local authorities

Situational irony, coronavirus and the French local elections

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Chris Game

One of Birmingham’s most enterprising theatres is one of its smallest, the Old Joint Stock – a studio theatre above a pub that was once the Birmingham Joint Stock Bank – which found itself an early and particularly unfortunate Covid-19 victim. For the Government’s March 16th announcement of the effective closure of all theatres came literally on the eve of the OJS’s five-day run of The White Plague, the scheduled second leg of a European tour, following a successful launch at Greenwich Theatre the previous week.

The title derives from an IRA-era sci-fi novel by Frank Herbert, whose vengeful Irish molecular biologist creates a particularly discriminating (in both senses) plague, in that, while men are the carriers, it kills only women. The feature of this Ferodo Bridges theatre production, though, is that audience members are given masks or goggles that ‘white out’ their vision, thereby supposedly immersing them in the world of the blinded victims.

I was sorry to miss such a topical example of immersive theatre, but found some consolation in its ill-timed cancellation providing a rather classier example of situational irony than the standard fire station burning down, or the Facebook complaint about how useless Facebook is.

Which was neat, as the same week offered a further, and more democratically pertinent, Covid-19 example of situational irony in France’s municipal elections – partly in the results, but mainly in their happening at all.

President Macron faced a dilemma. French municipal and mayoral elections happen only every six years. This year’s, therefore, would be the first since he became President in 2017, thanks rather amazingly to his newly created LREM party, La République En Marche!, winning a substantial majority in the National Assembly elections.

This, therefore, should have been Macron’s big chance to establish a grassroots power base. In Paris City Hall, Socialist Mayor Anne Hidalgo, notwithstanding a radical manifesto – including a referendum on Airbnb, plans for a “100 percent bicycle” city centre, and a municipal police force comprising 50% women – looked vulnerable, and there were early visions of scores of LREM mayors and thousands of councillors across the country.

That’s right, thousands – this is France, with over 900,000 candidates contesting seats in over 35,000 villages, towns and cities, though excluding this time, rather sadly, the 757 British citizens currently serving as municipal councillors – which, incidentally, is nearly 300 more than in all seven West Midlands metropolitan boroughs combined.

Macron himself, however, was at less than peak popularity, following months of protests and strikes – by the Gilets Jaunes (Yellow Vests) movement against rising fuel taxes, then by rail and health care workers, teachers and others against under-funding and pension reforms. Added to which, LREM’s Paris mayoral hopeful had had to abandon his candidacy in a sex video scandal – on Valentine’s Day!

And now France was showing the second highest number of confirmed Covid-19 cases in Europe. Yet, having himself just shut down restaurants, museums, big sporting events, most stores, and the whole education system, Macron announced that the coming Sunday’s first round of the two-round municipal elections would go ahead – with strict sanitary conditions imposed, naturally.

The situational irony: the one man who could have saved his very personal party from a probable serious electoral thrashing, by doing the apparently responsible, expected thing and without any loss of face, chose not to.

Having merely a global citizen’s concern with French public health, I was actually quite pleased. Partly because French local elections are always fun to write about, but especially following the outcome of our own head of government’s Flip-Flop Friday.

In the morning of, yes, unlucky Friday 13th, Number 10 insisted – “driven by the experts”, of course – that May 7th’s local, mayoral, and Police & Crime Commissioner elections would go ahead, in defiance of the Electoral Commission’s postponement recommendation and Electoral Administrators’ warning of possibly insufficient polling station staff.

But then, literally within hours, all elections were off – and not, as proposed by the Electoral Commission, until the autumn, but for a year.

What makes French local elections fun? Well, not least – and making Macron’s go-ahead seem even more extraordinary than Johnson’s dithering – because there are just so many of them and they really are so genuinely local.

England’s local government currently comprises 341 principal councils, of which just Rutland, fractionally, has a population of under 40,000. By contrast, over 98% of France’s 35,000+ communes have under 20,000, and over half under 500.

