council mergers

Budget cuts, outsourcing, council mergers: 12,000 miles travelled, but Cornwall’s ex-CE will find plenty that’s familiar

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Chris Game

Even allowing for local government’s legendary Stakhanovite working practices, the sector can’t usually manage that many hot news stories on Christmas Eve, so you do tend to notice them, especially if they contain a strand of possible personal interest. I remember well, then, the BBC’s announcement this past Christmas Eve that Cornwall Council CE, Kevin Lavery, had accepted a five-year appointment as CE of Wellington City Council and would be moving to New Zealand to take up the post in March – oh yes, at an annual salary of NZ$400,000, which converted then into £203,000, but today into £219,000 (I note irritably).

The reason (for my remembering, not for his moving) was that I happened to know that England’s cricketers would be playing the second Test Match in their series against the New Zealanders at Wellington’s charming and historic Basin Reserve ground in March – and I was planning to watch it. How brilliant, I thought, if I could do a quick interview with Lavery, just a couple of weeks into his new job, about his first impressions, contrasts with Cornwall, etc. Unfortunately, it quickly turned out that – for, I have to concede, eminently good reasons – ‘March’ in fact meant 31st March, by which time I would be well back in the UK.

More recently – like this morning – it also turned out that the final day of the said Wellington Test Match would almost certainly be rained off. So, lacking anything better to do, I thought I’d report anyway on some of the stuff that the interview might have covered.
First, the contrasts and similarities. Wellington City has a population of 200,000 and the biggest of 9 and a bit elected councils (1 regional, 8 and a bit city and district – don’t ask!) in the Wellington region. The council has an elected mayor (currently Green), 14 councillors, employs 1,500 staff, and has a budget of NZ$400 million (£220 million).

Cornwall has a population of 535,000 and a 123-member council – roughly the number of councillors plus mayors in the whole Wellington region. The council employs 19,000 staff – not far short of NZ local government’s total employment – and has a budget of about £1 billion.

In short, Lavery’s new job represents an apparently significant drop in scale, but barely a drop at all in remuneration. I quoted his salary at the outset, partly because the NZ media (and possibly public) are at least as fascinated/obsessed with executive pay, pay-offs, etc. as ours are, but mainly because so far his financial cost is one of the very few things that most Wellingtonians, including most councillors, know about their new CE. He was head-hunted in a recruitment process that cost NZ$157,000, including NZ$12,000+ to fly him out for interview; he can claim up to NZ$40,000 removal costs, and is promised a ‘golden parachute’ payment of up to NZ$200,000, if the job disappears in the regional governmental reorganisation expected over the coming couple of years. As one councillor put it: “We don’t know what we’re getting, but he’s cost us a bomb to get and he’ll cost us a bomb if he goes”.

So it’s fair to say that his relations, initially at least, with some councillors could be as touchy as they were with some of those in Cornwall, where, it may be recalled, the Conservative leader, Alec Robertson, was deposed and plans for a massive Lavery-driven shared services joint venture project had to be halted after they’d failed to win majority councillor backing.

Reportedly, Lavery was first sounded out by the Wellington headhunters immediately following the leadership change and the resulting withdrawal of one of the two bidders for the shared service joint venture, leaving only BT, one of Lavery’s former employers. But whatever the detailed sequence of events, the reputation preceding him to Wellington has been that of a ‘Marmite (or perhaps Vegemite) bureaucrat’ – you either love him or loathe him – and one with an undisguised enthusiasm for privatising and outsourcing services.

From which you might suppose that the costly new appointment was perhaps a symbolic act on the part of a council whose leadership had recently taken a shift to the right, and was looking at one and the same time to signal its political authority and a major change in policy direction. You might, but you’d be quite wrong.

If party politics in Cornish local government is, by UK standards, relatively low-key, in Wellington – and indeed in NZ local government generally – it is barely visible and almost uninterpretable to the untrained eye. In the city’s 2010 local elections, only 3 of the 14 successful candidates had stood openly under party labels (2 Labour and 1 Green), and the Mayor, elected for the first time (like councillors, for a three-year term), though a Green party member, had campaigned as an Independent.

Celia Wade-Brown’s election as Mayor seemed to surprise her almost as much as it did pretty well everyone else. Born and brought up in England, she came to NZ only in her late twenties, and, with little prior public warning, decided in 2010 not to recontest her council seat, but instead to challenge the high-profile mayoral incumbent, Kerry Prendergast, seeking her fourth term of office. In the STV election, Prendergast was a comfortable 6% ahead after the count of first preference votes, was still ahead on the second, third and fourth counts, but was overtaken by Wade-Brown on the fifth and final count by just 176 out of more than 60,000 votes cast.

The mayoral and councillor results combined were interpreted as representing at least a modest move towards the centre-left, but if voters were looking for a significant leftward policy swing, most must have been disappointed. Indeed, the CE appointment, involving as it did the personally humiliating dismissal of the former CE after 15 years and for apparently nothing very particular, was one of the few visible signs of an intended change of direction. As far as the 2013/14 Draft Annual Plan and budget is concerned, the headlines must look as familiar to Wellington electors as they do to us: large-scale savings (NZ$240 million over 10 years), necessitating service cuts, job losses, increases in fees and charges, and ongoing outsourcing.

