The state and local government



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Under the enabling model in its extreme form, as popularised by Nicholas Ridley, councils would only need to meet once a year to exchange contracts.62 Meanwhile, strategic management ‘in the enabling model’ has provided ‘the ideal managerial framework’ for ‘the new model of 'local governance'63: that is, out-sourced instead of directly-provided local government services. The Audit Commission (by the mid 1980s) and the Local Government Management Board (by the early 1990s) both considered strategic management to be the ideal model for local government; and many local authorities in England and Wales adopted strategic management.64 Marxist and radical critiques of these developments are discussed in Chapter 4.
Liberal-Democratic theories

Marxist Paul Feldman reviewing liberal democratic theorist Professor Anthony King’s recent book The British Constitution65 describes it as ‘readable’, ‘important’ and by ‘an eminent political scientist’, who ‘sets out to explain how the relationship both between institutions and with the population at large has altered radically over the last 35 years’.66 Feldman argues that, although King ‘remains a somewhat complacent optimist, seeing no need for radical change’, he ‘reveals some potentially fatal flaws in the British constitution as it functions today’: but in ‘many ways, his conclusions do not logically follow from his analysis’.67 The latter contradiction occurs because:
King…accepts the framework as given. He does not challenge…the assumptions that lay behind and beneath the parliamentary state system itself and nor would you expect him to do so. While he acknowledges that voters have a minimal say in the way they are governed, King does not pass judgement on this. Of course, there is no class analysis which might lead to the conclusion that the state is capitalist in nature and practice. That is, the principal function of the state is to develop and defend the existing social order. It maintains and expands private property ‘rights’ and limits democracy to the occasional visit to the ballot box. It is power on behalf of the people rather than of the people.68
The leading liberal-democratic theorists/analysts of local government also exhibit similar contradictions and limitations. ‘There is no theory of local government’, asserted W.J.M. Mackenzie – the doyen of British Public Administration in the 1950s and 1960s – whose ‘assertion’, according to Chandler, ‘would still be widely accepted among British academics some 45 years later’.69 Moreover, as R.A.W. Rhodes points out, the ‘institutionalist tradition’ in Public Administration – ‘with its distaste for theory, focus on institutions, and predilection for administrative engineering’ ‘that prevailed for the first half of the twentieth century began a long and lingering death in the 1960s’.70 In addition, as Rhodes also noted:
A flurry of social sciences invaded Public Administration in the late 1960s on the back of rapid expansion of the universities. But their day in the sun was short. A new star rose in the firmament, and the eclecticism of the 1970s came to a rapid standstill as New Right ideology dominated the 1980s. In the 1990s, British Public Administration…lost its coherent identity...71
Professor George Jones and Professor John Stewart together with many other aspects of New Labour’s ‘local governance’ project are the leading liberal-democratic academic critics of US-style directly elected mayors in local government. They base their arguments for more independent local government partly on the value of local authorities in ensuring efficiency and economy in the use of resources but also stress the contribution local government provides in ensuring liberal democracy.72 However, Jones and Stewart despite their valuable academic work and articles in the local government press over many years fail to acknowledge that such mayors with cabinets represent the optimal internal management arrangement for privatised local government services. In addition, New Labour’s ‘local governance’ project, as Michael Cole noted, only ‘received support from some academics’ and ‘[m]any academics have… expressed scepticism about the reform agenda’.73 Nevertheless, although the empirical findings of these analysts are cited in subsequent chapters of this book, the main problem with such studies is that as with Jones and Stewart they do not see such policies as attempts by the central state to restore the conditions in which profitable investment and capital accumulation can take place.

