MPs slam government approach to localism as "inconsistent and incoherent"

June 9, 2011

The government’s actions in relation to localism – both in the Localism Bill and in the programmes of individual Whitehall departments – “give an overall impression of inconsistency and incoherence”, MPs have warned.

A report by the Communities and Local Government Committee also suggested that the government had failed to produce a compelling vision of what its imagined localist future would look like.

The committee said local authorities’ role in localism was unclear in particular. It pointed out that a parallel democratic structure was being established for policing, schools were to be further removed from council control, and there were to be binding referendums on council tax increases above a certain level.

The committee also noted that assets of former regional development agencies were not being transferred to local government or local enterprise partnerships.

“All these developments imply that the government may be more interested in circumventing local government than further empowering it,” it said.

On the other hand, the report said, local authorities would have a new general power of competence and new responsibilities for public health.

“The government must decide what it wants the role of local authorities to be and how it should develop, what powers they will have and how they will exercise them in relation to other bodies,” the MPs said. It recommended that each central government department set out how it will devolve further powers to local government.

The committee also called for ministers to rein in their interventionist instincts. “Central government cannot have it both ways – on the one hand giving local authorities the freedom to make their own choices, and on the other maintaining that only one of those choices is the ‘sensible one’,” it said.

“The government must make its own choice: does it wish local authorities to exercise local discretion, or does it want to continue to prescribe and recommend courses of action centrally? The litmus test of localism will be the government’s reaction to local decisions with which it disagrees.”

The committee added that the concept of ‘guided localism’ was “an unhappy compromise which is neither helpful to local authorities nor as radical as the government seems to believe”.

Other findings from the report include:

The government’s commitment to localism and decentralisation was welcome. Power in England is currently too centralised and in the past there has been too much central government interference in the affairs of local authorities
The explanations of localism and decentralisation that the government has provided so far “invoke very diffuse aims from which it is difficult to construct a coherent picture of the end goal”. There is little clarity about who will ultimately be responsible for what
Some policy areas – such as the priorities of the Department for Work and Pensions – appear to have been granted an exemption from decentralisation. These exemptions, however valid, will limit the radicalism of the government’s overall vision. “They also give the impression that the definition of localism is a matter only of tone and of convenience for the government as a whole, with each department permitted to ignore localism or to adopt whichever strain of the policy will facilitate its other goals”
The government should hold a formal consultation to gather the views of local government and other stakeholders about what sort of localism they would like to see (report’s emphasis)
The Minister for Decentralisation will need to make “more clearly demonstrable progress in influencing other government departments than he has done so far if questions about his role and his position in DCLG are to be answered positively”. If progress cannot be demonstrated, the role may have to be moved to another, “more influential” government department such as the Cabinet Office
The government should be wary of assuming that decentralisation will reduce public sector costs in the short or medium term. It should not be quick to declare localism a failed experiment if efficiency savings do not instantly materialise. “Indeed, the chances of localism transforming the way the country is governed may be hampered at the outset by a lack of resources to prime the pump by building community capacity”
Ministers are not alone in needing to curb their appetite for intervention. “Changing the cultures of the civil service and of Parliament to support a more localist system will be crucial”
Critics of localism have legitimate concerns about fairness, the need to safeguard vulnerable people, and about services underperforming. Some stakeholders and sections of the community do not trust the present forms of local democratic accountability to look after their interests when the apparatus of central accountability is dismantled. The government should consider how to help these groups hold providers to account. “In particular, the government must address the contribution to accountability that can be made by robust – and if necessary enhanced – local authority scrutiny functions”
National minimum standards may be necessary in areas such as adult social care and child protection, but these should be formulated in consultation with local government “in order to ensure that they reflect the level of central government oversight appropriate to a localist system and do not simply recreate an overly-interventionist performance regime”
The government should make clear the principles on which it will determine at what level different decisions will be made, and the grounds on which intervention in local services will be deemed necessary. “These questions should not be decided purely on a case-by-case basis”. A constitutional commitment to decentralisation would be one way to provide clarity about which decision-makers communities should be seeking to influence. It would also forestall campaigning groups’ reliance on national government to enforce acceptable standards of services
The government should work with the Local Government Association to set out examples of specific ways in which the general power of competence will enable local authorities to extend their role beyond that conferred by the well-being power. “In particular it is unclear what activities currently carried out by central government might be taken over by local authorities using the new power.” The government should assess the extent to which the general power will be restricted by existing regulation and statute. “If there is in practice little room for local government to expand into, the power is likely to have very minimal impact”
Greater financial self-sufficiency for councils is a crucial foundation for localism. The case for increasing and broadening the tax and revenue-raising powers of local authorities, and their ability to borrow, must be central to the local government finance review
If variations in local services are to be embraced as the expressions of local choices, the legitimacy of the process by which those choices are made is paramount. As the scope of local decision-making is extended, the government must seek to strengthen and support rather than marginalise the role of local authorities
In relation to engagement and representation, the government’s solution in the Localism Bill is mechanisms that can be triggered by any community, regardless of whether their council wants it or not. However, together with the local government sector, the government should consider how to enhance the effectiveness of the democratic tools already at the disposal of communities
Across departments, policy developments that may individually be inspired by the ethos of localism risk entrenching silos rather than enabling creative responses to local problems. “Alternative power and delivery structures such as GP commissioning, elected police commissioners and free schools may fragment accountability, and make it more difficult to corral public resources in any one area into a Total Place-type vision”
There is “palpable enthusiasm” for community budgets in the DCLG and the Department of Health has been praised for its enthusiasm. However, ministers in the Home Office and the DWP gave the impression of being barely aware of how they might contribute to such an initiative. “We hope that this does not presage a damp squib”. The government should publish regular reports on the progress of the “crucial” community budgets programme, which demands “a great deal more concrete commitment from government departments than has thus far been demonstrated”
The government should develop a process facilitating local authorities’ right to challenge the centre for services it believes it can deliver better. It should legislate to give this right effect
The government should acknowledge that the Big Society exists already to some extent, and therefore must be realistic about how much further it can grow. It has not explained how it expects to achieve a substantial increase in the number of volunteers and community bodies willing to take on the provision of services
The intention to publish statutory guidance for local authorities not to pass on ‘disproportionate’ funding reductions to the third sector is another example of two types of localism coming into conflict. “Local government must be given the flexibility to manage its resources according to local decisions, even in instances where those decisions might threaten the development of a Big Society along the lines envisaged by the government”
Democratically-elected local authorities have a prime role to play in holding service deliverers to account. “Local authorities are also needed as enablers, market-shapers and failsafes, evening out inconsistencies or gaps in service provision, and helping community groups and the voluntary sector to grow their own capacity.” The government should not “assume that a diversification of provision can occur spontaneously, nor can it occur without a coherent strategy to manage the risk of failure in service delivery”
There can be no serious localism if councils are expected to transfer powers to localist institutions but still take the blame for failures in services. The government must accept that in some cases services will fail
The forthcoming White Paper on public service reform should address the issues of the role of local government, the practical help that can be given to community groups to expand their activities, reform of commissioning processes, accountability arrangements for delivery bodies and those that take on the management of assets of community value, and how the risk of failure will be handled. The White Paper should not set out detailed solutions to these challenges, but rather the principles on which solutions can be developed locally. The government should acknowledge that some solutions will be difficult to implement without sufficient funding to support them.

