The state and local government

³⁴⁹ In 2005 John Williams left the CBI to become special adviser to John Hutton, the then Chancellor of the Duchy of Lancaster, ‘working with him on implement­ing key parts of the government’s public service reform programme’³⁵⁰; and in February 2009 he was still listed as Hutton’s special adviser.³⁵¹

The PricewaterhouseCooper advertisement for the successor to John William with a salary up to £60,000 appeared in the local government press on 19 April 2002 together with a new post for Head of Research on a salary up to £45,000. Warren Hatter, former Head of the Local Government Research Unit at pollsters MORI – then one of NLGN’s corporate sponsors – was appointed as NLGN’s new Head of Research. Dan Corry – who subsequently became a special adviser to Gordon Brown³⁵² and was a former senior economist at the Institute of Public Policy Research and infamous special adviser to both Peter Mandelson and former Secretary of State Stephen Byers – was recruited as NLGN’s new Executive Director and started work in September 2002. He had sent e-mails searching for information on the political affiliations of the Paddington Survivors Group in order to discredit them. Hence the government wanted Corry to delay the announcement of his new post until the committee on standards in public life had completed its investigation into special advisers.³⁵³ Following an interview in July 2002 with ‘well-known advocate of PFI’ Dan Corry – in which he said that he wanted to concentrate on its delivery – Karen Day concluded that:
It is likely that the NLGN will change beyond recognition in the next year – it will ease up on its mayoral campaign and will attempt to offer practical advice on the Private Finance Initiative as well as general policy work.³⁵⁴
That is, both NLGN and the New Labour government at this time now reluctantly seemed to have acknowledged that the mayoral project to date had failed: and that their common aim – viz. privatised local government services – could not ‘be delivered through central dicktat’.³⁵⁵

However, despite Dan Corry’s claim to be against ‘central dicktat’, the Office of the Deputy Prime Minister’s Consultation Paper Tackling Poor Performance in Local Government published in August 2002 stated that the ‘Secretary of State has the power to direct a referendum on a different form of constitution including that of a mayor…where that is appropriate’; and to outsource the ‘operation of corporate services’ to ‘the public, private or voluntary sector’.³⁵⁶ ‘Failing councils face new poll for elected mayors’ was the title of the front page report in The Municipal Journal on the implications of the Consultation Paper.³⁵⁷ Matthew Warburton of the Local Government Association said “destabilising the governance arrangements in that way is very, very rarely likely to be conducive to improvement”; and that councils need “help and support more than compulsory process”.³⁵⁸ Conversely, Chris Leslie – the NLGN’s present Executive Director who was then Local Government Minister – when launching the document warned that poor performance would “not be tolerated”; and that where councils “are resistant, we will have to make tough and sometimes, unpopular decisions”.³⁵⁹
NLGN’s ultimate aims

NLGN in January 2000 published Towards a New Localism: A discussion paper, which indicates the ultimate aims of the NLGN, New Labour and big business. Written by Geoffrey Filkin, Gerry Stoker, Greg Wilkinson and John Williams it was aimed at influencing party manifestos on the future of local government in the run up to the general election. The paper ‘rejects the dominant view of local councils as primarily producers of services’; and proposes asset management partnerships to take ownership of local authority and public sector assets and lease them back to local authorities at economic rents. Concepts from the private sector are uncritically used and the paper is full of language like ‘front and back line services’, the ‘virtual local authority’, ‘world class procurement’, and ‘supply markets’. Conversely, words like ‘probity’, ‘public sector ethos’, ‘ethical’, ‘equity’ and ‘equal opportunities’ never appear in the paper. The paper is also elitist since council leaders/mayors only would get pay, pensions and support similar to Members of Parliament. Moreover, despite the reference to ‘localism’, the paper states ‘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 mayor would also have the power to appoint quangos. These proposals, if implemented, would mean the end of representative democracy in local government. Moreover, as shown in Chapter 7, the NLGN and IPPR urged New Labour to impose directly-elected US-style local authority executive mayors in every major English city and town.

