Memorandum by the Local Government Information
Unit (LGIU) (BOP 17)
The Local Government Information Unit (LGiU)
is an authoritative and informed source of comment, information
and analysis on a range of local government and public policy
issues. It has provided support to councils and championed local
democracy for 25 years. Our 150-strong local authority membership
includes Labour, Conservative and Liberal Democrat councils. The
LGiU shares its expertise with government and campaigns to extend
local authority best practice, freedoms and responsibilities.
Our teams of policy analysts provide policy advice, training,
consultancy, public affairs services and other resources to our
members and other organisations. The LGiU was awarded Think-tank
of the Year 2008 by Public Affairs News.
LGiU welcomes the opportunity to submit written
evidence to the Committee, and would value the opportunity to
expand on the issues we have raised in oral evidence.
SUMMARY
Although progress has been made towards devolution,
we believe that government in Britain remains over-centralised,
that devolution from Whitehall to localities needs to go further
and faster, and that strong, energised local councils should provide
the framework for local democratic engagement.
1. Decision-makers are not sufficiently
accountable to local people about service delivery, particularly
where service providers are primarily responsible to Whitehall.
We propose:
(a) A new model for accountability with local authorities
commissioning policing and health services, including services
for the ageing population: these services would be self-managed,
but would be financially accountable to local authorities.
2. Many bodies are responsible for services
locally but have limited accountability to local authorities or
local people. We propose that this could be mitigated by:
(a) Quarterly public question time events for appointees,
non-executive directors and staff of quangos and boards. In the
case of Primary Care Trusts, Health Question Time events could
include councillors with health portfolios.
(b) Immediate assessment of how bodies such as Foundation
Trusts can be held to account by council Overview and Scrutiny
Committees.
3. Progress towards devolution made in the
last decade needs to be built upon and protected by including
a set of principles within a constitutional framework that has
cross-party support. This will energise local government by providing
authority for the responsibilities created in Strong and Prosperous
Communities and subsequent White Papers. There is now a tremendous
opportunity to balance the various obligations and recognise the
overall responsibilities of local authorities and their interaction
with citizens and central government in one place.
We propose as a set of principles :
(a) A statement of the purpose of local government,
for example:
(i) to promote the economic, social and environmental
well-being of their areas; and
(ii) to enable and promote democratic understanding
and participation in communities and neighbourhoods.
(b) A statement improving local accountability by
recognising and protecting the roles and responsibilities of elected
representatives.
(c) A commitment to a formal concordat between central
and local government.
(d) A commitment by government to consult and involve
local government on all matters affecting its responsibilities.
(e) A statement that administrative arrangements
for ensuring local authorities comply with their responsibilities
should be proportionate and serve a clearly defined purpose, and
that any intervention by central government should be proportionate
and with the aim of supporting improvement.
(f) A commitment that local authorities be able
to control and exercise discretion over their financial resources,
so enabling them to tailor expenditure to local needs and priorities.
(g) Provisions strengthening arrangements to ensure
that central government expectations are fully funded.
(h) A statement that local authorities hold the
stewardship of natural resources locally.
4. The central-local concordat needs to
be more transparent and accountable. We propose that the concordat
should be negotiated on a statutory basis, and should be monitored
by parliament.
5. There is a lack of parliamentary oversight
over the central-local relationship and the balance of power between
central and local government. We propose:
(a) Government submit annual or triennial reports
from government to this Select Committee which would allow the
Committee to monitor the operation of the concordat and of the
central-local partnership.
(b) Options for monitoring the operation of a new
constitutional framework could include pre-legislative scrutiny
Public Bills, and assessment of the appropriate degree of subsidiarity
in the allocation of responsibilities and level of decisions,
and the funding of mandates.
