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Tuesday, 6 March, 2001, 10:29 GMT
Local authority reform

Local authorities have experienced a number of reforms since 1997 - with the possibility of more to come.


They empty your bins, clean the streets and (theoretically) run most of education - but when it comes to deciding who actually takes these decisions, fewer and fewer people are interested in local authorities.

And so, despite having responsibility for some 65bn of spending every year and employing more than two million people, town halls are a lonely place to be for the 21,000 councillors who give up a fair whack of their spare time to run some of the most important services in the country.

Voters remain largely uninterested, with turnout for local elections falling below 25% in some areas - a level of political involvement far lower than in other European countries.

Labour came to power in 1997 saying that it wanted to change this and re-engage people with their local representatives.


Before Labour took office it proposed to change both the structure of local government and how it would provide services.

One of the first firm pledges was for an elected mayor and assembly for London - though Labour's attempts to prevent Ken Livingstone from standing ended in victory for the former GLC leader and severe embarrassment for Downing Street.

The party initially proposed that other cities should be allowed to follow suit if they could prove that their electorates wanted the change in a referendum.

Secondly, Labour said that it would abolish the Conservative-introduced system of compulsory competitive tendering (CCT).

This controversial system, hated by many in local government and fiercely opposed by Labour members, forced councils to subject its own departments - from refuse collection to legal services - to a bidding process against the private sector.

The party also pledged to end forced capping of local authority budgets and to create regional development agencies (RDAs).

While RDAs are not part of local government itself, Labour believes that these bodies, with a strong presence of local councillors, will help iron out regional disparities in wealth and prosperity.

The 1999 Local Government Act introduced some of these changes, principally the replacement of CCT with a new system called "Best Value".

Labour said that CCT's main problem was that it was based on "the dogmatic view that services must be privatised to be of high quality".

The party in government said that a scheme focused on "best value" for the council tax payer would not necessarily lead to privatisation but would ensure that the so-called "four Cs" were met:

  • Challenge why and how a service is being provided
  • Compare performance with others in both the public and private sector
  • Consult local taxpayers and the wider community
  • Compete on a fair and open basis to secure efficient and effective services

    The scheme means that councils must produce an annual performance plan for a particular service and the quality of the delivery of all services is reviewed over a five-year period.

    Councils are then expected to reach the standards of the top performers, based on tables compiled by the Audit Commission.

    The new system differs from CCT in that the government could effectively remove a service from a council deemed to be failing by sending in consultants or officials from a different, high-performing council.

    The Act also placed a duty on councils to promote involvement by the community in local council affairs - something that Labour in government believed to be crucial to renewing interest in local democracy.


    But local government lobbyists say that the major problem with town hall voter-apathy is that councils have effectively lost most of their decision-making powers.

    In finance, central government lays down a raft of targets for local authorities to meet in terms of how they spend their money - 48% of which comes direct from Whitehall and not the local taxpayer.

    This, they say, means that the broad thrust of policy-making can become more concerned with meeting central government's requirements rather than the local needs of local people

    In 1997 Labour said that it would go some way to meeting this complaint by largely scrapping what it said was the "crude and universal" council tax capping system introduced by the Conservatives.

    However, in government the party immediately found itself embroiled in controversy on this issue when Deputy Prime Minister John Prescott, head of the Department fo the Environment, Transport and Regions, capped three councils weeks after taking office.

    The 1999 Act sought to clarify the position and revealed that the secretary of state would retain capping powers but in a less far-reaching way than before.

    Under the amended system, a council is only under a capping threat when its budgetary decisions are deemed excessive - though the definition of "excessive" appears open to interpretation because the powers have not been used yet.


    The government's second major piece of legislation to affect councils, the Local Government Act 2000, introduced the right for councils to change their structures and decision-making processes in the hope that it would help them re-engage with the public.

    Among the measures now open to councils are:

  • Switching to an elected mayor system
  • Holding local referendums on important issues
  • A "cabinet system" where other councillors perform a scrutiny role

    A move to a directly-elected mayor could only be triggered by a petition signed by 5% of the population.

    The stated aim of the changes was to provide more accountability, have a community focus and encourage voter turnout.

    Liverpool and Birmingham are among cities wanting to shift to the new system while smaller authorities, such as those in Grimsby and Watford, are also expected to try and go the same route.

    But the new systems have been controversial, and have been greeted with a mixed response.

    For instance, authorities that have moved to a cabinet system have already faced local criticism for turning a small group of leading councillors into well-paid, full-time professional politicians.

    There has also been much criticism that far from increasing openness and accountability, the "cabinet" system has done precisely the opposite.

    The 2000 local elections also saw many councils pilot different voting arrangements, such as electronic voting and mobile voting stations, to see if they would increase the turnout.

    The results were generally disappointing, although postal voting did boost participation. Easier access to postal votes has since been introduced, in time for the general election.


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