Recommendation 49 (1998)1 on the situation of local and regional democracy in the United Kingdom

The Congress,

1. Aware of the mandate given by the Congress Bureau to the Rapporteurs responsible for the preparation of the report on the state of local and regional democracy in the United Kingdom (Henry Frendo and Hans-Ulrich Stoeckling), as renewed by the Bureau on 3 February 1998, within the framework of the joint meetings of the Working Groups on the "situation of local democracy in member States" and on "regionalisation in Europe";

2. Bearing in mind its Resolution 58 (1997) on the situation of local democracy in member countries, in particular paragraphs 17 and 18 focusing attention on certain aspects of the situation of local self-government in the United Kingdom;

3. Recalling its Resolution 31 (1996) on guiding principles for the action of the Congress when preparing reports on local and regional democracy in member States and applicant countries;

4. Recalling in particular paragraph 11 of Resolution 31 (1996) requesting that all member States be the subject of a detailed report on local and regional democracy, over a reasonable period of time;

5. Consequently, bearing in mind that the present investigation into local and regional democracy in the United Kingdom is part of the overall commitment of the Congress to examine the state of local and regional democracy in Council of Europe member States and applicant countries;

6. Conscious of the fact that the United Kingdom was a founding member of the Council of Europe and that there is, in general terms, a high level of local government, although its principles and functioning may differ in many aspects from the legal situation and practices on the continent, given the specificities of the British legal system;

7. Welcoming the fact that the United Kingdom signed the European Charter of Local Self-Government [ETS 122] on 3 June 1997, i.e. during the last Congress Session and the fact that the Charter was ratified on 24 April 1998 and will enter into force on 1 August 1998;

8. Welcoming the fact that all principles of the Charter have been accepted by the United Kingdom and that it has already been quoted in several Government papers concerning reforms such as the devolution to the Scottish Parliament;

9. Expressing the hope that the Charter will continue to inspire the reforms planned by the Government and, in particular, a new local government Bill which might be drawn up next year;

10. Conceding that the British legal system is largely different from most continental systems in so far as it does not have a written Constitution, and that it is based largely on common law and statute rather than on general legislation. Inevitably, this leads to certain difficulties when applying general European texts such as the European Charter of Local Self-Government. Their implementation therefore has to be regarded in a wider sense, paying more attention to the spirit of the text than to the strict application of its wording. This also has to be seen in the light of a strong local authority tradition, even if some serious setbacks are to be noted in recent decades, including in the general perception of local government by the media, by politicians and by the public at large which may, for example, result in a very low turnout in local elections;

11. Welcoming and recognising, from this background, the very wide-ranging ambitions for reform and democratisation of the State in general and of local government in particular undertaken during the last year;

12. Considering that, from this starting point, the remarks made in the present Recommendation should be interpreted as a contribution to an ongoing debate in the United Kingdom itself, with a view to disclosing the best possible solutions, also in the light of experiences in other European countries;

13. Recognising, however, the difficulties linked to the fact that the recognition of local self-government cannot be based on a constitutional text, as no such text exists in the United Kingdom and that, in principle, no limitation of sovereign Acts of Parliament seems to be acceptable under British law;

14. Taking due note of the findings of the Rapporteurs during their visits to London and Edinburgh from 15 to 17 December 1997 and from 26 to 27 March 1998;

15. Thanking the British representatives from Parliament, Government, local government, universities, NGOs and other bodies for their excellent co-operation with the work of the Rapporteurs and, in particular, Mrs Hilary Armstrong, Minister for Local Government, representatives of the Local Government International Bureau and of the Convention of Scottish Local Authorities;

16. Welcoming the fact that the British Government has taken serious steps towards devolution, in particular concerning the establishment of a Scottish Parliament with large competences, including in the legislative field, the establishment of a Welsh Assembly, as well as of a strategic authority for London, including an elected Mayor;

