Setting the scene to examine the coalition approach toward local government, and in particular local government finances, it is important to review central/ local government relations immediately prior to to 2010 election and first spending review. The coalition approach has been characterised by interviewees as claiming the introduction of devolved powers and freedoms but actually creating constraint through legislation and most particularly through budget control and austere reductions.
The previous government and their policies toward local councils also claimed to be devolving powers away from Westminster. The final Communities and Local Government Committee report (the sixth) published in 2009 and entitled 'The Balance of Power: Central and Local Government' was charged with assessing the degree to which this had been achieved. Despite the ministerial view that the then government had created new freedoms for local government, the opening lines of the report's conclusion said, "There is clearly a wide division of opinion between the Government’s view of recent developments and the views of the majority of our witnesses, many of whom believe that central direction and control remain unchanged or even that they have increased. The Government’s record appears to us to be mixed. There remains a sizeable gap between the newly empowered local government that the Government believes it has established in principle, and the actual impact as witnessed at the local level. (Paragraph 28)" (HoC 2009, 60)
Similarly, though nowhere close to the general definition of 'austerity' we might use now, councils were familiar with budget reducing measures. Few in local government would claim this to be an overt control methodology, as is more openly the case today, but would rather characterise it as simply another example of the 'patriarchal' relationship between central and local government. Efficiency was a local government buzzword and authorities were relatively comfortable working in an environment of 'efficiency' savings of between 2-3% per year, following the independent review conducted by Sir Peter Gershon in 2004. This approach had created a culture of budget stability and prudence, most often referred to as 'salami slicing' to reduce council directorate budgets. That said, these efficiencies were not linked to an overall decrease in the total amount of central government grants.
Taking as the start of 'austerity' the first coalition government Comprehensive Spending Review (CSR) of 2010 there is an immediate and marked increase in the reductions required. This was a total grant reduction rather than a drive to squeeze out greater efficiency and productivity from existing spend areas. Cutting substantially larger proportions from budgets, especially when the reductions were heaviest in the first year of the CSR period, forced Councils to adjust quickly to the new reality of ongoing austerity. Ironically the burden fell particularly heavily on some Conservative controlled authorities, who had, as trailblazers for local government efficiency, already made radical reductions in spending and even service provision to fund council tax freezes or reductions over a period of some years. Having trimmed the authorities to such an extent they were to find themselves facing the same 28% cuts to an already very lean council.
Research areas/ questions
How different was the budgeting and planning approach taken after the spending review of 2010 to that before?
How prepared/ resilient was local government (your authority) for the level of reductions?
What was the approach and the rationale for that approach, which your council took in dealing with these levels of financial constraint?
In these initial questions I hope to gain a picture of the level of 'seismic' shock that local government experienced as well as how and why the first strategies to cope came about.
Questions will then examine the constraints on these strategies; legislative, structural, political and personal. Underpinned by theoretical themes on structure and agency, rational choice and leadership.
References:
House of Commons (2009) The Balance of Power: Central and Local Government, Communities and Local Government Committee - Sixth Report (London, The Stationary Office ltd.)
Gershon, P. (2004). Releasing Resources for the Frontline: Independent Review of Public Sector Efficiency (Norwich, HMSO)
