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Category Archives: Local government

Local Government Pensions: People in Glass Houses Shouldn’t Use Trebuchets

The Daily Mail (which I would point out is not my newspaper of choice) has got the Left worked up over a claim they repeated again yesterday.

Taxpayers had to find almost £6billion to maintain the pensions official accounts show – a sum that swallowed up nearly 28% of the council tax collected

This has upset the ironically named* public sector campaign group The Campaign for Pensions Justice.

Oh dear! The 25 per cent council tax fallacy is back

[…]

Readers are no doubt meant to think that councils are now spending more than a quarter of their funds on pensions every year.

But this is a trick.

Nice wickerwork on that straw man there!

Councils do not just get money from council tax-payers. They also get a business rate from local companies and income from charges such as parking charges and fines. But their biggest source of income – at least for most – is income from central government. These together pay for council spending – a big part of which will be on staff costs given that much of what councils do is pretty labour intensive.

OK, the article simply says that £6bn is equivalent to 28% of council tax. The CPJ aren’t denying this, or maybe they are, given the title of their blog post. Anyway, the implication could equally be that without that £6bn (an unlikely situation, granted) council tax would be reduced by 28%. Also true.

Unfortunately the CPJ aren’t too careful with their own facts. Councils don’t ‘get’ business rates; they collect the rates, which are then remitted to the government, who then redistribute that money around the country. Some councils do well out of the deal, some not. The system is due to change soon, but it’s a bit rich for the CPJ to criticise the Daily Mail for a lack of precision with the facts.

However, all this is trivial compared to the hypocrisy of the Left in making some of their own claims on the subject of the Local Government Pension Scheme (LGPS), which are far more misleading than the Daily Mail piece. Let’s look at just the first point from here:
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How the Council Tax Freeze Could Become to a Quick Thaw

Among the (intentional) headline-grabbers at last week’s Conservative Party Conference was the underwhelming news of the council tax freeze being extended for a second year; news that had been known to local councillors and council officers for some months already.

Puddle

Council tax freeze ... and for next year?

However, it now seems that all was not quite what it seemed, and that the announcement is indeed a surprise to local government, and not in a good way.

The nasty surprise was tucked away, as they so often are, in the smallprint, in the notes at the bottom of the Treasury’s media release.

If an authority sets its basic amount of council tax (i.e. its Band D council tax) in 2012-13 at a level which is no more than its basic amount of council tax in 2011-12, it will receive a one-off grant equivalent to a 2.5 per cent increase.

Did you spot it? “One-off grant” – words so inoccuous they passed by deadline-watching journos.

“So what?”, you may ask. It means, quite simply, that the residents of any council taking advantage of the extra money to freeze their council tax could be facing a stinging double hike in the tax in 2013. Let me explain….

This current year’s freeze was funded by money that was given as an increase in the annual (recurring) grant to councils. This makes sense, since council tax is a recurring annual revenue stream. It would be like someone saying they’ll protect you from next year’s increase in your fuel bills by paying you an ongoing regular annual income equivalent to the increase in next year’s costs.

Now suppose someone made that same promise, but to do it they would give you a pile of cash equal to the extra costs next year, but that was it. For that next year, all would be well. The following year, though, you would still face not only the higher prices from the year just gone (which had been offset by that pile of cash), but also the following year’s increase. While you have been protected from the increase in year one, you now face a double whammy because the gift only lasted for that one year. All that it has done is put off the inevitable, so now you have to pay for both increases at the same time.

And so it has turned out to be with the money for the second year’s council tax freeze. Like this year, it will be paid to councils bringing their budgeted increases to 2.5% or less, but if they want to avoid the ‘bounce-back’ in council tax next year, they actually will have to cut their budgets to a 0% increase anyway, before getting the grant.

As a proponent of low taxation, I don’t necessarily see that as a bad thing. However, Osborne and Pickles are playing the same media game as Labour by suggesting that the freeze has been extended for another year when, in fact, all that is being offered to councils is a reward grant for keeping the tax down, by their own devices, for a second year running.

Perhaps more damning, it is the sort of faux-localism which was so beloved of Labour, complete with the moral blackmail of raising the public’s expectations.

I’ve nothing against tax cuts – one form of fiscal stimulus that actually works – put please, Eric Pickles, call a spade a spade; it’s what northerners are meant to be renowned for isn’t it?

Is Eric Pickles Rewarding Failure Now?

Eric Pickles, British politician and Chairman ...

Eric Pickles: (make up your own caption)

Eric Pickles, Secretary of State for Communities and Local Government, has come forward with another potentially popular and localist announcement, pre-conference:

Weekly bins are on the way back!

