Council Tax Benefits: A Case of Seriously Muscular Localism

Chris Game

I noticed recently that, among the links on the right-hand side of this page, we still listed the We Love Local Government blog – which, despite its having been wound up, in characteristic style, several months ago, rather pleased me. It deserves to live on, and, should its belatedly unveiled authors, Glen Ocsko and Gareth Young, happen to see this blog, they may take it as a small personal tribute to them and their … I was going to type ‘baby’, but that would make them filicidists … creation.

WLLG was written by local government officers – often critical of aspects of the world in which they worked, but who managed at the same time to love it – or at least sizable chunks of it, for quite a bit of the time. This, of course, is what made it and them different – from so many of their fellow citizens who achieve only the harshly critical bit. This blog is addressed to these gripers, in the hope that, if ever there were a sequence of events that might arouse in them a tad of sympathy for local councils, it could well be the latest episodes of the Government’s council tax benefit changes, summarised below and using as an illustration Birmingham City Council.

These benefit changes are a pivotal and controversial Coalition policy, revealing what critics claim is the true nature of its welfare philosophy, its commitment to genuine localisation, and its sheer managerial ineptitude. Details are on Birmingham City Council’s website under ‘Council Tax Support’ – so what follows is a brief summary for the late arrivals at the Taxpayers’ Ball.

From next April, the Government is abolishing Council Tax Benefit (CTB), a means-tested benefit currently paid by the Department for Work and Pensions (DWP), but administered by local government – in Birmingham’s case, £100 million to approximately 137,000 council tax payers. Replacing it will be Council Tax Support – financial support schemes determined and operated by local authorities themselves.

This ‘localisation’ of welfare sounds a commendable transfer of responsibilities from Whitehall to town hall – until you examine the attached strings. First, the policy forms a key part of the Coalition’s deficit reduction programme, aimed at reducing the current CTB bill by 10% by strengthening councils’ incentives to get people into work, and cutting the fraud and error that the DWP was unable to control. And councils will need to achieve all this immediately, apparently, as the Government would pay them 10% less for their new schemes than for CTB, creating for Birmingham a funding gap of £10.9 million.

Second, the Government decreed that pensioners receiving CTB must be protected against any reduction in support. In Birmingham this means 54,000 pensioners are protected, while 83,000 working-age recipients (those born after October 1951) shoulder potentially the whole savings burden.

So far, so centralist, for it is only here that the localist part begins, with councils able to devise their own schemes to achieve these savings, provided they do so by January 2013.

In practice, this discretion amounts to three unenviable choices: spreading the funding cut equally across virtually all CTB recipients apart from pensioners; giving the rebate to certain groups only; or continuing with the full rebate, and filling the gap either through raising council tax or finding savings elsewhere, on top of those already being demanded by the Government – for Birmingham, a possible £600 million over the next five years.

The Council’s selected option – essentially a version of the spread-the-pain-equally model – was revealed in early September in two documents: one setting out the proposed tax support scheme, the other asking for residents’ views by 2 December. Almost all working-age people could expect to pay at least 24% of their council tax – which this year would be £178 or £3.43 a week on a Band A property. Main exceptions would be those with a dependent child under six, and those receiving a disability or disabled child premium or war-related pension. A modest contribution to the scheme’s cost should come through removing council tax discounts on second homes, as permitted when the Local Government Finance Bill eventually completes its unhurried progress through Parliament.

Now here, I thought, is where the sympathy might come in – for the contemptuous treatment councils regularly receive, even from Community and Local Government ministers who are supposed to be vaguely on their side.

First, there’s the constitutional arrogance of requiring councils to prepare and consult on detailed schemes before the authorising legislation is even passed. Yes, it’s equally contemptuous of the Queen’s Royal Assent, but it seems almost standard procedure nowadays.

Then there’s the Government’s brand of centralist localism – ‘muscular localism’, as Secretary of State Eric Pickles calls it – which involves both setting all the main rules, then changing them in what ministers must know is the middle of councils’ consultations, but that to them presumably is merely a game.

In late October, weeks after most councils had formulated their support schemes and gone out to consultation, DCLG ministers announced that they’d had a quick whip-round and found an extra £100 million ‘transition grant’ for councils whose schemes were ‘well-designed’ and maintained positive incentives to work.

