R eading for bankruptcy? .
Paul Smith (J„,
(,ess action is taken soon to change drasti,, tV„`Y the spending patterns of local government LasPect of public expenditure will result in ee bankrupting both of local government and v have of the central exchequer which will
number to be called in to bale out the increasing
uti!nber of local authorities which are seriously ret,ng into the red. At the same time unless t10n is taken to curb the remoteness of local tn `'vernment and the lack of any real participae!l With its electors in the form of producing fo, Ii3e, al environment which they desire and nich they are prepared to pay then any cii:4°Iance of local democracy will very soon aPPear. Likewise unless corruption in its Zeissest forms in local government, of favourip'isrn over the allocation of contracts and (tanning consents, is stamped out then the lack Public confidence in those who take part in aPublio life will turn into an active reaction gainst democracy both at a local and national eve,.
& There has been adequate evidence of the p‘e-'erioration in the participation of local th,„°Ple in local decisions and co-incidentally in ex` enormous growth of local government n?enditure far in excess of spending by even ps-eintral governrnent, ever since the gold-rush in lanalldn,hig consents over the development of Act'l°11oving the Town and Country Planning goy 1948. At the same time the powers of local f ,ernment have been increased by hundreds csie'c°cal Acts and national statutes and the r' ha,4e.Y of the operations of local government str been firmly cemented. Even the new opetteture of local government which began ating in April goes only part of the way to bei tire that the public can see how they are ensrig governed. Nothing has been done to Which tire that the millions of council contracts for n are allocated every year are competed terldpnlY by being made a.% “,lable to "open cotc'r." Not merely to ensure that every als tractor is given an opportunity to bid, but gm° so that the public can see that justice is
done and the best value obtained.
wi;11, e Picture is gri—m and likely to becomeeven loc'se as the rates explosion progresses and Ile al authority staffs continue to grow (having san doubled in the last fifteen years) and the lastaries Paid to senior executives have over the lc, Year in many cases increased by as much as Wit Per cent. savni!ra question now of what can be done to da
` y as regards local government and local democracy and the simple step towards safety is by adopting the measures used in most parts of Switzerland and also in a number of American states whereby major council expenditure and enterprises are subject to the approval of the local electorate. This means giving the people the right to veto by a majority vote (by local referendum) any major changes in their local environment and any increases in their local rates. In Switzerland the local 'financial referendum' has been used successfully for many years and there is little doubt that the system has produced a local and national government which is viable both democratically and financially. In Britain today, however, the financial crisis has reached such proportions that there is a need for an immediate freeze to be applied to the cancer of galloping local government expenditure. This should be coupled with a national plan to reduce progressively the current estimated revenue expenditure for England and Wales 1974-5 of approximately £7,000 million. Even allowing for inflation the opportunities for savings within such a figure ,are legion. The size of local government staffs which have grown out of all proportion should be reduced by planned reductions to their 1960 levels as far as possible by the non-replacement of staff who retire or take up other appointments. There should be an overall examination of the enormous increase in statutory powers which have been given to individual local authorities with a view to repealing in the interests of the public any unnecessary legislation affecting or interfering with the rights of the individual citizen. While desirable that the expenditure on education, police and fire services should be transferred from the local ratepayer to the national taxpayer — for obvious reasons — this does not mean that the economy measures referred to above should be mitigated. For the cause of the rates explosion is excessive and increasing local government expenditure: Pledges by governments to stop soaring rate bills by government grants and payment of rates by income tax as opposed to a local tax by collecting rates from property will only temporarily alleviate the situation which is caused by excessively high spending by local authorities with the approval and encouragement of various governments; spending which has included full freedom to undertake luxury expenditure without the approval of the local electors and to borrow the necessary money at high rates of interest over long periods both from the Government Loan Board and also from private sources. The situation is exemplified by the GLC's expenditure increase of 46 per cent for this year (1974). Since about 15 per cent is represented by inflation, there is a 31 per cent increase in real expenditure. High spending produces the inevitable result of high rates. As the burden of rates becomes inSupportable with increasing unemployment and inflation, ratepayer revolts will spread. These rate increases have been • attributed by the political establishment to inflation, high interest rates, local government re-organisation — even to revaluation, but never to reckless spending. Yet the major factor is the anachronistic lack of democratic local control which has permitted reckless and often secret council spending to develop. In most English local authorities there is no participatory democracy. The situation has now been exacerbated by the Local Government Act 1972 resulting in the amalgamation of local authorities into a small number of giant authorities and the increasing extent of absolute powers delegated to local authorities particularly in the realms of land use and planning.
The creation of larger local authorities has in general meant more and higher paid ivory tower bureaucrats. It has not brought about either a more efficient or a more democratically responsive local government. Rather it has achieved the worst of both worlds in making a mockery of local democracy.' Under the myth of 'reform' it has permitted the new large and more remote local councils to operate even greater powers in secrecy; to spend their ratepayers' monies with even less recourse to local opinion; and to enforce the collection of the massively increased rate demands by stringent legal action.
The ultimate consequence of the present unhappy state of affairs can only be a bankrupt local government — bankrupt both financially and morally with the inevitable dire consequences of a public who when awakened will turn away their allegiance from what was once a world-admired cradle of democracy.
Paul Smith is honorary secretary of the Local Government Reform Society. He is taking part in the Money Programme (BBC 2) on this subject on November 15
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