Select Committee on Environment, Transport and Regional Affairs Memoranda

Memorandum by the Labour Campaign for Open Local Government (LCOLG) (LAG 24)

  Thank you for the invitation (30 November) to the Labour Campaign for Open Local Government to express its comments on current LOCAL AUTHORITY GOVERNANCE. These are listed below, using your subject headings, following a brief preamble which describes the Campaign, its supporters and its experience of the legislation, before and after the Royal Assent.

  If invited, we would like to attend the Select Committee to support this submission.


  Lewis Baston's essay on the Labour Party in local government, in The Labour Party: A Centenary History (2000), reminds us that in 1900 there was a flourishing system of largely independent local authorities administering an extensive public sector, but few Labour councillors elected to serve them, During the 1990s the Labour Party gained unprecedented success in local elections, although local government by then had little autonomy and had lost most of its powers (Ibid.) Between 1973 and 1988, local government was reorganised into larger units, each authority with the equivalent of a cabinet (Joint Chairs or Policy Committee) under the control of the leader. At the same time financial independence was virtually eliminated.

  LCOLG regards the Local Government Act 2000, which has imposed the cabinet/mayor/manager models of local governance, as a further step in the role back of democratic accountability.

  The Campaign was initially established in May 1999 by a handful of London backbench councillors to make the case for a fourth model, the retention of a modernised committee system, in accordance with the government's avowed principles of "efficiency, transparency and accountability, where this was the wish of the people. It now has 350 active supporters, mostly mainstream Labour councillors, who act as points of contact for colleagues in their groups in over 100 different authorities—a number which is steadily increasing. LCOLG has been referred to by Howard Knight (Head of the Labour Party's Local Government Unit) as "mischievous" and "misinformed", and by Hilary Armstrong, the Minister for Local Government at the DETR, as "dinosaurs and oppositionists". However its mailings and briefings have been described by councillors across the country as constructive, analytical and as reflecting the concerns of the backbench or non-executive councillors who are the majority of its supporters. These elected members have either experienced the changes to local government structures where they have already been imposed, or are now experiencing the consultation and debate based upon them.

  Although local government reform is not an everyday topic of conversation, the supporters of LCOLG know that whenever members of the general public become aware of the proposed changes in political management structures with their consequent threats to democratic representation, and the very real possibility of cronyism and corruption, they are universally horrified.


  It is the view of supporters of LCOLG and members of the public who are aware of the legislation, that the proposed changes are very unlikely to contribute to greater "efficiency, transparency and accountability", whereas a modernised committee system with relaxed whipping will do so. Throughout its existence, LCOLG has argued for evidence-based policy making instead of central prescription based on no real evidence. In introducing this legislation, no pilot studies have been conducted, as Professors of Local Government George Jones and John Stewart have noted, to "test" the "options proposed for internal political management" and compare "how executive forms work in other countries": hence the Act is "a classic example" of "a piece of bad legislation" (Local Government Chronicle 19 January 2001). This legislation was made on the hoof, which is illustrated by the fact that the government itself moved nearly a thousand amendments during its passage, and has had to issue endless pages of guidance and regulations before and since the Royal Assent.

  Despite the Government's acceptance in the Lords of the Liberal Democrat peers' amendment to allow small district councils to retain committees, and the recent decision to permit this for all Welsh councils, LCOLG considers that the implicit threats to local democracy highlighted by itself and others since the original publication of the White Paper still remain now it is an Act.


(a)  The Role of Councillors

  LCOLG has first-hand experience that the new arrangements have already created first and second class tiers of councillors, and the White Paper's original exhortation to increase community leadership and be involved in scrutiny has proved either redundant or unworkable. Most councillors stand for election because they want to become involved in the local community at different levels. Some may understand how local government works and in which areas of service delivery they want to become involved, others use particular committees as an apprenticeship to develop a specialism, and others want to represent their constituents as a sort of advocate vis-a"-vis the council. Nearly all now feel that it is impossible to fulfil any of these roles as a backbencher. Most complain that they are marginalised or isolated as a result of the changes.

  It is instructive to look at a particular category of councillor, one that is even more marginalised than most, but one the Government maintains that is keen to encourage.

  At its conference in July 1999 the Prime Minister told the National Association of Black, Asian and Ethnic Minority Councillors that his government's plans to modernise local government would address the problem of the "under-representation of women, ethnic minorities and young people in our council chambers...". "In America", he asserted, "experience shows just how the kind of local governance structures we are introducing, particularly directly elected mayors, can be more effective in putting black, Asian and ethnic minority politicians into positions of authority".

