Localism

Memorandum from Barnsley Council (LOCO 066)

Localism – submission to CLG select committee

In order to answer this question the rhetorical question posed is ‘What does Localism mean for us?’

Summary

This paper proposes a radical shift in the English model of governance, with a decentralised framework enshrined in law by a new Constitutional settlement.

In turn, the new settlement introduces a new architecture which would deliver the advantages of a governance system based upon ‘Localism.’ Fundamentally, Localism can only work with the right local governance system and with the security of legal underpinning.

Detail

1. The first and foremost principle is that there needs to be a Constitutional settlement. If there is to be meaningful progress with this question then a settlement enshrined in law needs to happen. Without this, Localism will continue to be buffeted by the winds of political preference, of changes to and within governments, in a permanent state of flux, which means that this question will be revisited every five years or so.

A Constitutional settlement would provide mutuality of understanding for each of the major participants; promote confidence and continuity, without the threat that powers could be withdrawn or transferred at the behest of a future government. It would also help the media and public better understand the distinction between Central and Local Government responsibilities. One consequence of repeated Parliamentary interventions into the affairs of Local Government is to encourage the media and public to look to Central Government to solve all problems and prompt Central Government to act, when in fact a higher threshold for any intervention should really be set.

There are two documents which could form the basis of ‘Constitutional legislation’: the 2007 Central – Local concordat (between the LGA & Central Government) and the European Charter of local self government. The former has had a disappointing impact and giving statutory effect by incorporation of the latter into existing law would go some distance to addressing the disregard thus far shown. The Charter establishes the principles of proportionality and subsidiarity (more of which below) which would help establish the autonomy of local government and provide ‘space’ for it to undertake its local leadership role, but this too is bedevilled by the lack of enforcement and monitoring. Whilst it is welcome that the UK has, since 1997 signed and ratified the Charter, it has crucially failed to implement, which means its worthy provisions can be ignored with impunity. We note that the last review of the UK’s compliance with the Charter recommended:-

Ø Establishing a legal framework which would give local government a clear basis & a general competence for the benefit of its citizens, with strong community leadership;

Ø Clarify the distinction between powers delegated to local government by Central Government compared with local Government’s own statutory powers;

Ø To increase Local Government’s financial capacities by developing a much higher share of its own income as compared with State grants, ‘capping’ ( or similar) and relocalisation of business rates ( with protection for low rate areas)

Ø Give Councils greater accountability to citizens;

Ø To incorporate the Charter into domestic law and to be considered legally binding.

Monitoring could be carried out by a cross party committee of the Lords and Commons, as recommended by the CLG select committee in 2009.

That said, it is recognised that laws and agreements do not of themselves create relationships and there is some merit in the argument to say that political and cultural barriers have to be overcome, but equally it has to be recognised that a mature democracy ought really to have achieved that point by now.

2. The meaning of ‘Localism’ - the problem with ‘Localism’ is that like sunshine, no one can be against it, which means that everyone is a ‘localist’. But the concept is sufficiently broad so as to invite a number of varying interpretations from a range of people and political parties. Often, this ensures that there is a perpetual sea of uncertainty and structural and functional change, some of which is genuinely supportive of localism, some of which, despite the stated claims, is profoundly not.

Most international comparators have a constitutional guarantee for decentralised government and administration. England is of course a highly centralised State. To counter that position, a ‘bottom up’ building block of localism needs to be established. There should be a reverse presumption of Localism - in other words, the burden of proof should be to establish what services are genuinely and inherently national in nature? In this respect defence and foreign affairs readily spring to mind. This model recognises that it is not possible to deliver strong economic public services that meet public expectations using the bold top – down, one size fits all solutions. Localism if properly done, offers sensitivity to local circumstances, which benefits the setting of priorities, delivery and accountability.

Within this framework central oversight would be limited and boundaries placed around Central Government’s capacity to intervene in LA activities.

3. Subsidiarity – is the second fundamental principle to support the Constitutional settlement – i.e. establishing , services at the correct (lowest) spatial level – in other words ‘what matters is what works’ and all services should be subject to this test.

The Constitutional settlement would need to recognise the notion of ‘scale’ and thereby support the existence of a number of spatial levels and the attached diagram attempts to articulate this vision.

The present English governance arrangements leave a large gap between the national and local tiers. Whilst there is no tradition or comprehensive support for regional ‘government’, the previous government and the new coalition government have, in their own ways, recognised that there is a gap to be filled by functions which need to be performed between the national and local level, by support for ‘Functional Sub regions’ which could perform functions which are decidedly not local, or national in nature and which make economic sense to be performed at the Sub regional tier. Examples include economic development, transport and skills and chime with the establishment of new Local Enterprise Partnerships.

Similarly, there needs to be explicit recognition of the ‘neighbourhood tier’ which is where certain functions, perhaps local policing; clean and green functions, should rest;

The test would be: - Where does the activity connected with this function naturally occur? Where does it make economic sense to carry out this function? - What are the economies of scale? - for example, it would not make rational or economic sense to carry out the Commissioning of Social Care at neighbourhood level. Reversing the test, we would argue, against powerful central oversight or thousands of micro institutions.

