Local Government II – How Local Government Works – Page 6

Having looked at how local government in Wales has got to where it is , next it's worth examining how local government in Wales operates. What does local government do? The powers and responsibilities of local government are largely set out in law. These powers and responsibilities generally change with the law – both at a Welsh and UK level. As mentioned in Part I ( The Story of Local Government ), most of the modern framework for local government is set out in the Local Government Act 1972 . There have been changes to the law since then – devolved and non-devolved – but the most important rules relating to the structure and governance of local councils have remained the same. In Wales, local government responsibilities are divided between the 22 unitary (also called principal) authorities and the country's 730-or-so town and community councils as well as some regional boards, panels and commissions (more on this later). The unitary authorities have the biggest share of responsibilities and powers. Broadly speaking, it looks something like this: [caption id="attachment_12417" align="aligncenter" width="1461"] Click to enlarge[/caption] Some local government responsibilities are known as "statutory services". This means a council must, by law , provide the service. Some unitary authority statutory services include social care, most elements of the planning system, public libraries, waste collection, licensing, building control, some elements of the housing system, highways, environmental health and education. There are also local government services that don't have to provide by law (called discretionary services). Councils can choose whether to provide them or not and/or charge to use them. These include public toilets, car parks, swimming pools & leisure centres, CCTV systems, parks & playgrounds and tourism promotion. Town and community councils have no statutory responsibilities meaning they don't have to provide any services by law. They do, however, have some rights - such as a right to be consulted on planning applications and a right to raise funds through council tax precepts (more on this later). Under the Local Government & Elections Act 2021, unitary authorities - as well as town & community councils in Wales that meet a certain standard of governance - have a "general power of competence". This means they can carry out any function they deem necessary for the well-being of their local community within the law. One trend over the last decade has seen the 22 unitary authorities hand responsibility and leases for discretionary services – such as public toilets, parks and leisure centres - to town & community councils (often via Community Asset Transfer), arm's length companies, clubs or charitable trusts. One grey area is housing. While councils have statutory responsibilities – such as a requirement to provide services relating to homelessness – they seemingly don't have a statutory responsibility to provide housing itself. Since the 1980s, a sizable proportion of previous council homes have been transferred to "not-for-profit" housing associations - though some Welsh unitary authorities have started to build council housing again. How is local government financed? Local government finances will likely be at the top of everyone's list because, "Yes, but how much will this cost?" is the most popular question asked concerning anything in Welsh politics these days – independence-related or not. This is a summary of some (probably not all; I'm bound to have missed something) of the budget elements that fund the unitary authorities, town and community councils and other elements of local government. This is how things looked in 2019-20: [caption id="attachment_12418" align="aligncenter" width="662"] (Pic: Wales Fiscal Analysis, Cardiff University)[/caption] The graphic is pre-pandemic and things look a bit different now. For example, housing benefit has been/is being phased out by universal credit and councils received additional funding to cope with the Covid-19 pandemic. The figures mentioned below are for 2022-23 1 unless stated otherwise. Total expected spending by local government in Wales for 2022-23 was just under £6.95billion (this figure doesn't include spending on the UK Government's behalf). Core Elements Revenue Support Grant (£3.974billion) – This is a straightforward share of the Welsh budget. The revenue support grant is set at a level to ensure each local authority can provide a consistent level of services based on national average spending based on the cost of providing different services, populations and demographics (called a Standard Spending Assessment). The level of grant to each council is calculated using a formula for its Standard Spending Assessment, its share of redistributed business rates and the county's council tax base (worked out using Band D as the average). Councils can decide how to spend this money themselves, though a portion of it may come from the Welsh Government for specific purposes – for example, funding for sixth forms, the pupil deprivation grant, funding bus services and free childcare schemes. These specific grants totalled £1.19billion in 2022-23. Councils were also awarded £150million