  However it was later pointed out by an NABAEMC executive member, Cllr Nirmal Roy of Camden, that only three per cent of councillors in the UK are from ethnic minorities which comprise six per cent of the UK population. Even when elected, many find themselves marginalised within their political groups and excluded from the decision-making power base. Contrary to the Prime Minister, Cllr Roy concluded that without "improved, open and democratic committees", the position of ethnic minority councillors "will be even more marginalized in the future" because "after the modernisation... power will be concentrated in fewer hands". Indeed, where "new structures have already been implemented, councillors of ethnic minority origin have found themselves more excluded than before".

  Cllr Roy notes that the Prime Minister's expression that directly elected mayors will offer new opportunities "has not been universally proven elsewhere". The Prime Minister's listing in his speech of three directly elected US ethnic minority mayors "is hardly a convincing argument, when 21 per cent of the USA population is black", and "certain other directly elected mayors of ethnic minority origin" have been "impeached and prosecuted for corruption and financial mismanagement", Cllr Buchan Bhalla, NABAEMC Secretary, in Local Government First (2 December 2000), makes similar points. He also considers that "modernisation will make things even worse and could even reverse the limited progress ethnic minority councillors have made".

(b)  The Role of Local Authority Officers

  It is noticed that the new arrangements have also begun to divide the roles of local officers between those who advise the executive and those who advise the non-executive or scrutiny function. This has led to damaging debate within the unions about relative career streams.

  LCOLG has no further comment on this.

(c)  The Local Electorate

  LCOLG has encountered bewilderment among even the informed local electorate when it grapples with the implications of these arrangements, and alarm when it considers whether it will have a greater or lesser role in the local democratic process.

  One reason for this is the "behind-closed doors" secrecy still implicit in the legislation. An amendment was passed which requires key decision-making meetings of the executive to be held in public, other than for exempt business. No definition of "key decision" exists, although two examples have been suggested: the spending or saving of significant funds and if the decision affects two or more wards. However the closure of a school could be described as affecting just one ward. Yet individual executive members are also able to take these key decisions; complete executives are able to meet in private to discuss key decisions; decisions deemed not to be a key can be taken in private with reports not having to be publicly available in advance; draft reports and decisions delegated to individuals require no advance disclosure. Even if executive or cabinet meetings are indeed open to the public it is obvious that, as executive members may be from one political party, every decision to be taken will be rehearsed in private in advance of the meeting. This is considered even less transparent that the whipping of a committee.

  It is difficult to see how this complies with the aims of "efficiency, transparency and accountability". Whether the new arrangements are "transparent" is a moot point, but at least the public will now know who is "accountable" for the decision. As far as "efficiency" is concerned, this appears to mean little more than faster, with no room for proper debate, consultation, or scrutiny. Even so the opportunity for the scrutiny process to "call in" an executive decision may delay its implementation. Effectiveness or speed is not therefore always guaranteed.


  The experience of local authorities in setting up overview or scrutiny committees or other devolved arrangements is extremely varied, because no two authorities have adopted the same systems. However the consensus among members of LCOLG is clear, and has been endorsed by a study of 290 councils prepared for Improvement and Development Agency (September 1999) by De Montfort University which stated that "while there is genuine commitment to one element of the change package (ie the cabinet or executive), other balancing elements, such as scrutiny and the role of the (full) council, are much less effectively developed. There remain a substantial amount of authorities that have shown little sign of responding to this part of the agenda". In some local authorities it is the Leader who actually appoints scrutiny members! The study concluded "the majority of authorities, almost three quarters, have some scrutiny system in place, but it is not clear whether these systems yet have the teeth to hold the executive to account".

  Supporters of LCOLG experience that one obvious effect of scrutiny has been to discard executive members from the decision-making process. Another recently published survey by IdeA, covering the 466 councillors who left local government in May 2000, revealed that just over half stood down voluntarily, and that more than one third did so precisely because of restructuring. As the Local Government Association Conservative group leader Gordon Keymer commented: "There's always been a concern that you'll have the cabinet running the place and the scrutiny people regarded as second-class citizens" (Local Government Chronicle, 3 November 2000).

  Second-class citizens lose interest. Indeed, according the LGA's magazine Local Government First (20 January 2001), Coventry City Council is docking wages from non-attending members and Birmingham is considering doing the same.

