Opinion: Constitutional Change? Not so fast…

On the subject of Post-Scottish-Referendum constitutional reform in the UK, I wish to counsel my fellow Liberal Democrats with a  call for sobriety and modesty.

Sure, we  are the party which is most in favour of constitutional reform and the Tories and Labour are clearly, by comparison, the parties of the constitutional status quo.

Before we get too excited that the public and political pundits will rush to support us, because now everyone is playing to our agenda, we should look to our own policies and assess what WE also need to recast in the light of changed political circumstances. Let us not fall into a trap of our own making and mistakenly believe that our long standing or more recent policies are a 100% fit with the public mood for constitutional change. Nor should we assume that we are automatically well-placed to capitalise politically on the recent ways in which the public have expressed anti-Westminster-elite  sentiments.

Constitutional reform in the UK is very complex and there is much scope for officials to tie politicians in knots, and to ‘Yes Minister’ us into contradictions that will result in minimal change. One reason for this is the fact that we are one of only three countries in the world without formal special (‘superior’) constitutional law, and parliamentary sovereignty makes it almost impossible for us to adopt such laws in peacetime.

The laws which ‘constitute’ the UK as a unit are labyrinthine, and many of them are not even in the public domain. Even worse, unlike most modern nations the general public have almost no knowledge about how the constitution works, and the actuality of our extant ‘constitution’ is unusually not taught in schools (excepting a few incomplete detailed points about parliament).

More importantly in the shorter term, we should all not forget that devolution or decentralisation (transfer of power to sub-national institutions and elected bodies) is ultimately about jurisdiction, taxation and spending. That means the legal constraints, if any, on what local or regional government can spend money on or borrow money for; the framework of permissible types and levels of taxation; and obligations placed on sub-national authorities to provide services or solve problems. To a great extent decentralisation in the UK is also about unravelling the creeping centralisation of the last 50 years. How many of us understand how we got here ?

In the UK, especially in England, local government is not much more than a branch of central government. Councillors used to do tax and spend. Now, around 80% of local spending comes from central government and Whitehall manages the local budgets of each authority in extraordinary detail, such that for example the reality is that in many county councils, Whitehall micromanages 100% of the revenue and capital spending in education. In addition, a parallel system of quangos and regional bodies deal with local issues, and now academy schools even report directly to London.

Meanwhile, Liberal Democrats have gone in the other direction to that of decentralisation. The party used to have a policy of reducing the 80% of money from central government, and ensuring that local government raised more taxes instead of (not in addition to) central government, on the principle that ‘who pays the piper calls the tune’. We chickened out of that. Further, we used to have detailed policy on regional authorities but never adequately worked out the tough details so that we could persuade people that it would not just be another layer of bureaucracy.

Even the Pupil Premium is a centralising measure (effective policy that it is), since it is predicated upon the central micromanagement of education budgets, and the transfer of associated funds from central government.

In conclusion, we have much to do now to translate our broader instincts into credible policy for the electorate, and to reverse that backsliding away from our decentralisation and localism-orientated past. We also have to grapple with some really tricky technical and legal obstacles, years of subtle centralisation, and a civil service wedded to centralisation and well-equipped to scupper proposals.

* Paul Reynolds works with multilateral organisations as an independent adviser on international relations, economics, and senior governance. He is an elected member of FIRC and an Executive member of Liberal International (British Group).

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10 Comments

  • Can I say how much I agree with Paul Reynolds, on both the complexity of the subject matter, and his call for caution above all others on us as Liberal Democrats as leading proponents of a reform agenda. I think we should support the principle publicly, but call for a proper UK wide Constitutional Convention. We can use our enthusiasm for the principle to stress that we do NOT welcome “kicking it into the long grass” but don’t expect immediate action or answers.