in general capital funding during 2022-23 which they can spend on new projects and infrastructure of their choice. Council Tax (£1.838billion) – A tax on households based on property values. Each domestic property in Wales is placed in a band from A (lowest value) to I (highest value). As mentioned, Band D is considered to be the "average" and is what most figures are based around. There are exemptions (such as student accommodation) and discounts available (i.e. for carers, the disabled and single people). Some local authorities have started to apply premiums to bills for second homes that aren't occupied all year round, while rules have changed to make it more difficult for holiday lets and second homes to avoid council tax. Each council keeps the council tax they raise for themselves. Non-Domestic/Business Rates (£1.135billion) 2 – This is a tax levied on business properties. It's set based on the value of the property (called "ratable value") times by a multiplier set by the Welsh Government (0.535 in 2022-23). Councils don't keep the rates they raise for themselves. Rates are redistributed across Wales using a formula based on the share of the Welsh adult population living in each unitary authority. A share also goes to fund policing, while the Welsh Government funds business rate relief for qualifying businesses to cut or eliminate bills. Precepts & Charges Council Tax Precepts (~£432million; not counted in local government spending figures) – Precepts are top-ups to council tax bills set by Police & Crime Commissioners as well as town & community councils (where applicable). In 2022-23, the average (Band D) policing precept was £318, while the average town & community council precept was £40. Total income from council tax precepts for the four police forces in Wales based on this was £380.9million in 2022-23 3 , while an estimated total amount raised in town & community council precepts would be somewhere in the region of £50.6million 4 . Fire Service Charges (~£172million in total; charged to councils from their budgets) – Unlike the police, the three Fire Authorities don't set a precept. Councils are charged directly for fire and rescue services, with changes passed on to council tax bills. Top-up grants are also provided to fire services by the Welsh Government, while fire authorities also have borrowing powers. Other income & expenditure Borrowing – The 22 unitary authorities and town/community councils have powers to borrow money, usually for capital spending. The legacy Public Finance Initiative and more recent Mutual Investment Model projects could be considered a form of public borrowing by councils too (particularly for the construction of new schools). In 2022-23, the 22 unitary authorities were expected to spend around £350million in total on debt financing (repayment of the principal and interest). Town and community councils can borrow money with Welsh Government permission, albeit under stricter guidelines on what the money can be used for. Borrowing requests above £50,000 usually require a full business case but, theoretically, there's no upper limit 5 . Reserves – This is money set aside as "savings" or emergency funds by each council. These reserves can be put towards future projects (earmarked reserves) or used to manage in-year spending changes (general reserves). As of March 2021, the 22 unitary authorities held £2.13billion of usable reserves, though only £224million of that hadn't been earmarked or ring-fenced in some way 6 . Councils are required to set minimum reserves as a % of overall spending each year as part of good accounting practices. Charges, Fees & Fines – Councils can levy charges for certain services and also collect fines for low-level offences such as dog fouling and littering. In 2019-20, this was estimated to have raised £1.3billion in additional income for councils across Wales 7 . However, many councils lost this income during the Covid-19 pandemic (i.e. fewer people using pay and display car parks), which had been partially offset by Welsh Government Covid-19 grants. 1. Welsh Government (March 2022). "Final Welsh Local Government Revenue Settlement 2022-2023". Available at: https://gov.wales/sites/default/files/publications/2022-03/settlement-2022-2023.xlsx 2. Business Wales. "Business Rates in Wales". Available at: https://businesswales.gov.wales/business-rates-wales#guides-tabs--0 3. StatsWales (24th March 2022). "Council Tax Levels in Wales: 2022-23" (p6). Available at: https://gov.wales/sites/default/files/statistics-and-research/2022-03/council-tax-levels-april-2022-march-2023-003.pdf 4. A national average of £ 40 per community council with a tax base of 1,265,370 Band D equivalent properties (40 x 1,265,370). 