New research: one-party councils could be wasting £2.6bn a year

Councils dominated by single parties could be wasting as much as £2.6bn a year through their procurement processes, according to a new report for the Electoral Reform Society.

The study, titled ‘The Cost of One-Party Councils’, measures the price savings achieved by English councils with ‘weak electoral accountability’ – i.e. those councils dominated by a single party or with a significant number of uncontested seats – and compares these with competitive councils. It finds that ‘one-party councils’ could be missing out on savings of around £2.6bn when compared to their more competitive counterparts.

The report also measures councils’ procurement process against a ‘Corruption Risk Index’, and finds that one-party councils are around 50% more at risk of corruption than politically competitive councils.

One-party councils come about because of the distorting effects of First Past the Post in local elections. Responding to the new findings, the Electoral Reform Society is renewing its call for England and Wales to adopt the Scottish system (the Single Transferable Vote) for electing local councils. This system has been shown to end the phenomena of one-party councils and uncontested seats, and could therefore result in significant public savings by increasing levels of scrutiny and lowering councils’ risk of corruption.

Key findings:

– One-party councils could be wasting up to £2.6bn a year through procurement compared to their more politically competitive counterparts – amounting to 5.9% of their £45bn annual spend

– One-party councils typically achieve lower price savings in procurement – 2.2% compared to 6.2% achieved by competitive councils

– One-party councils have on average50% higher ‘risk of corruption’ compared to competitive councils

– The corruption risk of competitive councils compared to those dominated by one party is similar to the average Swedish municipality compared to the average Estonian municipality

The research, by University of Cambridge academic Mihály Fazekas for the ERS, examines over 132,000 public procurement contracts between 2009 and 2013 to identify ‘red flags’ for corruption, such as where only a single bid is submitted or there is a shortened length of time between advertising the bid and the submission deadline. These are brought together in a Corruption Risk Index to give a measure of councils’ risk of corruption in public procurement. Further evidence of the link between weak electoral accountability and higher corruption risk is supplied by a comparison of average price savings in procurement.

The study is the first to use ‘big data’ to analyse the potential for local councils to waste money in procurement owing to a lack of scrutiny or accountability.

Katie Ghose, Chief Executive of the Electoral Reform Society, said: “When single parties have almost complete control of councils, scrutiny and accountability tend to suffer. It’s not true of all one-party councils, but it’s bound to be true of some – and this new research suggests that lack of scrutiny could be costing us dear.

“The fact that tax-payers in England could be losing out on £2.6bn a year in potential savings is a damning indictment of an electoral system that gives huge artificial majorities to parties and undermines scrutiny. This kind of waste would be unjustifiable at the best of times, let alone during a period of austerity.

“The risk of corruption at the local level should set off alarm bells in Whitehall. The public are getting a poor deal through our voting system. For many millions of people, their vote effectively doesn’t count – and now we are seeing the potential financial cost of that, as well as the democratic cost.

“First Past the Post is clearly unfit for purpose, with parties able to win the vast majority of seats often on a minority of the vote. A fairer system, such as the one used in Scotland for local elections, would make ‘one-party states’ a thing of the past. And by letting the sunlight in, a fairer voting system could lead to substantial savings for the taxpayer.

“It’s time politicians from all parties woke up to the need for a fairer voting system. First Past the Post is hurting our democracy, and now it looks like it’s hurting us in the pocket too.”