The English question

Martin Stott

It is worth contemplating the possibility of a scenario in which Scotland votes for independence in September and a new Government holds an ‘in/out’ referendum on the remainder of the UK’s membership of the EU in 2017 – and the vote produces an ‘out’ result.  Whether it is of the social democratic variety espoused by the SNP in Scotland, or the populist nationalism of UKIP in England, nationalism is having a profound effect on British politics.  Contested membership of the EU and the salience of immigration in the political debate are two examples of where political parties’ responses are fumbling and confused, and were these two referenda to result in Scottish independence and a British exit from the EU, the shocks  to the existing political system would be enormous.

What has this got to do with local government? The reality is that Britain has an extraordinary concentration of political and economic power in London and whatever their result, the impact of these referenda only serves to reinforce that position. None of the major political parties are seriously thinking about any kind of constitutional settlement which addresses the issue. There is a long tradition of parties praising local government to the skies in opposition and promising all kinds of devolution of powers and local taxation when they come to power, only for this to be forgotten the moment they actually obtain power.

This is particularly striking in relation to local tax raising powers. The proposed ‘mansion tax’ – a very poor substitute for a council tax revaluation (let’s not go down the path of the regressive nature of the council tax itself just now) will of course be collected by the Treasury and not local government. Labour has always seen the Treasury as a force for good, especially in the Brown era – think public expenditure and tax credits amongst other things. But the power of the Treasury combined with the influence and economic power of London and the City in particular, has hugely distorted the social and economic balance of England and the rest of the UK.

This sense of being ignored by metropolitan elites has certainly driven the rise in support for UKIP and a more general disenchantment with politics generally, where a cynical view that the elite looks after its own has been confirmed for some by the scramble for parliamentary seats by the sons of Labour grandees (think Stephen Kinnock, Will Straw and David Prescott).

A crisis of legitimacy is developing in England where the kind of top-down statism perceived to come from Whitehall and Westminster is exacerbated both by current government policies and by the dysfunctional and systematic inequality generated by markets  and inequitable public service provision over many years, both of  which have their roots in a culture of ‘Whitehall knows best’. The problem is that a lot of people don’t agree with that any more (if they ever did) and the problem for political parties is that voters are expressing that at the ballot box, where support for the major parties is ebbing away by the day, whether it be to nationalists, UKIP, independents, or simply by not voting at all.

Many Conservatives would dispute the idea that they were a party that supported the long arm of the state. But folks in local government know better. Whether it is Eric Pickles sounding off about waste collections systems (a subject he has been mercifully silent on recently) or the wickedness of councils raising revenue through ‘excessive’ parking charges, as he caps council tax rises at 2% and then decides that councils aren’t playing the game if they raise them by 1.99% and proposes that they should be capped at 1.5% in future, micro-management of local government is what Whitehall loves doing most. That is of course when it isn’t wriggling out of George Osborne’s public expenditure cuts by loading them onto errr…local government.  National Trust Chairman Simon Jenkins encapsulated this in a recent article in which he pointed out that in reality the really big loser in the recent rounds of austerity has been local government who have ‘…borne the lion’s share of the burden so as to relieve Whitehall budgets of real pain.’

The rising resentment of many outside the corridors of power about the absence of a political voice and accompanying economic levers for many different English communities is fuelling this splintering of political support and adding to the crisis of legitimacy. Yet there is plenty of evidence that complex policy challenges ranging from entrenched pockets of social disadvantage and isolation, the resource implications of a combination of long term care for the elderly and obesity and other lifestyle diseases amongst younger people, or the impacts of catastrophic climate change, are best addressed at local level, a reality briefly acknowledged  in the dying days of the Brown Government through its ‘Total Place‘ programme.

The idea of devolving more economic and political power across England is hardly a new one and a few nugatory experiments such as the Regional Development Agencies have been tried and dropped. Lots of politicians in all political parties pay lip service to the idea that the public realm means more than just the central state, but if this crisis of legitimacy isn’t to start taking an uglier form, a road map of how power will be devolved  to cities and counties in the next few years is urgently needed. A satisfactory answer to the ‘English Question’ presses, as these referenda loom, and whatever their outcomes it won’t go away any more.

