WRITTEN EVIDENCE
SUBMITTED BY
BRISTOL CITY
COUNCIL (LOCO 073)
SUMMARY
¾ Abolish
the ultra vires principle and leave councils free to act
locally;
¾ Need
greater recognition from Central Government of role and importance
of Local Government;
¾ Need
for further clarification on respective roles and responsibilities,
(ie how local authorities balance commitment to localism with
issues that require a wider perspective);
¾ Councils
should be able to raise much more of their own income—need
for combination of local income sources, greater direct management
of European structural funding etc;
¾ Localism
agenda has the potential to enable the more effective use of scarce
resources in the future;
¾ Need
for clarity on how citizens, communities and voluntary groups
will be accountable for services they deliver;
¾ Voluntarism
and co-production offer great opportunities for empowerment, but
still need to create greater demand to be involved in local civic
action.
RESPONSE
First of all, we welcome this opportunity to make
a contribution to the debate on the Government's plans for localism
and decentralisation of public services. Outlined below are a
number of thoughts and questions we would like the Select Committee
to consider during the course of its inquiry.
POWERS AND
ROLE OF
LOCAL AUTHORITIES
1. Article 4 "Scope of local self-government"
of the European Charter for Local Self Government states that
"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". Local authorities in England, operating
under the principle of ultra vires, have traditionally enjoyed
far less freedom and flexibility. The concept of ultra vires has
historically led to a focus on the legality of any potential Council
activity/initiative and has thus tended to restrain local authorities
from either taking risks or being particularly innovative.
2. Before the Government seeks to set out new
roles for local authorities it should therefore first abolish
the ultra vires principle and leave councils free to act locally,
aside from actions expressly forbidden by statute. In this respect,
Coalition government proposals to grant local authorities a "general
power of competence" is a welcome move, though there is also
something to be said for the NLGN's recommendation that the government
should, in addition, prioritise a systematic review of existing
legislation and regulations that would otherwise limit the scope
of local councils
and revoke any such regulations/legislation
as required.
3. The Chairman of the LGA, Sir Simon Milton,
has gone somewhat further and argued that "councils will
only be free when we can guarantee the rights of local councils,
and the democratic mandate of councillors, in a constitutional
convention". A number of other commentators[26]
have similarly called for a parliamentary resolution to entrench
the role of local government. Such a resolution could draw on
concepts (and sometimes the wording) from both the European Charter
of Local Self-Government and the Central-Local Concordat of 2007.
Critically, it would need to go further than did the Concordat
with respect to funding issues, drawing on the Charter's recognition
for "diversified and buoyant" sources of local government
finance (see below).
4. The move towards decentralisation may also
require some further clarification on respective roles and responsibilities,
in particular, in relation to how local authorities will balance
(and resolve) their commitment to localism with issues that undoubtedly
require a wider perspective. Communities will still need some
level of strategic thinking beyond the local level to deliver
many of the things they want, such as hospitals, transport links,
waste management and flood protection. Some of the most pressing
issues facing the nation—the housing crisis, economic recovery,
climate change and biodiversity loss—cannot be dealt with
solely at a local level.
5. Economic recovery is clearly one of the central
goals of the Coalition government. There is a case to be made
for recognition of the central role of cities as the engines of
future economic growth. Yet the abolition of regional agencies/Government
Offices has meant that a number of existing interfaces between
local and central government have been or will be removed. The
Core Cities group is an established network that could fill this
gap, providing an interface with the most important places for
economic growth.
6. It could be argued that until local government
is responsible for funding itself, "localism" risks
being little more than an aspiration, rather than the radical,
transformative project it potentially could be. When central government
funds 75% of local government, councils are held accountable by
Whitehall just as much as they are by voters. Real innovations
in local government are unlikely to occur until councils are able
to raise much more of their own income.
