When the main parties write their manifestos for next year’s general election, there is little doubt that all three will stress the importance of local control over public services. Tory leader Michael Howard has argued that there is ‘an urgent need to find the right way forward for local government’ and that ‘people want local services locally delivered’. According to Charles Kennedy, the Liberal Democrats want ‘want more money spent locally, decided by local priorities’. And for Tony Blair, the emphasis is on ‘the centre, local government and the front line working together’ on public service reform.
But behind the common rhetoric about giving power back to local communities there are real policy differences. At the crux of the debate is the role of the state in guaranteeing certain opportunities and protections for all of its citizens. How far should the Government ensure minimum standards that apply to all local areas? How do you ensure that poor areas with high levels of need are able to meet their obligations? And how do you balance the interests of the country as a whole against the sometimes conflicting wishes of local voters?
For Labour, this issue has become something of a hard sell. There is widespread recognition among ministers that the Government has been too centralist. National targets, inspection and performance management stifle local innovation and create an atmosphere of tension between local and national government. And that’s without even mentioning the current controversy over council tax. But at the same time, voters do appear to want national standards – something that must entail a degree of central control. How can this contradiction be resolved?
Labour’s response has been the so-called ‘new localism’ – a term beloved of policy wonks and pretty much nobody else. New localism recognises that there is a role for central government in guaranteeing core standards, but acknowledges at the same time that local government is better equipped to deliver them. It seeks to reward high-performing councils by granting them more autonomy, while providing more support to the strugglers. And it emphasises flexible structures, with new directly-elected bodies such as elected regional assemblies, police authorities and Foundation Hospital boards supplementing existing democratic local authorities.
The new localism agenda has proved a tempting target for both the Tories and the Liberal Democrats, who accuse Labour of being unable to shake off its centralist instincts. Concepts such as ‘earned autonomy’ reek of Labour’s ‘Whitehall knows best’ attitude, they say. In contrast, both opposition parties are attempting to portray themselves as the true champions of local control.
In a speech to the New Local Government Network on 19 April, Shadow Regions Secretary Bernard Jenkin mapped out the Conservative alternative, pledging to ‘break Labour’s centralising hold on local government’. Under Labour, he claimed, local authorities had been treated as little more than delivery agents for centrally determined policies. That had to change.
Under a future Conservative administration, the relationship between central and local government would be defined by four key principles, Bernard Jenkin said. Firstly, there would be a clear demarcation of responsibility between different tiers of government – for the first time, ministers would not have to answer in parliament for matters that fell within the remit of local councils. Second, no new levels of government would be created – so no regional assemblies for the Tories. Third, local councils would be responsible for raising a greater proportion of their own revenue, making them less dependent on central government. And finally, the Conservatives would encourage a diversity of local solutions, rather than a single centrally-prescribed model for each area of policy.
The central and most dangerous proposition of Bernard Jenkin’s speech was what he referred to as ‘the failure of equalisation’. ‘Predilections for fairness’, he said, had resulted in a ‘cycle of centralisation’. This had progressively stripped local government of its autonomy and fiscal independence, but had failed to deliver improved outcomes. He called on politicians of all parties to recognise this failure. It was necessary, he said, to ‘let go at least some of the equalisation agenda’.
The implications of this innocuous-sounding sentence are potentially catastrophic. Local authorities vary enormously both in terms of tax base and in terms of local needs. Some authorities have a large proportion of high value properties, and their council tax yield is accordingly high. The same is not true in many other areas. Likewise, some authorities have much higher levels of social need than others – for example, a high population of poor, elderly people requiring long term care, or a large number of children with special educational needs such as the children of immigrants who need extra support to learn English. These differences are reflected in the complex equalisation formula used by the government to establish how much additional grant local authorities require from the centre.
And the differences are substantial. The London Boroughs of Newham and Tower Hamlets fund only ten percent of their revenue expenditure through council tax. In contrast, the figure for Huntingdonshire is 71 percent. The level of deprivation is a key driver of this variation.
If the Tories were to cut back significantly on the equalisation objectives of the local authority grant formula, the effect on essential services would be devastating. If Newham were to receive the same proportion of central government grant as Huntingdonshire, its budget would be reduced from £396 million to only £55.5 million. Furthermore, centrally mandated initiatives to ensure that local authorities pull their weight in providing mental health services and tackling homelessness, domestic violence and crime would all be swept away.
The Conservatives claim that this new, unequal policy landscape would simply reflect the priorities of local voters. But in reality, local authorities would be denied the means by which to tackle very real local problems. Instead, swingeing budget cuts would be forced upon them by an ideologically driven Conservative government. And local authorities, enjoying their newfound ‘independence’, would be expected to take the flak.
The losers, of course, would not be the residents of wealthy, Conservative-controlled councils. The standard of service provision in those authorities would be substantially unaffected because of their larger tax base. Instead, those suffering would be among the most vulnerable and marginalized people in society – people who cannot fight back.
Despite these unpalatable consequences, the Conservatives do at least deserve credit for one thing: they are prepared to spell out that greater local control entails difficult choices. The same cannot be said for the Liberal Democrats, who promise both high national standards and total local control, even if that means adopting directly contradictory positions on the same policy. For example, in 2002, Lib Dem health and social care spokesman Paul Burstow promised an ‘end to the postcode lottery on fees’ for social services ‘with national standards for setting fee levels’. Yet the party’s Ten Point Plan for Local Government, set out by their then local government spokesman Don Foster, promised greater flexibility on charging. ‘Differences between councils on charging policies are not necessarily an unhealthy thing’, he said.
Labour has been on the defensive in the localism debate, with both the Conservatives and the Liberal Democrats arguing strongly for greater local control. Labour’s message, on the other hand, has been more complex and harder to convey.
But in truth, Labour is the only party that is grappling with the difficult issues that this debate entails – how to balance national standards with local control and how to protect the neediest in society. Labour recognises that the key to improved services lies in establishing a genuine partnership between all tiers of government, frontline public sector staff and ordinary citizens. It requires co-operation, not the Tories’ stark choice between central and local control, or the Lib Dem pretence that choices don’t have to be made. The challenge for Labour is to force the Conservatives and Liberal Democrats to spell out the tough choices that their policies would really entail.