Councils are not to be trusted

Written on:September 17, 2014
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Agent 151 is a senior local authority finance director and S151 officer writing exclusively for Room151

The House of Commons Public Accounts Committee has published a report on funding for local authorities. You can find it here.

In summary, the report says that councils have been given more flexibility in how their grant funding can be used locally, but DCLG is not doing enough to monitor that councils deliver value for money and its plans to rely on residents and councillors to scrutinise local decisions are not good enough.

Let’s break that down. What do they mean when they say councils have more flexibility? Well, they certainly can’t be referring to the Direct Schools Grant, which represents a whopping chunk of the funding that goes to councils. Public health funding too is ring-fenced. Indeed, looking at my budget book for 2014/15, there is still a plethora of specific grants in all areas of the council’s operations. So there may be a bit more flexibility, but there is still a very long way to go before councils are free to prioritise locally.

Also, let’s remember that doing away with specific grants is not the same thing as giving more freedom to make decisions locally. In converting specific grants to un-ring-fenced Revenue Support Grant, the government has trimmed them quite dramatically and in some cases cut them completely. “Here you are,” it has said munificently. “Here’s nothing. You are free to spend it on whatever you like.”

Now let’s look at the role of DCLG and other government departments in monitoring delivery. The report says:

Whitehall departments must still be able to assure Parliament that they are achieving value for this money.”

Must they? Forgive me my mad presumption, but isn’t it rather the case that councils must assure their residents that they are achieving value for money. Aren’t councils accountable at the ballot box? Once the money has been handed over, Whitehall departments have done their job. Councils are free to decide priorities locally and be held to account by residents. Isn’t that the whole point of removing ring-fencing?! Do we really need another layer of Whitehall bureaucracy on top?

What about the armies of armchair auditors and council scrutiny committee members that will scrutinise local authority decisions? We were told we didn’t need the Audit Commission any more on the strength that these worthy folk would provide ample challenge. To bolster their efficacy, DCLG has been imposing transparency requirements upon councils. There is now more information about councils and their performance than ever before whirling around in cyberspace. Well, despite all this work, the report asserts that the amount of information is still insufficient.  It also voices concern that councillors are not up to the job:

“..councillors may not always have the skills or time to fulfil this role”.

So, let us summarise what we should learn from this report. It appears that there is cross-party support in Parliament for the view that councils are incompetent and not to be trusted. The heavy hand of Whitehall is needed in order to ensure that councils do what they are told and perform to standard. We need more ring-fenced grants so that Whitehall can keep control, and we need the Public Accounts Committee (aided by the NAO) to hold councils to account in place of the Audit Commission. Is that it?

Well, that may be the message from PAC. However, what I learned from this report is rather different. I learned that the pervasive control freakery of Whitehall is unabated, in spite of all the rhetoric about flexibility and local prioritisation. I learned that there is no real belief that local accountability works, nor is there any real intention to let councils off the leash; Whitehall is too hungry for power and too paranoid. On this evidence, councils will have to fight very hard indeed to keep the Whitehall beast at bay.

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