Sir Michael Lyons – in the final report of his Inquiry into Local Government published in 2007 – argues that


there is value in government, as a device which allows us to frame and enforce rules and laws for behaviour, manage the provision of public services, redistribute resources, and manage frameworks for long-term economic, social and environmental sustainability. All of these things require collective action and collective choices, often choices which have to be binding on a whole community or the whole nation if they are to be effective….Local government is potentially an important part of that system of government - and…it is important we consider it as a component of a single system of government, not as something separate.74
Lyons also discusses – from an orthodox Liberal Democratic perspective – ‘Classical’ and New Liberal, Social-Democratic, Neoliberal New Right and New Labour theories of the state and local government: but makes no reference to Marxist and radical critiques of these ‘main’ theories.75
Neoliberal New Labour theories

Leo Panitch and Colin Leys in 1997 pointed out that:


Only time will show…how far the Labour Party is now anything more than an alternative manager of the market-driven, inequality-riven society inherited from the Thatcher era, rather than the instrument of ‘national renewal’ promised in New Labour rhetoric.76
Since then opinions have differed regarding the precise nature of New Labour’s ideology. Steven Driver and Luke Martell describe New Labour’s ideology as ‘liberal conservative’ and argue that it represents a fusion of neoliberal economics and conservative social morality.77 Conversely, Dearlove and Saunders reject Driver and Martell’s formulation because ‘exactly the same label could have been applied to Thatcherism’. They argue that ‘New Labour is much more than simply an extension of Thatcherism into the twenty-first century; it is something distinctly different… better described as “liberal socialism”, which derives from the tradition of ‘ethical socialism’.78 However, Dearlove and Saunders contradict their view that New Labour is ‘distinctly different’ when they conclude that:
If we are correct in defining New Labour’s position as ‘liberal (ethical) socialism’, then this raises the question of how far the party differs in fundamental beliefs and principles from the Liberal Democrats. Our answer is that there is very little substantive difference.79

The neo-Gramscian Stuart Hall, writing in 2003, maintained that:



New Labour does have a long-term strategy, 'a project': what Antonio Gramsci called the 'transformism' of social democracy into a particular variant of free-market neo-liberalism….It combines economic neo-liberalism with a commitment to 'active government'. More significantly, its grim alignment with the broad, global interests and values of corporate capital and power – the neo-liberal project, which is in the leading position in its political repertoire – is paralleled by another, subaltern programme, of a more social-democratic kind, running alongside. This is what people invoke when they insist, defensively, that New Labour is not, after all, 'neo-liberal'. The fact is that New Labour is a hybrid regime, composed of two strands. However, one strand – the neo-liberal – is in the dominant position. The other strand – the social democratic – is subordinate.80
Panitch and Leys in their 1997 discussion of ‘New Labour and the State’ concluded that: ‘Even here, however, the limitations of the “project” and its tendency to constant dilution were no less clear’.81 They refer to a speech by Tony Blair in February 1996 which included at first sight an ambitious programme of local government reform: local government ‘renewal’, including a qualified end to central imposed ceilings on local taxation, elections of a third of council members every year, referenda and citizens’ juries; a strategic authority for London; elected mayors for London and other major cities. However, there was no proposal to restore significant powers to local government, even for London; and no proposal to abolish unelected quangos.82

Chandler argues that:


The Third Way and the Blair government…rather than being particularly new, resemble more the values of New Liberalism and the policies of Lloyd George. As with the New Liberals, New Labour can similarly value decentralisation in theory but in practice shows but limited enthusiasm for local government….as with J. S. Mill, other aspects of this ideology have forestalled much enthusiasm for local government as opposed to local governance.83
New Labour also exhibits ‘a strongly ingrained culture, originating from Mill and embroidered by New Liberal and social democratic thought, that justifies local government expedientially as an organisation serving the needs of the state in securing stable liberal democracy led efficiently by educated professionals’.84

Moreover, as Panitch and Leys note:


There were probably fewer intellectuals in the Blair leadership team than at any time in the party’s history….Nor was New Labour obviously indebted to any conspicuously original or creative thinkers outside the ranks of the leadership. Instead, and symptomatically, there was a proliferation of new ‘think tanks’, pools of what might be called ‘average’ intellectual labour power, which aimed at bringing useful ideas from a wide variety of sources to the attention of the Labour leadership…85
They list four such groups by the end of the 1990s - the Institute of Public Policy Research and Charter 88 (both founded in 1988), Demos (established in 1993) and Nexus (formed in 1996).86