5. Welsh Government (June 2019). "A Guide to Community & Town Council Borrowing Approvals". Available at: https://gov.wales/sites/default/files/publications/2019-06/borrowing-approvals-guidance-for-community-and-town-councils.pdf 6. Welsh Government (May 2022). "Local authority reserves: 2020 to 2021" (Table 1). Available at: https://gov.wales/sites/default/files/publications/2022-05/whole-of-government-accounts-2020-2021_0.pdf 7. Wales Fiscal Analysis, Cardiff University (April 2021). "Local Government & The Welsh Budget" (p46). Available at: https://www.cardiff.ac.uk/__data/assets/pdf_file/0009/2513619/lgf_outlook_2021_7.pdf How are the 22 unitary authorities run? From finances to leadership (or lack of). I'll start with a TL;DR graphic, then go into more detail later on. [caption id="attachment_12419" align="aligncenter" width="1200"] Click to enlarge[/caption] Councillors [caption id="attachment_12434" align="aligncenter" width="800"] (Pic: Rhondda Cynon Taf County Borough Council)[/caption] You can't have a council without councillors and as of the 2022 local elections, we have 1,233 in Wales – roughly one county councillor for every 2,500 people. Each councillor represents a ward, with the number of councillors in each ward and their boundaries determined by the Local Government Boundary Commission for Wales. Much like elected politicians higher up the ladder, the role of the councillor includes: Representing the interests of their ward/constituents in full council and committee meetings. Processing and submitting requests from members of the public for action by the council (casework/referrals). Engaging with the local press (where it exists) on local issues. Taking part in scrutiny committees (more on this shortly) to hold the council to account. If a member of a political party, campaigning for that party during national elections. While the role is considered to be part-time, councillors have an unofficial commitment to be publicly available 24/7. Unitary authority councillors are paid an annual allowance of £16,800 (as of 2022-23) and are eligible for certain expenses relating to travel and care responsibilities. The unitary authorities are chaired by a Mayor (assisted by a Deputy Mayor) who is usually elected for a one-year term. Mayors and deputy mayors are paid a higher basic salary, making it a prized position. Councillors who are leaders of opposition groups receive a higher basic salary too. The Leader & Cabinet The Cabinet system was introduced in the Local Government Act 2000 . Before the Act, political decision-making in local government was undertaken by cross-party executive committees. After the Act, the executive decision-making power was entrusted to a Leader and Cabinet (sometimes called an Executive Board/Executive Committee) selected from the council as a whole – whether from the largest single party/group or as part of a coalition. The Council Leader is the political head of the council and is elected at the council's Annual General Meeting. They usually come from the party with the most councillors or a coalition with the most councillors between them. The Leader appoints councillors to Cabinet positions (including a Deputy Leader), with each one being politically accountable for a council department or policy area. The Leader and Cabinet Members are responsible for the council's work programme, drafting the budget and decision-making. If they were elected on a particular manifesto, it's their responsibility to ensure those pledges are delivered. There are some decisions – planning applications and licence applications, for example – which are made by committees rather than the Cabinet. Annual budgets and council tax levels have to be approved by the council as a whole too. Council Leaders and Cabinet Members are considered full-time positions and, as such, they're paid a full-time salary inclusive of their councillor allowance. Depending on the size of the council and the seniority of their position, salaries for Cabinet Members range from £32-63,000-per-year. Council Officers Council officers act as the civil service for local government. They run the day-to-day operations of the council. They're politically answerable to the Leader and Cabinet Members and are held accountable by councillors as a whole and the council's scrutiny committees. Officers offer impartial and politically neutral advice/recommendations to Cabinet Members, committees and individual councillors. Although decision-making authority is supposed to lie with the Cabinet – or with committees in the case of planning and licensing - in practice councillors rarely disagree with officer recommendations to which they are legally required "to have due regard". Some decisions – known as "delegated powers" – may be made by officers on the council's behalf. These powers are included in a council's scheme of delegation and include things like the power to issue on-the-spot fines, sign low-value contracts and issue public notices. Critics may argue that this has reduced the role of councillors role to nothing more than using a rubber stamp ( Part III ). Certain officer positions are legally required and are called statutory officers/statutory chief officers: Head of Paid Service (aka. Chief Executive) – The head of the council's administration and responsible for organising staff as well as ensuring the council's day-to-day operations are carried out effectively. Section 151 Officer (Finance Officer) – Responsible for the good management of the council's finances, including preparing budgets, monitoring things like borrowing and reserves and making recommendations on things such as council tax rates and fees. They have to be a chartered accountant. Monitoring Officer (usually the Head of Legal Services) – The council's chief legal officer