Whitehall Watch

This country’s so centralised, why should people care which set of politicians controls the town hall? Peter Madden on moves to make local government matter more.

When local council elections are held this May, two-thirds of voters won’t bother to turn out. They think, with some reason, that their votes won’t change much.

At present, government in the UK is incredibly centralised. Governments of all persuasions have further concentrated power in recent decades. Over three-quarters of local government money now comes from the centre. And it comes accompanied by a plethora of targets and management regimes, with an estimated 1,000 performance indicators, to ensure that local authorities spend it in an approved manner.

But there’s a strong argument that more robust local government is essential for sustainable development.

“Greater power at the local authority level could unleash the innovation we need to tackle climate change.”

Greater power and autonomy at the local authority level should improve democratic engagement, by making government more responsive to the needs of local people. It can allow problems - such as transport - to be tackled at the right spatial level. It could also unleash the kind of innovation we need to tackle problems like climate change, by allowing different places more room to experiment.

Central government does now recognise these issues. So will 2007 be the year in which local government is given the freedom it needs to do its job? All the political parties are saying that they want to give power back. The Conservatives want to give local authorities more control over spending plans. The Liberal Democrats promise “an end to centralisation”. And Labour promises to “show our confidence in local government... by giving them more freedom and powers”.  

Last autumn’s local government white paper Strong and Prosperous Communities made some moves in the right direction. It set out a modest devolutionary agenda with some re-balancing in the relationship between central and local government. It gave local authorities greater power in overseeing local services, but did little to change structures or finances.

More fundamental changes are likely to come in the next couple of months with the completion of Michael Lyons’s long-running inquiry into the funding, functions and future of local government. 

The Lyons review has been postponed three times already, largely because of political difficulties. Gordon Brown will not want a huge public backlash over council tax changes, in particular property revaluations. Will we see local authorities given more radical control over spending? I suspect Lyons will propose some re-localisation of business rates, more revenue from the new planning gain supplement, and that more fees and charges be held locally. So, there will be some - but only limited - widening of the local tax base.

The Local Government Association (LGA) is asking for a much more ambitious settlement. And a cross-section of politicians and think tanks is about to launch a call for all three parties to beef up their policies on localism.

The LGA also wants to turn the wellbeing power (the discretionary power given to local authorities in 2000 to act to improve local social, economic and environmental wellbeing) into a duty. This would be a welcome step, but we need to go further, placing a statutory duty on local authorities to deliver sustainable development. So far, government has sent very mixed messages on this. Climate change, for instance, was relegated to Annex F of volume two of Strong and Prosperous Communities. And there is a danger that devolving power and resources, without devolving the duty to act sustainably, could actually drive unsustainable development as localities compete with each other, regardless of wider social and economic impacts.

What might we see from Gordon Brown? Contrary to the impression he often gives as chancellor, he does have decentralising tendencies. He might announce that local government will take on new functions, overseeing the majority of locally delivered services. We may also see, at last, something coherent emerging on city regions. 

Will these proposals be enough to change the perception that local government is a tool of Westminster and Whitehall? If councils are given more scope to make a difference then they should be taken more seriously. And if they show confident leadership in shaping the places where people live, local people will value them. Unless this happens, voters are likely to continue to use local elections as a referendum on the national government of the day.

Peter Madden is chief executive of Forum for the Future.

9 March 2007

Peter Madden