I’d like an extra pint of local democracy tomorrow please milkman

I went to see Milk yesterday. I shall try not to ruin the film by giving too much away, but if you are one of those people who prefer to see a film having no previous information about the plot, and haven’t seen it yet, please look away now! Anyway, I thought it was a very good film, but I found the experience rather depressing.

I didn’t find it depressing because of a dash across town when it emerged that our chosen cinema did not take part in the Orange Wednesday promotion. Seriously, I’m not paying £24 for two cinema tickets, and this is a widespread enough thing that some notice on their website or door warning you before you queue up for 15 minutes would surely be in order?

I didn’t find it depressing because of the uncommonly rude man who sat in our seats and then attempted to blame us when he was incapable of working out how to move from one seat to another without getting trapped, though that was depressing. I didn’t even find it depressing because of the liberties taken with the history and the simplification of some characters – I recognise that a film needs to have narrative and to entertain - a film is not an academic biography.

Instead I found it depressing because despite working at the heart of local politics, and having the privilege to have worked with many dedicated, talented and inspiring elected Councillors, my experience of local government in England is nothing like the picture portrayed in the film of local government. Indeed I find it hard to imagine that a film about local government in England would be played for anything other than laughs.

There were some similarities – the importance to the media and local voters of focusing on ‘pavement politics’ issues as well as wider political ideology, and the necessity of compromise - but overall there was also a picture of a politics where individuals take office with the hopes of their communities, rather than their grudging acceptance, where local decisions are the expression of political will rather than least-worst options to stave off financial crisis, and where local government is truly local government, rather than merely local administration.

That said, I wouldn’t trade a place in the public sector in Britain for one in California right now, and on balance I’m glad that laws about racial, gender, sexual discrimination are set in Parliament for the whole country, rather than determined in each Council area in a battle between referendums and the courts. Equally, it would be wrong to go from one example, and a dramatised one at that, to an assessment of a whole system.

Nonetheless, the US, overall and seen from a distance, does appear to me to afford more opportunities for political involvement, more respect for those who become involved at a local level, and a greater freedom for local government to act in a way that reflects the local area it serves. I hope to return to this  theme shortly, and look at a few simple differences, and what impact they may have.

The Treasury’s Cunning Plan

There is a concept in the delivery of public services whose time has come and gone. That idea is the Private Finance Initiative.

I have no objection to the public sector choosing the most efficient way in each individual case to procure buildings. Whether it is more efficient to buy, build, or rent, matters not a jot to me, I am ideology-free. I care only about the bottom line.

The Private Finance Initiative – private companies handling the whole construction process for public buildings, including borrowing the construction costs, and then renting them to the public sector, had some advantages when dreamed up by John Major’s Government, and enthusiastically adopted by Tony Blair’s.

It provided greater certainty on costs at a time when confidence in public sector procurement skills was low; it made it possible to spend more on new buildings without ramping up current public sector debt (especially important at the time when it looked like the Government wanted to join the Euro), and it allowed the public sector to focus on the services and outputs, rather than the infrastructure and inputs.

Despite this it was never clear that, in a critical mass of projects, these advantages justified the loss of flexibility and the need to deliver long-term profits from the public purse to the private company which came as a result of PFI. Now, a more serious flaw has emerged. PFI relies upon the private sector borrowing money – something it is very hard for a lot of companies to do right now.  If companies go bust, then the risk can very easily fall straight back onto the public sector in an unpleasant way.

As an example, while the UK Government can currently borrow money for 10 years at an interest rate of around 3.5%, the borrowing of reasonable-sized companies is costing them upwards of 7%. On a £50m project, this £1.75m per year difference, and the impact it would have on revenue budgets, cannot be ignored.

Because of this, a large number of PFI projects no longer stack up, and the realisation of this has caused a rapid slowdown in public sector construction projects at precisely the same time as the private sector suffers from the recession. So much for the stimulus. Given that the Government are now keen to spend money frantically to keep the economy going, and public debt is of no concern to them in the short-term, one might expect them to rip-up the rule book and fund these projects through direct borrowing, right?

Wrong. The Treasury has a cunning plan. Council pension funds will be used to pay for the completion of these projects, at a fixed rate of return. It is not clear why the Government cannot simply borrow this money on the open market as it does much other spending, or indeed print it as appears to be the new plan, thus leaving Council pension funds to invest in the most sensible way for their members. That may be by lending to the Government, or it may not.

In principle, though, the Treasury have had a stroke of genius, they just don’t appear to realise it. There is one thing which Governments can almost always do more efficiently than private companies – borrow money. For PFI to be a good economic model, it required a particular set of circumstances to hold in the wider economy. Insofar as they ever did, they no longer do.

