Prepare for ‘widespread financial failure’, ministers warned

Copied from Local Government chronicle online
30 January, 2013 | By Ruth Keeling

The government must establish mechanisms for dealing with “widespread financial failure” in local authorities, the National Audit Office has warned in its first assessment of the sector’s financial robustness.

A report by the watchdog said Whitehall was failing to understand the combined effects of its policy reforms on councils’ finances. Despite councils having “generally coped well” with the significant cuts made to their budgets, the NAO’s head Amyas Morse warned that councils would struggle to absorb further cuts over the next two years without reducing services.

“The [Department for Communities & Local Government] will need to be able to detect emerging problems and respond flexibly and quickly,” Mr Morse said.

Margaret Hodge, the Labour chair of the public accounts committee, went further, describing herself as “alarmed” by details in the NAO report and describing the lack of transparency over the scale of the cuts ministers had made to council budgets as “extraordinary”.

“The department needs to make clear what it will do if multiple authorities fail financially,” she said.

DCLG ministers and officials will be expected to appear before the committee’s MPs to answer questions on how they have assessed risks and intend to monitor for failure.

“My committee will expect the department to provide us with a clear statement on the financial impact of the government’s changes to authorities’ funding and what this might mean for local services,” Ms Hodge added.

The NAO report details several significant funding and policy changes that have heightened risk and uncertainty for local government.

And in a key finding, it claimed some Whitehall departments had failed to provide DCLG with costed estimates of the effects of their policies on councils.

The watchdog’s researchers discovered that the Department for Education’s 2010 spending review submission failed to include an estimate of aggregate cost pressures or possible cost savings across children’s services.

This omission resulted in DCLG assuming cost pressures on children’s services would be no greater than inflation over the spending review period.

The NAO also discovered that Whitehall departments lacked data on how policy reforms would hit different regions.

Research by the Association of Directors of Children’s Services last year revealed that demand for services had not only gone up – meaning service costs outstripped inflation – but also that geographical cost variations ranged from -30% to +100%.

LGA chair Sir Merrick Cockell said: “It is concerning that the departments examined by the NAO had not fully scoped the demand for and cost of delivering services to different areas and that not enough effort was made across Whitehall to assess what savings were possible before cuts would start eating into frontline services.”

Speaking as the government embarks on a new spending review, Sir Merrick called for assessments of cumulative impact of changes to become “a basic feature” of future government decisions.

DCLG did not respond to the specific recommendation of the NAO report but said: “Every bit of the public sector needs to do its bit to tackle the deficit left by the last administration, including local government which accounts for a quarter of all public spending. Councils need to do their bit to deliver sensible savings, and in turn, protect frontline services and keep council tax down.

“Our broader local finance reforms will reward councils which promote local jobs and enterprise, driving economic growth and making councils less dependent on Whitehall handouts.”

A Department for Education spokesperson said: “Local authorities know best how to meet the specific needs of their communities. That is why we have removed ring-fencing from a number of grants so that local authorities have more freedom to spend their resources where they are needed most – on disadvantaged children and families.

“We are working with local authorities to consider the possibility for efficiencies in major spending areas.”

We hope you enjoyed the above article. To get unlimited access to all articles on LGCplus.com you will need to have a paid subscription. Subscribe now to save yourself £100 off the standard subscription rate.

Tory leaders warn PM of ‘fractious’ relationship

Copied from Local Government Chronicle online
23 January, 2013 | By Ruth Keeling

Conservative council leaders have written to the prime minster warning that a “retrograde tendency towards greater centralism” and “constant criticisms” by ministers have left local activists “angry” and possibly unwilling to help the party win the next general election.

More than 30 county and unitary leaders have warned David Cameron of an “unhelpfully fractious relationship” between the local and central arms of the party and called for a “new start” to ensure the party does not lose in 2015.

The letter, marked “private and confidential” but seen by LGC, lists a range of issues which have angered Conservative councillors including the bypassing of councils in favour of local enterprise partnerships, constraints on council tax powers as well as proposals that “volunteer” councillors should not receive a pension.

“It is not only the substance of such policy but also the nature and tone of constant criticisms of their work by Conservative ministers which is most worrying,” the letter said.

“We are open to genuine feedback where it can be evidenced that we have fallen short in some way. Our issue is with ill informed and anecdote based general criticism and sometimes highly inaccurate personal attacks.”