17. Expressing the hope that devolution will be continued in England itself, where the planned regional development agencies should be transformed into democratically constituted territorial authorities, if so desired by those concerned, following the orientations contained in the draft European Charter of Regional Self-Government;

18. Welcoming in particular the positive results of the negotiations about Northern Ireland and the establishment of a regional Assembly in this part of the country, as well as Councils for transfrontier co-operation between Northern Ireland and the Republic of Ireland;

19. Considering that this important outcome of the negotiations on the longstanding crisis in Northern Ireland corresponds to the opinion already expressed by the Congress, according to which stability and peace in Europe might by fostered by granting a certain degree of regional self-government in particular areas and creating bodies in charge of regional transfrontier co-operation;

20. Aware of the fact that local government in Britain suffers at present from serious setbacks in the financial field, such as dependence on grants from national budgets (for 80% of the budget) and other measures including "rate capping", thus limiting seriously the range of local government action when it comes to determining its scope of activities and exercising its discretionary power;

21. Welcoming the desire expressed on many occasions by the present British Government to enhance the functioning of local democracy, especially in the financial field, but also by widening the competence of local government, by enhancing local government's role in community leadership, in addition to its traditional service delivery activities, giving it a power of community initiative in order to create a better environment for citizens in such fields as social cohesion, environment, etc;

22. Welcoming the tendency to enhance local government's accountability towards the citizens - rather than their responsibility towards other institutions - as a major step forward towards the development of grass roots democracy;

23. Convinced that public bodies known as "quangos" ("quasi non governmental organisations"), where they exercise functions that could and should be submitted to democratically legitimised local government control (as will be the case with the Scottish Parliament and the Welsh Assembly), should be abolished and their tasks be given to local government;

24. Considering that the role of the Audit Commission for England and Wales and of the Accounts Commission for Scotland is perfectly acceptable when it comes to checking the legality of local government action and correct accounting, but that it may be more difficult to accept when it comes to areas such as appropriateness of local government action (except where local government councillors or officials act against the law) and, in particular, the "value for money" issue or, in the future, the "best value", etc;

25. Whilst welcoming the general approach of "best value", where service delivery for the inhabitants is at stake, it considers that this is a matter for policy-making decisions of local self-government and that therefore local government in general should be the only institution responsible for its implementation. This would mean that local government should be free to choose its partners concerning the "best value" exercise and that no Government sanctions should be applied in this field, the sole and ultimate sanction lying with the voters, at regulars intervals;

26. Recommends to the Government of the United Kingdom, as well as to the Parliament, to pursue the major reforms in the local government field in the light of this Recommendation and of its appendix, which gives further details on the Rapporteurs' findings, and in particular:

i. to establish a legal framework giving local government a clear basis and a general competence for the benefit of its citizens and other inhabitants, including the issue of community leadership;

ii. to clarify the distinction between powers delegated to local government by national government, as compared to local government's own powers;

iii. to increase seriously local government's financial capacities by developing a much higher share of own income as compared to State grants, and by abolishing practices like "rate capping", as well as by re-localising the "business rate";

iv. to give local authorities greater accountability towards citizens;

v. to reduce the power of outside bodies on local government management in fields as "value for money" or "best value";

vi. to ensure that elected mayors/councillors, etc, who have to work full time, should be able to draw a decent income from their activity without being placed in an awkward position when compared to the senior officials working for them;

vii. to establish that the principles accepted by the United Kingdom within the European Charter of Local Self-Government should be incorporated in the domestic law and considered as binding by the British Courts;

27. Expresses the hope that the British Government will agree, in the near future, to sign and ratify other Council of Europe conventions in the field of local and regional government, and in particular:

- the European Outline Convention on Transfrontier Co-operation between Territorial Communities or Authorities [ETS 106] and its Additional Protocols [ETS 159 and ETS 169];

- the Convention on the Participation of Foreigners in Public Life at Local Level [ETS 144];

- the European Charter for Regional or Minority Languages [ETS 148];

28. Offers the United Kingdom authorities concerned its assistance with more detailed discussion on intended reforms or reform Bills, wherever this might be considered useful;

29. Recommends that the Committee of Ministers set aside financial means, should the United Kingdom authorities make large use of this offer being made by the Congress.

