Between 1900 and the 1970s, local government in England gradually became less
independent of the centre. Increasingly, national politicians recognised that the
negative effects of urbanisation and industrialisation were so extensive that they could no longer be addressed at the local level. As a result, they sought to provide much more comprehensive and uniform welfare provision across the country – particularly after 1945.
The process of centralisation began in earnest with the 1906 ‘People’s Budget’, which introduced pensions and sickness insurance for workers. It continued after World War I with the House and Town Planning Act in 1919, which placed a statutory
requirement on local authorities to provide council-owned housing to their residents. However, various reforms to funding arrangements changed the nature of the central-
83
local relations more fundamentally. For example, the 1929 Local Government Act replaced the assigned revenues system with a formula grant, which calculated how much funding each authority should receive from central government according to the perceived demand for their services. It also gave the Minister for Health the power to reduce an authority’s block grant to provide public health services, ‘if he considered that the expenditure of the council had not been effective’ (Seeley, 1978, p. 13).
This growing interdependency conflicts with the popular characterisation of Britain as a ‘dual polity’ (Bulpitt, 1983). At the same time, however, ministerial control over local authority finance meant that central-local relations became increasingly asymmetric as the century progressed – in contrast to the more balanced situation in Germany. Indeed, only 45% of municipal revenue came from local taxes by 1974, compared to 94.5% a century earlier (Hesse and Benz, 1990). By this time, central government had assumed a dominant position in the relationship, partly due to the plethora of legislation that was introduced shortly after World War II. Some of these Acts meant that councils had to provide additional statutory services (such as
education), a number introduced new legal requirements (for example, all new building developments now needed planning permission), and others gave central government responsibility for functions that were previously administered at the local level (including hospitals). Finally, many services that had previously been owned by local authorities – including gas, electricity, telecommunications, railways and many airports – were nationalised. Not only did these nationalisations deprive
municipalities of revenue streams, but they also reduced their capacity to shape their localities independently of other actors. Notably, the post war German government did not nationalise utilities: instead, the vast majority of authorities retained their municipal Stadtwerke and therefore exercised more control over public service provision within their communities.
As the century progressed, changes in population distribution, technological
developments and the growing welfare state led to calls for relations between levels of government to be clarified and their respective responsibilities put on a statutory footing, in order to stop the trend towards increasing asymmetry (Seeley, 1978). In response, ministers set up several commissions and published a number of proposals on the future of local government, including the Redcliffe-Maud Report of 1969. This
84
recommended establishing much larger local government areas (including unitary authorities in England’s largest cities), clarifying functional responsibilities across tiers and abolishing the concept of ultra vires (Thomas, 1969). It argued that local government was unable to punch its combined weight in discussions with central departments and larger authorities were necessary in order to increase capacity, attract better quality staff and help municipalities to achieve their objectives (Garner, 1970). Notably therefore, the report did not prescribe greater interdependence with higher tiers of government in line with the German culture of Politikverflechtung (which encourages public bodies to work across and between tiers in order to achieve policy objectives – see section 3.3.1). Instead it argued that bigger municipalities would be better placed to achieve their goals because they would have the extra internal capacity that was necessary to operate more independently of the centre.
However, the UK Government implemented neither the recommendations of Redcliffe-Maud nor those of several other commissions on the future of the
municipalities. Together with the lack of a codified constitution – which meant that ministers could decide to abolish or create new authorities quite easily – this meant that the drift towards greater asymmetry in central-local relations continued. There were of course powerful arguments in favour of central control, not least that a growing proportion of municipal spending was funded by central government, and that people across the country should benefit from services of broadly similar quality (Seeley, 1978, Norton, 1994). Yet, as section 3.4.2 will illustrate, it resulted in a situation where local authorities lacked the capacity to achieve their objectives alone – and where higher tiers of government were far more reluctant to provide support than was the case in Germany.
Indeed, principles such as Politikverflechtung have been almost entirely absent from central-local relations in England, despite the fact that ministers have recognised the important role that municipalities play in implementing policy. As a result, English councils were far more dependent on the centre than their German counterparts by the early 1970s: they were still subject to ultra vires and ministers still viewed them primarily as functional agents rather than local democratic bodies. Although the growth of national welfare states in both countries meant that the centre had assumed responsibility for many services that were previously delivered by local authorities,
85
German municipalities became much more integrated with higher tiers of government than English councils. This meant that they could call on a much larger pool of state support, co-operate with other bodies to develop consensual solutions and increase their capacity as a result. The contrast between the two countries is still relevant in the present day, as the empirical chapters will demonstrate in the cases of Gelsenkirchen and Newcastle.
Figure 3.3: Shifts in vertical dependency relationships for local government in England and Germany, 1900-1970s
Figure 3.4: Shifts in horizontal dependency relationships for local government in England and Germany, 1900-1970s
86
Figures 3.3 and 3.4 show how power dependencies shifted between 1900 and the early 1970s in both countries and along both dimensions. They illustrate the
increasing degree of vertical interdependence across tiers of government in Germany, which contrasts with English councils’ greater dependence on the centre for resources. There was less change along the horizontal dimension, in that German municipalities retained control over utilities and other local services and, as powerful local
institutions, continued to act largely independently of other actors. In England, developments such as the utility nationalisations reduced local government’s
horizontal influence to a greater degree than in Germany and therefore increased their
dependence on other actors – but not to a significant degree. Nonetheless, as the next section will demonstrate, this trend away from horizontal independence began to accelerate rapidly from the late 1970s onwards, particularly in England, as
municipalities sought to work with other actors to increase their capacity to achieve policy objectives.