To be published as HC 1049-i

House of COMMONS



Communities and Local Government Committee

Codification of the Relationship between Central and Local Government

Monday 11 March 2013


Evidence heard in Public Questions 1 - 20



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Oral Evidence

Taken before the Communities and Local Government Committee

on Monday 11 March 2013

Members present:

Mr Clive Betts (Chair)

Bob Blackman

Simon Danczuk

Mrs Mary Glindon

James Morris

Mark Pawsey

John Pugh

Andy Sawford

Heather Wheeler


Examination of Witness

Witness: Mr Graham Allen MP, Chair of the Political and Constitutional Reform Committee, gave evidence.

Q1 Chair: We will now move on to our session on the codification of the relationship between local government and central Government. Graham, could you perhaps introduce yourself? You do not really need an introduction, but if you could begin by just saying who you are.

Mr Allen: I hope I do not need an introduction. I am Graham Allen, and I am Chair of the Political and Constitutional Reform Select Committee. We have been looking at the political and constitutional relationship between local government and central Government, and how we might move that forward. If I may, Chair, I would just like to put on record my thanks to yourself and Members around the table for their support in that job. It is going to be a long job; I am sure you appreciate that, probably more than anyone on the Committee. None the less, a start has been made-and, may I say, a very encouraging start-not least with the support of colleagues around this table.

Q2 Chair: That really leads on to the very obvious question. When you last came to speak to us, in April 2012, it was very much a draft code, and you were talking to people about it. Perhaps you would just like to say how things have moved on since then, to the point that an illustrative draft code was published on 29 January.

Mr Allen: Everyone is very interested in this. I think we all know that the current situation is not sustainable in the long-term future. If we look 20 or 30 years ahead, we are clearly not going to have this position of dependency of local government on central Government. The idea that we could carry on being as over­centralised as we are-probably the most over­centralised of the western democracies-just would not hold for 20 or 30 years. The question, really, is not whether change should take place, but how we should change and how we should make that relationship much more effective and get the best out of both sides of the equation, as it were.

We have worked very closely, not just with this Select Committee, but also with the Local Government Association. I have paid tribute publicly-and I am happy to do it again-to the members and officers of the LGA of all parties, led by Sir Merrick Cockell, for the way that they have engaged in this. I do not know if it is something that other Select Committees might pick up and run with, but the partnership that we have had with him has been, in effect, hand­in­glove. We have been trying to make sure that we do not run too far ahead of what people feel is appropriate, and trying to make sure that all the time Government is with us and understands what we are doing. Not getting a "no" from Government is a big thing these days, as it always should be. We have tried to make sure that Government comes with us and is not frightened by the proposals, but actually understands them. That obviously applies to the LGA, although the LGA have been more radical in pushing forward ideas of reform.

I have been extremely open with members of the Government and, indeed, of the Opposition, and have had a dialogue. I think that dialogue continues. Yes, we have published a Report. The Report does recommend codification of the rights and responsibilities of local government versus central Government. It does produce some interesting ideas, I hope, on local government finance that can be debated and discussed. What we have not done, however, is said, "We have got the answer: here it is; just agree it." We have engaged with the Secretary of State and with the Minister for Local Government, and have said, "Let’s continue that debate."

That is probably best evidenced by the fact that we are intending to have a small conference in July. Hopefully, Members around this table might be available to attend also-and yourself, Chair. We will involve the Secretary of State, who has very kindly agreed to keynote it for us, and also the Deputy Prime Minister and a Treasury Minister. We would like officials to be there. We would like it to be under Chatham House rules. The intention is to go back over our Report and say, "Now the dust has settled a little bit, can we start to take this further?"

If we collectively manage to get some references in the various parties’ manifestos about how we may take further the evolution of local government, I think we will have done a damn good job. It may have taken us three or four years, but I regard it as way better to do that than to have had a quick splash of a Report and then move on. I know that you may feel that my Committee is not as nimble as your own Committee, Chair, not least because it is dealing with some longer­term issues. You can often respond quite fleet­footedly to what is happening in the immediate term. We deliberately select things that are quite slow­burning, because they do require some significant shifts. I hope that, together, we will be able to do that. It may be evident in the manifesto­making process, and, indeed, whoever is the Government and the Opposition after the next general election. Because frankly, unless all parties come along with this, nothing sustainable is going to happen. Getting a consensus is well worth aspiring to, however long it takes.