Voting – in larger communes at least – is by proportional representation, potentially over two rounds, and mainly through party lists, which Parity Laws decree must comprise as many women as men, listed alternately. Mayors are indirectly elected: voters electing the council, the council then electing the mayor.

Most impressive attribute of French local elections, though, is that voters like them, and like voting in them, much more than in National Assembly elections. Evidence Exhibit 1: in reporting turnout in even local elections, the French way is to cite not the turnout percentage but ‘Abstentions’ – and then to worry when in 2014 the 36.45% abstentions (they’re also very precise) constituted “a record high” .

Exhibit 2: my favourite English language election preview, bemoaning how coronavirus was “eclipsing the elections in national conversation”, because “87% of the French people are discussing the coronavirus, while ONLY 52% are discussing the upcoming elections” (my emphasis). The last time over half an English electorate were caught discussing upcoming local elections being …?

Nevertheless, there clearly was concern that, even with voters queuing three feet apart, their own pens poised to sign the register, and voting machines wiped with hydro-alcoholic gel, polling stations were almost custom-made germ-spreading venues, particularly for older people.

Still, however, they recorded an estimated abstention rate of “up to 56%”, and a turnout therefore of around 45% – immediately seized on by the media as an “historic low”. In context, though, the last time turnout in our metropolitan district elections, for example, touched 45% in a non-General Election year was 1990 – poll tax year.  The recent average is 33%.

Macron’s decision was surprising, avoidable, predictably politically costly, and – given the second round’s almost immediate cancellation – probably wrong. It was not, though, without its integrity.

 

Chris Game is an INLOGOV Associate, and Visiting Professor at Kwansei Gakuin University, Osaka, Japan.  He is joint-author (with Professor David Wilson) of the successive editions of Local Government in the United Kingdom, and a regular columnist for The Birmingham Post.

Is commercialism the answer? If so, what is the question?

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Catherine Staite, Director of INLOGOV

 I often hear local government compared unfavourably with business, often by members who have had careers in business or industry. However, when I ask where they worked – they almost invariably name companies that are now defunct.  That makes me wonder if local government deserves this unfavourable comparison. That’s before I ponder the notable probity of the banks, the honesty of VW and the reliability of Cross Country Trains.

Commercialism is a loose term, covering everything from trading activities to the skills to commission, procure, manage markets and deliver services through complex contracts.  There also seem to be a number of implicit underlying meanings, including ‘entrepreneurial’ as in ‘risk taking’ and ‘tough’ as in ‘winner takes all’.  Those perceived meanings strike me as both very masculine and very old-fashioned.

Commercialism, however it is understood, is not a guarantee of success.  In fact, the wholesale importation of now discredited low cost/low effectiveness models of service from the private sector have actually generated failure demand.

So why do so many commenters think that increased commercialisation of local government’s functions or the acquisition of stronger hard and soft commercial skills is so necessary?  There are usually two key reasons; the need for agility in a time of rapid change and to maximize resources in a time of austerity.

Every book on local government that I have ever read, regardless of when it was published, starts with a statement about the turbulence and unprecedented change being experienced by local government at that time. That does demonstrate that everything is relative.   Was there ever a time  when local authorities were like stately galleons, built for stability not speed, breasting the waves, largely unmoved by external pressures or internal dissent, with the cry of ‘steady as she goes’ echoing through the corridors?

If that was ever the case it certainly isn’t true now.  Now many local authorities seem more like racing yachts – ploughing through stormy seas, with small crews and all hands on deck.  Many are agile, resilient and efficient with some truly excellent skippers who are tacking in response to current pressures while maintaining a clear view of where they are headed. INLOGOV’s study for Grant Thornton in 2014  highlighted the significant differences between local authorities in terms of their likely financial futures, even after taking account of the inequities of local government finance. The difference between the most and least agile isn’t a reflection of varying degrees of commercialism. It’s much more fundamental than that. The best are distinguished by mature relationships between political and managerial leadership, with shared understanding of risks and opportunities that enable difficult choices to be made without blowing the authority off course.

