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Gove finally admits it: Localism got councils all in a Pickles

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Is the Levelling Up minister in denial about the extent of financial problems in local government? It certainly seems that way after his speech to the Local Government Association conference yesterday. By STEVEN DOWNES

Minimising: ‘Seriously, the problem is only this big’… Michael Gove did not say at yesterday’s LGA speech

Michael Gove, the Secretary of State for local government who has council chief execs in a queue to his office seeking billions in bail-outs, yesterday as good as admitted that a decade of “Localism”, as introduced by his predecessor, “Big” Eric Pickles, had been a complete failure and had contributed to the financial collapse of multiple authorities including Thurrock, Slough, Woking… and Croydon.

Gove was the keynote speaker at the Local Government Association’s annual conference in Bournemouth, and used the occasion to launch “Oflog”, the Office for Local Government, a new tier of government and regulation.

The set-piece speech is thought to be the reason that an announcement about new arrangements, and wider-reaching powers, for the Whitehall-appointed improvement panel in Croydon, which was due to be made last week, was postponed.

Speaking to an audience made up almost exclusively of senior local government officials, Gove said, “Oflog is about supporting you to get on with the job of running local government and delivering for residents and communities.

“And we will work with you to establish the best indicators of performance that will be upheld via Oflog.” It’s as if the idea of erasing the role of District Auditor, as Pickles did, was all just a bad dream…

“Oflog should also support us and the department in another vital way. And that is identifying potential problems in councils earlier,” said Gove, the minister who has presided over more councils going bankrupt than ever before. Before Croydon went bust in November 2020, only one council had issued a Section 114 notice this century.

In the last three years, five other authorities have followed Croydon and ‘fessed up to not being able to balance their budgets.

But it appears to be Gove’s preferred narrative that Thurrock, Woking and Croydon are somehow isolated examples of bad local governance. When Tony McArdle, the chair of Croydon’s improvement panel, was dispatched to Thurrock to find out what had been going on there, he described their £1.3billion debt black hole as “unique within local government”. Which is blatant hog-wash.

McArdle also suggested that there had been no warning signs over Thurrock’s addiction to borrowing, which is also counter-factual.

The LGA has said recently that there could be another two dozen councils on the brink of bankruptcy.

Was there a hint, yesterday, of an admission by Gove that he and the Department for Levelling Up, Housing and Communities could have, should have acted sooner?

“We all know that there have been local authorities where problems have arisen – notably Thurrock, Liverpool, Croydon, Slough and most recently Woking,” he told the LGA conference.

“A handful of cases, the exception… but the problems did not happen all at once – they were there for some time, and they worsened over time.

“We, collectively and in the department, I think, need to be able to respond to the warning signs.

Toxic legacy: Eric Pickles

“These failures are felt most acutely by taxpayers and residents in higher costs and worse services…” It was Gove that gave permission to Croydon’s part-time Mayor, Jason Perry, to hike Council Tax by 15per cent while axing more services.

“Where government intervention is needed to deal with these problems – in the most serious cases – we must be able to take targeted action. The Levelling-up and Regeneration Bill…”, proposed legislation which probably won’t get enacted before a General Election, “… strengthens our ability to act to protect taxpayers where trouble is brewing.”

Gove then returned to his “small minority of councils” nonsense, “outliers of concern in a sector characterised by excellence”, he patronised his captive audience.

“But we must reflect seriously on what these exceptional cases tell us about how core parts of the framework work in practice. But we must also ensure that framework is designed in a way to support our delivery of services. We need in order to ensure that we both identify problems early and free you to do you even better to reform the external audit system.”

It is the external audit system that was introduced when Pickles did away with the previous District Auditor system. Croydon, as one example, currently has three (or is it four?) years’ worth of accounts that have not been signed off by its external auditors.

“It’s just not working at the moment,” Gove said in an unusual outbreak of truth-telling.

“We need to tackle the delays in external audit and are talking to firms, council representatives and others on concrete steps that will get us back to a system where we all have faster and more effective, swifter and less bureaucratic reassurance in the way money is being used.”

The new totem is to be “Best Value”. Gove is soon to announce a consultation on statutory guidance around responsibilities for Best Value.

Would that have made any difference in the cases of Thurrock, or Woking, or Croydon?

Plenary: Michael Gove giving his LGA audience what they wanted to hear yesterday

Probably not, when the government was so keen to throw millions of pounds worth of low-interest loans at local authorities, and tell them to get on with speculative investments in commercial property, wind farms or housing.

Is there to be a shift in this respect? Gove cited the need for a rational allocating system, fewer ringfences, more rewards for successful authorities, and clear incentives, which would “make funding simpler, more rational and predictable”.

Access to the Public Works Loan Board will also be looked at.

“There have been some local authorities, obviously, that have speculated on property and other assets in a way that was unwise,” Gove said.

In future, he said, there would be a requirement to “ensure that we minimise this sort of unnecessarily optimistic level of borrowing”.

Oflog’s role will be to support local authorities, based on authoritative and accessible data and analysis about performance. And it will use those tools to help detect financial problems in local government much earlier than previously.

At least, that’s the theory…

Read more: Perry admits he can’t take action against council’s bankrupters
Read more: Slough, Thurrock, Sandwell, Liverpool: Croydon’s not alone
Read more: Penn Report wanted police probe into possible misconduct
Read more: Cover-ups and denial over Brick by Brick failure


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