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Memorandum
from
Summary
· The issues covered by the Inquiry have been canvassed on a number of occasions, most notably in the Lyons Inquiry. This response contains similar messages to those in our submission to the Lyons Inquiry. · We believe that there needs to be an open strategic debate across government about the most appropriate policy and delivery mechanisms for services. Where local government is responsible this should be supported with the necessary powers and freedoms to act in the best interests of the locality. · The European Charter for Local Self Government needs to be explored further by the Inquiry. The principles it contains are critical success factors for any reform. · As a fundamental principle of the local democratic mandate, we believe central government should no longer be able to limit and cap Council Tax increases by local authorities. · We believe that a revised and refreshed Local Area Agreement (LAA) model would have the potential to act as a bespoke negotiation mechanism through which there can be a balancing act and a focusing of key national and local priorities which would deliver a form of 'double devolution dividend' - improved and responsive local services and value-for-money. The current LAA model does not facilitate this adequately.
1.0 The Constitutional Position
1.1 The Inquiry has a major opportunity to 'mainstream' the European Charter for Local Self Government and use it as a driver of change and a means to clarify and define the way forward in central/local relations. The Charter, ratified by the Government on 24 April 1998, enshrines the concept of subsidiarity and should be at the heart of any debate about the nature of central/local government relationships and the promotion of a new local democracy. In our view, the Charter has not been an adequate driver of recent White Papers and other guidance and legislation. Articles 4 and 9 (see below) in particular include a number of core principles by which to measure the current central/local relationship and should be considered as part of any reform. These factors include:
Article 4 - Scope of local self-government · Local authorities shall, within the limits of the law, have full discretion to exercise their initiative with regard to any matter which is not excluded from their competence nor assigned to any other authority. · Public responsibilities shall generally be exercised, in preference, by those authorities which are closest to the citizen. Allocation of responsibility to another authority should weigh up the extent and nature of the task and requirements of efficiency and economy. · Powers given to local authorities shall normally be full and exclusive. They may not be undermined or limited by another, central or regional, authority except as provided for by the law. · Where powers are delegated to them by a central or regional authority, local authorities shall, insofar as possible, be allowed discretion in adapting their exercise to local conditions.
2.0 Further Devolution/Existing Powers
2.1 Central and local government, in reality,
have a shared set of objectives that relate to our local vision of creating a
"successful, prosperous and healthy community which offers a good quality of
life for all". Both tiers of government
must work together effectively to deliver this shared
2.2 In our view, the debate on form and function of local government should have at its heart two core considerations if local democracy really is to be renewed and revitalised through this process:
- Which local public services is it appropriate and desirable to have under direct local democratic control?
- How can other local public services, where direct local democratic control is not deemed appropriate/necessary, be held to local democratic account?
2.3 We see the power of well-being as a key potential determinant of future functions that could be placed under more direct local democratic control. Of course, the transfer of responsibility for services alone is not enough. Whatever form local government ultimately takes, its success can only be maximised through clear powers, access to adequate resources, and freedom to act in the best interests of its community.
2.4 The importance of sub-regional working also needs more recognition as a means to deliver priorities and enable greater flexibility in policy approaches. Indeed, the Sub-National Review of Economic Development and Regeneration highlights the importance of decisions being taken at the right geographic level. It would seem evident that the right level to deliver the majority of public services with and for communities, people and business is at the local level. Depending on the nature of communities and the services to be provided, local may refer to 'district' level, but in respect of issues such as economic development and regeneration is most likely to refer to the local strategic partnerships led by upper tier authorities, or groups of local authorities. Some issues will inevitably require a wider geographic consideration and response. Often these will be sub-regional rather than regional.
2.5 In looking to the future, we endorse much of the Government's comments in its recent publication "Excellence and Fairness - Achieving World Class Public Services". In particular, Government identifies its role as needing to provide strategic leadership by 'setting a clear vision, a stable framework, adequate resources and effective incentives'. It then goes on to say that it must reject 'the temptation for government to micro-manage from the centre'. We endorse this assessment as such an approach is key to both a productive central/local relationship and to enable effective local delivery. However, there remains a gap between theory and practice as there is some way to go before Government Departments 'let go' fully. There can still be a tendency to over-prescribe how things should be done in a locality. Indeed, some of the Government's more recent proposed policy approaches and guidance could be seen as by-passing rather than bolstering local democratic arrangements.
3.0 Financial Autonomy
3.1 In our view, Article 9 of the European Charter for Local Self Government includes a number of core principles that act as critical success factors in terms of any proposals for financial reform:
Article 9 - Financial resources of local authorities · Local authorities shall be entitled, within national economic policy, to adequate financial resources of their own, of which they may dispose freely within the framework of their powers. · Local authorities' financial resources shall be commensurate with the responsibilities provided for by the constitution and the law. · Part at least of the financial resources of local authorities shall derive from local taxes and charges of which, within the limits of statute, they have the power to determine the rate. · As far as possible, grants to local authorities shall not be earmarked for the financing of specific projects. The provision of grants shall not remove the basic freedom of local authorities to exercise policy discretion within their own jurisdiction. 3.2 One of the key 'decisions' that local government has is around the raising of local revenue through Council Tax. However, the Government has adopted the annual approach of effectively putting a ceiling in place to limit any rise (and, as a consequence, limited the nature of any engagement), with the threat of capping powers to enforce this limit.
3.3 It is also a fact that with constrained, 'damped' or capped budgets, the things that matter most to people in localities (liveability issues) - and which are the issues that they are most likely to engage around - are the things that are most 'squeezed'. This is likely to lead to community disengagement and impact on local accountability if decisions are about marginal or cosmetic issues and councils are unable to make a big, fundamental difference on key local priorities.
4.0 Improving the Relationship between Central and Local Government
4.1 The current system still tends towards centralist management and one-size-fits-all with the consequent potential to stifle innovation and flexibility. The proposed new Comprehensive Area Assessment may also unintentionally reinforce this. While on-going assessment, rather than 'event-based' inspection/ assessment, may have some advantages, there is a danger that this could lead to authorities/LSPs becoming more risk-adverse and less innovative in implementing solutions. There needs to be a medium-term perspective to assessment otherwise the process can become too short-sighted and 'knee-jerk'. The Local Area Agreement/National Indicator Set present major performance challenges on issues where tangible - and sustainable-improvement will only be realised in a medium to long-term context. 4.2 The new LAA had the potential to rise above this but, in our view, has failed to do so. Our Government Office was clearly under pressure from Government Departments to ensure the inclusion of some indicators despite the premise that the LAA should be about a locality deciding what its priorities are rather than this being done nationally.
4.2 We believe, however, that a revised and refreshed Local Area Agreement model still has the potential to act as a bespoke negotiation mechanism through which there can be a balancing act and a focusing of key national and local priorities. This should be underpinned by a negotiated level of Government resources and appropriate policy and delivery mechanisms based on the principles of true partnership and subsidiarity. It would also deliver a form of 'double devolution dividend' - improved and responsive local services and value-for-money. This will be particularly important if we are moving into a period of recession from one of steady economic growth.
September 2008
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