House of Commons
Communities and Local
Government Committee
The Balance of Power:
Central and Local
Government
Sixth Report of Session 2008–09
Oral and written evidence
Ordered by the House of Commons
to be printed 12 May 2009
HC 33-II
[Incorporating HC 813-i-iv, Session 2007-08]
Published on 20 May 2009
by authority of the House of Commons
London: The Stationery Office Limited
£0.00
Communities and Local Government Committee
The Communities and Local Government Committee is appointed by the House of
Commons to examine the expenditure, administration, and policy of the Department
for Communities and Local Government and its associated bodies.
Current membership
Dr Phyllis Starkey MP (Labour, Milton Keynes South West) (Chair)
Sir Paul Beresford MP (Conservative, Mole Valley)
Mr Clive Betts MP (Labour, Sheffield Attercliffe)
John Cummings MP (Labour, Easington)
Andrew George MP (Liberal Democrat, St Ives)
Mr Greg Hands MP (Conservative, Hammersmith and Fulham)
Anne Main MP (Conservative, St Albans)
Dr John Pugh MP (Liberal Democrat, Southport)
Emily Thornberry MP (Labour, Islington South and Finsbury)
Mr Neil Turner MP (Labour, Wigan)
David Wright MP (Labour, Telford)
The following members were also members of the Committee during this
inquiry:
Jim Dobbin MP (Labour Co-op, Heywood and Middleton)
Mr Bill Olner MP (Labour, Nuneaton)
Powers
The Committee is one of the departmental select committees, the powers of which
are set out in House of Commons Standing Orders, principally in SO No 152. These are
available on the Internet via www.parliament.uk.
Publications
The Reports and evidence of the Committee are published by The Stationery Office
by Order of the House. All publications of the Committee (including press notices) are
on the Internet at www.parliament.uk/clgcom.
Committee staff
The current staff of the Committee are Huw Yardley (Clerk of the Committee),
Andrew Griffiths (Second Clerk), Josephine Willows (Inquiry Manager), Emma Gordon
(Committee Specialist), Clare Genis (Senior Committee Assistant), Nicola McCoy
(Committee Assistant), Stewart McIlvenna (Committee Support Assistant), and
Hannah Pearce (Select Committee Media Officer).
Contacts
All correspondence should be addressed to the Clerk of the Communities and Local
Government Committee, House of Commons, 7 Millbank, London SW1P 3JA. The
telephone number for general enquiries is 020 7219 1353; the Committee’s email
address is [email protected]
The Balance of Power: Central and Local Government
3
Witnesses
Monday 23 June 2008
Page
Sir Michael Lyons
Ev 1
Mr Chris Leslie, Director, New Local Government Network, Ms Janet
Grauberg, Development Director, Public Management and Policy
Association, and Mr James Morris, Chief Executive, Localis
Ev 8
Monday 7 July 2008
Councillor Jill Shortland, Leader, Somerset County Council, Councillor Susan
Williams, Leader, Trafford Council, and Mr Jules Pipe, Mayor of Hackney
Ev 13
Monday 10 November 2008
Mr Stephen Hughes, Chief Executive, Birmingham City Council, Sir Richard
Leese CBE, Leader, Manchester City Council, and Mr Eamonn Boylan,
Deputy Chief Executive (Regeneration), Manchester City Council
Ev 24
Mr Peter Gilroy OBE, Chief Executive, Kent County Council, Mr Paul Carter,
Leader, Kent County Council, Mr David Petford, Chief Executive, Maidstone
Borough Council, and Councillor Mike FitzGerald, Chairman of the Balance
of Power working group, Maidstone Borough Council
Ev 31
Mr Mike More, Chief Executive, Westminster City Council, Councillor Colin
Barrow CBE, Leader, Westminster City Council, Ms Moira Gibb CBE, Chief
Executive, London Borough of Camden, and Councillor Keith Moffitt,
Leader, London Borough of Camden
Ev 38
Monday 17 November 2008
Mr Andy Sawford, Chief Executive, Local Government Information Unit,
Councillor Merrick Cockell, Chair of London Councils, and Ms Anna Turley,
Deputy Director, New Local Government Network
Ev 45
Ann Keen MP, Under Secretary of State (Health Services), Department of
Health, and Mr Vernon Coaker MP, Minister of State (Policing, Crime and
Security), Home Office
Ev 52
Mr Ken Jones, QPM, President, Association of Chief Police Officers, and Ms
Jo Webber, Deputy Director, NHS Confederation
Ev 60
Monday 8 December 2008
Professor George Jones OBE, Emeritus Professor of Government, London
School of Economics and Professor John Stewart, Emeritus Professor of
Local Government and Administration, The Institute of Local Government
Studies, University of Birmingham
Ev 66
4
Communities and Local Government Committee
Professor Vernon Bogdanor CBE, Professor of Government, Oxford
University and Professor Tony Travers, Director of the Greater London
Group, London School of Economics
Ev 72
Rt Hon Lord Heseltine, a Member of the House of Lords
Ev 77
Rt Hon Nick Raynsford MP and Baroness Hamwee, a Member of the House
of Lords
Ev 80
Monday 15 December 2008
Mr Jeremy Smith, Secretary General of the Council of European
Municipalities and Regions, (CEMR), appearing in a personal capacity, and
Mr Martin Willis, Director of the Institute of Local Government Studies,
(INLOGOV), University of Birmingham
Ev 86
Councillor David Shakespeare, OBE, Vice-Chair, Local Government
Association and Leader of the Conservative Group (Buckinghamshire CC),
Councillor Richard Kemp, Deputy Chair, Local Government Association and
Leader of the Liberal Democratic Group (Liverpool City Council), Councillor
Keith Ross, Deputy Chair, Local Government Association and Leader of the
Independent Group (West Somerset DC), and Councillor Sharon Taylor,
Deputy Leader of the Labour Group, Local Government Association
(Stevenage BC)
Ev 92
Monday 12 January 2009
Rt Hon Hazel Blears MP, Secretary of State for Communities and Local
Government
Ev 102
The Balance of Power: Central and Local Government
5
List of written evidence
1
West Midlands Business Council
Ev 119
2
Birmingham City Council
Ev 122
3
Emeritus Professor Jones and Emeritus Professor Stewart
Ev 126
4
Lancashire County Council
Ev 137
5
London Borough of Camden
Ev 142
6
Somerset County Council
Ev 144
7
The Federation of Small Businesses
Ev 145
8
West Sussex County Council
Ev 147
9
Manchester City Council
Ev 148
10
Mansfield District Council
Ev 151
11
Gateshead Council
Ev 152
12
Telford and Wrekin Council
Ev 155
13
Warwickshire County Council
Ev 158
14
CSS (formerly the County Surveyors’ Society)
Ev 160
15
Kent County Council
Ev 162
16
Local Government Information Unit (LGIU)
Ev 169
17
Oxfordshire County Council and Oxfordshire District Councils excluding Oxford
City Council
Ev 175
18
Knowsley Borough Council
Ev 177
19
Association of North East Councils
Ev 181
20
County Councils Network
Ev 184
21
Institute of Local Government Studies (INLOGOV)
Ev 186
22
The Institute of Revenues Rating and Valuation
Ev 194
23
New Local Government Network
Ev 198
24
Chartered Institute of Public Finance and Accountancy
Ev 202
25
Essex County Council
Ev 204
26
Buckinghamshire County Council
Ev 209
27
North Yorkshire County Council
Ev 212
28
Jeremy Smith
Ev 213
29
The Core Cities Group
Ev 218
30
Professor Gerry Stoker
Ev 232
31
Localis
Ev 224
32
West Midlands Local Government Association
Ev 226
33
Sunderland City Council
Ev 230
34
Audit Commission
Ev 233
35
Westminster City Council
Ev 237
36
Maidstone Borough Council
Ev 245
37
Lifting the Burdens Task Force
Ev 262
38
London Councils
Ev 263
39
London Borough of Hackney
Ev 268
40
Trafford Council
Ev 271
41
NORA (National Organisation of Residents Associations)
Ev 272
6
42
Communities and Local Government Committee
Institute for Public Policy Research (IPPR) North and the Institute for Public
Policy Research (IPPR)
Ev 274
43
The Department for Communities and Local Government
Ev 279
44
The Department for Communities and Local Government (supplementary)
Ev 286
45
Local Government Association
Ev 291
46
Professor Tony Travers, London School of Economics
Ev 293
47
Professor Vernon Bogdanor (Professor of Government, Oxford University)
Ev 294
48
Ann Keen MP Parliamentary Under Secretary of State for Health
Ev 304
49
Adrian Beresford-Wylie, Chief Executive of the Australian Local Government
Association in response to questions posed by the Second Clerk of CLG Select
Committee
Ev 305
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Communities and Local Government Committee: Evidence Ev 1
Oral evidence
Taken before the Communities and Local Government Committee
on Monday 23 June 2008
Members present:
Dr Phyllis Starkey, in the Chair
Sir Paul Beresford
Mr Clive Betts
John Cummings
Anne Main
Mr Bill Olner
Dr John Pugh
Witness: Sir Michael Lyons, gave evidence.
Q1 Chair: Welcome, Sir Michael, to this, the first
introductory session on our inquiry on the
relationship between central and local government.
We have a slightly unusual form at this time in the
sense that we have not yet firmed up the terms of
reference for this inquiry. We are having two
introductory sessions to help us to firm up the terms
of reference of the inquiry and then we will put out
a call for evidence more widely for the subsequent
evidence sessions. This may be a slightly more
deliberative evidence session than maybe the
normal. If I could start, Sir Michael, by asking you
about your inquiry, which was extremely lengthy,
kept having its terms of reference changed and
extended just as you seemed to be coming to a
conclusion which might have required the
Government to do anything, and then came up with
a lot of recommendations, very few of which the
Government has actually acted on. What do you
think, on balance, your inquiry actually achieved?
Sir Michael Lyons: Good challenge! It certainly was
an extensive piece of work, and perhaps that is
inevitable given that both the remit changed but also
I almost certainly contributed to that by, from the
very beginning, making it clear, both in the original
commission and certainly in laying out how I
intended to go about that publicly, that I did not
believe that you could look at the funding of local
government and its services as a narrow technical
issue, that you could only seek to understand and
make any useful conclusions if you—and I used this
metaphor at the time—opened the lens very widely
and looked at the constitutional relationship
between central and local government, the
relationship between local government and those
that it serves and at its policy of engagement. If there
are any areas in which I can look at the finished body
of reports—and as you know, altogether there were
three separate reports and quite an extensive body of
research that we commissioned, which is all in the
public domain—I think it is about drawing attention
to those issues, the relationship between central and
local government, the constitutional underpinning
of that and whether that is right for the current age.
Certainly, I answered narrow questions about the
funding of local government but I also had a lot to
say about the place shaping role of local
government, going well beyond local services, in
terms of the stewardship of place. So inasmuch as an
inquiry like this is as much about how it educates
public discourse, and I would like to think that this
might be said to have scored quite highly, I can
clearly point to areas in which it has influenced
government thinking and action.
Q2 Chair: Would you like to do that? Just briefly
point us at some areas where it has altered
government thinking.
Sir Michael Lyons: I can certainly do that. Let me
start with the issue of place shaping itself adopted in
the White Paper, my conclusions that local
government first and foremost needed greater
flexibility—we might argue whether it is adequately
so or not, but reflected in a reduction in the number
of indicators, a substantial reduction in the number
of indicators by which local government is held to
account; reductions in the degree of reporting that
local government has to do; the place shaping role.
I drew attention to the fact that local government
should be more clearly identified as a primus inter
pares in terms of the local partnership. That is
reflected in the Local Government and Public
Involvement in Health Act in terms of a
responsibility on other bodies to consult with local
government and the broadening of scrutiny powers.
The concordat is admittedly a diluted version of the
new constitutional settlement that I recommended,
but it is a step in that direction. I do not want to sit
here in any way as the person responsible for
government decisions; I do not believe that is my
responsibility, but I do see signs of Government
having responded to my recommendations. I could
say more but perhaps I should stop there.
Q3 Chair: Those are clearly areas in which it appears
the Government has responded but overall, it seems
to be incredibly diYcult for a government to grapple
with these large changes and to implement them.
Although in opposition each party has been quite
keen on change, once they get in, they seem to go oV
the idea. What could be done to remove those
constraints on a government in implementing really
significant constitutional change in relation to local
government?
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Ev 2 Communities and Local Government Committee: Evidence
23 June 2008 Sir Michael Lyons
Sir Michael Lyons: I think your question is at the
very heart of the problem; it reveals the very heart of
the problem. I sought to respond to that in my work
by talking about the fact that there was no quick fix,
there was no set of simple changes. Basically, there
were a number of things that had to happen, and I
tried to sketch out a pathway and in my final report
was quite explicit that that went beyond the life of
one government. Of course, you cannot start that
sort of journey unless you make some bold early
steps, otherwise, as the baton is handed over, the
journey has still to be started. It leads me, as it did at
the time—and I had discussions with representatives
of all three political parties as represented at
Westminster and elsewhere—then as now, to believe
that this has to be an area in which there is some
understanding about the progress being made,
otherwise you end up with a rerun of the debate that
surrounded my final report, and indeed an earlier
report, that this could all be distilled down to the
revaluation of council tax, which was frankly a byline in the picture that I sought to paint.
Q4 Sir Paul Beresford: If my memory serves me well
enough, there was a Raynsford Committee and then
they passed the ball to you, which was very kind of
them, having come to no real conclusions. The big
problem at the time, as many people perceived—and
I do not just mean Daily Mail readers but people like
that as well—was that the council tax had gone up
enormously in cost, and it had gone up since 1997
quite dramatically. There was the contention from
local government—and you touched on this in your
answer—that the imposition of penalties, scrutiny,
targets, audits and so on and so forth, were having a
dramatic eVect on the costs and gearing was
multiplying that. Did you really touch on that? Did
you really look at it and would you agree with local
government’s position on that?
Sir Michael Lyons: I looked at all of those issues.