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Martin Stott joined INLOGOV as an Associate in 2012 after a 25 year career in local government.

What does the Autumn Statement mean for local government?

Catherine Staite

This December, in contrast to the previous two years of worse than expected news, the Chancellor has revised his growth forecasts upwards and revised his debt forecasts downwards.

Figure 1 shows successive forecasts for year-on-year GDP percentage growth (at constant prices) since November 2011 It can be seen that the forecasts have been successively revised downwards by the Office for Budget Responsibility since then, as shown by arrows a, 2 and 3.  However, the latest survey of forecasts by the Treasury for this November suggests that the Chancellor will be presented in December with a higher-than-expected forecast for GDP growth – as shown by arrow 4 – for his Autumn Statement.

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Figure 1: Growth forecasts since November 2011

Up until now, local government has taken more than its fair share of the downward adjustments to spending plans. Funding for councils has fallen by an average 21% and ‘councils serving deprived areas have seen the largest reductions in funding relative to spending since 2010/11’.

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Figure 2: The variable impact of the cuts

Dealing with the problems generated by changing demographics, the economy and central government policy have increased pressure on council finances. Spending on homelessness has risen by 16% since 2011/2 and the number of looked after children increased by 10% between 2009 and 2012.  The pressure to meet rising urgent need means there is less to invest in early intervention which will save money and improve lives in the long term.

Local government has reduced its costs by cutting jobs and being more efficient.  Council’s can only cut so far before they become unable to meet their 1700 statutory duties, including protecting the most vulnerable and remain viable.

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Figure 3: Cumulative cuts for CLG and local government

Because Communities and Local Government have taken a disproportionate share of previous budget cuts, local government has also taken more than its fair share of the cuts.

The news that there will be no further cuts to local government funding in 2014/5 is to be welcomed, not least because it is a tacit acknowledgement that local authorities have risen to the challenge of becoming more efficient, in an exemplary way. Perhaps it also reflects some understanding that continued cuts would further endanger services for the most vulnerable.

Local government has wearied of the confrontational style and unrelenting unpleasantness of Eric Pickles. Perhaps, today’s news is a sign that George Osborne is interested in having a more mature and productive relationship with local government.

Catherine Staite

Catherine Staite is the Director of INLOGOV. She provides consultancy and facilitation to local authorities and their partners, on a wide range of issues including on improving outcomes, efficiency, partnership working, strategic planning and organisational development, including integration of services and functions.

It’s been 30 years coming, but Clause 38 is still really bad news

Chris Game

Sometimes you hear “All things”, but the ancient proverb and the modern Guinness advert agree that it’s “Good things come to those who wait”. Unfortunately, bad things do as well, and for local government Clause 38 of the Local Audit and Accountability Bill is a bad thing that’s been waiting to happen for 30 years and now finally has.

Full badness details will follow, but first, please excuse some personalised scene-setting. The LAA Bill is through the Lords and should get its Commons Second Reading later this month. Its main and originally entire purpose, embodied in Clauses 1 to 37, is to complete the Audit Commission’s abolition and introduce from 2017 a new regime for local authorities and other public bodies to appoint their own auditors. Yes, it is controversial, but a controversy best pursued by more knowledgeable others.

The sole concern here is Clause 38, one of two added by Communities Secretary Eric Pickles and the DCLG long after MPs’ scrutiny of the draft Bill had been completed. It comprises Ministers’ intention to turn the Code of Recommended Practice on Local Authority Publicity from guidelines with which councils are currently recommended to comply, into a statutory document with which they must comply.

There are several wrongs here, quite apart from Ministers’ extraordinary Humpty Dumpty attempt – “when I use a word, it means just what I choose it to mean” – to label it an exercise in ‘localism’, because it seeks to protect the interests of local newspaper publishers against those of elected local authorities. The story starts, though, in the adventitiously appropriate year of 1984.

