A previous blogpost has set out the background as the Welsh Government embarks on reforming local government in Wales. This blogpost looks in more detail at potential issues around the Local Government (Wales) Bill, which is the first legislative step in that process.
(For more information on the Bill itself, the Research Service has just published a summary of its main provisions.)
The Bill was introduced by the Welsh Government on 26 January 2015, and in essence it has two primary aims:
- To enable local authorities who have made successful bids to merge voluntarily to do so;
- To enable preparatory work to begin for new local authority areas that will be created by compulsory mergers via a second Bill.
One immediate question to ask is whether the part of the Bill relating to voluntary mergers is now necessary. This follows the Minister for Public Services’ recent decision to reject all three expressions of interest submitted by local authorities who were keen to explore such a merger.
Linked to this is uncertainty about the eventual local government map and which authorities will actually merge. The July 2014 White Paper on reforming local government indicated that the Welsh Government’s preferred option was for 12 local authorities (in line with a recommendation made by the Williams Commission), but that has now been thrown into doubt.
The First Minister seemed to concede that the Welsh Government was reconsidering its options when he told the Assembly on 27 January 2015 that the 12-authority structure was not “definitive”.
Then, on 5 February, the Minister for Public Services told an Assembly committee that he was “still moving forward on the basis that Williams option 1 is our preferred option”. However, he also said:
Now, I think if I were in local government—I’ll be blunt—I would not want to bring forward at this moment a voluntary merger proposal without seeing the overall map.
The Minister went on to say that the Welsh Government would publish its map by the summer recess, regardless of whether it had reached consensus with other parties on the matter by then.
The Two Bill approach
A related issue is the unusual legislative approach the Welsh Government is using to press ahead with its merger programme. As well as enabling voluntary mergers, the Local Government (Wales) Bill makes provisions allowing preparatory work for future, compulsory mergers to take place. This includes work by the Local Democracy and Boundary Commission for Wales (LDBCW) to start reviewing and making recommendations for the electoral arrangements of new local authority areas.
Significantly, the Bill allows the LDBCW to start such work as soon as the Welsh Government has published proposals for new areas (and as long as this Bill has received Royal Assent). The Welsh Government has clarified that such proposals could be published in any form, although the indication is that it might do so in a draft, second Bill to be published next autumn. This all means that work could theoretically begin on new proposed areas as early as this year, even though the Welsh Government doesn’t intend to formally introduce the Bill that will outline the proposed new areas until after the Assembly elections in 2016.
This raises questions about what would happen if a different government was elected that did not support either mergers in themselves, or the specific form of mergers set out in the second Bill.
When questioned on these issues on 5 February, the Minister for Public Service justified the provisions in the Bill by claiming they were needed to do things “in an orderly way”, and to “allow work to begin in certain areas, regardless of what the map might look like.”
Alternatives to mergers
Notably, the Williams Commission recommended merging local authorities along their current boundaries, rather than redrawing the local government map from scratch. According to the Welsh Government, this could achieve the benefits of having larger authorities “without the more significant disruption and cost which would result from redrawing boundaries”.
Not everyone is convinced that this is the best way forward, with some arguing that a more substantial reconfiguration of local government could be more sustainable in the long term than simply bundling together the current local authority blocks.
For instance, the Auditor General for Wales has said:
Form follows function. Where is the debate in Wales about what local government should be about? Where is the debate about what services should be done at a particular level so we can design what structures we need?
For this quote and further discussion, see this paper by the Welsh Local Government Association.
Costs and benefits of merger
Critics argue that the Welsh Government hasn’t yet made a convincing costs and benefits argument in favour of its merger programme.
In a November 2014 report, the Chartered Institute of Public Finance and Accountancy (CIPFA) suggested that the transition costs of mergers could range between £160 million and £268 million, with eventual annual savings of around £65 million. However, CIPFA warned that it was impossible to assess the financial implications “with any degree of precision” until the exact nature of the merger programme was known. Notably, in proposing mergers, the Williams Commission conceded that it had not attempted to look in detail at what the process would cost or save.
In the impact assessment accompanying the Bill itself, the Welsh Government claims that “it is difficult to compare the costs and benefits in an objective way”. Although this quote relates to the first Bill and not the whole merger programme, it is unlikely to reassure critics such as the Welsh Local Government Association which has previously expressed concern that the Welsh Government “is pressing ahead with legislating for one of the most wholesale public service reforms in two decades … without a clear and costed business case”.
Scrutiny of the Bill (including a public consultation) has just began in the Communities, Equality and Local Government Committee, and will continue up to Easter. The details are available here.