Planning in the Critical Decade

From "The Planner" Vol 47 No 1, Jan/Feb 1981
RTPI, LondonBA

Critical '80s


Des McConaghy


The key to democratic planning is the democratic control of capital. To spend is to choose: the rest is relatively rhetoric. Town and country planning developed with little regard for financial controls and this became a recipe for professional and academic suicide. There are, of course, wider interpretations of 'planning'. Planning is ubiquitous; everybody plans! But planners must be more clear about what is possible in a non-totalitarian Society. We have to be more realistic if we are to tackle the more demanding tasks of the eighties.


We squandered the more prosperous sixties in an academic debate about land-use planning: attempting to transform it into a general planning system. I will summarise the main aberrations later. At this point, I want to emphasise a more serious miscalculation which undermined local government reform and provided the 'incubator' for strategic planning digressions. I refer to traditional concepts of local government 'autonomy' and the notion that they were reconcilable with modern macro-economic management. This led to the progressive erosion not merely of planning but, more importantly, of local government itself.


One generality emerging, not only in Britain but throughout Eastern and Western Europe, is that the fortunes of territorial planning and local government are inextricably linked. It is no accident that the only credible part of our planning system remains local land-use planning and development control. This reflects clear executive functions which, so far, local government has managed to retain. But just as planners have shown small interest in public finance, more generally local government lacked macro-economic awareness. As resources became finite beyond any precedent, both paid the price.


Any realistic assessment of the eighties finds planning dominated by two factors. Firstly, planning by central government will remain largely a matter of continuous budgetary control: essentially an aspatial sum. Secondly, centralisation will continue, and may gather pace, at the expense of traditional ideas of local 'autonomy'. He who pays the piper will continue to call the tune and the trend is towards 'single source finance' in every European state where this is not already the rule. Local/central relationships have entered a new development stage.


This institutional context is fundamental when considering the scope of territorial planning. I will refer to the economic imperatives of centralisation and hence to the tasks of central planning. Here the technical possibilities of building in spatial or constituency implications will remain very limited. 'Developed socialism' now shares similar limitations in both central planning and 'scaling down'. (1) Without sustained economic growth, this leads to political diseconomies: a growing distance between politicians and the mass of people; between politicians and executive governments. With continuing recession, the energy crisis and structural trends in employment it may become difficult to proceed on a consensual basis.

So, to some extent, democratic hangs on the survival of viable local government systems capable of sensible resource planning with the centre. The main opportunity in Britain is the continued development of programmatic expenditure-based plans - initially in terms of capital expenditure but increasingly with regard to revenue implications. Successive governments have been edging towards this, albeit outside coherent principles for operation and control. The potential of such planning is to bridge the gap between management of the economy and local control. The political definition, as a framework for discussion, is even more important.


Sixties and Seventies

Most reforms fail: the landscape of public administration is littered with their debris. All major procedural reforms of the last two decades sought greater accountability: more political control over increasingly complex government and associated bureaucratisiation at all levels.

The major reform of this type was evolution of the Treasury's Public Expenditure Survey System (PESC). Normally, the longevity of others was due, in some way or other, to their ability to relate.


Obviously, the 1965 National Plan did not. And the failures of the Department of Economic Affairs did much, I think, to show the limitations of what is possible to achieve by such planning. It is true, of course, that the DEA was never properly constituted: a pro-growth organisation separate from the Treasury and with a separate philosophy. But its 'main difficulty must have been its conventional approach to economic planning. It was eclectic and amounted to a full frontal attack on budgetary control.


Indeed, there was another 1965 'national plan' of sorts! The rot began with the Planning Advisory Group Report and was later consolidated by the wider aspirations of the 1968 and 1971 Town and Country Planning Acts. Since the war, the scope of local government's physical services had expanded at an astonishing rate. By the sixties, the sheer size of spending programmes plus the tasks of implementation gave local planners little time to reflect. Money just flowed. Innocently unaware of the crudities of financial arrangements they ran riot.