A major reason for Lavery not taking up his post until the end of the month is that there are three important events taking place between now and then, the consequences of which will take up a sizeable chunk of his in-tray. One is the Council vote on 27th March to approve the Draft Annual Plan, detailing the Council’s work programme and proposed rate and fee increases, following which it will, as required, go out for a month’s public consultation, before coming back to the Council for final approval in June.
This year’s Draft Plan cuts council spending by NZ$9 million and proposes a rate (property tax) increase of 2.8%, and several of the detailed cuts especially are controversial: restricted library opening hours, increased parking charges, “changing the operating model” of the aquatic centre crèche (unsubtle euphemism there!), reduced grants to the Zoo Trust and ‘Positively Wellington Tourism’. All can, of course, and doubtless will be compared to the new CE’s salary.

Before that, on 21st March, another public consultation begins – on three options for local government reform across the whole Wellington region. Two of the three are alternative ‘super city’ models, as favoured by the regional reform working party. The third is a minimally modified status quo, added by the Mayor and councillors who oppose a super-city solution and argue that the public should be presented with a wider-ranging choice. Lavery will be on familiar territory here.

Also on 21st March Wellington councillors vote again on the national Transport Agency’s proposal for a 300-metre long, 9-metre high concrete flyover to ease the perpetual congestion round the huge roundabout within which is situated the Basin Reserve cricket ground (where in fact I should be sitting at this moment). We cricket fans fear the flyover would seriously blight our spectating, to say nothing of its impact on hundreds of local residents. The Mayor – for whom almost any kind of road development is anathema – and a majority of councillors argue that the congestion can be resolved by a combination of other means. However, some of the Mayor’s phraseology is worrying. She talks rather vaguely of ‘fine-tuning’ the present roundabout, and of how Basin Reserve “must not be blighted by a naked block of concrete”, as if various forms of pleasingly attired concrete were available alternatives. And now there’s talk of a couple of the eight councillors who opposed the flyover in December maybe switching sides following a two-month council staff investigation. What a pity I couldn’t have given the new CE a short personal briefing on the issue.

game

Chris is a Visiting Lecturer at INLOGOV interested in the politics of local government; local elections, electoral reform and other electoral behaviour; party politics; political leadership and management; member-officer relations; central-local relations; use of consumer and opinion research in local government; the modernisation agenda and the implementation of executive local government.

An Arsène Wenger perspective on West Somerset

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Chris Game

In her recent blog on financially distressed councils in general and West Somerset DC in particular, Catherine Staite suggested that we should be talking more about “streamlining the machinery of local government … merging smaller councils”, and in effect institutionalising some of the multiplying numbers of apparently cost-saving shared service and shared staffing arrangements

Hardly had Catherine’s blog hit the page, however, than things had moved on – certainly for hapless West Somerset. Despite its being a key recommended solution of both the LGA and the former Local Government Minister, Bob Neill, it seems West Somerset may not after all be one of the smaller councils destined for oblivion by merger. Instead, Neill’s successor, Brandon Lewis, has come up with a cunning plan to – as it’s put in the report going to the full council this Wednesday – “retain the ‘sovereignty’ of the Council as the local democratic accountable body in West Somerset” (p.34).

It’s good that ‘sovereignty’ word is encased securely in the kind of quotation marks used for unfamiliar or ironic usage – because it’s not one generally considered applicable to any UK local authority, and there certainly doesn’t seem a whole lot of it in the plan for West Somerset. Rather, it takes on almost the exact opposite of its usual meaning: namely, following to the letter the Minister’s lengthy list of demands and conditions, in exchange for which it has the unique ‘opportunity’ (my quotes, this time) to create a new model of operation by becoming a ‘Commissioning Authority’.

No, sorry, a solely Commissioning Authority, for in this case the Council would commission other service providers, mainly neighbouring councils, to provide all the services it decides West Somerset residents require, retaining only a skeleton staff to manage the arrangements and monitor performance. Yes – the minimalist council, once merely a gleam in the mind’s eye of Thatcherite Environment Secretary, Nicholas Ridley, has finally arrived. Remember the punchline to his vision of a council meeting just once a year, to hand out contracts for its various services: “I wouldn’t mind paying those councillors attendance allowances”.  How we laughed.  I wonder if West Somerset members will see the joke, as they learn the details of – to use a term that seems not to feature in Wednesday’s council report – their ‘virtual authority’: not physically existing as such, but made to appear to do so by software, or in this instance Ministerial soft-soap.

I want to return, though, to Catherine’s blog and her exhortation to talk about these things, and mergers in particular, before they reach the stage of Ministerial intervention. Here at the uni we’re all for more talk and critical inquiry – can’t get enough of them. So, in the interests of helping things along, I thought I’d perform an Arsène Wenger role and add a bit of perspective to the discussions.

The French-born Wenger, for those unfamiliar with Planet Football, is the longest serving and most successful manager of the English Premier League side, Arsenal. Despite his outstanding record, he is currently getting flak from both the media and club supporters after, by Arsenal’s recent standards, a poor start to the season. Wenger’s understandable response is to call for less emotion and more perspective, claiming that the club is in fact “in fantastic shape”.

