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Holyrood's threat to local government

1 July 99

Author's fears that the Scottish Parliament will merely perpetuate the "onslaught" against local government

by Jean McFadden

The Scotland Act 1998 is virtually silent on the matter of local government. There are only two references to local government, in Schedule 5 to the Act which lists the areas reserved to the UK Parliament, local taxes (which are excepted from reservation) and the franchise at local government elections (which is reserved). Therefore all other aspects of local government are devolved to the Scottish Parliament. The Parliament is able to pass legislation on any aspect of local government. It could change the boundaries and structure completely, add functions to or take functions from local government and change the ways in which services are provided and local government is managed. It has responsibility for the financing of local government, both through the system of grants and in determining the form of local taxation.

Scottish Ministers have wide powers to scrutinise the activities of local government either through inspectorates or through bodies such as the Accounts Commission for Scotland and have powers to regulate the activities of local government by requiring them to maintain certain standards in, for example, social work and education. There are also some powers of intervention.

The relationship between these two tiers of government, both elected by wide popular franchise, accountable through the ballot box and with tax-raising powers, is not, however, defined in statute. The Parliament is viewed with some suspicion by members and officers working in local government and fears have been expressed that the Scottish Parliament will suck up council powers to itself.

The heart of the problem

The heart of the problem lies in the present structure of local government. Between 1975 and 1996 there was a two-tier system of local government on mainland Scotland. There were nine regional councils responsible for those local government functions which required a relatively large geographical or tax base, including education, social work, roads and transportation, water and sewerage and structure planning. There were 53 district councils, ranging in population from 689,000 in Glasgow to 10,420 in Nairn District. These councils were responsible for the more local functions such as local planning and development control, housing, museums, parks, libraries, refuse collection and disposal, cleansing and environmental health and a wide range of licensing and other regulatory functions. The three island groups were treated as special cases and were constituted as single-tier authorities  with responsibility for most local government functions.

The two-tier system worked remarkably well, but in 1991 the Conservative Government announced, rather unexpectedly, that it was their intention to abolish the two-tier system and replace it with a system of single-tier authorities. Despite the lack of enthusiasm shown for their proposal, the Government pressed ahead and passed the Local Government etc. (Scotland) Act in 1994. The regional and district councils were abolished in 1996 and replaced by 29 single-tier authorities on mainland Scotland. The three islands councils remained unaltered.

The new councils range in terms of population from 623,000 in Glasgow City Council to 48,600 in Clackmannanshire Council. Seven of the new councils have populations of fewer than 100,000. Because of the small populations it was not possible to transfer the entire range of local authority functions to them. A council with a population of less than 100,000 is not able to provide, for example, police and fire services on a cost-effective basis. As a result, arrangements were made in the 1994 Act for some functions to be removed from local government entirely and for others to be handled on a joint basis by consortia of local authorities.

The functions which were removed from local government are: 

  • Water and sewerage – transferred to three water authorities whose members were appointed by the Secretary of State for Scotland;
  • Children’s reporter system – transferred to the Scottish Children’s Reporters Administration whose members were similarly appointed;
  • Responsibility for all roads except local roads – transferred to the Scottish Office.

The functions handled jointly are:

  • Police – eight forces established, six of which are run by joint boards, consisting of three or more of the new councils;
  • Fire services – eight brigades established on a basis similar to that for the police;? Property valuation for council tax and non-domestic rating purposes – run by ten joint boards;
  • Structure planning – seventeen structure plan areas established, many of which are run by joint committees;
  • Public transport – Strathclyde Passenger Transport Authority established to run public transport in most of Strathclyde.

Since some councils were so small, it was necessary for them to enter into joint arrangements or agency agreements with neighbours to provide specialist services in, for example, education and social work. A survey carried out by the Convention of Scottish Local Authorities (COSLA) found that between 1996 and 1998 a total of 333 voluntary joint arrangements had been established by Scotland’s councils.

Joint arrangements are not new. There was widespread use of them in Scotland before the introduction of the two-tier system in 1975 when there was a cumbersome structure of over 400 local authorities. Joint arrangements, however, have drawbacks and are generally considered to be rather ineffective. They tend to be officer-led, the smaller councils tend to feel dominated by their larger neighbours and since the members are appointed by the constituent councils and are not directly elected, they lack democratic legitimacy and direct accountability to the electorate.

Threat or opportunity?

