Devolution and Centralisation: The Impact of Devolution on Local Government

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This blog is part of an IPPO series looking at how policymaking across England, Wales, Northern Ireland and Scotland has been shaped by devolution since 1999.

Claire MacRae

Devolution has reshaped the landscape of government in Scotland, Wales and Northern Ireland. In many ways, it has revitalised local democracy by bringing decision-making closer to the people it affects, and has empowered parliamentarians, ministers and officials within the devolved territories to design tailored solutions to match local needs and preferences. But the transfer of power from Westminster to the devolved institutions has been mirrored by a centralisation of power within the devolved nations, particularly in Scotland.

The relationship between the Scottish Government and local authorities has been one of mutual interdependence but unequal power. The Scottish Government is not, by and large, a delivery body. It makes policy and spending decisions, but relies upon local government and other public bodies to deliver many of the public services over which it has policy responsibility. Collaborative governance is therefore a necessity. But the Scottish Government, by and large, holds the purse strings and its ability to ring-fence parts of the budget transfer has eroded the decision-making autonomy of local governments.

There have been various attempts to enhance Scottish local democracy during the last 25 years. Most notably, the Local Governance Review, jointly overseen by the Scottish Government and the Convention of Scottish Local Authorities (COSLA), has sought to explore the devolution of more power to local government and communities. Launched in 2017, its aim is to review “how powers, responsibilities and resources are shared across national and local spheres of government, and with communities.”  This builds upon previous commissions centred around central-local relationships, for example the Mcintosh Commission (1999) focusing on local democracy, the Christie Commission (2011) focusing on empowerment and participation, and the Commission in strengthening local democracy (2014). 

In part, these commissions have been in response to concerns about the centralising impact of devolution within Scotland. In particular, policy decisions to integrate services at the national level saw local authorities cede power and responsibility to the Scottish Parliament and Government. For example, in 2013, eight regional police forces were merged to create Police Scotland. In the same year, eight regional fire brigades were merged to form the Scottish Fire and Rescue Service. The amalgamation of regional police forces was the first time since devolution that local authority services were transferred to central government. Prior to the establishment of Police Scotland, 50% of funding for policing was allocated by local authorities and they were involved in local Police Boards, exercising some influence over local policing. A similar structure existed for the Fire and Rescue service of joint boards pre-amalgamation. Although provisions for local scrutiny of these services were written into reporting frameworks, the overall effect was one of centralisation. 

Ongoing plans to establish a national care service could similarly see the authority and responsibility for social care transferred from local authorities to a new, national service. Local authorities and trade unions are among those raising concerns about the prospect of transferring power from local authorities to newly formed regional care bodies, removing localised decision-making for funding and service delivery.  

Much of the power imbalance and tension come from the fiscal dependence that local government has on Scottish Government. A report published in 2023 by The Local Government Information Unit (LGIU) noted that confidence in the sustainability of local government finance was “critically low” and that the relationship between local and Scottish Government is “critically poor”. As Graeme Roy and Rob Richardson pointed out in a recent IPPO blog, local authorities across Scotland face significant funding pressures. This is largely due to a combination of tight settlements from central government, growing demand and rising costs, including public sector wages, and a lack of flexibility in raising additional income. Scottish Government decisions to freeze the Council Tax are compounded by the fact that valuations in Scotland, as in England, are based on those that were set in 1991 when the Council Tax was introduced. Over the course of the last 25 years, there have been several enquiries exploring reforms to local taxation, but with little consensus on an alternative model. Local governments have also expressed frustration at the extent to which their funding is tied to national government priorities. Work on a new Fiscal Framework is ongoing, including a commitment to explore options for local authorities to engage earlier on the Scottish Budget, improve fiscal flexibilities for councils, and develop additional revenue raising powers such as the Visitor Levy (tourist tax).   

In some ways, local government has struggled to find its place within the new multi-level governance arrangements created by devolution. But effective and cooperative relationships require a willing partner. In his first speech as First Minister, John Swinney stated his determination to adopt a collaborative approach, with cross-party working and across governance levels. In the case of local government, that will require a concerted effort to rebuild trust, find ways to ease fiscal pressures, and work towards a more equitable share of power.