Q3 Bob Blackman: There is a view, I think, that after devolution to Scotland, Wales and Northern Ireland, the big issue-what we do with England-has never been dealt with. Without going into the long history of the unification of Germany and Italy, the Spanish arrangements in the civil war, and the comparisons with other EU countries, is it not fair to say that England has had a very central form of democracy and rule for more than 1,000 years? Why change that?

Mr Allen: I think it is very important that we do look at Scotland, Wales and Northern Ireland. Wearing my other hat-as somebody who, as people know, is very passionate about early intervention-where you go for passion, detail and change is to the places where people can get on and do the job. You go, in my case, to Scotland, Wales and Northern Ireland. But in England, you also go to local government. They are the people who have got the bright ideas. They are the people who are pushing along, even sometimes in difficult economic circumstances. My view is that if we can give local government more authority, responsibility and independence, then local government will more than repay that faith.

The last time I was here, Chair, I mentioned that I had been a local councillor and a local government officer. I have also chaired a local strategic partnership, and I have seen the brilliance and the creativity that there is in the localities, which is often repressed and held back. There is a great degree of passivity and risk aversion, which is not indigenous to people who work in the localities; they are made to feel that way, because they very often have that blanket of Whitehall over them. Whitehall, the governing parties and the Opposition are all now coming to the view that if you can liberate that talent, it will help us, not just in terms of our communities and our social capabilities, but economically as well. I think that is the way the world is going, Mr Blackman, and I think your Committee and ours feel the same way about that. It is just a matter of getting there gently.

Q4 Bob Blackman: The Government have passed the Localism Act, and have given local authorities a general power of competence to get on with things. Is that all the intervention that is needed? We have also got the new deal for cities, and all the arrangements of devolution seem to be happening. Is there a need for anything more radical?

Mr Allen: You need to go with the flow on that. I congratulate the past Government and the current Government for seeing the need to free up the capabilities that are there in local government. I think it is going with the flow, and I could also throw in the Heseltine proposals. We are all beginning to see in the centre-even from our vantage point of Westminster, looking down Whitehall-that the man in Whitehall cannot do absolutely everything, and that the more we let local government get on and do its job as it sees fit, in relation to those issues that are appropriately their responsibility, the more we will get out of local government, and I think it will be repaid many, many­fold.

In a sense, that is one of the driving forces behind the document that we have produced: to get people to think about how that would affect local government itself. Could it go further? Could it even devolve to a lower level itself? That was touched upon. How might it legitimise tax-raising powers? How would it involve people? How would we begin to draw people back into local government and local politics, and get that gene pool of politics revived in a way that, I think, would be healthy for all parties?

Q5 Bob Blackman: Do you think we have got to wait for Scotland, Northern Ireland and Wales, which are pressing on with changes and asking for more powers, before England will get anything?

Mr Allen: The English are quite rightly looking keenly across the border, particularly the northern border. I think that debate will be very, very healthy for us, particularly if you look at what this place has already done in terms of passing the 2012 Scotland Act. That assigns to Scotland the product of 10p of income tax. The Silk Commission in Wales has now said, "That looks pretty interesting. We recommend that for Wales." I suspect that the Northern Irish will be about two seconds behind Scotland and Wales on that, and that will just leave England, who are still dependent wholly on the block grant.

I suspect that people in England will start to look at the possibilities of being clearer about where your income tax goes, in terms of the support that gives to local government. I suspect, as we have recommended, that if the amount of income tax that goes to local government appears on your income tax slip, or your wage or salary slip, and you suddenly realise that the equivalent of two-thirds of the income tax take goes to local government, that might make a lot of people much more interested all of a sudden in local government-or even were it just to be an assigned amount, like the 10p that is going to be assigned to Scotland.

That does not, of course, mean that a rate-varying capability is necessary. Indeed, the Scottish Parliament has had, since its inception, the ability to vary the rate, and have chosen not to. But it does mean that people get a perspective on public spending, which currently is a bit of a mystery. Something happens on the seventh floor in Eland House, and some equalisation happens and a cheque arrives-or does it? If it were clearer where your tax was assigned to, that would be a great stimulus to political development and accountability.

