What do councils do?
The electorate trusts local councillors with responsibilities for using public resources appropriately and fairly, ensuring that communities are properly represented and providing day to day services on which they can depend. Councillors are not only elected to office to represent their ward (wards are now referred to as electoral divisions) and their constituents, they also have legal obligations to oversee the management of the corporate body of the council and to assure the highest standards of governance, stewardship and organisational performance in the public interest.
Effective local government relies on public confidence in their elected councillors and officials. High standards of conduct and leadership are at the heart of good governance. Elected members and officers should demonstrate leadership by behaving in ways that exemplify the highest standards of conduct. Good governance is based on the simple principles of openness, objectivity, integrity, selflessness, honesty, accountability and leadership. Governance can only be effective where the local authority provides vision for its community and leads by example in its decision-making and other processes and actions.
Community Leadership
Councils are central to the lives and futures of the communities they serve and have a unique power of community leadership.
Community leadership means defining a vision for the community and working in partnership with a range of public, voluntary, community and private sector partners to fulfil that vision. In practice this is achieved through partnerships, mutually agreed strategies, joint working and the pooling of resources.
Councils have a statutory power to promote the economic, social and environmental well-being of their areas which is usually expressed through the Community Strategy. The council has a duty to produce a Community Strategy which should bring together all partners and provide the long-term vision and direction for the whole of a local area. Underneath this overarching plan, the council also prepares a number of other key strategies, including a Local Development Plan, Children and Young Peoples’ Strategy and a Heath and Well-being Strategy.
Challenging Times
The financial challenges currently facing the public sector as a result of the economic downturn have been described as the most serious since the period after the Second World War. Local authorities are facing reduced budgets which inevitably has a serious impact on both services and the potentially the workforce. This means that local government is changing the way it does business.
A national Efficiency and Innovation Board, made up of key stakeholders and partners, and chaired by the Minister for Business and Budget, is leading a programme of prioirty interventions focused on taking a public service wide approach to deliver significant benefits.
The aim of the Efficiency and Innovation Programme is to make the delivery of local services more efficient and to encourage the people working for councils to rethink how they deliver services to citizens.
Key to this will be will be building much stronger collaboration across organisations and administrative boundaries and with citizens themselves.
The Programme will initially focus on seven areas of work
- Collaborative Procurement and Commissioning
- Public Service Information Communication Technology
- National Asset Management
- Transforming the Business
- New Models of Service Delivery
- Workforce Development
- Leadership
As councillors you will be expected to bear in mind the need to change the way local government does business and do your part to secure improvement and efficiency and encourage innovation at every opportunity.
Financial Stewardship
In 2010-11 local government is responsible for £8.6 billion of public spending in Wales. This compares with expenditure of £6.1bn on the NHS and the total public expenditure in Wales of £18bn1.
The majority of the £7.5bn local government revenue expenditure is funded by the revenue support grant (RSG) from the Welsh Government which is supplemented by council tax, Business Rates (National Non-Domestic Rates), specific grants and earned income, such as car parking charges, leisure centre fees, etc. The biggest spending services are education, social services and housing. The Welsh Government’s revenue support grant is not ring fenced or hypothecated. This means that the grant is flexible and councils have significant scope to decide how it is to be used to meet local needs and priorities, and on what services it should be invested in.
Capital expenditure makes up the remaining £1.1bn of local government spend and includes spend on assets such as buildings and vehicles, a Council uses to deliver its services. Again this is largely funded through Welsg Government grants and supplemented by prudential borrowing and capital receipts. The largest spending areas are disabled facility or housing renovation grants, housing and education.
Councils develop a medium term financial plan, which reflects their other corporate strategic plans and which link with their Risk Management and Asset Management Plans. Each year then the annual budget will be developed from the medium term financial plan. As well as setting out the Council’s spending plans for the following year, the budget process result in the setting of the council tax increase. The annual budget and level of council tax is set by the whole council on the advice and recommendation of the cabinet or executive board.
Despite being one of the most contentious taxes, council tax represents only 4.2% of national taxation in the UK, and funds on average only 20% of local council expenditure in Wales. The council tax pays for police officers and fire-fighters, as well as the broad range of council services. If a council needs to increase its expenditure, it can only do this by raising more money through the council tax which results in a disproportionate increase, as a 1% budget increase would require a 5% Council Tax increase. For example, a Council’s budget is £100m and it raises £20m of this via Council Tax. The Council needs to raise an extra £1m, which has to come from the Council Tax. Whilst only 1% of the Council’s budget, £1m represents 5% of the £20m Council Tax total, therefore bills would go up by 5%.
The council is advised and supported in managing its finances by a senior officer, known as the Section 151 officer, who is statutorily charged with responsibility for ensuring financial probity. This officer is often the Treasurer or Director of Finance of the Council. The management of financial transactions is governed by the financial regulations of the council. There are also statutory requirements on the Council to adopt, the Accounting Code of Practice Asset Management Strategies and the Prudential Code (relating to Capital accounting) where capital investment plans must be shown to be prudent and affordable.
