This extract from the What next for localism? pamphlet is by Graham Allen, Chairman of the Political and Constitutional Reform Select Committee and the Labour MP for Nottingham North
We are the most highly centralised western democracy and it is essential for our economic and social health that we continue the campaign to drive powers out of Whitehall and into the town hall. However, the process should not stop at substituting a local state for the central one. We need to empower the localities in any new constitutional settlement, to build a web of neighbourhood community and parish councils with stronger powers and independent finances. That’s part of the task that will make independence local government work.
The Political and Constitutional Reform Select Committee, which I chair, is the newest of all of the Parliamentary Select Committees. As a non-departmental committee we have the luxury of being able to look at the bigger picture, as well as scrutinising specific Government policy within our remit.
In November 2010 the Committee announced an inquiry to explore the possibility of writing into a formal statutory code the principles and mechanics of the relationship between central and local government in England. The Government’s commitment to localism is welcome and laudable, but unless the rights of local government are codified in statue, there is a permanent risk that power will drift back, unnoticed, towards the centre.
In 2009 the Communities and Local Government Select Committee, in their Report Balance of Power, concluded: “The power to govern in England remains too heavily centralised to be efficient or effective. Put simply, the balance of power between central and local government is currently in need of a tilt towards localities”. Evidence submitted to my Committee’s inquiry suggested that the relationship between central and local government was still unbalanced, and that a previous attempt at regulating the relationship, the 2007 Central Local Concordat, had been a failure.
The 2007 Concordat is a good example of why codification of the rights of local government is necessary. Signed by the Secretary of State for Communities and Local Government and the Local Government Association in December 2007, the Concordat was meant to “establish a framework of principles for how central and local government work together to serve the public”. However, there was little or no awareness of the Concordat outside the Department for Communities and Local Government and so it did little to address the imbalance of power.
It has been powerfully argued that only when local government’s right to exist is enshrined in statute will it be able to negotiate equally with central government and be empowered to plan for and invigorate its communities. With this in mind the Committee sought and received a draft code for relations between central and local government to see what appetite, if any, existed for formal codification. The draft code has ten articles. Article one is reproduced below. The full draft code can be found on the committee’s website.
’1. The fundamental rights and duties of local councils herein are defined protected and entrenched. They may only be changed by the consent of Parliament as authorised firstly by an elected joint committee of both Houses, and then by the approval of both Houses of Parliament as prescribed in the amendment to the 1911 Parliament Act [enabling the second chamber to reject changes to the fundamental freedoms of local governance].’
In order to raise awareness of the draft code, the Chair of the Local Government Association, Sir Merrick Cockell, and I have been running a campaign for Independent Local Government. We have hosted a series of conversations across the country about our vision for a local government that has financial independence from central government. These events have told me that people want local government to have greater financial control over its own affairs and to be more than the delivery arm of central government.
At a time when ordinary people are far more satisfied with their local representatives than with central government, it makes sense that local government should be allowed, in conjunction with local people, to shape local communities.
Over the course of the Committee’s inquiry it has often been said that for codification to mean anything, a settlement would have to guarantee the unfettered right to set a local tax, and the end of capping, including capping of council tax. I applaud the recent city deals initiatives which were announced in July this year. Negotiated by the Cabinet Office and the cities themselves, each of the cities, Greater Birmingham and Solihull, Bristol and the West of England, Greater Manchester, Leeds City Region, Liverpool City Region, Nottingham, Newcastle and Sheffield City Region, has their own agreement with central government for taking more responsibility over their own affairs.
I look forward to seeing how initiatives such as the ‘earn back’ scheme —which would allow Greater Manchester to receive a portion of the additional tax revenue if their investment in local infrastructure boosts the local economy—work in practice. These current measures are a step in the right direction, but they fall short of the kind of financial independence that many, including myself, would like to see. This is why I believe that some kind of codified framework for relations between central and local government is necessary.
There are two possible methods of enshrining local government’s right to exist in statute.
The first is to codify a framework of relations between central and local government in statute in a similar way to the 1998 Scotland Act. Under the Scotland Act 1998, the Scottish Parliament can make primary and secondary legislation in those areas not reserved to Westminster (which are specified in schedule 5 of the Act) or protected from modification (specified in schedule 4). Devolved subjects are those which do not fall under the reserved categories, or are not otherwise outside the legislative competence of the Scottish Parliament. They include: health, education and training, local government and the police and fire services, among others. The 2012 Scotland Act devolved stamp duty, land tax and landfill tax and limited income tax raising powers.
Or more simply, we could create greater independence for local government at a stroke by amending the 1911 Parliament Act—as suggested in the citation from the draft code above—to ensure that the balance of power between central and local government could only be altered with the consent of both Houses.
This would be my preferred option.
These proposals may sound radical to some but they would not seem at all unusual in Europe. The majority of other European countries afford some protection for local government in their respective constitutions, giving local government the right of continued existence. In the United Kingdom there is no such right. The Government, if it so wished, could abolish English local government tomorrow and voters would have to wait until a General Election to voice their displeasure about it. This is not an acceptable state of affairs in a mature democracy. This is exacerbated by the asymmetric nature of devolution in the UK, in which England, which is home to 85% of the UK’s population, is heavily centralised in comparison to Scotland, Wales, and Northern Ireland.
While opinion polls suggest that there is little appetite for an English Parliament, or a new tier of English regional government, our cities, our local councillors, town halls and parishes have the knowledge and experience to play a greater role in how our communities are run.
So, what is next for localism?
The Spanish model for relations between central and local government is one that I would like to see England adopt eventually. Article 149 of the Spanish Constitution sets out what powers are exclusively the preserve of central government, including criminal law, defence, immigration and macro-economic policy. Article 148 of the Spanish Constitution sets out what powers the 17 autonomous communities (ACs), may, but are not required to, assume. They include health, education, and local government organisation. The residents of these ACs affirmed that they wanted these powers by endorsing the package as a whole via a referendum, and the powers were then detailed in the constitution of each autonomous community.
In 2008 Spain’s ACs raised approximately 34% of their expenditure from local taxes on property and business, and 21% from sharing revenues on Income Tax and VAT (split equally between the AC and central government), with the remaining expenditure funded through equalisation or conditional grants from central government. I am not saying that the Spanish system is perfect, but it allows local areas and comuunities the freedom to find local solutions to local problems, rather than having solutions imposed upon them from the centre.
That can only be a good thing.