Q6 Simon Danczuk: Just before I ask some questions about exactly what you were talking about then, I get the impression that you are not really comparing like with like. You are talking about Scotland and Wales, and yet your proposals are not about devolving down to regions or down to an English Assembly, or something, which would be the equivalent of devolving down to Scotland or Wales. You are talking about devolving down to local authorities. It is not comparable at all, is it?

Mr Allen: No, I do not think it is. There are some similarities, and there are things that we can learn, but I do not think it is a straight read-across. At one level-sadly, from my own point of view, if I may be personal for a moment-I do not think that the vehicle for devolution in England will be the regions. That was tried; there was a gap left, under the last Labour Government, between the referenda in Wales and Scotland, which was fatal, and I think regionalism, at the moment and for the foreseeable future, is dead.

Therefore, rather than try to resurrect that or come up with some new device, why do we not leave the existing institutions in place and utilise them to get some form of effective devolution? It will not be at all identical to Scotland and Wales. Indeed, their own experiments or evolutions are not identical, either.

That is part of the beauty of this. At one level, it starts off as a good old British bodge: it is about expediency, and what we can do from the centre to get away with this. It then moves towards a principled position, which is that if we believe in a Union but we believe in devolution, then both of those things should apply in some measure-and it can be at a differential pace-to all the nations in the Union. I think we will find our own way, and I think these things will evolve over time, as they are doing in Scotland and Wales. I think they should be allowed to find their own level in England, too.

Q7 Simon Danczuk: For the code to work, it will need to be underpinned by greater fiscal independence for local government. You were just touching upon that, but the document does not really provide any meat on the bones, does it?

Mr Allen: No. Quite deliberately, we did not want to say to everyone, "You should be free of Whitehall," and then "Here’s the magic answer that the Government is going to impose." People are going to find their own way. Also, setting that discussion up and having that debate is very, very important. The House of Commons as a whole should probably be careful of having a prescription. This is something that has got to have a lot more airtime and a lot more discussion with the institutions of government: central Government, local government and, of course, Parliament itself. I think we can get there on that. Fundamentally, there is probably an agreement that local government is too in thrall to central Government. Central Government is too over­centralised. Working from those basics-and if you believe there should be greater devolution within the Union-you start to ask those difficult questions about how you do that.

One thing that we do say in the Report, however, is that that code should not be something that is, like many in the past, a memorandum-something that is just pulled together and has no value and no legitimacy. We do say that it should be statutory, and we do say that it should be entrenched, hidden, as it were-protected-behind the 1911 Parliament Act, so that it cannot be easily repealed. In other words, you have got some bulwark against a Government that might want to impose its own view and change local government, as indeed all Governments in the past have tried to do. A little bit of protection is there also, to defend local government’s rights.

Q8 Mark Pawsey: I just wanted to move on, and assume that the code is in operation, and consider how it might affect the town and country planning system-a particular area of interest for this Committee-where we have seen a movement to greater local involvement. How would you see town and country planning, in particular, working between central Government and local government?

Mr Allen: Personally, I have been really careful not to prescribe what anything would look like. This is really saying to local authorities, "You should come together. You should have a view." I would say that I do not think that the way the Use Classes Order applies to local authorities-whether you can have a betting shop on the High Street, or that sort of thing-is appropriate in this day and age. It might well have been appropriate when running an empire, but the local authorities in England are quite capable of deciding those things themselves.

Also, independence does not mean isolation. Local authorities could get together collectively. They could get together on traveltowork areas, or sub­regionally or even regionally on different issues, and they could, in a sense, make agreements between themselves. I could imagine a situation in which the local authorities throughout England could collectively decide on what a sensible inspection regime was, or what a sensible set of policy priorities for planning were: those things that should be done locally, and then those things that are often more controversial, which require a national view, and where that line ought to be drawn. At the moment, Mr Pawsey, it is pretty evident that the line is drawn not in local government’s favour, and needs to be renegotiated sensibly between equals and partners.

Q9 Mark Pawsey: Would you perhaps foresee a series of planning inspectorates, rather than one centrally based Planning Inspectorate?