Then, as now, Ministers were in a lather because a handful of mainly London councils were doing things they didn’t like: some admittedly dubious, but most provocatively ‘political propaganda on the rates’ – when the phrase, unlike when their successors use it today, at least made literal sense. The then Pickles, Patrick Jenkin, played to his party conference audience by announcing what would become the Widdicombe Committee of Inquiry into the Conduct of Local Authority Business, designed to do a hatchet job on those pesky Labour boroughs.

It didn’t work out quite like that – partly, I like to think (as one of the researchers), because of the Committee’s commissioning and use of an extensive programme of independent research, and partly through refusing in its main report to deliver the censorious denunciations of local government practice for which Ministers were apparently looking.

That main, research-based Widdicombe Report, though, was preceded by a quick-and-dirty, research-free interim report on local authority publicity. The Committee members didn’t want to play, and used the opportunity to rehearse their views that local authorities were more than a sum of their services, and had a duty to inform the public both of their own functions and on local government matters generally.

They delivered a divided report, but the majority verdict calling for a prohibition of publicity designed to support a political party was enough for Ministers to produce a statutory political publicity ban, based not on content, which was Widdicombe’s concern, but intent – indeed, possible intent: any material which appeared designed to affect, “or can reasonably be regarded as likely to affect”, support for a political party, cause or campaign.  Remember those conjectural words; there’s more coming up.

The only constraint on the Government in the 1983-87 Parliament were the Lords, and here they removed “likely to affect”, and a good deal else besides, and refused to agree to any code of practice being more than advisory. But the reprieve was short-lived and by 1988 there was a new Act with an even more restrictive definition of legitimate publicity, embedded in a Code of Recommended Practice to which authorities were required to “have regard”.

There have been various interim revisions of the Code, but none that have changed its fundamental character: a set of recommended principles and ultimately voluntary practices, written and scrutinised as such, with none of the forensic drafting rigour that would have been brought to a document intended for legal enforcement. But change “have regard” into “must comply” and you change everything, and that’s what the Government is doing in Clause 38.

I’ll look first at the Publicity Code itself, then at the proposed means of enforcement. The Code’s most recent revision in 2011 was driven jointly by the Newspaper Society – arguing (without much support from hard evidence) that council publications, rather than the internet and broadband, were the crucial threats to local newspapers’ sales and advertising revenues – and a receptive Eric Pickles, two of whose favourite hate taunts are ‘propaganda on the rates’ in the form of ‘town hall Pravdas’ or council newssheets.

Up front in the Code are seven key principles: that publicity by local authorities should be lawful, cost effective, objective, even-handed, and appropriate, should have regard to equality and diversity, and be issued with care during periods of heightened sensitivity.

Even here there are examples of the real slackness and imprecision with which the Code is, and will remain, littered. What do ‘have regard’ and ‘care’ mean? How tall does sensitivity have to grow? And another of those conjectural phrases we saw earlier: objectivity is infringed by “anything likely to be perceived by readers as constituting a political statement, or being a commentary on contentious areas of public policy”. Whether or not you think it reasonable for a political body to make a political statement or an observation on a contentious policy, what kind of yardstick is the likely perception of all, or most, or some, or a vexatious handful, of your readers?

To repeat: in a voluntary code, already overseen by numerous laws, auditors, and the Advertising Standards Authority, these vaguenesses are merely irritating and a potential get-out. In a statutory code, they can cost potentially serious money.

Probably the code’s most contentious provisions are that, where councils do publish “newsletters, newssheets or similar communications”, they should not be issued more frequently than quarterly, or “seek to emulate commercial newspapers in style or content”.

The majority of council newspapers are now quarterly, although even a monthly publication – an appropriate and cost effective frequency, one might argue, for keeping residents fully informed of service developments and changes, consultations, forthcoming council business, councillors’ surgeries, traffic orders and planning notices – could hardly be said to be emulating the style of commercial newspapers, whatever that might be guessed to mean.