The Local Government Act 2000

The Local Government Bill 2000

Inexplicably the Local Government Bill 2000 was introduced by the government’s business managers in the Lords rather than the Commons. The House of Lords in March 2000, moreover, amended the Bill to allow councils to opt for the enhanced committee system advocated by the Labour Campaign for Open Local Government (LCOLG).³⁶⁰ LCOLG was established in May 1999 by left-wing backbench London Labour councillors to campaign for the ‘Fourth Way’: that is, the right for all councils to have the enhanced committee system if their local communities so wished. Ironically, in February 2009, the Tories pledged that a future Conservative government would
amend existing legislation…and allow councils to decide what particular structure they wish to adopt – including a return to the Committee system if they wish. The council will then need to get a democratic mandate by putting their proposed changes to their citizens, either in a referendum to be held at the same time as local elections, or by advocating such a change in the manifesto on which they stand for election.³⁶¹
And this is now the policy of the Con-LibDem coalition government.³⁶²

The GMB, UNISON and FBU plus individual trade union and other supporters funded LCOLG, whose other major achievement was its subsequent role in building the broad alliances which resulted in ‘No’ votes in 25 out of the 38 mayoral referendums held to date (see Appendix 4).³⁶³ The only reference to LCOLG in orthodox local government literature is: ‘Thus one councillor, as Vice-Chair of the Labour Campaign for Open Government, refers to the Network as “a front organisation for multi-national corporations looking for juicy contracts.”’³⁶⁴

During the second reading of the Bill in the Commons on 11 April 2000 nearly all MPs, including almost every Labour MP, who spoke were critical.³⁶⁵ Indeed, an ICM poll published on April 19 showed only 22 per cent were in favour of directly elected mayors (compared to 59 per cent in February).³⁶⁶ Nevertheless the government used its large majority in the Commons to reverse the Lords amendments. The Bill then returned to the Lords: which – because the Bill was first introduced in the Lords and would not be subject to the Parliament Acts to force through the Commons’ wishes – could have reinstated its original amendments. But the Local Government Act 2000 finally became law when the government caved in over the repeal of Section 28 and Liberal Democrats did a U-turn on 24 July 2000 by voting against the Conservative amendment which would have allowed all councils to opt for the improved committee system.³⁶⁷ The final regulations and guidance published in October 2000, moreover, were even worse than the draft version published in July 2000: for example, they allowed councils to hold a binding referendum even when consultation only showed low levels of support for a mayor and a petition fell short of the five per cent requirement.³⁶⁸

Hence, despite the amendment allowing smaller English district councils with populations of less than 85,000 and all 22 Welsh councils to keep committees, the Act further rolled back local democracy and the five key threats were and still are:

• 
  The ‘behind-closed’ doors secrecy implicit in the legislation
  
• 
  The concentration of power in too few hands with a cabinet system and in particular with an executive mayor (the optimum internal management arrangement for privatised local government services)
  
• 
  The marginalisation of all other councillors in relation to the decision-making process³⁶⁹
  
• 
  The ineffectiveness of scrutiny (see below)
  
• 
  The evidence that New Labour’s ultimate aim is to eliminate representative democracy in local government
  

Four imposed options

The Local Government Act 2000 imposed one of four options on councils in England and Wales:

• 
  A directly elected mayor with a cabinet
  
• 
  A directly elected mayor and council manager
  
• 
  A cabinet with leader
  
• 
  ‘Alternative Arrangements’ for an enhanced or streamlined committee system only for English districts in two-tier areas with populations under 85,000 and the 22 Welsh councils if they so wished.
  

During 2001/02 in England 316 (81 per cent) councils opted for the leader-cabinet model, 10 for a directly elected mayor following successful referendums and one (Stoke-on-Trent) for a directly elected mayor and council manager. Most of the smaller English district councils (59) opted for ‘Alternative Arrangements’ and the streamlined committee system, which allowed for not more than five policy committees politically proportionate to vis-à-vis the full council, and four of these by 2007 had shifted to the leader-cabinet model. In 2005 – following a ‘Yes’ referendum result – Torbay Council adopted the US-style directly elected mayoral and cabinet system.³⁷⁰ Following the reduction in the number of councils since the 1 April 2009 there are now 295 councils in England which operate the leader-cabinet model (27 county councils [100 per cent], 49 out of 55 unitary authorities [89 per cent], 29 out 32 London borough councils [91 per cent], 34 out of 36 metropolitan borough councils [94 per cent] and 156 out of 201 district councils [78 per cent]). There are 44 councils which still have the alternative arrangements of the streamlined committee system (43 district councils [21 per cent] and one unitary authority [2 per cent]). In England 11 out of 352 councils [3 per cent] have directly elected mayors; and one council (Stoke-on-Trent) now has a leader elected by the whole council under the provisions of the Local Government Act 2007.³⁷¹ Though Tower Hamlets LBC – following a ‘Yes’ vote in a referendum for a US-style directly-elected mayor on 6 May 2010 – will hold its first mayoral election in October 2010 (see Appendix 4).

