New Labour’s Local Government Act of 2000 concentrated decision-making in fewer hands as the committee system was replaced by the cabinet and most councillors no longer make policy and feel marginalised with little influence over issues that affect their local areas. PETER LATHAM writes in his new book how this status quo could be reversed
The introduction of executive government in England and Wales since New Labour’s Local Government Act 2000 concentrated decision-making powers in fewer hands. In most authorities the committee system was replaced by the cabinet, overview and scrutiny system. Hence most councillors no longer make policy and feel marginalised with little influence over issues that affect their local areas.
Council leaders’ powers have also massively increased via the “payroll vote” of special responsibility allowances (SRAs).
Therefore, as the prospect of fewer and lower SRAs may be the main reason why only 13 councils have reverted to the committee system since the Localism Act, I propose that no councillors should be paid more than the median gross weekly full-time earnings in their locality.
The privatisation model in the Tory-led coalition government’s White Paper Open Public Services (2011) is based on Payment for Success, published in 2010 by three senior partners at KPMG. Councils are also being neoliberalised via new models of local government, which prioritise the interests of property developers and big business.
The amount spent by local authorities on outsourced public services almost doubled from £64 billion during the last Labour government to £120bn during the Tory-led coalition government.
Moreover, as the Arvato UK Quarterly Outsourcing Index shows, contracts worth £2.08bn were signed across the UK public and private sectors between January and March 2016, a sharp rise from the £414 million agreed in the final quarter of 2015.
Overall 65 per cent of spend came from the public sector and 35 per cent from businesses. Local government clients signed double the number of deals in the first quarter of 2016 compared to the same period in 2015, with a contract value worth £348.6m.
Thus, contrary to the government’s empowerment rhetoric, the book argues that their main purpose is to complete the privatisation of local government and other public services — started under previous Tory governments and intensified under New Labour — to restore the conditions in which profitable investment and capital accumulation can take place.
The private finance initiative/public private partnerships programmes should therefore be terminated and replaced by direct public investment, the average cost of which is 3 to 4 per cent, compared with an estimated financing cost of 7 to 8 per cent for all private finance projects.
I also propose an overall reorganisation of the structure of local government in Britain to eliminate the democratic deficit whereby it has the highest average population size per local authority in Europe. That is, there should be more councillors and councils — each with the committee system, which is much more inclusive than any other form of governance and gives all councillors the right to make policy covering smaller areas.
Developments since the Localism Act also reinforce the main arguments against US-style directly elected mayors (DEM) including “metro” mayors, which the Conservative government is now imposing on combined authorities in England.
DEMs lead to cronyism, patronage, corruption and remove the working class from this layer of local democracy, replacing it with full-time career politicians; create an arena focused on personalities, not politics, crucially have not increased turnout and lack voter support. They have an undemocratic voting system and cannot be removed — all types of DEM should be therefore abolished.
Moreover, until abolition, the single transferable vote (STV) should also be used for all elections with the right to vote at 16-plus and the right of recall leading to a new election if a police and crime commissioner (PCC) turns out to be bad or ineffective.
The main arguments against US-style directly elected PCCs in England and Wales are similar to those against DEMs. PCCs should be abolished as part of the overall reorganisation of the structure of local government proposed above. That is, each local authority should also have a police authority made up of elected local councillors, representatives of trade unions and community organisations. And that the transitional arrangements prior to abolition should be similar to those for DEMs.
The financial provisions of the Localism Act are analysed plus subsequent legislation relating to local government finance, recent and future trends in public and private sector employment, trends in British public expenditure and local government finance in Britain. Moreover, some councils are already becoming financially unviable.
Hence the council tax, stamp duty land tax and business rates should be abolished and replaced by a system of land value taxation (LVT), which would eliminate property bubbles and reduce the price of land. Only freeholders and landlords would pay LVT and buildings tax.
Tenants would also no longer be liable to property taxes.
I also argue that the Marxist approach in political science is still relevant and that — to implement the policy proposals made — an alternative economic and political strategy and a new system of federal, regional and local democracy is needed — beginning with addressing the crisis of working-class political representation.
In financial terms the estimated revenue from a 2 per cent annual wealth tax on the richest 10 per cent of the population who owned 45 per cent of Britain’s wealth in 2012/14 and estimated to be £11.1 trillion — would total £100bn a year. The ending of tax dodging by the super-rich and big business would bring in £120bn a year. The latter would fund increased provision of directly provided public services.
Dr Peter Latham is a sociologist, former researcher on direct labour at the London School of Economics. He is a UCU delegate to Croydon trades union council and a member of the Communist Party of Britain and the Labour Land Campaign. Who Stole the Town Hall? The End of Local Government as we Know it is available to pre-order with a 20 per cent discount at: policypress.co.uk.
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