You particularly focus on the relationship, I think,
between the work that I did and the work of the
Raynsford Committee under the heading of the
balance of funding.
Q5 Sir Paul Beresford: I was not just meaning the
funding. Some of the impositions of central
government on local government have cost local
government, that they then had to fund, and
predominately that went on to the council tax and
the gearing hit the council tax payer savagely.
Sir Michael Lyons: Certainly, the heart of my
conclusions lay in the region of the lack of flexibility,
the lack of ability for local government to respond
adequately to the views and preferences of people in
the communities that they represented because of an
onerous performance framework and centrally
dictated imperatives, some quite explicit in terms of
objectives set for local government, the use of ringfencing of expenditures, again, reducing the
flexibility to respond to local circumstances. That
was at the heart, and I would put that much higher
up the agenda than the additional cost of responding
to that framework of control and regulation. I was
much more concerned, and indeed found stronger
evidence, that it had the eVect on local government,
perhaps you might say predictably, of making it
more interested in and more responsive to the views
of ministers and the departments that serve them
than the people who actually elected them.
Q6 Sir Paul Beresford: I accept that and it has been
my complaint of local government. Could I give you
a tiny example? I have a little council in my
constituency. Their budget is £10 million or
something like that. The CPA (Comprehensive
Performance Assessment) costs them, quite apart
from the time spent working with the teams and the
fact that the senior staV are not working eVectively
for three weeks, about a quarter of £1 million;
because of gearing it costs the taxpayer £1 million.
On a budget of £10 million that is outrageous. That
is what I am really getting at. Not only are they
focusing on the CPA requirements for the auditors,
et cetera, but it is costing the local taxpayer an
outrageous amount of money.
Sir Michael Lyons: I am absolutely clear about the
point you are making. I do not have the evidence on
that authority, which of course is anonymous to me,
nor indeed did I spend a lot of time exploring what
this body of costs might actually look like, because
I was more concerned with the issue of what impact
it had on behaviours. I do not dismiss the point you
are making for a moment.
Q7 Mr Olner: You have been in local government a
long while, Sir Michael, in some Midlands
authorities as well. Do you think, using that
experience, and certainly since you produced your
report in 2004, the amount of council tax that people
have to pay has risen dramatically? I just wondered
where you saw local authorities and the Government
in the “blame game” stakes?
Sir Michael Lyons: My main report in this area was,
of course, in March 2007 but you are right; I did
earlier reports. In terms of increases in council tax
since I reached my final conclusions, I think the fact
that they have been modest for a number of reasons
compared with the period immediately before that,
where they were very sharp, is probably one of the
reasons why some of the tensions which were around
when I was first commissioned have not rekindled,
have not been as alive again. What I was seeking to
do in this report was, to the best of my abilities, to
expose whether increases in council tax could be seen
to be solely the problem of individual local
authorities, and indeed, one of the strongest
conclusions I believe my work reached was that,
actually, it was impossible, despite all of the
resources that we assembled here, to identify the
balance of responsibility between local and central
contributions to the pressures which had led to
increases in council tax. If that is the situation, it tells
us something much more serious. In terms of who
local people should hold to account for local
expenditures that is itself confused and needs
attention. That is really where I addressed the heart
of my recommendations.
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Communities and Local Government Committee: Evidence Ev 3
23 June 2008 Sir Michael Lyons
Q8 John Cummings: I think we are all very aware
that local government in England has been subject to
regular reform over the last few decades. We have
seen a reduction in local authority powers in
education, in housing, et cetera. On the other hand,
enabling powers given to local authorities have
increased their economic regeneration and
community leadership roles. What do you believe
have been the key positive developments and the
retrograde steps in the relationship between central
government and local government in the last
decade?
Sir Michael Lyons: There is quite a lot for me to
answer there, but if I just pick up a couple of
points—with more time I would probably go more
deeply into these—in terms of the most negative
impact, that is in my view unequivocally the
increased centralisation over areas of local
government responsibility, in some cases leading
directly to the eVective transfer of that
responsibility. I immediately think of areas just at
the boundaries of that time span you have given me:
further education; more recently, schools budget,
with a much stronger central responsibility defined
by government. There is nothing wrong with reshaping what central government believes it is
responsible for and what it wants local government
to be responsible for, as long as everybody is clear
about that, clear in terms of who to hold to account
and who actually makes the key decisions. I think
that has often been less clear to the individual
council tax payer, income tax payer, the local citizen,
than it might have been. You are quite right, of
course: it has not been one-way traYc. There have
been some changes in the other direction. Indeed,
one of the things I would welcome is that in the
period since I reported and immediately around
reporting there have been some further changes, not
least in reinforcing the role of local government as a
player in economic development, in contributing to
this place shaping agenda that I sought to lay out.
Perhaps I can approach that by focusing on one
specific issue which looms very large in my final
report, and that is the job that local government
itself has to do. It sometimes has allowed itself to be
characterised as powerless in this debate. What I was
seeking to underline is that local government itself
has a job to do in rebuilding its relationship with
those that it represents and serves so that together
they might place pressure on government for faster
change in terms of more local decision-making.
Q9 John Cummings: To follow on from your last
comments, how do you view the relationship
between local government and central government?
Do you think central government view local
government as something to be tolerated, that has to
be there, that gives a smattering of local democracy,
yet they wish to retain power at the centre? What
further changes do you think are going to be
necessary in order to improve the relationship
between central and local government?
Sir Michael Lyons: Again, it is a very expansive
question, so perhaps I can limit myself to two areas
that I sought to explore in the report. One of them
was this national debate about public expectations
of what could be delivered out of tax income, and my
concern that, with the growth of promises made
through the centralisation of decision-making in the
United Kingdom, particularly in England, had been
coupled with a raising of expectations of what could
be achieved with tax income. As a result of that,
there was a lack of balance between what people
expected and what was delivered, with the net result
that we had a downturn in satisfaction.
Q10 John Cummings: Where do you place the blame
for this?
Sir Michael Lyons: It is an interesting debate. It is an
interesting debate about the extent to which local
government—
Q11 John Cummings: Trying to move it on, do you
think it is a matter of central government oZoading
blame on to local government, raising the
expectations of the general public, but not providing
the incentives to allow local authorities to carry out
their functions in a more eYcient manner?
Sir Michael Lyons: Do you know, I have never
found the apportionment of blame a great aid to
making progress, so I am going to decline your
invitation to attach the blame, but I am going to say
that the problem is exacerbated—
Q12 John Cummings: If we cannot attach it where
the problem lies, how we going to correct it?
Sir Michael Lyons: Let us just put the word ‘blame’
to one side and say what are the factors which
contribute to this and make it diYcult to tackle?
There I am quite clear: they are about
inappropriately centralised control. They are about
decisions being made at Westminster which could
more appropriately be made locally, and they are
about local government not itself becoming an
unequivocal champion for eYciency and for
working energetically with its local community. It is
not as if this is just a simple issue that can be resolved
at the centre. It actually requires—and I spent a lot
of time thinking and oVering conclusions about
this—local government also to put its own house
in order.
Q13 John Cummings: Do you think the will exists in
central government to move towards that particular
objective?
Sir Michael Lyons: It is a problem, is it not? That is
why these two things go hand in hand. Local
government continues to have a reputation of not
always being eYcient, and this goes hand in hand
with a national belief that postcode lotteries are a
bad thing, so an anxiety about diVerent decisions
being made in diVerent localities, as if it were
possible with limited resources to do the same
everywhere, which it is not. I am searching for how
to give you the shortest answer to something which
I do not think is amenable to a short answer, but my
strong conviction is that central government finds it
diYcult to move on not just because it does not have
a will but actually because there is a limited public
space—
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Ev 4 Communities and Local Government Committee: Evidence
23 June 2008 Sir Michael Lyons
John Cummings: Do you think there is a deliberate
policy on behalf of central government to continue
to emasculate local government?
Chair: John, I do not think you are going to get an
answer to such a leading question!
John Cummings: Let him answer.
Q14 Chair: Can you answer that shortly?
Sir Michael Lyons: The short answer is: do I believe
that somewhere in the heart of government are a
group of people intent on hanging on to this? I do
not think it is as simple as that, no, but if you find
them, I will be happy to review my answer.
Chair: We appreciate these questions are all very
complex but we do need to try and get the answers a
bit shorter.
Q15 Anne Main: We have had four reports. Can I
just say, I have noted a few things you have said: that
local government allows itself to be characterised as
powerless; that there had been modest rises in
council tax; that you could not arrive at a conclusion
as to who was to blame about escalating council
taxes, and you did not want to apportion blame. All
that is very interesting but I actually think people felt
out of four reports you could have shone a
searchlight on some of these things. I have an
excellent rated authority, as many local authorities
are excellent rated, but they feel that the
Government decrees that so much needs to be done
that they have very little control over what they do,
and the public are then asked to pick up the bill if
they have to put in extra services. The public do not
see the rises as modest. The public, and indeed
councils, will regularly say that they are hamstrung
by the Government to having to deliver a
government agenda because that is where the
funding comes from. If they do not deliver, they do
not get the funding, and therefore they are more
impoverished than they were beforehand. So whilst
I am not saying apportion blame, can you see, after
four reports, whether there is a better way of doing
this? I do not believe either that there are councils
sitting there going “Poor little me. I want to be
characterised as powerless.” I think they genuinely
believe they are and, having been a councillor, I
actually have sympathy with that. I am on the side
of councils here somewhat. We do not want to be
characterised as powerless. What can be done to
shift the balance? Four reports of very interesting
engagement with the public debate, as you said
earlier on in your speech, to me does not sound good
value for money.
Sir Michael Lyons: I have absolutely no doubt that
in each one of those reports there are clear
conclusions reached and clear recommendations
made. The fact that it is a complex picture I make no
apologies for.
Q16 Anne Main: Is anyone following your clear
recommendations?
Sir Michael Lyons: I do not know. Let me look to
you and others who aspire to take on the mantle of
government. Are you looking at these conclusions,
because I was clear that was not only speaking—
Q17 Anne Main: You are reporting to the
Government.
Sir Michael Lyons: Let me finish. This is an
independent public report in which I explicitly said
this cannot be the responsibility of one government
and I have said publicly since if any one government
does not take it on, it remains an issue for future
governments to consider.
Q18 Anne Main: Do you feel we are any further
forward as a result of your reports?
Sir Michael Lyons: Yes, of course, I do.
Q19 Anne Main: I know what you say about place
shaping and things but things that are really on the
ground level, the level of council tax, which, as I say,
people do not feel is inconsiderable, and indeed, the
level of powerlessness that is genuinely felt by
councils. Are we moving forward or do they still see
themselves as simply delivering a government
agenda and they then make up the shortfall in the
budget?
Sir Michael Lyons: Let me be careful, because I have
not spent as much time in the last year working on
this. I have taken on another part-time job, which
has distracted me a little, but I have still had
discussions with the Local Government Association
and others and, inasmuch as that captures all of the
views in local government, which is of course very
diYcult, I have no doubt the Local Government
Association and every local government conference
I have spoken to welcomed these conclusions in their
entirety, felt that they had revealed eVectively the
dilemmas, hoped that they might lead to
government making some decisions but, most
importantly, just to come back to my point about
change in local government itself, have led directly
to actions within individual authorities and
collectively aimed at further improving local
government’s performance and reputation.
Q20 Anne Main: So when the Government, for
example, pushes planning on up to a regional level,
perhaps even thinking of having RDA (Regional
Development Agency), can you understand why a
local council feels it is really just administering a
government agenda?
Sir Michael Lyons: I have no problem at all in
agreeing with you about the frustrations felt in local
government. I absolutely understand those.
Q21 Anne Main: You would agree with that
observation that they are indeed really just tools to
administer a government agenda?
Sir Michael Lyons: Do I agree that local government
is frustrated with that: yes, I do.
Q22 Anne Main: That is not what I asked you. I
know they are frustrated.
Sir Michael Lyons: You are asking me to
characterise government policy in a particular way,
and I am saying that I understand why local
government is frustrated with this because it does
have the eVect—and I will not duck this point at
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23 June 2008 Sir Michael Lyons
all—of reducing local choice and local discretion,
and that was the very heart of my thesis, that these
need to be expanded.
for local government to go out and ask for more
money to be collected. That would be a rather odd
way of looking at where the world is at the moment.
Q23 Mr Betts: Can we turn to the issue of local
government finance, which was actually where your
report began and was then widened in its terms.
Would you accept that there cannot be any real
change in the relationship between local and central
government unless local government has greater
financial freedom?
Sir Michael Lyons: Broadly, yes, I would accept
that. No doubt you will go on to tell me what you
mean by “financial freedom”?
Q27 Mr Betts: It does not have to be more money,
does it? It could have been the transfer of the
business rate to local councils. Some people feel you
just bottled that, quite frankly.
Sir Michael Lyons: I did not bottle it. I spent a lot of
time discussing this both with local government and
with the business community. If you have a moment,
let me expand on what emerged from that.
Q24 Mr Betts: Broadly, the ability to raise more
resources independently.
Sir Michael Lyons: There we might part company.
As I was very clear in my first report, I thought the
preoccupation with local government having
freedom to raise more money was a distraction from
the most urgent presenting problem, in my
judgement, and that—and I did not change this view
over the life of the work I did—was actually the
flexibility to use the money that it had. I am on
record in that first report and in presenting this on a
number of occasions as saying the notion that local
government already feeling—and to some extent this
captures your comment earlier on—that it was not
able to respond to the variations in local
circumstances because it was in too tight a
regulatory framework, the last thing that local
government needed was the ability to raise more
money that it did not have the freedom to explain
how it was going to spend. It is a question of the
sequence of these things. Yes, the balance of funding
comes on to the agenda but not before the issue of
flexibility.
Q25 Mr Betts: Right. It is still on the agenda. At least
we have got it that far. Can you understand,
therefore, why many in local government, who have
seen other models of how things operate on the
continent of Europe, where local councils generally
have an ability to raise directly, for the most part,
more money and by a variety of diVerent means—
Sir Michael Lyons: It is a complicated picture in
Europe but yes, there are some countries.
