Accountability of Local Authorities in England and Wales, 1831-1935 Volume 1 (RLE Accounting)

Hugh Coombs, J. R. Edwards, Hugh Coombs, J. R. Edwards

• Publisher: Routledge
• Year: 2014
• ISBN:
  9781134676996
• Edition: 1
• Topic: Betriebswirtschaft
• Subtopic: Staatliches Rechnungswesen

These books make available material relating to the statutory regulations covering the degree of accountability required from local authorities during the period 1834-1936. The bulk of historical accounting research has focused on the development of financial accounting although in recent years the development of management accounting has attracted more interest. In both these areas, it has been the accounting practices of the private sector which have received more attention, central government in the Middle Ages some attention, and local government accounting very little. These volumes redress this imbalance in historical investigation, both to provide a comparative basis for work on the private sector and to provide an historical perspective for the system of local government accounting currently in use.

Introduction

The purpose of this book is to make available, to researchers, material relating to the formulation of statutory regulations covering the degree of accountability required from local authorities during the period 1834–1936. The bulk of historical accounting research has focused on the development of financial accounting although, during the last twenty years, the development of management accounting has attracted more interest. In both these areas, it has been the accounting practices of the private sector which have received more attention, central government in the middle ages some attention, and local government accounting very little.¹ Clearly it is important to redress this imbalance in historical investigation, both to provide a comparative basis for work on the private sector and to provide an historical perspective for the system of local government accounting presently in use.

The introduction is divided into three sections: section 1 summarises the development of local authority services and the level of accountability required from providers of these services in the period up to 1834; section 2 outlines some of the broad background developments during the period covered by this anthology (1834–1935); section 3 outlines, briefly, the structure and content of the two volumes.

Section 1

Early Administrative Developments

In the Dark Ages, such services as existed were provided locally. With the emergence of a united England under a single king (Alfred), the separation of duties between central and local government gradually began to emerge. In medieval times the sheriff acted as the local representative of the king in a particular county, and he possessed considerable powers. An important contribution made by the office of sheriff, from the king’s viewpoint, was that it helped limit the power of the barons. The sheriff presided over the shire (county) courts. He also had responsibility for collecting taxes and paying the proceeds over to the Exchequer; for military organisation in times of war; for administering a rudimentary policing system; and for bringing prisoners to justice.

In the twelfth century the Crown started to issue Royal Charters to certain towns, usually in recognition of financial or military assistance. This gave the town a ‘borough’ status and contained arrangements, which varied from one charter to another, for its local government. The powers of government were placed in the hands of a council, which might be elected by the freemen or might be self-perpetuating, initially based on the membership of a guild, a group of merchants, or simply a special court of favoured individuals. The first boroughs were Southampton and London. Their number increased slowly whilst in other areas the sheriff retained his authority.

Successive monarchs became increasingly uneasy about the extent of the sheriff’s powers and, from the thirteenth century, they began to transfer some of his powers to justices of the peace (JPs). The first JPs were Knights given responsibility for maintaining law and order and, over the years, they became responsible for what might be described as county-based government. Their judicial duties extended to the petty sessions, special sessions, and quarter sessions, while their administrative duties covered such matters as the granting of licenses for public houses, controlling the administration of the poor law, the building of bridges and roads, and the management of prisons and houses of correction.

The system of JPs, as effective rulers of the county, worked fairly well, in most places, for a number of centuries. They were rich, independent in the sense that they had no political affiliations, locally respected, and they normally acted fairly. By the 1830s, however, the system was failing for three reasons: lack of numbers, lack of competence, and a lack of power to enforce the application of the law (Halevy, p. 24). As regards numbers there were about 5,000, but by no mans all of these were active and it was difficult to obtain a sufficient number of parsons or other ‘country gentlemen’ to do this work in the major mining, industrial and urban areas. Lack of competence was more sharply felt when JPs became responsible for technical matters such as building or managing a prison, under the Regulation of Gaols and Houses of Correction Act 1823², while their lack of power stemmed from the absence of central support to enforce law and order. By the early 1830s the time was ripe for change.³

Local Authority Finance; The Rating System

Following the dissolution of the monasteries, in the 1530s, the parish (an ecclesiastical unit whose boundaries usually coincided with those of the feudal manor) gradually achieved recognition as the focal point for making provision for the relief of the poor. The most prominent parish officers were the churchwarden (whose duties in the main part were ecclesiastic rather than administrative), the overseer of the poor and the surveyor of the highways. Money was raised mainly on a voluntary basis from wealthy local residents, though it sometimes proved necessary to elicit statutory support for a degree of compulsion.

By 1597 the cost of poor relief was sufficiently great to justify the introduction of the system of local rating which remains in operation today, in England and Wales, although domestic rates were replaced by the Community Charge in April 1990. The Act gave clear statutory support for the idea of the parish as the area to be used for the purpose of levying the rate. The poor rate was, over the years, supplemented by separate rates levied by the overseers for specific purposes and rates levied directly by a number of other spending authorities. The poor rate remained, however, the dominant source of revenue (e.g. aggregate rates of £38.6m. for 1898–9 included £22m. from the poor rate, £8.6 m. from the district rate and £3.8m. from the metropolitan rates) until the various levies were consolidated under the Rating and Valuation Act 1925.

Accountability; its Origins

The earliest known reference in English legal records to a form of ‘local government audit’ is dated approximately 1430. It seems that money was collected to repair and improve the walls of a town, and it was suspected that certain individuals had converted some of the proceeds to their own use. Commissioners were appointed and charged with the responsibility for examining the accounts, and the individuals involved, under oath, and if ‘there remains in their possession any money so collected, to charge that sum on the same collectors’ (Jones, Reginals, p. 1).⁴ A power was therefore granted to recover amounts improperly remaining in their possession. According to Jones, the investigation ‘was an adoption, evolved by the courts, of the writ of account which from the thirteenth century had been available against bailiffs, factors and receivers’ (p. 1).

Following the introduction of the rating system, in 1597, the Poor Law Act 1601 provided for a degree of accountability from churchwardens and overseers who had the job of levying and collecting the rate. The specific requirement was that they should ‘within four days after the end of their year … make and yield up to such justices of the peace … a true and perfect account of all sums of money by them received, or rated and sessed, and not received, and also of such stock as shall be in their hands’ (s.2). There was no requirement, however, for the account to be in writing, and it may well be that the presentation was often made orally. The fact that the new regulations placed squarely on the shoulders of JPs the ultimate responsibility for raising and spending local monies is demonstrated by the requirement for them to nominate churchwardens and overseers (s. 1) and to imprison any of those who failed to make a true account (s.4). Section 6 gave rate payers a right of appeal to JPs, at quarter sessions, concerning the amount of an assessment.

The poor law rate increased steadily to about £1m. over the next 150 years and, during this time, there was growing criticism of the lack of control over the power of churchwardens and overseers to spend ratepayers’ money, sometimes for private ends. An early report which drew attention to the inadequacy of the accounting system of parishes was completed in 1715. This focused on the affairs of St. Martins-in-the-Field, apparently chosen as the basis for the inquiry on the grounds that it was the parish considered to be most free from financial abuse. The accounts for 1712–14 were studied and judged to be unsatisfactory, however, on the grounds of incompleteness and their failure to distinguish different types of expenditure. The report also pointed to the need for better controls to ensure collection of the poor rate and the elimination of improper expenditure.

In an attempt to impose a more effective system of control, the Poor (Overseer’s Accounts) Act 1744 stiffened the duties and responsibilities of overseers and churchwardens by requiring, from them, a greater degree of accountability. More specifically, annual provision was made for: the draft ...