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LGC review of the year 2014

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Like the glittering Christmas present that looks so enticing but causes tears because it requires an absent battery to work, local government has been given presents by chancellor George Osborne, but not the money to operate them properly.

The sector has gambled that its skill in absorbing 28% cuts without the sky falling in shows it could take more devolved powers and deliver better results with them than central government could achieve. Greater Manchester councils’ devolution deal - the single biggest event of 2014 - has at last provided the evidence that this approach can sometimes bear fruit.

However, this record could be seen by ministers as a splendid reason to keep cutting in the knowledge that the public may not notice the results, or will blame councils if they do.

Mr Osborne has both devolved and cut, meaning councils may face a 2015 of more powers but less money. A victory of sorts, perhaps.

January

The year opened with half of England under water, triggering demands on councils for both immediate relief and long-term defence measures, the costs of which cause recurring rows with the government.

Solihull MBC chief executive Mark Rogers moved to the top job at Birmingham, which proved an even hotter seat than he can have imagined.

LGC revealed how 28% of councils had adopted and another 38% were considering adopting the living wage.

Brighton & Hove City Council’s Green administration tried to hold the first ever council tax referendum for a 2%-plus increase, but could not secure councillors’ agreement.

Communities secretary Eric Pickles issued a ‘bin bible’ to push his obsession with weekly waste collections, a document officers may have likened to the bins’ customary contents.

Both smaller cities and counties realised core cities were running away with the devolution agenda and launched initiatives to secure their inclusion.

The Welsh Government said the country’s 22 councils should be merged down to 10-12, sparking uproar that may have dampened enthusiasm for reorganisation in England.

 

February

Chief executives at Carmarthenshire and Pembrokeshire CCs were found by auditors to enjoy unlawful pension supplements. Although this was not a crime, both eventually resigned.

Councils received back more of their money which had been feared lost when Icelandic banks crashed in 2008. In total, 95% of the £1.04bn deposited was recovered.

Great Yarmouth BC took the unusual step of publicly warning it could run out of money.

Councils’ grip on resources was not help by Whitehall delays over approving business rate pools, a quarter of which fell through as a result.

There was some welcome news as care services minister Norman Lamb said there would not be cash penalties for areas that did not meet better care fund performance metrics. Integration of health and social care remained a holy grail, with councils resenting most of the money involved being allocated to the NHS.

Sheila Wheeler Somerset CC

Proposals for county unitaries to save money in Leicestershire and Warwickshire rose and fell within weeks as districts made growling noises.

Somerset CC chief executive Sheila Wheeler left after an unexplained four-month absence that led to questions in Parliament.

 

March

Mr Pickles announced legal moves against ‘town hall Pravdas’, preventing councils from publishing more than once a quarter.

In a recurring theme, councils were given a new responsibility, in this case for youth training information provision, but no extra money.

LGC research found the risk of successful appeals had led councils to expect £519m less than expected in business rates.

Liverpool pier head

 

Liverpool City Council scrapped its huge back office and customer service partnership with BT, as did Lancashire CC.

The LGA restructured to counter a threatened breakaway by big cities, which saw Sir Richard Leese (Lab) chair its new city regions board, and David Hodge (Con) chair the strangely named ‘people and places’ board. Aren’t cities places with people too?

Shadow communities secretary Hilary Benn dashed hopes by saying a Labour government would keep referendums for above-cap council tax increases.

It emerged that councils and NHS commissioners planned to pool more in better care fund arrangements than they were statutorily required to. A total of £5.2bn was due to be put into joint pots.

Durham CC took LGC’s Council of the Year award, while Norwich City Council was Most Improved Council.

 

April

Councils planned to use £1.5bn from reserves to plug budgets gaps, LGC research found, almost double the level of two years earlier. This emptying of council ‘piggy banks’ should have pleased Mr Pickles, being another of his curious obsessions. Maybe some was spent on weekly bin collections.

The formation of Liverpool’s combined authority was marred by the city’s elected mayor Joe Anderson (Lab) threatening to leave two days later when leaders preferred Wirral MBC’s Phil Davies (Lab) as chair.