What we have, then, is one more example of Ministers’ typical modus operandi in their dealings with local government. They see something they don’t like being done by a few London boroughs on their proverbial doorstep – in this case, distributing a weekly newspaper (Tower Hamlets) or fortnightly magazine (Newham). Then, instead of letting residents decide for themselves whether they approve of how their money’s being spent, they outlaw it with ill-prepared legislation applying to every principal and parish council in England – in the name of localism.

Which brings us to the enforcement debate. Clause 38 allows the Secretary of State to direct one, some or all authorities to comply with part or all of the Code, whether there are grounds for believing they are currently breaking it or not.

How, though, do you judge either compliance or non-compliance with a code as casually drafted as this one? Even in the apparently straightforward case of council publications, there’s no definition even of ‘newsletter’ or ‘newssheet’ or when either metamorphoses into a newspaper, let alone of what emulating commercial newspapers in style and content entails.

“Contentious issues” – like HS2, a third runway at Heathrow, large housing developments, cuts to police and fire services, hospital closures, welfare reforms – are, well, even more contentious.

At present, if an authority feels it or its residents would be severely adversely affected by a government policy, it can “have regard” to the principles of the Code, but still judge the matter sufficiently important for it to explain its opposition in a way that will certainly be perceived by at least some readers “as constituting a political statement, or being a commentary on contentious areas of public policy” – because that’s what it’s intended to be.

LGA Chairman, Sir Merrick Cockell, picks HS2, and specifically the cross-party 51M alliance of 19 local authorities opposed to it, as a topical issue that highlights the almost laughable irrationality of the Government’s proposals. The authorities have already challenged the Government’s policy in the High Court, may carry on the fight in the Supreme Court, and will surely petition Parliament for amendments to any eventual legislation. Yet, if they attempt publicly to explain their case and how they’re spending residents’ and taxpayers’ money, they would in future risk being individually and/or collectively prevented, on the grounds of infringing the Code.

It seems that, after nearly 30 years’ waiting, Pickles and his colleagues are about to achieve what their Thatcherite predecessors never quite managed: the power to gag any council’s questioning of any Government policy. It would have been bad legislation then, but in today’s hugely different political climate, it looks, if anything, even worse.

Chris Game - pic

Chris Game 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.

In favour of the mundane: citizenship testing and participation

Katherine Tonkiss

This weekend saw the announcement that the Government has completed its revisions to the ‘Life in the UK’ citizenship test, refocusing the questions on British culture, history and sport.  According to the Government, there will be no more ‘mundane’ questions about water meters, job interviews, the internet and public transport.  Rather, as immigration minister Nick Harper described, ‘the new book rightly focuses on the values and principles at the heart of being British.  Instead of telling people how to claim benefits, it encourages participation in British life’.

This is just the latest in a series of announcements which have reinforced some notion of a British way of life as a criterion of both immigration and integration, as I have described elsewhere.  Nick Harper’s words draw us again into the vastly questionable argument that migrants are ‘benefits scroungers’, and so rather than telling them how to access those benefits we should instead be expecting them to assimilate to the British way of life.  It is this, we are being told, that holds the key to participation in community life.

The use of the word ‘participation’ is itself more than a little problematic.  Is participation really what is at stake in this debate?  Harper is also quoted as saying that the new citizenship test is ‘just part of our work to help ensure migrants are ready and able to integrate into British society’.  Integrate into.  This claim seems to denote the idea that integration is something that migrants ‘do’ when they come into a country in order to take on the national culture and history, rather than something that a society experiences collectively in order to build social inclusion and cohesion.

None of this sounds much like participation to me.  Casting an eye over the ten sample questions from the new test is similarly illuminating.  Does my knowing which admiral died in 1805 and has a monument in Trafalgar Square help to participate in my local community?  Does my knowing the name of the prehistoric landmark still standing in Wiltshire really help me to play an active role in society?

Actually, what it might do is to further define me as an outsider, whether or not I know the answers.  Much in the same way that Communities and Local Government Secretary Eric Pickles has suggested that Councils only publish documents in English because ‘translation undermines community cohesion’, the new citizenship test underpins the idea that it is up to migrants to integrate into ‘our’ culture, and that if migrants are unable to do that then they have no right to live in our country, to make use of our services or to participate in the lives of our communities.  It presents an ideal of Britishness which is unattainable beyond a simplistic test, when migrants bring with them their own rich cultural heritages – heritages which have, previously, been celebrated as central to the life of our communities.