FINANCIAL LIMITATIONS
7. English local authorities currently have quite
a wide service remit, yet a relatively limited and inflexible
financial base, particularly in relation to their European and
Commonwealth counterparts. The LGA, among others, have argued
that it is not desirable for local government to rely on income
from a single tax. Many European countries have more than one
local source of income. There should therefore be a combination
of local income sources, which could include:
¾ A reformed
and more equitable property tax;
¾ The
progressive re-localisation of business rates (similar to German
model). We welcome recent announcements to introduce Tax Increment
Finance;
¾ The
transfer of a proportion of national income tax to fund local
government directly, either initially as an assigned revenue,
developing into a local income tax or moving straight to a local
income tax;
¾ A reduction
in grant to local authorities consistent with this shift of national
income;
¾ A basket
of smaller taxes and charges, for example:
¾ localised
vehicle excise duty;
¾ local
sales taxes (not a general sales tax, which would fall foul of
the EU VAT regime);
¾ localised
stamp duty on property transfers;
¾ land
value taxes;
¾ tourist
(bed) taxes;
¾ more
charging for services, using and extending the powers in the 2003
Local Government Act;
¾ charges
for utilities' street works;
¾ local
congestion charges; and
¾ "Green
Taxes".
8. Greater direct management of European structural
funding is also essential to ensure that the full potential of
the funds can be exploited. Previous experience with European
structural funds has highlighted the need to have greater local
involvement over the development and management of the programme,
ensuring that the policy fits local priorities and has greater
alignment with sub-regional strategies and national funding programmes.
COST CUTTING/EFFICIENCY
SAVINGS
9. Local authorities have been dealing with efficiency
savings for many years now. The Total Place/Place Based Budgeting
agenda also has the potential to deliver significant cost savings
to sub-regions/local areas. Local authorities already have considerable
experience of working with partner agencies and this can be developed
further. The Localism agenda has the potential to enable—though
does not ensure—the more effective use of scarce resources
in the future, through better identification of need and targeting
of spend. Local decision-making and delivery reduces the overhead
costs of long "delivery chains" and the management and
monitoring associated with centralised programmes.
10. The task of delivering "more for less"
is better achieved at the local level, where more informed and
accurate judgments can be made about the costs, benefits and impacts
of specific decisions and interventions. Localism also has the
potential to enable the more effective delivery of services. Services
that are developed locally, with a high level of engagement with
partners and service users, better reflect local priorities and
the diversity of local needs, interests and preferences. It is
easier to identify needs, reflect local issues and preferences
and respond to changing circumstances at the local level.
ACCOUNTABILITY
11. Essential to the democratic process is accountability:
the ability to scrutinse decisions that have been made about public
money and service delivery. If public services are going to move
towards delivery by citizens, communities and voluntary groups
a system for holding them to account needs to be outlined. It
needs to be clear how citizens, communities and voluntary groups
will be accountable for services they deliver, who will hold them
to account, and what the role of the "Big Society" will
be in holding itself to account. What will be the role of elected
members if responsibility and accountability for services may
be moved away from the local authority? Will Councillors become
the scrutinisers for an increasingly more devolved decision making
system? There remains a need to think through how Big Society
initiatives interact with the formal governance and service delivery
functions of local government, especially as these become more
autonomous themselves.
CAPACITY AND
DEMAND
12. By pushing power and resources closer to
"the ground", localism creates greater opportunities
to empower people—individually and collectively—to
take decisions for themselves and influence the services that
affect them. There is a growing demand from people to have more
of a say in the decisions that affect them, and for public services
to be flexible, tailored and responsive. As we enter a period
of reduced spending and public service reform, managing these
pressures and finding ways to co-produce services is going to
be ever-more important. Of course, it may be the case that not
all local needs can be met by local action so the Select Committee
may need to give some consideration to the issue of how to create
greater demand to be involved in local civic action and what may
motivate people to do this. Local councils and communities will
also need to consider what skills and expertise they have and
how they can be developed, so that the capabilities to take on
these responsibilities are present.
October 2010
26 See for example Roger Gough, With a Little Help
From Our Friends: International Lessons for English Local Government,
Localis/LGA (2009) Back
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