6. The present balance of funding creates
an accountability gap, with councils less accountable to local
people than they believe them to be. If local government is to
be seen as a political institution with a strong community leadership
role which allows a degree of local choice and diversity, then
it needs the authority and means to act, including adequate financial
resources and a reasonable degree of autonomy and discretion in
relation to local taxes. In our view this will involve at least
50% or a much larger proportion of funding raised local through:
(a) the return of business rates to local control;
(b) local authorities having access to a range of
local taxes; and
(c) radical reform of council tax and council tax
benefit.
7. LGiU would support an independent commission
to monitor and review local government finance, with the ability
to initiate inquiries and produce its own findings and recommendations.
It would be necessary to reach a cross-party consensus over what
the role of an independent commission should be. There are real
questions about whether it is appropriate to further depoliticise
the financial settlement process or whether it is desirable to
do so.
INTRODUCTION
1. LGiU welcomes the Committee's Inquiry,
which comes at an important point in evolution of the relationship
between central and local government. Some important steps have
been taken towards empowering local communities, but governance
in Britain remains among the most over-centralised in the world.
LGiU has welcomed the moves in accountability from the centre
to community partnerships and away from constraining targets,
but believes more is needed. A fundamental shift is needed in
the balance of power from Whitehall towards the local, and devolution
from the centre needs to go further and faster.
2. At present, decisions about services
and public spending priorities are taken too far from the people
who will be affected by them, and who want to influence them.
Yet challenges for communities at a time of scarce resources and
environmental pressures can be best managed at local level. It
is urgent that communities, neighbourhoods and citizens are engaged
on issues that affect them, and strong responsive councils should
be the framework for achieving this.
3. The welcome changes that have occurred
over the last decade are the foundation of further decentralisation
and devolution. In this transitional period the Committee has
the opportunity to set out what needs to be achieved to energise
local government and so make the localised agenda real.
INCREASING LOCAL
ACCOUNTABILITY FOR
POLICING, HEALTH
AND OTHER
SERVICE PROVIDERS
4. Greater accountability to local people
can be achieved by bringing commissioning duties for external
public services within local authority decision-making structures.
Commissioning is a multi-staged process that encompasses local
accountability: a comprehensive assessment of community needs
and aspirations; agreement of priorities in dialogue with communities,
stakeholders and providers; identification of appropriate providers;
procurement of appropriate services (from a range of providers,
including the local authority itself); monitoring services (including
managing demand), and review of services to ensure that they have
addressed the priorities identified in the needs assessment. All
of this needs to be conducted in dialogue with the community.
5. In practice, services such as police
and primary care trusts are primarily accountable to Whitehall:
this lack of direct accountability has an immediate impact on
the ability of these services to respond to local priorities and
meet local concerns. The commissioning mechanism would shift responsibility
for local issues from the centre to local decision-makers. Little
structural change would be needed, and accountability to citizens
and across existing organisation boundaries (eg between social
care and health care, and between local authorities and the police),
would increase. These services would be self-managed, but would
be financially accountable to local authorities. There would be
an emphasis on agreement between councillors, chief executives,
and citizens.
Policing
6. LGiU has found significant opposition
to current Home Office plans for directly elected crime and policing
representatives. Of those attending a recent LGiU conference on
policing, only 8% supported the proposal for directly elected
representatives, with 70% saying they would not increase confidence
in local policing. The LGiU has devised four tests for police
accountability, which have been backed by the Minister of State
for Policing, Security and Community Safety as capturing the aims
of reform. The Home Office scheme raises concerns against all
these measures. It is very complex and would be difficult to communicate
to the public and administer. It does not devolve any powers from
the centre to the local level, or integrate well with Neighbourhood
Policing. It does not provide any drivers for increased efficiency,
and it has the potential to undermine the progress in joined up
government that have been made within local strategic partnerships.
7. There is a consensus, however, on the
need to increase police accountability. 95% of delegates to our
conference agreed—a result backed by a national survey of
councillors undertaken by the LGiU earlier this year. LGiU considers
that the commissioning model would provide greater police accountability
in a way that builds on existing partnership, democratic and neighbourhoods
structures, motivates efficiency and increases public transparency.