And the very notion of ‘our culture’ is itself deeply problematic.  This suggests a one-size-fits-all notion of Britishness that will evade people who were themselves born in Britain.  Arguing that Britishness involves ‘the national love of gardening, the novels of Jane Austen and the musicals of Andrew Lloyd Webber’ is ignorant not just of diverse ethnicities and cultural heritages, but also of the diversity of genders, class backgrounds and life experiences present within Britain today.

I want to make an argument in favour of the mundane. If we have to have a citizenship test, then surely in a liberal society our citizenship test should be about helping people to access public services and to actually participate in their community through contact with their elected representatives and other important organisations in their area.  We live in a liberal democratic society – citizenship testing should not be about reinforcing a sense of Britishness that is alien even to the most ‘British’ amongst us.  Rather, it should be about making sure that everyone has equal access to services and the equal chance to participate, and that everyone is deserving of equal respect.

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Katherine Tonkiss is a Research Fellow in INLOGOV.  She is currently working on a three year, ESRC funded project titled Shrinking the State, and is converting her PhD thesis, on the subject of migration and identity, into a book to be published later this year with Palgrave Macmillan.  Her research interests are focused on the changing nature of citizenship and democracy in a globalising world, and the local experience of global transformations.  Follow her Twitter feed here.

You couldn’t make it up – except DCLG just did

Chris Game

Did you see manager Arsène Wenger’s explanation of Arsenal’s feeble performance against Manchester City last Sunday?  While most players are galvanised by home supporters and see playing at home as an advantage, Arsenal’s apparently are scared by theirs. “They have a great desire to do well, so maybe they’re a bit too anxious that they don’t respond completely to the expectation level of the crowd.”

A strong bid, certainly, for this week’s You-couldn’t-make-it-up prize, were it not for the Department for Communities and Local Government (DCLG), who, not satisfied with inventing their own measure for disguising the severity of their grant funding cuts to councils, have now disguised it still further by double-counting. If the whole grant-slashing exercise weren’t so serious, the ineptitude really would be laughable. Ridicule aside, it can only serve to validate and reinforce the allegations of unfairness that core city leaders in particular have been making.

Nick Forbes, Newcastle City Council leader, kicked off in November, writing personally to David Cameron to complain about the ‘unfair’ impact of funding cuts on councils like Liverpool with cheap housing and therefore a low council tax base. Then on December 19th, local government finance settlement day, the leaders of all seven English core cities – Birmingham, Bristol, Leeds, Liverpool, Manchester, Newcastle and Sheffield – wrote jointly to Local Government Secretary, Eric Pickles, demanding an urgent meeting to address the “looming financial crisis” their authorities were facing.

The scale of the potential crisis was illustrated by reference to the Jaws of Doom’ graph – Birmingham’s version of Barnet Council’s now famous and similarly apocalyptic ‘Graph of Doom’, produced by the London borough to shock residents, but particularly Ministers, into realising that by 2020 councils would be facing a £16.5 billion shortfall, with no money left for anything apart from children’s services and adult care.

The ‘Jaws of Doom’ graph appears in Birmingham City Council’s budget consultation document (p.8) and does indeed resemble the gaping jaws of a crocodile, attacking from stage left, but unable to swallow the monstrous £600 million budget deficit for which the council estimated, last October, it was heading – and now, following the finance settlement, closer to £625 million.

jaws of doom

This is on top of the £275 million of mainly ‘efficiency and transformational’ savings, including a 25% staffing cut, already made over the past two years, and that have brought the council to the point where the Labour administration, elected last May, claims further efficiency savings are no longer enough. The severity of the reductions in government grant will necessitate significant cuts in front-line services. Hence the budget consultation: outlining the Council’s proposed four-year savings programme, and seeking residents’ views on detailed service cuts for 2013/14, and on alternative council tax scenarios – a further freeze, a limited increase of under 2%, or a larger increase requiring referendum approval.