The importance of trust and a new set of skills and attributes, in order to maximize resources, is becoming ever clearer, as demonstrated by INLOGOV’s study ‘The 21st Century Public Servant’ which highlighted the importance of ‘municipal entrepreneurs’. Their role is about a lot more than commercialism. It is more about creativity working with agility while never losing sight of fundamental purpose of public services and retaining all the ethical underpinnings of stewardship.  Our study for DCN on ‘New Ways of Working’ demonstrates that toughness and the short-term pursuit of financial gain don’t bring success, selflessness does.

Mature relationships and 21st century skills are now forming the foundations of Combined Authorities and underpinning ‘devo deals’.  The potential gains are likely to be of an entirely different order of magnitude than those achievable through mere commercialism.

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.

Grubby-handed local politicians? It’s called local democracy and devolution, Sarah!

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Chris Game

The BBC’s Radio 4 Today programme isn’t what Americans would call a Hot Talk show, and nicely spoken presenter Sarah Montague, even in her own fantasies, is no shock jock. So listeners must have been slightly surprised to hear her, while questioning the proposed devolution of NHS funding to Greater Manchester’s combined authority, talk of “local politicians sticking their grubby hands into the decision-making process” (07.50).

She tried laughing it off and rephrasing, but it was already out there – an unintended confirmation of the dismissiveness with which so much of our London-centric media treat sub-central government. For them, it’s apparently a world too complicated to try to understand and explain; one in which every small service variation is a product not of local democratic choice, or the Lyons Report’s ‘managed difference’ (p.3) – but a ‘postcode lottery’ and thus an easy cue with which to stir up listener and viewer outrage.

With Scotland and Devo Manc putting down serious markers and new combined authorities springing up seemingly every week, English devolution will be a major issue at and following the General Election, whether parties and voters want it or not.

Voters, we know, aren’t clamouring for it. A YouGov/Prospect poll just after last September’s Scottish referendum presented a large sample of English voters with a list of 18 specific things Britain’s government might do over the next few years, and asked them which four or five they felt were the most important.

Probably unsurprisingly, tightening immigration rules came first, favoured by 55%, then providing more money for the NHS and holding down gas/electricity prices. “Giving more powers to English regions and local councils” came 17th, just 12% according it any importance at all.  Unpromising, but, unlike England’s cricket World Cup campaign, there are some definite positives out there.

First, as many local authorities used to find when they could still afford to commission annual surveys of residents’ views, councils and councillors generally have a better image, not only than Westminster and Whitehall, but than they themselves sometimes realise.

The Local Government Association (LGA) still does undertake such surveys, its most recent, by Populus last October, broadly confirming previous findings. Around 70% say they’re satisfied with their own council, and, asked who they’d trust most to make decisions about how services are provided in their local area, 72% said councillors, 11% MPs, and 7% government ministers.

But that’s the easy bit. These encouraging levels of satisfaction and trust relate to councils’ currently very constrained tax powers and policy discretion. They quickly dissipate when it’s suggested those powers be extended or more strategic service decisions be made locally.

The YouGov/Prospect poll also asked its English respondents at which level – England-wide, regional, local – decisions on ten services should be made. For six services the choice was overwhelmingly national, including VAT and unemployment benefit rates, the core curriculum, and NHS drug and hospital treatments. Refuse collection frequency was the only decision even a bare majority (53%) allocated to local councils, and 38% wanted even that to be national or regional.

This English predisposition towards uniform national standards in almost everything can seem extreme, but it clearly runs deep and is well documented.  A 2012 YouGov survey for the Institute of Public Policy’s Future of England report asked a similar question: whether certain policies should be the same across the whole of England or should be matters for local authorities to decide.