The letter makes prominent mention of local government minister Brandon Lewis and Conservative party chairman Grant Shapps’ comments that councillors were volunteers, questioning their eligibility for pensions and larger allowances, but also contains a list of policies and statements from ministers covering areas such as education, business and media.

Local government was blamed for a number of problems, from poor education standards to a lack of house building, with “little or no evidence”, the letter said. In one example, the letter said local government had been blamed for the slow roll out of high speed broadband at a time when councils were “immensely frustrated by some six months of delay in [the Department for Culture, Media & Sport] in obtaining EU state aid clearance”. However, this aspect of the delay was “never mentioned”, the letter said.

So many policies appear at stark variance to our party’s commitment to localism
The creation of the Education Funding Agency, plans to bypass local planning authorities and restrictions on council tax increases above 2% were all given as examples of where the government’s policies appeared to be in “stark variance to our party’s commitment to localism”.

County and unitary leaders also complained they were being bypassed in the government’s growth agenda as the government focused on local enterprise partnerships, City Deals and planning, the latter power held by districts in two-tier areas.

“Many councils feel increasingly bypassed when responsibilities and funding is proposed to be diverted to still inexperienced and poorly resourced Local Enterprise Partnerships for roles that councils currently perform well,” the letter said.

It is unfortunate to read of LGA leaders referred to in the press in pejorative terms by a cabinet member
The Conservative signatories to the letter said they had written to the prime minister because their concerns “are not solely with one department”, but they also appeared to allude to communities secretary Eric Pickles’ occasionally dismissive treatment of local government concerns.

“We have been raising these concerns for some time via our senior Conservative Party representatives on the LGA. It is therefore unfortunate to read of them referred to in the press in pejorative terms by a cabinet member.”

In a recent interview with House magazine Mr Pickles said the LGA was “the voice of the officer class with the odd politician thrown in as a hostage handcuffed to the radiator and they occasionally speak”.

The Conservative party has recently made some changes in a bid to improve the representation of Conservative councillor views in its structures with the appointment of former local government minister Bob Neill in a new post of party vice chairman with special responsibility for local government.

Halt attacks or lose our support, council leaders warn No 10

Copied from Daily Telegraph 23 Jan 2012
LOCAL GOVERNMENT
By Robert Winnett, Political Editor
MORE than 30 Conservative council leaders [Including Martin Hill, leader of Lincolnshire County Council] have written a private letter to David Cameron warning that grassroots support for his re-election bid will be withdrawn unless ministers stop attacking local government.
They warn of anger about the “nature and tone of constant criticisms” directed at councils and urge the Prime Minister to stop “patronising language” being used to attack those “who work extraordinary long hours for our communities”.
The four-page letter sent to the Prime Minister, which has been leaked to The Telegraph, warns: “It is important that you understand how disappointed and even angry local activists are and how many might not be there when we need them as electoral foot soldiers.”
Those who have signed the letter include the Conservative leaders of Derbyshire, Warwickshire, Essex, Buckinghamshire, Wiltshire and Durham county councils. In total, 31 senior local councillors, mostly council leaders, have signed the document.
Ministers have become increasingly angered by the resistance of many local councils, including those run by Conservatives, to government cuts and calls for restraint on pay and pensions.
Senior figures including Eric Pickles, the Local Government Secretary, and Grant Shapps, the Conservative chairman, have made outspoken attacks over the cavalier use of taxpayers’ money by some local authorities.
Many authorities are preparing to defy central government by increasing council tax bills.
Some are suspected of attempting to blame ministers for the expected fall-out in forthcoming local elections.
In the letter to Mr Cameron, the council leaders say: “We believe it is essential to bring to your attention our concerns regarding some government policy affecting local government, the rhetoric that accompanies it and the effect it is having on our people.
“Importantly, it is not only the substance of such policy but also the nature and tone of constant criticisms of their work by Conservative ministers that is most worrying.”
They add: “To be clear, we are open to genuine feedback where it can be evidenced that we have fallen short in some way. Our issue is with ill-informed and anecdote-based general criticism and sometimes highly inaccurate personal attacks.”
The council leaders express particular anger at attacks on the pension arrangements of councillors and complain, “there seems little recognition of the efforts of our members”.
“By contrast, members of parliament (including those with other employment), police and crime commissioners and mayors are accorded a status worthy of pensions. This position was not helped by criticisms of the unanimous recommendations of the all-party select committee on local government on Radio 4’s Today programme by the party chairman which appeared to compare council leaders to volunteers running scout troops.”
The leaders also express dismay over the “apparent constant criticism” of local government for hindering economic growth. They say: “Sometimes the criticisms even seem designed to deflect criticism from Whitehall departments.”
The council leaders – who also include the Conservative heads of Lincolnshire, Leicestershire, Kent, West and East Sussex councils – say they have written to Mr Cameron to urge him to take action.
“We are also worried in the widest context about the impact for the party of any continued weakening in the relationship between the parliamentary leadership and the party’s active local members.”