Missing from this list, however, is the New Local Government Network (NLGN). The NLGN, which is analysed in detail in Chapter 6, was established in 1996 by a small group of senior Blairite figures in local government plus Gerry Stoker (until recently NLGN’s Chair and still a member of its Board) who in 1997 became a member of the Academic Advisory Group to the then Department of Environment, Transport and the Regions which drafted the statutory guidance on the Local Government Act 2000.87 NLGN is funded by the private contractors whose profits are boosted by the privatisation of local government services (see Appendix 1). NLGN’s executive included former Local Government Minister Hilary Armstrong’s closest advisers and the Local Government Act 2000, which deprived most councillors of any role in policy-making by abolishing the committee system in all except the smallest local authorities and introducing US-style executive mayors, implemented its original agenda. In January 2000 the NLGN published Towards a New Localism by Geoffrey Filkin, Gerry Stoker, Greg Wilkinson and John Williams.88 The paper ‘rejects the dominant view of local councils as primarily producers of services’; and, despite the reference to ‘localism’, stated ‘that over a ten-year period the number of councillors in all principal authorities should be reduced significantly’ and 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’. The US-style executive mayor would also have the power to appoint quangos. These proposals, if implemented, would mean the end of representative democracy in local government.

Stoker is the leading theorist/analyst of New Labour’s local ‘governance’ project, and advocate of compulsory US-style directly-elected mayors in particular; and the most referenced academic in the field of local government.89 In the mid-1990s, when, strongly influenced by Clarence Stone90, Stoker argued that liberal urban regime theory
provides a new conceptual framework for analysis which captures key aspects of urban governance at the end of the century. It provides a new conceptual framework and more particular theoretical statements about causal relationships and behaviour in urban politics…Its emphasis on the interdependence of governmental and non-governmental forces in meeting economic and social challenges focuses attention upon the problem of cooperation and coordination between governmental and nongovernmental actors.91
But, as Kevin Orr points out, ‘regime theory’s focus on the local at the expense of the nonlocal… has little explanatory power over the wider conditions in which local government operates’.92 Moreover, there are similar problems with Stoker’s recent work arguing that institutional grid-group theory93 – which identifies ‘four biases in social organization’ of hierarchy, individualism, egalitarianism and fatalism – ‘helps to illuminate the particular character of New Labour’s reform strategy’.94 New Labour, according to Stoker, like the Conservatives, has a ‘top-down, hierarchical approach’ that
has also been influenced by nostrums associated with the fatalistic quadrants of grid-group theory. A sense that the world is unpredictable, that reforms cannot be assumed to work and that it is difficult to know which actors or institutions to trust pervades New Labour thinking….The point of the interpretation offered here is not that New Labour’s programme is incoherent but rather that up to a point it is incoherent with reason, and for a purpose. New Labour’s policies are in part deliberately designed to be a muddle in order both to search for the right reform formula and to create a dynamic for change by creating instability but also space for innovation’ 95
Stoker’s latest interpretation, as Orr concludes, is therefore a
top-down account of the drivers for change in local governance: transformations appear, in this analysis, always to stem from the vision and calculations of central government strategists… As had been the case with his approach to regime theory, Stoker outlines a fairly positivist conception of how grid-group theory ought now to be developed and applied… 96
The methodological and theoretical contradictions of Stoker’s work are also compounded by his political and policy interventions via the New Local Government Network: which, as shown above, simultaneously provide both a justification for New Labour’s local ‘governance’ project to date as well as seeking to extend it to the point at which representative democracy is eliminated altogether (that is, total local ‘governance’ with no directly provided services).

