Local Government Bill : Council mergers edge closer (sort of)

We still have no idea what form local government reorganisation will take. The latest law introduced
to the Assembly will, however, give councils the opportunity to take the initiative themselves
....unless they've already taken the initiative themselves, of course.
(Pic : Wales Online)

A little over a year to the day since the Williams Commission reported on local government and public service reforms, Public Services Minister, Leighton Andrews (Lab, Rhondda), introduced the Local Government Bill to the National Assembly on Tuesday (27^th January), with the aim of outlining the process for voluntary mergers between local authorities.

Bill (pdf), explanatory memorandum (pdf).

Back in December, the Minister expressed his disappointment that only six local authorities came forward with voluntary merger proposals : Conwy & Denbighshire, Bridgend & Vale of Glamorgan (Case for Bridgend-Vale merger outlined) and Blaenau Gwent & Torfaen.

True to form and with baffling timing (more from Y Cneifiwr), on Tuesday he rejected all three proposals, believing none of them matched the vision set out by Williams or the Welsh Government. As a result, Peter Black AM (Lib Dem, South Wales West) described it as a "Bill without a cause" yesterday.

It suggests Leighton is going to "persuade" local authorities to either follow the Williams Commission recommendations to the letter, or something radically different which we don't know about yet.

That means, locally-speaking, a Bridgend-NPT merger is back on the table, even though an overwhelming majority of Bridgend councillors voted in favour of a Vale merger.

What's included in the Bill?

Voluntary mergers

The Bill :

• Sets a deadline of November 30^th 2015 for local authorities to make an application to the Welsh Government to commence merger procedures. A full public consultation will also be required before making an application. The aim is for the new local authorities to be in place by April 1st 2018.
• Gives Welsh Ministers the power to issue guidance on merger applications and make regulations relating to mergers themselves – this includes setting the name of the new authority.
• Sets out transitional "shadow authority" arrangements, which will come into force on a specific date. Shadow authorities will be made up of all of the councillors in merging local authorities. The powers and budgets will be outlined in regulations.
• Includes the power for the Welsh Government to make regulations regarding electoral arrangements, specifically including powers to :
• suspend local elections (both local authority and community council) for a set date
• suspend by-elections for vacancies during the "shadow authority"/transitional period
• set the date for the first local election to the new authority
• grant the new local authority the option to hold a referendum on directly-elected mayors

Transition Committees

• Each new local authority will be required to establish a "transition committee". These must be made up of equal numbers of councillors from each of the merging local authorities (a minimum of 5 from each) and will need to be politically-balanced.
• Transition Committees will be responsible for :
• Setting out the transfer of staff, property, liabilities and functions to the new authority.
• Ensuring the new local authority is ready to function as soon as it becomes active.
• Any other functions set out by Welsh Ministers.
• The merging authorities will meet the costs and resource requirements of the transition committees, in proportions which they either agree between themselves or which will be set out by Welsh Ministers.

Electoral arrangements in the new local authorities

• The Welsh Ministers will direct the Local Democracy and Boundary Commission (LDBC) to undertake an "initial review" of local election arrangements in the new local authorities, and will set a deadline for when the review will be published.
• This review will include recommendations on :
• the boundaries of communities
• the constitution and electoral arrangements for community councils (if impacted by changes to local authorities)
• the number of councillors in the new local authority or new community councils
• electoral ward divisions, the number of councillors per ward and the name of wards (both local authority and community)
• The LDBC must have consideration to :
• ensuring "effective and convenient local government"
• ensuring the ratio of electors to elected representatives is consistent across a new local authority
• setting ward boundaries that are easily recognisable and which avoid "breaking local ties"
• The Bill gives Welsh Ministers the power to implement any LDBC recommendations, with or without modification.
• The Bill also gives Welsh Ministers the power to amend the Local Democracy Act 2013 in order to reset the review period for local government boundaries (it's currently every 10 years from September 2013).

Remuneration in the new local authorities

• The Independent Remuneration Panel for Wales may be directed by Welsh Ministers to "perform relevant functions" for the "shadow authorities" as well as during the first full financial year of the new local authority – as set out in the Local Government Measure 2011, which will be amended accordingly.
• The transition committee must publish a pay policy statement for the new local authority (as set out in the Localism Act 2011) within 42 days of the "shadow authority" being established. The shadow authority will then have to approve or amend the statement.
• No chief officer (I presume they mean chief executive) may be appointed for the new local authority until a pay policy statement is approved.

Limits on functions of transitional authorities

• Unless fully explained to the transition committee, the transitional authority cannot :
• make any land or capital acquisition or land disposal (worth more than £150,000 [land] or £500,000 [capital])
• enter into any contract or agreement
• give any grant, loan or financial assistance (exceeding £150,000)
• The transition committee must give its opinions on the appropriateness of any of the above. Any action that hasn't been properly reported to the transition committee is void, unenforceable or repayable.
• All of the above will also need written consent from the shadow authority.

The Costs

As usual, I'll only cover the Welsh Government's preferred options.