One question, however, that the consultation document neither asks nor, judiciously, attempts explicitly to answer is: IS IT FAIR?  So I thought I’d have a go.

Are Birmingham and urban councils generally, or Labour councils, or the most deprived areas, being particularly harshly treated by these grant funding cuts? Or was Pickles right, when he insisted in his finance settlement statement that “overall the average spending power reduction for councils in 2013/14 is expected to be limited to just 1.7% per household”, and that “concerns that the poorest councils would suffer disproportionately are well wide of the mark”?

Well, let’s start right there, with that phrase ‘spending power’ (SP) reduction – used by Pickles and his civil servants in preference to the ‘grant reductions’ quoted by council leaders and measured by the ‘Jaws of Doom’. Are they different? You bet. SP was introduced in 2010/11, when the new Government announced its intention to cut central government grant funding of council revenue spending by an unprecedented 28% in cash terms (nearer 40% in real terms, allowing for inflation) over four years, with 21% ‘front-loaded’ in the first two years.

To disguise the savagery of that front-loading, and to make before-after comparisons more difficult, the DCLG first restructured the whole grant allocation system, and then created ‘revenue spending power’ – a measure Ministers claimed that, by including council tax receipts, certain specific grants, and NHS social care funding, gave a fuller picture of a council’s overall financial position. Fuller, yes, but not full. If it really was a full, rather than politically beneficial, picture that Ministers wanted, they could have included income from fees, charges and investments. These, however, are income sources that tend to decline in a recession and whose addition to SP would emphasise, rather than de-emphasise, councils’ grant dependency – so nothing like as helpful as the DCLG’s contrived measure, which could instantly reduce a 28% grant cut to a 14% cut in spending power.

You’d think this was sufficient, but this year, it seems, they’ve really over-egged the pudding by double-counting council tax support in two separate elements of SP. Sadly, at the time of writing, the Department was refusing to help Local Government Chronicle journalists with their enquiries into how the double-counting occurred, and whether it was intentional or accidental. Either way, Pickles’ claim of an average 1.7% spending power cut in 2013/14 was clearly wrong and should have been about a percentage point higher.

Having changed the system and invented new terminology, Ministers’ next rule is always to describe funding reductions in overall percentages, not cash. This fools no one who gives a moment’s thought to how grant funding works, but then there are plenty who don’t.

Formula Grant – the general grant allocated in the annual finance settlement – is calculated in four blocks, the two key ones being Relative Needs, to compensate for areas’ differing service needs, thereby broadly reflecting economic and social deprivation; and Relative Resources, reflecting the strength of an area’s council tax base and ability to raise its own revenue. In combination, these two elements mean some councils are much more reliant on central government grant than others. The more deprived the area, the greater is its need for council services, the lower its council tax base and tax receipts, and therefore the higher the proportion of its revenue spending that needs to be funded by central grant.

Overall in 2012/13, 27% of councils’ revenue spending is funded through council tax. But that proportion ranges from averages of 16% and 22% among Inner London and metropolitan boroughs to over 50% among shire districts. Even neighbouring councils’ grant/tax ratios can differ considerably – like Birmingham’s 84% grant/16% council tax and Solihull’s 67%/33%. What can be presented, therefore, as a uniform 10% grant cut across the country means for Birmingham a budget cut of 8.4%, for Solihull one of 6.7%, but for some shire districts barely 2%. Not so uniform after all.

The reforms to specific or targeted grants have hit councils in deprived areas relatively harder still. Some grants specifically conceived for deprived communities, like the Working Neighbourhoods Fund and area-based grant, have been run down or scrapped altogether. In contrast, the Council Tax Freeze grant to councils agreeing to follow the Government’s tax-freeze policy comprises a 3.5% addition to a council’s existing tax revenues, so benefiting most those with higher tax bases. Likewise, the New Homes Bonus Scheme, funded by top-slicing the central grant to all authorities by equal proportions, benefits disproportionately those in the south, where the bulk of the building is.