Part 11 of the Local Government Act 2000 provides for the National Assembly of Wales to specify which local authorities may operate “alternative arrangements”: that is, arrangements which do not involve the creation and operation of an executive in accordance with Section 31(1)(b) and Section 32 (1). The Local Authority (Alternative Arrangements) (Wales) Regulations 2001 allow all Welsh councils to operate “alternative arrangements” and specify their Board’s functions. Three Welsh councils – Carmarthenshire County Council, Gwynedd Council, and Powys County Council – have such arrangements with politically proportionate Boards. The other 19 out of the 22 Welsh councils have cabinets with a leader.³⁷² In Scotland, following the Scottish Executive’s establishment of the Leadership Advisory Panel, all Scottish councils reviewed their political decision-making structures. The Panel’s findings – published in June 2001 – showed that only six councils in Scotland had adopted the executive leader and cabinet model, 23 had chosen to adopt a streamlined committee system and three others retained the traditional committee system.³⁷³
The 2002 Select Committee Report

How the Local Government Act 2000 is Working published in September 2002 confirmed and reinforced all of the above concerns.³⁷⁴ The Committee received written memoranda from 41 organisations and individuals – which included councillors, councils, council officers, researchers, UNISON, the Local Government Information Unit, the Audit Commission and the Labour Campaign for Open Local Government – and took oral evidence from 16 individuals and organisations in April and May 2002 plus Nick Raynsford MP, then Minister of State for Local Government and the Regions. They concluded that: ‘Not only are the majority of councillors no longer involved in decision-making…they have also lost the access to information and informal contact that they had with officers under the old structures.’³⁷⁵ Overview and scrutiny committees, according to the Committee, ‘have so far had a marginal effect’ because ‘the executive is not obliged to take notice of the recommendations of an overview and scrutiny committee’.³⁷⁶ The Committee was also ‘very concerned by Nick Raynsford’s suggestion that LSPs create an opportunity for people to become involved in decision-making without standing for election….If Local Strategic Partnerships are to become a way in which people can take decisions without standing for election, this would undermine the role of democratically elected councillors…’.³⁷⁷ Moreover, although ‘the Secretary of State believes whipping is incompatible with overview and scrutiny’, the Committee concluded that ‘informal mechanisms’ are ‘used by the majority group to ensure that group members…do not challenge the executive’.³⁷⁸ Moreover, as J.A. Chandler – based on the 2004 study by Colin Copus and Steve Leach³⁷⁹ – recently concluded:

In practice the capacity of powerful party groups to control their members…ensures that matters which would be highly embarrassing to the local authority are either avoided or not subject to as withering a scrutiny as possible.³⁸⁰

The outcomes and impact

Secretary of State for the Environment Stephen Byers – shortly before his resignation in 2002 – appointed Professor Gerry Stoker (then Chair and still a member of the New Local Government Network’s Board) to lead a research project lasting five years to assess the outcomes and impact of the Local Government Act 2000.³⁸¹ The latter study was published by the Department for Communities and Local Government (DCLG) in October 2007, and the key findings were as follows:

• 
  Only 12 per cent of councillors agree/strongly agree that ‘backbenchers are more engaged’ following the changes³⁸²
  
• 
  Only 28 per cent of councillors agreed that the executive effectively responds to the concerns of non-executives³⁸³
  
• 
  Since 2002 ‘there has been little significant change in the diversity of councillors…only 26 per cent…are female, just over a third…are in paid employment, very few are under 35 years of age and almost all respondents…describe themselves as white’³⁸⁴
  
• 
  Seventeen per cent of councillors had never consulted the forward plan, 12 per cent ‘were unsure as to what qualifies as a key decision’ and only 39 per cent of councillors thought it was easier to find out who has made key decisions with the new arrangements³⁸⁵
  
• 
  Over the last year 37 per cent of authorities had experienced no call-ins of decisions, 22 per cent only one, and only 9 per cent had had more than five³⁸⁶
  
• 
  Only 37 per cent of councillors thought overview and scrutiny committees had been more effective in holding decision-makers - that is, the executive/cabinet/mayor - to account³⁸⁷
  
• 
  In 2006 the proportion of citizens ‘trusting the ten mayor cabinet authorities that have been in operation since 2002 was lower than for the leader-cabinet authorities (40 per cent compared to 43 per cent) with the alternative arrangements authorities’ - that is, those who had retained the committee system - ‘scoring highest at 45 per cent’³⁸⁸
  
• 
  ‘…changing the leadership form does not have a strong impact on the decision to vote or not to vote by citizens’³⁸⁹
  

Moreover, in September 2008, the Institute for Local Government Studies (INLOGOV) summed up the major changes to the role of councillors following the Local Government Act 2000 as follows:

