The Terrible Simplifiers

LGN June 1990


In view of Michael Heseltine’s further plans for Local Government, Des McConaghy offers a short postscript to his April Heseltine interview and suggests the Tory Challenger is not alone in over-simplifying local government’s role.


This postscript to my interview with Michael Heseltine (1990A; LGN April) may now be in order since we then covered his local government plans without dealing explicitly with community taxes. In this respect his more recent essay in “The Times” adds one of two points which made me turn again to my “Heseltine Tapes” – and other records!


I suggested to Heseltine that if Whitehall fixed local budgets there was really not much point in having locally determined taxes at all. He didn’t respond– just looked rather surprised, as if the thought had not occurred to him before. Well, perhaps it had not! In any event we now know – do we not? – thatHeseltine’s Whitehall would continue to determine a specific budget for each and every local authority.


His qualification that councils would still be “free” if they held an election mandating an increase is by no means a new idea. His “Times” article suggested that he narrowly failed to persuade the Cabinet to adopt this clever idea in 1981. But in fact it was the Scottish Office which first pushed the “solution” that Scottish councils should go to the electorate if exceeding centrally imposed guidelines – this in the wake of their Local Government (Miscellaneous) (Scotland) Act 1981. The matter was subsequently dropped in the face of almost universal scorn.


But I come back to my unanswered question to Heseltine – because the referendum notion actually betrays a much deeper flaw in the UK approach to central/local relations. It first emerged in my 1981 LGN interview with the Scottish Minister Malcolm Rifkind. Indeed in this respect Rikind’s memory was also not 100% when recently dubbing Heseltine’s ideas as “wooly and wildly unrealistic”. In 1981 I had put the same point to Rifkind, thus:


LGN: So putting your proposals simply, the Secretary of State will have to approve the budget and rate fixing of each authority  - but exercising this control transfers the need for accountabilty to central government?


Rifkind:  Yes. But not just central accountability. As you know we propose that councils wishing to maintain a greater level of expenditure than the Government wishes might like to consult their local electorate through a referendum. (1982A. “The Scottish Model” LGN January 1982).


Of course the desire for central control while avoiding a loss of local accountability has long dominated UK government policy. Nevertheless there is no doubt whatsoever that the local budget referendum idea was one of the most blatant examples. In the same “Times” article Heseltine again stumbles into a frank admission of the dilemma: “The burden of community charge could, of course, be cut by transferring the funding of some services to central government, but in practice the Government might find itself blamed for poor standards and find it difficult to resist pressures for ameliorating expenditures”!


The varied arguments against referenda are all there for anyone who cares to read up the 1981 debates and Hansard records. But in spite of that effective revolt it nevertheless still resembles the poor fellow, blindfolded and tied to the stake before the firing squad, aware that something was going very wrong but unable to put his finger on it!. This is something no party seems to get right – and there has to be a reason for that. In the meantime we need not delude ourselves that crazy ideas about local government are a disqualifying defect for an aspiring leader.


So I wondered if Heseltine shared Donald Dewar and Gould and the “Guardian” and almost everyone’s misconceptions about what really went on in major European examples, like Germany and Italy.  He did!


LGN: “What do you make of the trend towards single source finance in all major European countries where that is not already the case?”


Heseltine: “What do you mean by single source finance?”


LGN: “There is a clear trend towards dependence on central taxation in those major countries where central finance is not the main provider of services in any event”.


Heseltine: “Is that a fact”?


The answer was a definite “Yes”! And yet The Guardian (et al) persist in talking about  Länder freedoms in West Germany when they are simply not comparing like with like. The Governments of these German “regions” function like a central government here so far as environmental and domestic services are concerned. But, for example, within North Rhine Westphalia the administration is now very centralized by our own criteria – (see Des McConaghy, 1990B: “German Questions” LGN May 1990, and Des McConaghy, 1978D: “Where Have All the Powers Gone?”, Municipal Review Vol 49, No 584, August 1978). North Rhine Westphalia is larger than Holland and I explained that tax sharing is carefully worked out in advance by Financial Planning Councils – and there is very little discretion for raising additional income at local levels.


We saw, too, how Poles at “Citizens’ Committee” level were lapping up all sorts of fictions about British local democracy (Des McConaghy, 1979B: “Local Government in a Communist Mould”. Municipal Review Vol 5 No 598 September 1979). They were disbelieving about Germany. They were amazed to hear that the famous achievements of an Italian city like Bologna were accomplished with hardly any local income – bar a few levies such as the dog tax. Italian skill and municipal fame derived from the effective use of every lira from Rome and experts who could effectively challenge national income accounts to secure better local shares. Nowhere are new sources of local income seen as the key to modern local government.


As in so many other matters, British myths hang like a millstone round our necks and blind us to actual European practice – and even to the reality of what is happening under our noses. And so the Tories will now try to perfect a ridiculous local tax – just to end up with something perfectly ridiculous” (Poll Tax). Meanwhile the Labour Party fits its own “nobs” and “carbuncles” on to – at base – the same outworn idea of independent budgets – while promising regional authorities and development corporations without the slightest move towards successful joint resource planning as can be practiced on the continental mainland.


A generation of jumped up “can do” merchants in Whitehall – and the usual circumspect academics – cannot alter the fact that government is a highly complex operation. Michael Heseltine is by no means alone in endlessly trying to over-simplify an inherently complex and diffused business – as the Home Office innovator Derek Morrel once observed: creative administration was never Whitehall’s strongest point.  The Government and Opposition proposals for local government (and leadership bids) will be decided as usual by the national economy and precious little else.


Meanwhile it is perhaps worth remembering Alex de Tocqueville’s references to “les simplificateurs terribles (the terrible simplifiers) as the curse of modern government. A caution is still relevant today.


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