Austerity and bottom-up restructuring, 2010-2017

While the reforms of the Coalition Government, as outlined in Chapter 4, emphasised the role of local communities from the outset, the challenges and requirements of economic intervention have been similar to previous governments. The austerity agenda as borne out of the 2008 financial crisis, which the Conservatives communicated as a crisis of public debt and deficit, and lack of economic competitiveness, and later, the devolution agenda advanced in the later years of the Coalition Government, demonstrate this.

The 2010 Treasury Spending Review demonstrates the link between localism and the change in services and spending. It describes itself as being “underpinned by a radical programme of public service reform, changing the way services are delivered by redistributing power away from central government and enabling sustainable, long term improvements in services” (HM Treasury 2010, 8). This is an example of strategic localist discourse: localism was presented as a way of implementing central government policy and aims, in this case, meeting the challenge of reducing the deficit. It is also a reflection of the association between reduced funding and (at least the discourse of) local control. While the spending review promised to ‘radically’ increase local authorities’ freedom to manage budgets, it demanded ‘tough choices’ on service delivery and allocation (ibid, p. 9). As Greg Clark argued during Select Committee evidence:

… if the cake is shrinking – as it undoubtedly is and, for reasons that we all understand, there is not the possibility of increasing local authorities’ resources in particular – then there is an additional imperative to give local people and local councils more control over what is actually there in the first place. That is why I think that the need for [decentralisation] is particularly great at the moment (CLG Committee 2013, Ev3).

The spending review similarly emphasises the importance of communities, citizens and volunteers in playing a bigger role in shaping and providing services (HM Treasury 2010, 9).

For example, despite earlier references to the idyll of Swiss cantons, neighbourhood planning was not about a wholesale change in governance and participation: it was a specific policy fix to the housing problem, where it was perceived that resistance to development was causing delays, costs, and loss of housing supply. In this sense, as suggested by a civil servant who was part of the team developing neighbourhood planning in DCLG, the policy was as a way of reconciling a long running tension between the desire to have local control, which is what politically people want and like, and the desire in government to make economically rational decisions [21]. While the Localism Act replaced regionalism and its housing targets (overseeing the abolition of all regional institutions – the Regional Development Agencies, Regional Assemblies, Regional Offices, as well as the Regional Spatial Strategies – by 2012) with the Duty to Cooperate,77 neighbourhood planning was presented as a way to humanise and democratise the planning system, by, similarly to Village Design Statements, involving communities at an earlier stage on the design, quality, and location of development (note: not quantity, unless the plan allocated more housing in relation to the Local Plan). Decentralisation

77 A duty on local authorities sharing boarders to cooperate in strategic planning matters.

in this sense then sought to increase housebuilding by reducing conflict. As was argued in the neighbourhood planning impact assessment:

One of the principal objectives of neighbourhood planning is to increase the rate of growth of housing and economic development in England. Coupled with a system of powerful financial incentives … neighbourhood planning will achieve this by enabling neighbourhood communities to exercise real power in respect of the design and precise location of the development that takes place in the neighbourhood area (DCLG 2011a, 10).

This quote shows the general tendency in policy to ignore the inconsistency between, on the one hand, introducing ‘powerful financial incentives’, and on the other hand, promoting ‘real power’. Indeed, this strategic role of neighbourhood planning exposed the contradiction of Localism already in its infancy, since, regardless of whatever circumscribed version of localism was offered by the government, localism was a concept that tended to be interpreted intuitively and widely, and even radically, by communities. As one Liberal Democrat politician argued:

“… the interpretation of [localism] was a lot of it informed by local campaigning against development, and that contradiction exists today, and it’s still there, and it’s still there in the way it’s debated”, adding; “the contradiction between ‘we want lots of homes’ and ‘we’ve empowered you to say no to them’, as it’s seen, has increased the political difficulty of delivering the housing numbers that they want” [23]. Similarly, a Labour politician during interview warned that the risk is that a lot of people will “feel they’re developing neighbourhood plans under false pretences” [22]. Here, I include three comments made during the Localism Bill debate that similarly demonstrate concern over the public’s wide interpretation, and the potential for disillusionment, of localism.

We are setting out for the worst of all possible worlds. We will raise expectations and then set people up to fail, thus setting this whole community empowerment agenda back years and years; I think there will be an awful lot of disappointed people (Hazel Blears, HC Deb 17 January 2011, Vol 521 c607).

… the only thing worse than not giving people a voice is the pretence that we are giving them a voice. That is not only disempowering but sends a message that when it comes to the crunch the Government simply do not trust people to make decisions for themselves (Zac Goldsmith, ibid., c648).

I consider the Bill to be poorly thought through and irresponsible, often reflecting only knee-jerk populism and being in danger of raising false hopes (Kate Green, ibid., c632).

This accusation of populism, and the link between populism and localism, will be further explored empirically in the following chapter. What these statements show is a growing cynicism of the rhetoric surrounding localism, and the growing contractions that emerged between the interpretations of those on the receiving end of the policy change, and those overseeing reform. In other words, there seemed to be a growing conflict between normative and strategic localism.