Obviously, there have been and will continue to be numerous other technical changes in the grant funding system, with criss-crossing impacts on different kinds of councils. Even a year ago, though, the Audit Commission’s Tough Times report was clear that “there is a strong link between local deprivation and the scale of funding reductions”, with “deprived areas in the north, the midlands, and inner London [experiencing] the greatest cuts”.

There have been several comparisons of the scale of funding cuts across individual local authorities, among the most accessible being the Guardian newspaper’s analysis and interactive map. English local authorities were found to be facing, on average, a cut of £61 a year per person in the total central government funding they would receive between 2011 and 2014, but the range extended from over £250 per person in Hackney, Liverpool and Knowsley to North Dorset’s £2.70.

The severity of cuts correlated closely with the Government’s own Index of Multiple Deprivation (IMD), examples including Liverpool – IMD 2nd, funding cut 2nd (₤252); Manchester – IMD 4th, funding cut 5th (₤210); and Birmingham – IMD 13th, funding cut 16th (₤166). Of the 30 councils facing the severest cuts, 28 are currently Labour controlled. All of which suggests – returning to Pickles’ other bluster from his finance settlement statement – that “concerns that the poorest councils would suffer disproportionately” are not so wide of the mark after all, and certainly not as wide of it as his own 1.7%.

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.

Equal Pay: Birmingham’s Seriously Disagreeable Christmas Sprout

Chris Game

You probably caught Monday’s headlines: “Country’s largest authority hit by £757 million equal pay bill”; “Birmingham taxpayers face massive service cuts to pay for growing compensation bill”; “Council bankrupt if Government withholds borrowing permission”.

If so, they may have prompted a feeling of déjà vu – both recent and distant. Recent, because these November 12th headlines reported only Birmingham City Council’s delayed official reaction to the genuinely headline-meriting event a fortnight earlier: the Supreme Court’s landmark ruling against the Council and in favour of 174 former employees seeking compensation under the Equal Pay Act 1970 (now the Equality Act 2010). Distant, because – to the shame of all those materially responsible – this lamentable case has been dragging on, chapter by chapter, for a good proportion of the 42 years since Barbara Castle’s historic legislation was passed in the final days of the 1960s’ Wilson Governments.

It’s inevitably a complex story, and the basis of the Supreme Court’s 3-2 majority judgement exceptionally so. But it also has potentially huge implications for other public and private sector employers. A bit of background, therefore, may be useful.

The Equal Pay Act outlawed unequal treatment of men and women, by permitting equal-pay claims to be made by women in the public and private sectors, who were engaged in the same or broadly similar work as men. Though passed in 1970, the Act’s implementation was put back until 1976, thus allowing employers what many felt was a generous period in which to make the necessary ‘adjustments’. Don’t laugh!

It took local government decades seriously to consider its adjustments, but in 1997 the National Joint Council for Local Government Services (NJC) – representing local government employers and the main trade unions: UNISON, UNITE and GMB – negotiated a Single Status Agreement, intended finally, or at least by 2007, to implement the Act without wholesale recourse to employment tribunals. The aim was to develop, through systematic job evaluation schemes, a common pay and grading scale for all manual, administrative and clerical jobs, based on the principle of equal pay for women employed in jobs of equal value to those typically done by men.

Whatever may have been fondly imagined, Single Status could never be cost-neutral. With (in Birmingham) men earning up to four times more than women doing identically pay-graded jobs, there would be losers as well as winners, with local authorities having to find very large sums of money on top of their required efficiency savings, and without jeopardising their primary task of improving local services. They had to devise and negotiate a more expensive unified structure, and compensate those discriminated against under the existing regime, while also ensuring that the now ‘downgraded’ bin men and road sweepers would not be penalised excessively – either through pay cuts or the withdrawal of the supposedly output-based bonus payments that tended to be the preserve of male-dominated jobs.