Threat of revolt wins Tory shires more money

Copied from Sunday Telegraph 20 Jan 2013
By Patrick Hennessy, Political Editor

MINISTERS have backed down and promised more money after a revolt by shire Tories against “grossly unfair” cuts in local government spending.
A group of about 120 councils, mostly Conservative-controlled, warned Eric Pickles, the Communities Secretary, that reductions in spending announced last month would “crucify” rural communities.
The group was considering bringing a judicial review against Mr Pickles’s settlement, which it said would see “predominantly rural” councils receive 3.81 per cent less from central government compared with cuts of 2.05 per cent for urban councils.
Andrew Lansley, the Commons Leader, has signalled that a “correction” will be applied to next year’s spending figures.
Mr Lansley said the difference between spending on urban and rural councils was a “matter of concern”.

Icy pavements a potential financial nightmare for the council tax

This makes interesting reading. I wonder why the county council aren’t being given a hard time about this every hour on the hour? If it’s a legal duty, why doesn’t the government fund this work properly?

Councils have a legal responsibility to keep pavements safe.
Under section 41 of the Highways Act 1980, a council has a duty to ensure that the highway is safe to use, as far as reasonable, and specifically that it is not made dangerous for pedestrians by snow and ice. The highway includes the footway (as defined in section 329 of the same Act). On top of this, under section 150 of the Highways Act 1980, councils have a duty to remove a deposit of snow from the highway if it is an obstacle. The public can complain to a magistrate if this duty is not carried out.

Can councils realistically do anything about this?
They can and they should – they have the legal duty to ensure clear and safe highways, including pavements. Living Streets has collected some great examples where councils have taken this issue seriously. Realistically councils will need to prioritise where they use scarce resources – which is why it is so important to make the case that a huge proportion of the most essential local journeys, particularly for some of the most vulnerable people, are made on foot.

http://www.livingstreets.org.uk/make-a-change/urgent-actions/call-for-ice-free-pavements#info

Planning minister dipping his fingers in to the infrastructure pot

<em>Yet another short-term, short-sighted proposal from the Minster of Planning Chaos. This government has a lamentable track record of top slicing local government funding – robbing Peter to pay Paul. They now appear to have turned their sights on to privately sourced funds, as a way of bribing communities in to accepting development.

Developers only have so much funding to put into such pots. Taking 25% of any CIL that might be in place, simply means that the funds that should be accumulated to the benefit of the community as a whole will, under these proposals, be partly dispersed amongst pockets of the community, potentially to the long term detriment of all.

New plans to encourage communities to build more homes will be unveiled today by planning minister Nick Boles.
Mr Boles is expected to announce a community infrastructure levy, which will replace Section 106 agreements and raise around £1bn a year from property developers.
Communities that draw up neighbourhood developments and secure the consent of people through a referendum will get up to 25% of the money raised through the levy. The money will be paid directly to town or parish councils.
Neighbourhoods with no development plan will still receive 15% of the levy from developments in their area.
‘The Government is determined to persuade communities to accept more house building by giving them a tangible share of the benefits it brings,’ said Mr Boles.
‘By undertaking a neighbourhood plan that makes space for new development, communities can secure revenues to make the community more attractive for everyone.’
The National Housing Federation’s head of homes and land, Rachel Fisher, said: ‘New developments should take into account the needs of local people, so we welcome the commitment to giving 25% of community infrastructure levy (CIL) money to neighbourhood groups. But it’s crucial that this does not come at the cost of delivering affordable homes.’

Leaders hit back in pensions row

This debate gets more and more surreal at each turn. Eric Pickles kicks things off by claiming that chief executives are surplus to requirements and that elected members should be able to fill the gap. One of his lackeys then goes on record suggesting that elected members are only volunteers and amateurs in the game of politics – ‘professional’ only applies to members of Parliament it seems.
So which is it DCLG? If it is cull the officers and plug the gap with councillors, are we to assume that this is to be done on a completely voluntary basis and for the love of it only?

I particularly like the use of the term ‘prat’ in this case and the pointed remark made to somebody I know well, ‘He’s one of your prats’.