Q26 Mr Betts: Yes. People in local government can
see this major review happening, they can see other
examples where there are greater abilities to raise
money by a variety of means in other countries. Can
you understand therefore why some have described
your report, or the Government’s response to your
report, as a disappointing response to a
disappointing report?
Sir Michael Lyons: I have heard that, but quite often
I have heard that from people who consistently want
to simplify the problem. The problem cannot be
boiled down to: the government should allow local
government to raise more money. Indeed, I have to
say that would be an extraordinary way to
summarise the current problems faced by local
government, as if the British populace is just waiting
Q28 Chair: Briefly.
Sir Michael Lyons: Very briefly, I found a very clear
message from the business community that they
were anxious about this, not because they did not
believe there should not be a closer link between
local government and the business community,
locality by locality, but they actually believed that
this was likely to lead to an inexorable increase in
taxation. Of course, given the background of people
arguing about the balance of funding, it is not
surprising they had such a fear. When I talked to
local government, what I could find was no appetite,
frankly, to consider anything other than a reduction
in the business rate. So you then had the proposition
that you might be encouraging central government
to make a change which would then be used by local
government, or by some local authorities, to
position themselves as anti to the original
proposition. Quite a messy situation but, far from
bottling it, what I said was— and my
recommendation is very clear on this—that you need
to build confidence to move in this direction. It
cannot be sensibly imposed on the business
community. A first step to that might be a
supplementary rate around those areas where local
government and the business community were clear
about the legitimate case for raising more money,
namely local transportation infrastructure.
Q29 Mr Betts: Can I ask you about the willingness of
national politicians to engage in the reform of local
government finance? The more modest things that
might have happened, like the revaluation of the
council tax on an overall increase basis, which the
opposition parties were against from the beginning
and government eventually decided it could not face
up to the consequences of; the previous government
ended up with the Prime Minister basically falling on
the grounds of an attempt to reform finance and
bringing in the poll tax. Do you think it is possible to
bring about any significant reform, certainly without
some funding to cushion the eVect on losers? That is
what happened with the VAT increase that Norman
Lamont brought in to enable the change to the
council tax system to happen.
Sir Michael Lyons: It was very much not only that
thinking but that experience through the life of this
project that led me to believe that this could only be
achieved by a combination of what I would describe
as a mosaic, a number of small changes, but
nonetheless changes which moved in a single
direction of increasing flexibility, increasing local
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discretion and providing the room for communities
to make more choices for themselves, and in time to
have more say over what tax was paid, greater say
over what tax was paid locally, and that that would
have to extend over the life of more than one
government if any progress was going to be made. I
think it is very interesting to see how the debate
about revaluation was excited as if it was the issue,
and it is also interesting to reflect that it continually
focused not on the fact that some people would gain
and some people would lose, but it was constantly
presented as if there were only losers, when in fact
the argument in favour of the revaluation of council
tax was that it would redistribute the burden
beneficially, as was originally intended in the design
of the tax, between diVerent areas.
Q30 Sir Paul Beresford: Can I turn the equation in
this question on its head? Much of local government
does not want to raise more money; what they
actually want to do is to have better use of the money
they have, and what they are asking for is
government to get oV their back, to reduce the
regulation, to give them more freedom with the
funding which they already have.
Sir Michael Lyons: Sir Paul, that is absolutely in line
with the heart of my eventual conclusions. The key
issue here was flexibility, but it did not rule out the
aspiration over time to move further. The key issue
was flexibility so that local authorities could be seen
to respond eVectively to their own communities and
begin to rebuild the trust which would lead to other
alternatives in the future without binding anyone.
There was no attempt to lay out a pathway where
you could divine the step to be taken in 2020 from
the one that had to be taken in 2007.
Q31 Sir Paul Beresford: Do you feel that has
happened, that the Government has responded?
Sir Michael Lyons: The Government has responded
to some of the recommendations.
Q32 Sir Paul Beresford: Have they responded to
that?
Sir Michael Lyons: Do I regard it as a full spirited
response? No, I do not, and particularly in the area
of local government finance, the recommendations
sit there, as valid today as they were a year ago, when
I finished this work.
Q33 Dr Pugh: Constitutional settlements,
concordats and the like, of which much is spoken.
We do not actually have concordats, do we? We have
truces from time to time between central and local
government. Central government has overreached
itself, local government complains more vigorously
than usual, and you get a bedding down for a while
of whatever is the current state of play. Is that not
what we get in this country? “Yes” or “no” will do!
Sir Michael Lyons: I do not know. If it was amenable
to a “yes or no” answer, I would give you one. I do
not think it is really. You asked for my view on this.
My view is actually that the concordat that has been
signed is valuable. It goes nowhere near as far as the
constitutional settlement that I was asking for, but
it does have some very important components, not
least, a recognition of a mutual interest between
central and local government, and therefore I think
is a more healthy context for discussions into the
future.
Q34 Dr Pugh: Should any future concordat either
adopted by the government or proposed by you have
a clear understanding about what local government
is good at and central government is not, and that
should be agreed, because without that, any kind of
concordat or agreement is pretty vacuous, is it not?
Sir Michael Lyons: Yes, certainly an important part
of the discussion might be what—
Q35 Dr Pugh: Should it be an essential part of the
discussion?
Sir Michael Lyons: I am going to get to your
question but slightly indirectly, because I think the
heart of the issue is not so much what the two tiers
are best at as what does central government believe
it is responsible for doing, whether it does it well or
not, and clarity that it will fund that and is
accountable for it.
Q36 Dr Pugh: So central government needs to know
its mind—I think that is more or less what you are
saying—about what it wants to do with local
government.
Sir Michael Lyons: I would agree with that and,
what is more—
Q37 Dr Pugh: It is something short of a concordat,
is it not?
Sir Michael Lyons: Yes, in my view it would need to
go further than a concordat but, to come back to
your point, in making up its mind, it would not be
unreasonable for it to reflect on what is best dealt
with as a central proposition and what is best left to
local choice.
Q38 Dr Pugh: You are not actually proposing a
constitutional limit to what central government
thinks it should be doing?
Sir Michael Lyons: I do not think that would have
been the right thing to do.
Q39 Dr Pugh: You recommend a degree of
parliamentary oversight. If we are observing the
current state of play or truce, did you envisage
Parliament, or maybe a Committee like this, playing
a kind of referee role and simply telling the various
parties who has gone too far and when?
Sir Michael Lyons: I guess if I had put that in quite
those words, you would have thought that was
giving you quite a challenge. What I am clear about
and what I tried to reflect in my report is that these
are not just technical issues about powers, grants,
regulations. Underneath it all there is a
constitutional issue about the extent to which, just
like we have a debate about the extent to which the
individual citizen should be free to make decisions
for themselves, so there is an issue about the ability
for communities to collectively have the freedom—
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Q40 Dr Pugh: I just want to be clear about what you
are saying. Are you suggesting that parliamentary
oversight provides a kind of commentary or an
adjudication service? I think the former rather than
the latter. Is that the case?
Sir Michael Lyons: I am just baulking slightly—
Q41 Dr Pugh: Now we can give a sort of
commentary on how we think things are going.
Sir Michael Lyons: In the current climate all that you
can do is provide a commentary.
Q42 Dr Pugh: Yes, and you want something more
than that for Parliament?
Sir Michael Lyons: Yes. I was recommending
something certainly that went beyond that.
Q43 Dr Pugh: Do you think it would be helpful if we
could separate the issues of what local government
should properly do, and get that sorted first, from
the issue of how local authorities should properly be
financed? You think that it would be easier to take
the questions as separate questions?
Sir Michael Lyons: Firstly, let me acknowledge,
because I spent a lot of time initially trying myself to
identify whether it was possible, on the basis of
either public reactions or the nature of services, to
distinguish between nationally provided services
and locally provided services. It is very diYcult.
There are some things that fall neatly into one
category and some neatly into another category, but
there is a very substantial grey area in the centre.
There is not a simple division between these but, in
answer to your question, you do have to be clear
what it is that local government is being asked to do
before you can properly start a debate about how it
is funded and to what extent.
Q44 Dr Pugh: Just a final point of clarity. My take
on this is, there is a lot of talk about partnership, a
lot of talk about place making, and underneath the
radar there is a haemorrhaging of powers of local
authorities to other non-elected bodies, whether
they are local strategic partnerships, other sorts of
partnerships, or regional and sub-regional fora. Is it
not the case that most people now currently perceive
local government as, firstly, less accountable than
hitherto and, secondly, less transparent?
Sir Michael Lyons: “Yes” to both of those,
depending on what time horizon you are taking.
“No” to the assumption at the beginning that the
movement of powers from local government to nonaccountable bodies is something that continues
apace. I perceive that actually, for at least the last
three years, there has been some reversal of that
process. I personally see the pendulum as moving
back from its peak point.
Q45 Mr Betts: I wonder what we can do to try and
lift the whole debate about the relationship between
central and local government on to almost a
constitutional basis. In the absence of a written
constitution, all we have is a number of Acts of
Parliament, which are not in themselves considered
constitutional. Two examples: first of all, we have
the concordat, which was supposed to be the basis
for this constitutional arrangement. In reality, my
guess is that most members of the public have never
heard of it, many Members of Parliament probably
have not heard of it, many councils probably have
not heard of it. It has not exactly set the world on fire
in terms of change in relationships. If you look at
what has happened in Scotland and Wales, the
Parliament in Scotland and the Assembly in Wales
have been established by a constitutional Act. They
are constitutional because the Committee stages are
taken on the floor of the House and it is recognised
as being diVerent. Local government legislation is
not considered that way. The Parliament and the
Assembly were then backed up by a referendum, and
it is inconceivable that their powers will be taken
away or changed without another referendum. Do
we not have to do something to try and put relations
with local government on to a diVerent standing to
what they are at present?
Sir Michael Lyons: I think broadly I would say “yes”
to that. I would say that in my view issues of
devolution and the constitutional position of
England in a UK of devolved nations is unfinished
business. However, if I just come back, I do think
underlying all of this is the problem of a debate with
the public of this country which, when surveyed,
believes that more decisions should be made locally
but still has some anxieties about those decisions
being made by local government.
Q46 Chair: Are you referring to the postcode
lottery?
Sir Michael Lyons: In part I am. There are two issues
behind my conclusion. In part, it is an anxiety that
local government remains ineYcient in its use of
resources. I do not say that it is but that remains a
perception and, despite local government’s
strenuous eVorts to improve on that, it is diYcult to
shift, in part, because centralised decision-making
just sounds as if it is likely to be more eYcient. Put
that beside the postcode lottery, the belief—and I
cannot say enough how much I do not believe it can
ever be delivered—that standards will be the same in
every community if decisions are made for the
nation as a whole. That, excited by press coverage of
what is characterised as a postcode lottery, leads
people to believe that they will be disadvantaged by
decisions made more locally.
Q47 Mr Betts: Coming to this point you made about
the concern people think more decisions should be
made locally but are not sure local government
should make them, is this what you think drives
ministers to try and reinvent diVerent ways of
delivering local decision-making outside local
government? We have talked about the
Balkanisation of decision-making locally which
means you do not get proper joined-up government.
Sir Michael Lyons: I could take you back—although
I am not going to in the space we have today—to
specific episodes where individual ministers have
further excited that belief by interventions that were
seen to oVer consistency across the country as a
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Ev 8 Communities and Local Government Committee: Evidence
23 June 2008 Sir Michael Lyons
whole. To matters which arguably would have been
more appropriately left to local decision-making
and local priorities.
Q48 Chair: Could you give an example, because
otherwise we are all going to be thinking of diVerent
examples?
Sir Michael Lyons: Let me go back a very long
way—only because it is safer rather than because it
betrays . . .
Q49 Chair: Think dangerously, Sir Michael. After
all, you are not elected so you do not have to worry!
Sir Michael Lyons: No, but I am impartial, or
struggling to be. As you know, impartiality is not a
state of grace; it is a journey. I became the Chief
Executive of Wolverhampton Borough Council in
1985 and inherited a scheme for assisting small
businesses. This was in the aftermath of a very deep
recession in the West Midlands which had cost one
in three manufacturing jobs. The council was
strongly committed to trying to improve the
economic condition of Wolverhampton. We had a
scheme to support new businesses which was lacking
in explicit criteria and, has as a result, both expensive
and at times potentially damaging to existing
economic activity. For instance, you would get
applications from people wanting to set up new
retail activity when that was basically in direct
competition to existing businesses. It took us two
years to convince both the council and the
community that the council could only sensibly seek
to intervene if it asked the question “What impact
would this have on existing businesses and jobs in
the area?” We finally got that sorted out and
working when central government decided that it
liked the idea of Task Forces. A task force was jetted
into Wolverhampton and its first decision was to say
“Unlike the council, we will oVer support to any
retail business that comes along.” That is an
illustration, without anything more to it.
Anne Main: On retail needs, of course, the retail
needs assessment has been taken away by the
Government, so that is another planning thing.
Chair: Not yet!
Q50 Anne Main: With the funding formula, many
local authorities feel they are hamstrung. Have you
completely ruled out any possibility of having a local
income tax? Did you rule that out in your report?
Sir Michael Lyons: No, I did not rule it out, and
what I tried to do—and again, I would like to
underline that I tried to evaluate all of the options
and to lay them out so that anybody at any future
point coming to this dilemma would see as best as I
was able to demonstrate the pros and cons for
moving in this direction.
Q51 Anne Main: Is this because radical reform is so
politically nuclear? I think you touched on that in
your comments.
Sir Michael Lyons: It is clearly diYcult for any
government to move, but it is diYcult for any
government to move faster than the population
wants it to. So the notion of quick and simple local
government reform, I felt, was not possible but I did
see that if actually you started to rebuild trust, to
provide the flexibility—flexibility first, back to our
agreed point—the ability for local government to
respond more eVectively to the needs of the
community that they serve as opposed to standards
set nationally, it would be possible to make change.
Q52 Anne Main: That does sound as if you are
saying “Get oV the councils’ backs, Government.”