Health
8. Central government is committed to lessening
the one-size-fits-all approach to the health service, so local
accountability can take over the responsibility of oversight:
local accountability will also ensure local priorities are met
and lessen health inequalities locally. Research shows that the
public expects to be involved in decisions, not just about their
own care but about strategic priorities and that the views of
the public are echoed by councillors. The majority of 506 elected
members contacted in a recent LGiU survey believed that elected
members should be accountable for local health services through
new mechanisms. The survey showed a considerable degree of consensus
on the need for greater local accountability amongst all political
parties and all types of local authority.[1]
9. LGiU recommends that a system of health
accountability which answers to the needs and aspirations of local
people and which is clear and accessible would include:
(a) the public health and commissioning functions
of local authorities and primary care trusts (PCTs) to be merged
within existing democratic structures;
(b) targets and priorities for all public services
to be set locally within a broad national framework;
(c) a number of accountability measures including
regular public question time events for non-executive directors
of PCTs and local authority portfolio holders; and
(d) overview and scrutiny committees to have more
prominence and capacity to hold commissioners and service providers
to account.
Ageing population
10. The All Party Parliamentary Local Government
Group, supported by the LGiU, considered services for older people
earlier in 2008, and backed the local authority commissioning
model as the obvious mechanism to provide clarity and efficiency
over the respective roles of central and local government. The
APPG Inquiry found a clear direction of travel towards much closer
working between local authorities and in health, blurring the
boundaries between organisations, and concluded that there should
be a staged movement towards integration. It found that the local
authority is best placed to coordinate services across the spectrum
of need and additionally, that a strong democratic input is needed
when making difficult decisions about resources. Pilots should
aim to develop a model that offers a plan for transition from
joint planning to fully shared commissioning.
INCREASING THE
ACCOUNTABILITY OF
QUANGOS AND
BOARDS
11. Many bodies are responsible for services
that have a significant local impact, have a primary responsibility
to central government, and have limited accountability to local
authorities or local people. The duty to cooperate in the processes
of a Local Area Agreement, where it applies, will in practice
have limited impact. There is no obligation on partner authorities
to do more than engage in dialogue with the relevant local authority—no
targets can be included in the LAA without the organisation's
consent. The extension of the "duty to involve" as promised
in the Communities in Control White Paper will not tackle the
accountability deficit that exists where an organisation that
is nationally oriented cannot be required to account for the local
impact of its activities.
12. LGiU would recommend that this situation
be mitigated to some extent by adopting open forms of accountability,
which could include Quarterly Public Question Time events for
appointees, non-executive directors and staff. This model would
have a wider application in the public sector. As already mentioned,
in the case of Primary Care Trusts, Health Question Time events
could include councillors with health portfolios.
13. In addition, immediate consideration
should be given to assess how quangos and bodies such as Foundation
Trusts can be held to account through overview and scrutiny, building
on the extension of scrutiny of external bodies recently introduced
by Parliament in the Local Government and Public Involvement in
Health Act 2007, and considering how recommendations can be given
force. This could be part of a major review of the role and governance
of quangos and local boards.
PRINCIPLES OF
LOCAL DEMOCRACY
AND SELF-GOVERNMENT
14. LGiU believes that the ability of locally
elected representatives to make democratic decisions and to represent
and support the participation of people locally should be protected
within the constitutional framework. The chequered history of
local government over the last fifty years shows widely varying
views on the role and responsibilities of local government on
the part of central government. The progress made in the last
decade should be built upon and protected within a constitutional
framework that has cross-party support.
15. There is a need for a broad statutory
statement of the role and responsibilities of local government
in order to:
(a) Create the foundation for a positive and sustainable
partnership between central and local government by providing
clarity and mutual recognition.
(b) To provide a coherent framework, necessary as
the complexity of multi-level government expands.
(c) To underpin further devolutionary measures such
as those we suggest.