Ministers responsible for the legislation were aware of its obscurities. Despairing both control and constituency roles by linking the new 'planning system' to 'public participation'. But the operation of the whole ignored three crucial areas for decision. Firstly, no interest was taken in the control of finance. This meant a mismatch between planners' aspirations and any ability to deliver the goods. Secondly, little attention was given to the prevailing realities of local or central government management. This resulted in a credibility gap between planners and their colleagues throughout public service. Finally the concept of 'participation' was academic and inconsistent with the: pragmatic nature of the political process.


Inevitably, the financial stringencies of the seventies (and eighties) found such planning unmatched by coherent machinery for implementation. Strategies were insensitive to economic fluctuation, used social criteria incomparable with executive services, employed horizons incompatible with forward estimating - and subjected programmes of 'economic' and 'social' policy to formal public debate.


The main opportunity in Britain is the continued development of programmatic expenditure-based plans - initially in terms of capital expenditure but increasingly with regard to revenue implications. Successive governments have been edging towards this.


Inevitably, the financial stringencies of the seventies (and eighties) found such planning unmatched by coherent machinery for implementation. Strategies were insensitive to economic fluctuation, used social criteria incomparable with executive services, employed horizons incompatible with forward estimating - and subjected programmes of 'economic' and 'social' policy to formal public debate beyond the actual scope of local government or effective ministerial approval. The technology rescued social sciences by giving them something to bite on but sank planners by developing separately from the real features (or directions) of control. There was notorious confusion between what planners thought they did and what, in fact, they were able to do. (2)


Experience suggests that administrative reform fails when considered separately from financial control. Thus 'corporatism' (late sixties and early seventies) also provided few lasting benefits. The 'management mood' inspired the 1971 central government reorganisation (3) but generally Whitehall took an agnostic stance. The Treasury had already studied the costly failures that always followed applications of corporate planning techniques in governments elsewhere. Programme Analysis and Review was never, I think, a serious 'handmaiden' to PESC. The 'strategic' role of CPRS (Central Policy Review Staff) wilted with it, and so on down the line.


The unfortunate 1974 local government reorganisation is a further case - with the inconsequential inquiry into local government finance reporting years later. (4) Financial arrangements determine 'regional' or 'strategic' funding rather than 'absolute' management areas on maps. But the 'keystone' of DoE 'planning' remains obstinately unconcerned: local planning is linked to the management of the economy by 'regional plans' and 'structure plans'. This is such an over-simplification as to be totally misleading. Flawed from the start, the patronage of the idea condemned large public and academic bureaucracies to vested interest in travesty - and ultimately to redundancy!


Centralisation and the Centre

What can planners do? Perhaps the dislocation of central and local planning is now so critical that only a 'whopper' will do! We have to ask what is possible. This means first looking at centralisation and central planning.


The position is this. Increasingly since the last war the management of all modern economies became a centralised activity. But, for ourselves, the vast increase and complexity of governmental roles, the early adoption of Keynesian economics and the new demands of macro-economic policy made this inevitable. Economic imperatives made for centralisation and, if we had been very clever, we should have asked - some 15 years after the war - what are the implications for local government?


But we didn't. The Royal Commission and all the work preparatory to local government reorganisation ignored the inherent constitutional issues of centralisation. As a result, long before OPEC and economic recession shifted centralisation into top gear, traditional concepts of 'local autonomy' had lost their economic and constitutional rationale. Democratic control of local services, including planning, remained important. But this depended for substance on a more important choice: democratic resource planning with the centre or with local government by central administrative instruction. (5)


The latter has been the prevailing trend everywhere. (6) It has led successive British ministers to alternate between rhetorical appeals for local democracy ('disengagement') and actual measures for ' central direction. Moreover, any sensible development of new financial dialogues between the two levels of government is impeded by the illusion that 'partnership' and traditional ideas of 'autonomy' remain reconcilable. Governments are aware of the political diseconomies of centralisation. Its classic features are the irrelevance of 'place', the imposition of uniformity and an indifference towards means. (7) They face a paradox when attempting to reinforce constituency or traditional ideas of local control while, of necessity, retaining effective control at the centre.


