It's not new to say that local government isn't really master of its own destiny. Nor would I be the first to observe that local councillors - the people we elect to make decisions about that local government - have even less control over that destiny. Most thoughtful local councillors know that the big decisions about funding are outside local control and also that many of the ways in which that funding is distributed are not within the local council's gift either.
Back in 1961, when my Dad was first elected to the Municipal Borough of Beckenham, local councils undertook duties placed on them by national governments (e.g. refuse collection) but the funding for those duties, as well as the other things a council chose to do, was entirely raised locally through the rates or through charges. There was no revenue support grant, no centralised setting of business rates and no national fee levels. It was down to the councillors.
Between then and now something changed. My Dad always blamed the 1970 Local Authority Social Services Act for starting the rot but whatever the cause we moved from a situation where local government was controlled locally to a situation where, for most councils, what they do is defined by national regulation and the necessary funding provided by central government. In 2011 local government spent £147billion and £103billion of this - 70% - was central government grant funding (one caveat here - this is a net spending figure not a gross spending figure, the £147bn is the call on tax revenue from local government).
Not surprisingly governments have sought to control this level of expenditure (it is about a quarter of total government spending after all) and to try and direct the way in which the money is used. To understand how this budget works we can divide the activities funded through local government into three areas: education; social services and social care; and municipal services (bins, potholes, parks and so forth). This is an oversimplification but helps to explain how local government actually works.
For education the local council (as 'local education authority') is two things - a route for money to be paid to schools and the provider of services to those schools. The bulk of the funding is in the form of the Dedicated Schools Grant (DSG) - the formula for distributing this grant is defined nationally but administered through a schools forum rather than, as in times past, a committee of the local council. The schools forum is not an elected body, it is not accountable to the council and its membership is institutional (schools, LEA, unions, colleges, etc.). Put simply, local councillors do not control the funding of schools. So when you blame your local council for not improving education try to remember this fact.
In the case of social services and social care local councils provide services in response to demand - or 'need' if you prefer the approved social care word. The budget is what the US Federal Government would call "relatively uncontrollable". In any given budget period the council has to estimate how many people will require social services and/or social care. That's how many children might be taken into care, how many disabled people will require support, how many of the elderly population will need home helps and so forth. Since education funding is effectively outside the local authority this is the biggest area of council spending. And while councils have some funding flexibility, at bottom they have a duty to meet the need identified.
Municipal services consists of everything else the council does - this includes statutory services such as planning, libraries, youth services and the registrar of births, marriages and deaths. As well as those things we tend to think of as what councils do - empty our bins and maintain the roads, run parks and provide swimming pools. Councillors do have more discretion over these services and over how much funding they receive. For some things - swimming pools and public lavatories, for example - the council has absolute control and can open or close them as it wishes.
The truth of all this is that 80-90% of the spending and activity undertaken by your council (or councils if you live in the shires) is simply given - determined by regulation, set out in statute or otherwise required by central government. And three-quarters of what your council spends comes in the form of central government grant - with all the strings and restrictions that come with this. Ministers and bureacrats down in London will always want to make sure that, wherever possible, the agenda of the national government is met by the local council. As a result we have had restrictions of borrowing, limits to tax-raising powers such as rate capping, the use of regulation or ring-fencing to direct spending and, if all else fails, simply removing any power for councillors to control or change what the council does. We even got an instruction this year to hold a 'named vote' on setting the council tax!
So when, as we did in Bradford yesterday, councillors get together and "set the budget" bear in mind that what you're seeing is a finely tuned political row about a few million quid out of a budget totally over a billion. The budget debate - "we've found £200,000 to invest in saving kittens", "the Tories are casting old people into the darkness by reducing the walking stick budget by £50,000" and "Labour are failing youngsters by removing the swing seat cleaning service" - this debate isn't really about the budget at all, it's about the tiny bit of the budget that our system of local government allows us to control.
Sometimes it makes me wonder?