and counsel. They're responsible for ensuring a council upholds its Constitution, monitoring the conduct of elected members and ensuring decisions made by the council are lawful. As such, they're usually a qualified and suitably experienced solicitor, barrister or legal executive (see also: A Welsh Justice System II – The Legal Profession in Wales ). Head of Democratic Services – Responsible for matters relating to the political make-up of councils (i.e. assigning committee seats), taking minutes of meetings and overseeing the voting process at council meetings. Other key non-statutory positions that most councils have (though the titles may be different) include: Returning Officer – Responsible for overseeing elections and election counts; almost always the council's Chief Executive. Head of Development Control/Chief Planning Officer – Acts as head of the local planning authority, so oversees strategic/local development plans and the process of determining planning applications. Planning officers are almost always members of the Royal Institute of Town Planning. Department managers – Chief officers in charge of a particular council department. Although the titles may be different from council to council they'll include the Director of Education, Director of Social Services, Director of Children's Services etc. Despite the principle that officers should be politically neutral, as of 2021 officers in Wales – except the most senior/statutory ones – are allowed to stand in elections to the authority they're employed by, on the expectation that they'll resign from their post if elected. Committees [caption id="attachment_12435" align="aligncenter" width="700"] Most council committees are focused on scrutiny, while others - known as regulatory committees - make decisions on the council's behalf, such as planning decisions. (Pic: Western Telegraph )[/caption] As mentioned earlier, before the introduction of the Cabinet system most political decisions were made by executive committees. Since then, the role of the committee in local government has been primarily focused on scrutinising the Cabinet and council officers. Committees are made up of councillors who are not members of the Cabinet. They're supposed to reflect the number of seats each party/group has on the council. Each Committee appoints a Chair to run meetings who in turn receive a higher allowance – though the Chairs of committees with decision-making powers, like planning/development control, usually receive more. As a result, committee chairs are often fairly powerful and sought-after positions. Some committees are required to be established by law (each council is required to have a Standards Committee, for example), while other committees are set up to scrutinise a particular policy area or council department. The role of the committees and their members is to provide detailed scrutiny of decisions proposed or taken by Cabinet Members and/or officers. This is to ensure the council is being well-run, isn't taking any unnecessary risks (financial or otherwise) and is acting in the best interests of residents. Committees have the power to "call-in" decisions made by the Cabinet or officers if they believe those decisions require additional scrutiny. This could be because, for example, a decision was made without enough information being provided - read a recent example in Bridgend at Oggy Bloggy Ogwr . There are certain other committees outside the council that councillors may be appointed to. These include Fire Authorities, Police & Crime Panels, National Parks Authorities (where applicable), certain health and social service-related boards and – as of 2021 – Corporate Joint Committees. These appointments usually come with additional pay and expenses. How are town & community councils run? [jnews_block_12 number_post="1" include_post="11022"] Wales has around 730 town and community councils and up to 8,000 town and community councillors – or roughly one town/community councillor for every 390 people. Being able to pin down an exact number has been difficult and not exactly a good sign in itself. As mentioned in Part I , while all of Wales is divided into communities, not every community has a council. Only 12 unitary authorities are fully covered by town and community councils. Some have very few. Merthyr Tydfil, for example, only has one community council (Bedlinog & Trelewis) while Cardiff – the most populous unitary authority – only has six. To summarise, here are the main differences between the 22 unitary authorities and town/community councils: The biggest difference is that a town/community council works as a corporate body, with the Mayor/Chair acting as a presiding officer or senior spokesperson (usually on a one-year term). As a corporate body, a town or community council makes decisions together with no single leader or cabinet – although they'll receive appropriate advice from their Clerk. The unitary authorities have the Cabinet and senior officers to do this (with some regulatory decision-making delegated to committees). Party politics plays less of a role at the town and community council level and many operate on a non-partisan basis. This isn't always the case. There have been incidences of party or group allegiances