Copied from Local Government Chronicle online
11 January, 2013 | By Ruth Keeling

Council leaders from across the political spectrum have criticised ministerial attacks on councillors remuneration and may launch a legal challenge against plans to restrict access to the local government pension scheme.

The judicial review is being considered by Labour leaders while their Conservative counterparts said had they met ministers no fewer than four times in the past 48 hours to discuss proposed pension changes.

Conservative, Labour, Liberal Democratic and Independent leaders at yesterday’s meeting of the LGA executive were particularly critical of ministers’ language. Local government minister Brandon Lewis, who has proposed closing the Local Government Pension Scheme to councillors, said elected members should see themselves as volunteers rather than professional politicians.

Mr Lewis’ comments, made before Christmas, has already led one leader to accuse ministers of treating councillors with “contempt”. The issue was also raised by Conservative leaders when they met with Mr Lewis on Thursday morning.

On that same day, during an appearance on the BBC’s Today programme, Conservative Party chairman and former housing minister Grant Shapps added fuel to the fire and widened the row by questioning allowances for “volunteer” councillors and likened them to “scout leaders”.

At a meeting of the LGA’s executive on Thursday, LGA Labour group leader David Sparks said it was “extremely important that we do not just roll over on this [pension] issue” and suggested a legal challenge could be made against the proposal.

He called for LGA officials to compile a report on councillor pensions as well as those of other elected members such as MPs and Greater London Assembly members. “I am expecting that the report we get in February will look seriously at the whole issue of judicial review,” Mr Sparks added.

‘Prat’

Leaders from all parties expressed frustration and some anger at ministers’ comments, although there was widespread laughter when Cllr Sparks described listening to Mr Shapps on the radio that morning as “like driving up the motorway and seeing one of those kids in a car who continually sticks his tongue out…[and] you think one of these days you’re going to grow up and be an even bigger prat”.

Turning to LGA chairman Sir Merrick Cockell (Con) and LGA Conservative group leader Gary Porter, he added: “He’s one of your prats and you really have to do something about him.”

Cllr Porter declined to comment on Cllr Sparks’ analogy but he criticised the “language around the debate” and called for ministers to take a more mature approach. “If there is a genuine need to revisit [the pension arrangement] on financial grounds they could do that in a mature, adult way,” he said.

Describing the proposal as “a stupid idea being carried out in a stupid way”, he said he and other Conservative leaders had already seen Mr Lewis and discussed the pension proposal twice on Wednesday and would raise it again in a further two meetings with the minister on Thursday.

Making the argument for councillor pensions and allowances, Sir Merrick said reducing remuneration would adversely affect councillor diversity. “The idea that only certain people of a certain background with a certain financial security can stand to be a councillor is highly objectionable.” He added: “I hope that our representations, particular those made in private earlier today [to Brandon Lewis], will be heard.”

Leaders and elected mayors at the meeting also questioned the distinction made by Mr Lewis between elected mayors, who are judged to work full time and therefore should be eligible for a pension, and leaders, who are not.

‘Hypocrites’

Peter Box (Lab), leader of Wakefield MBC, added: “As an executive leader I am responsible for a multi-million pound business and to say you can do that on some part-time basis is detached from reality.” The truth was councillors passed up career opportunities to be elected members, he said, unlike “many MPs who seem to have two jobs, and Grant Shapps is one, they have got that much time on their hands”.

Accusing ministers of “hypocrisy”, Cllr Box was one of many to make a comparison with MPs pensions and salaries just hours before publication of a survey of MPs showed they felt their salaries should increase by 33%.

Mr Lewis’ criticism of councillor pensions combined with Mr Shapps’ comments on allowances led Hackney LBC elected mayor Jules Pipes (Lab) to question their wider attitude to local government. Shapps’ and Lewis’ comments indicated the government thought councils “with £1bn-plus turnover can be run by an occasional few evening meetings”, he said. This image was “a world away” from the present day when there were “issues of performance that we are held directly accountable for in a way we weren’t 10 or 20 years ago”.

LGA Independent leader Marianne Overton described the government’s attitude as “an attack on the value of democratic representation” while Chris White (Lib Dem), leader of Hertfordshire CC, warned the pension proposal was “the beginning of an attack and the attack will be on allowances in general”.

He also warned that councillors arguing for pensions would be “a tabloid story. Grant Shapps and others will be absolutely delighted if we make a fuss because that is just writing copy for the Daily Mail”. However, he added, “that does not mean we shouldn’t [make a fuss].”