(d) To bring balance to the framework incorporating
the three spheres of central, local government, and the citizen,
confirming that the primary accountability of local authorities
is to local electorates.
(e) To energise local government by providing authority
for the responsibilities created in Strong and Prosperous Communities
and subsequent White Papers.
Creating a sustainable partnership
16. A broad statutory statement would ensure
clarity and continuity as the basis for a sustainable partnership
between central and local government:
(a) Clarity in three spheres : among politicians
locally and nationally; among civil servants in departments responsible
for services that have an impact on localities; in the courts,
as a guide to the interpretation of legislation.
(b) Continuity, because careful parliamentary and
sectoral consideration would be needed before it was amended in
the future; this will be stronger if the principles are based
on a consensus when they are agreed.
(c) Sustainable partnership: in the form of a concordat
gives practical effect to the partnership and provides a positive
culture among both national and local politicians, civil servants
and officers.
Bringing balance
17. The role of councils in empowering communities
will shortly be put on a formal basis by the new duty on local
authorities to promote democratic understanding and participation.[2]
In parallel, the Government is promoting an amendment to the European
Charter of Local Self-Government, which would result in this responsibility
becoming an obligation under the Charter. The principles of subsidiarity
and local self-government that inform the balance of power between
central and local government that are embodied in the Charter
should also be given similar formal effect in UK law. This is
a tremendous opportunity—to balance the various obligations
and recognise the overall responsibilities of local authorities
and their interaction with citizens and central government in
one place.
Energising a positive local government culture
18. A confident, lively and energetic local
government culture is essential for the promotion of local democracy.
Sir Michael Lyons reported finding a culture of dependency during
the period of his Inquiry, caused partly by centralised financial
structures, partly by a perception that it was necessary to be
provided with central government guidance in situations where
councils had considerable discretion. There are many decisions
and activities that are best carried out at local level: a set
of principles will enable local authorities where caution prevails
to shake off a culture that has developed over decades, and enhance
the strength and capacity of others.
Using existing powers
19. Sir Michael described finding that authorities
reported needing fuller guidance before using the well-being power
more fully. This power provides a high level of local discretion,
and research suggests that there are a range of reasons why it
is less used than central policy makers may have expected. Experience
in other jurisdictions suggests that it can take a period of years
for changes that allow opportunities for innovation to be assimilated
and to have impact.[3]
It seems that at present there is a "patchy" level of
awareness and understanding within local authorities and a low
level amongst partner organizations, but research suggests that
interesting and innovative activities are being undertaken using
the power.[4]
There may be a number of reasons why this power has not had the
attention that that it might in the period since it was introduced.
Promotion of the possibilities generated by the well-being power
could have value in generating confidence and understanding. More
dynamically, a statutory framework recognising the broad functions
of promoting economic, social and environmental well-being would
provide a substantive framework and encourage use of existing
discretionary powers.
Stewardship of the environment
20. Local authorities' stewardship of the
environment and sustainable development provides a good illustration
of the national and local advantages in promoting a sense of authority
and confidence in local government. The success of LGiU's Carbon
Trading Scheme illustrates how local authorities are best placed
to carry out many of the activities necessary to make real advances
in averting climate change and promoting environmental sustainability:
making informed local decisions on complex subjects, communicating
effectively in a climate of ignorance where long term change is
needed, and negotiating difficult priorities. It appears that
councils do have the necessary powers to play this role: the barriers
to their doing so could be partly due to confidence in dealing
with the scientific issues involved, partly unwillingness due
to uncertainty over central government support and over use of
the well-being and other powers. A statement acknowledging this
powerful role would have considerable impact in energising local
government and ensuring it was recognised in Whitehall. LGiU believes
that this statement should go further and specify that local authorities
hold the stewardship of natural resources locally. We suggest
some of the implications of this more substantial approach in
appendix A.
