Wednesday 14 September 2011

Localism or centralism?

There have been some significant changes in the way we are governed in this country over the last decades. Political scientists talk about a shift from government to governance. And politicians complain that, once in power, they can decide precious little, while unelected bureaucrats in Europe or impersonal market forces are the real diving forces of the political agenda.

Curiously, the current government has embarked on a fundamental reform of government that can, at first glance, only compound these problems: I am talking about localism, the desire to devolve decision making powers to the local level, away from London and its faceless civil service. It seems to me that there is little to be gained for the current government if it is successful in this reform. In fact, they have a lot to lose.

Conventionally, central government is held responsible for pretty much everything that goes wrong, from ill-thought out foreign adventures to burst pipes in the local street. Yet, political observers agree that central government has fewer mechanisms today to make decisions that affect people than it used to. A large number of laws are 'adopted' from Europe where European directives are taken over wholesale into the body of national law. On the other hand, national governments are no match for the economic might of international companies, not to mention hedge funds or banks as the recent liquidity crisis in the European Union reveals.

Yet here is the crunch point. Central government is also squeezed by the forces of devolution, transferring power to the four home nations, as well as by the principle of localism. Now, localism is nothing new. It was already the rallying cry of Blair's first government and even Margaret Thatcher talked about it. However, neither Thatcher nor Blair's governments actually put in place the mechanisms to devolve substantial powers to the local communities. The community regeneration partnerships under Blair are a good example. They were the attempt to let communities participate in decision making without quite giving up on pulling the strings, not least the purse strings. The fact is that genuine localism would involve the transfer of tax raising powers to local authorities (beyond council tax and some business rates), a step still unthinkable in the UK.

So, this government is stuck in the same conundrum as those before: between a rock and a hard place, increasingly unable to make decisions, yet held responsible for everything that affects people in their local community.

The latest example of this is the cut to the local authorities budgets by the Local Communities Department. While cuts are administered across the board (with some thought to differential need), it is up to the local authorities to structure their budget in such as way that public services remain viable. The reaction of local councillors have ranged from constructive co-operation to outright obstinacy. We will see who will be blamed if and when public services take a knock. My guess is central government will get it 'in the neck' whatever it does.

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