Minister pledges £250m fund to PAY councils to dump fortnightly rounds

Local authorities will have to guarantee weekly bin rounds for five years to qualify for funding
[…]
In a victory for householders and the Daily Mail, ministers unveiled a £250million fund to restore them.

Local Government Secretary Eric Pickles said councils will now have ‘no excuse’ to maintain hugely unpopular fortnightly schemes. ‘My view has always been that people expect a weekly collection,’ he said.

He cannot force town halls to go back to weekly collections, but made it clear that voters should throw out councils which do not – a provocative suggestion, given that many of those that have gone fortnightly are Conservative controlled.

Mr Pickles told the Daily Mail: ‘I’ve had council leaders sitting at this very table who claim their public like a fortnightly collection and are very supportive. Well, good luck to them. Come the elections, there can be no excuses.’

Well, that’s nice. Nice if you’re the sort of council who simply cut the collections to fortnightly, with the spurious justification of ‘going green’, and faced a revolt from residents who would be equally rebellious (and understandably so) against any increase in council tax to restore what they thought they were already paying for.

In other words, this morning you will be delighted if you are a council that messed up (sorry) and are now being bailed out; rewarded for your failure.

Where I live, however, I’m not so sure they’ll be so pleased. We have fortnightly collections of general waste and non-paper recyclable stuff, and weekly pick-ups of kitchen waste and paper. Complaints have been very few – honestly: in some council areas the local rag’s letter pages would be bulging week after week with angry missives, ours have barely registered one. The reason is that the council has done it properly: still picking up the smelly, rat-friendly organic waste weekly, and thus immediately dealing with the main gripe of ‘fortnightly’ collections. In doing so, they have surely forsaken some of the savings that could have been made by the Foxtrot-Yankee approach adopted elsewhere.

So, screw up and you will now have been saved by our chum Eric. Well run councils, on the other hand, will likely get nothing extra for their efforts of listening to their residents, some of whom will now have their expectations raised unnecessarily.

As one of the latter councils you might also be somewhat miffed that Mr Pickles has ‘found’ £250m but is not just putting it into the local government formula grant for councils to spend according to their local priorities. ‘Localism’ I think it’s called.

(Pic. credit: The Health Hotel)

Nick and Cut

Coming soon on the free-to-air BBC:

The BBC’s Nick Robinson reveals what happened when the residents of an ordinary street in Lancashire had to run everything for themselves .

Ponder instead how you’d do if you had to run not the whole country but just your own street.

What if you didn’t have a budget but each house had to decide how much to spend on what?

Like a budget, then.

What if you had to organise and pay for the everyday things we take for granted: the bin collection, the recycling, the street lights

Errm, we already pay for them.  This is sounding like it was written by someone who works where other people pay for everything.

If so, come and join me on The Street That Cut Everything – that’s the title of a programme to be shown on BBC1 next week.

The residents weren’t paid for taking part, but they were given back their council tax money for those six weeks to spend – not on themselves but on the needs of their community.

OK, but council tax only accounts for typically a quarter to a third of councils’ income. Why not given them back three times that much to make it more realistic?

You might think that life wouldn’t change that much if the council closed down…

Shift workers woke early to find their street in total darkness…

Not quite “without government the sun wouldn’t rise”, but close.

Children emerged earlier than usual. They could no longer get the bus to school

Because bus services can only be run by councils, you know.

Those who fancied a trip to the local leisure centre to get away from the rubbish and the endless meetings and the cameras found their way barred: it’s run by the council.

… and so on.

I know that some will assert that the programme’s title shows that the BBC has an anti-cuts agenda.

Not just the title, Nick, but anyway … admittedly it would be difficult to believe that the state funded BBC could produce such a programme without having, if not an anti-cuts agenda, then certainly a pro-statist one. Thus so it would seem, with it peddling the idea that such services as leisure centres could not exist without the council to run them. It is part of the wider mindset that if the state doesn’t do it, then no-one will do it. They used to think that about telephone networks once.

Naturally the experiment, from the sound of it, will bear little resemblance to what a properly organised scaling-back of government services, replaced by community-organised efforts stretching beyond a cul-de-sac could achieve (given enough of a lead time). Nor do most, even of the classical liberal tendency, seriously suggest that there should be no government, as the “you libertarians ought to try living in Somalia” commentators from the collectivist Left might like to suggest.

However, whatever the institutional bias at play, it should be an interesting examination of ordinary council taxpayers people’s ideas about (local) government and the work of politicians, council officers and staff. I will reserve my final judgement (for what it is worth!), until then.

Of course, if it’s successful they could always make a sequel; how about a street that did without the BBC …

The Underpaid Prime Minister?