A set of principles for the role and responsibilities
of local government
21. Any statement should recognise the local
democratic mandate, the leadership role of local government and
of councillors in the world of local governance, and include:
(a) A statement of the purpose of local government,
for example:
(i) to promote the economic, social and environmental
well-being of their areas; and
(ii) to enable and promote democratic understanding
and participation in communities and neighbourhoods.
(b) A statement improving local accountability by
recognising and protecting the roles and responsibilities of elected
representatives.
(c) A commitment to a formal concordat between central
and local government.
(d) A commitment by government to consult and involve
local government on all matters affecting its responsibilities.
(e) A statement that administrative arrangements
for ensuring local authorities comply with their responsibilities
should be proportionate and serve a clearly defined purpose, and
that any intervention by central government should be proportionate
and with the aim of supporting improvement.
(f) A commitment that local authorities be able
to control and exercise discretion over their financial resources,
so enabling them to tailor expenditure to local needs and priorities.
(g) Provisions strengthening arrangements to ensure
that central government expectations are fully funded.
CENTRAL-LOCAL
CONCORDAT
22. The central-local concordat should be
a practical and dynamic expression of the relationship between
the spheres of central and local government. The current concordat
was signed by the leadership of the Local Government Association
and the Secretary of State for Local Government in December 2007.
It sets out broad statements which (other than the negotiation
of Local Area Agreements) are indications of intent rather than
solid commitments; indeed, government compliance with the concordat
has been questioned on at least two occasions since it was agreed.
The parties agreed to come together in a renewed central—local
partnership, which would be responsible for monitoring the agreement
and revising it as that became necessary.
23. At present the concordat has an essentially
informal status: despite a reference to the concordat in The
Governance of Britain, it has not so far been included in
parliamentary scrutiny of the Green Paper. While the government
will refer to the negotiation of local area agreements as indicating
that significant progress has been made under the concordat, the
agreement continues to run on an informal basis: according to
a response to a Parliamentary Question in late July the future
role and terms of reference of the central-local partnership have
not yet been clarified.
24. LGiU believes that the concordat, if
it is to have impact, should be transparent and the players accountable
to parliament and to those with a stake in local government more
widely for implementing and reviewing its provisions. There should
be a mechanism for the operation of the concordat and the central-local
partnership being discussed and tested in the parliamentary arena.
25. A survey of 480 councillors conducted
in early September 2008 on behalf of LGiU[5]
shows a positive attitude towards the concordat, but suggests
that there is a lack of knowledge about its provisions and what
it means, and that there is a lack of faith in the processes adopted
for its effectiveness, monitoring, and review. The great majority
of those that had heard of the concordat agreed that it is right
to agree common priorities, objectives and partnership arrangements,
and there appears to be significant support for putting the concordat
on a stronger basis. In particular:
(a) Most agreed that the negotiations should be
put on a statutory basis and agree that it should be monitored
independently, for example by a parliamentary committee.
(b) There is strong support for arrangements that
bring all relevant government departments to the table with the
LGA on a regular basis.
26. The survey showed support for the negotiation
of the concordat being established more formally on a statutory
basis. This could be achieved as part of the framework of a set
of principles, or separately, and either in the Constitutional
Renewal Bill or the Community Empowerment, Housing and Economic
Regeneration Bill. The Joint Committee on the Constitutional Renewal
Bill recommended that the scope of the Bill be opened up to allow
wider debate.
THE ROLE
OF PARLIAMENT
27. The role of parliament in maintaining
an oversight of central-local relations and the balance of power
between central and local government would differ according to
the proposals made in this submission
(a) In relation to the concordat, compliance with
a statutory requirement could include the submission of annual
or triennial reports from government to this Select Committee
which would allow the Committee to monitor the operation of the
concordat and of the central-local partnership
(b) In relation to a statement of principle setting
out the roles and responsibilities of local government, a number
of options would emerge and could include pre-legislative scrutiny
for the implications for local government of Public Bills, assessing
the appropriate degree of subsidiarity in the allocation of responsibilities
and level of decisions, and the funding of mandates.
