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Real Localism

Author: Simon Duffy

The growing rhetoric of decentralisation is matched only by the growing reality of increased centralisation. Yet this paradox seems to go unnoticed in the mainstream media. It is time to explore what real and radical localism might look like and start to organise for the kinds of constitutional reforms necessary to halt the creeping extension of central power. 

The paradox of localism

In theory almost everyone seems to believe that power and control should shift towards local communities; in practice the UK is not only the most centralised welfare state in the developed world - it is also becoming more centralised.

The latest stage in the process of disempowerment process is paradoxically called ‘localism’. It seems to involve:

  • Further diminishing the roles and responsibilities of local government - e.g. the loss of control over education, termination of further duties
  • Massive and unprecedented cuts to local government
  • New grants programmes for local organisations - which are run from the Cabinet Office

The chart below shows that the greatest cuts have been to local programmes and the individual incomes of people in local communities, the greatest increases have been for centralised programmes. The centre of the centre - the Cabinet Office and Treasury have grown to such an extent that it is impossible to fit their figures on the chart:

The gravitational pull of the centre

This is not a recent event nor a matter of party politics or ideology. Although these recent cuts to local government are unlike any we have seen before the on-going deterioration in local autonomy is not new. Previous governments also talked about increasing local control and democracy, while in fact undermining it.

There are a number of reasons why power is pulled in greater concentration to the centre, to London.

1. Self-interest

Despite the rational case for shifting power to localities the brute fact is that power brings the rewards of power and status to those who wield it. Government ministers, think-tanks, civil servants and the CEOs of large private service providers all have a vested-interest in keeping decisions local to them - in Whitehall.

2. Party politics

The party in power in Westminster is usually in opposition in most local communities. These areas can then be targeted and blamed by the ruling party for their local failures.

3. Organisational weakness

There is no effective voice for local government. The very party political system which leaves local government vulnerable on the ground seems to lead to a stalemate at the level of national umbrella organisations. There is no effective advocate for local government on the national stage.

4. Constitutional weakness

Local government lacks any constitutional guarantee of its rights, its role or its structure:

  • Central government uses the Boundary Commission to redraw local maps
  • Funding formulae, in England especially, have been subject to repeated manipulation - by both political parties
  • The revised House of Lords is even more centralised and under the sway of central government - there is no constitutional check on centralisation

This marks one of the factors that is peculiar within the UK. Other welfare states have established local and regional structures which are much more robust - set in constitutional law and reflected in national democratic structures.

Case Study: Adult Social Care

Even where a new responsibility has been added to local government the detailed story demonstrates the negative relationship between local and central power in the UK. In 1980 central government created an entitlement for residential care called Board & Lodging, which could be claimed by residential care home owners. From 1979 to 1990 the numbers using this entitlement to enter residential care jumped from 12,000 to 199,000. This marked a significant policy failure by central government: expenditure ran out of control and new forms of institutional provision developed.

Central government had effectively created the residential care industry by an incompetent central subsidy.
In order to stop this haemorrhage in public funding it was decided to cap the level of funding and transfer this funding to local government. This was the central policy decision of the 1992 NHS and Community Care Act.

  • In practice local government took over this new responsibility and successfully managed to:
  • Control the growth in funding
  • Increasingly support more people in their own homes
  • Develop new forms of support - like direct payments and individual budgets - often in the face of central policy resistance

In fact the very success of local government in taking responsibility for adult social care and introducing new innovations and efficiencies probably marks the beginning of a new period of effective centralisation.
Adult social care funding will be squeezed - unlike centrally funded programmes like health and education and despite the preventative efficiencies of social care it is adult social care that will have to be cut.

Funding for adult social care may be nationalised - eventually a new social care settlement will probably create a nationalised insurance model and further weaken local discretion. The strange way in which local success is then twisted to the advantage of centralised power can be further demonstrated by the development of personalisation in England. 

In 2003 self-directed support was being developed in 6 local authorities by the In Control project. By 2006 over 60 local authorities had joined the programme, despite significant reservations by central government about an approach that would shift power and resources into the hands of local citizens. Many local leaders went onto put increasing levels of pressure on the Department of Health; which in turn led to the publication of Putting People First.