Sir Michael Lyons: Those are the words you have
chosen but they might well be used to summarise
what I said in the report.
Chair: Thank you very much indeed, Sir Michael.
Witnesses: Mr Chris Leslie, Director, New Local Government Network, Ms Janet Grauberg, Development
Director, Public Management and Policy Association, and Mr James Morris, Chief Executive, Localis, gave
evidence.
Q53 Chair: I think you have all been here for the
previous session, so you know what has been said.
Given that we have three witnesses and only about
half an hour, we are all going to have to be
disciplined. Perhaps we could all bear that in mind.
Can I just start oV with the questions about the
Lyons Inquiry. Having heard Sir Michael say what
he thinks the Lyons Inquiry achieved, and those
things which the Government took up, do you agree
with him or disagree?
Mr Morris: I think that the Lyons Inquiry certainly
set out very clearly the policy area around reforming
local government, and I think that there are many
recommendations in the Lyons Inquiry which are
good and sound and should be picked up by
government. I think though that the issue which I
think was being debated and skirted around in the
question and answer session is that the reality is that
over probably the last ten to 15 years the policy
debate in this area has been chock-full of
contradictions. I was particularly interested in the
point that I think Anne was making about the fact
that during the last ten years we have had this
movement towards very much top-down
approaches to both regional and local government
at the same time as there being rhetorical lip service
paid to decentralisation of power. So the example of
planning powers being placed into the hands of
democratically
unaccountable
regional
development structures, for example, I think is an
example of policy tensions which still exist in the
central/local relationship, and one could go through
a whole series of them around education, health,
even the provision of welfare, which are still very
current.
Mr Leslie: I was quite overwhelmed, I suppose, by
the volume of Michael Lyons’ report and the eVort
and length to which he went to describe and cajole
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ministers to make some changes but, fundamentally,
I think where it feels a little bit less than the sum of
its parts is in the politics. I think there were some
very good, sound and quite pragmatic, modest ideas
about reform, but persuading governments of the
day to make the big leap to shift towards devolution,
decentralisation, localism, there was not really a
compelling enough attractive force there. The same
really would apply, I suppose, for the other political
parties too. I think the reaction of the other political
parties to the Lyons Report were similarly very
defensive. They were quite happy to point out
problems or flaws rather than recognise the gains,
the advantages, to be attained through moving to a
far more mature, sophisticated, decentralised way of
doing decision-making in this country.
Ms Grauberg: I would pick that up, because I think
the key question which underpins this, which we
have just touched on, is about the value that we as a
nation place on local democratic determination and
decision making. This is a “where there’s a will,
there’s a way” point, in that we presently have a
model where it appears that this is not much valued,
and the questions that we had about performance
management are examples of that, and schools’
budgets, housing budgets and whatever. It is easy to
understand why, because on the issue of what Sir
Michael called “confused accountability”, actually
central government is often blamed for failures in
local government and is unwilling to have that
debate, but it seems to me if we do not work through
those fundamental decisions and views, and in
particular take into account not just what the
present Government views are but the views of
political parties and the people that they seek to
represent, any of the particular changes that we want
to make, any of the particular changes that Sir
Michael has recommended, and any particular
words you want to put into a concordat are going to
be skating over the surface.
Q54 Chair: One of the things that Sir Michael said
was that he was trying to inform public discourse.
Apart from think-tanks such as yourselves, which
are clearly part of the public but not quite what he
was meaning, do you think it has informed a public
discourse—not politicians, not us lot, not you?
Mr Morris: I think, in short order, probably not, not
in the wider world. I still think that people are on the
whole unclear about the role of local government,
that they are not sure who is responsible for what. If
you ask somebody about policing, for example, and
they say “Who is responsible for fighting crime in
your area? How does that relate to the local
authority?” they probably do not know. I think
there is still a big gap that exists between the local
government level and perceptions of voters and
perceptions of local communities. That is one of the
points which I think Sir Michael was making about
trust, that there still is a lack of trust between local
communities and the decisions taken on their behalf
by central and often local government. It seems to
me that, until that gap is closed significantly, we are
still going to have some problems around the speed
of reform.
Mr Leslie: I do not think that the Lyons Report
really gelled or set the public alight in any particular
way, apart from perhaps a few torrid headlines
about council tax and revaluation, as Sir Michael
was pointing out. As with a lot of our work, we can
talk about local government reform but sometimes
the things that are reported are about the bins or
about council tax, maybe the occasional local
election results, but even those can simply be a
reflection of the national political perspective. I had
great hopes for Michael Lyons’ report, and I think
he did really as well as he could on the technical side.
I think there was a need to really prove not just the
political case, as I was saying before, but also to get
a head of steam going amongst the public to demand
a change from this archaic system for decisionmaking, the constitution that we currently operate
under, which sees so much power centralised in
Whitehall, when so many of the challenges facing the
country in the 21st century require local, tailored,
personalised solutions on the front line, and we are
still too far from that.
Q55 Chair: How would we do that then?
Ms Grauberg: I think we can agree that Sir Michael
Lyons’ report did not galvanise that in the way that
it might have done but I do not think that is a cause
for despair. He argued very much that this was a
challenge for local government itself to take up the
baton and to have that debate. We do see in the
conversations that people have, whether it is
policing or polyclinics or post oYces, a willingness to
have a conversation on a very local basis about
where the responsibility lies, the balance between
national provision and local flexibility, however that
is described. Just because it has not happened in
response to a weighty tome does not mean that it
could not happen in future in a diVerent way.
Q56 Dr Pugh: I just want to pick up on something
that has just been said. You are an optimistic bunch
with lots of good ideas for the future but I wonder
whether you accept the pessimistic view I present.
There is a lack of clarity amongst the general public
about what local and national governments’
respective roles are, and it is not obvious who ought
to be blamed when things go wrong, so it is quite
understandable that central government want to
manage things themselves. If they are going to pick
up the blame, they will be punished at the local
elections for things that local councils may or may
not have done. It would be really nice to have clarity
about the respective roles of central and local
government. I just wonder whether you think it is
achievable and, if so, how it can be achieved, given
that there is a natural entanglement of national and
local government. Is there ever going to be a day
when the public actually know what their council
does and can legitimately be accountable for and
what central government does on the other hand and
distinct from local government?
Mr Morris: You are in a sense engaging in
futurology. With the trends of technology and the
trends of the use of data and information in new
ways, one of the keys to re-engagement of local
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government with local communities is through the
sharing and presentation of data, by which I mean
not just a local authority telling me where my local
swimming pool is but a local authority telling me
very clearly about the performance of my local
police force and where the crime hotspots are, a local
authority telling me about the performance of my
hospitals in comparison with others. Given the
propensity of communities and voters these days to
use technology and mine data it seems to me that
that has to be one of the ways in which engagement
can be promoted so that people do begin to really
understand in a clear way what it is that their local
authority is doing for them. That would be one idea.
Q57 Chair: There are already league tables on
schools, on crime rates, on hospitals, on MRSA
rates. I am not quite clear how that enables the
public to get behind the reason why their hospital
may be worse or better than somebody else’s?
Mr Morris: I am talking about information that goes
beyond league tables. I think you could argue that
league tables are a manifestation of the current
problem because they are a central government set
of parameters which are put around local
information. What I am talking about is inverting
that; I am talking about information which is
bottom-up information.
Q58 Chair: Can you give an example. What do you
mean by bottom-up?
Mr Morris: If we look at the way in which young
people are increasingly interacting with community
websites, for example, like MySpace and so on. They
are beginning to interact with information in a
completely diVerent way. They share information
about what is going on. I am talking about that, the
way in which information about local authorities is
at the moment aggregated in silos, and it needs to be
much more accessible in a network way.
Mr Leslie: I think there is a lot to be said on the data
question but just coming back to your original
question: ultimately, can the public understand
where power lies? Yes, I think they can. Is it clear
about whether it lies with local decision-makers or
national decision makers? I suspect not so much
right now. I believe though in the future it is
inevitable that power will have to be devolved and
decentralised if public services are to be delivered
successfully, appropriately and eYciently, because
the nature and divergence of the challenge is such
that trying to do all these transactional activities
through from a Whitehall quango-ised basis is not
sustainable. So over time I really do think that any
government of whatever political complexion is
going to have to devolve power downwards. I
personally think the public would prefer to have a
greater proximity with those who are making
decisions over their lives. That sort of subsidiary
subsidiarity principle has been around for quite
some time. The question is whether politicians at the
centre, again, of all political complexions, are going
to have the foresight to let go in time in order to see
those services flourish or whether they are going to
be stifling that potential by hanging on to things
unduly long.
Q59 Dr Pugh: So they have got to let certain local
authorities sink or swim at times, even if the
consequences are politically unpalatable. Can I
persist with the question I asked Sir Michael a few
minutes ago: it seems to me that one part of the
devolution mentioned by the Government is the
kind of devolution that goes beyond the council to
various other groups as well as a way of basing
community decision-making more thoroughly in the
community. Would you like to comment on my view
that this often makes the decision-making process
genuinely more opaque at times? I will give a very
simple example. I was talking to a local reporter
today about a change of policy in my local authority
area with regard to statementing. We had to start
talking about the schools forum, and I had to
explain—and my knowledge was by no means
adequate—what the schools forum was and how
that stood in the decision tree, as it were. We were
not completely clear even after my explanation, I
have to say. Can you comment on the handing on of
local authority powers?
Ms Grauberg: I think it is a good question, and there
are a number of diVerent ways of approaching it.
Professor George Jones in a report which the Public
Management and Policy Association published,
argued through it, and his argument was that there
are models of devolving beyond the local authority
that serve to reinforce rather than undermine the
decision-making abilities and the democratic nature
of local government. An option, whether it is about
participatory budgeting or schools in conversation
with the local education authority, advising ward
councillors or the executive or scrutiny or whatever,
there are models that serve both to allow greater
devolved decision-making and to bolster the elected
democratic nature of local government. There are
also models that seek to bypass that and those who
sometimes argue against that greater level of
engagement at whatever level it is, often assume that
those are the only models that exist.
Q60 Chair: There are suggestions that health should
be brought under the strategic control of the local
elected councillors. On the other hand, there are
alternative models which suggest that you should
simply have an elected basis directly to manage the
local health service. I would just use that as an
example. What are the pros and cons of those two
sorts of models?
Mr Leslie: I think it is quite important to reassert the
virtue of multifunctional local democracy, the fact
that if we are, for instance, going down the route of
comprehensive area assessment, with the place
shaping mentality, which was Sir Michael’s phrase
that he coined, that did see this concept of locally
accountable political leaders shaping all the services
in their area, then it is important that there is
consistency between them, that they are prioritised
according to the local area’s needs, and that we do
not just bleeding chunks of siloed areas of public
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Communities and Local Government Committee: Evidence Ev 11
23 June 2008 Mr Chris Leslie, Ms Janet Grauberg and Mr James Morris
services separate with little walls around them,
because, as we know, and we can see this certainly at
Whitehall level, getting joined-up government is an
exceptionally diYcult thing to achieve, so it is really
important to have consistency and strategic
leadership at that local level. The box has been
opened on comprehensive area assessment, place
shaping will be the test against which authorities are
judged in the new audit regime, and yet the powers
that they have in order to actually achieve that are
not fully fledged; they have not been allowed to
develop. I would like to see PCT (Primary Care
Trust) commissioning powers coming under local
democratic control, and the police authority much
more under accountable control as well.
Q61 Dr Pugh: How do you respond to the research
that shows that if you ask the public who they would
like to be running their health service, councillors are
always at the bottom of the pile after doctors and
clinicians and administrators and maybe even
government, because there is a view that these are
areas, local areas albeit, but which are so expertdriven in a sense that an ordinary democratic chap
who gets himself elected by delivering Focus leaflets
or whatever would not be qualified to discharge a
function like that?
Mr Leslie: It depends how you ask the question, of
course, but it is our money; it is taxpayers’ money at
the end of the day that is commissioning these
services and therefore no taxation without
representation, in my view.
Mr Morris: If I can speak on that point that you
made, in a sense it is a question about capacity,
because in principle I would agree that, for example,
there is an ongoing debate about the delivery of
social care and the relationship with local
authorities, and that is a very current debate, but you
cannot delegate more power without having a secure
capacity for the delivery of the powers, and therefore
I think that is again something that needs to be
considered in terms of the capacity of councillors to
make the appropriate decisions and how those
decisions are communicated.
Ms Grauberg: I would add that it is also a question
of accountability. It is a sign of progress from a local
government point of view that these debates are now
being held across all the political parties about
health and police, and actually people are having the
debate. I would probably argue that the precise
nature of the accountable solution is less important
because every solution has pros and cons. The
precise nature of the accountable solution is less
important than actually having some solution that
increases the accountability at a local level, whether
that is directly elected or nominated or whatever. To
me, the key issue is the fact that actually we are now
having this debate probably proves that Sir Michael
Lyons’ recommendations about the place shaping
role have actually taken root in some form.
Q62 Anne Main: Can I ask you to comment on the
comment that Michael Lyons made here today that
councils have allowed themselves to be characterised
as powerless, somehow implying that they were not
powerless if they could better use the powers that
they have. I did actually challenge him on the fact
that there are so many government directives that
come down to local councils attached to funding
triggers that actually councillors do feel powerless
because they are having to deliver perhaps a regional
agenda that they do not understand. So there will be
a regional directive that says St Albans has to do
something when St Albans District Council, and
Hertfordshire County Council indeed, may have
said it does not want to do something. It is that
conflict that people say to me makes almost the
council look powerless, and I would say is not
characterised as powerless, but I would invite your
views on it.
Mr Morris: The fundamental issue in this debate is
about financial discretion at a local level, and that
local authority leaders and chief executives are too
focused on looking upwards rather than focusing on
their communities, looking downwards, and the
financial mechanisms that are currently in place do
not encourage them to look outwards and
downwards. There have been some incremental
changes made recently, but without a
comprehensive look at financial discretion, with
grants being made without ring-fencing, much more
comprehensively, and even looking at the whole area
of local government finance once again, taking into
account the fact that it is politically diYcult, I think
nothing else can really follow.