Hopes of devolution were dashed when transport secretary Patrick McLoughlin vetoed West Midlands councils’ bid to take full control of the region’s rail franchise.

Mr Pickles sent inspectors from PwC into Tower Hamlets LBC to probe alleged grant irregularities under elected mayor Lutfur Rahman (Tower Hamlets First).

Barnsley MBC leader Sir Steve Houghton (Lab) urged the LGA to extend peer reviews to help any council at risk of financial failure

Education secretary Michael Gove found himself condemned by a chief constable for appointing a former anti-terrorist officer to investigate the ‘Trojan Horse’ claims of Islamic extremist takeovers of Birmingham schools.

 

May

Councillors from coalition parties were the unhappiest with their national leaderships, an LGC survey found as local elections loomed.

Election results showed a solid if unspectacular Labour advance, recovering control of the LGA after a decade with Dudley MBC leader David Sparks becoming chair.

He said he would end it “consensus at all costs” approach and focus on devolution.

In May’s oddest poll, Fylde BC voters used a referendum to force a return to the committee system.

Conduct of the mayoral election at Tower Hamlets proved so contentious that a legal challenge followed.

LGA polls found the public trusted councillors more than MPs, and 70% were ‘very’ or ‘fairly’ satisfied with councils’ services despite recent financial carnage.

LGC analysis of councils’ spending with private providers found a huge variation, from a high (ignoring the oddity that is the City of London Corporation) of £2,376 per head at Barnsley MBC to only £116 at Wigan MBC.

 

June

The LGA and Cipfa launched an independent commission on local government finance, which later reported there wasn’t enough of it, and that councils should seek self-sufficiency eventually by retaining all business rates.

Councils were told to limit their ambition on their growth plans after the government’s local growth fund pot for regeneration, housing and transport projects was massively oversubscribed.

The Queen announced curbs on public sector redundancy pay in her speech to Parliament. It wasn’t her idea.

LGA improvement board chair Peter Fleming (Con) admitted he was more worried by the performance of ‘one party states’ than by councils in no overall control.

An LGA census found the average age of councillors had topped 60 for the first time, and that 96% are white.

Despite bold claims about change management, a survey for Somerset CC found staff baffled as to which part of the restructured council they now worked in.

An LGC survey found the downward pressure on chief executive salaries had eased, with new appointments at an average of 6.1% below their predecessors, compared with 10% in early 2013.

 

July

Unison, Unite and GMB members walked out on 10 July in support of their pay claim, which was settled in November when the LGA made a 2.2% offer.

LGC analysis of Ofsted’s new-style children’s services inspections showed twice as many councils saw their ratings worsen as saw an improvement.

spy car one use

 

Even motoring organisations opposed government plans to stop councils using ‘spy cars’ for enforcement. Mr Pickles complained they could be seen “lurking in every street”, presumably behind the uncollected dustbins.

Localisation of council tax benefit led to arrears increasing by 20% to £836m, as new low-income payers struggled.

The LGA’s Municipal Bond Agency secured £2.9bn from councils to get an alternative source of lending going.

Doncaster MBC emerged from its corporate governance intervention after a favourable peer review.

LGC’s regular confidence survey couldn’t find much confidence, with 61% of chief executives and senior officers expecting some councils would face a financial crisis within a year, though only 18% that their own would.

In a ministerial reshuffle Kris Hopkins replaced Brandon Lewis as local government minister. Michael Gove’s demotion was deemed an opportunity to improve the “long-distance relationship” between councils and the Department for Education by Solace president Mark Rogers.

 

August

One of local government’s worst scandals in decades erupted in late August at Rotherham MBC, where an independent report found more than 1,400 children had suffered sexual exploitation even while senior officers and councillors knew of the problem.

It led to the immediate resignation of leader Roger Stone (Lab), and later to the resignations of chief executive Martin Kimber and South Yorkshire police and crime commissioner Shaun Wright (Lab).

LGC noted it was impossible to tell whether Rotherham was unique, or even unusual, given the poor recording of child sexual exploitation.

Research by the Chartered Institute of Public Finance & Accountancy showed the north-east experienced the sharpest fall in spending of any region in the previous year. Its 5% cut contrasted with a fall of just 1.8% in the north-west.