LOCAL GOVERNMENT
FINANCE
Balance of funding
28. LGiU has long argued that a shift towards
a fairer balance of funding would demonstrate a real shift in
the balance of power between central and local government. This
would involve radical changes in funding as well as a cultural
and political change, with central government departments being
ready to trust local authorities to decide their own priorities
within a national policy framework.
29. If local government is to be seen as
a political institution with a strong community leadership role
which allows a degree of local choice and diversity, then it needs
the authority and means to act, including adequate financial resources
and a reasonable degree of autonomy and discretion in relation
to local taxes. In our view this will involve:
(a) the return of business rates to local control;
(b) local authorities having access to a range of
local taxes; and
(c) radical reform of council tax and council tax
benefit.
30. The present balance of funding creates
an accountability gap, with councils less accountable to local
people than they believe them to be. It is also the basis of an
environment that undermines the ability of local authorities to
respond to changing needs and circumstances quickly and effectively
and so fully undertake a place-shaping role.
31. The Lyons Inquiry finally placed emphasis
on the need for greater local discretion rather than changes in
the financial structures of rates and taxes. However, it is difficult
to see how a council can fully grasp its own agenda without, for
example, radical reform of council tax. LGiU wants to see at least
50% or a much larger proportion of funding being raised locally
using the measures that we have identified.
32. The European Charter of Local Self-Government
requires that local government be able to rely on a finance system
that allows a reasonable degree of discretion and is "sufficiently
diversified and buoyant". It is clear that the current
system requires further amendment before it complies with the
letter and spirit of the Charter, and before it provides an effective
framework for the government's broader expectations of local government
and matches the commitment that it has made in principle in the
Central-Local Concordat.
An Independent Commission to oversee the financial
settlement
33. LGiU would support a commission with
a remit to monitor and review the impact of government proposals
for local government finance, and the ability to initiate inquiries
and produce its own findings and recommendations. In particular,
we believe it would be valuable for such a commission to:
(a) examine proposals for new responsibilities and
consider how any burdens involved would be funded;
(b) assess the implications and reasonableness of
efficiency targets; and
(c) play a role in a review of council tax.
34. It would be necessary to reach a cross-party
consensus over what the role of an independent commission should
be. There are real questions about whether it is appropriate to
further depoliticise the financial settlement process or whether
it is desirable to do so.
APPENDIX A
LOCAL STEWARDSHIP OF NATURAL RESOURCES—"LOCAL
SONAR"
1. Standards on the quality and/or quantity
of natural resources should be set locally (as devolved as practical).
This could mean the local authority or for some resources eg air
quality—neighbourhood standards. These standards would be
a transparent part of the electoral process.
2. The Local Authority could commission
agencies like the Environment Agency or Natural England to carry
out works that help them achieve the local standards.
3. The mechanisms needed for local communities
to influence the standards appear to exist within the community
empowerment agenda, which needs development to include environmental
concerns.
4. Disputes between local and national government
on targets would be subject to an arbitration process rather than
the current top down command culture.
5. Funding for Local-SONAR should be integrated
into normal funding streams and not in separate funding pockets
to ensure that SONAR becomes part of the core democratic process
and for example, hidden choices about air quality versus mobility
are more transparent.
6. Standard setting and implementation should
be part of the representative democracy process (as in 1) but
also has a significant participative democracy element.
1 Local Government Councillors Survey Feb to Mar 2008,
carried out by ComRes for LGiU. Fieldwork dates: 21 Feb to
11 Mar 2008. Back
2
In the forthcoming Community Empowerment, Housing and Economic
Regeneration Bill. Back
3
Kitchin, H A Power of General Competence for local authorities
in Britain in the context of European Experiments in Local Government,
CLD 1996. Back
4
Formative Evaluation of the Well-Being Power, Annual Report 2006,
DCLG. Back
5
Local Government Councillors Survey August 2008, carried out by
ComRes for LGiU. Fieldwork dates: 28 August to 5 September
2008. Back
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