As they say in professional cycling, if it sounds too good to be true, then it probably is. Ministers’ idea of ‘well-designed’ turns out mainly to mean that those currently receiving full council tax support should pay no more than 8.5% of their council tax liability, or barely a third of Birmingham’s proposed 24%.

So, back to the drawing board – or perhaps not, who knows.  An unpredictable share of the £100 million would represent a fraction of councils’ 10% funding cut and complicate budget-making. Besides which, collecting costs will cancel out much of the arbitrary 8.5% tax payments: £1.21 per week on a Birmingham Band A property. The smart money is on most councils sticking with their intended schemes.

Clearly, though, ministers have been spooked by the savage impact on the poorest households of their own inflexible funding restrictions – of which they were repeatedly warned, and which might have been largely avoided, had they allowed councils not just to remove tax discounts from empty properties, but, as proposed by the LGA, to reduce even slightly the 25% single person’s discount.

But no, that was another ministerial rule: “the Government has no intention of introducing a ‘stealth tax’ on eight million people” – a benefit cut on even more, even poorer people being apparently something other than a stealth tax, or anyway one for which councils would take the blame. Now, no doubt, they’ll get additionally blamed, whether they change their proposed schemes or not – and if that lot doesn’t earn them a scintilla of sympathy, I’m at a loss to think what might.

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.

Can I Vote, Please? Councillors, Budgets and Illegality

Philip Whiteman

This week, there is plenty of news about granting 16 and 17 year olds the right to vote.  You may therefore be surprised to learn that another group may have their right to vote withdrawn.  Okay, I am being slightly flippant here, but there is a potentially serious oversight on whether councillors should be allowed to vote at the full council budget setting meeting.

On a number of occasions I have criticised the Localism Act as a poorly drafted piece of legislation that leaks like the proverbial legislative sieve. From the inability of standards committees to sanction their own members, to questions on whether standing councillors are required to sign a declaration of interest, there are plenty of examples to choose from. So here is another to wet your palate.

Councillors are naturally bound to vote on their annual budgets and also on their allowance packages at Full Council.  Nothing too complex about that, you would think.  However, the new Declaration of Pecuniary Interest could result in a breach, should councillors vote at their annual budget meeting or on their allowances.   As both tax-payers and recipients of allowances, this leaves councillors vulnerable to members of the public lodging official complaints.  In all probability, a police investigation would not be pursued but it is a risky situation.

Monitoring Officers with a sharp-eye should be able to circumvent this problem through a motion to Full Council granting dispensations to the council en-bloc.  Whether the dispensation lasts for a full four years or for the remainder of council’s term until the election, care is required to ensure that dispensations are kept up to date for all named councillors.

Ensuring the right of councillors to vote at budget setting meetings is an essential component of representative democracy.  To forbid that right would be counter to the whole belief in local government.  The idea that they could face prosecution for breaching pecuniary interest would be quite ridiculous.

Philip Whiteman is a Lecturer at the Institute of Local Government Studies.  He has research interests in the impact of central government and regulators on the role, service delivery and performance of local government and other local bodies.  He is also Editor of the journal Local Government Studies.

Local Government and the Democratic Mandate: An Outdated Model?

Martin Stott

Local government could never be described as fashionable, yet today there is more talk than ever about the importance of ‘the local’.  However, this has converted into less, rather than more, freedom to act locally.  Whitehall’s desire to control is strong, as the current freeze on council tax rises demonstrates.  Local government hasn’t suffered as much at the hands of Whitehall as the NHS, where the current reorganisation follows countless previous ones – none of which have any clear rationale other than to undo the actions of a previous Minister and ‘prove’ that the new Minister is in charge.

The reason that local government has remained untouched by similar reorganisation is because it has one priceless asset that the NHS has never had.  An independent democratic mandate.

But that’s the rub.  Nothing drives Westminster politicians wilder than others challenging their supposedly democratic right to rule.  But local government did and still does.  Hence it’s abiding unpopularity in Whitehall and Westminster.  The excuses are many and varied – ‘inefficiency’ (when was democracy ever efficient?), ‘cost’ (let us try and recall local government equivalents of Whitehall’s IT and defence procurement fiascos, amongst others), ‘postcode lotteries’ (isn’t that a subjective term for local decision-making?), ‘poor quality of elected members (remind me which political parties put up these candidates?).

