| SPOTLIGHT |
As councils prepare for an age of austerity, new models of how to run a local authority are emerging. Neasa MacErlean asks the leaders of Essex and Hammersmith & Fulham and others what the future holds.
The next five years will probably see the fastest period of change that local government has ever felt. What is certain is that public spending cuts will go deep. What is uncertain is whether the councils will be agile enough to stop the cuts reaching the bone – but react they certainly will.
2010 itself is going to be a turning point. If – as seems highly likely – the Conservatives win the next general election (due on or before June 4), central government funding to local authorities could be even tighter than Labour plans. But local government seems to be already responding better in terms of belt-tightening than central government – and 2010/11 council tax rises look set to be the lowest for a decade, with many authorities freezing the tax or keeping rises under 1-2%.
Councils, effectively, have a choice between austerity and creativity. They “will be faced with demands for reductions in spending of perhaps 10 to 15% during the coming decade”, in the words of Tony Travers, local government expert at the London School of Economics.
A Conservative government has a particular incentive to be tight with the purse strings because so many Conservative councils appear to be already rising strongly to the challenge. For the fourth year running, Hammersmith & Fulham, the Tory flagship, is set to cut council tax bills by 3% next spring. Essex, bigger on its own than each of the smallest six EU nations, is pledging to keep council tax below inflation for the next four years. These and many other authorities are coming out with efficiencies, cost-savings and new ways of working that are only being dreamt of in the centralised government departments.
Freedom to breathe
However, council leaders believe they need law reform to enable them to do their job properly. “The cage has to be removed,” Stephen Greenhalgh, leader of Hammmersmith & Fulham tells LGL. “We are going to have to think through the legal barriers to change.”
Greenhalgh, who studied law at Cambridge, also leads the Conservative Councils Innovation Unit – and is listened to by Conservative leader David Cameron as he plans his reforms in this field. Greenhalgh specifies four areas that need overhauling: barriers which block the integration of services; rules “which restrict us from being commerical in approach”; limits on the way housing stock is managed; and revenue-raising powers.
Lord Hanningfield, leader of Essex, tells LGL: “Some of the laws are Draconian.” Essex runs, for instance, a scheme called Banking on Essex which acts, like a bank, to provide loans to small business. “I would like to have the power of general competence,” says Lord Hanningfield. “We can only do this under well-being powers.” He also wants to see the application of the targets system loosened, describing that system as “ridiculous”.
Melvyn Caplan, Westminster’s cabinet member for finance, is also calling for a major change in reporting and inspection. “We produce masses of statistics and performance indicators which are massively disproportionate to the benefit that delivers,” he argues.
Flying high?
These councils and many others are working on new ways of relating to the people they serve, and they believe they need more flexible legal frameworks around them both to develop more effective relationships and to deliver the cost reductions they will have to make in the coming years.
Barnet in north London is famous for its “EasyCouncil” idea, borrowed from the EasyJet airline in which residents will soon be given more choice about what services they want. Residents who generate less waste or look after their local park, for example, could receive council tax discounts. Those who want more services would have to pay more, just like the options offered on a no-frills airline.
But Barnet is a relatively small, outer London borough which needs to raise a greater proportion of its revenue from council tax than some bigger councils. Stephen Greenhalgh of Hammersmith says: “We will always collect the rubbish and provide the street lighting. We are more of a full service airline.”
Sharing the load
Hammersmith, Essex and many other councils are concentrating on combining cost savings with efficiencies. Westminster, Hammersmith and Essex are, for instance, working in partnership much more with other bodies. Instead of the local Primary Care Trust (PCT) and the council’s social services team visiting the same families separately, administering similar bureaucracy in parallel and overlapping in many areas, these councils are looking at sharing the work between them.
Researching this issue recently, Barnet found a family that provided information to the state in its various guises 37 times. The family itself improved its position through only five of those occasions, as the remaining 32 events were set up to help the state bureaucracy.
The next step, says Westminster’s Caplan is to start commissioning from a more effective government machine, “using the same groups of people” drawn from PCTs, the police and the local authority. “And you can provide a better service to the client,” he says. Westminster’s HR head Graham White is already working on these kinds of partnership. “The world of HR will broaden out,” he says, referring to the new close co-operation with other bodies.
As more years go by, technology will be a vital part of the motor of reform. “There will be a lot of training the customer in how to do things,” believes Lord Hanningfield. But, although we will get to universal internet access one day, “that will happen over the long-term”, he adds. A move to make internet access a human right failed in the European Parliament failed in November 2009 but it will be as universal as electricity before many decades pass. Then local councils can become as streamlined and responsive as internet banks.
Tax incentives
Despite noises coming from both Conservative and Labour parties about the need to reform local government, there could be some awkward discussions between town and central hall after the next election. Stephen Greenhalgh makes an impassioned call for councils to get more tax-raising powers. “For localisation to bite, we need to think about local tax and spend. We need some very bright lawyers to say what we could do.”
Brendan Donnelly, director of the Federal Trust think tank, which studies government across the world, agrees with this idea: “Tax-raising should be carried out by the people responsible for spending the money. If not, it distorts decision-making.”
But he thinks there is little chance of this happening soon. As illustrated by the way the national Labour party fell out with former Labour London mayor Ken Livingstone, central powers do not lightly give away the reins. Donnelly says: “It is very worrying for people at the centre to have people – who are, apparently, their party friends – doing things they are suspicious of.”
Neasa MacErlean is a freelance journalist.
