Community crusaders, by Philip Johnston

30 Jun 05
Post-election, with a minister in the Cabinet and a vociferous council leader on their side, local authorities believe their time has finally come. But will new localism's dynamic duo succeed in giving local government back its powers? Philip Johnston doubts it

01 July 2005

Post-election, with a minister in the Cabinet and a vociferous council leader on their side, local authorities believe their time has finally come. But will new localism's dynamic duo succeed in giving local government back its powers? Philip Johnston doubts it

The guest speaker at this year's Local Government Association annual conference is Rudolph Giuliani, the personification of big city power and accountability. The presence in Harrogate next week of the former mayor of New York will be both a reminder of what local governance in England does not have – a figurehead politician with real authority and extensive powers (pace Ken Livingstone in London) – and an indication of what it might get if the centre ever agrees to loosen its grip over local or regional decision-making and fundraising.

Giuliani will be addressing the conference on leadership in local government; but one suspects that what his listeners would prefer is some idea of where they are going, a sense of purpose and direction at a time of uncertainty and opportunity. That task falls to Sir Sandy Bruce-Lockhart, the chair of the LGA, who, as leader of Kent County Council, is a Conservative politician who actually runs something, unlike his Tory colleagues at Westminster.

When the latter debate the merits of greater local autonomy, they do so from a theoretical perspective. For Bruce-Lockhart and his fellow council bosses, these are practical questions about the best way of delivering services at the most reasonable cost, unencumbered by regulations, targets, excessive inspection and unreasonable Whitehall diktats.

There is, on the face of it, a developing political consensus that decentralisation is the way forward, that control over local services has become too top-heavy. Hardly a leading politician of whatever hue makes a public pronouncement nowadays without bending the knee before the totemic concept of localism. There is deep irony here: a country where municipalism was once so strong is now having to reinvent the wheel after 30 years of relentless centralisation.

In a recent pamphlet, Direct democracy: agenda for a new model party, a group of newly elected Conservatives sought to open a fresh policy front for the party. They came up with a series of radical proposals for returning power to local communities, ranging from the election of sheriffs or commissioners to run the police to replacing VAT with a local sales tax, which would become the principal source of finance. It so happens that the amount of money raised for the Treasury by VAT (£64bn) is almost identical to the grant given by Whitehall to town halls. This would therefore allow for an unpopular tax to be scrapped, and encourage tax competition, since local authorities would have an incentive to lower their rates to attract custom and boost their revenues.

However, because some areas would have a far higher tax base than others, there would still be a need for central redistribution, which would somewhat defeat the object of the exercise. Local councils in England would also be given genuine power over issues of essentially local consequence, assuming control over the same fields of policy devolved to Scotland.

The pamphlet's subtitle, Agenda for a new model party, has a Cromwellian ring to it, and there is a touch of the Grand Remonstrance about its contents – a list of grievances against an over-mighty state and the implication that revolution is needed to address them. There was even a brief period when the authors toyed with the idea of calling it just that, a Grand Remonstrance, though they baulked at the prospect of being dubbed the Tory Roundheads.

But is a revolution really needed or are matters already in hand that will lead to a gradual re-empowerment of local government?

From the LGA's vantage point, the signs are promising. The appointment to the Cabinet of a minister for communities and local government gives councils extra clout where it matters. David Miliband, the new minister, has made all the right noises about 'partnership, engagement and delivery' and appears to be an enthusiastic champion of greater local autonomy and empowerment. He is in favour of giving communities a bigger say in their affairs, he talks about 'civic pride for the modern age' and wants to tap into the 'local dynamism' that he detects in town halls across the country.

In a speech to city leaders in Nottingham last month, he invoked the spirit of Joseph Chamberlain and other great Victorian municipalists, who built up England's cities in coalition with local business and communities without any help or interference from central government.

While Miliband did not want to 'fall into the trap of golden-ageism', he held out the prospect of a similar renaissance today. 'I see local government as a key agent, not just to help central government deliver on national priorities, but as a leader and shaper of local priorities,' he said.

But are all these fine words from the Tory roundheads and the Cabinet pointyheads going to make any difference? Beyond the rhetoric, what are they trying to achieve? What matters to local communities is less to do with the structure of delivery than whether their schools get better, their streets safer and their bins emptied. On the other hand, if the structures are actively working against the achievement of these basic aims, they clearly need to be reformed.