  A recent internal survey by Bristol City Council has found that 86 per cent of the 22 councillors who responded said scrutiny was less effective. Not one thought it was more effective. 21 members thought the structure itself had failed to strengthen local democracy and 20 felt scrutiny committees had not increased accountability. Just four thought services had improved since the changes. One member commented: "Scrutiny has so far failed to achieve anything significant." Another said: "Bring back the committee system. It worked and all members were involved in the decision-making process." Cllr Barbara Janke (Lib Dem), Leader of the opposition, said the scrutiny experiment had been a failure. "It was clear from the start there were major problems with the scrutiny commissions, Not least the fact that they have no power. How can such toothless bodies be expected to call the powerful decision makers to account?".

  Professor Paul Corrigan, Executive Director of the Public Management Foundation, concedes this point when he states: "For some, this failure of scrutiny is no surprise since they never believed there was anything in the new system" (Local Government Chronicle 24 November 2000). Apart from being the partner of the Minister, Professor Corrigan is a luminary of the New Local Government Network (see below).


  LCOLG has no comment, at this stage, under this heading.


  As might be expected, LCOLG is alarmed at the concentration of power in too few hands under either a cabinet or executive system and in particular under a directly elected mayor. Unsurprisingly, LCOLG sees very few advantages.

  Many local authorities disperse budgets of hundreds of £ millions. Decisions which affect this will be largely taken by very few elected members. Yet it is understood that the Government is determined to press towards directly elected mayors. As the Local Government Chronicle (3 November 2000) has remarked ". . . one theme stands out—the way councils are being cajoled into the mayoral option. The Government has in fact skewed the guidance to push councils towards holding a binding referendum even when consultation reveals only low levels of support for a mayor". It suggests that "even if a petition falls short of the [5 per cent] requirement, the council should consider going ahead anyway". The legislation also gives the Secretary of State "reserve powers to force referendums" on directly elected mayors. However, research from the LGA has demonstrated that only 1 per cent of councils actually want a directly elected mayor.

  In an article in the Municipal Journal (13 October 2000), Tom Watson of the AEEU gave certain arguments against directly elected mayors.

  The first was that they can often lead to patronage and corruption. Recent examples include a court in Spain which banned the mayor of Marbella from holding mayoral office for 28 years because he mixed the town's accounts with those of his football club (The Times 12 October 2000). The following day Jean Tiberi, mayor of Paris, was expelled from the Gaullist RPR party: because he and 60 others were under formal investigation for accepting kick-backs from firms seeking council contracts while President Chirac was mayor of Paris from 1977 to 1995 (The Times 13 October 2000). Not so long ago almost half the mayors in Italy were either in prison, on bail, under investigation, or fleeing the country because of corruption on a massive scale.

  The Government's intention is modelled on the USA experience. Its lobbying arm, the New Local Government Network, includes the directly elected mayors of New York, Baltimore and New Orleans as examples of what it considers is "a powerful case for mayors in this country". However the NLGN omits to point out that corruption is an endemic problem in the USA, where over fifty former mayors are currently in prison for this offence. Jail is the most common abode for ex-mayors. Who can forget the unedifying footage of Mayor Barry of Washington closing a drugs deal in a hotel room?

  Directly elected mayors will put the "vested" back into interests. Capita's evidence to the Joint Select Committee on the Local Government Bill stated that "it helps if the leader is able to commit the council and to have control over his/her group". That is, contractors prefer to do business with one person only, without internal discussion or effective scrutiny by democratically elected councillors.

  Directly elected mayors, and indeed the establishment of executives, will effectively remove working people from this layer of local democracy and replace them with a brigade of career politicians, professionals at best, and even celebrities with little experience of anything except "stardom". It is interesting to note that Liverpool, once keen on a directly elected mayor, is now less keen when it was known that Cilla Black, Derek Hatton or Phil Redmond might join the mayoral race. In Britain the politics of personality, at least at local level, have never had a place.

  The Act states that directly elected mayors cannot be removed by impeachment or a vote of no confidence, however, incompetent they are, and can only be removed if there is "evidence of corruption or other law breaking". Since a directly elected mayor may have no prior qualifications or experience this is a major flaw in the legislation.

