Discover The Facts

Historically, local government has had two unusual characteristics: it was the only institution other than Parliament directly elected by the people and it was the only other institution which had the power to tax.  This was a measure of the importance of local government.  As the tier of government closest to the people, local government in theory is best able to understand and respond to the needs of the people.

However there is a tension between central and local government: between acknowledging the need for minimal national standards, and acknowledging the role of local government as best placed to understand the needs of the locality.

In recent years, there have been grave concerns about the vitality of local government and the management of this tension.  One recent report found that local government in Britain lacks constitutional protection and financial autonomy, and suffers from too much central government intervention - it has become entirely subordinate to central government.  Perhaps as a result, voter turnout for local government elections has dropped to around 30-40% of the electorate.  It is not surprising that one academic has talked seriously of ‘the demise of local government’. † More

The trend in the 20^th century, which shows no signs of being reversed in the 21^st, is increasing central government control.  Local government boundaries and functions have been and are being continuously altered by central government and the exercise of local government functions are subject to oversight and regulation.  However the most important control is fiscal.  Local governments are deeply dependent on central government grants.  Professor Bogdanor has reported that local government is responsible for roughly 25% of all UK public expenditure, but raises only 4% of tax revenue.

Turnout at local government elections has been declining, dropping to between 30% and 40% of the electorate, suggesting to many that there is a crisis of local government.  Vernon Bogdanor and others have suggested that key reasons for this decline of interest in local government include:

• The centralisation of the British state and the subsequent ‘hollowing out’ of local government
• The dominance of political parties in local government
• The increasing mobility of British citizens, leading to a loss of connection with locality

Until the 20^th century, the boundaries of local government were determined mostly by historical circumstance.  They were not created by the centre but were based on the territorial divisions of historic communities.  These local divisions were the key units with which the central government worked, often through statute.

In addition, at the beginning of the 20^th century, local government was responsible for most basic services.  However, since the 1930s, local government has slowly been stripped, either partly or wholly, of various duties.  Responsibilities for various areas of life such as electricity, health, housing, education and planning have gradually been assumed by various bodies like central government, executive agencies, privatised organisations and quangos.

The 1972 Local Government Act (which took effect in 1974) replaced over 1300 existing authorities with 422.  The objective was to make local government administratively easier for the central government to work with, but also to make local government more comprehensive to the people.  However, the reorganisation also had the effect of destroying the traditional boundaries which had till that point existed: it was difficult for people to identify with the new, administratively convenient units.

Further reorganisation of localities in England, Scotland and Wales took place under both the Thatcher and Major governments. The Conservatives tended to see local government as an impediment to reform, particularly as many local authorities were run by the Labour Party.

As a result of the 1972 reorganisation and later changes, local authorities in Britain are now larger and are responsible for a greater proportion of the population than the local authorities of any other Western European state.† More

The trend in the 20^th century, which shows no signs of being reversed in the 21^st, is increasing central government control.  Local government boundaries and functions have been and are being continuously altered by the central government: there is no constitutional protection for local government.  But there are other ways in which local government remains at the whim of the central government.  For instance, local authorities, in exercising their functions, are subject to oversight and regulation.  But by far the most important control is fiscal: local governments are deeply dependent on central government grants.  Council tax, while collected by local authorities, is passed to the UK Treasury who then redistributes the money in accordance with need and performance.

There have been a number of reports critical of the centre-local relationship, which call for a readjustment in favour of local government; but these as a rule have been ignored by central governments. † More

A key result of the complexity of local government structure, the overwhelming fiscal reliance on central government funding, and the shifting obligations imposed by the central government is that the lines of accountability between people and their local authority are blurred and unclear.  Many people remain confused about where responsibility for particular government functions lie.

Structure and Composition

Generally speaking, local government in Britain is a mixture of one and two-tiered systems.  Scotland, Wales and Northern Ireland all have unitary local authorities which carry out the majority of local government functions in their areas and have done so since the 1990s.  England, however, remains a mixture of one and two-tier systems as reform has taken place on a piecemeal basis.  As a rule, metropolitan areas have a single tier of local government; ‘shire’, or rural areas, often have two tiers, which share responsibility for local government functions.  In some parts of England, there is also a third tier of local government: town and parish councils.

The 1972 Local Government Act introduced a two-tier system for England and Wales.  For major urban areas, six metropolitan councils were established.  Under this level there were 36 metropolitan district councils.  The metropolitan councils were mainly concerned with strategic direction; the metropolitan district councils were responsible for local services such as housing, education and social services.  In rural areas, there was a similar division of functions with 47 county councils and 333 district councils below them. † More

In more recent years there has been a trend towards the establishment of unitary authorities as two-tier authorities were felt to be too remote from the people and because two tiers were thought to be obstructive in implementing central government decisions. The six metropolitan councils and the Greater London Council were abolished in 1986, and more recently in the shire areas responsibilities for local government have been transferred to unitary authorities.