In the end though, the reality was summed up for me by a member of Tony Blair’s Cabinet, himself ex-local government, who when I asked him once over dinner how many local authorities he thought there should be in England, replied firmly “one”.

The government’s plan for fragmentation, competing foci of accountability and localism without democracy (‘localism lite’) has continued apace.  Examples of this include:

  • Police Commissioners.  Elections in November 2012 will confer a certain cloak of democratic legitimacy but with a few exceptions, their jurisdictions will have little connection to existing democratic jurisdictions.
  • The NHS.  It’s hard, even now, to know what the NHS reforms will really mean in practice, with local authorities having been ‘given’ responsibility for public health – as if environmental health, trading standards or waste management had nothing to do with the subject already.  And will GP Commissioners engage effectively with local authorities about the health of their populations when their accountability remains to Whitehall?
  • Schools.  Not long ago, local authorities were deliverers of education from 4-18, however this is now disappearing with the introduction of academies, foundation schools, free schools and the like.  The mantra is ‘freeing schools from local authority control’, but this means that the schools will have no direct democratic link with their localities.
  • The planning system.  The right of individual property owners to develop their land was nationalised under the 1947 Town and Country Planning Act.  The process of granting or refusing ‘planning permission’ was then delegated to local authorities.  Brick by brick, the Localism Act, and the Infrastructure Planning Commission and its successors have removed the foundations of democratic local determination.
  • Elected Mayors.  The argument for mayors is simple.  A single point of accountability for things that go wrong – or right – in a locality.  The problem is that giving a single person a lot of power can be a recipe for corruption, and doesn’t allow for the nuances, ambiguities and consensus-building that is so important in local democracy.

Despite all this, by and large, local government has risen to the challenges of the last two decades.  Gone are the command and control attitudes – the diverse ecology of local public service provision has made a new way of working essential and local government has found itself sharing responsibility rather than working alone.

There remains a distinct division of opinion in local government between the ‘local authority as service provider’ view and the ‘local authority as community leader and local voice’ perspective.  The two aren’t necessarily in conflict, but the rise of the customer has led to a view in some quarters that service provision is all.  High quality value for money public services are a very important part of what local government offers.  But if that was all it offered, why both with the democracy bit?

There are plenty of companies delivering high quality public services efficiently, but there is a gap in the market for local leadership, the championing of ‘place’, the focus for the expression of local democratic legitimacy.  Sadly the trend seems to be in the wrong direction as, rather than bolstering local government, its powers and responsibilities are being stripped.

Martin Stott was Head of Environment and Resources at Warwickshire County Council until the autumn of 2011, when he concluded a 25 year career in local government.  He has recently become an INLOGOV Associate.

Roaming Buffalos, High Speed Trains and Localism?

Ian Briggs

As the government seeks to develop measures that stimulate the economy through the relaxation of the local planning processes, should we stop for one moment and think about some pretty fundamental issues about the relationship that we, as citizens, have with the locality where we reside – issues that localism may be ignoring?

The predominant notion we have in the UK is that (with due respect to women) an ‘Englishman’s home is his castle’ – however, as the details of the 2011 Census are eagerly awaited we are aware that we have a society that is perhaps more geographically mobile than ever before – mobile through commuting to work or mobile though national or international migration. For most communities today, even those that have relatively fixed populations, the proportion of those who have been domiciled in one locality for more than one generation is shrinking. This means our emotional connectivity to place is changing – this is not to say that many localities have populations that don’t have a strong commitment to place. Rather, it implies that we see connectivity to place through economic factors more than any other. However, many communities have powerful and longstanding psychological commitments to the locality where they reside going back generations and generate fierce local loyalties that policy makers and politicians often find hard to recognise.

The concept of land ownership is not always recognised in other societies. Throughout the world there are examples of where the concept of ‘ownership’ is reversed – it is not the fact that the landowner actually has titled deed to the land where they reside but the land has ownership of the very people who reside upon it. This has been often misunderstood in places such as Australia, New Zealand and certainly parts of North America.  Where indigenous populations have been resettled there are numerous occasions where the sense of displacement is cited as the root cause for various social problems. The Native North American notion of the ‘Washee’ is not a catch all term for white North Europeans – it is a term better translated as a ‘trespasser’, as someone who this land does not recognise as within its own ownership.  This notion that the people belong to the land is more important than we have perhaps recognised – the sense of belonging to ‘place’- despite how challenging it may be to quantify or measure – is a key factor that local councillors have to account for, and a mistake that government at local and national level seem to continue to make when decisions are made that fundamentally impact upon communities.