  Finally, one aim of the legislation is to increase voter turnout. Directly elected mayors are unlikely to increase turnout, because the centralisation and the reduction in the powers of local authorities mentioned above will de-motivate many electors who cannot see what difference their vote will make. It is salutary to consider the meagre 38 per cent turnout that a highly publicised and recent direct election, that of the mayor of London, achieved.

  By contrast, where committees still exist, such as in Scandinavia, turnout in local elections is regularly 70 per cent—80 per cent.


  The evidence could be that it is the government's ultimate aim is to eliminate representative democracy in local government and replace it by local administration.

  In 1999 the Society of Local Authority Chief Executives informed the Joint Select Committee that "the number of councillors should be reduced as we move to a new model of executive and scrutiny". Interestingly, it is suggested that the structures may even dispense with Chief Executives. Local authority contractors, who fund the New Local Government Network (in 1999 the NLGN received £279,542 from "corporate sponsors") to advance their intention, tend to support SOLACE.

  The NLGN and the Institute for Public Policy Research have jointly launched Towards a New Localism: A Discussion Paper (19 October 2000). The paper "rejects the dominant view of local councils as primarily producers of services" and proposes that asset management partnerships take ownership of local authority and public sector assets and lease them back to local authorities at economic rents.

  All the evidence of so-called partnerships so far is that local government is invariably at a disadvantage in dealing with private companies. Whereas private companies can operate in secrecy and negotiate with a "hidden hand", public bodies are supposed to be accountable to the public, the District Auditor and ultimately to central government. Local government budgets are published so that the private sector nearly always has a good idea of what a council has budgeted for a service, and negotiates accordingly. Local government is also itself governed exclusively by statutory authority, and cannot become bankrupt in the way that a private company might use bankruptcy to avoid liabilities. None of this is reflected in the legislation.

  LGAs are treated as equal partners in law in relation to private bodies. The result is that Public Private Partnerships in practice mean that usually the public sector raises a relatively high proportion of the equity in a project and takes a high percentage of the risk, whereas the private partner puts up far less and effectively takes no risk. If it does it can always evade any risk through insolvency, but it is able to recoup the major part of any profits or assets. Thus without a properly thought out system of administrative law governing public bodies and their relationships with private bodies, as exists in other European countries, local authorities will always be at a disadvantage. Prive Finance Initiatives or PPPs will be nothing more than conduits for channelling public money into private pockets for no, or little, appreciable public benefit, and no, or little, real accountability.

  The above defects and inadequacies will be exacerbated under unaccountable executive members or directly elected mayors who may be less experienced, less principled, subject to less scrutiny and political control, and possible more corruptible. In the absence of clear legislation on what is public and what is private, what accounting methods should be used for mixed assets, what decisions need to be made in public, and which decisions should be scrutinised, the whole area of so-clled `outsourcing' is open to abuse. Unless, of course, the real intnetion of the present legislation is to privatise all public assets and services and abolish public provision of anything at all.

  The NGLN has long proposed that the responsibility for education should be removed from local education authorities, ie democratically elected councillors, and handed straight to governing bodies and head teachers. Its paper advocates a reduction in councillors in favour of "neighbourhood managers". It states that "over a 10-year period the number of councillors in all principal authorities should be reduced significantly" because "gone is the need for a mass of councillors to represent local people and oversee the production of local services". They should be replaced by "talented people from business or the voluntary sectors to take office within a cabinet on the invitation of the leader or the mayor".

  These proposals, which were first advanced by Nicholas Ridley in the 1980s, would, if implemented mean th end of representative democracy in local government and its replacement by local administration. Dennis Reed, Director of the Local Government Information Unit, notes that these proposals "come from an organisation whose self-appointed executive is stuffed with local government minister Hilary Armstrong's closest advisers and those actively campaigning against the return of the business rates to local level and for the imposition of elected mayors" (Local Government Chronicle, 3 November 2000).

  Thank you for inviting the Labour Campaign for Open Local Government to respond to the Select Committee's invitation. LCOLG would be pleased to also give evidence.

  For your information, LCOLG's future strategy, in consultation with its supporters, is to:

    —  Monitor the implementation of the Local Government Act 2000.

    —  Champion the interests of non-executive or backbench councillors.

    —  Continue the fight against directly elected mayors.

    —  Make new links with trades unions.

    —  Raise awareness among the Labour movement and the public concerning the government's ultimate aim to eliminate representative democracy in local government, and to replace it by local administration.

    —  Promote a progressive agenda on public participation, transparency, accountability and efficiency in providing direct and improved services.

January 2001

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