So, two cheers for the new Treasury model – public sector buildings built with public sector money, using high-quality procurement to harness the private sector’s skills in construction and project management, and the public sector’s skills in coming up with the cash. Now we just need to get rid of all the bureaucracy of lending it to ourselves to pay for building and renting back the results. We should rebrand while we’re at it.

Let’s call it the Public Finance Initiative.

Control Shift – the Conservative Green Paper

Being topical is a mixed blessing, but local government is certainly in the news at the moment.

Behind the headlines, it is also the subject of detailed political debate in the lead-up to the next election. Fundamental questions are once again open for discussion – what should locally-elected Councils do, how should they do it, and who should pay for it? Of course, in theory, these questions don’t have to be answered the same way everywhere in the country, that is the point of local government. But let’s not get ahead of ourselves!

This week the Conservatives published Control Shift, their Green Paper on local democracy. For Labour, Hazel Blears described it as “a damp squib”, and made a series of specific criticisms. I have not seen a detailed official response from the Liberal Democrats, but if anyone wants to point me in the right direction, I would be keen to take a look. Julia Goldsworthy, who speaks for the Lib Dems on CLG issues, condemned it for being too similar to Labour policy, and not pledging a reform of council tax.

Both sides have something to be said for them in this debate.

Labour’s first criticism, that the Conservatives would scrap Regional Development Agencies which have ‘helped hundreds of thousands of businesses’ is a bit odd. Firstly because that isn’t what the Tories have proposed – much to the annoyance of their most anti-regionalist members – they merely want to take housing and planning powers away from the regional level, and give them to local Councils, and secondly because they say they want to ‘refocus the RDAs on economic development’. That sounds like more powers to help business, not fewer. I defer to businesspeople on how helpful they think these are in reality, I suspect for some, very much so, for others, less so.

The Labour Party likes regions, that much is clear – John Prescott recently described the failure to bring about elected Regional Assemblies as the greatest regret of his political life.  It’s not clear that the public do, and those Councillors who did preferred Assemblies (unelected) on which they sat, which Labour has abolished. So it is unclear who this criticism is intended to win over.

Beyond that, Labour focus on threatened cuts – to an extent a fair comment following Tory proposals for an across the board cut in government budgets, and obviously a concern to those of us who see costs outside our control continuing to go up – but not something raised in this particular document.

There is, however, an inconsistency between the Conservative claim that they plan to abolish capping, and an effective cap of 2.5%, imposed by promising that much funding to any Council achieving a 2.5% rise, enabling them to deliver an actual increase in council tax of 0%. In reality it will be very hard politically for any Council not to participate in this.

That said, much depends on general inflation. If general inflation falls to zero for some time, as Wise Men think it might, Council Tax is close to the limits of public acceptability if not beyond them for many people. Capping is not a long-term solution to high taxes, but raising taxes forever is not a long-term solution to growing budgets either.

Finally, Labour’s criticism tends to echo that of the Liberal Democrats. They claim that a key problem with the document is that it contains much which the Government are already doing – reducing the number of targets, allowing Councils to introduce elected mayors, reducing ringfencing of funding, and so on.

While this is true, some of the Conservative rhetoric goes further, and in any case I am not someone who believes the duty of the Opposition is to oppose, no matter what. It is useful to know what the Conservative Party thinks, even if that turns out to be the same as what the Labour Party thinks, on some issues. There are also proposals which are genuinely different, and which are proper subjects for debate. Scrapping blanket inspections, and focusing them on high-risk areas such as social services; scrapping the Standards Board and investigating alleged wrongdoing locally; freeing Councils up to decide their Trading Standards priorities, so they can take stronger action on those selling booze to kids, and less on those selling fruit and veg in imperial measures.

Overall, a mixed bag, and it is a sad fact of British political life that Oppositions are always more committed to local democracy than Governments, but this is nonetheless a revolution, and a welcome one, in Conservative attitudes to local Councils compared to a decade or two ago – could it be connected to how many of them they now control? Surely not.

Welcome to my world

A lot of people blog. A lot of people blog about politics. Most of them are politicians, or would like to be. This is right and proper – they have a need, personal and professional, to tell the world what they think about topical issues.

A number of people also blog about their professional lives, many far more eloquently and informatively than I could aspire to do. Clearly for those employed in some way by politicians, this is harder – it is for us to carry out their orders, not to attempt to force any of our personal views onto them.

Despite this, I feel there is a gap in the world of blogs for someone from the staff side writing, in their spare time rather than as part of a communications role in their own Council, about local government. This is my humble attempt to fill that gap.

For what it’s worth, I am not an apologist for all the activities of Councils, nor for the institutional set-up under which they currently operate. Nonetheless, compared to those who write for sensationalism, or without reference to facts, or both, I will probably appear to be just that.