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There are downsides to empowerment, says Michael O'Higgins. So how do we avoid an empowered few from costing councils a fortune in legal fees? Last autumn, after an investigation costing at least £1m, the auditor to Barnet LBC threw out a seven-year-old ‘objection' to the borough's accounts. It had been raised by a handful of residents with bees in their bonnets about the sale of land by the council to Barnet Football Club – currently languishing in the lower reaches of the Coca-Cola championship league two. Of course, local residents should be able to complain, and pursue grievances. In a vibrant community there will be lots of local argy-bargy, and the more, the merrier. The point is that this mechanism isn't suited to this sort of problem. Objection to the accounts unleashes an avalanche of legal fees. A large chunk of the cost estimate above – a minimum figure, since it excludes the time of council officials – went on lawyers. As the law stands, auditors are obliged to mount an inquiry in response to an objection – however trifling or frivolous. The investigation is essentially a legal process, with the possibility of review by the courts at its end, if the objector is dissatisfied with the auditor's response. Objectors are free to raise issue after issue, which pushes costs up further. Auditors don't have much choice. Their costs have to be recovered from the local authority and, therefore, are being paid for by council taxpayers, and they can be totally disproportionate to the amount involved in the initial complaint, and much higher even than the normal cost to the council of having its accounts audited. Barnet is not an isolated instance. The auditor to one district council had to determine an objection concerning a council tax liability of £13.34. The auditor's decision, that the council incurred no loss as a result of wilful misconduct, was appealed to the High Court. The auditor then faced legal costs of £35,000 during the appeal, which the court ordered should be paid by the objector. But only £20,000 was recovered, and the council had to find the balance. It can't be right that a handful of local electors should be able to impose such costs on their fellow citizens in this way. Objection is effectively a cost-free way – for the objectors – to increase the tax burden of their own neighbours. It's an anachronistic right which should now be abolished. A bit of history. The right to object was introduced by Section four of the Poor Relief Act 1743. Those objecting to the accounts of a parish or municipal corporation were given a right to appeal to magistrates at the quarter sessions. In 1844, the auditor became the official who took up the objection – as the only individual to whom an elector could raise issues of concern affecting a locality, for example, the extravagant quality of gruel provided in the workhouse. This was at a time when all local expenditure was financed by ratepayers who, in many places, could comfortably be assembled in a single room. These days, citizens have multiple opportunities to register complaints or problems. Members of the public can, at any time, bring matters to the attention of the auditor which, at their discretion, auditors may consider as part of the audit. In addition to councillors themselves – opposition members are always glad to take up complaints, and many councils have active oversight and scrutiny committees as well – citizens can go to the local government ombudsman, the Standards Board for England. The information commissioner stands ready on matters concerning the rights that individuals have under the Freedom of Information and Data Protection Acts. Residents can also go to the courts, and ask for a judicial review of decisions made by the auditor. Recently, too, residents have been urged to play a more active part in setting council budgets and decisions about spending. Empowering local people in financial and other matters is being promoted as a means of enhancing democracy and improving accountability. The community kitty pilots, introduced by Hazel Blears, are designed to introduce some of the democratic benefits gained through participatory budgeting in Brazil, India and parts of the US and Canada. But the right to object provides a cautionary tale. It shows how empowerment mechanisms, if not introduced sensibly, can lead to axe-grinding, at the expense of fellow citizens. Local people ought to have more opportunities to be involved in decision-making, but the Barnet case tells us there are downsides. Objecting to the accounts might look to some like community empowerment in action. But it is difficult to see how the citizens of Barnet, who have incurred an unwanted bill of £1m-plus, as a result of an objection by a handful of electors, have been empowered by it. We could reform the process – we don't need to abolish it – by limiting objections to where a minimum number of local electors – say 50 or 1% of those on the electoral register, whichever is the higher – come together as objectors. Such a move would, in my view, be quite consistent with the thrust of government policy, for example, its recent proposals on local petitions and community calls to action. There is a tendency to promote empowerment as if it is something to be maximised at any cost. But our experience of objections suggests that a pragmatic approach is needed. The interests of the general taxpayer need to be weighed in the balance too. That is why, in the latest proposals for the Comprehensive Area Assessment, the Audit Commission and its fellow inspectorates are suggesting that they consider value for money – alongside other considerations – as part of the assessment of how well local areas engage with their communities. There are clear benefits to involving local people in decisions which affect them and their areas. But local authorities need to capitalise on the efforts and energy of the many, rather than the disenchanted few. Michael O'Higgins is chairman of the Audit Commission Editor's note: We've had a response from a reader to this article which ran longer than permitted by the comment function of Localgov.co.uk.You can read it here.

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WHITEHALL

Empowerment – but not at any cost

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