Memorandum
from Gateshead Council (BOP 12)
Further devolution
Does local government need greater autonomy from central government? If
so, in what ways?
1. In our view, the key issue for local government is not the
granting of new powers, but the need for a period of stability for local
government, to allow the sector to embrace its changing role as a community
leader and place shaper. We would therefore support, in general, the principle
of greater autonomy for local government.
2. Local government now has significant powers at its disposal. The general
power of well being contained in the Local Government Act
2000, has underpinned (if used ambitiously) a community leadership role, which
Gateshead Council embraces. The key
challenge for local authorities is to ensure that these powers are used for
specific well-defined purposes, which are based on sound evidence and which
have widespread local support. We would consider powers of 'general competence'
for local government to be too wide.
3. Local authorities have demonstrated their ability to change and
evolve over time, as well as their ability both to achieve significant
efficiencies, and to improve the quality of their services, as evidenced by the
broad upward trend in CPA scores nationally.
4. However, there have been two significant White Papers and
associated legislation on the role and function of local government in 2 years
- the Local Government White Paper 2006 and the Communities in Control White
Paper of 2008. The latter, in particular, is now being followed with six
additional consultations and guidance notes in advance of the publication of
legislation.
5. We would also suggest that the recent Communities in Control White
Paper illustrates a tendency for central government to prescribe how local
authorities should operate in far too much detail. Central government should
set out a national framework, and then empower local authorities to deliver
this effectively at a local level without further prescription.
6. Faced with this degree of guidance and prescription, local
authorities are being asked to continually change the way in which they
operate, with new proposals emerging before existing proposals have been fully
explored - a constantly shifting policy context does not enable effective local
working. Not only does it create additional activity in interpreting and
responding to guidance and consultation documents, but also it serves to stifle
innovation at a local level, by removing incentives for local government to
develop genuinely local solutions and interpretations that best meet local
needs.
7. We would suggest therefore that central government should, as a
matter of course, consult the Local Government Association under the terms of
the concordat on whether new guidance is needed, and whether this should simply
be issued via the LGA / IDEA as best practice wherever possible.
Do local government's role and influence need to be strengthened in
relation to other public services, such as policing and health?
8. In the
existing statutory framework, current powers are sufficient for local
authorities to engage productively with other public services. The duty to
cooperate provides a mechanism for working with a wide range of other public
services, and we have taken opportunities locally to ensure that they are also
engaged in our scrutiny functions throughout the whole process.
Policing
9. I would
like to make some detailed comments on the relationship between local
government and policing, which are influenced by some of the proposals
contained in the recent Policing Green paper.
10. I am
concerned about proposals in the recent Green Paper that I feel have the
potential to undermine the role of the local authority in respect of policing.
I have written directly to the Home Secretary on this issue, and want to take
the opportunity to address some of these issues in this response.
11. Whilst I
welcome the objective in the Policing Green Paper to increase service
accountability at a local and area command level, in my opinion we already have
this with a Police Authority made up of:
· Nine democratically elected councillors who are
answerable to the community at large, as well as their own local area; and
· Eight independent members, including three
magistrates, who bring a wealth of different experience to the authority.
12. The
Authority has a responsibility to ensure the provision of an efficient and
effective police service across the whole of Northumbria, and this diverse
group of people allows the Police Authority to operate in an independent, fair
and balanced way.
13. As a
'Responsible Authority', a police authority - along with the local police
force, usually the area commander - already works in partnership with local
councils and other organisations to reduce crime and disorder. This work, which is often through the Crime
and Disorder Reduction Partnerships, focuses on local and neighbourhood
issues. Following the implementation of
the recent review of the partnership provisions of the Crime and Disorder Act
1998, members also represent the Authority at a strategic level on these
partnerships. This representation and
involvement ensures the Authority is aware of local neighbourhood issues across
the whole force area.
14. With this
in mind, I am concerned that if members of a police authority have a mandate to
address local crime and disorder issues, then focus on this strategic overview
could suffer.
15. Taking
these points into consideration, I believe the Government can make police
authorities clearly accountable to the electorate by linking the democratic
legitimacy of the elected members on the authority to the chair: i.e. by
requiring that police authorities are chaired by an elected local authority
member.
16. I would
welcome the opportunity to attend a meeting of the Select Committee to expand
on this issue further.
Health
17. In respect
of joint working with health partners, my view is that there are sufficient
powers to enable local authorities to work in partnership with health
agencies. A proactive approach to
partnership arrangements, such as shared budgets, and a strategic and planned
use of each other's resources, can bring real health benefits. In Gateshead,
the appointment of a Director of Public Health is shared between the Council
and the Primary Care Trust.
18. The power
of Overview and Scrutiny to scrutinise health arrangements is seen as extremely
positive.
19. However, I
am concerned about the absence of any real degree of accountability in the
health sector. The recent Communities in Control White Paper says little about
the intention to increase the democratic accountability of Strategic Health
Authorities or Primary Care Trusts. I think there is a debate to be had about
whether local government should be given a greater opportunity to influence
health bodies, either through greater representation on Boards, or through a
more formal role as a commissioner of services.
Financial Autonomy
To
what extent do the current arrangements for local government funding act as a
barrier to local authorities fulfilling their 'place-shaping' role? In
particular:
-
Does local government need greater financial freedom? If so, in what ways?
-
Should local government be able to raise a greater proportion of its
expenditure locally?