Prime Minister David Cameron

Cameron ... because he's worth it?

Today sees another story about local authority chief executive pay and the ubiquitous comparison with the Prime Minister’s salary – the benchmark by which everyone’s remuneration is to be measured these days in the public sector, and sometimes beyond.

Almost half of councils paid their chief executives more than the £142,500 salary that David Cameron received in 2010.

At least 26 chief executives earned more than £200,000 in 2009-10, while 1,000 council officials were paid more than £100,000.

I know that in Bromley in my own fair county the chief executive has taken flak himself for his £185k salary, though today’s survey does put that figure into context; the likes of Wandsworth’s (pbut) chief exec. are on around £300,000, for heading up a borough with a smaller population than Bromley but receiving considerably more central government grant.

Now for the (probably very) minority view. In comparing such figures, why do we fixate on the PM? Surely what this tells us is that it’s the PM who is underpaid? (Granted, of course, that we’re ignoring the benefits in kind: the job-related accommodation, etc.) I must say that I thought this even when Gordon Brown was still care-taking, though sadly I didn’t blog about it so you’ll just have to take my word for it.

Seriously, though, Cameron has the power (albeit it delegated from Her Majesty, as are all his powers) to send the country to war. He has his finger on the nuclear button. In some respects he has more freedom of action as head of government (at least in practice) than the U.S. President. It is a true 24*7(*365) job. A Chief Executive, on the other hand, cannot go further than the ruling administration will allow.

Which brings us to another key distinction that gets overlooked: a council Chief Executive is the ‘Head of Paid Service’ – that is, he/she is the ultimate line manager for all the Council’s staff. The politicians make the overarching decisions, but he puts them into practice. So the parallel in central government is not the Prime Minister but the Cabinet Secretary – the head of the civil service. Gus O’Donnell (for it is he) earns somewhere north of £235,000. No, that doesn’t mean that he or anyone else on the public purse is immune from scrutiny of their remuneration package, but in a rational debate you must surely start by comparing like with like.

So Farewell, The Audit Commission

The Government Office for London … Comprehensive Area Assessments … now it’s farewell to the Audit Commission. Like Frankenstein, it had grown mutated from its financial roots such as its name suggested to being an instrument of Labour’s paranoid control of local government, delivering the vision of local councils as branch offices of the New Labour project.

I had been wary that the Government’s apparent enthusiasm for smaller government might stop at simply reversing some of Labour’s efforts, yet in abolishing the Audit Commission, Eric Pickles’ team has also undone one of Margaret Thatcher’s centralising turns. The Commission was not one of her better examples of rolling back the frontier of the State, her suspicion and hatred of Socialism, I suspect, trumping any small government instincts.

That wrong has now been righted, and so now we in local government will be on our own with no oversight … apart from our own external auditors, internal audit, scrutiny by fellow members, opposition and the media. Oh, and the small matter of elections.

Now, if Eric would let me know where the Audit Commission will be buried … I feel like a boogie.

As High Streets Struggle, Assembly Calls for More Aspic

It is tempting for us politicians to think that we can make things better by intervening, without stopping to take stock of our previous efforts, and whether they had any effect or even made things worse.

This is something the Mayor would do well to be aware of now that the London Assembly has delivered its opinion on the struggle faced by local shops; troubles not helped by the recession of course.

The report …

…. calls for changes to local, regional and national planning policies – including the Use Classes Order – to offer them more protection…

Deputy Chair of the Planning and Housing Committee, Jenny Jones AM, said:

“People in residential areas need local shops that provide essential services that they can walk to.  They do not need rows of betting shops and internet cafés, or to have to travel to supermarkets by car.”

Whether they need rows of betting shops and internet cafés is hardly for government to decide. They may not need to have to travel to supermarkets by car … yet they might want to.

It seems that some people have an idyllic view of the corner shop, open all hours, which is then brutally crushed by the big supermarket opening up down the road. Yet it’s not the supermarket that closes the shop – it’s the fact that so many people prefer to shop at the supermarket. Tesco et al know this. If they thought that their offer wasn’t better than the existing provision, they wouldn’t waste money opening up.

“Use it or lose it” goes the old saying.

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Lessons in Localism

Something that councillors like me are going to have to get used to is the fact that ‘localism’ means devolving power to the lowest practical level. That sometimes will mean bypassing us altogether, as with today’s “Community Right to Build” proposals from Grant Shapps, where local land trusts can obtain permission via local referenda to build small developments.

I expect that some of my own colleagues will not be happy with this one but, so far, I am.

One group that has already come out against the move, though, is the Council for the Protection of Rural England:

“A more democratic approach to house building is welcome as local people should always be given a say in development…. However, bypassing the planning process is not the way to deliver it and any proposals should include proper planning scrutiny.