Mr Allen: The field would be open for that sort of sensible democratic negotiation between equals and partners. Having seen local government operate in the past, may I say, without wishing to be derogatory, that I think local government has proved itself capable of doing these things perhaps better than we have at national level.

Q10 Mark Pawsey: Would you see a national role in respect of major infrastructure projects: for example, high­speed rail or the provision of nuclear power stations? Clearly, left to individual local authorities, those kinds of things, in most instances, would not happen.

Mr Allen: Yes, I think there would need to be sensible arrangements for those things at that level. If you are free to have the debate, I think common sense will prevail in that relationship. At the moment, those things occur basically in Whitehall; decisions are made, they are rubber­stamped in Westminster, and very often to a high level of resentment in the localities. It is way better to involve people through their appropriate organisations, to negotiate a sensible level-

Q11 Mark Pawsey: Does that not then become a NIMBY’s charter? If you have got, for example, a new railway line or a new motorway, if there is one part of the country that does not want to play that game it is not going to happen.

Mr Allen: I think you get that at the moment, and I think if you had a proper dialogue-

Mark Pawsey: It happens eventually, under the current system, although it maybe takes too long.

Mr Allen: Well, maybe. Sometimes it does, sometimes it doesn’t. I suspect that if you had local government that had its own independence, it would act as a responsible partner and would give certain authority to the national Government in a way that would be resented at the moment. People will continue occasionally to feel that they have a right to act irresponsibly if they are given no responsibility-if they are not responsible for many things in their local areas that, quite frankly, they can do way better than central Government. Do not forget, many parts of local government have an AAA credit rating. Often central Government as a whole, from all parties, has been giving lectures to properly elected, democratically elected local government about how it should run its own affairs, throughout my political lifetime. That causes a resentment, which I think you would eliminate. You would have a much more sensible and mature relationship between local government and central Government, as you do in virtually all western democracies apart from England. You are getting that now in Scotland, Northern Ireland and Wales. That maturity is starting to feed through the process.

Q12 Mark Pawsey: Do you really think that that sort of delegation would lead to a level of maturity where people would accept for the greater good projects that they are really not very happy with?

Mr Allen: They would agree that their representatives could negotiate with central Government a proper division of responsibilities. That is the case in most countries.

Q13 Heather Wheeler: I am actually interested in carrying that on a little bit more. I remember being a councillor in the early 1980s. There seemed to be great opportunities for local government to cock a snook at central Government. If this code were brought in, do you think-if you went back to those fomenting days of the 1980s-that it could have exacerbated the situation? It could have become a constitutional crisis.

Mr Allen: I go back even further than that, Mrs Wheeler. I will go back to Joseph Chamberlain in Birmingham.

John Pugh: I remember it well.

Mr Allen: Yes, sadly, we are of the same generation. Local government was the driving force of the national economy. In the provision of your water supply, your sewage, your energy-gas, and electricity-the innovation that took place was driven by local government. What an engine that was. It was the basis of our prosperity. Now, we have, I think the Report says, 1,200 directives covering what local government can and cannot do, even with some devolution of responsibility taking place.

I would far rather redress the balance. If there are some difficulties-and I am sure there will be-that come with that, we would need to deal with them sensibly. But frankly, putting local government into a position of abject subordination is not the way that you are going to get our economy going again and rebuilding a lot of what we need to rebuild in our localities. There is a lot of talent out there among members, but also among officers in local government and among the local partners that there are in health, policing and education. We are not making the best of them at the moment.

The Report we came up with is very much still open for discussion. There is a lot of change that is necessary on the code. We should kick it around and get it into really good shape, but I think there now is a fundamental need for a rebalancing in the relationship between local government and central Government. As Mr Blackman has pointed out, this goes with the flow; Government, particularly at political level-not quite so much at civil service level-is saying that we should move in that direction.

Q14 Heather Wheeler: That is a great advert for local government. All of us are very proud of our bits and pieces, and our past involvement with local government. Sometimes, though, things do go wrong. With the new proposed code, when local services are collapsing, how would the Government deal with it? Could they send the commissioner in, or the Gauleiter? The Allen Gauleiter comes to the rescue!

