Paul Feild analyses how accountability and standards can be upheld as the Government promotes power-house “regionalocalism”.
Now the uncertainly of the election is over, what will the shape of localism look like? We saw the centrally managed 1997-2010 New Labour concept aided by inspection regimes, national initiatives and performance measure and targets followed by the Coalition government’s ‘laissez-faire’ response that saw localism to ‘revitalise democracy and strengthen community life’ and a reduced role for the state. Finally a third type of localism, ‘democratic localism’ which seeks to achieve a balance between the various levels of elected government local and national with popular participation, promotion of public value and social partners. So the latest re-boot of localism is the power-house.
It is looking regional and ruled by elected mayors with extra powers for transport and health. With the Cornwall initiative and discussions around Manchester finalising there maybe even a North Yorkshire Mayor.
I now address accountability. The Chancellor's powerhouse speech was silent on this issue. So what have we got? Since the Localism Act 2011 (2011 Act) and amendment of the Local Government Act 1999 by the Local Audit and Accountability Act 2014 (2014 Act) the means of calling to account poor standards and management is essentially either the Ministerial intervention on the grounds of failure to deliver best value under the 1999 Act or complaints under the 2011 Act or finally every four years by the ballot box.
The 2011 Act accountability relies on the calling to account by means of complaints. It therefore needs a complaint to activate it. So if no one complains nothing happens. The source of the complaints will either be internal (elected members, employees and managers) or external (citizenship and stakeholders). In a study which sought to locate the public sector management values in Victoria, Australia the researchers found a historical system of officer appointment on merit and a neutrality ethic. This ethic was built upon the proposition that the employed officials are servants to the elected officials (members) subject to the law. As a result the employed officials would carry out their instructions and only if an instruction was illegal would an officer refuse to carry it out.
If complaints are made internally they will come from the workforce or from other politicians, but as the employee’s role is to carry out the will of the politicians and accept that the members must have the last word otherwise the employees will be the politicians. This means there can be a fine line between a manager refusing to take an action because it is unlawful as opposed to it not being in the interests of the local authority and its community. In practice it is difficult for officials to hold elected leaders to account, if at all, and were officers to attempt to do so they would face the accusation they have crossed the boundaries and were acting politically. So how will the current arrangements work with a Powerhouse Mayor who will be the most powerful politician in a region?
In 2015, the current localism has lead to new forms of governance underpinned by an audit local accountability. Is it working? Yes, of sorts, but so far it is immensely costly in terms of resources. The recent Tower Hamlets intervention by PwC cost many hundreds of thousands of pounds (some say a million). In fact it probably cost more than the sums of money at stake and such medicine is ironically to ensure ‘best value’. So apart from this costly process, or the ballot box at elections, the accountability in practice is led by the need for a person to make a complaint. This is not satisfactory because it needs something to go wrong for a complaint to be triggered. Under the previous administrations the role of overseeing good governance and financial administration was by the Audit Commission, which had a supervising role but now it has been abolished. So it is looking like we need something else if the Localism Act is to be effective in terms of standards. The answer is it will need to be through the agent of getting elected Members to embrace the values in public life and live them in their practice. But how do you get a Powerhouse Mayor to do that?
In late 2013 Lord Bew, the Chair of the Committee for Standards in Public Life, made a keynote speech for lawyers in local government and observed that:
"the lack of sanctions meant that success of the standards regime is entirely dependent on robust local leadership and ethical championing. This is a fragile balance and we fear those local authorities who are “good at this stuff” will continue to be while others resort to monolithic culture which have in the past had the most difficulty in dealing with issues internally." (Bew 2013, p.4)
Bew’s view was that it was necessary to establish an open culture in which challenge of poor behaviour is encouraged. He made a further observation at the OEDC Policy Forum that leadership behaviours were established on either:
1. Compliance based systems – that is a well designed and systematically enforced external system of rules; or
2. Integrity based - that is internally driven.
But by dismantling the national body of Standards for England and the Audit Commission, the Government has removed much of the compliance means of control of behaviour. This leaves the integrity based formula. The question is can an integrity based system suffice, if the next election is years away?
Recent research (Feild 2015) confirms that there is widespread concern held regarding misconduct of council leaders and lack of sanctions. The evidence from this research supports an argument that there needs to be a statutory ability of the Secretary of State to intervene where there is failing leadership on standards. As Lord Hanningfield's credit card expenses case shows and re-inforced by the Tower Hamlets (PwC 2014) and Rotherham Borough Council (Casey 2015) interventions, the authorities concerned were not capable on their own of remedying their failure of leadership. This sustained a local culture of poor standards. Indeed the research supports the thesis that the Localism Act standards duty in its current form cannot displace a poor local culture. In a nutshell, those organisations were no longer capable of healing themselves and needed external intervention. While there was intervention, it was taken under the Local Government Act 1999 because of a failure to deliver ‘best value’. Yet the failure to deliver was arguably at least equally due to lack of adherence to the Nolan principles rather than just organisational inefficiencies.
In addition, the Local Government Act 1999 intervention arrangements to date are heavily dependent on the use of expensive external expertise. It is unfair that the council tax payers of a failing standards council have to suffer bad governance and then have to pay the cost of the external consultants to tell them of it! Worse still, adding insult to injury, if there is a finding of poor value or poor administration, there is no power to remove the member(s) from their elected positions or their members' allowances. So there needs to be a process for dealing with errant members and particularly leaders which includes the power of suspension including allowances and if need be disqualification. This must be located with the Secretary of State via an amended 1999 Act because the Localism Act seems incapable of changing a culture that has set in of poor leadership on standards at the local level.
Time for a change
Furthermore this responsibility for standards needs to be set out in a functions and responsibilities regulation made under the Local Government Act 2000. It appears that many authorities have simply placed the S.27 (1) 2011 Act promotion of standards responsibility with their now non-statutory standards committee or its successor. Not good enough. For it to be effective there has to be leadership from the council leader and the chief officers together with full council. Apart from the strong leader measures there is very little legislation directly affecting the council leader, but it is not unknown to place special responsibility on an elected Member, indeed the Children Act 2004 section 19 establishes a ‘lead member for children’s services’. It would seem right to place a similar responsibility on the council leader to be lead member for the promotion and maintenance of high standards of conduct.
Dr Paul Field has just completed his doctorial thesis - How does localism for standards work in practice? The practitioner’s view of local standards post Localism Act 2011. Paul is a local government lawyer.
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