Again, as shown in the chart, there wasn’t a single service – refuse collection, planning approvals, housing, museums and galleries – that a majority of respondents saw as a chiefly local government responsibility.

Game blog pic

It’s perfectly possible, even reasonable, to suggest that differently worded questions would elicit different answers; that, if you put respondents in a focus group, presented them with evidence, and let them think for more than five seconds before answering, they’d change their minds; even that, dammit, they’re just wrong. The fact remains that this is what they instinctively think and say, and it presents an unignorable hurdle for would-be devolvers, especially politicians. There are signs, though, that at least the height of the hurdle is adjustable.

Returning to the recent YouGov/Prospect survey, although, refuse collection excepted, there was no service on which respondents came near to preferring local to England-wide decision-making, the picture changed a bit when regional and local preferences were combined.

Put brutally, it’s ‘local councils’ – the label, the actuality, or both – that aren’t trusted with anything more than our rubbish. Combine them with ‘regional level’, and there are clear majorities for the sub-national determination of strategic policing priorities (64%), siting of new towns and major new housing projects (60%), and rules governing social housing rents (52%).

Interestingly, there were some arguably similar findings in the surveys of Londoners and ‘London business decision-makers’ by ComRes in January.  In both surveys there were majorities (56% and 60% respectively) in favour of “Local Government having greater control in London over tax levels and how those taxes are spent”.

It quickly turned out that the tax levels most respondents had in mind were limited to business rates and stamp duty land tax. Nor was there anything remotely approaching majority support for even business rates being set by ‘local borough councils’. But again, combine local and ‘regional’ tiers – in this case the boroughs and Greater London Authority/’City Hall’ – and majorities in both samples (58% and 73% respectively) were in favour of ‘Local Government in London’ setting business rates, with over a third in each case prepared to add stamp duty land tax as well.

All of which seems to suggest that, in a future of large, and in some cases almost regional-scale, combined authorities, committed devolvers have at least something positive to work with – provided, of course, media presenters keep their grubby centralist hands out of the debate.

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.

What is local government for?

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Howard Elcock

Do we know what local government is for? Is it just a device for providing services to people at the behest of the central government, or does it provide local citizens with a means of making policy choices about what they want their councils to do? In the 19th century John Stuart Mill and Charles Toulmin Smith debated this issue, with Mill taking a centralist view that local government is an agent acting for the centre and a training ground for would-be Parliamentarians, while Toulmin Smith argued that local authorities are and must be elected bodies chosen by local people to make local choices on their behalf(Chandler, 2007), a view echoed by Professor John Stewart (1986).

Today local authorities are much too dependent on central government to be able to make major local choices. In 1976 the Layfield Committee said that if central government provided more than 40 per cent of local authority funding, this would make local councils excessively dependent on the centre. Today that proportion is between 70 and 80 per cent as a result of rate capping, the bitter legacy of the Poll Tax and incremental funding decisions to support local services with central grants. Beyond all this, local authorities are dependent on Westminster and Whitehall for their very existence, as has been demonstrated by repeated and largely enforced reorganisations imposed on local government by Parliament since 1972.

The role of local government can be discussed in terms of its five purposes. The first is to represent the different political balances in different parts of the country. In England this has become an acute issue as a result of the recent Scottish independence referendum because devolution for England is being discussed partly in terms of proposals such as “English votes for English laws” and the creation of an English Parliament that treat the country as a unit and ignore the major differences in the economic interests and political balance between the North and the South-East, which ought to be reflected in any proposals for constitutionals change. Enhancing the autonomy of local authorities would be one way of achieving this.

Secondly, councillors are the only elected representatives apart from Members of Parliament who can hold public servants to account on behalf of their electors. Thirdly, local authorities can adopt varied methods of providing local services which may provide models for other public authorities to copy. Fourthly, local authorities provide responsive and accessible services that can be sensitive to local needs and wishes – something the central government with its responsibility for 60 million citizens cannot hope to achieve. Lastly, local control of certain activities has long been regarded as a defence against tyranny. For example, the local control of police forces ensures that the central government cannot enforce its policies on the control of public order without persuading local police forces to comply with its demands. Again, the dispersed ownership of computer systems may provide a protection against an all-knowing and all controlling central state.

