We need even bigger upper tier councils


By Rob Whiteman, CIPFA CEO

Local government reorganisation has been high on the agenda this month, with the resignation of the devolution minister, the delay of the government’s devolution white paper, rumours swirling of two tier arrangements being abolished and in many areas, much posturing on both sides of the fence.

Let me first say at the outset that, sadly, I share the scepticism regarding the government coming good on promises to use reorganisation as a platform for devolution. Since 1945, we have steadily but surely become one of the most centralised states in the world. Put bluntly, we don’t really have ‘local government’ in its truest sense. We have councils as local institutions running some functions, but often directed by central government.

This sits alongside most of the local state – health, welfare, criminal justice, further education, skills, academies – which is directly run by government. Current planned changes, for example with the planning system, see us heading further toward the spiritual nirvana for Whitehall of just one local authority in England... itself! Ironically, it’s only such a heavily centralised state which would argue that the problem is that there’s not enough centralism!

The COVID-19 pandemic has been a glaring example of the failures of our over-centralised state. From the absence of a functioning test and trace system and sluggishness of supplying councils with local transmission and infection data, through to central government controlling local lockdowns, we keep seeing councils and local public institutions having to wait for permission or resources to act in the immediate and best interests of their communities.

On devolution to overcome this sorry state, my experience is that we focus on the wrong question. We must replace ‘what should get devolved?’ with ‘what does government reserve?’ - a default in which everything is devolved except those few things that are reserved. It worked for Scotland and is the only way to achieve devolution, rather than mere piecemeal delegation, in England. Let’s reverse 70 years of creeping centralisation and instead give councils the policymaking and financial powers to enable a full local state.

For me, the key to unlocking a transformed English state lies in the unfettered ability of local democratic mandates to raise revenue beyond council tax and business rates, and share the proceeds of taxes that are presently nationalised. With increasing demand on local services as they currently stand, councils cannot continue to be funded by council tax and business rates alone. In Germany, sub-national areas have access to income, sales and corporation taxes that provide greater flexibility and resilience to deliver against local need.

However, when promoting a vision for a devolved English state funded by multiple tax streams, the organisation of local government, its workforce and technology dynamics, cannot continue to be based on Victorian footprints that are long past their sell by date. Many councils are too small to be strategic whilst being too big to be local.

Personally, I lean towards a two-tier model that’s both bigger and smaller than what exists now. I would argue for bolstering parish councils in all areas to enhance community capacity, engagement and hyper-local decisions, but for upper tiers to be even larger than existing counties and unitaries. Larger local authorities that cover material economic geographies would lend themselves to setting tax variations akin to Scotland. It would mean that big councils could achieve material economies of scale and would be responsible for several places, not just one.

Any conversation that involves such radical change inevitably presents a challenge. It’s very easy for us all to retreat into arguments for the merits of our own units of local government. While this is understandable, it divides our collective voice as a sector and weakens the argument against centralised Whitehall control. It’s time we come together as a sector with one voice and debate how we want to reorganise the state over the next 30 years. Let’s address the more fundamental issue of real devolution and make that the exam question that drives reorganisation.

This article first appeared in the Local Government Chronicle.

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