About Levels of Government
What controls does the UK central government have over local government?
We take you through the timeline of the relationship between the UK central and local government. We also set out the different types of UK government controls over local government that have been used.
The 1860s until the 1930s have been seen as a time when local councils were relatively independent.
There was some light regulation. Parliament required them to provide some services such as schools and refuse collection and gave them a range of powers to do other things such as provide rented housing but was largely left alone by Central Government. The London County Council ran a health service, East Ham its gasworks and Hull its own telephone exchange.
Central controls developed in several stages:-
- After 1945, the expansion of the Welfare State meant health and social security was controlled centrally. The nationalisation of industries took electricity and gas away from local authorities, although they did take on some new functions such as town planning.
- Central government also became more involved in making sure that social housing was built and began to intervene in education, for example, ensuring the creation of comprehensive schools.
- Economic problems from the mid 1970s led Governments to want to reduce public expenditure. Local government was an easier target than trying to control central government spending. The Conservative Government in the 1980s also wanted to ensure more services were provided by the private sector.
- As more decisions moved to the European Union, Governments became more concerned to ensure that local authorities were efficient and provided good schools and health.
- Measures by the Coalition Government, after 2010, to reduce the deficit led to a major reduction in public expenditure. This trend of efficiency savings and doing more with less continues.
- The Conservative Government has looked to by-pass local authorities and encourage initiatives at a more local level, often depending on voluntary work by local people.
What types of UK central government controls have been used?
Tax and money
Local authorities in Britain have only ever had one type of tax to fund their spending, though they can raise money from charges, for example, for parking or using council swimming pools.
The type of tax is a property tax based on the value of a house for residents and the value of a business property for firms. In other countries local authorities have much more control over their finances and can set a local income tax or a local sales tax.
The property tax, called the local rate, was never very popular because it came as a single demand in April, whereas other taxes such as income tax or VAT are paid by people in small amounts over the year.
After 1945, as Central Government put more demands on local government to provide services the rate was not enough to pay for them. Increasingly Central Government began to provide a grant to each local authority based upon a calculation of their needs.
In the 1980s a battle took place between a Conservative Government that wanted to reduce spending and Councils, mostly Labour, which wanted to maintain services and, as Central Government cut back its grant, increased their rate to pay for them.
As a result of this, the Government introduced Ratecapping. This legislation gave Central Government the power to limit the amount by which a council could increase its rate. It also took away control of the business rate from local authorities.
In 1989, Mrs Thatcher, against the advice of some of her ministers, decided to replace the rates with a tax on each person, which became popularly known as The Poll Tax.
It was based on the argument that if everyone paid local taxes they would vote out Councillors who put them up. It was very unpopular and seen as taxing poorer people at the same level as richer people. The protests that followed contributed to her replacement as Prime Minister.
Prime Minister John Major abolished the poll tax in favour of a Council Tax, very similar to the rates.
Governments have continued to use powers to cap the Council Tax and, under the Coalition, every local authority was limited to Council Tax increases of 2% a year unless the electorate voted for a higher increase in a referendum.
As part of plans to reduce the deficit, the Coalition and recent Conservative Governments, have made large reductions in the grant to local authorities. They have needed to cut back on almost all of their services.
No UK written constitution
The UK has no written constitution. Local government, therefore does not have the level of protection from Central Government intervention that it does in other countries.
Central Government is able to pass legislation to abolish local government or change the boundaries of local councils. It can change the way in which they operate by introducing elected mayors. It can ask local authorities to provide services or it can take services away. For example, public health moved from the NHS to local authorities.
Changing how services are provided
Local authorities have always contracted out some of their work to the private sector. However most areas such as parks maintenance, refuse collection and architectural design of new public buildings were provided by their own staff.
In the 1980s, the Conservative Government required local authorities, by a process of Compulsory Competitive Tendering, to open bids from the private sector for all this work.
Council tenants were given the right to buy the house they rented and local authorities were encouraged to transfer their council housing to housing associations or private landlords.
The Government, run by Prime Minister Tony Blair, allowed schools in poorer areas to become Academies, largely free from local authority control.
The Coalition and Conservative Governments greatly extended this. They allowed other schools to become Academies and for groups of people to set up Free Schools, also outside local authority control.
Central Government has increasingly regulated local government. Legislation has given Government Ministers wide ranging powers to intervene.
Central Government can even take over the running of a council from Whitehall as has happened in Rotherham due to the child abuse scandal.
The Major Government required every school to provide information on examination results and these were compiled in national league tables.
The Blair Government introduced the Best Value system so that the standards each local authority service achieved could be monitored by Central Government. This was replaced from 2010 with similar National Performance Indicators.