Mr Allen: I certainly hope not. As I pointed out gently, central Government has not exactly been flawless. Every time central Government makes a blunder, every single one of us suffers. If your local government unit-whatever that may be-has a problem, it can be put right. You can look down the road, you can see how other people do it, you can help each other out.

Do not forget, there is still a national level. Every one of those western democracies that we mentioned a little earlier has got some form of the centre doing stuff. In America, President Clinton introduced the Head Start Program. It was not done in 1,000 different places, just growing. There was a national view-and there still will be, whoever is in power centrally-that certain things need to be done. Those things will hopefully be done in future in consultation with an equal partner-a deliverer, someone who can get things done- properly elected democratically throughout the land. That is a better way to go than people deciding at the centre that they do not like a particular thing happening, so they are going to stop it. I believe in the play of political ideas, dialogue, discussion and debate. That way, you will bubble up and get a consensus eventually, which will stand us all in good stead.

Q15 Heather Wheeler: Heseltine is a free thinker. He has come up with the idea that there really ought to be unitary authorities across the piece, outside of London. How do you think the code could react with that? That would be imposing something. It ought to grow organically, but how do you get that to happen? I cannot quite see that working. Is there still any lever of government left?

Mr Allen: Unitary authorities could fit very comfortably, and work with the code very comfortably. The question is, if that is what you wanted, how you would get there from where we are at the moment. That is not quite a question about the code; that is a question of how you move the structure of local government.

Skirting around that gently, what we really suggested was that people should initially be allowed to make their own arrangements. If units of local government decided to go that way, then that should be facilitated. They should be allowed to agree that. They should, if they wish, have a local vote or a proposition on how they did that. Frankly, codifying the independence and power and financial power of local government does not depend on whether it is unitary or not. That is a separate question. In a sense, separating central Government from local government is a bigger-picture question than how local government itself then chooses to organise itself, rather than be organised from the centre. That is no longer local government; that is agency of the central Government, and I hope that there is a growing consensus that that is no longer a way to run the sweetshop.

Q16 Chair: Greg Clark is going to come and talk to us about these issues after Easter, and also about his report on decentralisation. I wonder whether you have had a chance to look at that report, and whether you see that agenda there as a stepping-stone towards a longer-term objective-maybe the code-or whether you see it as a diversion away from that key issue. Is it trying to make out that progress has been made, when it is perhaps a bit superficial?

Mr Allen: We need to cut away some of the rhetoric that we all put forward; all political parties, and all Ministers and shadow Ministers, do this. We need to actually look at what is being said, and the direction of travel. On that basis, I would very strongly welcome what Greg Clark has said. It is a great contribution to the debate, and it is going to nudge us further in the proper direction, and it will allow people to have those discussions. It will endorse the fact that people are allowed to think like this. For too long, people have decided that there is one election that matters, and that is the general election when one party is elected and then hands over power to a Prime Minister and Whitehall. I think that all the elections should matter, and I think that the elections in everybody’s locality should have a significance. If they do, people are going to come flocking back to vote in those elections, because they will be important. A lot more good people will put their names forward for election.

If I were in my 20s again right now, would I want to put my name forward for the council? I was very proud to do it in my 20s, a few years ago. I wonder whether people would really put their names forward in the same way right now. We have got to bring that excitement back, that passion back, and that means bringing the authority and the responsibility back to local government. Trying to feel our way towards that, with a consensual approach if possible, is very, very important, and Greg’s contribution helps to move us all a bit closer to that.

Q17 Chair: There is one little omission in his report that we are probably going to ask him about when he comes. All of the Departments got star ratings-we can have our own personal views about whether the stars were appropriate in every case-but one Department did not get rated at all. That was the Treasury. Did you find that surprising?

Mr Allen: You know me, Chair; I am trying to build consensus wherever I can.

Chair: That is a politician’s answer.

