It’s probably time to give up on the idea that central government has the political will to fix local government’s problems. We need a bottom-up transformation of how local services work.
What is local government? Do we think it is essentially a delivery organisation, there to ensure that local people get a certain range and quality of services? Or, do we think it should be the political expression of a community, reflecting the needs, hopes and desires of a group of people who live together on the same patch of land?
The question sounds academic, but in fact it suggests two very different approaches to reforming the sector as austerity continues to bite over the next five years. If councils are basically there to deliver services, then the way to save the sector is probably through a national policy fix. This is the view that dominates last month’s Independent Commission on Local Government Finance, a document that blends incisive analysis with the surprising conclusion that the answer is to set up another independent review of the problem. The implication here is that some sort of Royal Commission could force ministers to confront a range of issues that have historically been placed in the ‘too difficult’ box. We might expect it to recommend the reorganisation of two-tier areas, the promotion of service integration and the reduction of statutory duties.
But it is far from clear why the next government should want to hear these messages. Frontbench spokespeople have already ruled out top-down reorganisation because the savings do not justify the political pain, the political parties already think they are promoting integration, and are frankly wondering why councils themselves are not doing more to rise to the challenge. While there are splashes of colourful radicalism in the commission’s recommendations for so-called ‘pioneer’ areas of the country, the recommendations for universal reform amount to ending council tax referendums and allowing councils more control over fees and charges.
There is another way of looking at the problem, and that is to use financial reform as a lever for a more bottom-up transformation of the way local services – and local democracy – work, driving and incentivising positive change in the way that local government and its partners are structured and the ways in which councils engage their citizens. Instead of simply handing councils a little more control over the existing finance system, ministers should insist on debates in Manchester, Liverpool and Leeds about the future funding of public services. Councils that work together to hold local conventions, and which can convincingly demonstrate substantial local support, should be encouraged to bid for greater financial freedom of the back of it. If Labour is in power in May, there will be a golden opportunity for councils to take the lead in demanding a federal approach to the party’s plans for a constitutional convention, demanding that it should be made up of delegates who have already considered the issue at a local level.
This approach would heavily incentivise councils to lead mature conversations about the future of all the public services in their area, and to work with citizens to legitimise new approaches to configuring everything from the local acute sector to whether or not the public can help maintain parks and public spaces. The obvious starting point for any discussion on the future of funding is to give local authorities a much bigger stake in the growth they help to deliver in their localities. Councils need a way to benefit from new development and rising wages. Assigning cities and shires a fraction of local income tax or corporation tax revenue might be a good starting point.
It is probably time to give up on the idea that the centre has the political will to fix local government finance. Looking ahead over the next five years, we might question whether the next government will even have the legitimacy to address such a difficult set of problems. It will take some sort of systemic crisis to drive real reform. But everything we have seen since 2010 suggests that savvy and forceful action from the ground-up can drive real change; that principle will probably deliver far more in practice than would yet another national review.
Simon Parker is director of the New Local Government Network