However, all these purposes are in danger of being diluted or even lost as a result of excessive central control. The diminished powers of local authorities mean that they are not able fully to represent the views and interests of their local citizens. Secondly, their ability to hold public servants to account has been weakened by the creation of increasing numbers of non-departmental public bodies (“Quangos”) with no local and tenuous national accountability to elected representatives, as well as by the enforced privatisation of local services including care homes. Thirdly, local initiatives are stifled both by financial restrictions and excessive regulation, especially through target setting by Whitehall departments. Fourthly local government has been made less local by the creation of smaller numbers of increasingly large units of local government, especially unitary authorities that cannot easily identify and respond to the concerns of local communities within their wide areas. Lastly, central control over public services has been increased by financial constraint, reorganisation and over-regulation, thus increasing central control even over services such as policing where local control is an important bulwark of democracy and accountability, which has not been significantly reversed by the 2011 Localism Act (Jones and Stewart, 2012).

It will take bold Ministers and a collective commitment by the central government to reverse these trends, particularly because the Treasury will be staunchly resistant to an effective programme of renewed devolution of powers and functions to local authorities. Such a programme would have to include an end to council tax capping, the introduction of new sources of local revenue such as a local income tax together with the reduction of central government grants towards the 40 per cent limit recommended by the Layfield Committee. This must be accompanied by renewed creation of truly local democracy by strengthening the powers of parish and town councils and securing their creation where they do not now exist. The dead hand of central regulation and target setting must also be relaxed. Lastly, the rights, duties and powers of local government must be guaranteed under a written Constitutional settlement. I fear that this is too big an agenda for any of our political parties to cope with.

References

Chandler, JA, (2007) Understanding local government, Manchester, Manchester University Press

Jones, G and JD Stewart (2012): “Local government: the past, the present and the future”. Public Policy m& Administration, volume 27, no. 4, pp. 346-367

Layfield Committee (1976): Local Government Finance, Cmnd 6453, London, HMSO

Stewart, JD,(1986): The New Management of Local Government, London, G Allen & Unwin

DSCF5376_Elcock_small

Howard Elcock is Professor (emeritus) at Northumbria University. He is author of Administrative Justice (1969), Portrait of a Decision: the Council of Four and the Treaty of Versailles (1972), Local Government (three editions 1984–1994) and Political Leadership (2001). His current research includes political leadership and elected mayors; local democracy; and the ethics of government.

The future is analogue – confirms local government’s Honey Man

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Chris Game

Of all the reactions to Northamptonshire County Council’s controversial ‘Next Generation Model’ – abandoning service provision in favour of outsourcing everything to ‘specialist social enterprises’ – few can have been as measured and dispassionate as my colleague Ian Briggs’ reflections on the merits or otherwise of Public Interest Companies (PICs).

Personally, it came as a bit of a blast from the past. Typing that opening paragraph, I really couldn’t recall when I last consciously thought about that particular three-letter initialism that once seemed to feature in a good proportion of my lectures. Especially following the 2004 Companies Act, PICs were ubiquitous, and taxonomising them – and/or CICs (Community Interest Companies) – quite a fad: national and local, companies limited by guarantee, industrial and provident societies, limited companies owned by service users, unincorporated associations, social firms, share trusts, mutuals, co-operatives.

So, rusty as I am, I admit to being curious about how Northamptonshire’s down-sizing vision works out once it leaves the drawing board. This blog’s concern, though, is not Northamptonshire’s or any other single council’s future, but that of English local government as a whole – which, in a neat triad of happenstances, was also addressed last week, in the final report of the Independent Commission on Local Government Finance (ICLGF), Financing English Devolution.