However, when personalisation became national policy civil servants shifted their role from resisting personalisation into one of imposing personalisation upon local government. They then set about imposing targets, incentives, regulations as if they needed to force personalisation onto the very local leaders who had developed these ideas. And unsurprisingly many of these centrally-led initiatives were poorly thought-through, wasteful or inconsistent with other central policies.

Central government enjoys spending money; but it has a poor understanding of the real needs of people or communities.

Case Study: Total Place

We can see the same peculiar pattern at play in the development of what became known as Total Place. On the face of it Total Place is an eminently sensible policy goal - let local leaders shape all local resources to achieve locally defined goals and objectives in ways which are sensitive to local needs and local opportunities and structures.

But what is the reality of Total Place? In fact it is almost impossible for local government to really exercise the necessary control or influence over the vast majority of public resources that are spent within the area:

  • The benefit system is nationalised
  • The NHS is centralised and uses a nationalised funding tariff
  • Education is increasingly beyond local control
  • Back-to-work services are both centralised and privatised
  • Even the funding streams that do pass through the hands of local government are subject to significant regulatory restrictions e.g. Supporting People 

In fact we seldom seem to ask why the policy of Total Place is needed in the first place. Total Place is appealing because it reflects how things ‘should be’ - in a rational world. But the policy is only needed because the reality is that local government has been left to pick up and reintegrate funding streams and organisations that have been separated by central government.

Total Place is a Humpty-Dumpty strategy: local government is being asked to put together the pieces of funding that was divided in Whitehall - an impossible task.

In fact the whole of the current welfare system is deeply inefficient. (a) Resources are extracted from local communities through the various tax systems, (b) pooled - largely within Whitehall - (c) divided into government departments and benefits and then they (d) pass through central and local systems into services, often with management and transactional waste at every level. 

By the time those resources are then return to local communities they have diminished in size and been divided into multiple streams for competing purposes.

The missing resources

We can take this analysis even further by examining the public resources that are spent in a local community. For example, let us take Barnsley:

  • Benefit expenditure in Barnsley in 2009 was £587.7 million
  • NHS Barnsley’s local expenditure in 2009-10 was £418.5 million
  • Formula funding for schools for 2009 was £154.4 million
  • Expenditure on Council services was £239.6 million
  • The DWP’s administration and benefits offices are approximately £6 billion - by capita this means that there are approximately £22 million of DWP services in Barnsley (although some of this will still be London based).
  • The cost of prisons and probation is approximately £18.2 million

So, looking at the main elements of public expenditure, total public expenditure in Barnsley is approximately £1.44 billion.

This means that Barnsley controls only 16% of actual public spending in Barnsley.

In 2009 per capita GDP was estimated at £23,000. For the UK as whole this is £1.38 trillion, for Barnsley - with a population of 225,200 that gives a proportionate figure of £5.2 billion. Government expenditure for 2009-10 was approximately £670 billion (45% of GDP figure), hence the share of that which one might expect to be spent in Barnsley, other things being equal, would be £2.34 billion.

In other words there is a significant discrepancy between the size of government expenditure for the UK and the size of public services and income transfers into Barnsley. Approximately £0.9 billion has gone missing.

This means that Whitehall has wasted at least 39% of Barnsley's funding - before that funding has even been returned to the local community.

Further - this means that Barnsley controls only 10% of Barnsley's rightful share of public expenditure.

Of course it may be objected that the figure of £5.4 billion as the hypothetical Barnsley GDP is not real. And this may be true, but if so this counts for my argument. For this suggests that Barnsley is doubly disadvantaged by current arrangements:

  • First, it is poorer, because economic activity has become primarily located in London and the South East (although Manchester and Leeds are also quite economically powerful.)
  • Second, not only does it not get a compensatory level of funding (to counter balance its primary economic disadvantage) it does not even get a proportional share of public funding. For the missing public expenditure must be being spent for the advantage of of other localities (mostly Whitehall) - hence making Barnsley even poorer.

The size and complexity of the various funding transfers from local citizen - to central government - back to local services - seems to obscures the fundamental injustice of the current welfare settlement. Places like Barnsley are made to feel that they are somehow dependent upon the centre - but this illusion is created by a sleight of hand. Barnsley has been cheated.

