Smaller Government: Bigger Society?

Written evidence submitted by Emeritus Professor George Jones and Emeritus Professor John Stewart (BS 15)


· Localism and the Big Society

· Governance and Accountability Issues

· Role of Central Government and its Civil Service

· Controlling Central Government

· A Neglected Essential Element: Decentralising Taxation

· Responses by Local Authorities to the Cuts: Making a Reality of the Big Society

Localism and the Big Society

1. What is localism? One simple answer would be "not centralism". The Coalition: our programme for government stated "The Government believes that it is time for a fundamental shift of power from Westminster to people. We will promote decentralisation and democratic engagement, and we will end the era of top-down government by giving new powers to local councils, communities, neighbourhoods and individuals" [p.11]". The Big Society is seen by the Government as the outcome of its policy of Localism which entails decision-making about public services being decentralised to sub-local-government entities of various kinds, often called community groups or associations.

2. We have already given written and oral evidence both to the Communities and Local Government select committee on the Government’s Plans for Localism and Decentralisation and to the Public Bill Committee on the Localism Bill, in which we raised questions about the "localism" aspect of the Government’s proposals. This memorandum repeats our concerns as expressed in our previous evidence, focusing on items 6, 7 and 8 in the Public Administration Committee’s Issues and Questions paper about governance and accountability, the implications for central government and the place of local authorities.

3. But first we note the important questions asked by Kelvin Hopkins during the Public Administration Committee’s oral evidence session on 16 February 2011 (Q148-Q150) when inquiring into the Funding of the Voluntary Sector. He asked the ministers Nick Hurd and Justine Greening what research evidence there was that the voters wanted to have services delivered by charities and volunteers rather than by publicly-elected bodies and professionals. The replies of the ministers revealed there was none: instead ministers based their policy on a few people they had talked to. We must conclude that the policy is driven by ideology and hunch, not hard evidence. The ministers may well be right but they have not based their policy on research.

Governance and Accountability Issues

4. Our two main criticisms of the Government’s policies are that (i) it has not faced up explicitly to the issue of how decentralization to local authorities and decentralization to communities relate to each other, or (ii) recognized the complexity of the issues that have to be faced in the development of community groups, especially their representativeness of their community, their accountability, probity, transparency for open government, financial control, legal requirements and the relationship of their activities to local authorities’ policies.

5. Many issues need to be faced in decentralization to communities. What is a community? Is decentralization about only communities of place or does it include those of background, interest and need? What if more than one group claims to be the sole expression of the community? Is the community group genuinely representative of the community? How are transparency and open government ensured in community groups? How is the community group accountable to the community? How far should the community group be bound by the policies of the authority? How are financial accountability, legal requirements and probity ensured? What is the role of the local authority in determining these issues? The questions are left unanswered in the Bill.

6. If these issues are not resolved problems could emerge as decentralization to communities develops. Unrepresentative community groups could arise, dominated by a few individuals and sectional interests. There could be little accountability of groups to local people. Early enthusiasm in the community could be eroded by time. Individuals sustaining the group could leave the area. The requirements for open government could be ignored. Financial irregularities could occur, even financial scandals. Conflicts may arise between the local authority and community groups, unless the relationship is clear, close and productive of a shared understanding. While disagreements are inevitable the danger is they can lead to sustained conflicts which could undermine not merely localism but the aspirations of the Big Society.

7. The issues can be resolved effectively only at local level by effective working between local authorities and community groups who share an understanding of their area and its communities. The Bill should place the main responsibility for involving, empowering and working with communities on local authorities.

8. Local authorities already exist as the government of their localities, with clear structures and powers, arrangements for handling public finances, and lines of democratic accountability to their voters. With a responsibility for shaping the development of their local areas, local authorities are well-placed to promote the empowerment of local community groups. They should be allowed to innovate in their areas.

Role of Central Government and its Civil Service

9. But the Bill appears to be based on the assumption that these issues can be resolved only by central-government prescription in orders and regulations that could well aggravate the problems because central government is remote from the actual issues being faced locally. The prospect is local authorities will be constrained by a plethora of central-government controls.

10. Centralism pervades the legislation on the localism proposals. The Bill requires that local authorities should consider any petition for a referendum by 5% of the electorate. Local authorities can reject the petition but only on limited or technical grounds. The Bill however gives the Secretary of State power to specify by order additional criteria for rejection, although the local authority cannot apply its own additional criteria. Centralism trumps localism.

11. Local authorities must consider whether an expression of interest by a community group, in providing one or more of its services, would promote or improve social, economic and environmental well-being. But it can be rejected only on grounds to be specified by the Secretary of State by regulation. Localism is again controlled by centralism.

12. The Secretary of State will define community value in the bureaucratic procedures proposed for local authorities in compiling lists of local assets of community value, although what is of community value should be a matter to be determined locally rather than at the centre.

13. These examples are only a few of the powers being given to the Secretary of State. The Local Government Association has calculated there are at least 142 order and regulation-making provisions, in addition to the 405 pages in the Act, with its 208 clauses and 25 schedules. One foresees the forthcoming Act being accompanied by panoply of regulations and orders, as well as by almost endless pages of guidance, as the centre seeks to determine what should be done locally, rather than the local authority which knows local conditions and is accountable locally. It is ironic that a Localism Bill contains so many means by which central government can prescribe how local authority powers are to be used, their procedures developed and criteria to be applied by them.