Strategic localism, as both a communicative discourse and material policy effect, applied also to larger questions of local government restructuring, which entered the agenda as ‘localism’

evolved into ‘devolution’, as explored in the previous chapter. Bottom-up reorganisation, or, as one interviewee described, self-aggregation [37], describes the ability for a collective of bordering local authorities to move into partnership and form one bigger local authority (either unitary or combined authority). Self-aggregation is, one might argue, a useful strategy for achieving local government territorial reform. In theory, local authorities decide for themselves how they want to enter in partnerships, rather than face the prospect of central government deciding for them, as was the case in the late 1960s, with the Redcliffe-Maude report and the two White Papers that followed, and in the 1980s, when the Thatcher Government abolished the Greater London Council and Metropolitan Councils. To a certain extent, it emulated and extended the thinking of the creation of unitary authorities in the 1990s as explored earlier, where the then Minister of State for the Environment (Earl Ferrers) argued that “the government believe that local authorities, because they know the local area and because they represent local people, are often best able to respond to local needs” (HL Deb 7 November 1995, Vol. 566 c1654). Later, a member of the boundary review commented how “these proposals contained a dash of populism, in that local people were to have a say in the structure appropriate for their area” (Chisholm 2000, 27).

The idea of self-aggregation began when the Coalition Government abolished the regional development agencies, regional offices, and the regional spatial strategies, and replaced these with Local Enterprise Partnerships. As one of the junior ministers commented how the main opposition (Labour), civil servants, and Local Authorities found the idea of self-aggregation

“pretty challenging”, where “for years and years and years it suited everybody to be told by Whitehall what they should do” [37]. Over time, local authority funding shifted to a more bottom-up approach, as central government grants were replaced by local-level funding (business and domestic rates), and a greater proportion of central grants were deal-based (e.g.

devolution deals). However, local government was limited in terms of raising these rates. As the same interviewee commented:

… the system we now have is, you’re on your own folks, you’ll have to live off your own tax base, and by the way you can't put your taxes up. So, I mean, that’s proving to be- actually, you look at social care or lots of other things, we're getting to a crisis point. Now, to such an extent that this year councils have been permitted by the Tory government to put up council tax bill to cover additional social care cuts. So, what, what in theory and ideology is right to let local councils to be free to raise and spend their own income, um, which was where - what the Localism Bill mechanism sets up, is now disrupted by councils’ ability to raise taxes. So, it sort of throws in devolution where, sooner or later, something is going to snap [37].

Similarly, as a Councillor from Cambridge argued,

… they devolved the decisions on council tax benefit. They cut the council tax benefit bill by 10%, devolved it to us to decide how to achieve that 10%. Which is, in a way, really good because we as a Council would make decisions about where we want those cuts to fall or not fall … But all the same, you can be quite

cynical about it. Devolve the cuts and decisions, you know, I mean, it’s so far from being any respectful definition of local self-government, it’s sort of laughable [03].

In turn, the combination of devolution and austerity set the stage for a new approach to local government restructuring under the policy agenda of ‘Devolution’, which upscaled the methods of the LEP in relation to financial incentives, in combination with structural self-aggregation, with the creation of the (Mayoral) Combined Authority. Seen from this angle, the Conservative Government’s devolution agenda, as briefly explored in Chapter 4, was rhetorically concerned with a renewed approach to localism, and also strategic in the sense that it addressed a fundamental problem in local government restructuring. Boundary reform (in the sense of widening local authority boundaries), and the threat to councillors and local government officials’ jobs, as well as the prospect of increasingly remote governing and its impact on local democracy, is evidently very unpopular, as we have repeatedly seen in the previous sections.

Commenting in 1969, Labour MP John Mackintosh observed “… there are few votes to be won by promises to reconstruct local government” (The Times 12 Dec 1969, 10). Similarly, as one interviewee suggested, “local government re-organisation is something no government really wants to take on formally” [05].

This aversion to local government restructuring was confirmed by a senior civil servant working directly on devolution in MHCLG. The interviewee argued that the existing two-tier system was not constructive, but that governments since 2010 had been opposed to restructuring, pointing out how the last round of unitary councils in 2009 caused a huge amount of local and political conflict [38]. Further, they pointed out, Conservative governments have wanted to avoid causing a rift between local conservative councillors and the central government [38].

Self-determination through ‘devolution deals’ made between central government and local authorities (proposing to join together to form a Combined Authority), offered a way of avoiding these political difficulties and legitimation challenges. As former head of the civil service, Lord Bob Kerslake, observed during Select Committee oral evidence: “You stop the problem that previously bedevilled devolution, which was unless everyone did it the same way, it was not going to happen” (CLG Committee 2016, 11, Q172). In turn, austerity, rather than top-down imposition, provided the (financial)78 incentive for local authorities to self-aggregate in this way, which, while exposing the false pretence of it being a bottom-up process, still insulated central government from negative public opinion, where challenges focused mainly on austerity itself rather than its implications on governance and central-local relations. The civil servant admitted that, because of the financial pressures since 2010, restructuring has been able to move forward despite political conflict of doing so: “local government has accepted change under considerable pressure” [38]. There were also elements of earned autonomy where areas which ended up adopting a Combined Authority structure, particularly with a mayor at the helm (a so called Mayoral Combined Authority, or MCA), received more devolved powers.

