English Local Government: Take-off velocity or holding pattern?
7 November, 2007

Dick Sorabji, Deputy Director, NLGN
Auckland University of Technology

2007 has already been the busiest year for new policy on local government since Labour came to office in 1997. All announcements have danced around Michael Lyons’ concept of ‘place shaping’. Lyons argued that councils should not be judged on the delivery of specific services, but instead on achieving outcomes that change communities for the better.

Lyons described much of this agenda. His interim report in December 2006 touched on new approaches to governance, the need to move away from nationally driven targets and the vital role of local government in driving economic growth. His final report emphasised greater fiscal autonomy from Whitehall.

These ideas have re-surfaced in government policy plans this year. Those plans have removed the grey zone in which the choice between further centralisation or devolution could be fudged. However, they have not all pointed to the same conclusion.

The contradiction is explained by a dilemma that will underpin much of British politics until the general election is finally called in 2009 or later. National policy goals increasingly depend on place shaping and so require devolution. Yet Whitehall fears letting go and distrusts local government accountability.

So when Lyons’ called for real fiscal autonomy through reformed council tax it was rejected by all parties in Parliament. Yet the tight financial settlement in the autumn spending review will mean above inflation rises every year. Council tax reform is back on the agenda

Government supported his call to cut the burden of national targets. The old Comprehensive Performance Assessment (CPA) is being replaced. The October spending review cut national targets on local government from 1200 to 200. Central government has tried to be more joined up through an improved set of 30 Public Service Agreements (PSAs) that cut across departmental silos.

Whitehall followed Lyons’ advice, creating more room for place shaping. However, it was only days before the first attempts to re-centralise broke cover. An important test for devolution in England will be whether new performance controls to be announced in November support devolution, or draw power back towards the centre.

Economic growth is the most tangible example of place shaping. It has long been a priority for Gordon Brown. The sub-national review of economic development proposed a duty to promote economic well being. Groups of councils covering natural economic areas are to lead growth plans through multi-area agreements (MAAs). Where MAAs are managerially robust and have support from local public and private sectors the promise is that national public services will have to bend their plans to meet local needs.

Yet Whitehall won’t let go without reassurance on the quality of governance at local level. The review proposed that England’s part elected Regional Assemblies be abolished. It is not yet clear whether they will be replaced by greater power for local leaders, or by centralising to the newly created Regional Ministers. The outcome may turn on the transparency of local accountability.

While worried by standards of local leadership, central government has avoided paying the political price of imposing solutions. So in the Local Government Bill new models of leadership are optional. The Governance of Britain sets out Brown’s plans for constitutional reform; yet local government is hardly mentioned.

When Brown pulled back from an early election he said that he wanted a contest based on vision not competence. Devolution and place shaping are embedded in the details of his policies, but it is not yet his vision. Nor has any other political party embraced devolution as the key to its programme.

These uncertain steps towards a new way of governing reflect contradictions at the heart of government. Both Whitehall and Brown have accepted the logic of devolution. Yet in their hearts central control remains the more comforting option. As a result reform has created the space in which councils can try to demonstrate their skills in place shaping, but Whitehall lacks the confidence to endorse those efforts until after they succeed.

So it seems that the future prospects for place shaping depend on local government’s ability to create the political agenda. Shaping the political agenda is the essence of place shaping and so that responsibility may be a fair price to pay for autonomy.