Q63 Chair: Can I just clarify, Mr Morris, would you
agree with Sir Michael that the key thing is flexibility
in the way the money can be spent, and that that is
more important than necessarily giving councillors
new ways of raising money themselves?
Mr Morris: I do not think I would necessarily agree
with him 100% on that. I think flexibility is
important but I think we should also be considering
examples where local authorities can raise capital in
alternative ways. For example, the debate about
Barnet Council, who have been looking at raising a
Barnet Bond. I know that possibly in the current
financial market things like that may be a little bit
diYcult but that is certainly something that we
should be considering in the future, politically in
relation to local capital projects where there is
essential infrastructure that needs to be built in local
communities which is not fitting in with the current
financial framework. We should be looking seriously
at alternative mechanisms for local authorities to
raise investment capital.
Mr Leslie: Could I follow up on your question about
powerlessness, but weave in the finance? I would
agree with James that actually, it is more than
flexibility. If only 15% of the total quantum comes
from the locality, with the size of grant dependency
that there is out there, that balance forces any
rational chief executive and council leader to look up
towards Ministers and how they are designing their
funding formula rather than, if that grant were
substituted for elements of local income tax or
elements of stamp duty, call it what you will, that
were a direct result of their actions as councils within
their community—that revenue of course currently
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Ev 12 Communities and Local Government Committee: Evidence
23 June 2008 Mr Chris Leslie, Ms Janet Grauberg and Mr James Morris
goes all the way to the Treasury and comes back
down. I believe it should come much more straight
to the authorities as a substitute for grant. Councils
do, I think, get into the habit of feeling powerless,
partly because they are in this dependency cycle,
although there is also a certain amount of
responsibility that local government should take on
its own shoulders, because in the annual financial
round it can be quite convenient for councils to
blame ministers and ministers blame councils, and it
goes round and round and has done for generations.
I believe that part of the constitutional reform
programme you may want to look at should be how
we can encourage the local government family to
take on more responsibility. For instance, why
should ministers be the ones who determine grant
distribution all the time? Why cannot the local
government family come to an agreement amongst
themselves—diYcult though that may be—about
how grants should be distributed? That would be a
sign of maturity in the constitution.
Q64 Anne Main: Can I just ask you one thing,
because one of the biggest issues in my constituency
is planning. This is a big example, and actually a lot
of guidance has been coming from government in
terms of the number of parking spaces you are
allowed and so on and so forth: we are asked to
deliver this number of houses and almost told in
which way we deliver it, and that is where local
authorities become very annoyed. They say “We
would like to refuse that but we cannot because the
Government says this that and the other.”
Ms Grauberg: What you have put your finger on is
that it is too simple to say there is one relationship
between local government and central government.
Actually, in housing, in schools, and in planning
there is one nature of the relationship, whereas in
other areas, for example, supporting the voluntary
community sector, business growth, economic
development, there is a completely diVerent
relationship, down to that the housing revenue
grants structure eVectively determines the level of
rent increase that a particular council might be
required to implement because of the complicated
nature of the interaction of the rent grant. In any
debate about the nature of the relationship I think
there is something that says what the relationship is
service by service. We talk about central government
being siloed; are there things that one can learn from
the nature of the relationship in one part of
government to apply in another part of government
that says actually, you can let go and the world does
not end?
Anne Main: You are saying a prosaic approach.
Q65 Dr Pugh: A few minutes ago we were talking
about the Health Service and accruing services to
robust, autonomous, strong local authorities that
have a sense of purpose and all that sort of thing.
Chris Leslie very sensibly said if it has a place
shaping role, it is silly for them not to have the levers
on services like the Health Service, which interacts
with social services and the like. James Morris said
that the objection that we would not have the
expertise could be sorted out by capacity building,
but there is another objection hanging around, and
that is to say that whereas a quango can be relied
upon to do the inevitable, local authorities are
congenitally populist and will dodge making tough
decisions, particularly in areas like health where
decisions sometimes have to be made which are not
wholly approved of by everybody. How would you
respond to that?
Mr Morris: I think you are right that the world is not
perfect, but one of the underlying principles which
should drive reform has to be about democratic
legitimacy. Local government councillors are
elected, and that has to be respected. We may need
to be rebuilding trust in local government but, in the
end, democratic legitimacy leads to democratic
accountability, and it seems to me that that needs to
underpin and be really focused on the course of
reform.
Ms Grauberg: I would make a supporting argument,
which is that local councils deal with diYcult choices
every day, and what they have is the opportunity to
explain why the options are being set out, what the
pros and cons are, in a way that resonates with their
localities. When it comes to closing a hospital or
whatever, actually there is no resonance. The
decision is taken in Whitehall and there is no
resonance, which forces local politicians into a place
where they have to oppose it, and that debate has
just disappeared. Something whereby those
conversations, played out through the press or
whatever, have all of the sides argued out in the same
place might make those choices easier to make
rather than more diYcult.
Mr Leslie: If we treat local government as though it
is somehow subservient and does not have power, as
it should have, then we will not attract people of the
ability to show the leadership necessary to get to
those tough decisions. Ultimately, how do you make
a tough decision? You have to have strong
leadership. How do you get strong leaders? You
have to make that a task worth attracting the very
best people into. I still think that fundamentally one
of the best ways of reinvigorating strong local
democracy is to see that shift in the balance of power
so that it really is fundamentally a worthwhile thing,
and possibly there are leadership issues in structural
terms as well that need to be considered. Seeing
where the buck stops at local government level is
also still not quite as clear as I think it could be.
Chair: Thank you all very much indeed.
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Communities and Local Government Committee: Evidence Ev 13
Monday 7 July 2008
Members present:
Dr Phyllis Starkey, in the Chair
Sir Paul Beresford
Mr Clive Betts
Andrew George
Anne Main
Mr Bill Olner
Dr John Pugh
Witnesses: Councillor Jill Shortland, Leader, Somerset County Council, Councillor Susan Williams, Leader,
TraVord Council, and Mr Jules Pipe, Mayor of Hackney, gave evidence.
Q66 Chair: Can I welcome the three of you and say
I note we have a change of witness at the last minute?
Obviously we welcome the fact that you have come
but I will be writing to the person we did ask to be a
witness because it is not normal for witnesses to be
substituted. The Committee invites people but
obviously we are pleased that you are here and we
can draw on your experience. This is an introductory
evidence session of our inquiry on the balance of
power between central and local government. That
means it is before we start the full inquiry. We have
had one session Sir Michael Lyons and various
representatives of think tanks. This is the second
session. What we are asking is that you suspend your
positions as the leaders of diVerent councils and
indeed your political persuasions. What we are
asking is for your ideas from first principles about
the relationship between central and local
government, obviously drawing on your experience,
but not thinking narrowly from your current
positions in local government. We will be using these
two introductory sessions to help us to draw up the
terms of reference for the actual inquiry when we will
then be advertising for evidence as usual. Can I ask
you to answer the most obvious question which is
why should local government be more than just a
local administration of services?
Mr Pipe: I think there is a great need for local
accountability. All central governments will always
want to make local government a local
administration. If a government does not, certainly
Whitehall departments will want to do that. Why
would they not, because they have a national agenda
to deliver. Local leadership and accountability are
needed, local accountability that is on a manageable
scale for residents. Accountability up to government
for delivery of services is not on a manageable scale.
Also, I think there is a need locally to establish vision
and priorities for an area, commonly called “the
place shaping agenda” in the Lyons Report. That
would have to be done locally. There are too many
diVerences within localities for that to be a regional
agenda. Those are a couple of principal things.
Councillor Williams: I would again say why should
we not? We are the ones who are held accountable
for what goes on locally. Therefore, I think we need
to have the tools to be able to deliver locally with
more discretion.
Councillor Shortland: I agree with what has already
been said but I think there is an additional point
which is that, if you are thinking about nationally
delivered services, national politicians do not always
look at what goes on in a locality other than
individual MPs looking at their own locality. It is
very diYcult for individual MPs to be able to
understand what is going on in somebody else’s
locality that could be quite diVerent to their locality.
It is about the needs of the individual localities. It is
the translation of national policies into individual
localities. It can be quite significant. From my local
perspective, in terms of the south west, you have
huge diVerences across the south west, let alone
around the rest of the country. I do think there are
some significant diVerences that not all individual
MPs would know about.
Q67 Anne Main: I would like to pick up Councillor
Williams’s comment about being the ones held
responsible. Do you believe the fact that you are
elected makes a big diVerence to be able to make the
decision locally?
Councillor Williams: Absolutely. We are elected to
deliver locally. Therefore, we should be accountable
to deliver locally and we should also be aVorded the
discretion on what is right for the locality.
Q68 Anne Main: If there was a committee that did
not have full electoral representation, would you feel
that was a disadvantage in local decision making?
Councillor Williams: No, but it is up to us, not
elected through the polling station but local
partnerships. They work with us to deliver. If you
take the local area agreement, the local strategic
partnership is the delivery body. We are the
accountable body ultimately.
Q69 Mr Olner: Some of you seem to be speaking
diVerently. Councillor Shortland spoke about
national politicians. Mr Pipe spoke about civil
servants leading the agenda, apart from national
politicians. You mentioned things coming from
Whitehall as opposed to national politicians. There
does seem to be a diVerence of opinion.
Mr Pipe: I do not think so. I think it all fits. I was
trying to say that, even if a government was true to
its word and wanted to be localist and was not trying
to be prescriptive, surely a government passes to civil
servants a political agenda to enact and wants to see
its policies enacted throughout the country. That is
absolutely fair and right. Therefore, that means that
that is giving Whitehall a mandate to impose a
national agenda across the regions and the country
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Ev 14 Communities and Local Government Committee: Evidence
7 July 2008 Councillor Jill Shortland, Councillor Susan Williams and Mr Jules Pipe
through local government. You will always have
that tension. It is a tension we will always have to live
with. It is a dynamic equilibrium and probably each
side will continue to be pushed back from either side
of the divide.
Sir Paul Beresford: I have a little experience of local
government and also of being a minister for local
government. It is always a balance. On the one hand
you have local government that hates being
restricted. You cannot scratch your nose with your
left hand because the government says you have to
use your right hand. The prescription seems to me,
over the last ten years or so, to have become very
much harder, more expensive, more detailed etc. On
the other hand, government has the things it wants
to do. When they look at local government, they see
a sea of faces from competent to utterly
incompetent.
Q70 Chair: Also in Parliament, I have to say.
Mr Pipe: I do not think it has got worse. It changes.
Sir Paul Beresford: What we are trying to find out is
what you suggest should be done to get that right
balance. I think it has gone too far personally.
Q71 Chair: Paul, we are not supposed to be arguing
amongst ourselves. Would the witness like to try and
answer whatever the question was?
Mr Pipe: I think the initial question was: has it got
worse? I do not think it has got worse. It has changed
and it will always change. The regulatory framework
will always change. Local government financing
changes, sometimes at the margins, sometimes in a
greater way. That is often what local government
rails back at, about a greater burden. Often it is just
diVerence; it is just change.
Councillor Williams: I wanted to comment on the
cost of reporting back to local government. The cost
on average to local authorities is £1.8 million a year
to report up to government. In addition there are
between 600 and 1,200 items on which we have to
report up to government. The reason that maybe
there is a bit of disagreement around the table is
because national government has to decide what it
will allow local government to do.
Councillor Shortland: The issue for me is more that
diVerent parts of national government ask you to
report on diVerent things. If they all got together and
said, “We want one single report”, that would be
much easier for us to understand. We have to join
things up together at a local level for the
comprehensive area assessment. It is very diYcult to
do that if the government does not have a country
assessment that they have joined up at central
government in terms of creating a comprehensive
country assessment. If they had done, maybe it
would be easier for us to understand.
Q72 Andrew George: On the one hand you are agents
of central government; on the other hand you are
dynamic place shapers. What stops you delivering
your vision for shaping your place?
Councillor Shortland: What stops me from
delivering in my place? I have already mentioned one
thing which is the fact that government is not joined
up. I can come together with health people locally,
police locally and come to some arrangements about
programmes that we want to deliver in order to tick
the right boxes for central government; but then
central government departments do not do the same
so there could be diVerent targets set for those
individual, diVerent components. For example,
diVerent targets set for health and diVerent targets
set for the police that do not allow us the freedom to
be able to move on. The second barrier is all the
other agencies that work around my area, whether it
be county-wide or sub-regionally or regionally. We
have lots and lots of diVerent government agencies
that we have to work with but they have no duty to
cooperate with us. They are only answerable to an
individual minister. For example, the Regional
Development Agency. There are lots of others I
could name. There are about 123 in the south west
alone, diVerent government agencies who are only
answerable to central government. Although some
of them are named in the new duty to cooperate, the
vast majority are not. How do I improve things in
my area if they have no duty to cooperate with me?
Councillor Williams: There are two main elements to
this. The first is the ever changing goal posts of
legislation and the second is finance. On the first, I
will give you an example of that: the local area
agreement. We have signed up to the first local area
agreement only months later to have to start
working on the new local area agreement. I am
almost meeting myself coming back with diVerent
types of area agreement. What was quite frustrating
about that process certainly with the new local area
agreements is that we were led to believe that there
would be up to 35 targets. It became very clear that
we were being pushed towards 35 targets and some
of those almost seemed mandatory from
government. The second element is finance. My local
authority—I will not mention individual local
authorities too much—when you include council tax
got 3.8% increase in funding this year. If you reckon
that public sector inflation is running anywhere
between 5 and 10%, you can see the constraints that
we are under. If you also take government initiatives
which seem on the face of it to be very laudable, and
they are, like concessionary fares and free
swimming, that often translates into a huge cost for
the local authority. I will give you another example.
Concessionary fares in the first year cost us in the
local authority £700,000.
Q73 Andrew George: More than the grant you
were given?
Councillor Williams: Correct, because the way it was
distributed was contrary to how the PTA (Passenger
Transport Authority) redistributed the funding.
