core reason for the failure of genuine localism lies in central not local government. Despite the government’s rhetoric of localism, centralism is deeply embedded in the workings of departments and of central government generally. The centre knows no other way of relating to local government than through command and control. Policies for localism must start from change in central government itself.
The behaviour of ministers and civil servants towards local government needs to change. Urging them to do so will not be enough. Change in the institutions and processes of public administration at the national level are essential. A new pattern of central–local government relations is required through legislation prescribing a semi-constitutional statutory code to govern central–local relations and giving expression to the principles of localism. Whitehall departments would recognize a statutory code more readily than words that carry no legal weight.
The code should build on the words of the European Charter of Local Self-Government, but a code will not be enough to secure change. Procedures for monitoring and enforcement are necessary. Within central government there should be a unit in the very centre of government – probably in the Cabinet Office or a department responsible for constitutional affairs – to monitor the operation of these principles as set out in the statutory code, and to ensure its application in a consistent way by all departments.
Just as important would be a joint committee of the two Houses of Parliament with responsibility for monitoring central–local government relations in accordance with the principles of the code, reporting to parliament with both an annual review and on specific proposals.
Similar recommendations were put forward by the CLG Select Committee in its 2009 report The Balance of Power: Central and Local Government [HC 33-i] but were neglected by the then-government. The recent CLG Select Committee Report of 2011 Localism [HC 547] supported this idea. The need for these proposals gains urgency from the need to ensure that the government’s commitment to localism informs the culture and practice of central government throughout all departments. Without such changes localism will remain a topic more spoken about than acted on. The weakness of the government’s approach to localism is that it has not recognised the need for change in the centralism entrenched in the workings of central government itself.
Helping the government implement its localist agenda
To achieve the government’s aims for decentralisation to sub-local government units, the government should turn to local government. The Localism Act should have placed the main responsibility, indeed a duty, for involving, empowering and working with communities on local authorities. Local authorities already exist as the government of their localities, with clear structures and powers, arrangements for handling public finances, and lines of democratic accountability to their voters. With a responsibility for shaping the development of their local areas, local authorities are well-placed to promote the empowerment of local community groups. They should be allowed to innovate in their areas. But that approach is not in the Localism Act, where central government dominates.
Conclusion
The need for a genuine Localism Act that empowers local government
Central government should recognize it does not know what is best at local level because it does not understand local circumstances as well as those at local level. Only on that basis can a real Localism Act be built. The present Act might well be called the Centralism Act because it contains so many examples of ministerial powers to issue orders and regulations. They should be removed. If the Act is to live up to its title, it should have been amended to express trust in elected councils to shape the development of their localities, to provide community leadership, to be primarily responsible to their local citizens and to promote community empowerment. The Act should have contained a statutory code governing the relationship between central and local government, and local authorities taxation resources, so that local authorities could cover most of their expenditure from their own voters with taxes whose rates they determine.
Further work for local authorities
The public culture, as represented by the national media, and the inhabitants of the village of Whitehall need to change. A big question for local authorities is how they can demonstrate to their local publics the dangers of centralisation and uniform national standards in all services everywhere.
Local authorities should overcome the culture of deference. As a golden rule they should abandon any tendency to ask for central government guidance. If you ask for guidance, you will get it and may not like it. It is for a local authority to determine its own guidance. It is or should be local government. The case for local government is best made by a local authority that builds initiatives and innovates through close contact and interactions with its citizens and communities in ways that are impossible for central government.