Independent local government

Author: Graham Allen MP

How would we all respond if local government in this country were set free from the clutches of Whitehall and had the same independence as it has in most western democracies, are we up to it? That is the challenge made by Parliaments Political and Constitutional reform Select Committee in league with the Local Government Association.**

Localism which is gifted by central government is a sham. Pretending to give “freedoms” while deciding in Whitehall how many times your bin is emptied is not enough. Any localism worth the name has to be codified and protected by constitutional guarantee. For this to work in the UK would require not only powers to be devolved to local government but financial autonomy too.

Given the reduction of local government over recent decades to little more than an agent of central government, this proposal would amount to the largest denationalisation ever undertaken and the restoration to the public of their ownership of their own local government.

Virtually every democratic nation and every business has concluded that the current economic complexities are way beyond the capacities of a command economy. Yet the way the UK –and England especially-governs itself seems to be stuck, Brezhnev-like, in command politics-the last country in the empire. Petty interference from the centre must be denied any legal or financial basis and local government given unchallengeable legitimacy. This can be done in two ways.

Firstly, in order to guarantee their independence, local authorities must be created in law as independent and sovereign entities and their duties codified. They would then be able to undertake as of right all those duties for which they are elected locally and which subsidiarity recognises as being local. Local government, like any other public body, would have to perform its duties within a legitimate inspection regime and within the context of human Rights legislation and so could be held to account by any citizen. This independence must be protected from easy repeal perhaps by including an amendment to the 1911 Parliament Act, which would allow the Second Chamber to veto legislation that threatened the rights of local government. In the longer term, such a fundamental bedrock of our democracy must be guaranteed by clauses in a Written Constitution for the United Kingdom.

Secondly, Political independence for councils would mean nothing without financial independence. Of all local authority spending, the bulk is now provided by central government and only a fraction (one eighth) is raised locally by the Council Tax. This dependency culture must end. Central government must be removed from the financial equation and localism given monetary teeth. To do so a radical new settlement needs to be implemented on taxation with HMRC sending half the national income tax take back to local councils via an independent redistribution commission, without central government interference. Central government could continue to be free to assist councils with time limited funding on particular problems, just as the federal government of the United States and many European States already do.

Local councils, assured that the funding of most of their expenditure was secure, could then be free to raise the remaining part of their income however they and their electorates decided, from a menu of revenue raising powers, ranging from property rates to sales taxes or local bond issues. In a mature democracy, local authorities would be confident and competent enough to raise and spend what they decide is appropriate. Citizens knowing what they pay and why they pay it and holding their own local representatives to account will constitute a firmer discipline and stronger bulwark against central interference than any statute.

Local authorities already have a record of financial expertise and economic management which outshines that of the central government that so often wishes to lecture them. However, as a constitutional safeguard, local authorities would be obliged to operate a “balanced budget provision” – a self discipline operated by most American state governments. Annual income would have to match annual spending. Local borrowing, providing its costs were met from annual income, would not be controlled by Whitehall. Well managed local councils would gain triple A credit ratings, poorly run ones would not be able to raise any borrowing .

Throwing away the crutch of central government will be a frightening as well as an exciting challenge. There will be no one else to blame anymore. However, devoted public service has always characterised local councillors of all parties, and they will respond to their liberty. Let local people decide on their spending, their services, on their electoral system or the use of direct democracy. A thousand flowers are waiting to bloom locally, not all of them to the liking of whichever political party is in control at the centre.

This would also deliver a tremendous revitalisation to our all too moribund local politics – a key part of our civic society that has been deliberately neglected by the beneficiaries of centralism. Once again it would really matter who got elected locally and how well they were politically prepared and technically trained to handle the onerous local duties of independent local government. We would recreate that invaluable network of citizen politicians of all parties, in touch with their communities, close to their constituents, empowered and empowering their local areas.

The current undemocratic agency relationship between the centre and the localities should not be sustained. Localism will either default back to Whitehall control or move forward towards real independence.

** the consultation is now open (see pdf),send your views to the Political and Constitutional Reform Select Committee at pcrc@parliament.uk by Friday 5th October 2012………

Graham Allen is MP for Nottingham North and Chair of the Parliamentary Select Committee for Political and Constitutional Reform.

Independent local government

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