Chair: Can we park the finance issues until later?
Can we not get too much into the nitty gritty of
detail because this is a high level concept discussion.
We do not want each of you saying how you are
badly done by. I recall that from my days in local
government.
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Communities and Local Government Committee: Evidence Ev 15
7 July 2008 Councillor Jill Shortland, Councillor Susan Williams and Mr Jules Pipe
Q74 Andrew George: We take that as read.
Mr Pipe: Sometimes the question is asked: “What
other powers would you want?” There are issues that
I have about planning and licensing. I have
absolutely nothing to do with either apart from
setting the policy originally. It is obviously down to
councillors on the respective committees to make
decisions within that framework. The national
legislation is really quite prohibitive about what you
can turn down. Sex encounter establishments are
increasingly on the agenda. For me in Hackney, it’s
betting shops. After Westminster, we have the
highest number of betting shops anywhere in the
country in a local authority. In one street a third one
has recently opened. I was very angry when I heard
one morning on Radio 4, a minister saying, “We
have given local government the power to control
what appears on their high street.” That simply is
not true. When taking up the minister on that in
writing, in the end he had to accept that it was
market forces that drove that. For example, if you
have a financial services shop selling insurance or a
bank, which are popular, there is nothing local
government can do to stop those turning into betting
shops. That is a big thing. It is not additional powers.
It is giving local government the powers that local
people think it has. Local people cannot understand
for a second when committees very reluctantly say,
“Our hands are tied.” Secondly, data and the lack of
accuracy about ONS (OYce for National Statistics)
data. Hackney—
Q75 Chair: We really do not want to go down that
road because that is being looked at by the Treasury
Select Committee. I recommend their report to you.
Mr Pipe: We reckon we are under counted by 7% so
I am glad it is being looked at somewhere. There is
a lack of coterminosity between many of the
organisations expected to work in a locality.
Whether we are in the northern region for the
Government OYce for London, whether we are in
the eastern region for something else, that does not
help. The threat of PCTs (Primary Care Trusts)
being changed in London, whereas in the rest of the
country they have gained coterminosity in a lot of
places recently, we are about to lose that because the
30 odd PCTs, it seems, are unsustainable in London.
Losing that will become a great barrier.
Q76 Andrew George: On the issue of place shaping,
Councillor Williams, you were touching on area
based initiatives, the single regeneration budget to
enable renewal and progress and coastal town
initiatives, those kinds of initiatives which the
government sends out to local areas. How do those
impact on your ability to be able to shape the place
or are you simply delivering what the government is
trying to get you to deliver through silos of funding?
Councillor Williams: I hate to be more cynical and
more seeming like I am badly done to but I do feel
that we are increasingly dancing to the government’s
tune. The local area agreement is a good example of
that when we really did try to shape that in
accordance with what our partners wanted. You end
up almost following the government line. On the
multi-area agreements, which I think in their own
way will perhaps be the real test of whether
government is willing to allow a sub-regional
discretion to deliver, they may be the real
opportunity to make a diVerence. I am not sure that
local area agreements are. They were supposed to be
the arm of the sustainable community strategy. They
have almost superseded it.
Q77 Dr Pugh: We have all put a lot of work into
constructing local area agreements, constructing
them again and going back over them and so on.
There are two views I have teased out from what you
have been saying so far. One is that they are a
misnomer. They are not local area agreements; they
are full of central directives for things you ought to
do locally. The other view, which is probably closest
to my view prior to your evidence, is that they are
simply the summation of what people are currently
doing in a rather bland kind of way. Which of those
views is more nearly correct? Is there some third view
or concept that I have not hit upon?
Councillor Shortland: I think it is the first of those, in
my opinion. Local area agreements that I have been
involved with—this is now the second time round, as
has already been said, were not just a collection of
what we are already doing, although obviously that
forms the basis for the local area agreement, what
you are already doing, because it is stretching you
and moving you into new areas. The direction that
we get from central government is quite clear and
harsh.
Q78 Dr Pugh: Is that the common perception of all
of you?
Mr Pipe: Not in Hackney. I can see why LAAS
(Local Area Agreements) might have that
description. In Hackney, we did not start from the
indicators but from what we saw Hackney as now
and what we wanted it to become. It was a discussion
about a ‘story of place’ with our partners. It was a
discussion of what we wanted to see and that drove
what the 35 indicators would be. Obviously then
there is the discussion between local government
about what those 35 should be but in our case that
did not go too badly. There are probably some
learning points that will perhaps be relevant to your
next questions.
Q79 Dr Pugh: Regardless of what they are, if they do
not get delivered—let us say you formulate them and
they simply languish as dusty documents without
making much impact to the real lives of people—
who is ultimately accountable for that, because it
seems to me the local area agreement is primarily
owned by the local strategic partnership, above all,
is it not?
Councillor Williams: Yes.
Q80 Dr Pugh: The local strategic partnership is an
amalgam of identifiers and they are not all
electorally accountable, are they?
Councillor Williams: The council is ultimately
accountable for its delivery.
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7 July 2008 Councillor Jill Shortland, Councillor Susan Williams and Mr Jules Pipe
Q81 Dr Pugh: The council is only responsible for
delivering the bits that it has agreed to deliver.
Councillor Williams: No. The council is accountable
for the delivery. The LSP (Local Strategic
Partnership) is the delivery body, but the council is
ultimately accountable and that is what makes it
such a strange creature.
Q82 Dr Pugh: You did say that the LSP is the
delivery body and the council is the accountable
body. Is that not a bit odd?
Councillor Williams: Yes, it is very odd.
Chair: There are lots of examples of that.
Andrew George: That is not a question.
Q83 Dr Pugh: My opinion does not matter.
Councillor Williams: I agree with what the Mayor
said but, no matter how you do it, whether you build
it up from the bottom up or the top down, you are
still trying to get your council area’s views and vision
into the government’s set of indicators. There was no
real way of being able to choose your own local set
of 35. It came from the government shopping list.
Dr Pugh: The concordat between central and local
government sounds fine. What is it?
Chair: If the concordat does not deliver, what sort of
constitutional settlement do you want?
Q84 Dr Pugh: I am sure there are documents and
conferences about it. I am sure people talk about it
in the LGA (Local Government Association)
magazines and that sort of thing but, in real life
where there is a battle going on between central and
local government as highlighted by Paul Beresford
earlier, what real diVerence does having that
concordat there make?
Mr Pipe: I suppose it is in the delivery of it from both
sides. It is only three sides at the most long and who
would not agree with what is in there? It is
motherhood and apple pie really.
Q85 Dr Pugh: I accept that as an answer.
Mr Pipe: That does not mean to say that it is easy to
comply with. Coming back to the LAA process, I did
say that we found agreeing our 35 a relatively easy
task. However, once those had been agreed through
the GoL (Government OYce for London) and with
the relevant government departments, then other
government departments start saying, “Why not
mine? You have permed 35 out of 198; why is mine
not in there?” There were some really hard tussles,
particularly on NI35, the one on preventing violent
extremism. The pressure that people came under
from the Home OYce to include that was quite
extraordinary.
Q86 Dr Pugh: In reality, when you get a directive
from a minister saying that you must do this or that
and you go to your filing cabinet, get out a concordat
and read the details, can you not phone the minister
and say, “This was not in the concordat and is clearly
inconsistent with it”? You cannot, can you?
Councillor Shortland: The concordat is more about
the relationships. It is not about the individual
specifics, saying, “You are going to have this; you
are not going to have that.” The real test for me will
be when a government minister starts saying, “You
are now going to do this” and whether we are able or
whether local government as a whole, as a body, is
able to say, “Hang on a minute. No, that is not part
of the relationship we agreed we are supposed to be
equal partners in and not one person telling the other
person what to do.” From my perspective, we are
already seeing a little bit of that because of the new
sub-national review, where the government is
saying, “No, the powers for the planning are not
going to stay with local authorities. They are going
to our agency.” What we are saying as local
authorities, I think pretty much around the whole
country, is, “Hang on a minute. That cannot be
right. This is supposed to be a power that is with
local authorities or local government, not given to
an agency.” The real test for me will be whether we
do truly have an equal partnership because at the
LGA conference last week John Healey was saying
to us all, “No, your role will only be scrutiny” and I
do not seem to have heard the message back so far
that that is not the role local government wants to
have.
Q87 Mr Betts: Is that not because the concordat is
nothing more than a piece of paper that has been
signed over a cup of tea between the LGA and
ministers? Council leaders may have heard of it.
Councillors probably have not. I do not know. Most
council oYcers certainly have not heard of it. The
public would not know what you were talking about
if you mentioned it to them. If that is the best local
government can do, I will turn it around: are you not
selling yourselves short?
Councillor Shortland: The diYculty is that none of us
here has any power in that sense individually. We
have to try and work collectively. The best we can get
is what we can collectively agree to with central
government ministers and it is little baby steps, is it
not? The concordat is better than the relationship we
had before the concordat.
Q88 Mr Betts: Is it? Is this not a chance for local
government to say what it thinks its role in a
constitutional settlement of some kind is? We talk
about how we appoint judges and who sits in the
House of Lords and those sorts of issues.
Occasionally, local government gets mentioned as a
fag end of this debate. In this place, you pass a local
government act, a housing act, an education act, and
it aVects local government. Nobody seems to
recognise that importance. When the Scottish
Parliament and the Welsh Assembly were set up, the
legislation was called constitutional legislation. We
took it on the floor of the House in committee stage.
It was then underpinned by a referendum in both
countries so it is inconceivable that we could change
that relationship without a constitutional debate.
Local government has not got itself into any of those
areas, has it, for discussion?
Mr Pipe: If any government or putative government
wanted to come forward and propose that—
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7 July 2008 Councillor Jill Shortland, Councillor Susan Williams and Mr Jules Pipe
Q89 Mr Betts: How about local government coming
forward?
Councillor Williams: Can I perhaps turn that on its
head and ask: is that the best that government can
do, the local area agreement? The Sustainable
Communities Act does allow for local government
to suggest how it would like to shape the place it is
in. There will be an agreement upwards rather than
downwards.
Councillor Shortland: We are in a position of having
a real test of exactly what you are saying. In the subnational review across England, local authorities
have said, “This is what we want.” We now have the
power to get what we want under multi-area
agreements. Local authority leaders across the
whole of the region can combine themselves under a
multi-area agreement. It is all written in the
legislation. We have the power to do it. We can then
start saying, “We are not going to cooperate with
you, central government, if you put the power into
the RDAs (Regional Development Agencies).” That
is happening across the country. If you look at the
responses that have gone from local authorities up
and down England to central government on the
sub-national review, that is what they are all saying.
This is the first test of whether central government
means what it says, because the original intention, as
we understood it, of the sub-national review was to
devolve power down to local authorities. All they are
doing is devolving the power but into the hands of
an agency instead of into local authorities. That is
not good for any of us, in my opinion. That is what
we have been saying across the country. I sit in the
chair of a regional assembly for another week and I
sit with the English Regions Network. Every region
is saying the same. That is not true. One region has
said, “We are happy to work with what the
government has given to us” but every other region
has said, “No, we are not going to do it.”
Q90 Anne Main: You are saying you are not happy
for the powers to be going to regional development
agencies. Is it possible for local government to act as
a strong leader when you have to work with so many
regional bodies?
Councillor Williams: The multi-area agreement is a
very good example of how there can be a mature
discussion between the regional tier and the subregional tier. In Manchester we have signed oV our
multi-area agreement and there is a very mature
debate going on between the North West
Development Agency, of which I am also a member,
and the sub-regional tier as to how funding will be
devolved down. I do not think we are having the
problems that perhaps others in the rest of the
country are. Why? It just comes straight down from
government.
Q91 Chair: Which would suggest it is not the
structure that is the problem, if you are not having
problems and the others are. Why do you think you
are not having the problem and the other regions
are?
Councillor Williams: Because we have worked very
well to get what we think is the right thing.
Q92 Anne Main: Ms Shortland has just said, “We are
not happy if the powers are handed over for example
to the regional development agency. That is not
what we thought would happen because that is not
devolving power down to a local level. That is
devolving power over a non-elected level”, which is
exactly what you were saying. Why are you not
having a problem with that, or do you have a
problem with that?
Councillor Williams: We are not because some of us
who are sub-regional leaders are also on the regional
development agency. We are working well together,
maybe by accident or design. I do not know. We
have managed to make it work. It would have been
easier if it had just come straight down from
government though. We would not have had to have
that debate.
Q93 Anne Main: If you were not on the RDA, you
would not have that representation.
Councillor Williams: Possibly not, no.
Q94 Anne Main: Therefore, it is a happenstance that
you happen to have two hats on.
Councillor Williams: Correct.
Q95 Anne Main: That is a bit like being a district and
a county councillor at the same time.
Communication is great because you know where
you are at both meetings.
Councillor Williams: Correct.
Anne Main: Ms Shortland, have you any more to say
on that because obviously you are not in the happy
position of wearing the two hats by the sound of it,
so therefore you are finding communication—
Q96 Chair: You are on the county council and the
assembly. Is that right?
Councillor Shortland: But not on the RDA.
Q97 Anne Main: Therefore communication seems to
be the issue because if you are not in two places with
two hats you do not seem to know what is going on.
Councillor Shortland: It is not that I do not know
what is going on. I know exactly what is going on.
Q98 Anne Main: You cannot influence it.
Councillor Shortland: I do not have any control over
it. The RDA is answerable only to its minister, not
to anybody else. It is not answerable to me. There is
no power or control that I or even a collection of
leaders in my region can have over the RDA because
it is answerable to the minister. It is not just the
RDA; it is the Highways Agency and there is a whole
list of agencies that would have exactly the same
position. They are not answerable to any of us in
terms of being local authority leaders and therefore
we are not able to influence how they use their
resource to improve our region.
Q99 Anne Main: It does not matter how good they
are with communication. The fact is you are not in a
position to be able to aVect their decision making.
Councillor Shortland: No.
