The Royal Commission on Local Government in Scotland, usually called the Wheatley Report, identified a twofold purpose for local government: ‘It exists to supply public services locally, on such scale and of such character as the nature of each service requires, and to provide local government. That means services are in a real sense locally controlled. It is implicit that local authorities should in some degree provide a means for self-expression of local communities.'

Following the Wheatley Report, the 1975 reorganisation meant the majority of public services were provided by 53 district, nine regional and three island councils.

There was widespread understanding that councils were the lead authority for public service provision and the future planning and developments in the locality. Local government became a powerful driver of change as evidenced by the regeneration of urban areas, economic and transport initiatives, housing improvement, social inclusion programmes and through the extensive use of European Structural and Social Funds programme.

In addition, Scottish newspaper and media reporting was focused on the activities and decisions of local government. Its leaders were better known than most MPs and had parity with Government ministers at the Scottish Office.

By the 1980s, the Thatcher Government determined that regional councils were too powerful and that ambiguities in the two-tier system resulted in tension and conflict.

The Government had abolished the Greater London Council and metropolitan counties in 1986 and Scotland was deemed to be next.

The community charge was piloted in Scotland in 1989 but was abandoned after poll tax riots and a million Scots refusing to pay. It was the harbinger of the end of Margaret Thatcher's premiership, but not in policy. John Major called Strathclyde Regional Council a ‘monstrosity' at the Tory Party conference in 1992 and announced another local government reorganisation. It was ostensibly about eliminating a tier of local government and remote leadership.

The reality, evidenced in the parliamentary process, was that it was about centralising democracy and carving out councils that had a chance of electing councillors of the same political persuasion as the Government.

The Government also revealed its intention to reduce public expenditure by shifting the balance of power from local to central Government.

The 1996 reorganisation replaced the two-tier system with unitary councils. It reduced the number of councils from 65 to 32, with 400 fewer elected representatives. It also removed several functions from local government by creating Scottish-wide bodies and establishing joint boards for functions including police, fire and assessors.

The 32 councils have made significant developments, not least in renewing the school estate that had been allowed to crumble, driving forward recycling and environmental issues, and promoting community engagement. They also radically reshaped structures by collapsing the tiers of management and amalgamating departments into services that better matched the needs of users, rather than professional disciplines.

Scotland's councils are generally larger – with an average population of 167,000 – than those of most European countries, but are served by fewer councillors.

The new unitary councils suffered significant budget cuts as services were transferred to Government agencies or contracted out.

Since the advent of the Scottish Parliament in 1999, many funding streams have been ringfenced and aligned to Scottish Parliament priorities. A panoply of inspection regimes was created and this restricted the room for councils to set local priorities.

In 1999, the Scottish Parliament was created to devolve power from Westminster to Holyrood. Its architect, Donald Dewar, stated that devolution was to be carried from the Scottish Parliament to the local level.

In practice, devolution delivered powers to Holyrood but failed to extend the principle of subsidiarity to local government. Despite various commitments to ‘a parity of esteem' between central and local government and enshrining the principle of subsidiarity, the Scottish Government has sucked up power and responsibilities from the local level. This was a finding of the Christie Commission in 2011:

‘The public service system is often fragmented, complex and opaque, hampering the joint working between organisations which we consider to be essential. As a whole, the system is "top- down" and unresponsive to the needs of individuals and communities. It lacks accountability and is often characterised by a short-termism that makes it difficult to prioritise preventative approaches.'

Since the 1996 reorganisation and the advent of the Scottish Parliament, there has been a steady erosion of local democracy through the transfer of power to unelected bodies and agencies. They cover different and inconsistent geographic areas that makes the co-ordination of the delivery of local services ever more difficult.

There is no legal requirement for the non-elected bodies to co-operate with councils. Community planning was established as a vehicle to enable partnership working for localities, but the active participation of many non-elected bodies has been difficult, so reducing or nullifying local democratic leadership.

This loss of democratic control has been further eroded as councils set up arm's-length external organisations (ALEOs) to run many services, usually for tax-effective reasons.

A report by Audit Scotland identified 130 ALEOs, spending £1.3bn per annum.

Added to the 39 executive non-departmental bodies, five public corporations, including Scottish Water and the Crown Estates, eight executive agencies and a phalanx of commissioners, ombudsmen and regulators, Scotland has created a highly complex and centralised network of public services. There is a danger of strangling local democracy. Councils are no longer the trusted custodian of public services, they are merely one of the players.

The Scottish Parliament imposed a council tax freeze from 2008 until 2017, following the banking crisis and the recession that followed. This further reduced the competence of councils to take decisions in the best interest of their communities. Councils were left to take hard decisions on closing or reducing services. The Scottish Government, operating within tight budgetary control from Westminster, could pass the difficult decisions and the opprobrium onto councils. Conversely, they took the kudos for new initiatives with ringfenced budgets.

Twenty years after the creation of the Scottish Parliament, councils are less powerful, and they lack financial responsibility for much of their funding and expenditure. Trust has been lost as they have been hollowed out by the transfer of services and having less democratic control of services that are jointly managed or run by ALEOs.

Management capacity and experienced employees have been lost and leadership diluted as centralisation of functions and non-executive bodies have grown in influence.

Many employees have become demotivated as they strive to cover for lost posts with diminished resources.

Management is overly focused on striving for savings, meeting external performance targets and preparing for and responding to inspections. There is less scope or capacity for innovation to tackle the local priorities that are a key feature of local democracy. This includes the support of local community and voluntary initiatives – with the latent capacity of these further curtailed by the reduction of other funding streams.

In the next article we will reflect on the achievements of councils and the importance of their understanding of and connections with their communities and businesses. This will be timely, as the Scottish Government is considering whether to sign the European Charter of Local Self Government.

The Charter has many merits (see below) but these would be greatly amplified if it were to be included in a written constitution for Scotland.

Local government would be embedded in the constitution and Scotland would recharge local democracy to provide a resurgence of local innovation and to harness the energy of its communities. These have been stifled by the events leading to and subsequent on the 1996 reorganisation.

Letting local democracy flourish should be central to the national debate about local/central government relations we hope will soon develop.

Keith Yates was chief executive of Stirling Council from its inception in 1996 until 2009

Lead author Keith Yates is part of a developing, informal network of ex-chief executive officers of Scottish councils. They see a need for a fundamental review of the role, functions, responsibilities and financing of local government that learns the lessons of the last 50 years, starting with Wheatley.

The European Charter of Local Self Government

The European Charter of Local Self Government, introduced in 1985, has been ratified by all other European countries.

The Charter commits the parties to applying basic rules guaranteeing the political, administrative and financial independence of local authorities. It provides that the principle of local self-government shall be recognised in domestic legislation and, where practicable, in the constitution. Local authorities are to be elected in universal suffrage.

Local authorities, acting within the limits of the law, are to be able to regulate and manage public affairs under their own responsibility in the interests of the local population. Consequently, the Charter considers that public responsibilities should be exercised preferably by the authorities closest to the citizens, the higher level being considered only when the co-ordination or discharge of duties is impossible or less efficient at the level immediately below.

To this end, it sets out the principles concerning the protection of local authority boundaries, the existence of adequate administrative structures and resources for the tasks of local authorities, the conditions under which responsibilities at local level are exercised, administrative supervision of local authorities' activities, financial resources of local authorities and legal protection of local self-government.