The third part of the triad, unfortunately, is directly relevant only to those of us residing within reach of Birmingham’s fine Repertory Theatre, which also last week staged a highly successful production of Tyrone Huggins’ play, The Honey Man. So, three disparate events from which, if you’ll bear with me, I’ll attempt to draw a coherent theme.

The ICLGF was established by the LGA and CIPFA, and is chaired by Darra Singh. The former chief executive of Ealing and Luton Councils bears little physical resemblance to the St Kitts-born author/actor Huggins, but, if his report has the transformative impact he obviously hopes, he could reasonably claim in, say, a decade’s time, to have been English local government’s Honey Man.

Digitals see the world in terms of ones and zeros, black and white, right and wrong answers, clearly defined systems. Analogues understand and deal in approximations, probabilities and muddle, 50-plus shades of grey.

Successive governments – ministers and civil servants both – have tried for years to run local government as a single, centrally controlled, one-size-fits-all digital system. ‘Honey Man’ Darra Singh’s message is that, while local services will be delivered increasingly digitally, the delivering ‘system’, insofar as there is one, will be increasingly analogue.

Huggins’ Digital Projects have not been that extensively performed. Even so, it would be hard for their collective impact to have been any less than that of the first three efforts in the Local Finance Reform Quartet: the Layfield Committee (1976), the Balance of Funding Review (2004), and the Lyons Review (2007). All three started from the premiss that the status quo is unsatisfactory – lacking transparency, fairness, balance, and accountability – and major reform vital. Yet all were either ignored or, in Lyons’ case, attacked and effectively rejected by ministers within hours of publication.

This time, the reflex rubbishing was administered by Local Government Minister Kris Hopkins, who immediately dismissed the Commission’s proposals for local areas to determine the number and value of council tax bands, and for tax increase referendums to be abolished.

No change there, then – and clearly there won’t be from the present Conservative-led coalition. The question is whether the new lot after May accept that this time the Commission really isn’t crying wolf: that the future now facing many, if not most, councils – severely less money, increasing and more complex service demands, and cripplingly limited scope to raise additional revenue – really has regressed from unsatisfactory to unsustainable.  And recognise too that, following core grant cuts of 40%, radical reform is no longer urgent but imperative – if, that is, anything resembling a viable, democratically accountable, service-providing local government sector is to have a future.

There is of course, and always has been, an alternative: the wholly Contracting Council, famously envisioned in the 1980s by Conservative Environment Secretary Nicholas Ridley as meeting once a year to award all the council service contracts to private firms. A number of councils in recent years have gone some way down that road – most notably perhaps Suffolk and Barnet – and now Northamptonshire is preparing to go a good deal further.

Northamptonshire County Council, employer ten years ago of nearly 20,000 full- and part-time staff, plans in future a workforce of 150 max, with services formerly provided by the council or by council-run companies and partnerships being commissioned from external organisations: a Children’s Services Mutual, an Accountable Care Organisation for vulnerable adults, a Wellbeing Community Organisation, and a Place Shaping Company “to deliver services to improve Northamptonshire as a place”.

It’s analogue service provision alright, and pioneering, but not in the quite the form the Commission’s final report sets out. Nor last October’s interim report, although, reflecting the quite startling speed with which events have moved since the Scottish independence referendum, the two documents do have differing emphases.

The interim report, Public Money, Local Choice, underlined the need for council tax reform and for a desperately overdue property revaluation and banding revision.  But the headlines it earned were all about how, through full – rather than the present partial – retention of business rates and appropriate ‘equalisations’ between richer and poorer councils, English local government could by 2018-19 become financially self-sufficient and independent of central government grant funding.