Because of the fragmented nature of local government and the plethora of joint arrangements which now exist, some councillors and local government officers see the establishment of the Scottish Parliament as a threat. They see it as an institution which will further undermine local autonomy. Since certain important services are now carried out under joint boards or committees, the accountability of which is diluted, will the Parliament, itself directly elected, take control of these services? There has already been discussion of a national fire service. Structure planning, too, might be carried out on a Scottish-wide basis. Although it is unlikely that the Scottish Parliament would want to take over the running of schools and social work services, the Parliament certainly has the power to set policies in these areas. Will policies be drawn so tightly that local discretion is all but removed and councils become little more than agents of the Parliament? There is also the fear that the Parliament with 129 MSPs will not provide enough work to keep all its members busy and that those without ministerial office might feel tempted to interfere in the administration of local government functions. Thirty-one of the MSPs were councillors. At least another dozen MSPs have been councillors in the past. Councillors are used to running services. Will MSPs with a background in local government be able to resist the temptation to attempt to run local government services from Edinburgh?

Others take a more optimistic view, seeing the Parliament as an opportunity for a fresh start in which two democratically elected institutions work in partnership. There has been discussion of the possibility of a concordat which would set out and regulate the relationship between the Parliament and local government. Some see this as a document with the force of law, entrenching the autonomy of local government and preventing the Parliament from encroaching on the powers and functions of councils. Others take the view that the Parliament, with statutory responsibility for virtually all aspects of local government, cannot be prevented from making changes to the framework within which local government operates.

McIntosh Commission

Prior to the passing of the Scotland Act, the then Secretary of State for Scotland, Donald Dewar, established a Commission on Local Government and the Scottish Parliament. The Commission was chaired by Neil McIntosh, the last Chief Executive of Strathclyde Regional Council prior to its abolition in 1996.

Its remit was two-fold: to consider how to build the most effective relations between local government and the Scottish Parliament and the Scottish executive; and to consider how councils can make themselves responsive to and democratically accountable to the communities they serve.

The Commission reported in June 1999.

McIntosh Report

Somewhat surprisingly, only three short chapters deal with the actual relationship between the Scottish Parliament and local government. The remainder deal with the methods of election to local councils, the conduct of council business and community councils.

It is recognised that the establishment of the Parliament represents a fundamental change in the political landscape in which councils operate. Although each has a democratic base, the Parliament has the ultimate power of determining what becomes of local government.

The principle of subsidiarity should be the key. That principle underlies the Scotland Act which created the Parliament and should be equally applicable to the relationship between the Parliament and local government. If a greater centralisation of power is proposed, the onus of proof should be on those who propose centralisation to demonstrate that it will bring greater benefit to the public at large. Since both have a common democratic basis, relations between local government and the Parliament should be on the basis of mutual respect and parity of esteem. So far, so good.

However, McIntosh asserts that to earn that parity of esteem, the Parliament will have to be convinced that it is dealing with local authorities which are as representative of their electorates as possible and which are ready and willing to embrace renewal in their attitudes and working practices. Certain principles drawn from those laid down for the Parliament are set out:?

  • accountability;
  • accessibility, transparency, responsiveness and a participative approach;
  • equal opportunities for all.
  • These are further developed into:
  • participation by the citizen;
  • transparency in the conduct of council business;
  • focus on the customer;
  • delivery of quality and cost-effective services;
  • partnership working;
  • improvement of the public image;
  • promotion of active citizenship and social inclusion;
  • good employment practices.

Although many, if not all, of these are to be found in local government at present, McIntosh issues a stern warning. If local government does not deliver to the Parliament’s satisfaction, the Parliament will look elsewhere – perhaps to quangos, accountable to Ministers, and local government will find itself progressively stripped of functions and influence. The fears of local government are reinforced.

Covenant and Joint Conference

After this rather depressing start, the Report becomes a little more positive. It calls for the Parliament and the councils to commit themselves to a Covenant setting out the basis of their working relationship and set up a standing Joint Conference where parliamentarians and council representatives hold a dialogue on the basis of equality. A draft Covenant is included as an appendix to the Report containing the following general principles:

  • respect for each other’s roles;
  • partnership on strategic issues;
  • genuine consultation prior to any major restructuring of local government;
  • pre-legislative discussion on local government issues;
  • a sound financial base for local government;
  • the principle of subsidiarity;
  • openness and accountability;
  • a recognition of councils’ key roles in service provision and as co-ordinators of service delivery.

The Covenant should not be enforced through the courts nor by any other formal mechanism but by the political necessity of keeping to it. However, the Joint Conference should monitor its application and consider modifications from time to time.