-
What effect does the capping of council tax rises have on local accountability?
20. Capping
of council tax increases conflicts with the role of local authorities as being
accountable for local decision-making.
National spending on local government will increase by only 1.5%, 0.8%
and 0.7% above inflation over the next three years. This inadequate level of resources and
the constraints on council tax is likely to result in cuts in services.
Council Tax
21. Although the Government has previously
announced its intention to undertake a revaluation for council tax purposes,
the lack of this clearly continues to penalise council taxpayers in deprived
urban authorities outside of London and the South East, such as Gateshead, who
are predominantly in lower valued properties.
The lack of action on the significant relative movements in house prices
since 1991 means that Band D council taxes in Gateshead are significantly
greater than they should be.
22. The merits of council tax are its
predictability and ease of collection but it needs reform as follows:
· Increase
the number of bands - band A should be split into two bands and at least one
further band added at the top end of the bands to better reflect differences in
property values, wealth and income.
Reforming council tax by adding new bands will reduce bills for those in
the lowest value properties, paid for by increased bills for those in higher
value properties - there should be no increase in average council tax bills as
a result of this;
· Revaluation
- the significant relative movements of house prices since 1991 means that Band
D council taxes in Gateshead are significantly greater than they should be. Government
should conduct a revaluation of all domestic properties for council tax,
ensuring transitional arrangements to ensure households do not face steep
increases from one year to the next.
Subsequent revaluations should take place regularly and automatically at
intervals of no more than five years;
· Revise
tax benefit system by increasing the savings limit and changing from a means
tested benefit to an entitlement benefit in order to improve take-up.
Re-localisation of
Business Rates
23. This is capable of significantly shifting
the balance of funding. If the business
rates were returned to local control, it would bring the balance of funding
back in line with a 50:50 split. This
would help in restoring the balance of funding, reducing the effects of gearing
and taking some pressures off local authorities.
24. Currently, rates are collected into a
national pool and are re-distributed to local authorities according to
population figures. Increases in rates are
linked to the retail price index (RPI); therefore, the contribution of business
to local authority expenditure has decreased from 29% in 1990/91 to 19% in
2004/05. As local government expenditure
has increased since 1990 by significantly more than inflation, this has
increased the pressure on council tax to fund local authority expenditure.
25. Removing the link with RPI is crucial in
halting the declining business contribution to council expenditure. It is also an administratively
straightforward way of increasing the local government tax base.
Existing powers
To what extent are local
government services a product of national or local decision-making?
26. Current
service provision is necessarily a product of a combination of central and
local priorities. The new LAA framework gives a greater sense of shared
responsibility, but negotiations are still subject to agreement from central
government, and the scope for purely local priorities to be addressed remains
low. This is further evidenced by the financial system, which effectively
reduces the ability of local authorities to deliver key priorities and to
allocate appropriate resources through the perverse 'gearing' effect.
Does local government
make adequate use of its existing powers, such as its well-being, charging and
trading powers? What scope is there for greater use of those powers?
27. Evidence seems to suggest that well-being, charging and trading
powers are being used to varying degrees.
Gateshead has utilised the well-being powers in an aspirational and
innovative way in a number of initiatives, which support its 'community
leadership' role.
28. On trading, the Local Government Act 2003 provides that the trading
power can only be exercised through a company within the meaning of Part V of
the Local Government and Housing Act 1989 (i.e. Companies Ltd by shares or
guarantee or a Provident Society). This
leads to two issues:
· We
would question why trading needs to be exercised through a company at all. Authorities already provide public services
effectively in competition to the private sector. There would be appropriate safeguards within
the procurement, anti-competition and state-aid legislation to 'protect' the
private sector from an authority's ability to trade within that sector.
· Specifically,
it would appear that the legislation does not allow an authority to trade
through a Limited Liability Partnership.
This is a corporate vehicle, provided for by legislation, which may in
some circumstances be the most appropriate vehicle. The legislation creating LLPs [i.e. the
Limited Liability Partnerships Act 2000] came into force before the LGA 2003 so
could have been included within its definition of bodies able to trade.
Improving the relationship between central and
local government
What difference has the
central-local concordat made to central-local relations?
29. The concordat provides a useful mechanism to manage the relationship
between central and local, but the perception remains that it has not provided
the radical shift in the balance of power that it was designed to.
Should an independent
commission be established to oversee the financial settlement for local
government?
30. We would support the idea of an Independent Commission. This would
be a potential way of identifying the full range of options available. However,
we would wish to seek reassurance that the Government would be willing to
consider the recommendations from such a Commission.
The constitutional position
Given the UK's
constitutional settlement, what protections should be placed in law to ensure
local government's ability to fulfil its responsibility as a balance on the
powers of central government?
31. Gateshead Council supports the system of local representative
democracy first comprehensively embedded in law by the Local Government Act
1972. It further supports an ongoing
legislative programme that deals not just with the provision of public services
but 'enables' and encourages a community leadership role for authorities.
32. Gateshead endorses the LGA's call for councils
to be at the heart of constitutional reform. In particular it is considered
appropriate to:
· Reform the local
government finance system, including the abolition of the capping.
· Put a statutory duty on
government to devolve decision making from the centre to the lowest appropriate
level.
· Make the audit
commission directly accountable to Parliament.
What role should Parliament have in the protection
of local government's position within the UK's constitutional settlement?
33. No specific comments
September2008
