Local governance referendums taking place this year: what, why and where?

Residents in several areas will soon have the chance to decide how their council is run. In local ballots taking place this year, they will decide the decision-making structure of their authority. Local referendums are nothing new. They were introduced for parish councils in 1972, but their use was limited and patchy; such councils covered only 37% of England and Wales. Following other legislative changes over the years, councils can now be obliged to hold a referendum to change their governance model if 5% of locals sign a petition demanding one.

Before the Local Government Act 2000, council decision-making had been taking place through committees. But the Act concentrated decision-making in the hands of cabinets and abolished the committee system for all local authorities with more than 85,000 residents.

The Localism Act 2011 made the committee system an option once again and there are now three ‘political management arrangements’ that can be put on the ballot in a referendum: the directly-elected mayor model; the leader and cabinet system; and the traditional committee structure. Under the committee system, local authorities are divided into politically balanced committees that make decisions. This set-up gives a louder voice to minority parties and independents, as each committee is made up of members from all political groups.

Under the mayoral system, the mayor is elected directly by a ballot of residents. The mayor appoints their cabinet of councillors, who also have their own decision-making powers, and the system must have at least one overview and scrutiny committee. The rationale for the system is to make it clearer where the responsibility for any particular decision lies. Authorities in England can choose themselves to introduce an elected mayor or to hold a referendum, while in Wales a referendum must be held. Despite enthusiasm for the model from both the Labour and coalition governments, most referendums on elected mayors have resulted in ‘no’ votes.

The majority of councils operate with the leader and cabinet model preferred by the 2000 Act. A leader is elected by the councillors, and that leader appoints a small group of councillors to their cabinet. The leader and cabinet make decisions and are held accountable by other backbench councillors who take part in the local authority’s scrutiny and overview processes. The leader is elected by a meeting of all councillors for a term determined by the authority itself or on a four-yearly basis, and they are normally the leader of the largest party on the council.

Choice of council structure is not a clearly partisan issue: there are mayoral, committee and leader Labour-run administrations across the country. Over the last few years, and since the 2019 local elections in particular, there has been renewed interest in switching from one set-up to another. Only two options can be placed on the ballot in each referendum, including the existing system, making it a straight fight between one of the types above and the status quo. Here are the areas where residents will vote on their council’s governance system this year.

Tower Hamlets (referendum on 6th May 2021)

Councillors in the east-London authority have decided to hold a vote of residents this year on whether it should retain its directly-elected mayor model, which 60% of residents voted for in 2010, or switch to a leader and cabinet set-up. Lutfur Rahman won the first vote to become mayor as an Independent in 2010, having initially been selected as Labour’s candidate but then dropped by the party over allegations including that he signed up fake members (denied by Rahman). He was re-elected in 2014 before being found to have engaged in “corrupt and illegal practices” and removed from office. Runner-up John Biggs, the Labour candidate, won the re-run in 2015. He won again in 2018 with 72.7% of first and second preferences.

Residents will now have the chance to get rid of the system and instead opt for the leader and cabinet model, used by most local authorities in London. Councils Newham, Lewisham, Hackney and Tower Hamlets are the only places with an elected mayor. “The mayoral model works well for big cities like London and Manchester, but local councils don’t, in my view, need a high-profile mayor to run local services,” Biggs tells LabourList, adding that the leader and cabinet structure is a “tried, tested and successful way to run a council”.

Biggs argues that the scandal surrounding his predecessor, which he describes as a “tragic low point” for the borough, would have been less likely to happen under the leader model because it “gives less scope for mavericks” and has more checks and balances on a leader’s powers. Under the leader and cabinet system, unlike the directly-elected mayor model, the leader can be removed by councillors before their term ends. “Now that we’ve recovered and stabilised the council, I think it’s in the borough’s best interests that we go back to the leader and cabinet system with its checks and balances so that it can never happen again,” Biggs says.

Croydon (referendum on 7th October 2021)

Croydon residents face the same choice, but with the opposite status quo. The council currently operates with a leader, elected by their councillor colleagues, and an appointed cabinet. But 20,000 people in the borough signed a petition last year calling for the council to adopt the mayor model. Later this year, voters will decide whether to stick with the current system or have a directly-elected mayor.

The referendum comes after the embattled south London council became the first in the capital in 20 years to issue a Section 114 notice, an admission by the authority that it has effectively gone bust. This followed an audit report that revealed a £60m black hole in its budget and only £10m of financial reserves. Auditors Grant Thornton said the pandemic had “ruthlessly exposed” a fragile underlying financial position. The notice was recently lifted after a loan from central government.

Tory minister Luke Hall MP said that the referendum could go ahead in May, but the council has instead decided that the vote should take place on October 7th. Labour council leader Hamida Ali explained earlier this year that this will allow the council to secure a balanced budget before discussion on the referendum takes place. It will also mean that, should residents opt for a mayor, the election can take place with the already scheduled vote on the borough’s councillors in 2022.

Newham (referendum on 6th May 2021)

Newham councillors voted in October to ask the public to decide how the council is run, and on May 6th residents will choose between the current directly-elected mayor model and a committee system. Current mayor Rokhsana Fiaz made it a manifesto commitment to hold a referendum on the future of her post when elected in 2018. It was also part of her campaign to replace Robin Wales, who had served as Labour mayor since 2002.

LabourList understands that there is broad agreement among the local Labour parties on the need for a change from the current model, with support across internal factions for a referendum. To determine what kind of change that might be, councillors voted at a full council meeting to put the committee system on the ballot, rather than the leader/cabinet model.

“I was elected in 2018 on a mandate for sweeping democratic change and since then we have conducted a groundbreaking democracy commission and citizens’ assemblies to give people direct voice in the council,” Fiaz told LabourList. “Newham Labour promised to give people a vote on council governance, as people now have a right to vote for a mayor of Newham, and it is only right that they should decide whether they keep that right by voting in a referendum.”

Sheffield (referendum on 6th May 2021)

Also offering voters the chance to switch to a committee-style system of local governance in May is Sheffield. The proposal is for a politically proportionate policy and strategy committee, chaired by the leader, that would take major decisions. A number of committees would also be established to make decisions on particular topics, such as housing or children’s social care. The precise number of committees and their exact areas of responsibility would be determined after the referendum.

The vote follows a campaign by It’s Our City. The group’s petition reached 20,096 signatures in 2019, triggering the ballot. It prompted several councillors, including ex-deputy leader Olivia Blake – now an MP – to resign from the cabinet, saying it was clear people want more democracy. “I wanted to stand with those fighting for a new way of doing politics in our city,” Blake argued at the time. “We now intend to contribute a socialist voice to the referendum debate. I hope it can be a starting point for a wider discussion on how to rejuvenate our democracy in Sheffield.”