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Ev 18 Communities and Local Government Committee: Evidence
7 July 2008 Councillor Jill Shortland, Councillor Susan Williams and Mr Jules Pipe
Q100 Chair: Can we get the viewpoint from London
where obviously it is diVerent?
Mr Pipe: I suppose I have less to say on this than my
colleagues simply because if people do not like it
they can vote them out and apparently they did. We
are answerable to someone other than ministers. My
borough worked quite happily with that tier of
government. There was a debate about the levels of
intervention over planning, housing targets, things
like that. That was a healthy debate. It is one that
will no doubt continue with the new Mayor. Coming
back to the original part of the question about giving
plenty of space and scope for local leadership,
whether within the borough or as an example
amongst the five boroughs in the Olympics, whilst a
lot of people are focusing on 2012 and the event, the
bigger, place shaping agenda of the whole of the
lower Lee Valley has been driven by the five
boroughs coming together, picking up the ball and
running with it. That space was created despite the
existence of the GLA (Greater London Authority)
and despite the intense interest of the then Mayor.
Q101 Anne Main: Despite, not working in
partnership with?
Mr Pipe: I said “despite” theoretically. I think it was
posed that the existence of these bodies would
obviate any need for local leadership and it would
suck everything up to that tier. We did work fine
with the Mayor and the relevant ministers.
Q102 Anne Main: Since you say you have a slightly
diVerent set of criteria and a slightly diVerent way in
which things aVect you, do you think this could be
something that is very diVerent once you get out of
London?
Mr Pipe: I think it is diVerent simply because it is
elected. I can forgive some of the things that might
be interpreted as a taking up of power, although it is
generally to be frowned on and I would agree it
should be frowned on, but I can forgive it if, at the
end of the day, that whole body is directly elected.
The complaint is that these regional bodies are not
elected. Then you are onto the question of should
you have tiers of regional government. You could
probably have a whole select committee on that
alone.
Q103 Mr Betts: Do you think the government’s
response to the Lyons Report was a disappointing
response to a disappointing report?
Councillor Shortland: We were just saying, “What
response?”
Councillor Williams: We described the Lyons
Report as like Waiting for Godot because it just never
came. Eventually it did and I suppose all that has
been got out of it is the ability to raise the
supplementary business rate, capped at 2p. What
else can we say about the Lyons Report?
Q104 Chair: Do the other two dissent or roughly
agree?
Mr Pipe: I probably would dissent. It was not full of
answers. It did not give a blueprint for the direction
in which we should all go, both central and local
government. I think it certainly asked the right
questions. It started oV just looking at financing and
Michael kept on taking a step back further: “Before
we can look at the money, we have to look at what
is local government expected to do before we start
talking about how it is financed.” It is not my place
to tell the Committee what it should be looking at
but, as well as asking the three of us, I am sure you
will be returning to the Lyons Report and the
contents are the very questions that we should be
asking ourselves about the central and local
government relationship.
Q105 Mr Betts: One obvious question is: should not
local government have the right to raise a bigger
percentage of its finance? Until it can do that, will it
ever really increase its standing with the public, its
accountability, its status and whatever else we want
to see?
Mr Pipe: Obviously the drift has been the wrong way
over the last couple of decades. Going back about 20
years, something like 30% of local government
funding was funded by business. Now it is down to
about 21%. There has been that shift so it is no
wonder, although that is one reason, why council tax
has increased over its lifetime.
Councillor Shortland: The other reason why council
tax has increased and why we have a problem is it is
not just about local government being able to raise
more money locally, which of course it should be
able to do. It is also about the burdens that are
placed upon local government by central
government.
Susan
talked
earlier
about
concessionary fares. It is not just concessionary
fares; the landfill tax burden is huge for local
authorities in that sense. There are huge shortfalls in
the licensing services. It is about central government
changing legislation and placing burdens upon local
government as to the delivery on without properly
funding it. Even if local authorities were given lots of
power to have their own council tax raising ability,
it is very diYcult for local authorities if the
government is going to continue to place burdens on
local authorities for which they then have to raise
local rates without having any control.
Q106 Mr Betts: I am not sure where that argument
takes us. It either takes us to local government does
not want these powers or local government wants
more funding from central government, neither of
which takes us in the direction of a more important,
self-assertive and independent local government,
does it?
Councillor Williams: There is the argument about
the relocalisation of business rates. If my authority
could relocalise all its business rates or even some of
them, we would almost be a self-suYcient authority.
We get back about a third of what we raise. I also
want to bring in the issue of the LABGI grant, the
Local Authority Business Growth Incentive Grant,
which appeared to disincentivise those authorities
that had historical high business growth. I think that
needs to be looked at again as well.
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Communities and Local Government Committee: Evidence Ev 19
7 July 2008 Councillor Jill Shortland, Councillor Susan Williams and Mr Jules Pipe
Chair: I am not sure that any of you have addressed
the fundamental philosophical point that Clive was
trying to put as opposed to specific examples of how
you would increase local government funding. As I
understood Clive’s question it was, if you are saying
that you do not want these additional things to do,
in what way are you saying that local government
should be more important?
Sir Paul Beresford: There is a sub-text to that. Many
local authority people tell me that the cost of some
of the pointless things like CPA (Comprehensive
Performance Assessment)—
Chair: We have been through that.
Q107 Sir Paul Beresford: We are going through it
again. Have you sat down and worked it out,
because the cost of CPA coupled up with gearing on
the local council tax payer and similar things like
best value and all these various audits seems to be
pretty astronomical for little or no gain.
Mr Pipe: I am sure if Steve Bundred was sitting here,
he would make a strong defence of what the eVects
have been on local government, driving up
standards, but that is for him to do. Those costs pale
into insignificance when compared with the swings
one gets under the four block model of funding that
we now have. The removal of damping, say, on
social services could cost an authority, as it did ours,
£25 million. If it was not for the floors, we lose that
£25 million. What it does mean is that we do not see
any money that finances new burdens, that goes into
the formula, until all that £25 million is eaten up.
Other than any floor increase, we will not see any
additional money for additional burdens until about
2019 until someone comes along and changes the
formula again..
Q108 Mr Betts: This is another example where local
government does not have a big picture to paint for
us. There is a real feeling that what you want is
independence and an ability to deliver local services
for the needs of local people. Should not local
government come forward and say, “Actually, we
believe the vast majority of the money that we spend
should be raised locally; that all central government
should be doing is some sort of equalisation process
according to the diVerent needs and resources of
areas”, which is probably about a third of the total.
You can probably do it on something like that. Then
you can try to find some consensus about how that
significant majority of money that you want to raise
locally should be raised.
Mr Pipe: This is where I come back to Lyons again.
He proposed that there should be a mosaic of
charges and an incremental change. I do not think
that any government would get the repatriation of
business rates through because the business lobby
would be too strong on it. They just do not trust local
government.
Q109 Chair: Are they right not to trust local
government?
Mr Pipe: They probably were right not to trust it in
places like Hackney ten years ago but there are
probably very few places where they would not trust
it now. Reputation lingers. I am a three star, strongly
improving authority. It puts me in about the top 22
authorities in the country, but most people’s
perception of Hackney would not be that. Perhaps
that comes as a surprise to Members here. That
reputation is what you are dealing with and that
reputation goes across many other patches of local
government. Perhaps business would not be justified
in thinking that but they would think it nonetheless.
Q110 Mr Olner: There is an aspiration as to what
local government wants to achieve for its
community. There is also a service that you need to
do because central government says, “These are the
rules and regulations. This is what you should do.”
Do you believe that capping should go?
Councillor Shortland: Yes.
Councillor Williams: Yes.
Mr Pipe: Yes. I say that as an authority that over the
last three years has set a zero increase in council tax
levels and probably 1.9% the year before that. I say
it out of simple principle.
Councillor Williams: For low spend authorities it is
even more appropriate that it should go.
Councillor Shortland: If you are going to cap, you
should tell people. We now have three years’ worth
of funding. If you are going to cap, let us know now
what you are going to cap at. How can you set your
budget if you do not know what the cap is going to
be until after your budget has already gone through
your council?
Q111 Anne Main: I can see some grimaces on faces
with the Chair and Clive’s question. My
understanding was, correct me if I am wrong, that
what you were saying to the Committee was that,
because you are being told to deliver extra things
such as free swimming and concessionary bus
passes, that eats into your budget so basically
government is spending your money. Even though
you might raise more locally to top up because you
wish to do that, the government is still coming along
with a shopping list. You want the shopping list
removed to some extent—is that right?—so that you
locally can decide whether or not it is a priority to
give free swimming rather than it being a
government priority? You want that devolved down.
Is that right?
Councillor Shortland: Yes.
Q112 Anne Main: I think we are getting slightly
diVerent views here.
Councillor Shortland: I was not saying that we did
not want the powers. We do want the powers but, if
you are going to prescribe something at central
government level that has to be delivered, then you
have to fully fund it.
Q113 Mr Betts: Local government is against ring
fenced grants.
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Ev 20 Communities and Local Government Committee: Evidence
7 July 2008 Councillor Jill Shortland, Councillor Susan Williams and Mr Jules Pipe
Councillor Shortland: Absolutely.
Mr Pipe: It does not have to be ring fenced.
Q114 Chair: How can it not be ring fenced? Let us
take free swimming. If you want to be fully funded
for free swimming, are you then saying, “We want to
be fully funded but we are not necessarily going to
spend it on free swimming”?
Councillor Williams: If we want free swimming
within our funding package, can we say that we want
free swimming rather than government saying we
want free swimming and then leave us stranded as to
how we are going to pay for it?
Q115 Chair: You would not get the money, so there
would be money for free swimming and councils
could decide. Are you saying, just to use that as an
example, that government should say, “We want
you to introduce free swimming in two years’ time
and we will give you this much funding for it. Do you
want the funding or not?” and, if you decided not to
do the free swimming, you would not get the
funding?
Councillor Williams: I am very cynical about the
government’s announcement of free swimming
because—
Q116 Chair: Just as an example.
Councillor Williams: If we get a funding package
from government and within that funding package
we want to introduce free swimming, we should be
able to do it. Why does the government claim it as its
victory and we then have to struggle to deliver it?
Q117 Chair: Using free swimming as an example on
this point that Clive was trying to raise, the LGA is
against ring fencing funding. You, Councillor
Williams, then seemed to be saying that it would be
okay to have it ring fenced if councils could decide
they did not want the money and they were not going
to give the free swimming either.
Councillor Williams: I did not say that. I said that it
should be a local decision, not a government
decision.
Q118 Chair: You should get the money and then you
can spend it on something else.
Councillor Williams: We should get a local
government settlement and decide how we wish to
spend it.
Q119 Sir Paul Beresford: Would you say the
concessionary fare decision years ago in London
amongst a number of authorities was an example of
that working?
Councillor Williams: It certainly was not because it
was devolved down to the PTA, who distributed it as
a per capita funding for the authorities and we lost
out significantly. The way it was done was quite
crude.
Q120 Andrew George: I am going to ask three
questions, one to each of you. Councillor Shortland,
are you not simply agents of central government? If
you were replaced by quangos and commissioners,
would your local electorate notice any diVerence at
all? Convince me that you do make a diVerence other
than the political froth of argumentation that goes
on in the council chamber.
Councillor Shortland: If you look at where the
agencies already exist and the work that they do, if
central government decides that an agency’s focus
should change, they just drop what they are doing
and move over to the new focus. For example,
recently lots of Arts Council funding was suddenly
dropped and all the community was left in the lurch.
They moved away to funding in a diVerent way.
Q121 Andrew George: That is just initiative funding,
not statutory duties though, is it?
Councillor Shortland: No. I think there are some
statutory duties amongst that. I am using that as an
example. The local people have nowhere to go other
than the minister himself, who is not accountable to
them electorally. They have no way of fighting that
decision other than doing a bit of publicity and
hoping the government will change its mind. If local
authorities were not there, local people would have
no way of changing the priorities. I come back to
what I said right at the very beginning. Central
government ministers, MPs that are elected, can
only do what they can do if they have power. If they
do not have power, all they can do is argue and there
is nobody accountable to the local people. There is
nobody accountable to my local community in terms
of concessionary fares for example, where the local
authorities are having to close swimming pools and
other things in order to meet the costs of
concessionary fares, because they have nowhere else
to fish in the pool for money.
Q122 Andrew George: Councillor Williams, turning
the question entirely on its head, those services like
police and health which are currently delivered by
quangos, by commissioners, by people appointed by
central government eVectively; are those the kinds of
powers that you think local authorities should be
taking over?
Councillor Williams: That is an extremely good
argument for that, yes.
Q123 Andrew George: How would you be able to
convince me and the government that you can and
should take those on? Why would it improve
services?
Councillor Williams: We could argue about the
health service until next week but I do not think we
are going to. The health service currently suVers
from a complete lack of local accountability. I still
cannot understand why such a local service can be
delivered eVectively from Whitehall.
Q124 Andrew George: Mr Mayor, taking that a stage
further, if local authorities are to take on that type
of responsibility—let us take health—that might
result in postcode lotteries; in other words,
variations in services at a local level. Is that
something that you would consider desirable if we
are to pursue the argument of devolution which I
think you were enunciating earlier?
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Communities and Local Government Committee: Evidence Ev 21
7 July 2008 Councillor Jill Shortland, Councillor Susan Williams and Mr Jules Pipe
Mr Pipe: Obviously government will want to see
minimum standards. We already have a postcode
lottery for absolutely every single service that local
government runs and that is acceptable because that
is local government. It is democracy. If people think
that there should be a balance of funding of the local
pot shifted away from street cleaning and they think
why do they have a street cleaner on every two
streets, it does not matter if we have a bit more litter
and we use that money to spend on something else.
Those are the kinds of decisions that local people
should be entitled to make. If people do not agree
with what is being proposed, then vote them out and
get somebody else in that you can agree with. This
goes back to the funding issue. What local
government would really like is the flexibility of the
total pot. People have advanced arguments on the
Directly Elected Mayor (DEM) issue that, if you go
for a DEM, you should have more say over the
totality of public expenditure in your locality. I am
sure every council leader would agree with the same.