Righting a major long-term injustice is inevitably difficult, but 10 years was a fair time-frame.  Nevertheless, in 2010, three years after the deadline, one in five councils had still not implemented a Single Status Agreement. Few emerge from the saga with much credit. Ministers set no staged timetable, enabling them to refuse to provide extra funding for back-pay settlements. They also capped, initially at a hopelessly inadequate £200 million, the total ‘capitalisation’ sum councils could borrow against their own assets: a figure that, even in 2006, would barely have covered the then estimated costs of Birmingham City Council alone.

The generally male-run unions resisted any national campaign, giving the impression of putting men’s wages – and Labour councils’ interests – above those of their women members. ‘No win, no fee’ lawyers rushed in to fill the vacuum, taking action against recalcitrant councils, against unions who had settled for less than maximum compensation, and trousering up to 25% of any payout. In a particular irony, employment tribunals, which Single Status was designed to bypass, eventually took centre-stage. One decreed that up to six years’ compensation should be paid for past injustice, instead of the two years that had become the norm – thereby adding further huge sums to councils’ pay bills.

Then, in April 2010, 4,000 women won potentially the biggest pay-out of all in a tribunal judgement against Birmingham City Council. The tribunal found that thousands of women workers – cooks, cleaners, carers, clerks – were entitled to the same pay as men working as gardeners, refuse collectors and grave diggers, who had earned several times as much through large and discriminatory cash bonuses ‘awarded’ for tasks such as picking up refuse sacks and completing rounds on time. Adding insult to the financial injury of conceivably up to £3 billion, the tribunal criticised the Council for wasting public resources in misguidedly incurred legal fees, and its senior management for having continually pushed the problem to one side ‘like a disagreeable sprout on a Christmas dinner plate’.

Obviously, given where we are today, the advice was not heeded. Christmases came and went, the sprout increased in size and disagreeability, but the Council persisted in pushing it around. It took the above case to the Employment Appeal Tribunal, where it was dismissed. Meanwhile, it was facing other cases in the courts – brought by former-employee claimants, unable to go to employment tribunals because of the rules limiting their jurisdiction to cases brought within six months of the termination of the claimant’s employment.

This was how the present case started, and what it is essentially about. The Abdulla Group, as it became known after the first alphabetically listed claimant, comprised 170 women and 4 men who had missed out on the Council’s equal pay compensation payments paid to women still working for the Council in 2007/08 or who had recently left and taken their cases to an employment tribunal. The 174 had all left more than six months earlier, which the Council cynically decided meant that, since they would be time-barred from going to a tribunal, they could be safely excluded from the compensation scheme.

The Council’s case was that ordinary courts should refuse to consider such claims. In the words of the 1970 Act, the court should “direct that the claim be struck out”, on the grounds that it “could more conveniently be disposed of separately by an employment tribunal” – as indeed all previous equal pay claims had been, generally to the considerable benefit to the claimants, in costs, time and accessible expertise.

In the High Court, however, the deputy judge was less concerned with precedence than with Parliament’s intended meaning of ‘more conveniently’. Grossly oversimplifying the literally hours of judicial time since expended on this innocent little phrase, the judge’s interpretation was that a tribunal could hardly dispose of a case more conveniently, if it was time-barred from considering it at all, and that this surely cannot have been Parliament’s intention.

Nearly a year later, in November 2011, the Court of Appeal took the same view, and so two weeks ago did three out of five Supreme Court judges. Former employees have the right to bring claims in the civil courts, where the relevant time limit is not six months, but six years – which, with this case having started in 2010, includes anyone who was still working for the Council from 2004.

The District Auditor estimates that the Council will need to find £757 million to cover actual and potential equal pay settlements, which will mean going cap in hand to Communities and Local Government Secretary Eric Pickles for permission to borrow £325 million on top of the £430 million already secured to help fund the pay claims.

At the same time, struggling finally to digest their wretched Christmas sprout, the Council’s leaders have the nerve to moan at the long succession of referees who’ve ruled against them: “Employment tribunals and the courts have changed their opinion around the law over this period of time always in one direction, which has added significantly to the amount of claims we have had and the cost of them.” To which the thousands of exploited women employees will surely chorus: well, you could always have settled sooner, or even not discriminated in the first place.

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.