Communities and Local Government

Justin Tomlinson Excerpts

Tuesday 20th December 2011 Commons Chamber

[Justin Tomlinson (North Swindon) (Con)]

Thank you for this opportunity to raise the subject of financial transparency in local government, Madam Deputy Speaker. I would also like to extend my thanks to the TaxPayers Alliance and the Local Government Group for providing some of my research notes.

This is an important issue, because we would all agree that we should be doing everything we can to ensure that council tax is affordable, especially against the backdrop of pressure on front-line services, particularly adult social care, which is piling on costs for local authorities. With that in mind, I welcomed the Secretary of State’s announcement in June 2010 calling on councils to provide financial transparency by publishing online information about spending over £500 by the end of January 2011; all councils except Nottingham city council have now done so. Such financial disclosure will act as a trigger, enabling local taxpayers to see how councils are using public money, shine a spotlight on waste, establish greater accountability and efficiency, open up new markets, and improve access for small and local businesses and the voluntary sector.

To strengthen that, the Government published their “Code of recommended practice for local authorities on data transparency” in September 2011. The code stipulates that the provision of public data should become integral to local authority engagement with residents, so that it drives accountability to them, it should be promoted and publicised, so that residents know how to access it, and it should be presented in a way that encourages residents to use and compare such data. Despite all that, however, we have not been overrun by a fully mobilised army of armchair auditors seeking to identify savings. This is a real opportunity that has been missed. To my mind, that is because although a vast amount of data has been put into the public domain, much of it is hard to comprehend.

I believe that the focus should be on the quality rather than the quantity of what is available. Three examples highlight this. First, most councils publish their expenditure to comply with the guidelines, but that does not necessarily mean that the publication is clear. Individuals are therefore often unable to challenge expenditure. Secondly, we have seen examples in which, when the data are printed off, font size 2 is used. Those data are technically accessible, but they are not exactly readable. Thirdly, the information is often hidden away on websites. A good example is provided by Birmingham city council. To access its data we have to go to the homepage, then click on “Council and Democracy”, then on “Services”, then on “Featured Services”, then on “Corporate Resources Directorate”, then on “Invoices and Payments”, and then on “Payments to suppliers over £500”. The process takes us through seven different pages, and it is not signposted in any way. The information would be very hard to find without going through the DirectGov site—or being Columbo. Chris Taggart, the founder of OpenlyLocal.com, has said:

“Public sector data is still being treated as an asset to be sold, rather than an underlying infrastructure of a modern democratic society, and with this approach people and the innovators who seek to empower them are marginalised and disenfranchised.”

There are, however, many good examples of local authorities providing data in innovative and eye-catching ways. Examples are Kensington and Chelsea, and Northamptonshire, which map the data so that residents can understand at a glance where the money goes. The Chartered Institute of Public Finance and Accountancy says that councils should set out reasons for particular spending decisions so that a more informed judgment can be made. It also highlights the need for effective feedback mechanisms, so that people can comment on spending and have their views taken on board.

Information needs to be accessible, transparent and understandable. I therefore welcome the five steps to fully open data that are set out in the code, but they need to be more robustly enforced. Guidelines could be altered to ensure that local authorities published their expenses in a comprehensible manner. A number of small and medium-sized enterprises are also working with open data, including OpenlyLocal, Spotlight on Spend and Armchair Auditor. Those private enterprises are all developing new ways of presenting council data. I would urge central Government to encourage local government to make use of such sites to break down its spending and make it more easily digestible and comparable.

I also have a recommendation. I would like to use incentives to encourage residents to become that army of armchair auditors. There is a fear that any savings that residents identify will simply disappear back into a council black hole. Perhaps 50% of the savings could go back to the council for it to spend as it wished, with the other 50% being spent on the front-line service of the resident’s choice. That could involve improving the local school, the local community library or a local sports club. This could be processed by a committee of back-bench councillors and finance officers, who would weed out the majority of suggestions. Probably 95% of the expenditure identified would be justifiable; it might just have been badly explained on the council website, for example. The remainder of cases could be passed on to the lead member for finance to bank, which would help the taxpayer and improve front-line services. CIPFA has also pointed out that when expenditure is found to be justifiable, a letter should be sent to the resident to explain what the money is being spent on.

A number of arguments have been made against this proposal. Some councils have said that they would be embarrassed if residents found that they were not spending money efficiently. I say that they should embrace that, because if a saving is identified, the council will have the opportunity to spend the money on something that people will reward it for. Nottingham city council says that the process would cost too much money. I do not think that that is an excuse when there is so much pressure on council tax bills. It has also been suggested that it would be too difficult to provide answers, but I find that unacceptable. Surely someone is signing off those budgets, and therefore owns them. A further argument is that much of this would involve one-off expenditure, but I believe that local authorities should still learn from such experience. This is a real opportunity to enthuse local residents and to deliver much-needed savings.