Appendix

PROPOSALS WITH A VIEW TO DEVELOPING

LOCAL AND REGIONAL GOVERNMENT REFORMS

IN THE UNITED KINGDOM

Legal Foundation for Local Self-Government

30. It is hoped that the European Charter of Local Self-Government would not be considered as a mere declaration of intent, but that it should be made applicable by British Courts, including the "judicial review". Although it is understood that British Parliament is sovereign and that local authorities are therefore considered as "creatures of statute" which could be abolished at any time by an Act of Parliament, it is hoped that steps could be taken in order to comply with the spirit of Article 2 of the European Charter of Local Self-Government, by granting this principle a formal legal and quasi-constitutional recognition, perhaps in the future Local Government Bill of the United Kingdom.

Concept of local self-government

31. Although powers and competences of all public bodies, including local authorities, derive from the authority and sovereignty of the United Kingdom Parliament, it is understood that Parliament has conferred specific and separate powers and duties to local authorities, in such important areas of public affairs as planning, education, personal social services, environmental health, housing and waste disposal, thus enabling local government to regulate and manage a substantial share of public affairs "under their own responsibility and in the interest of the local population", in accordance with Article 3 of the European Charter of Local Self-Government.

Scope of local self-government

32. The idea of giving local government a general power of community leadership as compared to service delivery should be encouraged. The law should establish the possibility for local government to "have full discretion to exercise their initiative with regard to any matter which is not excluded from their competence nor assigned to any other authority". Admittedly, the British legal system may make it difficult to develop a general competence of local government in all fields that are not explicitly assigned to any other authority. However, the envisaged general power of community leadership as a right of initiative to improve citizens' well being would probably, in its essence, cover the idea contained in Article 4 paragraph 2 of the Charter.

33. Article 4 paragraph 3 contains a definition of subsidiarity. It would certainly be desirable to include such a provision in a future Bill dealing with general aspects of local government.

34. Today, Britain has about 900 "quangos", of which 654 are linked to the National Health Service. However, many of the remaining 230 act in fields where normally local government action would be expected. There may be doubts as to whether this practice is in line with the principle of subsidiarity as set out in Article 4 paragraph 3 of the Charter. A very positive development is to be seen in the fact that the "quangos" in Scotland and Wales will, in all the fields for which the Scottish Parliament and the Welsh Assembly will be responsible, come under their authority and therefore be submitted to genuine democratic control. In a more general way, it is to be hoped that future developments will substitute the role of "quangos" by democratically-elected local government.

35. As far as the consultation in Article 4 paragraph 6 is foreseen, the newly-introduced practice in the United Kingdom of having central and local government partnership meetings with the participation of a high number of Cabinet Ministers must certainly be considered as an excellent practice.

36. As for the internal structures of local government, the Lord Hunt Bill would provide for a wide field of experimentation, including direct election of Mayors, which could enhance local democracy. It is indeed to be hoped that this will be adopted by Parliament and not be dropped because of time limits.

Protection of local authority boundaries

37. In view of the development towards regionalisation in England and the shift from district councils to unitary authorities, Article 5 of the European Charter of Local Self-Government should not be forgotten when and where boundaries of local authorities might be altered. The same would apply to Scotland if the new Scottish Parliament were to modify the borders between the existing unitary authorities.

Administrative structures and resources for the tasks of local authorities

38. Although it appears that no general statute or training scheme for local government officials exists, there has been no evidence that any of the present rules could prevent the British local government from recruiting high quality staff on the basis of merit and competence, as foreseen by Article 6 paragraph 2 of the European Charter of Local Self-Government.

