William Norton authors this ten point briefing on localism and decentralisation.
(1) Britain has a highly-centralised political culture. The state spends 41% of gross domestic product (tax year 2003/4), and this is distributed in a top-down manner from Whitehall, with local authorities only raising about 25% of their revenues from local sources. As at March 2005 there were at least 2,400 central government quangos operating on a UK or England basis (i.e. ignoring those managed on a devolved basis in Scotland, Wales, Northern Ireland or Greater London).
(2) This centralisation is exacerbated by a targets culture. The Treasury has Public Service Agreements with the various central government departments whereby "performance conditions" are attached to funding increases under Gordon Brown three-yearly Spending Reviews. In parallel, the Cabinet Office has a plethora of agencies such as the Prime Minister’s Delivery Unit and the Strategy Unit establishing central plans for the public sector. This forces the Whitehall Departments in turn to attach performance targets and conditions to the agencies they fund. In England the Audit Commission sits at the head of a vast empire of box-tickers running continuous monitoring of services in areas such as local government, criminal justice, health, and housing. OFSTED is also responsible for an inspection regime over schools. There is little or no evidence that targets of themselves have caused a better standard of public service. Even the most optimistic analysis of performance under Blair, Better Or Worse? By Polly Toynbee & David Walker concedes the "mindlessness of targetry as practised under New Labour", accepts that productivity has declined in the public sector (notably the NHS) and points out that too many plans fail to join-up with each other.
(3) As the state has aggregated greater powers to the centre, turn-out in elections has fallen. Typically, only between a quarter and a third of eligible electors will vote in a local election. The Government has responded with a variety of pilot schemes for boosting turnout, such as all-postal voting. The usual explanation given for low turn-out is that increased central control of town halls from Whitehall has rendered the results irrelevant.
(4) This has led many commentators, from differing ends of the political spectrum, to call for “localism”, or a return of power and discretion to local entities. There are two strands of thinking involved: the simple devolution of power to existing structures, and the creation of new directly-elected bodies. Since at least 2002 the left-leaning think tank the New Local Government Network has championed "refashioning the centre-local relationship". Immediately after the 2005 General Election, from a Conservative perspective, the authors of Direct Democracy called for a "a genuine link between taxation, representation and expenditure at local level" as a means of reviving voter participation in local government, and of creating more flexible and effective services.
(5) During the Blair second term, the Government itself claimed to be following a policy of "New Localism", but this is better regarded as "Earned Localism", whereby authorities or quangos which performed exceptionally well against central targets were to be permitted discretion in some (but not all) areas. Foundation hospitals, Continuous Performance Assessment in local government and, arguably, the recent Education Bill reforms should be seen as part of this approach. The policy has a dubious basis, since it presupposes both that heavy centralised control will be the norm and that this is something which local authorities should seek to escape. Now that its major advocate, Alan Milburn, has returned to the back-benches it is possible that the debate on the left will be further stimulated, perhaps as a veiled critique of Gordon Brown.
(6) New Labour would also argue that it has decentralised power through a preference for regional government and a bias towards the regions generally. However, the draft legislation which would have governed elected regional assemblies made them subject to central guidance to achieve national priorities and the Secretary of State retained a veto over everything from the budget to the location of foot paths. The only electoral test of regionalisation, the North East Referendum of 2004, saw a devolved assembly rejected by 78% to 22% on the grounds that it would put up council tax and not be worth the cost. The Blair/Prescott regionalisation policy has more to do with the avoidance of an English Parliament.
(7) Perhaps more relevant has been the Government’s policy of encouraging directly-elected mayors to replace more traditional local councils. Advocates of localism from all parties tend to support this movement as a vehicle for devolution, usually citing the example of Rudy Guiliani in curbing crime in New York. The electoral support for such mayors is also limited. Greater London, of course, has a Mayor, Ken Livingstone but his period in office has not been an unalloyed success and it is arguable that the low turnout 1998 referendum was as much about restoring a pseudo-county council lost in the 1980s. Since 2000 there have been 31 local referendums outside London and only 11 have been passed.
(8) The centralised funding of councils means that attempts to boost locally-raised funding will lead to disproportionate increases in council tax or the creation of new taxes to expand the local tax base, for example. The North East Referendum result suggests that will be very unpopular. A thorough policy based on localism would therefore most likely require an across-the-board cut in central taxation with local entities then making up the difference in amounts varying from place to place in significant amounts depending on their own policies. That in turn raises questions about the future of "equalisation", where the central tax system is used to redistribute resources from wealthy to poorer areas, in particular the Barnett Formula which guarantees higher per capita public spending in Scotland, Wales and Northern Ireland.
