England & Wales, Global Democracy, devolution and governance, Finance

What constitutes failure?

Photo by Markus Spiske on Unsplash

It is hard to get away from Northampton-shire as the local government story of the week, the month, possibly the year. Given that it is the best part of 20 years since a council last issued a Section 114 notice, it could even be the story of the decade.

In many ways the response to what has happened has been dispiriting. The debate quickly became polarised between those – including the county’s seven MPs – who claimed this was purely about bad decision- making in Northamptonshire and those who saw it as symptomatic of a deeper structural problem with local government funding.

As I pointed out when I took part in a local television debate in Northampton, these two analyses are not mutually exclusive. There is good reason to think they are both true.

The inspector’s report is damning in its depiction of decision-making in the council. I was particularly struck by a line about not underestimating the importance of getting the boring stuff right. Yes, we need transformation in local government, but we need to make sure we are getting the nuts and bolts right first. That is a salutary reminder for many of us.

Clearly, things did go wrong locally. At the same time, at LGiU we know from our annual finance survey with The MJ, that there are profound problems with the funding of local government. Eight out of 10 council leaders lack confidence in the sustainability of the local government finance system. These problems have been further underlined in recent publications from the Chartered Institute of Public Finance and Accountancy and the National Audit Office.

In a precarious financial climate, we would, of course, expect places where less good or less lucky decisions were the first to go under.

There is a broader question of how many bad decisions away from bankruptcy we think it is acceptable for councils to be.

This is just one of the ways the situation in Northamptonshire exposes gaps in our strategic thinking about local government as a whole. Others are bought into focus by the report’s recommendations.

It feels inevitable now that commissioners will be bought in to run the council in the short-term, but this raises as many questions as it answers.

What constitutes failure for a local authority and how much of it are we willing to tolerate: people in care dying and children exposed to abuse? These are clearly failures. Rubbish not being collected? Probably. Libraries, youth services and parks disappearing? Maybe. Democratically-elected members losing control of the council to centrally-appointed commissioners? How bad do we believe that is?

Even if we accept the premise that the commissioners bring a transformative level of competence which can turn the council’s finances around without an extra injection of cash, we are still forced to think about the value we put on local control and agency. What are we willing to pay for democracy?

We don’t have an answer to that question. We don’t even have a proper conversation about it.

The recommendation communities secretary Sajid Javid proposes to split the council into two smaller unitaries is similarly worrying. Not because it is necessarily a bad idea, but because it is not clear exactly how it fixes the problems described in the report.

Is it a pragmatic solution or a political punishment? The timing is unfortunate, coming only three days after Mr Javid revealed he was minded to approve a single county unitary in Buckinghamshire. What is the principle here?

If Government doesn’t believe there is a single best size or structure for councils, that it depends on local contexts, economies and politics and that we are best served by asymmetric settlements across the country, this is fine.

I have a lot of sympathy with this position. But let us try to describe what those local factors are and how and why they lead to different outcomes.

This gap in our thinking about local government offers glimpses of a much bigger debate we are not getting right: what services sit locally, how we are going to pay for them, what value we place on local control and how much risk are we willing to assume for this.

These are profound questions about democracy, legitimacy and values. So far, we are failing to have this conversation. The failings in Northamptonshire are collective failings.

Front and centre in all this, of course, should be the people of Northamptonshire. Staff and members in county and district councils will be worrying about their futures and the 700,000-plus people who rely on the services provided by those councils. They are the ones who will pay the price for our inability to even ask the right questions about local government, let alone find the answers. We must hope this price is not too high.

Jonathan Carr-West is the Chief Executive of LGIU. This article was first published in The Municipal Journal.

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