People do have a sense of belonging to locality and this is now being demonstrated through the rather extensive and turgid consultation processes around HS2. As a resident who is impacted by this development I have been active in a number of local and regional meetings, where the debate is moving from the awareness of the economic advantages and disadvantages associated with building the railway to one of a strong sense of hurt caused by politicians’ failure to recognise the desire that many local people have to hand down the ‘belonging to the land’ from one generation to the next.

The sense of betrayal that many in the North American Native self governed communities feel is often characterised not by a sense of loss of entitlement to the land but that the land has something missing – it has lost its people and the arguments are less economic and more socially psychological and spiritual. The deprivation and social problems in many of the Native American self-governed communities is plain to see and has been overlooked for far too long by Washington.  It is only now that steps and measures are being taken that make better connectivity between these communities and the land they occupy. So, what relevance does this have for us in the UK? Perhaps, HS2 can be used as a litmus test and a broader set of parameters applied to considering its worthiness?

The tone of many of the public meetings and consultations around HS2 is starting to open this debate up – however strong the economic arguments are or are not as the case may be, the feelings of hurt and imposition by a government of a rail line is an issue that local councillors are going to be left to deal with for potentially generations to come. Government can perhaps be a ‘trespasser’ and impose things on the land and the people but where that strong link between place and people is broken other problems always seem to follow. If HS2 is to be completed then there could be major economic gains.  Whilst this is questionable to some it is indeed possible – the local building industry could be stimulated through a relaxation of local planning regulations – there could be a higher price to pay that may take time to emerge and leave us with many more problems to solve.

Image

Ian Briggs is a Senior Fellow at the Institute of Local Government Studies.  He has research interests in the development and assessment of leadership, performance coaching, organisational development and change, and the establishment of shared service provision.

A ‘no’ vote for city mayors does not have to shut down discussion on how local political leadership can be strengthened

Dr. Karin Bottom

Last week, ten English cities voted on whether  to alter the dynamics of leadership in their authorities and replace the current leader and cabinet formula with that of elected mayor, deputy and cabinet.  The rejection was almost unanimous, only Bristol registered a yes vote – but with a majority of less than seven per cent – and more than 60% of voters in Coventry, Leeds, Newcastle, Sheffield and Wakefield   prioritised the status quo above change.   To some this outcome was a surprise, yet  polls prior to the referenda were inconclusive at best and taken in conjunction with the uncertainty surrounding elected mayors, it is hardly surprising that the majority of the electorate chose to stay at home or vote no, average turnout being recorded at a particularly  low 32 per cent.

With a focus on what the office of mayor could do to regenerate cities  and enhance local democracy,  ‘yes’ campaigns were beset with problems from the  start, not least for the reason that pre election, the role of the elected mayor was to be broadly similar to that of council leader: specifics were to be negotiated after taking office and worryingly for some, a substantial amount of the role’s leverage would be the product of personality and an ability to maximise what are often termed as ‘soft’  powers.  Compounding these factors, the office’s confinement to cities – as opposed to regions – suggested that capacity for real change was somewhat more limited than proponents suggested.

Analysis in the aftermath of the referenda suggests that a number of factors contributed to the ‘no’ votes but it  is clear that the overriding sentiments within the electorate were uncertainty and confusion.  Voters were unsure about what they were being asked to endorse or reject and some argue that this explains why the   ‘no’ campaigns were particularly successful at tapping into and harnessing public sentiment.  Taken in the context of austerity, ongoing public service cuts and a generalised dissatisfaction with the political class, it is easy to speculate and suggest that the electorate was unenthusiastic about electing more politicians, especially when the nature of the role was unclear and guidelines for removing poorly performing mayors were minimal to say the very least: to many the office seemed nothing other than a risky and unnecessary expense.

Yet, the results on May 3rd should not shut down discussion on local political leadership. The mayoral model may have been rejected but the issue has not gone away; arguments for stronger more visible city leadership persist and the government has made it clear that it now sees the move towards elected mayors as incremental, cumulative and progressive: in this sense the debate continues.  Yet, now it might be useful to shift the focus somewhat and think about how leadership can be nurtured and maximised in the 339 non mayoral authorities in England because there is nothing to suggest that the qualities which comprise strong leadership sit only within the purview of  an elected mayor.  While  Joe Anderson and Ian Stewart take up their new mayoral posts  in Liverpool and Salford, they do so alongside 124 other English authorities which also underwent some form of political reconfiguration last week: it will be interesting to see  whether  the issues which catalysed the mayoral referenda will impact on future leadership dynamics in those local  authorities.