39. However, an important problem has been noted which concerns the practice of "surcharge" (concerning huge fines that may be imposed on local officials to compensate for financial losses caused intentionally or by "gross negligence"). It is particularly discriminatory that this practice only applies to local government officials and councillors and not to other levels of public or semi-public responsibilities such as central government agencies and "quangos". This practice might be reviewed although individual responsibility for acts clearly contrary to the law or to established financial rules might in some way be maintained, but at all levels concerned.

Conditions under which responsibilities at local level are exercised

40. It would appear that, at present, mayors, deputy-mayors or other councillors working full time for local authorities earn only one quarter or less than top officials in the same authorities. This situation does not favour the taking on of democratic responsibilities by high quality councillors. Furthermore, they may be put in an awkward position as compared to senior officials.

41. The remarks concerning the phenomenon of "surcharge" apply equally to elected councillors and to senior officials.

Administrative supervision of local authorities' activities

42. The very wide functions of the Audit Commissions for England and Wales and, to a lesser extent, the Accounts Commission for Scotland raise doubts as to compatibility with Article 8 of the European Charter of Local Self-Government. Although it has been argued that these Commissions have no right to intervene directly in local government affairs and therefore have no "control" powers and that they are not direct State organs, but independent Committees set up under governmental authority, it cannot be excluded that such Commissions have an excessive role concerning supervision of local authorities' activities, as compared with Article 8 of the European Charter of Local Self-Government. This applies in particular where the Commissions intervene in the field of "value for money" or, in the future, in the field of "best value", where even the publication of reports on local government action, for example during the period preceding local government elections, may have a serious effect on the autonomous decision-making process of local government. In a democracy, the ultimate sanction should always be the expression of the voter, at all relevant levels. Any government policy should place sufficient confidence in the voter's judgement, as far as quality of management is concerned. Things are obviously different as far as conformity with the law and the correctness of financial accounting are concerned. This may also apply for the probity of local councillors or officials, if their behaviour is against the law or the rules of financial accountability, or against well-established rules of deontology.

43. In view of these arguments and of Article 8 of the European Charter of Local Self-Government, it should be envisaged to distinguish between basic administrative supervision in legal and financial matters and management advice in quality matters. As far as management advice in concerned, local authorities should be free to choose their advisors, and to follow the advice given or not, as the case may be. It seems equally difficult to follow the Prime Minister's statement addressed to local government, when he says "if you are unwilling or unable to work to the modern agenda, then the Government will have to look to other partners to take on your role". Although this is probably intended, within a given context, to enhance local government responsibilities, it could also be interpreted as a lack of support for the basic principles of democratic local self-government.

44. It is understood that the primary intention of the Government is to encourage local democracy which is more responsive to the needs and expectations of council electorates. It is hoped that local government would be able to seize this occasion and improve its democratic legitimacy, openness and accountability. Local councils should be seen as playing an important role in creating modernised councils which are outward looking and in touch with local people, and therefore better able to lead their communities and secure quality local services for all.

45. In the field of administrative supervision, practices like "rate capping" and "compulsory competitive tendering" do not seem to be compatible with Article 8 of the European Charter of Local Self-Government. Therefore, it is to be welcomed that the Government seems to be willing to abandon such practices.

46. The distinction between local government's own tasks and tasks delegated by central Government could probably be better clarified. This distinction would then allow central Government to exercise, for the delegated competences only, a supervision as to the expediency of local government action, in conformity with Article 8 paragraph 2 of the Charter.

47. Following the work of the Nolan Commission, great emphasis has been laid on the necessity for a code of conduct for local government councillors. These endeavours are in line with the efforts made in the Congress of Local and Regional Authorities of Europe concerning similar objectives. Such a code would be a serious basis for administrative supervision of local government action (Article 8 of the Charter) and could therefore cover the question of "probity" as it is applied at present by the Audit and Accounts Commissions.