78 At times, this financial incentive is extreme, as is evident on the case of Northamptonshire. Local government (near) bankruptcies have provided central government with the powers to force local councils to restructure into either combined authorities or unitary authorities. Not all of the financial struggles of local councils in recent years can be attributed to mismanagement, but rather, to the longer-term impact of austerity, indicating a clear link between centrally-steer austerity and local government restructuring (see Butler 2018).

Therefore, a ‘bottom-up’, austerity-induced restructuring of an increasing number of local authorities has been a way of implementing the unpopular yet omnipresent ideas of Redcliffe-Maud seemingly ‘through the backdoor’. From the perspective of the previous periods outlined in sections 5.3.2 – 5.3.4, it seems we have come full circle, where recent policy has fairly successfully converged the questions of both structure and finance into one question of governance. Here, rather than being restructured in accordance with central direction, local authorities have increasing applied for either combined authority status or unitary status to further address budget deficits or streamline their spending. The devolution debate, and the context of austerity, has therefore given way to a renewed strategy on unitary authorities.

While there is some insulation from public opinion, which is mostly focused on austerity on local government more broadly, there is extensive cynicism for this type of ‘strategic localism’

and it has been widely critiqued by stakeholders, commentators, and the wider public affected by local authority cuts. Several interviewees have indicated such sentiments, as indicated in the beginning of section 5.3. Further, as Copus et al. (2018, 15) comment:

… it is evident that what we are currently observing in English local government is not a genuine wave of the political devolution of power, but rather a fragmented and inconsistent pattern of the decentralisation (or limited devolution) of authority over specific projects and financial incentives aimed at both addressing economic growth, nationally and locally, and further streamlining of public service provision – both of which are for the benefit of political expediency at the centre.

This economic context of austerity has put a damper on the devolution process which many felt would have otherwise been a generally positive development. As an interviewee argued, “we are becoming more centralised, despite devolution” [05]. Further, economic policy seemed to supersede and dominate the agenda, with democratic legitimacy having to play ‘catch-up’, as one interviewee described:

… the combined authorities in places like Manchester are really playing catch up.

You can see them very hard trying to establish legitimacy and kind of engagement because actually it was all conceived around growth. So, it's all about the economics, it’s all about taxing, kind of financing and back mechanisms and investment [43].

This attitude towards devolution was reflected in an interview with a senior civil servant, who described the devolution process as one being fundamentally about what local areas could offer central government, giving further credence to the strategic localism thesis. As they explained;

… in return for that governance reform [mayoral combined authority] we will give you- we will devolve a series of powers down to you on an educative basis, on a negotiated basis where you prove a case for them, and in doing so we will create you know, both the institutional capability as well the right mix of policy leaders to actually be able to drive economic growth for us [33].

Further, and similar to the previous Labour government (1997-2010), the ‘radical’ rhetoric and wide promises of local empowerment has set future policy agendas and reforms up for

disappointment and comparison. These recent developments show once again how localism has been used strategically in government discourse as a way to confer legitimacy to policies which were more concerned with economic objectives and the strategic delivery of these objectives, than the question of democratic governance.

Conclusion

This chapter has explored the rhetoric and policies espoused by governments to address the question of why and how localism legitimises centralising interventions. In other words, I have investigated whether localism, and other decentralist and participatory forms of spatial governance reform and rhetoric, have been introduced partially as a form of legitimating centrally-led economic and regional policy over the past fifty years, and how the rhetoric around democratic deficits and spatial governance has shifted in tune with contemporary economic challenges facing the British state. The impetus of this chapter was to theorise and explore empirically the tendency for localist rhetoric and policy to emerge in conjunction with reforms that might otherwise be considered to centralise power. This tendency has resulted in some contradictory uses of localism in policy. Most fundamentally, the contradiction between the role of localism in supposedly challenging centralism, and on the other hand, being itself

“centrally orchestrated” (Jones 2019, 74), and supporting centrally led economic and constitutional reforms and interventions. Section 5.3 has charted out the empirical indications of public opinion and the discursive appearance of strategic localism in the context of central interventions relating to regionalisation and local government reform. The main contribution of the chapter has been to distinguish between what I label ‘normative’ and ‘strategic’ localism, and how this can be understood as a difference between the ends (the ideational) – and means (the material) of localism. This tendency of localism’s ‘means’ (centrally-led policy) being divorced from its ends (community empowerment) without fail seems to lead to disenchantment amongst intended beneficiaries, leaving governments vulnerable to extensive criticism from stakeholders and opposition party politicians. Therefore, while governments do attempt to legitimate economic policies and local government reforms through certain communicative discourses this is often sooner or later viewed cynically by stakeholders. While this chapter has focused on the concept of strategic localism from the perspective of government policy, the following chapter explores more closely the strategic element localism with regards to opposition party rhetoric, particularly during election campaigns. Chapter 6 will therefore take a similarly historical perspective to analyse the periodic emergence of localism, as well as its counterpart, centralism, in political discourse.