There was an interim vagueness about how these equalisations would be managed, and a somewhat cavalier assertion (p.18) that “there is less disparity in wealth between the different parts of the country than in often assumed.”  The brief equalisation discussion, though, like the report generally, focused on individual local authorities, even down to numbers of toppers and toppees: “On 2018-19 projections, self-sufficiency would require 247 councils to ‘top up’ 106 councils. Most of this could be managed through transfers between councils in the same area.”

There was a passing reference to Combined Authorities perhaps playing a part in this redistributive process, but otherwise no mention of these institutions that since then have so dominated local government discourse – while the Pioneer Authorities that take centre-stage in last week’s final report weren’t even embryonic.

The Commission’s blueprint isn’t as immediately arresting as Northamptonshire’s and its timescale is inevitably longer. But, if even substantially implemented, the shift of the central-local balance from Whitehall and Westminster to English cities and regions would be profound. Following a 10-year devolution programme, more than £200 billion of annual public spending would be controlled at ‘sub-national’ level – or twice the current total of English local authorities’ net revenue service expenditure.

The key analogue feature of the Commission’s programme is what tekkies would call its two- or variable-speed gearbox. All councils would have multi-year funding settlements, freedom to set council tax and tax discounts, and would retain 100% of business rates and business rate growth.

But there would also be ‘Pioneer’ authorities: combined authorities wishing and judged able to reform at a faster pace. These could vary council tax bands and undertake their own revaluations, have access to new or devolved taxes like stamp duty, tourism and airport taxes, and, most significantly, would control single place-based budgets covering a full range of public services, including transport, community safety, and – starting already with Greater Manchester – health.

As the Honey Man’s Commission notes, the analogue principle of variability has already been established, with city deals and devolution packages to Combined Authorities. These latter are clearly the key – which is why the honey coming the way of Birmingham and the West Midlands so far has been mostly the unblended stuff, while Greater Manchester is already onto the organic.

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.

An earlier, more Birmingham-focused version of this blog appeared in The Chamberlain Files.

Pickles’ Shock-horror News: Biggest Councils Have Biggest Tax Arrears

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Chris Game

Communities and Local Government Secretary Eric Pickles is famed for his sensitive news antennae. I wonder therefore just what – in a week dominated by revelations of his party’s and government’s moral flakiness on the whole tax collection business – persuaded those antennae that it would be a good time to attack local authorities’ tax collecting record.

Actually, I don’t wonder.  I assume that, as with the many other Pickles’ Passions – from council newspapers and biscuits at meetings (bad) to street parties and weekly bin collections (good) – he just can’t stop himself.

Councils’ uncollected taxes and hoarded revenue reserves have become Pickles’ winter perennials – a reassuring sign of approaching spring – and three league tables of the supposedly guiltiest councils were duly posted by the DCLG last Tuesday.

As a Birmingham City Council taxpayer, I was naturally interested to note that Birmingham featured prominently on two of these naughty lists – first of the 10 councils with highest council tax arrears, and fourth of those with highest non-ringfenced reserves – and, to be honest, slightly surprised that it didn’t register at all on the third. Doubtless to the minister’s disappointment, DCLG hadn’t found a single “surplus fixed asset, not directly occupied, used or consumed in the delivery of services”.

There’s no attempt to percentagise these lists, or acknowledge that there might just possibly be some relationship with, say, the size or relative deprivation of councils’ populations.  So Pickles’ shock-horror story amounts to large councils having bigger tax arrears, reserves, etc. than small councils.

It’s hardly headline stuff, but Local Government minister, Kris Hopkins, was determined we should share his boss’s outrage. During that same day’s Commons debate on the recent local government finance settlement, my and the University’s Birmingham, Edgbaston MP, Gisela Stuart, had questioned the fairness and sustainability of Birmingham’s share of that settlement. In customary Commons style, the minister, rather than answer that tricky question, preferred to tell the House about the council’s tax arrears:

“I am afraid that poor leadership in Birmingham and the fact it has not collected some £100 million in council tax arrears may explain some of the issues it is facing. Stronger leadership and the ability to carry out the simple function of placing a charge on an individual and collecting it will assist it” (col.671).