  • I dont see anyone arguing against a Convention, Nicks Cleggs suggestion of a a “Deadline” of 2017 for some actual decisions seems about right. However that no reason not to make changes in parallel with the Convention process, particularly if they are based on demands from below. This is a window of opportunity & it wont last. With both the Big Two Parties weak & divided this is the time to grab Power out of Westminsters sticky grasp.

  • Paul Reynolds, Do you really believe this part of what you have written ??–
    “….. in England, local government is not much more than a branch of central government. Councillors used to do tax and spend. Now, around 80% of local spending comes from central government and Whitehall manages the local budgets of each authority in extraordinary detail….”

    If your claim is true, can you point to the exact same policies that Rotherham Council is carrying out which exactly mirror those of Westminster Council??
    You will no doubt also be abe to prove that Tower Hamlets with its unusual directly elected mayor has precisely the same policies as Cornwall??

    Or were you perhaps over-stating your case a tad?!

  • Matthew Huntbach 24th Sep '14 - 1:55pm


    Whitehall manages the local budgets of each authority in extraordinary detail, such that for example the reality is that in many county councils, Whitehall micromanages 100% of the revenue and capital spending in education.

    Sure, but would people be happy with a situation where in Xshire, teachers are highly paid and schools are high quality because Xshire is a wealthy place and can raise a lot of money in taxation, whereas in Yshire teachers are poorly paid, schools overcrowded and in poor condition because Yshire is a poor place and a local tax doesn’t raise so much money? People SAY they want local control, but then they tend to moan “postcode lottery” if that means there are different qualities of service in different places.

    What good is devolution of power without devolution of wealth? And how much power is there to devolve when these days we are all supposed to kow-tow to global fat cats, who will run off and take their money and jobs with them if they aren’t given what they want? Yshire may say “Rotten dirty Westminster government for imposing student tuition fees” and “rotten dirty Westminster government for NHS cuts”, but if Yshire were given the “power” to subsidise its universities and its health system, just how much is Yshire going to have to tax its local residents to pay for it, especially as all its big employers are threatening to decamp to Xshire if it dares touch them and their profits and their executives’ bonuses and their executives’ mansions?

  • Steve Coltman 24th Sep '14 - 4:43pm

    I think we need to take a look at how other countries do it (devolution) before coming to any conclusions. If we can show that a certain system works well in another country it becomes hard to argue why it could not possibly happen here. They have much more devolved government in the USA, Germany and many others, with taxes raised and spent, and laws n]made locally, so all of Matthew’s objections have been addressed in these countries.

  • There is a point, somewhere between overcentralised government incapable of responding to local needs at one extreme and the postcode lottery of poor regions being abandoned to their fates at the other. This point is where power and responsibility is placed at the lowest practical level in each policy area, where local government can raise the revenue it needs to meet its requirements locally with local politicians accountable and responsible for local issues, backed up with wealth transfers from within its larger unions where necessary.

    Figuring out where that sweet spot, or rather that fairly broad range of conditions that would be neither kind of failure case, is a problem. But not one so huge that it is intractable and completely beyond rational minds to address.

  • TJ
    Such a spot doesn’t probably exist objectively, because it depends who you are addressing and on what topics, where the “sweet spot” is. So we as parties probably have to work out what we think, and sell our vision (with a whole lot of consultation while building that vision). We have a lot of history in this area, so our level of devolution could be quite great.

  • Matthew Huntbach 25th Sep '14 - 2:37pm

    Steve Coltman

    They have much more devolved government in the USA, Germany and many others, with taxes raised and spent, and laws made locally, so all of Matthew’s objections have been addressed in these countries.

    Well, actually no, certainly not in the USA where inequality caused by poor places being unable to raise the money locally they need to provide services of equivalent quality to wealthier places is a big issue.

