Whitehall sources have been briefing that a major reorganisation of local government in England is planned, with ministers expressing frustration at the inefficiency and inertia of many councils. The Ministry of Housing, Communities and Local Government is due to publish a White Paper with proposals to streamline administration in 10 identified pilot areas.
English local government is a diverse patchwork at best, a hidebound bugger’s muddle at worst. There are 317 local authorities, with most of the country administered by a two-tier system at county and district level, with a single tier for London and other metropolitan areas, as well as some parts of the shires. Local authorities come in no fewer than five types: 21 county councils, 164 district councils, 62 unitary authorities, 36 metropolitan districts and 32 London boroughs. The first two divide the provision of public services between them, while the last three all administer the full range of council services. Finally, there are two outliers: the City of London Corporation and the Council of the Isles of Scilly.
If this seems chaotic, it was once much more so. The last wholesale reform of English administration was the Local Government Act 1972, a typically technocratic measure of the Heath era which nonetheless aroused fierce opposition in some areas and did not go as far as it could have done. The legislation was shepherded through the House of Commons by the minister for local government and development, Graham Page, a diligent, accommodating but slightly colourless solicitor; it drastically reduced the number of councils, from 1,245 to 412, and established a more-or-less uniform two-tier pattern of six metropolitan and 39 non-metropolitan county councils overseeing 332 smaller district councils.
The Government’s new proposals will replace the two-tier system with larger unitary authorities of around 500,000 people and see the extension across England of elected mayors. At the Labour Party conference in September, Jim McMahon, the local government minister, declared it was ‘not acceptable’ for some regions not to have an elected mayor, because the model already used in Greater Manchester, the West Midlands and elsewhere was ‘part of our system going forward’.
The first stage of reform will focus on 10 areas where there is existing proactive support for the new model: including Essex, Kent, Surrey, Hertfordshire, Norfolk and Suffolk. In return for embracing the pattern of unitary authorities and elected mayors, the regions are promised increased powers and funding from Whitehall. Ministers hope that the changes will increase efficiency and solve the problem of district councils opposing housing development and accumulating cash reserves rather than spending money on public services.
The Government sees these new local authorities and mayors as a key part of its programme of economic growth. But they fail to acknowledge a more fundamental problem. Local government suffers from a damaging nexus of poor accountability, low visibility, lack of legitimacy and shortage of talent. Each feeds into the other, but at the root of it is financial dependency.
Local authorities in recent years have received more than half of their funding in the form of a grant from central government. Last year this accounted for 51.8% of council expenditure, with the balance coming from council tax (31%) and retained business rates (15%). This disproportionate reliance on a settlement from Whitehall, with less than half of local expenditure being raised where it is distributed, encourages a disconnection in terms of responsibility and therefore of participation. In turn this is reflected in low turnout for local elections, typically between 30–40% but sometimes as low as 24% for metropolitan district elections in 1998. By contrast, the turnout at the 2001 general election, the lowest since 1918, was still 59.4%.
Low turnout indicates that voters regard council elections as being of second-order importance. A poll in 2022 demonstrated that more than half of voters knew ‘not very much’ or ‘nothing at all’ about the work of local authorities, despite the fact that it is these organisations which are responsible for education, social services, public transport, roads, planning, council housing and refuse collection. Arguably, with more than half of expenditure being handed down from Whitehall, why should voters pay attention? And why should able, energetic, ambitious men and women involve themselves in local government?
This downward spiral needs to be replaced by a virtuous circle of devolution, financial responsibility, democratic accountability and public engagement. The government is right to pursue the principle of subsidiarity whereby powers are exercised at the lowest possible level: this has its roots in St Thomas Aquinas’s doctrine of natural law. With devolution of powers, however, must come devolution of taxation, emphasising the intimate and unbreakable relationship between income and expenditure.
The government believes streamlining councils could save £3 billion over five years. That is, in reality, a secondary issue. If ministers were willing to address local government finance, there is an opportunity for a fundamental reordering of the state and the services it delivers, to make power local, accountable and transparent. That really would be a legacy.
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