14. It is as if central government knows no other way to act than through command and control enforcing detailed prescription. Yet localism will develop only if centralism in the culture and processes of central government is effectively challenged. The Bill shows that, far from being so challenged, these attitudes and practices have deeply influenced the so-called Localism Bill. One must hope that, through scrutiny in the legislative process, the powers to make orders and regulations will be largely eliminated so that it ceases to be what is in effect a Centralism Bill. But more is required if centralism is to be challenged and localism fully developed.

15. Centralism pervades central government in forming its attitudes and determining its procedures and practices. It draws strength from the culture of the various departments of central government, which do not trust local authorities to run their own affairs and know no other way to deal with them than through regulation and detailed guidance designed to ensure they act in ways determined by the centre. Departmental attitudes are reinforced by ministers who have their own views as to how local authorities should act and wish to require them to act in that way.

16. There are plenty of examples even in the Department of Communities and Local Government sponsoring the Bill. The Secretary of State thinks that all authorities should publish details of the salaries of senior staff and of any expenditure over £500 and therefore sees it as right to require them to do so in the Localism Bill. These duties may be sensible for authorities, but it should be for local authorities to decide, as localism suggests. The centralism implicit in the accepted ministerial role is well illustrated by the letter sent by Bob Neill, a junior CLG minister, to all Leaders informing them they should provide an effective refuse collection even in difficult circumstances, as if they did not already know that and many of them were being successful in doing so. Ministers believe they must act even when localism means matters should be left to local authorities to deal with. One suspects that at times localism is seen by both ministers and departments as giving freedom to local authorities to do what central government wants.

17. Past experience suggests that ministerial words calling for localism do not translate into localism in practice because of the dominance of centralism in central government. Michael Heseltine, the Secretary of State in 1979, announced a bonfire of 300 controls, but the centralist culture remained unchallenged and over time new controls were introduced, more than replacing those abolished. The Labour government often set out policies for decentralization to local authorities but the reality was detailed control in targets, inspection, prescriptions and guidance. There is no better illustration of this approach than the at least twelve regulations, five directions and nearly two hundred pages of guidance specifying exactly how local authorities should introduce new political structures, virtually all of which will remain in force after the Localism Bill becomes law.

18. The Bill shows centralism is a powerful influence even in the Department of Communities and Local Government. In other departments the culture of centralism is even stronger. Unless challenged the culture of centralism will prevent localism becoming more than words from a Minster or in a White Paper as has happened in the past. If the Government wants, as it asserts, to see localism developed in practice, it must recognise the need for changes in the attitudes and practice of the departments of central government. Words by themselves will not be sufficient. Measures are required to entrench localism.

Controlling Central Government

19. We have given evidence to select committee inquiries arguing for changes to bring about a new pattern of central-local relations through a statutory Code that expresses the principles of localism. Whitehall departments recognise statutes more readily than words that carry no legal weight.

20. A statute is not enough to secure change. Procedures for monitoring and enforcement are needed. There should be a unit in the very centre of government – probably in the Cabinet Office - to monitor the operation of the principles set out in the statute, ensuring its application by departments. Even more important would be a joint committee of the two Houses of Parliament with responsibility for monitoring central-local relations in accordance with the principles, reporting to parliament both annually and on specific proposals. Similar recommendations were put forward by the CLG Select Committee in its 2009 report The Balance of Power: Central and Local but were neglected by the then Government. The need for these proposals gains urgency from the need to ensure that the Government’s commitment to localism informs the culture and practice of central government in all departments. Without such changes localism will remain a topic more spoken about than acted on. The weakness of the Government’s approach to localism is that it has not recognised the need for a change in the centralism entrenched in the workings of central government itself.

A Neglected Essential Element: Decentralising Taxation

21. There is a huge gap in the Bill. A Localism Bill that lived up to its name would have dealt with the financing of local government. Centralism will prevail as long as local authorities are so massively dependent for their resources on central government. They become supplicants for funding from central government rather than engaging in a dialogue with their citizens about local priorities. A genuine Localism Bill would give legislative authority to the decentralisation of local taxation, so that local authorities would draw the bulk of their resources from their own voters with taxes whose rates they determine.

Responses by Local Authorities to the Cuts: Making a Reality of the Big Society

22. In the present context of having to make unprecedented cuts in their expenditure councillors and officers taking the key decisions in local authorities should follow two precepts. First they should take the initiative, making their own plans, and not wait to be told what to do by central government. Now is the time for local authorities to show they are not merely the delivery arm of central government but the government of their local communities.

23. Second, they should involve their citizens, community associations, and voluntary bodies in considering the consequences of cuts, where they should be made, where the pain should fall, and how its effects can be mitigated. When resources were more plentiful, many local authorities used the methods of participatory budgeting to allocate extra pots of money in projects worked out in close discussions with people and associations in parts of their localities. Now in the era of restraint and cutbacks the same methods should be used, to assist councillors in making hard decisions. Local people know better than can central government about where cuts should be made in their local areas, and they are better placed to recognise where there is real hardship and how it can be relieved.

24. The Government’s Big Society agenda can be made a reality on the ground as councils engage with their localities in handling the cuts. This process can win support for difficult decisions more than can central imposition, since the people themselves in their own areas will be taking the decisions. Managing the cuts could be the way to revitalize local politics and local democracy. Central government must let go and trust local people and their elected representatives.

25. Localism can never be real until and unless central government gives up its 100 per cent control over all tax sources in the UK. Any number of ‘localist’ policies is unlikely to generate a new or ‘Big’ society in a country with such a unique level of centralization. The temporary need to reduce grants and expenditure will not disguise the underlying intellectual inconsistency in a pro-local government stance that cannot deliver local tax-raising for the majority of non-central spending. Britain is, and under current policies, will remain one of the most centralised developed democracies in the world.

March 2011