Local government structure and finance Flashcards
How many types of local government structure are there and give examples?
There are three types:
1) Unitary- Isle of Wight
2) Two tier- Surrey County Council
3) Hybrid- East Sussex
In Wales, there are only unitary authorities and there are 22 of them.
What is a Unitary system?
This is a single-tier all purpose council which looks after all services in a specific area, for example, each Greater Manchester council is its own unitary council (e.g. Manchester, Rochdale, Wigan, Tameside etc.)
What is a two-tier system?
A two tier system is where there are two tiers of council that look after services in a given area.
This is typically a county council and a city/borough/district council.
They look after different services:
County Council (upper tier): books after ‘major’ services such as education, adult social services, children’s social services, waste disposal, strategic planning.
Borough/city/district council (lower) tier: such as waste collection, housing, planning applications, elections, council tax collection.
What is the hybrid system?
This is when a unitary authority exists in a geographical area which is predominantly two-tier. Examples include Brighton being a unitary despite the rest of East Sussex being two-tier. Brighton exists as its own entity and gets no services from East Sussex County Council.
How do two tier systems work?
The upper and lower portions are politically independent which means they have their own elections, and decide their own spending and policies.
It is not a hierarchy.
What are some advantages and disadvantages of a two tier system?
Advantages:
- Electorate more likely to vote
- Services work closely with the people
- Identifiable units
- Services can be tailored
- Well adapted, functional staff that have specific roles
Disadvantages
- Risks crossover
- Small district councils cannot afford high-calibre staff
- Complexity of system results in public apathy
- Remote decision making
What are some advantages and disadvantages of a unitary system?
Advanatges
- Can save down on cost and resources used
- efficient as services are not duplicated
- Easier for public to understand as all services are under one roof
Disadvantages
- Can be too small, so may not be able to supply specific services like services for those with autism.
- Areas can be geographically way too large (e.g. Cornwall)
- Cost of moving to a unitary system can be high
What types of spending are there for local government?
There are two types
Capital (14%): Spending on signifcant, long term assets that will have a life of many years like roads, schools and hospitals
Revenue (86%): Is spending on day to day items such as staff salaries, heating and lighting costs, repayment of borrowing with interest
What are some sources for local government stories?
Councillors – they can give insider insight into the working of their council
Local MP – they will likely have contact with councillors and be able to offer their own perspective
Local government association – an organisation that represents local government on a national level
Vox pops with members of the public – get their perspective on particular issues
Political activists/interest groups campaigning on a particular relevant issue
People who work at council services, such as public libraries/state schools/etc
Local businesses – if relevant to your story
What are the sources of money for capital spending?
Capital Grants- these have come from a variety of sources in the past – central Government, European Union, National Lottery. Councils bid for the funding and don’t have to pay it back.
Borrowing - Supported capital borrowing (overseen and controlled by central government, mostly from Ministry of housing, communities, and local government);
or
Prudential borrowing - Local Government Act 2003 introduced code of conduct on borrowing. Can the authority afford the repayments and is it value for money (checked by external auditors)
Capital Receipts- this is using the money made from selling off other assets such as buildings. Trouble councils have with this is that they have loads of stuff they want to sell but no-one wants to buy it.
Public Private Partnerships - this is where the public sector body (in our case the council) signs an agreement with a private sector partner to design, finance and build the facility, which it then leases. Positive is that it doesn’t require the council to find the cash upfront but the negative is it will cost more in the long run.
What are some strengths and weaknesses of Private Public Partnerships?
+
Time effective as the public body does not need to fundraise initial funds, the private sector provides this.
Any risks involved in the development are transferred to the private sector
The quality of the asset should be better because private company designs to high specification as it’s responsible for maintenance
No central government controls
Costs more in the long run
How is revenue funding sourced for money?
Local Gov-
- Council tax
- Chargeable services like parking
- Rent
- reserves
(Mostly) Central Gov
* Grants
Grants generally come as two types – formula and specific.
Formula grants can essentially be spent on whatever the council wants while specific grants are ring-fenced and must be spent on specific areas (schools etc). The majority of grants are formula grants.
Uniform Business Rates- This is a tax on non-domestic, commercial properties, such as shops, salons, pubs, offices etc.
This tax is collected by local government and then redistributed by central government to different local authorities based on perceived need.
What is council tax?
Council tax is a tax on domestic properties, based on the estimated value of that property as per the 1991 prices of houses as assessed by HMRC Valuation Office Agency.
The properties are split from into 8 bands from A-H (in ascending price order). The average property falls into band D, and the other categories are set relative to that.
Single occupants get 25% discount.
This tax applies to social and private housing, but social housing provided by the government will have a discounted rate.
Councils set their own level of council tax but can only increase by a max of 2% per year unless they hold a referendum. For last few years they have been allowed to add a precept of a further 2% to pay for adult services.
What are some pros and cons of the post LGA 2000?
Faster decision-making process
‘Frontbenchers’ have disproportionately more power than ‘backbenchers’ - who have far less say than in old system
+ Elected mayors give the public more say in decisions over council leadership
Councils can become less democratically accountable because the power is in the hands of fewer people
+ Electorates can demand referendum on introducing directly elected mayors
Differing models leads to patchwork of representation and confusion for voters
What are some issues around LG operation?
The rollout of the directly elected mayor model, and why some authorities have scrapped it
Do the directly elected mayors have too much power (considering they can make decisions without cabinet approval)
Better representation of women and minorities in council cabinets – number of women councillors has been increasing in recent years
Outsourcing of council functions, with councils suffering from the legacy of austerity
