This is an article for the Institute of Welsh Affairs Click on Wales site
As officials in the Welsh Government begin their task of evaluating responses to the consultation on restructuring Principal Councils in Wales, it is worth turning our attention to the Cinderella of local government, the forgotten few, our Town and Community Councils.
Just why our second tier of local government in Wales is overlooked so often has more to do with function and relevance than with anything they do or say. As a group of statutory bodies, they are remarkably diverse and, in the vast majority of cases, get on with their job without making too much fuss or upsetting any apple carts.
There are in fact 738 Community and Town Councils in Wales representing 1,674,811 electors, that is 72% of the total number of people entitled to vote across the country.
In 2017-18 they raised £38,199,045 in council tax off a tax base of £887,811. That is an average band D equivalent Council Tax of £43 per property.
In a recent report, the Auditor General Wales stated that, in 2015-16, Community Councils were managing reserves worth over £32 million and long-term assets worth over £188 million.
And yet despite having such a vast resource at their disposal, our Town and Community Councils remain unloved, for the most part run only by a diminishing band of volunteer and largely unpaid Councillors together with a handful of employees, many of whom are part-time and poorly remunerated.
Just how unloved these councils are can be evidenced from the May 2017 elections. Of the 7,941 vacancies, 5,106, or 64%, were uncontested. At the close of nominations, 1,357 seats or 17% were vacant, ready to be filled by co-option if possible once the new bodies met for their annual meeting.
In fact, the picture is bleaker if we look at it in a different way: of the 1,555 wards, 1,231 or 79% were uncontested. On a local level that amounted to 92% of the wards being uncontested in Blaenau Gwent and Anglesey, and 100% in Cardiff and Merthyr. Other principal council areas were not far behind.
It is little wonder that some of these councils have a reputation for being self-perpetuating, self-appointed talking shops. That is particularly so when, as happens in a few areas where nominated candidates are close to equal to the number of vacancies, the various parties decide amongst themselves beforehand what numbers to put up for election so as to avoid a contest.
And there are deeper problems, often arising from the part-time and volunteer nature of the membership and officer base. The Wales Audit Office for example, also reported that too many Community Councils in Wales receive avoidable qualified audit opinions (when councils fail to comply with their statutory responsibilities) and this is particularly the case with smaller councils. Over 200 councils or 30% received a qualified audit opinion for 2015-16.
The most common causes of this black mark are the failure to adhere to the statutory timetable for the accounts, to put in place arrangements to manage risk, and/or to set an appropriate budget.
Over 50 councils (8%) failed to comply with the statutory timetable for preparing and approving the accounting statements, whilst too many submit annual returns that are incomplete or contain simple errors in the accounts.
Finally, the Wales Audit Office also complained that over a third (36%) of councils did not set an appropriate budget, including all the elements they are required to include by law; over half did not have adequate budget monitoring arrangements in place; whilst a majority did not have full terms of reference in place for their internal audit.
So where is it all going wrong? Is it just a matter of scale? The evidence suggests that this may well be the case. The bigger Town and Community Councils have the resources to satisfy their legal requirements and, in most cases even attract a greater interest from voters in standing for election, simply because they can see a greater potential to influence the direction of their community.
It has to be said that many of the bigger councils are situated in areas where party politics is more evident. But one of the reasons why political parties feel that they should engage with these councils is because of their ability to get things done.
Thus, Maesteg Town Council with a precept of nearly £300,000 saw 31 candidates for its 17 vacancies in May 2017. Porthcawl, with a £260,000 precept, saw 23 candidates fight it out for 19 positions. It is a similar story in Caerphilly Town, Llanelli Rural, Llanelli Town, Colwyn Bay, Rhyl, Chepstow, Neath, Brecon, Cwmbran, Penarth and Mumbles. All of these councils have six figure budgets and a healthy interest in standing for them. Llanelli Rural in fact has a precept of £1,011,000; 42 candidates stood there for 21 positions in May 2017.
The huge variation in the size of Town and Community Councils across Wales is striking. Councils like Llangynwyd Lower have a tax base of just £171, a precept of £8,000 and seven councillors. Rhossili in Gower has a tax base of £187, a precept of £3,630 and elects 7 councillors. These and many others are minnows compared to the councils cited above and are in no position to deliver the same range of services.
The potential for a Town and Community Council to make a difference locally is very strong. Neath Town Council for example, which raised £330,000 in council tax last year, has 18 Councillors representing a population of approximately 18,600. They have responsibility for Neath Community Cafe; Neath Community and IT Centre; Cimla Community Centre; Melyncrythan Community Centre; the Old Town Hall; bus shelters; roadside seats; allotments; footpaths/bridleways; Neath Castle and gardens and Charities.