At present, the structure of local government in the UK is as follows:

England:

• London: 32 London Borough Councils (plus the Corporation of London), the Greater London Authority, and 4 single purpose authorities
• Metropolitan areas: 36 Metropolitan Borough Councils, and 20 single purpose authorities
• Shire areas: 47 English shire unitary authorities (including the Isles of Scilly); 34 County Councils and 238 District Councils, plus 55 single purpose authorities. There are also about 9000 Parish or Town Councils

Scotland: 32 unitary authorities (unitary councils)

Wales: 22 unitary authorities

Northern Ireland: 26 unitary authorities † More

Elections

There are over 20,000 local councillors in England and Wales.  In England and Wales, local councillors are elected on the first past the post system.  In Scotland and Northern Ireland, the single transferable vote system is used.  Local elections as a rule take place every four years.  The requirements to qualify as a candidate in local elections are similar to that of candidates in general elections, but with the additional requirement that a candidate must be able to show a connection with the area—for instance, owning or renting property in the area, or having worked or lived in the area in the year leading up to the election. † More

In the postwar period, local government has gradually come to be the province of political parties.  Currently more than 90% of all local councillors belong to a political party.  Perhaps as a result, local government elections are used by voters to register their approval or disapproval of central government policies and decisions.  Thus it is sometimes the case particularly where one political party has long been in power at the centre, that local government is run by opposition parties.  This is one reason why the centre-local relationship remains difficult. 

Local councillors are supported in their work by local government officials, who provide policy advice and implement the decisions of councillors, in much the same way that civil servants do for the central government.  In 2007-08 local authorities employed just under two million full-time employees.  Councillors are not paid a salary or wages, but they are entitled to allowances and expenses to cover some of the costs of carrying out their public duties.  They are not council employees.  The elected councillors provide the policies, and then paid employees (council officers) put them into practice.

Since 1997, there have been attempts to revitalise local government.  The Local Government Act 2000 in particular was aimed at increasing voter interest in local government.  Prior to 2000, local government decisions were, in practice, determined by the committee system.  Under the committee system, the executive and legislature were one, but the reality was that the dominant party—the party with the majority—made the key decisions, and often ‘behind closed doors’.

The Local Government Act 2000 gave local governments a choice of three separate model arrangements:

• a mayor and cabinet
• a council leader and cabinet
• a mayor and council manager (this option was later abolished)

Central government had hoped local governments would adopt the mayoral option: this would break the hold of party over local politics, separate the executive from ‘the legislature’, and in turn re-excite interest in local government.  However, between 2000 and 2008 only 11 local authorities have switched to the mayoral model; the vast majority have opted for the leader and cabinet model.  Under this model, the leader is indirectly elected by councillors, which in effect means the leader of the majority party is chosen.  This is, of course, the model closest to previous arrangements.

In addition, there is usually a single or several overview and scrutiny committees, mostly run by those councillors not part of the local authority executive.  They operate to scrutinise the work of the council.

The Functions and Powers of Local Government

The functions and powers of local government are determined by statute.  Put differently, the central government ‘giveth and taketh away’: the functions and powers local authorities have are determined by what central government thinks is appropriate.

Local authorities have a mixture of statutory duties and discretionary powers.  For instance, the 1977 Homeless Act required local authorities to provide care for the homeless; the 1992 Community Care Act required local authorities to provide care for all those who needed it.  The Local Government Act 2000, on the other hand, gave local authorities the broad discretionary power to promote the economic, social and environmental well-being of their area. † More

As a general rule, unitary authorities are responsible for the vast majority of local government functions, such as strategic planning, education, transport, housing, social care, waste collection and disposal, and local taxation.  Where there is a two-tier system, matters become more complicated.  County councils are responsible for functions such as strategic planning, education, transport, waste disposal and social care; district councils are responsible for housing, planning applications, leisure and recreation, waste collection and local taxation.  Policing, fire and rescue are often the responsibility of single purpose authorities, whose remit may spread across two or more local authorities.

The diagram below sets out in more detail the division of functions between the various tiers of local government in England.

How these functions are carried out depends on the particular local authority.  In academic terms, there has been a shift from local government to local governance in recent years —that is, there has been a shift from one body (local government) which both makes policy and delivers services, to a number of bodies with overlapping roles, which govern at the local level.  Local government is no longer a ‘provider’ of services but often an ‘enabler’.  

