MEMORANDA SUBMITTED TO THE ENVIRONMENT
SUB-COMMITTEE OF THE ENVIRONMENT, TRANSPORT AND REGIONAL AFFAIRS
COMMITTEE
Memorandum by Mr M R Jackson (AC 01)
MEETING THE NEED TO INVESTIGATE PUBLIC CONCERNS
ABOUT LOCAL AUTHORITY ACTIONS—AN EXTENDED ROLE FOR THE AUDIT
COMMISSION?
ABSTRACT
The memorandum outlines the author's understanding
of present arrangements by which tax-payers may raise concerns
about local authority actions, particular those that affect the
community at large. It identifies perceived weaknesses in present
arrangements for investigating such general issues. It suggests
a wider role that the Audit Commission might fulfil in addressing
these concerns—beyond that presently available from the
District Audit Service or available by contacting government departments.
CONTENTS
1. Experience of the author
2. Facilities for identifying local authority
management actions (excluding parish councils)
3. Opportunities for obtaining investigation
of unresolved concerns
4. The financial difficulties of Local Authorities,
and the implications for their general culture and public perception
5. Requirement of Local Authorities to respond
to letters of concern
6. Problems with and uncertainties about
the Annual Audit and District Auditor's responsibilities
7. Problems when referring matters to government
departments.
8. Extending the role of the Audit Commission
1. EXPERIENCE
OF THE
AUTHOR
I am a retired university lecturer in business
information systems and basic accounting. For the last 15 years
(including before retirement) I have taken a considerable interest
in local authority services, particularly those delivered by district
councils and the planning and highway services of county councils.
2. FACILITIES
FOR IDENTIFYING
LOCAL AUTHORITY
MANAGEMENT ACTIONS
(EXCLUDING PARISH
COUNCILS)
A council-tax payer and/or resident may, as
I understand, become aware of the actions of a local authority:
(a) through personal transactions with the
authority, eg as a tenant or as a planning applicant;
(b) by registering concerns about a particular
state of the environment—pavement fouling, lack of footway,
obstructed drain, disregarded law or by-law, etc—and noting
the response;
(c) by being notified of some alleged offence
against a law or by-law administered by the authority, eg obstruction
of the pavement by overhanging foliage, etc;
(d) by responding to any advertisement of
particular planning applications, or to any consultation document
or display relating to structure planning, local planning or intended
major development by the local authority, and becoming involved
in comments and response;
(e) by reading press reports of matters discussed
in council committees, by attending these meetings in person,
or by reading the agendas and minutes of such meetings, and possibly
seeking further information on issues identified;
(f) by reading information about performance
supplied with council-tax demands, published in the press or in
some local authority news-sheet;
(g) by taking advantage of the opportunity
to inspect the annual accounts at the time of the Annual Audit.
3. OPPORTUNITIES
FOR OBTAINING
INVESTIGATION OF
UNRESOLVED CONCERNS
All concerns
Where a concern about a council or officer action
cannot be resolved through correspondence or discussions with
the authority, I understand that a concerned person may:
(a) for certain matters refer it to a tribunal
or similar body, eg a rent tribunal;
(b) for some highway matters object at a
magistrates hearing;
(c) refer the matter to the ombudsman;
(d) refer the matter to the district auditor,
at the time of the Annual Audit or at another time;
(e) refer the matter to a minister/government
department;
(f) seek a judicial review.
Options (a) and (b), tribunals and magistrates,
only apply to a very limited type of concern. The ombudsman, (c)
is restricted, or gives the impression that they are restricted
to investigating cases where a particular loss or injustice has
been suffered by a single person, or small group of persons as
a result of an improper officer action or ultra vires council
decision. Judicial review, (f), is impractical for most individuals.
Matters affecting the public at large
Where there is a belief on matters that affect
the public at large, that a local authority is:
(i) not acting in accordance with the letter
or intention of a statute or statutory instrument;
(ii) grossly ignoring the guidance of a government
department;
(iii) making accounting statements or publishing
performance figures not accurately reflecting: physical application
of resources; actual financial transactions undertaken; liabilities
incurred; a realistic value of assets; etc;
then, supplying information on that belief to the
District Auditor or communicating it to a government department
are the only practical options apparently available.
4. THE FINANCIAL
DIFFICULTIES OF
LOCAL AUTHORITIES,
AND THE
IMPLICATIONS FOR
THEIR GENERAL
CULTURE AND
PUBLIC PERCEPTION
At present, local authorities do not have the
resources to meet all the statutory requirements placed upon them.
For example, there is the requirement under Highway Acts to provide
a footway on every highway where the authority perceives a need
for reasons of public safety. There are many lengths of road where
every councillor would perceive a need, but no action is taken
to provide the footway because no funds are available.
This impracticality of complying with statutes
for financial reasons may develop a general culture amongst both
officers and members of the authority being a law unto itself.
Statutes, or statutory instruments, which present no financial
problems to an authority, may also be selectively applied. Officers
may become skilful at deflecting concerns about such omissions.
Concerned members of the public may give up raising concerns.
Phrases starting "all politicians are . . ." become
common in social discussions on transport and planning matters.