It is suggested that the Joint Conference should consist of not more than 15 representatives each of the Parliament (not Ministers) and of local government. The chairmanship (sic) should alternate annually between the parliamentary and the local government sides. It should meet regularly and local government policy issues should be able to be placed on the agenda by either side. Any local authority or MSP should have the right to submit papers on agenda items. Scottish Ministers may be invited and should be entitled to attend and speak. At least once a year all council leaders should be invited to attend. The Conference should work towards improved public service standards, provide an opportunity for the exchange of ideas, review policy and consider legislative proposals. It should produce an annual “State of Local Government” report. It is recommended that the Joint Conference be set up by 1 January 2000.

These are positive proposals which should be welcomed by local government as a distinct improvement on previous arrangements between local and central government.

Relations between local government and the Scottish Ministers

There is already in existence a formal working agreement between COSLA and the Scottish Office. McIntosh recommends that a similar agreement should be established between local government and the Scottish Ministers. A draft is included as an appendix to the Report. The general principles are almost identical to those suggested for the Covenant. In addition, it suggests that the Scottish Ministers should commit themselves to consultation with COSLA, as the representative body of local authorities in Scotland, on policy issues affecting local government. COSLA should also be consulted during the pre-legislative phase on legislative proposals affecting local government. Sufficient time should be allowed, where possible, for a considered and representative response.

Scottish Ministers should always convey public announcements directly concerning local government to COSLA no later than to the media and, where possible, in advance. COSLA should reciprocate in relation to announcements concerning Scottish Ministers.

The First Minister and the Scottish Ministers responsible for major services should meet COSLA on a regular basis to exchange views. Either side should be able to request ad hoc meetings to discuss a specific subject. COSLA should be consulted on the appointment of local government representatives to other bodies.

Local government will certainly welcome consultation, provided it is genuine. Genuine pre-legislative consultation should prevent unworkable Acts such as the poll tax legislation reaching the statute book.

A power of general competence

The legal position at the moment is that local authorities may do only those things which statute law empowers them to do. Anything else is ultra vires. In many other countries local government may do anything for the benefit of their communities which is not specifically reserved or prohibited or provided for through other legislation. Such a power is generally referred to as a power of general competence

The McIntosh Report recognises that legislation giving local government power of general competence would require careful drafting but nevertheless sees significant benefits in providing such a power. These include:

  • Giving specific statutory form to the principle of subsidiarity on a parallel with the Scotland Act itself which empowers the Scottish Parliament to do whatever is not specifically reserved to Westminster;
  • Giving statutory expression to the unwritten purpose of a local council, namely to be the voice of its people and promote their interests;
  • Facilitating the process of community planning by increasing the freedom of councils to take part in joint action with other agencies.

There is no doubt that the ultra vires rule has caused problems to local government and to those with whom it works. For example, it was held in Morgan Guaranty Trust Company of New York v Lothian Regional Council 1995 SLT 299 that local authorities had no power to engage in interest rate swaps, a decision which, along with similar English decisions, led to unwillingness on the part of financial institutions to deal with local authorities. Local government would therefore welcome a power of general competence embodied in statute. Whether the Scottish Executive will be willing to grant what may appear to be carte blanche to local government is another question.

Local government and the wider public sector

The Scottish Parliament is concerned with the entire range of public service in Scotland including the various Non-Departmental Public Bodies and other quangos. Given the unique role of local government which stems from its elected status, McIntosh recommends that in any review of other bodies delivering public services, the option of transfer to local government should always be considered. Likewise where new services are being developed prior consideration should always be given to whether local government should be the vehicle of delivery, subject to efficiency and cost-effectiveness.

This recommendation, too, will be welcomed by local authorities which have seen, over the last twenty years, a progressive transfer of many of their more important functions to unelected bodies.

Conclusion

The recommendations in the first part of the Report are fairly bland and will broadly be welcomed by local government. Whether the proposal will work will depend very much on the philosophies and personalities of the Scottish Ministers and the councillors involved in subsequent discussions and implementation. The chapters on electoral reform and the conduct of council business are much more contentious and will be addressed in a future article. There is, however, a worrying thread running throughout the whole of the Report. It patronises local government. It assumes that local government is caught in a time-warp and has not moved on for decades. This is patently not true. Local government over the last twenty years has had to contend with an onslaught from central government. It has had to contend with an almost impossible financial regime, with compulsory competitive tendering, with a politically inspired reorganisation which has left it weakened. Yet it has survived and in Scotland is relatively popular. Is it too much to hope that the Scottish Parliament will take a less jaundiced view of local government? The answer is probably and unfortunately “Yes”. 

Jean McFadden is a lecturer in Public Law at the University of Strathclyde and former leader of Glasgow City Council.