    I’m not opposed to devolution, it’s always been an aspect of liberalism that’s attracted me. However, I’m concerned at some of the ways it’s being pushed as a sort of instant solution to problems that it won’t solve. This is what we saw in the Scottish independence referendum. I have nothing in principle against Scottish independence, but it seemed to me that a lot of the arguments being used for “yes” seemed to assume that government has infinite powers, therefore if the government isn’t giving the people everything they demand it must be a bad government, therefore have a purely Scots government and it will be a good one which will be able to give everyone everything. But this is actually running away from the real issue of how can we build a fairer society, how can we tackle the demographic and environmental factors that are pushing up the amount of money the government has to spend to keep things seemingly the same, how can we manage the way so much control over what happens has moved to multinational companies who play one government off against another and use big threats if any dare tackle them.

    The discussion on the real issues that are causing people’s unhappiness with government and politics won’t happen if there are forces trying to distract it by putting the blame elsewhere. My feeling is that UKIP has been set up and funded to be such a force. I don’t think the same about the SNP, but in practice it acts that way, and at least some of what it proposed (attract the global fat cats by cutting corporation tax) played into its hands.

    Why is it that the “great and good” in England so often link up devolution to local government with directly elected mayors, as if the one implies the other both ways round? I don’t see any push for directly elected mayors outside the social, political, business and media elite, so why is this thing pushed again and again? I think because they want Boris Johnsons everywhere. The abolition of local government where ordinary people can get in as councillors and exert actual power. Instead, a system where you have to be big and powerful in the first place to get elected, with the result that the whole country will be run by a few business-friendly types who have dictatorial powers in their own patches. No more dealing with the awkward squad in a council committee. A nice lunch with the local Mayor, who’ll be a thrusting business type person just like the business fat cats, because you have to be that sort to get elected as a city-wide Mayor, and the deals get signed.

  • I wish to register complete agreement with Matthew Huntbach on this.

    Even before the big issues about England are decided (and anyone who thinks this will be done quickly is in cloud -cuckoo land) enhanced devolution to Scotland must be addressed. Here a large measure of urgency is required in order to fulfil the “Vow”. However that must not as I see it mean going too far with the degree of devolution, In addition to the excellent points made by Matthew, how can it make sense, having just “saved the Union” to go way down the road of providing Scotland with something perilously close to the independence they have just voted against? My own view is that the referendum revealed not so much a desire to do everything locally but more a disturbing degree of alienation from what the parties in Westminster are doing – alienation which many in the English regions would share. That is not solved by simply hiving off more and more power to regions whether or not they are designated as nations within the Union. As Matthew says far too much of the real power is in any case being leached away by “big business” or “fat cats” or whatever you like to call them. Would they be curbed in any way by mega devolution?

  • There is a simple solution to the problem of rich local authority areas having lots to spend while poor ones lack the funds to provide services their people need much more. There should be an equalisation formula, either worked through the totality of central government funding for local authorities (excluding probably a few relatively small ring-fenced funds which local authorities could accept or reject), or worked by a system of local authority contributions to a pool. After that, local expenditure should be locally funded. Most continental countries such as Germany have systems where a far higher proportion of local expenditure is raised locally.

    Yes, Paul has overstated his case a bit, though not much: we’re the most centralised of the larger Western democracies. As for Rotherham, the council was not doing anything distinctive in terms of policy: it was all in the implementation.

    How did it all happen? Good question, as for hundreds of years the English and Scottish systems of government were among the most decentralised and participative. In the late 19th century massive advances in housing, transport, health, education and other fields were made through elected local authorities, often led by Liberals. The impressive town halls demonstrate the confidence of local government in places like Leeds, a local government that expressed a local identity.

    The growing power of the Whitehall civil servants, who always looked down on the local councillors and officers, was part of it, but a crucial factor was the misleading experience of two world wars, when centralised planning was a necessity and appeared to work. Then came the Labour government of 1945-51, so admirable in many things but convinced it knew best and could run things from the centre – instance Bevan’s boast about the fall of a bedpan reverberating in Whitehall. Then Margaret Thatcher with her contempt for any kind of co-operation or association getting between the individual or family and the centralised state.

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