5. REQUIREMENT
OF LOCAL
AUTHORITIES TO
RESPOND TO
LETTERS OF
CONCERN
There is apparently no requirement for a local
authority to respond to any letter from a tax-payer simply inquiring
about general facts about the authority's assets and operations,
other than facts available in public documents. A chief executive
may instruct staff not to answer queries from particular taxpayers,
but to direct them to himself for any, or no, action. Only official
complaints must be responded to. I understand that a reply to
a complaint which is considered unsatisfactory cannot be taken
further unless it falls within one of the ombudsman's allowable
categories for investigation, or it is referred to the District
Auditor or government department.
6. PROBLEMS WITH
AND UNCERTAINTIES
ABOUT THE
ANNUAL AUDIT
AND DISTRICT
AUDITORS RESPONSIBILITIES
Complexity of Accounts
Local Authority accounts have a complex structure.
The main cause of this is the allocation of overheads such as
administrative, financial and personnel services, committee support,
provision for elections, etc down to committees or departments.
Further departmental overheads may then be added before the total
for a physically identifiable, deliverable service is reached.
Indeed, some deliverables have no direct cost, only an accumulation
of overheads. The rationale for these overhead allocations is
not made explicit. Even those who can read numbers like a book
find extracting meaningful figures time consuming.
Capital projects
Access to a particular year's accounts is only
for a few weeks in (usually) the following year. Expenditure on
a capital project may spread over several years. Appreciating
the total cost of capital projects is made more difficult for
this reason.
Limited access
It is clear that there must be a limited time
in which the District Auditor can receive comments on items for
further investigation before he reports on the accounts. It is
not clear why this could not be somewhat longer, say two months.
There seems no reason why (although the public may no longer have
their complaints and comments investigated in the context of the
District Auditor's Report) the full accounts, as available at
audit, should not remain readily available for inspection at any
time in, say, the next five years.
Requirement for a response by the District Auditor
Whilst the District Auditor must note all comments,
queries and complaints raised by the public at the time specified
for Annual Audit, it is not clear to what extent he is required
to investigate them, and how formally he must inform the person
raising the matter of the outcome of any investigation.
Similarly, the required response of the District
Auditor to complaints raised at other times is not clear.
Freedom from suspicion of complicity
It is no secret that there are concerns that
the minds of officers and members of local authorities making
decisions may, at times, be affected by loyalty to members of
brotherhoods such as the freemasons. It is not clear that such
loyalty could not occur in the operation of District Auditor's
offices.
7. PROBLEMS WHEN
REFERRING MATTERS
TO GOVERNMENT
DEPARTMENTS
Government departments, particularly the DETR,
support, enable and encourage local authorities to take actions
which are in line with the directions of change favoured by ministers
and their advisers. This influence includes:
— statutes or statutory instruments;
— plan approval, eg structure and local
plans;
— plan approval with funding, eg local
transport plans;
— grants for specific types of project;
or
— policy guidance documents.
Since policy guidance is a very significant
part of the influence, the relationship between government department
and local authority must be that of the wise friend, rather than
the police officer. This has implications for the individual concerned
about the correctness of a local authority action. Where an individual
raises a concern, the government department is usually willing
to clarify the law, or send copies of the relevant guidance document.
However, it appears usually to be unwilling to commit itself to
saying that what the local authority did was wrong. It is the
law maker not the court.
8. EXTENDING
THE ROLE
OF THE
AUDIT COMMISSION
For the reasons discussed above, the District
Auditor is apparently, at present, the only person who might look
into some general action by a local authority affecting the community
at large and say it was wrong. However, the impression obtained
is that the District Audit operates under tight guidelines, and
initiating such an investigation is not easy. Furthermore, the
resources of a District Audit Office are modest.
Thus, the issue is, whether in pursuance of
its objective of obtaining best value from public funds, the Audit
Commission should increase its role in investigating concerns
about procedural failings or gross misjudgements by local authorities
which affect the public at large, and thus fall outside the role
of the ombudsman.
A modest office could contain officers aware
of statutes, statutory instruments, guidance notes etc, affecting
local authority action. The team would be able to appraise quickly
the issues brought to them, transferring to the ombudsman items
within the ombudsman remit.
With the appropriate statutory backing, such
an office could obtain facts quickly from affected local authorities
and discuss apparent anomalies in procedures being followed. Where
some procedural failing is identified, it might refer the matter
to the appropriate government department to advise the authority.
In exceptional cases, it might put the matter in the hands of
the Crown Prosecution Service. It would publish an annual report
covering the issues investigated and the action taken.
As with the ombudsman, it would only investigate
matters after they had been first taken up with an authority in
a prescribed way, and the authority had responded within the prescribed
period. The existence of this "appeal authority" would
be likely to increase the action taken by local authorities to
right matters themselves. The quality of management procedures
within authorities would be improved and better value for money
would be delivered.
Involvement with local authorities in this way
would be useful in identifying general issues for further consideration
by government departments. Such issues would include areas where
legislation might be modified, either to clarify a point, or because
it is impractical, given the resources available to local authorities.
Having a procedure such as this in place, would
help restore public confidence in local authorities and eliminate
some of the cynicism and apathy that has developed in recent years.
December 1999
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