In the heat of the moment, Hopkins omitted to explain that this arrears figure was a cumulative one covering the whole 21-year life of the council tax, or that it includes costs incurred in collecting unpaid taxes. Nor, even more unfortunately, was there time for Gisela Stuart or anyone else to observe that the biggest councils have not only the largest cumulative tax arrears, but also, equally unsurprisingly, the largest tax receipts.

For, by Hopkins’ reasoning, Birmingham’s having collected £63 million more last year in council tax and non-domestic rates than any other English authority outside London presumably reflects rather positively on the quality of its political leadership (Table 5).

Returning from Planet Hopkins to the real world, the key statistics – and they are key – are those for tax collection rates: not pounds collected but percentages collected of the total sum due.

The 2013-14 council tax collection rate for all English authorities was 97%, ranging from shire districts’ 97.9% to 95.4% for Inner London boroughs and Birmingham’s most obvious comparators, the 36 metropolitan districts. Birmingham’s 95.3%, therefore, was fractionally below the met district average, but, as it happens, second highest among the 10 large authorities in the DCLG’s naughty list – behind only Croydon (96.2%) and way ahead of the coalition’s current favourite Labour council, Manchester (91.7%).

Certainly not the disgrace, then, that its heading of the naughty list suggested, but yes: both improvable and costly. If ever decimal places matter, it’s here. Though respectable nationally, Birmingham’s 95.4% collection rate was lowest of the seven West Midlands metropolitan districts – behind Solihull (98.6%) and, in a perhaps less expected second place, Sandwell (98%), ranked 9th most multiply deprived of England’s 326 local authorities against Birmingham’s 13th.  With each percentage point worth nearly £3 million, if Birmingham had achieved even Sandwell’s rate, it would have collected an additional £8 million – and a similar sum each year.

The DCLG’s non-ringfenced reserves naughty list is even more contestable. There is no set or professionally agreed formula for an ‘appropriate’ level of reserves, or for the balance between earmarked/ringfenced and unallocated reserves. But when CIPFA (Chartered Institute of Public Finance and Accountancy) asserts that councils increasing their cash reserves “is essential for protecting frontline services” and finance officers advise that, with council funding over the next few years being exceptionally uncertain, it’s only prudent to set aside reserves in anticipation, it’s hard for councillors – and should be for Pickles – to argue otherwise.

Birmingham’s prominence on this particular list – again, a consequence of its sheer size – is just perverse, given repeated warnings by the council’s external auditors about the councils’ reserves being, if anything, too low. In fact, last month’s Annual Audit letter noted specifically a concern regarding the “relatively low levels of general fund reserves (£85.8 million compared to a revenue budget of £3.5 billion)” (p.7).

Returning to tax collection, if there are numbers of individual councils that find it difficult to, as the minister put it, “carry out the simple function of placing a charge on an individual and collecting it”, what should we make of Her Majesty’s less than exhaustively tenacious Revenue and Customs (HMRC)?

One of HMRC’s helpful ancillary services – or hostages to fortune – is its annual report detailing all the taxes it doesn’t collect: in 2012-13 just the £34 billion – or 6.8% of the total it should have managed.  In other words, all but the very worst council tax collection rates exceed the average managed by the people whose sole job is tax collection.

If we take that most “simple function” of individual taxation, English local authorities failed to collect £734 million (3%) in council tax, while HMRC failed to collect £14.2 billion (5.3%) in income tax, NI contributions and capital gains tax. From businesses, councils failed to collect £478 million (2.1%) in non-domestic rates, while HMRC failed to collect £12.4 billion (10.9%) in VAT, and £3.9 billion (8.7%) in corporation tax.

As Matthew, the Galilean tax collector-turned-gospeller, might have put it: You hypocrite, Pickles; first take the plank out of your own eye, and then you will see clearly to remove the speck from your brother’s eye.

game

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.