Mr Allen: Now you are really putting me on the spot. Do not forget that the Treasury authorised a Bill to give Scotland greater authority just last year. They have actually let go of the product of the 10 pence income tax rate. I happen to know that a number of the key officials in the Treasury have all but been camped out in Scotland to make sure that that works effectively. They have seconded resources to the Silk Commission, and produced an excellent report that again gives authority to one of the nations of the United Kingdom. I am perfectly certain that they are among the groups of officials that we are inviting to our conference, and that if they can participate in a private and confidential way, they have the brainpower to help us to make a reality of England having a measure of devolution, as well as the other nations of the United Kingdom. Is it easy working with our good friends in the Treasury? Not always, but you know, if it was easy, we would have done this a long time ago. We have got to crack on and overcome any minor difficulties that stand in our way.

Q18 Chair: When we talk about devolution or decentralisation, we have got the idea of double devolution: the devolution of powers down to local councils, and local councils then devolving. How does your code deal with that? Also, we have got a changed political landscape now, with bodies like local enterprise partnerships, with the creation of academies and elected police commissioners. How do they fit into this code-or don’t they?

Mr Allen: Again, I am keen not to prescribe, having said that it is wrong for the centre to tell people what to do, but I think that this will evolve as time goes by. A matter of principle, however, is this question of whether we just want to transfer power from the central state to the local state, to use that sort of language. I think the answer is no. If you do give local councils more power and more responsibility, and it is properly inspected and also has proper democratic scrutiny, then I think that very, very many of those local authorities will want to experiment and push power further down. That could be to neighbourhood councils, parish councils, community and town councils or whatever. I think that is to be commended and encouraged.

Also, they would be in a position where they could share the best practice that is out there. They could all learn from each other and see what really works. Just as Whitehall cannot decide everything, town hall is not necessarily the most appropriate vehicle for deciding what happens on the village green, or whatever it may be. I think that we should let that go. I happen to have written a small piece with Phillip Blond in The Independent about exactly this: that once you can push power down to the localities, then the localities themselves will find lots of appropriate ways in which to push power that one stage further down. I think we would all benefit from that.

Perhaps some people are frightened of becoming Members of Parliament. Some people are certainly frightened of going on the council. However, they would be more than happy to get involved and engaged. As school governors prove, they would take very seriously and be really concerned about the opportunity to do something for their local community, regardless of party. We need to give those people space to breathe. You cannot do it when the man in Whitehall is telling you whether or not you can have a betting shop on the high street.

Q19 Chair: What next?

Mr Allen: We need to keep the dialogue going. Traditionally in here, we either win or lose. I do not think that is the way forward. From my own point of view and that of the LGA, and from discussions with colleagues on my Committee and indeed informal chats with people on this Committee, I think the idea must be to keep the dialogue going. Let’s keep testing this, pushing this, making sure that it is workable and practical, and keeping all people of all political parties involved. We may then be on the way to giving local government the freedom that it deserves and the accountability to local people that it needs.

Q20 John Pugh: When the code is finally published, do you see it being a generational thing or a onceinalifetime thing? Is it something that might well change from Parliament to Parliament? In this Parliament, for example, public health has been given to local authorities. Equally, education has largely been taken back from local authorities. How permanent would the code be?

Mr Allen: The way the code reads, it can be permanent, and it would lay down some of the fundamental principles. Having that tampered with would be difficult, because if you do that, what Whitehall giveth Whitehall can taketh away. This is particularly the case when you have got a new Minister coming in who has not been steeped in local government, for example. I would be anxious about that. That is why I think it not only needs to be in statute, but, short of having a written constitution, it needs the closest thing we have got to that, which is the 1911 Parliament Act, to be a protection for it.

That does not mean that you cannot, for example, continue to negotiate between two equal partners further devolution of health to local government. That is a sensitive issue at the moment, and probably always will be. Health can deliver incredibly well at a technical level and a scale level, but then perhaps falls down occasionally on the human level. In my view, one of the ways that you could deal with that would be to have much closer integration with local communities. The first elected person I meet in the health service is a Secretary of State. I do not think that is healthy, and I think that you lose a lot by doing it that way. If I were in local government, I would want to talk to central Government about how that might work.

Similarly, colleagues have raised planning issues, issues around finance, and more ability to raise or not raise taxes, levies or whatever, with the consent of the people in their area. There is a lot of play, but you have got to preserve the fundamentals from those who would want to go back to days where the centre told us to do everything.

Chair: On that point, thank you very much indeed.

Mr Allen: Thank you, Chair. Thank you, colleagues.

Prepared 19th March 2013