The additional point about subsidiarity is that it establishes government closest to the people which, in an era of globalisation and increasingly remote systems of government, economics and markets is to be promoted because:-

Ø This is a more effective means of providing opportunities for citizen participation in political life leading to greater electoral & political engagement;

Ø The closer to people that decentralisation can be, the more sensitive & more intelligible it is to their needs;

Ø It achieves greater legitimacy for the decisions taken;

Ø It protects and enshrines freedom by dispersing governmental power and creating a network of checks and balances upon Central Government and all other tiers;

4. Form of decentralisation - under the new constitutional settlement, there would be a combination of political, administrative and fiscal decentralisation. There are certain services that could be administered on behalf of Central Government – its planning, financing and management of public functions, which would be delegated or devolved to participants and which would not be retained as Central government ‘offices.’

There are certain services for which tax raising powers would be permitted at local level. Local government as the only elected body outside Central government has the democratic legitimacy to raise taxes and adjust the level of taxation. There needs to be a rebalancing of the local dependence on Central Government funding. Councils with a low Council tax base would still need to be protected but could raise additional finance in other more innovative ways with greater powers to borrow, levy fees and charges and levy sales and property taxes. The abolition of the ‘Ultra Vires’ rule as suggested by a leading think Tank and the proposed introduction of the new general power of competence offer an opportunity in this regard. The New Local government Network argues for a reverse presumption from one of not straying ‘beyond the powers’ to one of permissive powers, unless explicitly forbidden by law – which is more consistent with English legal principles, otherwise the Coalition Government’s proposal will not work effectively. NLGN also make sensible proposals for Councils to have greater freedom to develop new revenue streams and income with partnering of private sector, community groups & other Agencies to drive out savings and redesign services, which could include enhanced trading powers for a wider range of products and expertise; localisation of fees to reflect local economic conditions; adjusting tax rates 7 reliefs to incentivise behaviour / reflect local policy; localised banking facilities & credit services for business & residents.

5. Accountability – there are several strands – democratic accountability via voting for example; managerial accountability (within, or by organisations)the localist model described would be more accountable in being closer to local people, where local bodies have more power and visible decision making and spending powers and where, as a result, citizen engagement is increased; but that in itself is not sufficient. Equally, we have to ask whether the ballot box is sufficient to ensure accountability.

What is needed is greater transparency; this could be achieved in part by more and better quality information about the performance of Local Government and public service performance and better quality ‘Local Spending Reports’. The public needs a solid evidence base on which to make its judgements about the quality of local public service delivery.

Somewhere within this accountability framework there needs to be a sector regulator for the ‘local public service.’ This needs to be an outcome focused relationship about what the people want to be delivered and what Central Government expects.

Furthermore, Local Authorities have well established models of scrutiny whether carried out by committees of Councillors explicitly created for this purpose, or by other forms, such as Audit Committees. Elected Members also serve on Sub regional ‘Joint Authorities’ with an accountability role. It would be necessary to redesign a ‘scrutiny function’ to reflect the new constitutional settlement and the emerging governance structure under current Government proposals ( as with Health and Policing reform proposals, for example) and those emerging from the Place Based Budgeting model.

A further principle is one of comprehension – the system of accountability will be opaque if there are too many bodies;

6. The unique role of Local Government – Within any ‘Constitutional settlement’ Local Government has a unique democratic legitimacy among local Agencies and has, therefore, a mandate to be ‘leader of the community’ The Council has a well recognised convening and leadership role, but it is equally acknowledged that it cannot and should not be the provider of all local services, it is however, best placed to articulate community needs and lead, where difficult, often unpopular decisions have to be made and where vulnerable minorities need protection. This is the role into which Local Government has ‘matured.’

Within this framework, the role of Representative democracy is potentially a more powerful tool, when supported by real powers. The local Councillor is able to enhance his/her role as decision maker and ‘scrutineer’ only if decentralisation of power is actually carried out. Decentralisation would make the role of Councillor of greater value with more respect from the community and would as a consequence enhance the level of citizen engagement. This is to be preferred over systems of direct democracy. There is no tradition of referenda in the British Constitution and neither is this method of accountability appropriate for the often complex decisions that have to be taken where competing interests, minorities and unpopular decisions have to be contemplated and balanced

The elected Member also has a valuable and uniquely positioned part to play in accountability given his / her democratic legitimacy to hold providers and commissioners to account.

7. Co production - in addition to recognising and surrendering powers vertically to both the neighbourhood and functional sub regional tier, some powers would be shared laterally with partners at the local level in ‘Public service Boards’ which would pick up the advantages and lessons learnt from ‘Total place’ and take these forward alongside the introduction of ‘Place Based Budgeting.’ This would secure:-

· Joined up services on vertical and horizontal axes – where necessary (otherwise there would be no need for separate entities) centralisation of Grants, funding and objectives inhibits service improvement and innovation of delivery methods, ways of working and value for money;

· Overcome the appearance to citizen of centrally prescriptive services, of impersonal, fragmented and unnecessarily complex interactions;

· Opens up the possibility of more early interventions and preventative work rather than corrective work, which is much less effective and efficient;

· Consistent accountabilities for local Agencies

· Data sharing, which central prescription inhibits;

· Genuinely thematic services , designed around citizen needs – integration; back office shared services; shared management & joint working arrangements;

· The Commissioning of appropriate local public services would rest with a locally accountable governance body – of which the Council should be lead Authority; This Governance body would hold budgets and would purchase services on behalf of citizens to whom it would be accountable via elected Councillors;

Barriers to cross organisational working would be dismantled by an emphasis on thematic outputs and shared budgets and a radically amended relationship for each of the participants, with the State, which means removing bureaucratic and legal constraints which make collaboration difficult;

October 2010