England & Wales Finance

Following the money: Who is watching local government in England?

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In this article, Dr Ben Worthy, lecturer in Politics at Birkbeck, examines the findings from his recent research paper on (the lack of) oversight and audit in English local government finances, and makes suggestions for how the system should be improved.

In theory, being more open should make politicians behave themselves. This comes from the age-old idea that being watched is a good way to either stop poor behaviour or catch it when it happens. Both the German Parliament and the old Greater London Authority building took this to heart, with glass structures that allow the public to see what’s going on inside.

The same theory should be true for local finances. Making local finances open should stop councils spending unwisely, or doing bad or reckless things with voters hard earned money. Rather than being set in glass, local councils’ accounts and spending can be seen by voters physically or online, whether inspected, asked about in Freedom of Information requests, or even scrolled through in £500 tranches.

But, despite supposedly being watched, something has gone wrong. Why, given all the transparency, did no one, or at least so few, see it coming?

The rather depressing answer is that few spotted it because, from Thurrock to Birmingham, hardly anyone is watching. Since the coalition government abolished the Audit Commission, there has been a gap. Only a handful of journalists, voters and campaigners are really watching local government spending. My research has raised a number of questions about why it’s so difficult.

First, are local finances really open enough? Local government accounts are increasingly complex and hard to understand. To make it worse, publication is subject to severe delays and only 12% published accounts on time. This is partly about covid-19, and partly about bottlenecks and blockages. But put simply, the data isn’t there.

Second, what happens if you find something amiss? Even where problems over finance do come to light, it is unclear what channels the public can use to then raise the alarm and bring accountability. How can local voters highlight and publicise problems, and not rely on the media or activists to highlight them or sound the alarm?

And more to the point, how does change even happen? Voters have reacted to badly performing councils. There is strong evidence that finance data does reach voters, who then punish poor-performing councils in local elections (but don’t reward well-performing ones). But beyond the ballot box, or sending in commissioners, what can be done?

Third, who decides what the story is? A final danger is that financial data in newspaper stories and campaigns only shows part of the picture. Local government is facing a perfect storm of austerity, post-pandemic chaos and cost of living rises. Yet central government are, as ever, keen to paint a picture of profligate councils, in Margaret Thatcher’s phrase, ‘running out of other peoples’ money’. Rishi Sunak squarely fixed the blame for council tax rises on local councils. But this narrative around ‘councillors at the casino’ is a distorted one. The real story is, of course, local government being given too little money over decades, rather than spending too much money in a year.

Central government do seem to be, finally and slowly, waking up to the transparency gap. For proper monitoring and watching to take place, a number of things need to happen. There needs to be, first, available and accessible data and, second, a mechanism to publicise any findings or problems, either to the local community or decision-makers in the authority. The government has created Oflog, a one stop shop for local data. Labour have promised broader reform to audit, though what that means is unclear. But will any change to the audit be too little or too late?



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