The Council as an Employer
Councils are one of the largest local employers in Wales with over 150,000 people working in local government in Wales, representing 1 in 8 of the working population. Many of the workforce will live within the Council’s boundaries.
Councils have complex legal responsibilities as well as a general duty of care for their well being and safety. Councils are expected to develop strategies and good practice for the effective recruitment, retention, training and development and health and well being of their workforce, and for effective communication and engagement including maintaining open and constructive relations with their trade unions representatives.
Councils generally have a well-deserved reputation as good employers. There is a weight of evidence to show that a workforce that is well-managed, and fairly rewarded (including the less tangible elements of reward) will be more motivated and engaged and perform more effectively. However, the current financial climate presents councils with a real challenge in this regard as employee costs make up over 50% of the local authority budget.
With a rightful public expectation of modern, first class public services in Wales and the current financial climate for local government, it is important that those responsible for delivering those services are properly managed and valued.
Promoting Equalities
There are substantial economic and social costs of inequality. According to research, at the current rate of change the gender pay gap will be closed in 2085, the ethnic minority employment gap in 2105 and the disability employment gap will probably never be closed. Gender, age, ethnicity, disability, religion and belief, and sexual orientation can all be triggers of discrimination and disadvantage.
Councils have legal and moral duties to promote equality of opportunity and should be sensitive to the diverse needs for local services within their communities. The council has responsibilities to promote equalities as a provider of services, as a democratic body which is representative of all interests in the community, as a major employer and as a community leader.
The WLGA Equalities Improvement Framework is an aid that is used to mainstream equality into business planning and risk management, performance assessment and planning change.
Sustainable Development
Sustainability means not making decisions today that limit the ability of future generations to live healthy lives, planning and delivering for the longer term, rather than for short-term gain. Currently in Wales we are using resources as if there were 2.7 planets rather than just one and as such we are a major contributor to climate change.
In Wales there is a unique legal duty to promote sustainable development across all statutory bodies including councils. There are environmental limits which must underpin everything that councils and citizens do. A sustainable local government approach therefore should plan for prosperity not wealth, and offer sufficient local services and resources, whilst also understanding the need to live within environmental limits
Sustainable development can be used as a route to better council decision making and delivering improved council services. It is about:
- ensuring well-being and a better quality of life, as well as promoting social justice and equality.
- thinking about the impacts of today’s actions on future generations.
- protecting and enhancing the natural and built environment by learning to live within environmental limits.
Local authorities have a major role to play in achieving a sustainable economy and environment, as well as developing resilient local communities.
The ability of local communities to withstand future social, economic and environmental changes can be strengthened through thinking about sustainable development in the following areas of Council activity:
- Strategic Planning and partnership working
- Financial and resource management.
- Service provision
- Risk management
By using their combined resources to achieve sustainable development, local authorities and their partners can simultaneously support local economies, strengthen local communities and benefit the environment both locally and globally.
Health Improvement
There’s more to health than waiting times and prescriptions. The factors that determine health are broad and include environmental factors, the economy, the built environment and lifestyles – local councils and their partners have an impact in mitigating or improving all of those factors.
Every service provided by local authorities impacts on the health and wellbeing of communities and individuals; local authorities are increasingly seen as health improvement agencies in their own right.
The primary framework for all activity to secure health improvement locally within communities is the local Health, Social Care and Wellbeing Strategy. These statutory strategies provide a framework within which the local authority and Local Health Board set out how together they will drive forward improvements in the health and well-being of their local populations.
Improving Council Performance
All councils seek to achieve the highest possible standards of service delivery to meet the needs and aspirations of local communities. Councils are therefore continually striving to improve their services.
The Local Government (Wales) Measure 2009 set out the ‘Wales Programme for Improvement’ for councils, which strengthens the links between councils’ improvement planning and their longer-term community strategies.
The Welsh Government’s statutory guidance defines improvement in terms of “anything which enhances sustainable quality of life for local citizens and communities”. While this definition may seem broad and loose, the Measure imposes some more specific requirements. It requires authorities annually to set ‘improvement objectives’ that reflect and enhance the Council’s contribution to the delivery of local strategic priorities. It then requires authorities to establish arrangements to secure the delivery of these objectives and report publicly on both their future intentions and their actual performance.
The Wales Audit Office and other regulatory bodies hold the council to account, assessing both the likelihood of the Council complying with the Measure and its performance in relation to the objectives that it has set for itself.
External Regulation
Councils regulate their own affairs through their own governance arrangements such as internal reporting, resource management and performance management. Some of these responsibilities are discharged by nominated officers, such as the Section 151 Officer (financial monitoring), Monitoring Officer (legal compliance) and the Chief Internal Auditor.
External bodies appointed by the Welsh Government also regulate the compliance and performance of councils. The Wales Audit Office assesses corporate governance, inspects services, conducts national studies and provides external audit services to councils alongside appointed private providers. Other regulators include the Care and Social Services Inspectorate Wales (CSSIW) (care, early years and social services); Estyn (education) and the Benefits Inspectorate (benefits services).