No, I’m not about to claim that West Somerset, or indeed any other authority in these stressful times, is in fantastic shape. I do wonder, though, what it says about our system of LOCAL government that it apparently cannot accommodate a principal council of the size and with the potential resources of West Somerset, and when its own representative Association declares it “not viable as a unit of local democracy and governance over the longer term”. Why are we – a modest 80th among the territorially largest countries in the world – so desperately keen to have its largest-scale and least-local local government?

First, a few stats. The currently 28-member West Somerset DC was created in 1974 from a merger of two urban and two rural district councils (95 councillors in all), at least one of which – Minehead, a largely self-contained historic coastal town of just over 10,000 – would undoubtedly still be a principal council in its own right in many European countries.  West Somerset’s population is 35,000, with the oldest average age in the UK and spread across an area of 740 km² (290 mls²), including much of Exmoor, and the Quantock and Brendon hills. The result is a population density or sparsity of 48 people per km², compared to the UK average of nearly 400. Unfortunately, such extremes count for little when arguing grant settlement figures with London-based civil servants inclined to dismiss all such ‘special case’ bids as ‘that’s what they all say’.

Media reports of West Somerset invariably attribute its alleged unviability to its – meaning presumably its 35,000 population – being so ‘small’ or even ‘tiny’.  Which it is – but only by the UK’s extraordinary, Brobdingnagian standards.  Among EU countries, as shown in the table below, it is more than six times the average size of the lower-tier authorities in what are mostly two- or three-tier systems (Wilson and Game 2011, p.275). If, notwithstanding this being a Wengerian perspective, we take out the distorting influence of the Lilliputian-scale French communes, it’s still well over four times the average size. Try putting the figures on a graph, and the UK not only goes off the end of the horizontal axis; it would require a whole second page for itself

Image 1 Wilson and Game, Local Government in the United Kingdom, 2011, p.275(Source: Wilson and Game 2011: 275).

Dexia CEMR Image 2

(Source: Dexia-CEMR, page 6)

Most of these other EU countries’ municipalities, though generally much smaller than English districts, also have a constitutional power of general competence, and, even more relevantly in the present context, access to a number of different local taxes and tax bases – as can be seen in another graph from the same Dexia/CEMR publication (p.15). On average among the EU 27, the proportions of local revenue coming from central government grants/subsidies and from local/shared taxation are roughly equal; the UK ratio is 6 to 1. Across the EU, local taxes account for between 35 and 40% of local government revenue and between a fifth and a quarter of total tax revenues. Corresponding UK figures in 2011 were 12.7% and 6.2%  (Source: CCRE).

Dexia CEMR Image 3(Source: Dexia-CEMR, page 15)

West Somerset is simply an extreme example of UK local government’s general financial weakness and central dependency. It currently has, if I read the figures correctly, the lowest council tax base of any English district, minimal reserves on which to draw, and is facing a reduction in its revenue support grant both more savage and more immediate even than that for which it was already budgeting. Its alleged unviability is not, as the LGA described it, as a unit of local democracy and governance, but purely financial.  It is the victim of a rigidly centralist funding system being screwed down so tightly that the representative body of a sizable local area and population can no longer do the job for which it was elected.

One final point. Catherine Staite referred in her blog to Denmark’s recent municipality merger programme as one that might have lessons for this country: “councils joined together voluntarily with their neighbours until they achieved the best possible combination of size and geography to deliver economies of scale and locally accessible services”. As it happens, other Nordic countries and/or their citizens have resisted the Danish/British ‘bigger must always be better’ thesis – Norway and Sweden almost completely, Finland and Iceland considerably – but that is not my concern here.

The Danish structural reforms, if not the mergers themselves, were strongly centrally driven, incentivised, and extensive. The number of municipalities was cut by nearly two-thirds, from 271 to 98, the number of councillors by 45%, and the average population size increased from under 20,000 to 56,000 (see table above). However, there still remain 7 municipalities with populations of under 15,000 – the ‘special cases’ that our system seems unable, or unwilling, to accommodate.

It was actually suggested a couple of years ago that this should be the Government’s approach to West Somerset’s exceptional and increasingly dire situation: focus on the nature and needs of relatively small councils, rather than insisting on their adoption of a model designed for much larger councils. They could be allowed ‘flexibilities’, like lighter regulation, and not having to produce separate corporate, improvement and service plans. Above all, though, the Government might consider increasing, rather than cutting, their grant funding and allowing a council tax increase in excess of the then 3% cap.

And which hare-brained, ivory tower academic came up with that notion? None, actually – it was Bill Roots, ex-Westminster Chief Executive, and author of one of the first independent reports on West Somerset. A pity no one listened.

game

Chris is a Visiting Lecturer at INLOGOV interested in the politics of local government; local elections, electoral reform and other electoral behaviour; party politics; political  leadership and management; member-officer relations; central-local relations; use of consumer and opinion research in local government; the modernisation agenda and the implementation of executive local government.