Ensuring the LDBC can undertake its review of local government boundaries in time for the creation of the new local authorities in April 2018 will cost an extra £881,000 between 2015-16 and 2020-21. This is on top of the LGBC's current £3.12million funding.

The equivalent cost to the Independent Remuneration Panel to carry out its work in relation to the provisions of the Bill is £40,000 spread over two years.

The total costs across Welsh local government of establishing transition committees will be between £1.88million and £2million for 2016-17 to 2019-20, depending on the type of merger proposed.

Welsh Government guidance, and the costs of recruiting an additional member to the Independent Remuneration Panel, will be £149,000 between 2016-17 and 2019-20. Voluntary merger regulations will cost the Welsh Government £28,000-£56,000, based on a presumption there would be one or two voluntary mergers.

The LDBC is already recommending a reduction in the number of local councillors across four local authorities (Conwy, Denbighshire, Powys and Ceredigion). If this goes ahead as planned (regardless of whether they merge or not), this will save £780,000. Carmarthenshire is set to gain an extra councillor at a cost of £13,000 per year.

Total costs to the Welsh Government are estimated to be £1.12million over 6 years until 2020-21, while total costs to local government (net of savings from the proposed reduction in councillors) is £1.22million.

So the total cost of the Bill, if enacted, is £2.34million.

Method and Madness

You'll get no argument from me on the process outlined in the Bill.
The problems are political.
(Pic : WLGA)

The Bill itself is clear and methodical. This is, arguably, the best way to approach mergers in a way which minimises disruption and ensures a smooth transfer; so I can't find much fault.

I suppose it's been done this way in order to encourage as many local authorities as possible to come forward with their own merger proposals. There are clear advantages in them doing so, such as having greater control over the process as well as a delay in local elections.

The problem is that since the publication of the Williams report, the process of public service reform has been a slow motion car crash. There's a distinct lack of leadership from the top and no clear political agreement (remember that Easter deadline? Clearly Carwyn meant Easter 2015).

Here's an exchange between Carwyn Jones and Leader of the Opposition, Andrew Davies (Con, South Wales Central), at Tuesday's First Minister's Questions :

In short, it's all over the place in Cardiff Bay (Williams Commission : The Fallout).

That's mainly Labour's fault because they haven't given any firm commitment to a particular model of reorganisation, meaning we currently have no idea what the future local government map will look like in order to have something to work towards. All we know is the Williams Commission recommendations are the Welsh Government's preferred option, and that means somewhere between 10-12 local authorities.

The other parties haven't been forthcoming either.

We have no idea what the Tories want to do other than save money, while all we've had from Plaid Cymru and the Lib Dems is support for a principle of local government reform, but nothing else other than murmurings about proportional representation in local elections. In fairness, the Lib Dems have a reason to be shirty as they were unfairly shut out of the Williams Commission itself. Plaid and the Tories have dithered as much as Labour.

Having said all that, Leighton Andrews will publish a white paper on reorganisation next week which might give us a better idea what his intentions are. I haven't decided whether I'll cover it or not though, it depends what's included.

Meanwhile, local authorities themselves – as well as the WLGA – have been lukewarm towards the idea and are plugging alternatives (And then there were four?). A lot of little empires are going to be broken up, so many local councils are sulking in the corner with their arms folded.

That's reflected in the expected low number of voluntary mergers. The explanatory memorandum suggests there'll only be one or two, which makes you wonder if this Bill is worth it, and whether the Welsh Government should just bite the bullet and force the mergers through – maybe down to as few as six local authorities, as suggested by BBC Wales' Nick Servini.

The timings are incredibly tight in the Assembly, and this is acknowledged in the explanatory memorandum. It's expected the Bill will receive Bet Windsor's scribble this November. By Assembly standards that's not a long time for the law to go through the proper scrutiny process as it'll be interrupted by recesses, a large number of other laws going through the Assembly and what are likely to be the final committee inquiries of the term.

By the looks of it, local authorities are going to have to start the voluntary merger process soon if they're going to meet the Bill's November 30th deadline.

For those local authorities which don't merge voluntarily, depending on who's in charge, a second Local Government Bill would be introduced early in the Fifth Assembly. New local authorities created by compulsory mergers would come into being from 2019-2020, but presumably the local authorities involved would lose control over the merger process.

What's been overlooked here is the impact on community councils. It looks as though there could be a minor reorganisation on the cards for them too. Although any changes to community councils, as outlined in the Bill, are dependent on the impact of local authority reform, I would support a rationalisation of community councils as there are far too many, and they often struggle to find people to run for office.

For example, it would make sense to have a single community council covering the whole Bridgend urban area, as opposed to : Bridgend Town, Brackla, Coity Higher, Merthyr Mawr and Laleston. The Welsh Government's intentions at community level haven't been made clear though.

So overall, the process outlined in the Bill is relatively uncontroversial. The policy and political situation, however, leaves many holes and unanswered questions, meaning this Bill is likely to be in for a rough ride. Some sort of cross-party political agreement at Assembly level and with the WLGA will have to be done within the next couple of months - Carwyn Jones said on Tuesday by "this summer" - or the whole thing is at risk of spiralling out of control.