Who stole Croydon Town Hall?

By - Wednesday 20th September, 2017

A new book explains why ‘cabinet’ government by councils is the end of local democracy as we know it

Over the last year, there has been growing realisation within both the local Conservative and Labour parties that the executive leader and cabinet system for running Croydon Council has major flaws. The key question is whether either party will include in their local election promises next year a reversion to the former committee system that gives all councillors much more involvement in decision making. This is what Croydon Trade Union Council (CTUC) has been arguing for several years. It is also a proposed reform in the Croydon Assembly’s Plan for Croydon.

A new book, Who Stole the Town Hall? by Croydon resident and sociologist Peter Latham, a delegate to the CTUC, is essential reading for political activists, councillors and would-be councillors. It explains the background to the system and what its flaws are.

Its sub-title, The end of local government as we know it, indicates that Peter’s analysis is much broader than examining the leader/cabinet system. It analyses the Localism Act, open public services and the neo-liberalisation of councils, the elected mayoral system, police and crime commissioners and local government finance, and outlines a programme of reforms to strength federal, regional and local democracy.

Council leaders have massive power; the controls they face are toothless

The leader/cabinet system was introduced under New Labour’s Local Government Act in 2000, which concentrated decision-making power in fewer hands. 81% of English councils adopted it. The powers of leaders were strengthened in the Local Government and Public Involvement in Health Act 2007. The Conservative-Liberal Democrat coalition government’s later Localism Act 2011 allowed councils to revert back to the committee system, but only thirteen of them did.

The powers of leaders are massive, because they control which of their colleagues are made cabinet members and which receive special responsibility allowances. This concentration of power is supposed to be counterbalanced by an overview and scrutiny system, but this has proved to be toothless. Peter argues that councillors ‘material interests’ represented by these allowances, ‘ensure that the status quo continues.’

At the same time, local authority services have been increasingly privatised through outsourcing to contractors worth £16 billion under the 1997 – 2010 Labour governments to £32.5 billion under the coalition. In Croydon’s case, that includes the library service to J. Laing, which almost immediately sold the contract on to Carillion. Attempts to counteract the worst effects of privatisation have included outsourcing to social enterprises, in Croydon’s case to the Octavo staff mutual. The financial arrangements for contracts are subject to legal confidential commercial secrecy and hence hidden from public view, reducing accountability.

Ironically, the Localism Act increased centralised government control

Peter contends that local government is now driven by the desire of private enterprise to take over the running of public services and to have looser planning controls over development. He examines how this has worked out in Manchester, Birmingham and Croydon.

The ‘new model of local government’ here in Croydon has included the Croydon Council Urban Regeneration Vehicle with John Laing (now disbanded), the Croydon Strategic Management Board and the Develop Croydon Forum. At the centre of the ‘re-generation’ that these have been driving is the Westfield/Hammerson Whitgift shopping centre development. The council seeks to attract new corporate investors into Croydon by attending the annual international property event in Cannes – MIPIM.

Far from devolving democracy and accountability down to local communities, the Localism Act has helped to further centralise government control. Two leading experts on local government suggested it should have been called the Centralism Act. Although Peter does not discuss them in detail, this goes alongside the centralisation of schools through the academies and free schools programmes, funded by and accountable to the Department of Education and not to councils as the local education authorities.

“The council could be hopping on one leg with its hands tied behind its back”

Alongside all this is the drastic and continuing reduction in government funding to councils. meaning they have to reduce services and staff running them. Grants are being reduced every year to zero by 2020. Croydon Council leader Tony Newman has warned, “less money coming to services” could leave the council “hopping on one leg with our hands tied behind our back.”

Peter argues that directly elected mayors (DEMs) and police and crime commissioners lead ‘to cronyism, patronage and corruption’. ‘DEMS remove the working class from local democracy and replace them with a brigade of full-time politicians’, ‘are the optimal management arrangement for privatised local government services’ and ‘create an area focussed on personalities, not politics’. He shows how referendums for DEMs have not increased turnout, thus their outcomes lack voter support. In London, the highest turnout was in 2016 (45.2%). He also discusses the fact that DEMs can only be removed if corruption is proved. Similar arguments apply to police and crime commissioners.

Local councils are becoming financially unviable

Because EU directives include a commitment to introducing competition into all state-run utilities and services, the Localism Act contains provisions to enable parliament to pass fines under EU law on to local councils if Britain does not meet its obligations in respect of air quality, public procurement, services and waste.

Peter examines the tokenism of the Localism Act’s community right to challenge, and to bid to run, services. In relation to changes to local authority housing finances, he cites Croydon Council’s estimate for the year 2014/15 that sales of ninety-nine or more houses a year under the right to buy would plunge the housing revenue account into deficit. In a review of local government finance set within the context of all public expenditure, Peter shows how councils are becoming financially unviable.

In a final chapter on the reforms that are needed, Peter argues for a fundamental change to the structures of governance in Britain. This includes reform of local government through the repeal of the various acts that impede democracy and accountability and promote privatisation, a return to the committee system for local councils, strengthening citizen participation in decision making, a ceiling on the allowances that councillors receive, and a new system of finance based on land value taxation.

To purchase Peter Latham’s book, click here.

Sean Creighton

Sean Creighton

A former employee of and freelance project worker with community and voluntary organisations, Sean is active with Croydon Assembly and with the Planning and Transport Committee of the Love Norbury group of residents associations. He is Chair of the Norbury Community Land Trust. He is a historian of Croydon and South-West London, British black society, social action and the labour movement. He coordinates the Samuel Coleridge-Taylor and Croydon Radical History networks. He runs blog sites covering Croydon, Norbury and history events, issues and news. He runs a small scale publishing imprint called History & Social Action Publications. He gives talks on a range of history topics and leads history walks.

More Posts - Website

  • Robert Ward

    I have some sympathy with the argument that the all-powerful leader model is not working, although it may be that the character of the current incumbent may have something to do with that. However I think you are conflating this with lots of other things that you don’t like, such as anything that involves the private sector.

    Local authorities and the leader are not immune. The reduction in direct government grant funding to local authorities and replacing that with the likes of retained business rates makes local authorities more responsible rather than less. We also have the opportunity every four years to kick the rascals out.