Karin Bottom is Lecturer in British Politics and Research Methods at INLOGOV, University of Birmingham.  Her core research areas comprise parties (particularly small and the BNP), party systems and party theory.  She is particularly interested in concepts of relevance and how national level theories can be utilised at the sub-national level.

Go Back to Committees – and Use All the Talent of Elected Councillors

Andrew Coulson

A recent centre spread in the LGC has the headline “Committee System may be Outdated, Councils Warned”, even though the option to return to government by committees is one of the main planks of the Localism Act and a central plank of Conservative and especially LibDem policy.

The research reported on, by Ed Hammond of the Centre for Public Scrutiny, reports that four councils are expected to make the change in May 2012.  There will also be some “hybrid” arrangements, such as that likely to come into effect in Kent, where advisory committees are given greatly strengthened powers, even though technically decisions will remain in the hands of individual cabinet members, and the cabinet, though that is not expected to meet very often.

Up to 40 councils are believed to be giving serious consideration to making the change, including some of those where there will be mayoral referenda on 3 May.  If those referenda are lost, some of these councils may well revert to committee governance in May 2013.

Why?  Because, as they see it, committees are much more inclusive than any other form of governance. They give a voice to all the elected councillors, and potentially bring to the table all their talents. They make it harder to take decisions in secret. They give councillors a means of putting into effect the commitments they make when they stand for election, and they keep council officers on their toes because they can never be quite sure what will happen when they attend a committee – even if most of the major changes that might be made to a report will have been agreed in the group meeting of a majority party beforehand.  They also allow backbench councillors to specialise, and provide a means to induct them into how council services are run. They develop leadership – many strong leaders emerged over the years from the committee system.

This is not to say that committees were perfect or are inevitably the best solution. They can, and often were, criticised – for being slow to make decisions, leaving it unclear who was responsible for decisions, and for sustaining silos (such as Education authorities) which at times seemed to have little involvement with other parts of the council.  The criticisms can be answered. The committee system can be fast, and keep confidences, when it matters. With a cabinet, or indeed an elected mayor, leadership is still distributed – with chief executives or chief officers often the real leaders. Silos can be broken down if there is the political will to do so. But none of this is easy, and there were plenty of disillusioned and frustrated councillors and officers in the past. All we can say with confidence is that no system is perfect and that each council needs to work out what is best for its own purposes.

There are different forms of committee systems, ranging from a single committee with important decisions taken in full council (as in a number of the present Fourth Option councils, with populations less than 85,000, who have never given up their committees) to the massively complex structures in some counties and metropolitan districts before 2000 which had committees or sub-committees for almost everything that a councillor could become involved in – over 50 in total in one case. No-one is proposing to go back to that.

There have to be means of dealing with cross-cutting issues, urgent business between meetings, the size of committees and sub-committees, how often they meet, systems of councillors’ allowances, and policy review, to take but some of the issues of detail that must be addressed. Scrutiny will for most councils remain a function that needs to be done, and there are different ways of integrating it into a committee system. Maybe there is much to be said for not rushing into making the changes, and learning from what is happening now.

A day workshop at INLOGOV on 6 July will present a balanced picture and facilitate a discussion of the pros and cons of making the change and the detail issues that need to be taken into account in any new constitution.  Several of the councils making the change will be represented or make presentations. Ed Hammond, the researcher who wrote the Centre for Public Scrutiny report, will speak.  There will be comment from the Local Government Association, and support from FOSIG, the group that represents fourth option councils.

It will provide a unique opportunity to listen to the enthusiasts for making a change, and cross question them, and to understand the alternatives, and the possible downsides,  and the need to address the detail.  More about this workshop, including a booking form, can be found by clicking here.

Dr. Andrew Coulson is Lead Consultant on Overview and Scrutiny at INLOGOV,University of Birmingham, with wide experience of Overview and Scrutiny.  He has recently launched one of the first assessed qualifications on the subject.  His further research interests include partnerships and governance, economic and environmental strategies, and local government in Central and Eastern Europe.