Chapter Three

‘State Monopoly Capitalist’ theories of the state and local government
This Chapter focuses on state monopoly capitalist theories of the state and local government.97 James Harvey and Katherine Hood’s path-breaking 1958 study of The British State is re-assessed; Antonio Gramsci’s theory of the historic bloc and state monopoly capitalism is discussed; and trends in British state monopoly capitalism since the late 1950s and how they relate to local government are reviewed.
James Harvey and Katherine Hood’s The British State

Writing at the height of the cold war in 1958 Harvey and Hood applied the theory of state monopoly capitalism to the British central state, including local government.98 The concept of state monopoly capitalism ‘originated in Soviet and East European writing in the early 1950s’, and as the Marxist economist Laurence Harris also notes:
In most analyses of this stage the state is linked in some way with one fraction of capital, monopoly capital represented by giant enterprises and large financial blocks. The existence of such a stage, distinct from MONOPOLY CAPITALISM, is controversial, but the idea has been an important theoretical foundation for the strategies of Communist parties. The class nature of the modern capitalist state is seen to turn on monopoly capital being ranged against all other fractions and classes so that an anti-monopoly alliance comprising medium and small capitals, the working class, and middle strata can be built in the struggle for state power.99
Moreover, as Ralph Miliband commented, The British State was ‘the only notable work of Marxist inspiration on the British political system to appear after’ Harold Laski’s’ Parliamentary Government in England published in 1938.100 But, as Miliband further noted, although The British State
had very substantial merits; and there was much about its interpretation which was sharply penetrating….its ideological provenance was then too much out of tune with the ideological bias of most writing on British government and politics to give the book any resonance.101
Theory of the national state

Harvey and Hood state that their purpose is


to look below the surface at the real content of British democracy; to make an examination of the British state, how it works, who runs it and in whose interests; and from all this to see what conclusions can be reached about the way forward to Socialism in Britain.102
Two ‘rival’ theories of the state are then defined. The social-democratic theory, which
accepts the widely-held liberal view that the State is a piece of neutral machinery, impartial in the conflict between workers and capitalists; it therefore considers that the existing State can be used for the purpose of creating and organising a planned socialist society just as well as it has hitherto been used for organising capitalist society.103
And the Marxist theory, based on a ‘study of history’, which
led Marx and Engels to exactly the opposite conclusion….that the State only came into existence when society became divided into classes, and to the theory that while there is one class which exploits another, the State is the instrument for maintaining the domination of the ruling class.104
The final section of Chapter II on ‘The Marxist Theory and the British State’ is entitled ‘Monopoly Capitalism and the British State’. Sub-section (I) headed ‘Growth of State Monopoly Capitalism’ begins by arguing that profound changes in the nature of capitalism first referred to by Lenin105 who ‘did not distinguish this as a separate stage from monopoly capitalism’106 – had modified a key aspect of the nineteenth century British state analysed by Engels:
The change from competitive to monopoly capitalism has had a profound impact on the British State. As the economic power and wealth of the monopolies has grown, the State has ceased to be the ‘executive committee’ of the bourgeoisie as a whole (as Engels called it). It has become more and more subordinated to the dominant group of great monopolies, and has become an instrument which they use not only against the workers, but also against the smaller capitalists and the independent producers.107
The ‘monopolists’ they add
have been driven to extend the use of the State on an ever increasing scale, both as an instrument for coercion and for the purpose of regulating the economic life of the country. This has led to a great expansion of the armed forces, along with a strengthening in the power and efficiency of the police and the secret police; and to a tremendous increase in the size of that part of the State apparatus concerned with industry and finance….the monopoly stage of capitalism…gradually develops into ‘state monopoly capitalism’.108

Harvey and Hood in the following chapters – on political parties, the legislature (including the cabinet), the monarchy, key state personnel, the armed forces, the police, the secret political police, the legal system, the civil service, the Foreign Office, the economic functions of the state, the social services, local government, the BBC and ITA and the established church – ‘test’ the theories to decide whether ‘the historical continuity of the British State is consistent with either the social-democratic or the Marxist theory’.109 They concluded that the ‘study of all the different organs of the State’ contradicted the social-democratic view that ‘socialism can be introduced step by step within the existing political framework’ because:


  1. the machinery of the State has been shaped and developed by the capitalist class as an instrument to safeguard and promote the capitalist mode of production. The capitalist class has been compelled to make big concessions to the demands of the working people in the shape of social reforms and other measures. But it has never for one moment lost sight of the need to strengthen the State as the instrument of its rule…and has consistently followed the precept laid down by…Robert Lowe…[regarding P.L.] ‘safeguards against democracy’.
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