Councils won a partial victory in their long campaign against the proliferation of payday loan and betting shops with changes to planning rules meaning such shop conversions would need fresh permission.

The Troubled Families programme, widely viewed as a success, would be extended to children aged under five.

Environmental health officers warned of skill shortages among council staff able to regulate the nascent fracking industry.

 

September

Scotland’s 55-45% decision to stay in the UK triggered fresh devolution for the country and spurred English councils to seek more devolved powers, in particular northern ones that fear competition from an emboldened Scotland.

Department for Communities & Local Government permanent secretary Sir Bob Kerslake was named to review Birmingham City Council in the wake of the Trojan Horse affair and governance issues raised.

Hull City Council wanted to take over parts of its urban hinterland in East Riding of Yorkshire, provoking the latter to hold a referendum in which 96% of residents opposed joining Hull. Relations sank to a new low.

Business figures in Buckinghamshire raised £25,000 for the first crowd-funded study into whether a unitary county would bring savings.

Lutfur Rahman

 

Derbyshire and Nottinghamshire CCs started the process of becoming the first county combined authorities.

Mr Rahman persisted with a judicial review of Mr Pickles’ decision to send investigators into Tower Hamlets, despite a High Court judge branding his case “hopeless”.

 

October

With startling frankness, Doncaster MBC chief executive Jo Miller attacked the “professional narcissism” of children’s services directors, adding for good measure that chief executives who didn’t understand children’s

services “shouldn’t be chief executives”.

Shadow health secretary Andy Burnham said a Labour government wouldn’t mandate health and social care integration

Mark Rogers remained as Solace president as Liverpool chief executive Ged Fitzgerald, who had been due to take over, faced questioning over his stint as Rotherham’s chief executive by elected mayor Joe Anderson, who was later satisfied with the answers he got.

LGC research found of 77 councillor defections to Ukip, 56 were from the Tories.

Pembrokeshire chief executive Bryn Parry-Jones left after councillors passed a no confidence vote in him, though auditors cut his severance of £330,000 by £52,000.

The North East Combined Authority resolved to regulate buses in Tyne & Wear, under powers no local authority had previously attempted to use.

 

November

Manchester City Council leader Sir Richard Leese (Lab) and chief executive Sir Howard Bernstein jointly topped the LGC100 power list, largely for their role in Greater Manchester’s newly announced radical devolution deal.

The conurbation’s 10-council combined authority will gain wide powers, but leaders had to reluctantly concede chancellor George Osborne’s demand for an elected mayor.

West Midlands councils launched plans to form a combined authority, as did those in the Tees Valley, southern Hampshire and Lancashire, at varying stages of readiness.

A report by local government grandee Sir Derek Myers and Newcastle City Council chief executive Pat Ritchie called for pooling £5bn of funding streams for a local service transformation fund, warning that efficiency savings were largely exhausted.

Harrow LBC deleted the chief executive post last year, and with it incumbent Michael Lockwood. Labour took over and reinstated the position, appointing none other than Mr Lockwood.

Welsh councils gave a raspberry to voluntary mergers, with only one pair agreeing the merger pattern recommended.

 

December

Sir Bob Kerslake’s investigation into Birmingham led him to ‘not rule out’ dismembering the authority, hardly a vote of confidence but better than it might have been.

An LGC analysis found business rate income was £1bn below forecast at £20.5bn, leaving councils potentially having to top up the ‘safety net’ system.

The Sheffield City Region followed in Manchester’s footsteps, signing a deal with the government in which it won greater powers over transport, skills and housing, but without the imposition of a mayor.

Council tax collection rates fell for only the second time since the tax began in 1993.

Looking ahead to May’s general election, Labour said it “would not stand in the way” of unitary reorganisations, not quite the same as enforcing them as it sometimes did when last in power. It also promised a “fairer funding formula” for councils, a phrase that covers a multitude of sins.

As the year ended the Office for Budget Responsibility - surely one of the least festive things on the planet - said council spending would be 4% lower than previously projected in 2016-17, equivalent to £5bn, and also 4% down in each of next two years.

Merry Christmas!

Happy New Year!

 

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