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O'connell In the first of a regular new weekly column, John O'Connell, Research Director of the Taxpayers Alliance, says reducing the list of statutory requirements for councils gives the chance to get back to basics

Those familiar with the work of the TaxPayers' Alliance will know that we've uncovered hundreds of stories of councils wasting taxpayers' money. They range from the not so sublime to the completely ridiculous. We've seen councillors going to lap-dancing clubs as research, and leaflets produced telling people how to walk.

As this is my first of many weekly columns for the Local Government blog on ConservativeHome, I thought I'd take a slightly different tack. I'm sure there will be plenty of opportunities for me to tell you all about some crazy scheme a council is embarking on, or how many workers it takes to put a silly sign, but I want to go back to basics and discuss how councillors should be approaching their budgeting. There are some big decisions for councillors to make over the next few years; but there's also a great opportunity to establish a new culture in town halls across the UK. And how they approach budgeting will be absolutely crucial for delivering services at good value for money, and delivering lower council tax in the medium to long term.

A good place to start would be to ask every councillor in the country to read the State Budget Reform Toolkit, a pamphlet put together by the American Legislative Exchange Council. It is an eminently sensible guide designed for State politicians. While American States do have more fiscal autonomy, the lessons are transferable to councillors here. The authors suggest that local legislatures should first establish what the core principles of governing are, and they should do this as soon as possible after an election. Of course, this will be fiendishly difficult and ideological battles will rage. But establishing and agreeing what these principles are early on will provide a framework for governance for the rest of the term that no party can renege on. It will also give the electorate a clear idea of what an administration will do from the outset, and they can hold them suitably accountable.


After this, local councils should budget for outcomes. The pamphlet argues that many State budgets in America are on "autopilot". It's the same in the UK: to provide the same level of services next year, councils need the same plus more for inflation and population increases. Now that their budgets are reduced, many simply don't know how to react, because they've been on autopilot for so long. They cite Washington State as a classic example of a legislature budgeting for outcomes. Governor Gary Locke called for a thorough re-evaluation of what the State's priorities were, and ten key items were set out. They faced a $2.4 billion budget shortfall in 2002 and this was eradicated by closely sticking to clear objectives.

The success of these models relies in part on political consensus at the start of the process. In the cases where this is not possible, sound budgeting still is with strong leadership. I met with Sir Edward Lister from Wandsworth council last year, as well as their Finance Director, to find out more about how they consistently delivered low council tax. For every spending decision, they told me they ask themselves: Is this something the council has to do? Can someone else provide this service better than we can? If the council must do it, how do we do it for the best possible value for money? They have the lowest council tax in the country, and it's down to these simple but well established methods of rigorous review and assessment.

Spelling out these basics may seem obvious. But we know that politicians and bureaucrats often tend to equate an increased budget with success – they've obviously done something right and their good work has been rewarded with more money to do even more good things. It's known in political science as the budget-maximising theory of bureaucracy, a sub-set of public choice theory. Council leaders up and down the country need to establish a clear set of principles for how their council must approach budgeting before they even look at a budget line. If there are statutory obligations to meet that aren't a priority, then the minimum possible should be done to meet that obligation, in lieu of DCLG taking a big sharp axe to the bonkers legislation tying the hands of councillors. Simple, clear steps like these will make decisions accountable to taxpayers and that bit less painful.

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