It is a matter of keeping a balance, the argument runs, between these two legitimate concerns. But today's uncongenial and hostile atmosphere speaks more of a confusion of roles rather than striking any balance. Ministers could be more clear; no local government system can now survive outside a financial dialogue that recognises - and expresses - the overriding importance of managing the economy.


Innovations in central economic planning addressed special problems and developed separately from those of internal administration. Central government's unresolved problem, fifteen years after the war, was 'managing an economy' rather than simply 'balancing a budget'. The 1961 Plowden Report provided the genesis for PESC: the principle that decisions are taken in the light of overall expenditure over a number of years and in relation to resources. (8) Warts and all, PESC has become the best national control system yet devised. (9) But its main weakness, and that of annual Public Expenditure Plans, is lack of 'political visibility' or 'constituency base'. It is a sum! PESC's staying power partly derives from a grasp of what is technically possible in planning. Although mostly interested in aggregates, the Treasury does explore improvements assisting rational decision and consent. The fact is that no planners, management enthusiasts or Select Committees have yet suggested improvements that would not have created serious imbalance. (10)


Conventional Neo Marxist planners might note that 'scientific management' models don't help. Socialist countries are now also familiar with the problems of conventional economic planning, macro-modelling, forecasting and so on. As 'developed socialism' finds consensual politics and personal consumption more important, actual budgetary control is exercised by socialist finance ministers and their banks in similar ways to our own. (11) There are common features to centralism!


Expenditure-based Plans

One task of democratic planning, then is to improve the constituency dimension of central control: to bridge the gap between economic management and local planning. This means joint resource-planning between the two levels; forging common accounting and budgetary conventions for new policy measure. For ten years such developments have been obstructed by the unsupported claims of 'structure planning' and unrealistic notions about 'local autonomy'. Consequently, ministerial initiatives lacked an appropriate framework for rapidly changing central/local relationships: an accepted framework for 'Expenditure-Based Plans' (EBPs). This new generation of policy measures has been progressively adopted by successive governments since 1970. (12) EBPs are programmatic measures originating from the authority responsible for executive action. They represent a single procedure for making a claim on resources (bottom up) and allocating resources for implementation (top down).


Initial emphasis on capital expenditure is crucial as a 'lead' element for the much heavier burdens of recurring or revenue expenditure - and subsidy. Had it not been for digressions in the sixties, the logical development of our physical planning system was towards such capital expenditure planning in the public sector - and the sort of spending decisions that interest people most.


The origins of EBP were fortuitous. In 1970 the growth of local government spending was greater than that of the economy as a whole. The problem of exercising central direction without usurping local government powers had become critical. In education, a reasonably organised approach to programmatic planning was taken by DES with DoE Circular 3/70. Then in 1972, Mr Walker said he would extend a similar principle to transport. (13) Local authorities would be asked to justify expenditure proposals on the basis of comprehensive plans. Although also a device to cope with 'lumpy' expenditure outside RSG, 'Transport Policies and Programmes' became important policy instruments.


The challenge in 1972 was to develop the same type of instruments for housing and the general environment, programme by programme: appropriate arrangements in the financial field could bring more reality to a planned approach. Originally both Mr Walker and Mr Page wanted some such system built into a Finance Bill for the 1974 local government reorganisation. But in 1972 nobody was sufficiently clear and officials disliked the idea. Whitehall had no diagnostic capacity


Ten years of contradictions are not resolved and Ministers have been unable to provide a scenario for the most critical domestic policy measures of our time.


to deal with such plans and rigidly held the 'local autonomy' line. DOE town and country planners were in total opposition since 'structure plans' would provide a strategy for co-ordinating all programmes and local action.(14)


'Positive planning' via the Community Land Act was, as Mr Crosland knew, a cynical 'gimmick'. But in 1977 Mr Shore continued the EBP theme with 'Housing Investment Plans' (Circular 63/77). He claimed that progress with HIPs and TPPs - with the proposed unitary revenue grant of his 1977 Green Paper (Cmnd. 6813) - was a move towards 'the coordination of public expenditure planning'. This was speculative but Mr Shore was clear about the structure plan conflict: 'they are, after all, guides to the use of land. They should not be statements of social and economic policy covering the whole range of local responsibilities'.(15)