Bruce-Lockhart believes that the localist argument is over and the decentralists have won. The issue now is how to turn this ostensible desire for less central interference into reality. In an interview for Public Finance, he said the immediate priority was for a serious reduction in central bureaucracy, which has 'wasted public money, stifled innovation and denied local choice'.

He adds: 'Everyone agrees that, but doing something about it is another thing and nothing has really changed.'

His own council has to grapple with at least 500 performance indicators, few of which he considers accord with local priorities. Top-performing councils were promised a few years ago that the inspectors would leave them be for a time but that has not happened. Recently, 35 adult education inspectors descended on Kent for a fortnight to examine just one of the council's 64 business units.

'That kind of inspection is completely ludicrous,' says Bruce-Lockhart. 'Once a council has been judged good or excellent, why do we need teams of inspectors crawling everywhere? If the government believes in localism, it must dramatically slash inspection.'

The Kent leader has clashed with the Audit Commission over its new Comprehensive Performance Assessment framework, asking James Strachan, the chair, to reconsider the harder tests it sets for councils to achieve the same rating. Raising the benchmark will lead to councils dropping in the annual league tables, not because they are getting any worse but because they have failed against more stringent criteria. 'This is demotivating to staff and politically very difficult, with elections coming up next year,' says Bruce-Lockhart. 'Raising the bar like this every year is a relegation policy. We don't find this acceptable and I have asked them to rethink it.'

It is this continuing tension between national standards and local diversity that still has to be resolved. Miliband, for all his encomiums about localism, remains a supporter of targets and inspections as a way of pushing up standards.

'Targets help to raise sights, and force a strategic view of how to maximise positive outcomes from a range of inputs. Inspection helps provide an external spur to performance management,' he says. This might be true but they are also inimical to allowing councils to get on with it.

Miliband also favours encouraging community bodies that are outside local government, the sort of 'neighbourhood empowerment' that leaves council leaders distinctly cold since it involves a leeching away of their power and responsibility.

This is the central paradox of the localism debate. When Westminster politicians talk about it, they do not necessarily mean giving more power to councils, even though they profess their desire for better partnerships, fewer inspections and other changes local authority leaders like to hear. What they are really interested in is bypassing councils altogether and giving new powers to a network of community 'providers'.

The education reforms in the current parliamentary programme are a case in point, as are the city academies. In this area at least, central government sees local government as an obstacle to improved standards and wants to give head teachers, parents, faith groups and private firms a far greater role. Foundation status, as seen in the NHS, will be extended to schools.

And here is the second localist paradox: while this sounds like giving powers to the community, control over standards and funding will remain at the centre and, given the reluctance most people have to get involved in such matters, will be exercised by small groups of local activists.

The centre is most reluctant to release its grip where it matters most and that is on the purse strings. There are already noises emanating from Whitehall that whatever Sir Michael Lyons' Balance of Funding review comes up with, there will not be any radical changes.

For example, some expect that the review will recommend a complete reversal of the current 75:25 central/local funding ratio. But whether ministers have the political will to implement such a scheme is another matter. Although Lyons has, apparently, been assured that some reforms will follow his report, anonymous 'senior government sources' have popped up in recent days to indicate that there is no enthusiasm for fundamental changes. Changes such as introducing additional high-value council tax bands or other forms of local taxation are regarded as likely to create as many losers as winners. There are also strong rumours in Whitehall that the government is preparing to delay council tax revaluation until after the next election rather than proceed in 2007.

Yet from the point of view of 'localism', the problem with the council tax is not its unfairness, but the way it has developed into a system where three-quarters of council funding comes from central government grant. Only if councils have more freedom to raise their own money and be accountable for how they spend it will localist rhetoric be turned into reality.

Bruce-Lockhart believes the localists have won all the arguments for decentralisation but there is no certainty yet over how policies will now develop. When he and other LGA leaders call for 'radical decentralisation', they have something in mind that is fundamentally different to what Miliband or even the Tory authors of the Direct democracy pamphlet are thinking about.

By the time Bruce-Lockhart makes his chair's speech at next year's gathering, the picture should be clearer. Will the government have embarked on a restructuring of local finances, with all the political grief that could bring? Will it have taken an axe to the thicket of guidance notes, performance indicators, targets, bid systems and inspections that council leaders find so irksome? Will ministers be preparing to bestow upon a big city boss the sort of power that Giuliani wielded in New York? Somehow, you doubt it.

Philip Johnston is home affairs editor of the Daily Telegraph