(9) The most serious perceived flaw with localism is that, with local entities free to pursue their own policies and objectives, it creates the possibility of some areas being "winners" and some being "losers". To an extent a post code lottery already exists (e.g. with catchment areas for the best state schools) but a perceived inequality of outcomes would generate controversy. There must be doubts as to whether the mainstream media with their exaggerated Westminster bias would resist negative coverage, and whether Westminster politicians could resist the temptation to be seen to “do something”.
(10) It should be recalled that centralisation advanced greatly in the 1980s under the Thatcher Government. With the stabilisation of public expenditure growth a major strategic objective for the government, it was considered necessary to regain control of excessive local authority spending. Over time, a desire to curb the activities of loony left councils also gathered momentum. The metropolitan county councils were abolished ostensibly to streamline bureaucracy. These issues can be expected to resurrect themselves in one form or another with any application of localism in practice.
Very useful summary.
The important point about local institutions being forced to "earn" more independence is underlined again today by the announced changes to the government's school inspection regime. Schools can now qualify for "light touch" inspection, but only if they've already ticked the right government boxes.
Those that haven't done so should definitely peruse the Direct Democracy link in Williams post.
Posted by: Wat Tyler | June 23, 2006 at 09:16 AM
I agree, Wat. There's also a good discussion of localism and the state in the Policy Exchange's Compassionate Conservatism book whcih CHome summarised recently
Posted by: tory activist | June 23, 2006 at 09:33 AM
I am a fan of the ideas behind localism and think there are many positives to be said about localising more issues.
On the flip side I see an important role for central government and would certainly not suggest that all things central are bad.
But do the results in the various mayoral referendums suggest that the public actually quite like centralisation or owe more to either a lack of information or distrust of having more politicians?
Posted by: James M | June 23, 2006 at 09:46 AM
The excellent publication by some younger MPs, MEPs and candidates by Direct Democracy makes a compelling case for localism. If you haven't had the chance to read their publication, I strongly recommend it. It is well written, clear and well thought through.
Posted by: Donal Blaney | June 23, 2006 at 09:59 AM
Excellent. I will link this to my localism blog power to the people.
Posted by: Andrew Woodman | June 23, 2006 at 03:45 PM
A very useful overview, adn something to eb supported. But one doorstep question localists must be ready to answer is: "I live in a very poor area. Under highly localised public services, won't my local school/hospital/transport/services always be worse than those in the rich town down the road?"
And "work hard and maybe one day you can move to the rich town" doesn't actually answer the question.
Until we can convince people that this doesn't have to follow, a lot of those on low incomes assume localism is a way for the government to avoid paying for public services for poor people.
Posted by: James | June 23, 2006 at 06:26 PM
It maybe 'New Labour', but targets, statistics and dogma, are very soviet. I worked doing research into the SU for quite some time, and 'norms' (the same differnce) ruled their lives - in factories etc:!
Posted by: Patsy Sergeant | June 23, 2006 at 10:54 PM
I meant to add - - so the sooner David Cameron can distance himself from this sort of obssession in government, the better, and what better way than to have more localism and fewer vast government quangos.
Posted by: Patsy Sergeant | June 23, 2006 at 10:57 PM
For localism to work in Britain, people have to stop thinking "post code lottery" and start thinking "post code choice". That's what my husband and I did when we moved to Wandsworth (of course it doesn't hurt that our services are pretty darn good, too).
But I don't think anyone would realistically argue for full localism. Even under highly localised systems, e.g. in America, there is still tax revenue redistribution. So although much tax is raised and spent locally, some sales tax is redistributed from wealthier shopping hubs to areas which may not have car dealerships or malls.
But there needs to be more tax freedom in the UK - e.g. business rates should be local (or 80 to 90% so anyway) to help councils encourage business - instead of all being put in a national pot. If crazy lefty councils want to tax the heck out of business, I say let them. They won't last long.
Posted by: VA | July 02, 2006 at 01:30 AM
Patsy, I think you've picke up an important point about the socialist agenda of targets. But there's more than that - they have some kind of weird managerialist notion that everything must always be constantly changing to support a climate of "innovation". Between chasing targets - and trying to understand your PCT or police boundary, it's no wonder things are in an expensive muddle.
Posted by: VA | July 02, 2006 at 01:32 AM