Memorandum by Telford and Wrekin Council
(BOP 13)
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. 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. 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
agenda. The new relationship must therefore be based on the philosophy
and language of partnership working with effective (vertical and
horizontal) arrangements and accountabilities put in place. In
this context, the focus should be on achieving a set of shared
strategic outcomes and the debate should be about identifying
the most appropriate policy and delivery mechanisms.
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. 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. 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.
4.3 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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