Now in 1981, EBPs will be the rule for all local capital programmes. But ten years of contradictions are not resolved and Ministers have been unable to provide a scenario for the most critical domestic policy measures of our time.(16) There has been little consistent staff work in Whitehall on capital planning and still less in developing Mr Shore's plan for the premature new revenue grant. Sensible capital planning proposals were lost in the ill-considered and fragmented 1980 Local Government Act. Accompanied by penal cuts, the only message to emerge was 'elected dictatorship': the unacceptable face of centralism!

But its all to play for. Planners should discard totally discredited ideas and work positively for new roles that politicians and the mass of people find useful. There is no denying the importance of EBP principles in terms of an essential discussion framework for expenditure decisions. We must use the credible side of our physical planning system and assert, again, the idea of 'place', of territoriality - and of constituency! Strategies and bids should be published from ward to council levels and, once again, we must go further - to democratic resource planning with the centre.(17)


Our statutory concept of 'participation' was largely bogus. People can only participate in events and these have to be shaped, ordered - and paid for! EBP means that councils can publicise a visible, political assertion of need. Ministers also become accountable for specific allocations, programme by programme, and district by district. Instead of ad hoc 'nit-picking' this gives the new Select Committees of the Commons something sensible to bite on. The 'positive scrutiny' style of government could be realised from constituency to central control. We move towards expenditure-based plans or we do not move at all.


Notes and References

  1. McConaghy,Des, Local Government in a Communist Mould. Municipal Review, December, 1979.
  2. McConaghy,Des, Persistent Confusions. Built Environment Quarterly, December, 1977.
  3. The Reorganisation of Central Government. Cmnd. 4506, HMSO, 1970.
  4. Local Government Finance. (Layfield Report). Cmnd. 6453, HMSO, 1976.
  5. Caulcott,T.H. Central and Local Government Resource Planning. CIPFA, London, May 1975. This significant paper by DoE's Principal Finance Officer was not a statement of government policy but clearly indicated the need for co-ordinated central and local government resource planning within a national scheme compatible with PESC. It stopped short of new 'policy instrument'.
  6. Economic recession, etc. has accelerated centralisation throughout Western Europe, c. f., Local Government in West Germany, Municipal Review, Vol. 49, No. 584, Collapse of a Local Government System, Municipal Review, Vol. 49, No. 585; The Portuguese Parallel, Local Government News, May 1980. The same recession has limited Eastern European attempts to decentralise, c.f. Local Government in a Communist Mould, op. cit.
  7. The dilemma is well presented in Cornford, James (Edit.), The Failure of the State. Croom Helm, 1975.
  8. Cmnd. 1432. HMSO, 1961.
  9. C.f.,Wildavsky, Aaron, Budgeting: a Comparative Theory of Budgetary Processes. Little, Brown and Company, 1975; Ch. 4 and 19.
  10. For example, First Report from the Expenditure Committee 1975/76, The Financing of Public Expenditure, Recommendations and Reply by the Government. HMSO.
  11. This is one aspect of the classic debate in 'developed socialism' often ignored by Neo Marxist planners. C.f., Brus, Wlodzimierz, The Economics and Politics of Socialism. Routledge & Kegan Paul, 1973.
  12. McConaghy,Des, The Cutting Edge of Change. Built Environment Quarterly, January 1978.
  13. Official Report, 23 March 1972.
  14. A full account of this failure is given in McConaghy, Des, Setting Up Six Towns: An Urban Strategy Gap. Town Planning Review, Vol. 49, No. 2, April, 1978.
  15. Shore,Peter, Conference Paper. Town and Country Planning Association, 5 December 1978.
  16. For an assessment of the Local Government, Planning and Land Act, see McConaghy, Des, Local Government's Crossroads. Local Government News, March, 1980.
  17. See Annual Analysis of HSIP Bids and Allocations (NW), Liverpool Polytechnic


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