“The level and location of development should be informed by a proper assessment of local housing need and an understanding of whether the local environment can accommodate more development. This capacity should be assessed through democratic local plans and not a simple public ballot [my emphasis].”

Yes, you read that last bit right. I think that the term “democratic” in this instance, describing central planning under a system introduced in the 1940’s, is used in the same sense as it is in, say, the “Democratic Peoples Republic of (North) Korea”. (Certainly, at least in the past, it has given us a fair amount of architecture in a similar style too).

I could even comment that the use of the term “Council” in the CPRE’s name is somewhat incongruous, as it suggests a body made up of elected representatives. Perhaps that explains why the CPRE (chief executive: former Labour MEP Shaun Spiers) is so confused about what democracy really means.

When we councillors do draw up our local development plans, we are doing so as delegates of the local communities in our wards, divisions or parishes. At a borough or county level, it is the most practical method of getting democratic input into the process over large areas.

However, if you are talking about a neighbourhood or village, then a local referendum could clearly be a practical option. (Incidentally, Grant Shapps has tentatively suggested a high approval threshold of 80-90%). Yes, consideration must be given to the effect on the local environment, transport routes, schools and other infrastructure, but surely those best placed to judge this are those living in that same neighbourhood? What makes us, the local great and good councillors, think that we know any better? Is that not the philosophy of the paternalistic central state bureaucrat?

Taking of which, just how “democratic” does the CPRE think it is when, under the current system of central planning, a development wins approval after a successful appeal to a planning inspector reporting to his superiors in Bristol? “Not very” would be the answer, I suspect, but there’s no point in being half-hearted if you want to overturn decades of anachronistic state planning machinery.

Darling’s Stealth Council Tax Bombshell

Buried away in Wednesday’s budget speech was the latest waffle about efficiency savings – part of the government’s attempts well thought out strategy to shave a micron or two from cut the deficit. £11bn was the figure.

Part of those plans was £2.3bn from the Department of Communities and Local Government (DCLG).

Part of DCLG’s figures is £2.1bn from “local government efficiencies”. Now where have we heard that terminology before? Oh yes, it’s the fudge that is being used to pay for a major chunk of the costs of “free” home care for the elderly. In that case, it would be achieved by imposing extra duties and costs on councils without fully funding those responsibilities. In the case of the £2.1bn announced on Wednesday, it will simply be a case of reducing the amount of cash that central government gives to councils.

As anyone familiar with these things knows well, when the government says something will be paid out of “local government efficiencies” it means only one thing: it’s going on your Council Tax. If a council could find the required level of efficiencies, they would probably rather use it themselves, either to spend on other services or reduce/mitigate the level of Council Tax.

So, put bluntly, £2.1bn from “local government efficiencies” means £2.1bn on your Council tax … on top of the £250m (at least) to pay for “free” home care (assuming the bill survives and resurfaces in the next parliament).

Let’s grab ourselves an envelope, turn it over, and work out what this could mean:

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Lib Dem Mugged by Reality

This is a somewhat random item to blog about since I’ve never been to Stoke on Trent, but it caught my eye. It’s not going to trouble the psephologists much, but a Lib Dem councillor on Stoke on Trent City council has defected to become the sole (and, I think, first) councillor for the Libertarian Party.

Gavin Webb, who was selected as the Liberal Democrat prospective parliamentary candidate for Burton in 2008 and elected as a Lib Dem councillor on Stoke-on-Trent City Council in 2007, has today announced that he has resigned from the Liberal Democrats.

Stoke appears to have a rather eclectic mix of political groupings – I expect the council must need plenty of committee rooms available for the groups’ meetings nights, what with the City Independents, Labour, BNP, Conservative/Independent Alliance, Lib Dem, the “Non-Aligned” (which, I guess, are independent of the Independents) and the Potteries Alliance (I assume a reference to the area, rather than a trade body).

Now we all know that defections can often be prompted by an anticipation, on the part of the defector, of a fall from grace in their old party – such as a deselection – yet Cllr. Webb was the Lib Dem parliamentary spokesman for Burton. Could this be an example of that rare thing – a genuine defection on a matter of principle?

Whatever. In announcing his departure he says that the Lib Dem party has:

“… unfortunately firmly wedded itself to the belief that there are primarily government solutions to the problems facing our country, and in the process, they are adopting policies that undermine our rights and freedoms as individuals.”

So, it seems a Lib Dem has realised that the Liberal Democrats aren’t actually that liberal anymore. The only question is: why did it take him so long to notice?

(H/T: The Devil)