Local authorities and the exercise of their functions are subject to scrutiny by various central government bodies such as OFSTED (the Office of Standards in Education) and the Audit Commission.

There are also a large number of quangos, or semi-autonomous government agencies, working at local government level.  One 2001 report set the number of quangos at over 5000, employing over 60000 people.  These include NHS trusts, primary care groups, higher and further education institutions and police authorities. 

Local Government Finance

A major factor in understanding the position of local government within the British constitution is local government’s fiscal status. Local government expenditure has increased steadily since the 1950s, and usually at a faster rate than the economy as a whole.  Since the financial crises of the mid-1970s, however, central governments have sought to control local government expenditure.  In spite of local government’s capacity to tax, the distinguishing feature of local government finance is overwhelming control by the Treasury.

Key statistics

• In England, local authorities’ total expenditure was £154 billion in 2007-08, or 27% of national public expenditure.
• Net current local government expenditure in 2007-08:
  • education = 37% of the total
  • social services = 17%
  • housing = 15%
  • police = 11%.† More
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    Source: Local Government Finance statistics—England http://www.communities.gov.uk/documents/statistics/pdf/1240022.pdf

Professor Vernon Bogdanor makes clear the problem.  Local government is responsible for roughly 25% of all UK public expenditure, but raises only 4% of tax revenue.  Such a lopsided result makes it difficult for voters to see the relationship between what they contribute to local government, and the services they receive.

Funding for local government comes from three main sources:

1. Grants from the central government (and the devolved administrations) (55% of total revenue)
2. Local taxation on domestic properties—i.e., council tax (about 25%)
3. Local taxation on business properties—i.e., non-domestic rates (about 20%)

Grants from the central government are made in two forms: grants earmarked for particular purposes; and general grants.  General grants are determined by an assessment made by the centre about how much each local authority needs to reach the standard level of service.  

The non-domestic rate, or business rate, is set by central government, collected by local authorities, and then re-distributed by central government on a formula basis.

Only council tax is under the control of local government, but this is capped by central government—that is, there are limits on how much local authorities can raise tax.† More

Moreover, the central government sets strict limits on local government expenditure—that is, local government is restricted in how much money it can spend from asset sales (for instance, revenue from the sale of council housing).

Thus, the autonomy of local government is severely limited by the central government’s financial controls. † More

Local Government in London

London, the largest city in the United Kingdom, has always had a relatively weak form of local government: no British government has wanted to create a London government which could compete with the centre.  Until 1963, London had no city-wide government at all.  In 1963, the Greater London Council (GLC) was established, along with 32 boroughs, to cover both inner and outer London.  In 1985, Margaret Thatcher’s government abolished the GLC, after several clashes with the Labour-controlled Council. London was run by the central government and the boroughs until 1999.

After a referendum, the Greater London Authority (GLA), consisting of the London Mayor and Assembly, was established in 1999.  In essence the GLA is a strategic authority charged with the development of London, but it is the London boroughs who must implement these policies.

The Mayor and Assembly are elected in different ways: the Mayor directly by first past the post or the supplementary vote system; the 25-member Assembly by proportional representation.  There is a fixed four year term for both Assembly and Mayor.  Both the Mayor and GLA members are salaried. † More

The GLA is a strategic authority, with responsibilities for such areas as transport, policing health and economic development. † More

Key functions of the GLA are carried out by:

• the Metropolitan Police Authority
• The London Fire and Emergency Planning Authority
• Transport for London
• The London Development Agency

The London Mayor has an executive role, directing the GLA, setting policy and the £4 billion budget.  The Assembly has a supervisory role.  It can scrutinise, but not reject the Mayor’s policies and actions and it can only amend or reject the Mayor’s proposed budget on a vote of two-thirds of the Assembly.  The effect of this arrangement is to give the Mayor far greater autonomy, and in the eyes of Londoners, far greater visibility; while Assembly members are virtually unknown. 

Below the GLA are the 32 boroughs and the Corporation of the City of London.  The relationship between the GLA and boroughs is complex and not easily explained by logic.  The GLA, and the Mayor in particular, sets strategy; but it is up to the boroughs and central government to implement this strategy.  Thus, in practice it is not the Assembly which checks the Mayor but rather the boroughs.

As can be seen in the diagram above, it is the boroughs (and the Corporation of London) who have responsibility for most local government functions, such as housing, social care, health and the collection of local tax.  They are not responsible for local policing or fire and rescue. † More

Put differently, the Mayor of London is only responsible for about 10% of public expenditure in London; expenditure on the NHS, higher education, housing and social security is determined by the central government; social care, local transport and planning are determined by the boroughs.

