Local government (1)

The corrupt juggernaut

Paul Smith

Local government, rarely front page news, is today in the centre of public attention because of the spate of corruption cases and reports of corruption yet to be revealed. This has the dangerous effect of obscuring a far more important aspect of our political life, the recent growth of all powerful juggernaut-like local authorities, whose spending policies are leading the nation to bankruptcy. Their remoteness from control by electors or central government alike, and their unwillingness to consult the people they claim to represent has made local democracy a myth.

It is not generally realised that the growth of local authority expenditure over the last fifteen years has been out of all proportion to the growth of central government expenditure and has consistently outstripped the rate of national growth. It is now spending nearly

£8,000 million. or 27 per cent of all public spending and between 1960 and 1972 local

authority expenditure rose from £1,715 million to £6,328 million'. The number of staff employed by local authorities in England and Wales last year totalled 2,310,000 compared with 1,440,000 in 1960. The effect of this on the national economy can be realised when wr consider how these sums were raised. Part was raised from steadily increasing rates, thus triggering off both demands for increased wages from those faced with these demands and price increases from commercial concerns, particularly shops, similarly affected.

The price increases in turn fuelled further wage. demands. The balance came from government grants, in part met by resorting to the printing press, thus fuelling inflation.

Another effect of the staggering increase in capital expenditure has been an upward pressure on interest rates. Since the demands of local government on the capital market have steadily increased and local authorities are ready to pay whatever rates of interest are necessary to secure loans the result is a spiral of competition between central government, banks•and institutions, and building societies • to secure first place in a savings market inadequate to meet all the demands made upon it. Earlier this year local authorities were

borrowing seven-day money at interest rates as high as 17 per cent and in March a record.

international loan was obtained by the: Greater London Council of £215 million for ten years at a floating interest rate with the Treasury covering the risks involved in any currency fluctuation.

The situation can be clearly seen from the GLC's expenditure increase of 46 per cent for this year. Since about 15 per cent is represented by inflation, there is a 31 per cent increase in expenditure at a time of great

economic difficulty. High public spending produces the inevitable result of high rates and the latest analysis prepared by the Rating and Valuation Association has shown that rates will rise this year by an average of 40 per cent. While the increases have been attributed to inflation; high interest rates; local government re-organisation; and even occasionally to irresponsible spending plans, one of the basic causes which is not noted has been the lack of democratic local control. which has permitted reckless spending policies to develop. It is very questionable how many of the multi-million-pound town, centre redevelopment schemes and 'white ,elephant' office/shop development schemes would have been undertaken had the issues first been put to the public. The situation has been exacer

bated by the recent amalgamation of local authorities into a small number of giant authorities and also by the increasing amount of local government powers.

It was claimed, with the enthusiastic support of all the main parties, that these amalgamations would reduce expenditure through greater efficiency. However, already in the first month there are signs that this aim is not being achieved. Many councils are budgeting for staffing levels higher than the combined totals of staff employed by their predecessors and even now there is an admitted staff increase of over 5 per cent, mainly in the higher-paid categories.

It is a sad commentary on the leadership of a country which has been proud to regard local government as the cradle of democracy that despite a growing mood for people to be consulted about public decisions affecting their local environment the new system has made it even more difficult for local control to be kept close to the people.

Contrary to the views frequently expressed, local authorities do have an abundance of powers and in many respects are all-powerful as regards dealings with private individuals, commercial concerns and even central government. They are able simply to do what they like and since they are in some instances prepared to spend without limit on litigation it is only the wealthiest who can afford to risk opposing them. The power to purchase compulsorily on virtually any pretext has become a threat to our national liberties and there is need for such arbitrary and dictatorial powers to be reduced to use only in cases of essential need in the public interest.

Unless and until the current trend is reversed by reducing and transferring powers downwards to the district councils, there is no prospect of control other than by party machines. When authorities reach the size they are today, independent minded councillors have no prospect of seeking an effective voice in local government. Recently a case was reported where an independent councillor was squeezed out of a council by, it was alleged, the two main parties refusing to appoint him to any council committee. This practice is not uncommon and the power of the party machines and the power of councillors, as laws unto themselves, to spend as they please can in my view only be broken by transferring powers downwards and ensuring that no district council is larger than, say, 50 to 75,000 in population.

Within the narrower context of corruption and the appointment of a Royal Commission or even a standing committee of inquiry it is important that the real public corruption which has occurred in local government since the end of the war should not be lost sight of. The most sinister aspects of this public corruption are not just the remarkable lack of

Spectator May 25, 19 f, laws and rules to control graft and conflict0 interest in local government but the deter mination of the whole establishment to that graft of any kind did exist. Worse str11h! the unexplained failure in high places for Poulson miasma to have been exposed nietir).' years back when the facts were first 101011,4 but like dirt were swept under the carPet.„ must never be forgotten that but for the 8'; cident of bankruptcy proceedings which Pei'd. mitted full disclosure of the facts they vOt!,', still have remained secret and there is doubt that the power of the 'gagging

would have effectively stilled any P '

r comment. Nor should we forget the extra„ dinary protest from many powerful sourceA against the learned Counsel who was Con" a ducting the examination in bankruptcy. oLe Ever since the Town and Country Plat Act 1947 first gave local authorities the solute power to grant permission 1°,c development of land there has been a rush in building and land values. This Pe)W to put millions of pounds on land values b0t in the main been exercised in secret by 1°c3r h councillors. The temptations must have bee. t alluring and it is a sad reflection uponI. who determine local authority powers t". they omitted to provide adequate protectre"; both in the interests of local government aLle' the public. Similarly the reluctance on Wof tl part of the authorities to ensure publicit)tis s Council business by the admission of the Pre a P and public to committee meetings raises n h question of establishment integrity. Ev,ect today following the Local Government 1972 the law is so drafted that councils legally evade press access to committees converting themselves into sub-committees,,iu, rr passing an appropriate resolution. The tra' tion of secrecy continues. The real villains of the piece are those vlb„cf have chosen to keep the people ignorant,

Redditch and Bognor Regis. "power

actri a their 'democratically' elected council's ties and who instead of making consultati°3ti and participation a reality have used thent. P a device for letting off steam and alloy/I:10 local bureaucracy still to continue to oPerl,e in secrecy and beyond the wishes of electorate. To this day almost the entire 11.:i 3! tion is unaware that it is the spending 3°41 ties of local government that is at the V t1 root of many of our economic misfortunes',1 It is these 'corrupt practices' which a`i tl sounding the death knell of a local Ii" IL Ir democracy and making the cry of

the People" the great deception. e;

ti Paul Smith, a solicitor, is honorary secreter; rr of the Local Government Reform Society, served as an officer on county councils a district councils, and was chief officer lr

Redditch and Bognor Regis. "power the People" the great deception. e;

ti Paul Smith, a solicitor, is honorary secreter; rr of the Local Government Reform Society, served as an officer on county councils a district councils, and was chief officer lr