Mumbles Community Council recently reviewed the way it operated and took the decision to effectively double its budget for the 2018-19 financial year by seeking to spend £573,613. The precept for people living in a Band D property in the area will shoot up from £13.13 to £54.87 as a result. All of this money will be spent locally.
Their planned expenditure includes £150,000 to extend the pavilion at Underhill Park and then build a new sports and community building at the western edge nearby; £40,000 to refurbish Langland tennis courts; £25,000 for a new footpath across Pickets Mead in Newton; £24,000 for a Mumbles traffic warden; £16,000 to fund a feasibility study for a skateboard park; £7,000 to install a safe crossing at the junction of West Cross Lane and West Cross Avenue; and £5,000 for new playground equipment at Underhill Park.
None of the smaller, more rural councils could hope to deliver improvements to their local community on this sort of scale. In many urban areas, where there are no Town and Community Councils such as Port Talbot and the majority of Cardiff and Swansea, it would fall on the Principal Council to deliver both the sorts of services offered by Neath Town Council and the type of investment being delivered in Mumbles.
Such expenditure by a large Principal Council would be in competition with other statutory functions such as schools, social services, highways, major regeneration schemes and many other spending pressures.
There is a case therefore for Town and Community Councils who deliver place-based services, but in my view only if they are of a sufficient size to meet their statutory and regulatory requirements and to make a real difference to the communities they represent.
And if we are going to cut the number of Principal Councils from 22 to single figures, shouldn’t we be looking to a renewed Town and Community Council sector to help us keep the local in local government? To maintain the fabric of our communities and raise money to invest in improvements locally, whilst the big boys concentrate on the more strategic services and those that need a greater economy of scale?
I have argued previously that local government reform is only worth carrying out if it delivers a radical restructuring of the way councils operate. I have argued that this should involve new boundaries, based on a realistic number of Principal Councils drawn up by the boundary commission, and taking account of community links, economic factors such as enhancing major urban centres of employment, the views of local people and of course geography.
Boundaries would be based on travel-to-work areas, not on the existing map and we should get the boundary commission to do the work properly, as part of a meaningful consultative process, not the politicians.
That process would also be the perfect opportunity to carry out an overhaul of Town and Community Councils. The Minister would need to set some meaningful parameters for the boundary commission to work to, including a minimum size so that these new community bodies would be sustainable and capable of not just delivering basic local services, but also taking place-based functions off the Principal Council if members wished it, for delivery within their own community.
The potential for a revived Town and Community Council sector to act as agents for Principal Councils in delivering some of their place-based functions is huge, but there are drawbacks. This includes the issue of double taxation.
If taxpayers in a community are already paying council tax to a principal council to maintain their parks and public toilets for example, then it would be reasonable to expect that any transfer of responsibility for those services to their Community Council would also involve the transfer of the appropriate resources to do the job.
Unfortunately, that is not how many Principal Councils operate. In some cases in the past they have viewed the transfer of functions to the lower tier as a cost-saving measure, expecting the Town or Community Council to pick up the expense from their own resources. That cannot work on a larger scale.
There is already provision in legislation to deal with this situation. In particular the Local Government Act 1972, section 136, allows principal local authorities to pay grants to local councils in respect of concurrent functions.
More controversially perhaps in the Local Government Finance Act 1992 sections 34 and 35 allow a billing authority (district, borough or unitary council) to switch some of its general expenses into special expenses, as a result of which it can charge different amounts of Council Tax in different parts of its area.
My argument is that if we are to empower Town and Community Councils by taking some place-based services off the Principal Council and delivering them locally, then we need to secure public acceptance by seriously considering mandating the use of sections 34 and 35 of the Local Government Finance Act as part of the transfer of functions. In that way the Town or Community Council will have the resources it needs, its council tax payers will be no worse off and the Principal Council will still have money to deliver the service in areas where it has not been transferred.
Finally, a caveat: in arguing for more effective Town and Community Councils delivering place-based services in their area, I am not seeking to re-impose a two-tier system of local government in Wales, nor do I believe that the Welsh Government should try and force Town and Community Council onto communities that may not want them.
This is a proposal that argues that where an area wants representation at a Town or Community level, then the body that fulfils this function should be big enough to be sustainable and relevant enough to attract members and community engagement.
It would be up to each Town or Community Council to decide what additional functions it would want to take on, based on their own assessment of local need and capacity. I would expect that where a Town or Community Council believes they can deliver added-value by assuming responsibility for matters currently delivered by a higher tier of local government, then the Principal Council would facilitate the transfer.
Any localism agenda must involve choice. It should be the choice of the local electorate whether to have or retain a Town or Community Council and the choice of that council what services it will deliver.
The resulting pattern of local government may not be neat and tidy; indeed, it would be highly asymmetric but isn’t that what democracy is all about?