The failure of localism

As we discussed above, there are many explanations for this kind of mistreatment of local communities like Barnsley. But perhaps there is an even deeper explanation than these merely structural factors. At a recent seminar on public policy and localism, within a London think-tank, one of the participants - an employee of a large private-sector employment service (that is working with the DWP to take over employment services nationally)said:

“But Barnsley could not survive on its own. Barnsley needs Chelsea.”

This is false; but it is a false assumption that runs right through the Whitehall establishment. 

Whitehall, and the elites which circle around it, want to believe that the provinces are incompetent and need their support in order to survive. But of course these are views are self-serving nonsense. It is just easier to justify taking control of power and money if you also believe that you are better than the people whom you serve.The name for this powerful cultural assumption is meritocracy - that power should belong with the ‘best’ - and it turns out that those with power (of both Left and Right) always like to believe that they are the best. 

But they are wrong.

Strategies for change

This easiest thing would be for things to continue as they are. It is tempting to hope that the next political party will resolve these issues from the centre. It is nice to think that one day localism might be real and that someone else may deliver localism to our communities. But this is not realistic.

Power will not shift to local communities unless those communities find ways of organising themselves differently, unless leaders emerge who will stand up for their local communities, unless we develop a new account of how the whole system should work. In particular local government cannot expect to be part of a new and more just settlement unless it finds a way of making the case for change itself.

Here are some initial thoughts about the practical things that could be done by local government to shift the pattern away from meritocratic centralisation and towards genuine localism.

1. Stand up for local citizens

As local power is eroded it may become easier to change focus. Instead of pretending to be an agent of central government it may be more helpful if local government begins to really see how it can help articulate and defend the rights of local citizens - particularly with respect to centralised services:

  • Income security - Local leaders must help local people to get the benefits they need and ensuring that the benefit system is not redesigned to their disadvantage. The refusal of the Scottish government to accept the Welfare Reform Act is a promising beginning.
  • Health reform - Many current health services are unnecessarily institutional. There is data to suggest that healthier communities come with employment, better environment, income equality and better social support. The NHS has struggled to reform itself to promote these ideas and it has an in-built tendency to promote provider interests - in the face of the evidence - this creates an opportunity for local leadership.
  • Education reform - In many local areas schools have just become holding-places. Standards, discipline and expectations are far lower than they should be. Central government has tried to regulate schools without success and now is now trying to create some new kind of market solutions (often looking to large national providers to provide local schools). But local leaders could encourage citizens to promote their own - more radical and positive solutions - building on all community assets - within and without the school itself.

2. Create local solutions

Localism will make sense if local communities are really part of the construction of decent local solutions. The key to this strategy will be to work with and enhance the local civil society: 

  • local community groups
  • business
  • faith organisations
  • neighbourhoods. 

This is not about a ‘Big Society’ it is about constructing local alliances and solutions that have the commitment of local citizens. Partly this means looking at what is already working local communities. Importing solutions will not work. Communities already have leaders and innovators - at every level - but they will often not have come to the attention of the public system and they may not even know their own capabilities. 

Social justice demands building upon the capabilities of local people.

3. Organise a national network

One local area cannot make these changes on its own. It will be important to build a powerful alliance of other communities who want to achieve real localism. It will be the shared learning and the development of a sense of wider movement which will enable local leaders to act with sufficient courage and clarity.

4. Develop a new policy model

Ultimately a new policy model will be necessary; and this will also mean arguing for fundamental constitutional change. To achieve devolution in Scotland took real local action, bridge-building and debate. Attempts to impose regional structures from central government failed because the public suspected that these were just opportunities for new jobs for politicians and their allies.

Power will not be given back from the centre until new leaders emerge who care more about their local communities than party politics, their careers or honours and peerages. There has never been a better time to start building for real localism.

Conclusion

It can be guaranteed that, when we come to the next election, everybody will be talking about the need to shift power back to local communities. In times of austerity decentralisation becomes the default position. However it is likely that this will continue to be 'just talk'. If any of this talk is to become real then it is local communities themselves who must claim back their own authority, together with a fairer economic settlement.


The publisher is The Centre for Welfare Reform.

Real Localism © Simon Duffy 2012.

All Rights Reserved. No part of this paper may be reproduced in any form without permission from the publisher except for the quotation of brief passages in reviews.