Finally, while the boroughs are in the same position as other British local authorities, heavily dependent on central government funding, the GLA also lacks truly independent sources of revenue.  Revenue for the GLA comes from a number of sources:

• Grants from the central government (75-80%)
• A ‘precept’ on council tax: the GLA does not directly tax but takes a proportion of council tax collected by the London boroughs (15%)
• A variety of fees including the congestion charge † More
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  Vernon Bogdanor The New British Constitution (Hart Publishing, Oxford, 2009)

Thus, despite the identification of the GLA and the Mayor with the governance of London, it is not clear to what extent they can or ought to be held accountable for what happens within London. † More

Centre-local relations

In short, it is clear that local government is mostly at the mercy of central government. 

• Local government can only do what it is given the authority to do by the central government
• Local government and service delivery is subject to supervision and scrutiny by various bodies (for instance, OFSTED)
• Local government is heavily dependent on central government for funding, and limited in what revenue they are able to raise independently

In 2007, a central-local concordat was signed, which at least in theory recognised that local government should have greater autonomy from central government.  This concordat, however, has not been followed in practice. † More

Policy Exchange

The Decline and Fall of Local Democracy: A History of Local Government Finance

http://www.policyexchange.org.uk/assets/The_Decline_and_Fall.pdf

I'm a Local Councillor, Get Me Out of Here: England's System of Local Government Finance

http://www.policyexchange.org.uk/images/publications/pdfs/pub_26_-_full_publication.pdf

Nothing to Lose But Your Chains: Reforming the English Local Government Finance System

http://www.policyexchange.org.uk/images/publications/pdfs/Nothing_to_Lose_But_Your_Chains_-_Aug__04.pdf

The Commission on London Governance A New Settlement for London (2006)

http://legacy.london.gov.uk/assembly/reports/londongov/new-settlement-vol1.pdf

Electoral Reform Society The Great Local Vote Swindle

http://www.electoral-reform.org.uk/oldsite20070123/publications/briefings/Local%20elections%2006.pdf

Electoral Reform Society Local Authority Elections in England

http://electoral-reform.org.uk/downloads/Englishlocalreport2007.pdf

House of Commons Communities and Local Government Select Committee Sixth Report: The Balance of Power: Central and Local Government (HC 33-1, HC 33-2 2009)

http://www.publications.parliament.uk/pa/cm200809/cmselect/cmcomloc/33/33i.pdf

Sources and further reading

Martin Loughlin “The Demise of Local Government” in Vernon Bogdanor (ed) The British Constitution in the Twentieth Century (Oxford University Press, Oxford, 2003)

Tony Travers The Politics of London: Governing an Ungovernable City (Palgrave Macmillan, Basingstoke, 2003)

FN Forman and NDJ Baldwin Mastering British Politics (fifth edition, Palgrave Macmillan, Basingstoke, 2007)

Vernon Bogdanor The New British Constitution (Hart Publishing, Oxford, 2009) 

Mark Garrett and Philip Lynch Exploring British Politics (Second edition, Pearson Education Limited, Harlow, 2009) 

Local Government Finance statistics—England

http://www.communities.gov.uk/documents/statistics/pdf/1240022.pdf

Local Government Finance statistics—Scotland

http://www.scotland.gov.uk/Topics/Statistics/Browse/Local-Government-Finance

Local Government Finance statistics—Wales

http://wales.gov.uk/topics/statistics/publications/wlgf09/?lang=en

Department of the Environment—Northern Ireland

http://www.doeni.gov.uk/index/local_government.htm

House of Commons Library Standard Note “The Central-Local Concordat”

http://www.parliament.uk/commons/lib/research/briefings/snpc-04713.pdf

The Lyons Inquiry into Local Government (2007)

http://www.webarchive.org.uk/wayback/archive/20070428120000/http://www.lyonsinquiry.org.uk/index.html

House of Commons Communities and Local Government Select Committee Sixth Report: The Balance of Power: Central and Local Government (HC 33-1, HC 33-2 2009)

http://www.publications.parliament.uk/pa/cm200809/cmselect/cmcomloc/33/33i.pdf

Key Websites

The Local Government Association

http://www.lga.gov.uk/

The Department of Communities and Local Government

http://www.communities.gov.uk/corporate/

House of Commons Communities and Local Government Select Committee

http://www.parliament.uk/parliamentary_committees/clg.cfm

The New Local Government Network

http://www.nlgn.org.uk/public/

The Institute of Local Government Studies

http://www.inlogov.bham.ac.uk/