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February 7, 2013

picklesI’ve been pondering on Eric Pickles pronouncements last week, about Local Authorities who keep Council Tax rises below 2% in order to avoid a referendum. This story provoked a lot of journalistic commentary, and online comments, along standard lines. But I now realise what it was that saddened me in particular.

It’s because imposing a referendum on a Local Authority, on a single specific issue, actually results in less local democracy.

It undermines the goal of greater direct participation in local governance and services. I invested some of my finite stock of hope in the Coalition’s talk of greater devolution within, as well as to, the nations of the UK. I bet some of my remaining chips on David Cameron’s personal endorsement of the Big Society. I interpreted the latter as being about substituting local action for some component of your duty only to contribute through local taxation, and as an alternative to local service consumerism. The connection I make between the two is that if local people contribute more, they earn a stronger local mandate, away from the centre… and that this is a virtuous circle.

The rules are set thus – Local Authorities who want to raise Council Tax by 2% or more have to get a yes vote from a local referendum. Eric Pickles has turned up the heat by saying that those who make a 1.99% increase to comply with the cap are dodgers, disrespecting their public. That’s politics, of course, in both directions. 1.99% maybe smacks of clumsy presentation, or real desperation? But I also wonder whether Eric Pickles would be placated by 1.95%, 1.9% or even 1.8%… where do you not draw the line?

But the whole exercise seems warped.

It ignores the role of Central Government as a source of local funding. Here’s a simple hypothetical case – if a Council gets 3/4 of its cash from Central Government and 1/4 from Council Tax and local revenues, a 2% cut in central funding would mean it had to find 6% more itself, just to stand still. If their other rents and fees didn’t rise – that’s an increase of at least 6% in the Council Tax. In the same scenario a 2% increase in Council Tax would probably mean a 1% cut in overall expenditure, and so on.

If you want local people to have a say specifically on the local budget, why not give them a referendum on the level of Central Government support for their area as well? Because just as they might vote to be taxed less locally, they might vote to be given more by Whitehall? More legitimately, it’s because the ‘Government of the Day’ has already been voted for on the basis of a manifesto(s) and a complex set of inter-linked policies rather than just the resultant budget. Its reasons and constraints have been accepted… to some degree… by enough people.

Which is exactly the position that a local Council is in!!

By choosing to single out taxation, Central Government is loading the dice against elected bodies who have decided to raise more revenue and to be held accountable for the overall consequences at the next local election.

Instead, by giving local voters a seeming no-brainer to vote on, this arrangement further alienates people from the Council. It’s your chance to stop ‘them’ taking more from you… rather than getting involved in how ‘we’ resolve local needs and priorities. This weakens the existing processes for voting, lobbying, engaging… it somehow takes the failure of local democracy as a given and discards the whole thing. What does that do for devolution?

Of course local leaders could campaign for, and explain, their tax rise in the run up to a referendum. But that’s what should be happening anyway, and about a range of options rather than the blunt instrument of  ‘yes/no’. If Eric Pickles thinks this isn’t happening then he should be looking for ways to stimulate more engagement in local democracy – to the point where he can respect the local budget mandate and take his hands off. That’s how you devolve.

Similarly, by framing a referendum solely about the rate of local tax you reinforce the idea that local government is just about paying a fee for services. So if you can vote down a ‘price rise’ that’s it, you can walk away with no further need to get involved in choices, decisions or community. Again, how does that cultivate the sort of connections, and identification with your neighbourhood as a whole, that would fuel the Big Society?

If you have to use such a crude instrument to satisfy yourself that local people are having the impact on local decisions that they deserve, then you are admitting that the first 2.5 years of trying to foster greater local involvement and responsibility have failed.

That’s not a party political point – it’s a point I would make about every super-imposition of special decisions, and of locally unaccountable service providers [which instead ‘compete’], by any government.

One last thought – it costs money to run a referendum – a significant amount relative to the budget of a small Authority. How does that help them to deal with a budgetary shortfall? Unless Eric Pickles miraculously finds money for this exercise… which he couldn’t find for other purposes.

One Comment leave one →
  1. February 7, 2013 1:43 pm

    Thanks Nick for this. Have a look at Qwanz – it’s a new form of ‘democracy’ and I think I like it!

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