Pickles puts councils in a jam

The upside of Eric Pickles’ venture into waste funding is that thanks to the good sense of local authorities not all of the £250m Weekly Collection Support Scheme will be wasted. By my reckoning it will pay for 23 new or extended food waste collections to be introduced and various expansions of recycling services, without any significant return to weekly residual waste collections.

But there are plenty of downsides:

• Pickles has established a precedent for his department using its general responsibility for local government to interfere in specific services for which other departments are responsible. The Environmental Services Association’s  reaction to the funding announcement points out the confusion this causes about government policy[1] .  Which other policies will he now want to meddle in?
• Although only one authority – Stoke on Trent – intends to go back to a full weekly residual collection, more than 80 authorities are now prevented from going forward. The evidence suggests that even with improved recycling services their recycling performance will not be as good as it should be.
• Despite input from Defra and WRAP, it seems that the imperative to show that the scheme is fully subscribed has led to poor value schemes – like mixed food and garden waste collections – going through.
• Political rhetoric – rather than evidence – about recycling rewards has led to 19 new reward schemes being funded by DCLG while the trials and evaluation funded by Defra, to establish whether and how rewards can contribute to increased recycling, are still underway.

Perhaps most worryingly, Mr Pickles feels the need to cover his failure to achieve his original purpose of bringing about widespread return to weekly refuse collection with a blustering threat to withdraw formula grants from authorities that do not offer residents this “basic human right”.

It’s the autonomy, stupid

This is wrong on so many levels. It shreds what I, and most others, understood by the government’s welcome commitment to localism. To understand how damaging this is to the local government, it is necessary to understand what is happening more generally to local government finance.

Before the abolition of domestic rates in 1990, local authorities raised about 60% of their income from locally variable taxes. Government grants were distributed by a formula designed to allow each local authority to provide a standard level of service while setting the same local tax rate. Increased spending on services would produce a predictable increase in tax rates and allow local voters to judge the performance of their council.

The weekly collection support scheme has used a lot of energy but made little progress. Photo by www.acumenimages.com for the Health Hotel, via Wikimedia Commons.

The replacement of rates by first the poll tax and then council tax, removed business rates from local control so that local authorities were able to raise only about a quarter of their income from local taxes. This meant that any increase in spending was much more highly geared – a £1 increase in spending increased council tax by £4. This limited councils’ freedom of action even in boom times but especially once recession struck.

The change of government in 2010 has seen a massive reduction in grants to local authorities. Paradoxically that has helped with the gearing problem but replaced it with urgent and painful spending decisions. Last year and this, councils have also come under extraordinary pressure not to increase council tax at all. They are being bribed into this by the offer of extra grant to help cover spending pressures.

Tax poll demand

From next year, councils that want to increase council tax by more than 2% will have to hold a local referendum. The practical and cash flow implications of that are such that it will be surprising if any authority ever triggers the provision. What is presented as an exercise in direct local democracy will in effect become a centrally imposed cap. When similar provisions were put to Parliament in 1982 by Mrs Thatcher’s government, it was forced to withdraw them before a vote in the face of a rebellion by Conservative MPs opposed to the impact it would have on local accountability. This time the provisions were buried in the obese Localism Bill and passed with barely a mention in the press.

At a time when local service needs are growing, we are witnessing the sharp curtailment of the revenue raising powers of local government and steeply falling central grant income. But at least, until now, councils had the freedom to decide how to spend that grant income to best meet the needs of local people. Pickles’ bluster undermines even that. I’m not sure what he means by localism, but it seems to be something different from how I understand it and appears not to include the notion of elected local authorities making key decisions on taxation and spending, and being held accountable for them.

I apologise for dragging you into the complexities of local finance, but it is the context for much of what will or will not happen in waste in the next few years. There are further dimensions to understand as a result of how funding is being allocated. The grant reductions have not been uniform, the Home Counties, for example, have not generally been hit as hard as the North of England. And there are new – very complicated – arrangements for English authorities to keep some of the increase in business rates that arise from new developments. That will favour London and the Home Counties too. But that is a story for another blog.