Ministers’ rhetoric about the role of local government has been confusing, but this should not prevent councils from innovating
‘What if this is it?’ asked the chief executive of a Northeast metropolitan council. We were discussing the lack of clarity about the potential powers and funding for Local Enterprise Partnerships, but the comment could have applied to many areas of local government policy. It’s slightly paradoxical, but the most localist administration in a generation seems to have generated confusion and even resentment among many of the councils it claims to be empowering.
Some of the reasons for this are obvious: the New Local Government Network’s projections suggest cuts of at least 30% are in the pipeline, and councils have yet to adjust to the coalition’s habit of abolishing things and then waiting for the sector to come up with its own replacements. But local government is also reacting to a philosophical shift going on in Whitehall as the coalition tries to restructure the way accountability works in the British state.
Prime Minister David Cameron’s team doesn’t want national politicians to be held wholly responsible for the outcomes that public services achieve. The coalition views localities as a collection of individual services, each of which needs to be directly accountable to citizens. Hence free schools and elected police chiefs.
The problem with this philosophy is that it could easily squeeze local government’s role in shaping services. Elected police chiefs could fragment local democracy, creating a source of legitimacy independent of the council. Free schools, outcome-based contracts for tackling worklessness and GP commissioning all create new institutions with few incentives to work with councillors. Area-based budgets could be limited if these services are not included.
This matters because councils are the only institutions with the democratic legitimacy to reconfigure local service provision. If we want to redesign public services across traditional silos then councillors need to be in the forefront of making the political case to local people. This is even more important in areas such as libraries and elderly care, where community action could play a big role in service transformation.
Cameron says he is offering councils less money but more freedom. So far, they could be forgiven for feeling they have heard more about the former than the latter. In conversations with council chief executives and leaders over the past few weeks, I’ve heard three interesting suggestions for redressing the balance.
The first is to reinvent the duty for local public services to co-operate, which might not have much legal force after the demise of Local Area Agreements in 2011.
Strengthening the statutory obligation to work together would be largely symbolic, but would at least provide a starting point for partnerships between different service providers.
The second area is local government finance, which Communities Secretary Eric Pickles plans to review next year. He must make an early commitment that the review will result in a real increase in the proportion of council funding raised locally.
Once the cuts are taken into account, local government could be raising around 40% of its own non-education revenue by 2015. That figure could be boosted to over 50% by the end of this Parliament through tweaks to council tax and the business rate, starting with Tax Increment Financing powers for councils, as announced by Deputy PM Nick Clegg. This could be combined with increased charging powers and voluntary local taxes.
Finally, ministers could push further on decentralising power – parts of the criminal justice, worklessness and benefits systems are candidates for some form of greater localisation, perhaps linked into area-based budgets.
In return for this freedom, local government needs to move past the initial shock of the cuts and start showing just how innovative it can be. The rewards will be felt not only through minimising the impact of the cuts on communities, but ultimately in a more devolved and responsive generation of public services and a more localist British political environment.
Simon Parker is director of the New Local Government Network