Launching the report, committee chair Clive Betts MP said: "The government has to be clear about what type of localism it wants to pursue. At present there is no generally agreed definition of the term that helps everyone understand, for example, what the future role of local government will be. Consequently, most government departments have adopted whatever definition of 'localism' suits their aims, and some key areas of policy remain notably more centralised than others."

Betts added that a raft of government policies – including elected police commissioners, free schools, academies and health service reform – threatened to fragment rather than integrate delivery of better public services at local level.

He said: “The government's Community Budgets programme is intended to promote service integration, but few departments in Whitehall have so far proved willing to devolve budgetary control far or fast enough to permit localism along these lines to flourish."

Betts predicted that local councillors would need to work harder to improve accountability to local people, although he also warned that the government should not seek to dictate the methods of local accountability from the centre. “Tools like local referendums are too blunt to enable communities to express nuanced views on complex issues," he argued.

Baroness Margaret Eaton, Chairman of the Local Government Association, described the report as “bang on the money”.

“It shows how Whitehall’s ‘57 varieties of localism’ mean some departments are actually doing the exact opposite,” she said. “Even where decentralisation is going on each department is running its own private version, which means councils still feel that the government wants them to play entirely by its rules. A year into experimenting with localist policies it is now time for a clear Whitehall-wide commitment to devolving power.”

Baroness Eaton said the LGA supported calls for more wholehearted adoption of place-based budgets across all Government departments. The association has estimated that having a full place-based budget in every place would save £100bn over the lifetime of the parliament.

The LGA chairman also agreed with the committee that the government should avoid imposing methods of local accountability on councils. “Hard and fast rules on how local authorities should engage residents in decision making takes power out of the hands of democratically elected representatives and puts it in the hands of Whitehall officials, she argued. “The committee is spot on to remind Ministers they cannot have it both ways, devolving powers but telling councils how to use them.

Philip Hoult