The classic approach to central-local government relations introduced two basic models to describe the relationship: the agent and partnership models (see Hampton 1991). The agent model suggested that local government had little or no discretion under the national policies of central government. In this interpretation local government acted as an agent of central government which had financial and statutory superiority. The partnership model inferred that central and local government were ‘co-equals’.
Conventional wisdom (see for instance Byrne 1992; Chandler 1988; Hampton 1991; John 1994; and Wilson and Game 1994) suggested that due to increased centralisation and controls on the capital expenditure of local authorities the UK has moved from a partnership to an agency model. Conventional wisdom on central/local relations is now explored as the first theme for the study of local government within the City Challenge decision-making process. The City Challenge bidding process has forced local authorities to respond rapidly in an innovative manner: “new ideas emerged which demonstrated ingenuity and flexibility” (Cantle, 1992, pl2).
Following discussions with key players in Sheffield and the Deame it became apparent that local authorities have, to a limited extent, adapted their ways of working as a result of the City Challenge bidding and decision-making processes. Respondents confirmed that changes within local government have already been taking place over a number of
years and the City Challenge initiative was a relatively minor, yet identifiable part of that process. “That adaptation has been going on for some time and City Challenge just consolidated that” (A public sector employee). Other research confirmed that although the government had some success in transforming the way in which local authorities operated “new ways of working encouraged by City Challenge were in place prior to the initiative, through cross-departmental decision making and special committees to co ordinate and streamline decision-making” (Oatly and Lambert, 1994, plO).
The following section outlines two themes which emerged from discussions: the redefinition of the traditional role of local government and changing decision-making structures.
Some observers felt sympathetic towards local authorities who have had to ‘cede their sovereignty’ and alter the ways they have operated for many years. Others agree that the City Challenge initiative has contributed towards local authorities shedding their ‘traditional role’: “that incredibly paternalistic type, top-down attitude towards service
development that the authority knew best, they did everything, its (City Challenge)
forced them to challenge their thinking” (An academic).
The decision making process was one way City Challenge forced local authorities to change. “They’ve had to become faster and more responsive and delegate more decision-making power away from local authorities the traditional committee structure” (An academic). Whilst it was possible to adapt the previous system to incorporate ‘fast- track’ decision-making the process was easier in some authorities than in others. For instance in Rotherham the decision-making process normally involved three stages: from a sub-committee to the policy committee, before final council ratification. At best this process took three weeks. However the council had ‘urgent business powers’, initially introduced as a mechanism during recess periods, for holiday or election periods for example. This process allowed same-day decision making on major strategic issues following authorisation from the Chairman and Director of Finance. These powers were used for City Challenge programmes.
Whichever model was adopted, the relationship between central and local government
could be examined under three broad headings: legal, administrative and financial
(Hampton 1991).
First, local authorities were legally constrained from the centre. They existed due to
statutory authority may be found ultra vires and any consequent expenditure disallowed” (pl74). This emphasised the importance of the legal guidelines in determining the extent of local authority discretion (see John, 1994). As local authorities have no written constitution their sphere of influence can be altered at any time. However many authorities retained a degree of autonomy as legislation was interpreted in different ways and, to a certain extent, manipulated. Parkinson (1986) demonstrated how Liverpool attempted to curb central controls using ‘creative accounting’. The ‘Conventional Wisdom on Central/Local Relations’ (section 5.2) also referred to legal changes that influenced the operation of local government. Despite the implications of changes to
modus operandi of local authorities few respondents mentioned legal constraints, other than in general terms.
Second, central government imposed administrative controls over local government
Communication between government departments at a central and local level was inevitable. This often took the form of circulars offering advice and guidance. The strength of the relationship varied from department to department. As early as 1965 Griffith identified three levels of communication: “three separate attitudes are broadly distinguishable: one is basically laissez-faire, one is basically regulatory and one is basically promotional” (Hampton, 1991, pl77). The laissez-faire approach implied a considerable amount of discretion for local authorities, whereas the regulatory approach might, for example, have involved central statutory controls. The promotional approach involved fairly stringent controls over policy at the local level. Communication between the centre and the locality took two main forms, either direct or indirect. Directly, central government can influence local authorities by, for example, statute. Indirectly, circulars ‘advised’ local departments on a variety of issues such as how to interpret new legislation.
Finally, local government was constrained financially. Capital expenditure by local
authorities was under close scrutiny from the centre. Local authorities were also controlled in the way they could spend capital receipts. One recent example was the sale of council houses. Hampton noted “seventy-five percent of the receipts from council house sales, and half of the receipts from other sales, must be set aside to meet credit liabilities (Local Government and Housing Act 1989: Clause 59)” (1991, p99). Furthermore central government influenced the levels of revenue expenditure for particular services. Auditors were engaged to ensure value-for-money (VFM) and the achievement of the “three E’s”: economy, efficiency and effectiveness, in the ways it used finance. The centre therefore used its financial sovereignty to legitimise control over local policy.
Local authorities in the Deame have modified their financial regimes to accommodate the speed with which City Challenge funds needed to be processed. For instance Barnsley MBC has recently used a tool allowing local authorities automatically to deal with standing orders to speed up the process. City Challenge teams unlike local authorities also have the option of negotiating either an ‘overspend’ or an ‘underspend’ provided they found another City Challenge area that required either the surplus funds or needed to ‘off-set’ overspend. This flexibility was not awarded to local authorities budgets. “Now local authorities can’t do that...if they (the local authorities) don’t spend it they’ve lost it” (Local Authority Employee). One Deame Valley Partnership member noted that the City Challenge funding of £7.5 million per annum was relatively insignificant compared to the Deame authorities’ annual budgets of between £150-£200 million. “Therefore there is great difficulty in trying to change financial systems for the sake of a very small percentage of the overall budget”.
In summary City Challenge teams were decision-making bodies with a power base outside the political process of the local authority. Dunleavy (1980) referred to the teams as ‘non-local’ sources of policy change. However, findings within the case study areas suggested that the City Challenge implementation process has managed to infiltrate local authority command structures and committees, and short-cut the process with ‘fast- track’ decision making. The evidence indicated that local authorities have had more discretion in the City Challenge decision-making process than the agent model outlined by Hampton (1991), although they could not really be regarded as co-equals as the partnership model suggested. It was for this reason that the following section considers some more detailed explanations of central/local relations.
5.3 Explaining Central/Local Government Relations in Sheffield and the Dearne