causing arguments when contentious decisions are made. Another key difference is the massive variation in the amount of money available to town/community councils. The smallest ones may raise enough money to cover the cost of hiring a Clerk and holding meetings – literally a few thousand pounds a year - but little beyond that. The largest ones may bring in hundreds of thousands of pounds in precepts annually. There are some similarities between the two tiers too. Both unitary authorities and town/community councils are chaired by a Mayor or equivalent elected for a one-year term. Both tiers of local government are subject to audit by the Wales Audit Office and investigations by the Public Services Ombudsman. Both also have borrowing powers (though this strictly controlled at town/community council level) and are subject to the Wellbeing of Future Generations Act duties to promote the well-being of residents. As of 2021, both have a "general power of competence" to do anything within the bounds of the law to benefit their communities (though this only applies to town/community councils that meet eligibility criteria). Each town and community council usually has its own standing orders for how business is conducted. Although it doesn't seem to be a strict requirement, in most cases town and community councillors are appointed to committees in the same way as their unitary authority colleagues. I'll be going into the issues facing town & community councils and arguments in favour of reform in Part III – though it's also discussed in the link at the top of this section. The "Hidden" Tiers of Local Government When you think "local government", what will likely come to mind immediately are the elected councils - but it doesn't end there. There's a tier of community and regional government that you may not even know exists or you probably don't give a second thought to. Some have long been abolished – Health Authorities, Water Boards, Regional Transport Consortia and Electricity Boards, for example. Others are informal or organic and have been formed out of communities themselves; some have been created by new laws. [caption id="attachment_12424" align="aligncenter" width="948"] Click to enlarge[/caption] The WLGA, One Voice Wales & Partnership Council of Wales Wales has two representative bodies for the local government sector. The Welsh Local Government Association (WLGA), founded in 1996, represents the interests of the 22 unitary authorities, 3 fire authorities and 3 national parks authorities . The WLGA has a national council and board to make decisions in policy areas of collective interest. Under local government partnership arrangements, the WLGA is the recognised "voice of local government" in negotiations with the Welsh Government and UK Government. As a result, it's become a very powerful lobbying organisation – in both a good way and a bad way. The Williams Commission reforms/council mergers met a lot of resistance from the WLGA (effectively scuppering it), but they've also fought their corner on local government financing which perhaps limited the impact of austerity on local government in Wales when compared to England during the early 2010s ( Part III ). The second representative body is One Voice Wales for the town and community council sector. It was formed in 2004 following the merger of NALC Cymru and the Welsh Association of Town & Community Councils. One Voice Wales has a slightly different role compared to the WLGA in that its focus is more on improvement, guidance and training. Many town & community councils don't have suitably qualified staff to provide complex advice, so One Voice Wales often provides legal advice and alike as a consultancy. All elements of local government in Wales – county/borough councils, town & community councils, national parks authorities, fire authorities, health boards, police & crime commissioners and the Welsh Government itself – are members of the Partnership Council of Wales . The Partnership Council meets a few times a year to "encourage joint working between the Welsh Government and local government". The Watchdogs There are several organisations in Wales responsible for monitoring the performance of and standards in local government, whether that's local government as a whole or a particular service area. [caption id="attachment_12425" align="aligncenter" width="948"] Click to enlarge[/caption] What Does Local Government in Wales Look Like? Taking all of this together, local government in Wales probably looks something like the image below; and there are bound to be some elements I've missed. The Williams Commission published a similar graphic in 2014 called an "accountability map" – in itself fairly damning - but, conveniently, I can't find it as of 2022. Brace yourselves (and I've probably left some things off).... [caption id="attachment_12428" align="aligncenter" width="1838"] Click to enlarge[/caption]

Local Government II – How Local Government Works

All you need to know about how your local council is managed, how it's funded and what they do.

Local Government I – The Story of Local Government in Wales

Local Government III – The Case for Reform (and why it hasn’t happened)

Owen Donovan

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