Financial resources of local authorities

48. The current British situation, under which 80% of local government income stems from central Government grants and only 20% from local taxes and rates, can hardly be considered as being compatible with Article 9 of the Charter. The declared intentions of the British Government to enhance financial facilities of local government and to give them a wider share of own resources can therefore only be welcomed. This applies in particular to the idea of re-localising the "business rate", even if basic parameters have to be fixed at national level, in order to avoid discriminatory action by local authorities, that may have occurred in the past.

49. However, is has to be admitted that even under the present system, 80% of State grants are general grants and only 20% are earmarked for specific purposes. It is also worth mentioning that local government is responsible for about 25% of total national public expenditure in Britain.

50. The intention of the British Government to abolish "compulsory competitive tendering" and universal "rate capping" equally go in the right direction. This does not prevent central Government from introducing financial equalisation procedures or equivalent measures in view of protecting financially weaker local authorities, as is stated in Article 9 paragraph 5 of the European Charter of Local Self-Government. However, such procedures should "not diminish the discretion local authorities may exercise within their own sphere of responsibility".

51. It also has to be admitted that central Government may wish to fix a general framework in order to prevent an explosion of local government expenditure which could be detrimental to basic economic and financial balances of the country. However, this would have to be established by general guidelines and not by individual decisions concerning local authorities. Equally, it should respect Article 9 paragraph 6 concerning consultation of local authorities on the way in which redistributed resources are to be allocated to them.

52. Equally it should be ensured that local authorities have access to the capital market, within the limits defined by Article 9 paragraph 8 of the Charter.

Legal protection of local self-government

53. It seems to be accepted under British law that local government has the right to go to Court and, in the appropriate cases, to the highest jurisdiction, the "judicial review". A problem may lie in the fact that, in a situation where no written Constitution exists, it may be difficult to argue for a local authority that a specific provision of a law or regulation is not in conformity with a specific constitutional provision. A future local government bill should provide that the provisions of the European Charter can be referred to in this context.

Undertakings

54. It should be welcomed that the United Kingdom has ratified the European Charter of Local Self-Government as a whole, without making exceptions to particular provisions. This shows the high level of confidence placed by the British authorities in their local government system.

55. It would be worthwhile, however, for British authorities to make sure that the text of the European Charter of Local Self-Government is also widely known, in particular by Courts and other bodies like the Audit and Accounts Commissions, and that the text could be referred to by Courts and by the "judicial review" in future proceedings.

Authorities to which the Charter applies

56. The Charter shall not apply to Parish councils. This may indeed be justified, as they cannot be considered as fully fledged bodies of local government.

57. It is equally understandable that the Charter could not apply, in the present situation, to local authorities in Northern Ireland. It is hoped, however, that, if the peace process continues, the Charter could be applied there at a later stage.

58. The Charter would not apply to the Scottish Parliament and the Welsh Assembly. This is probably the right view. The Congress hopes that, at a later stage, the European Charter of Regional Self-Government, when adopted by the Committee of Ministers, would apply to these regions, and hopefully to regions in England itself. Indeed, at the present stage, it is only foreseen in England to create regional development agencies which would have to be considered as a kind of "quango". However, due note has been taken of the view of the Minister that these agencies are to be considered rather as a starting point than as a final stage of development. It is therefore hoped that, within the general devolution process undertaken by the present Government, these agencies might later be merged into democratically legitimized regional authorities, to which the draft European Charter of Regional Self-Government might apply.

59. The Scottish Parliament and the Welsh Assembly will have powers over local government in the respective regions. In the case of Scotland, this includes full legislative powers over local government. It has been made clear that the Scottish Parliament is supposed to apply the European Charter of Local Self-Government in its internal legislation. This would also follow from Article 7 of the European Charter of Regional Self-Government, should it be adopted in its present form.

1 Debated by the Congress and adopted on 28 May 1998, 3rd sitting (see Document CG (5) 7, Draft Recommendation presented by H. Frendo and H.-U. Stoeckling, Rapporteurs)

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