Putting Communities in Charge

March 10, 2011

Nick Hope, Senior Researcher, NLGN
The MJ

The scale and frontloaded nature of the funding cuts hitting local government means that in many localities the range of services provided by the council cannot be sustained. Local authorities are urgently redefining their fundamental role and purpose. Many are renegotiating the relationship they have with their citizens in an attempt to arrive at a new service settlement.

Limiting the parameters of these debates to decisions about simply stopping services, making trade-offs and transferring services from the public sector to the voluntary sector risks angering, alienating and, ultimately, failing many citizens. NLGN’s latest report ‘Communities in Charge’ argues that rather than simply ceasing to provide specific services, citizens should be given the option to pay for some services through charges if they want them to be provided.

Of course introducing new charging frameworks should not be a short-sighted unilateral attempt to try and fill the funding gap by councils, using residents as cash cows to avoid maximising the potential of efficiency savings. With a proven record in recent years of being one of the best parts of the public sector at delivering efficiency savings and with their strong and unique local democratic links councils are unlikely to act in such an irresponsible way.

Rather, freeing local authorities from Whitehall prescription, control and micro-management so that they can introduce and set their own charges for local services would add a vitally important dimension to a much wider and more profound local conversation which must take place about public service provision. There are a number of areas in which local authorities might wish to consider where they could optimise revenue from charges, such as planning, parking and licensing.

As polling cited in the NLGN’s report indicates, the public supports charging for services if done in a way that is regarded as fair. The evidence suggests that differential charging, based on usage, the ability to pay and to cross-subsidise and support other locally valued services, is regarded as acceptable by the public.

When exploring the possibilities to optimise income generation through differential charges, councils must be ever-mindful of the financial challenges citizens are also under. Decisions about charging frameworks for specific services should not be made in isolation, but as part of charging strategy that understands the wider financial pressures that citizens face and local services with which they interact. Segmentation and mapping of the population by customer groups will be important to ensure certain people are not disproportionately affected.

Implemented well, not only would charging allow councils to optimise revenue generation to protect locally valued frontline services, it could help drive service improvement. Rather than treating citizens as passive recipients and providing basic minimum services, charging will hand citizens greater control over the characteristics of the services they pay for and use.

Charging would also help local authorities to manage demand by influencing behaviour. Decreased charges could encourage people to make greater use of services where service take-up is too low. For example, if a local community is particularly worried about child obesity, children could pay reduced charges or even no charge at all for swimming and leisure facilities. Equally, where demand for local services is unnecessarily inflated through overuse, intelligent service charging could help discourage people from exploiting provision.

Take the example of waste collection. In the UK, citizens who recycle and minimise their waste output are hit by exactly the same charges as those who do not, producing a situation in which these citizens are essentially subsidising – through their council tax – the environmentally-damaging behaviour of others.

Considerable controversy has surrounded the introduction of fortnightly rubbish collections by many local authorities. Currently, many people reportedly still want weekly collections, but it is unclear whether they would be willing to pay for them. Many local authorities already offer optional fortnightly or weekly schemes for differential charges to private business. By allowing differential charging for weekly and fortnightly collection of domestic waste, citizens would be able to choose the collection option they wanted rather than having their choice dictated for them by either Whitehall or the town hall.

Charging by service usage therefore has the potential to create greater fairness; but if designed without care it could generate new and deep inequalities as some citizens are better placed to pay charges than others. Means testing and varying charges, based on the council tax of their property for example, would be a way to ensure that new inequalities do not develop.

Ministers should give far greater discretion to councils so that communities have wider scope to think about how services are paid for and delivered in their local area. Controlling charges so heavily from the centre is inconsistent with the Government’s localist claims and will severely limit the ability of communities to navigate their way to a new, fairer and more sustainable service settlement. The Localism Bill and upcoming Local Government Resource Review must put this right.


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