A minority became cabinet members, meeting regularly to take decisions….The rest….‘backbench councillors’ lost their positions in Committees….Committees were a very successful form of training. Newly elected councillors would observe what was happening…learn from the questions asked by their colleagues….After a time, they would contribute themselves, and after a year or so…they would have a very good grasp of what that part of the council’s work involved….This also meant that they were taken seriously by council officers….The situation now is that non-executive councillors are much less well informed…and…the amount of casework coming to councillors has declined. ³⁹⁰
The Local Government Association’s written evidence submitted to the House of Commons Environment Committee inquiry on ‘Local Authority Governance’ warned that the greater workload for cabinet members than under the traditional committee system would lead to full-time executive councillors.³⁹¹ How the Local Government Act 2000 is Working (September 2002) was also ‘particularly concerned by evidence that the time commitment required from councillors makes it impossible for someone in full-time employment to become a councillor...[and] that the higher allowances for executive councillors increases the powers of patronage of council leaders.’³⁹² Moreover, as shown in Chapter 7, such power is even greater with US-style executive mayors.

The key findings of the Local Government Association’s survey of the allowances paid to English councillors in 2008 were as follows:

• 
  Councillors’ basic allowance in 2008 averaged £6,099 per annum and ranged from an average of £4,194 in shire districts to £9,978 in shire counties.
  
• 
  The average leader’s allowance was £17,753 and ranged from £11,490 in shire districts to £37,486 in London boroughs.
  
• 
  Among cabinet/executive members, the average allowance was £9,710 and ranged from £6,083 in shire districts to £22,028 in London boroughs.³⁹³
  

Conversely, in 1998 the average allowance in England was £3,699 for backbench councillors and £7,749 for leaders.³⁹⁴ Hence the Local Government Act 2000, which imposed the split between backbench councillors without decision-making powers and executive councillors only with such powers, has massively both increased the power of the executive via this ‘payroll’ vote of special responsibility allowances and the proportion of full-time councillors.

Before the Local Government Act 2000 the average leader’s annual allowance of £7,749 in 1998 was twice that of the average backbench councillor’s annual allowance of £3,699. In 2008 the average directly elected local government US-style executive mayor’s annual allowance of £58,188 was over seven times that of their average backbench councillor’s annual allowance of £7,996 (see Table 7.1 in Chapter 7). Differentials have also increased with the leader cabinet system, with the average leader’s annual allowance in 2008 of £17,753 being nearly three times the average backbench councillor’s annual allowance of £6,099. Cabinet/executive members received an average allowance of £9,710 on top of the basic allowance paid to backbench councillors, which was over one and a half times that paid to backbench councillors.³⁹⁵ Leading councillors frequently also now have other jobs: for example, Croydon Tory councillor Steve O’Connell received a total of £106,098 in 2008/09 – £11,880 as a local councillor, £31,981 as the Cabinet member for regeneration, £52,910 as the Greater London Assembly member for Croydon and Sutton and £9,327 as a member of the Metropolitan Police Authority. Yet a report by the Review Body on Senior Salaries for the GLA recommends that assembly members should not have other jobs that demand their attention during the day.³⁹⁶

Michael Crick – using freedom of information legislation – has shown how the size of the political class has increased dramatically in the last ten years to 29,000 due primarily to the payment of 20,623 councillors (see Appendix 12). Many people now become councillors for the money and are less motivated by a public service ethos. Moreover, all the main political parties now require councillors to donate up to 10 per cent of their pay to the Party or face de-selection. For example, nationally Labour councillors have donated £1 million to the Labour Party since the 2006 General Election; and during this period Croydon Labour councillors donated £63,489. These donations are also increasingly used to pay private agencies to deliver leaflets because of the decline in party members and activists.³⁹⁷
The Local Government Act 2007

The Department for Communities and Local Government 2006 White Paper Strong and Prosperous Communities and the Local Government and the Public Involvement in Health Bill proposed:

• 
  A major acceleration of the drive for councils to become ‘enabling authorities’ - merely commissioning services with little role in direct service provision
  
• 
  A requirement for most public sector service providers to work together to achieve improvements in services through Local Area Agreements
  
• 
  A substantial shift of government funding away from councils towards unelected Local Strategic Partnerships
  
• 
  The compulsory introduction of mayors or powerful council leaders in virtually all local authorities
  

The White Paper proposed one of three executive models, each with a four year term, for councils in England and Wales: a directly elected mayor, an indirectly elected leader and a directly elected executive. However, the latter option was not included in the subsequent Local Government and Public Involvement in Health Act 2007. Moreover, in both models ‘all executive power powers will be vested in the mayor or leader who have responsibility for deciding how these powers shall be discharged.’