Q125 Andrew George: Given the fact that often the
contrast between one area and another is something
which is highlighted by the media, other than the
media, are there any others? In other words, is the
contrast the postcode lottery? Is that something
which your constituents complain to you about,
contrasting your service with those of other areas?
Mr Pipe: That is always going to happen. People are
going to see that those streets over there are cleaner
than ours. I am not talking about Hackney because
our streets are rather clean.
Q126 Andrew George: Is it a major theme or is it
something which is more in the media than in the
local discourse?
Mr Pipe: The local government concordat certainly
is not something that they discuss in the pubs,
highways and byways of Hackney, but up and down
the country, certainly on visible services, that is the
kind of pub type conversation that you will get. They
will say, “I went to such and such a park. They have
great services there. In my council, the parks are
terrible,” or whatever. You will get those real
conversations on the street.
Councillor Shortland: You get people moving to
areas dependent upon—
Mr Pipe: The schools.
Councillor Shortland: It is not just schools now. We
get people moving into Somerset for health services:
health tourists we call them. People move down to
the area because they have elderly relatives who they
know will get a better standard of care in our
authority area.
Q127 Andrew George: Quangos deliver whereas
local government does not?
Councillor Shortland: No. I am talking about social
care, not the PCT services.
Q128 Anne Main: You spoke about powers of the
police and health being brought down. What level
are we talking about? Are you talking sub-regional
as being a level that was acceptable? Are you talking
of sub-regional level, county level or district level?
How far down do you want the power to come?
Councillor Williams: Just thinking of the structures
that are in place now for Greater Manchester,
probably a sub-regional police service would be
appropriate. There was talk a few years ago of
making the police service much broader so Greater
Manchester Police would give a county-wide police
service, but sub-regional and local as well.
Mr Pipe: The PCT is the easiest one because you
simply do the commissioning and it would be an
extension of what local authorities already do about
so much social care. PCTs would definitely be
straightforward. The police are more diYcult.
Certainly in London I would want to see more direct
say over the neighbourhood teams but generally on
the borough police an accountability of the borough
commander to the authority.
Councillor Shortland: I would agree. We already
have coterminosity with our PCT, so we are
delivering most things together. Hence the comment
earlier about adult social care. We are already
working together so that would be a natural one to
move over to local authorities and, to a greater
extent as well, the police services. Our police
authority is Avon and Somerset and the Somerset
sections are two police sectors coterminous with out
county boundaries. We are already delivering the
neighbourhood work together collectively.
Q129 Anne Main: Sub-regionally in Somerset? That
is not west, is it? That is sub-regional?
Councillor Shortland: Avon and Somerset is the
police constabulary area and Somerset is the county
area. We are already doing that work together
anyway.
Q130 Chair: You have a two tier system obviously
which neither of the other two have. The London
Mayor is a bit diVerent. Are you suggesting it should
be at county level that all of that coordination would
occur then in every case?
Councillor Shortland: No. In Somerset already, in
coordination with the police, they have two police
districts—
Q131 Chair: I understand that point. As a generality,
would you expect it to be the county that would be
the elected voice for the police and health or are you
suggesting a role for districts?
Councillor Shortland: If you take the police as an
example, at the neighbourhood level, the
neighbourhood policing, the work with the
neighbourhood beat managers and the beat teams is
already done at a sub-district level because it is at an
area level in south Somerset.
Q132 Mr Betts: The commissioning of the health
services is a big idea. Across local government,
irrespective of party, you are going to advance a
major opportunity to expand local government’s
remit and the importance in local communities. One,
accountability: PCTs are not; local government is.
Secondly, to join up health and social care together
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Ev 22 Communities and Local Government Committee: Evidence
7 July 2008 Councillor Jill Shortland, Councillor Susan Williams and Mr Jules Pipe
in a way with joint arrangements. Some will work
better in other areas than they do in some. To pull
this together under local government’s overall
responsibility seems to me to be an issue that could
really take the agenda forward. Do you think people
at local level will be concerned to find local
councillors, as they might think, dabbling in health,
with party politics being brought to the National
Health Service, or do you think now that the
reputation of local government is so much enhanced
compared with where it used to be that people will
feel reassured about having health run by local
councils?
Councillor Williams: If it works, they will be pleased
with it. We, like Jill, have already started building up
that partnership with a PCT. If it draws down
economies of scale and enhances services to people,
I think they will be happy.
Mr Pipe: I would agree. It would also depend how it
was done. You are absolutely right in what you just
said. So much already is delivered jointly. It would
be an expansion of that. If it was dressed up as, “We
are passing local health services to the local council”,
that would be selling it rather badly. I am back to the
perception lagging behind the reality when I
mentioned businesses. If it was an incremental move
and the accountabilities were moved, it would not
generate negative publicity. For example, when
councils took on the scrutiny role of local health
services, no one minded and said, “This is
councillors dabbling in health issues.” In the same
way that scrutiny took an interest in the local health
economy, the extension taking an interest and
control over the local health economy too, done in a
similar way, should not frighten anybody.
Councillor Shortland: We already have joint
appointments. I think most councils are either
moving towards or already have joint appointments
on public health. We have two oYcers now working
on public health across Somerset, paid for jointly by
the PCT and the county council. The public health
oYcer sits on our executive. We have one of our
members and oYcers who sits on the PCT as a
member of the council as opposed to being the board
appointed by central government. We are already
doing it on our own in spite of government.
Mr Pipe: A lot of these things come about because
of positive cooperation between bodies as opposed
to the more solid accountability that would come
about by a joining up of them. I have an excellent
relationship with my borough commander. The
council and police cooperate very closely. It is
because we get on well. But, it is almost down to
personalities and that is probably not quite right, is
it? It ought to be on a firmer footing than that, with
proper accountability.
Councillor Shortland: By default instead of design.
Q133 Mr Olner: I agree. I think this is a new role for
local government to play as elected people as
opposed to oYcers fulfilling these roles. I asked you
a question about capping. Do you think police
authorities, if you are playing a senior role in them,
ought to be capped as well?
Mr Pipe: That is almost beyond my area of
knowledge because we are dealing with the MPA
(Metropolitan Police Authority). What I was
arguing for really was control.
Mr Olner: My local police authority was capped.
Q134 Chair: It is probably relevant to the other two
of you if you do have police authorities.
Councillor Williams: I would say, like local
authorities, they should not be capped.
Q135 Chair: No; whether you should get rid of them.
If you want councils to be accountable, should you
get rid of them? Bill strayed into capping but should
the police authorities be scrapped if local councils
have that accountability directly?
Councillor Williams: Possibly so, yes.
Councillor Shortland: Before you start looking at
who is scrapping this and who is doing what, I think
you start to look at the functions of the police
authority. What are they actually doing? Most of the
functions of the police authority are around the back
oYce, the business side of it. It is the constabulary,
the chief constable, who decides the format and the
working of the police, not the police authority
members. That is more the control that I am looking
for, looking at what the chief constable does and
having some influence over that, rather than the
working of the police authority. I sat as a police
authority member for a year and could not quite
understand from the beginning to the end of that
year what real influence they had over the
constabulary. I would much rather not say, “Let us
scrap that and have that power” if that is all I am
going to get.
Q136 Dr Pugh: If it is the case that we ought to scrap
the police authority or democratise it, what on
earth—maybe this is a rhetorical question—was the
point of having independent members dragooned on
or volunteering themselves on and magistrates who
are supposed to add to the democratic
accountability mix in some way? Is it your view that
they currently do?
Councillor Williams: I think they do but if you were
going to restructure the police in terms of
incorporating them into local government,
councillors sit on the police authority anyway.
Would there be a need for a police authority?
Q137 Dr Pugh: I was asking more about the
independent members and the magistrates who are
thought to have quite a distinctive role, quite
separate from councillors, and to bring something to
the feast which ordinary, democratically elected
people could not.
Councillor Shortland: The independent members are
appointed by central government. The magistrates,
as I think everybody knows now, are not local
people any more. They have a disconnect with the
local community. I am not entirely sure whether the
outcome that was intended when those people were
put on to police authorities has been achieved.
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Communities and Local Government Committee: Evidence Ev 23
7 July 2008 Councillor Jill Shortland, Councillor Susan Williams and Mr Jules Pipe
Q138 Sir Paul Beresford: We have elected Mayors
and you say the chief constable runs things. Can we
elect a chief constable?
Councillor Shortland: That is a diYcult question to
answer because I am not entirely sure that the power
the chief constable holds is necessarily held at a chief
constable level.
Q139 Sir Paul Beresford: Instead of having a police
authority?
Councillor Shortland: The power that the chief
constable holds is for the whole of the police force
area. There are some aspects of police work that I
think are more appropriately held at a local
authority area level. Neighbourhood policing has
been a really good initiative. We have PCSOs (Police
Community Support OYcers), a really good
initiative. Why is the chief constable still holding
reign over that work? If it is accountable to the
community, beat managers and PCSOs cannot be
moved from communities. Why should it not be
done locally by local councils?
Q140 Chair: I think Paul is trying to get you to agree
with him. Just say yes or no.
Councillor Shortland: Potentially. I did not want to
upset my chief constable.
Q141 Chair: Can I thank the three of you very much?
It has been very useful in rehearsing the ideas we
hope we will be taking forward in our later inquiry.
Thank you very much indeed.
Councillor Shortland: Thank you to the Committee
for allowing me to stay.
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Ev 24 Communities and Local Government Committee: Evidence
Monday 10 November 2008
Members present
Dr Phyllis Starkey, in the Chair
Sir Paul Beresford
Mr Clive Betts
John Cummings
Jim Dobbin
Andrew George
Anne Main
Witnesses: Mr Stephen Hughes, Chief Executive, Birmingham City Council, Sir Richard Leese CBE, Leader,
Manchester City Council, and Mr Eamonn Boylan, Deputy Chief Executive (Regeneration), Manchester
City Council, gave evidence.
Q142 Chair: Can I welcome you to this first evidence
session in our inquiry on the balance of power
between central and local government? You will
know that you are the first of three groups of local
authorities this afternoon, starting oV with
obviously two large metropolitan areas. So can I
start with the first question? I note that both of you
argued very strongly for greater powers being
devolved to councils, from your own experience, and
largely it seems to be the arguments are coming from
cities. Are you suggesting that cities have a
particular claim for greater powers, or do the
arguments that you make apply to local authorities
generally?
Mr Hughes: There is definitely a particular role for
cities, and coming from larger cities, you would
expect us to say that. Based on the evidence which
was done in, for example, the Parkinson report,
which demonstrates that cities are a key driver of the
economic performance of the country, but also
underperforming compared with European
counterparts, we have started from the perspective
that there is a greater role that we could make, and
that we can contribute more if we are able to have
more powers at a local level. I do not think
necessarily that that means that other areas could
not form eVective sub-regional arrangements which
could similarly deliver benefits, but clearly it is really
important that the major conurbations are able to
help drive forward the economic performance of
the country.
Sir Richard Leese: If I could give a practical
example: one of the things we are attempting to do
in Manchester is tackle enormous levels of
worklessness, even more diYcult in the current
climate, where we have to get not only what local
authorities do but services from JobcentrePlus,
services funded from the Learning and Skills
Council and so on, joined up in a way that they
historically have not been. We take the view that we
need more power in order to be able to do that
joining up eVectively, but it is a particularly urban
issue, a particularly city issue, and there are other
parts of the country who would neither have the
need to do that, nor would they have the capacity to
be able to do that as well. I think smaller rural local
authorities simply would not have the capacity to do
that. So we would argue for a diVerentiated
approach in that the devolution and decentralisation
we would see coming to cities is not necessarily the
same that would go to other areas.
Q143 Sir Paul Beresford: The other side of the
argument, and remember I have been on both sides,
not at the same time—I am not a Liberal—I have
been on both sides at diVerent times, is that the
Government have been elected on a programme,
they have been elected with control of the economy,
including unemployment, et cetera, and they will
have a pattern that they wish to be installed
throughout the country. How could they risk letting
you loose, in eVect, from their point of view, with the
prospect of possibly not following their guidelines
and going oV on your own?
Sir Richard Leese: I would say that the framework
of local area agreements, and, more recently, multiarea agreements, allows a contractual arrangement
to be established between central government and
local government about meeting agreed outcomes
for that particular area. What I think central
government often then tries to do, and does not have
the capacity to do, is to try and then tell us how we
are going to achieve those outcomes as well as what
the outcomes are. I think what we would argue is
that we are in a far better place—on outcomes that
we agree with Government, there is no division
between us whatsoever, but we are better placed at a
local level to know what mechanisms are needed in
order to be able to deliver those outcomes.
Q144 Chair: Why does that not also apply to smaller
councils?
Sir Richard Leese: Again, I go back to the capacity
issue. First of all, if you take worklessness in some
parts of the country, it is nothing like the level you
will find in large urban areas. That is why I think it
is a good example of the need for diVerentiation, but
also particularly small district councils simply would
not have the capacity to be able to drive an agenda
that needs co-ordinating a whole range of public
sector authorities. So it is a diVerence in need and
capacity, as I said earlier.
Mr Hughes: Just in answer to your question, what
local authorities are doing through local area
agreements at the moment is eVectively trying to knit
together all the various diVerent funding streams
which are supposedly designed to deal with things
like worklessness. So you are working not just with
Working Neighbourhoods Fund which authorities
like ours have, but LSC (Learning and Skills
Council) funding, JobcentrePlus, the RDAs
(Regional Development Agencies), all of those have
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Communities and Local Government Committee: Evidence Ev 25
10 November 2008 Mr Stephen Hughes, Sir Richard Leese CBE and Mr Eamonn Boylan
diVerent sets of accountabilities back to central
government, and what we are spending a lot of time
doing is trying to get them all connected to deliver
the local area agreement targets. Part of what we
have argued for, both of us, in our slightly separate
diVerent ways, is that, having cleared one line of
accountability on an area basis back up to
Government, whether that is through a local area
agreement or not, would help be more eVective in
delivering services at a local level. That is about
making local delivery agencies all accountable in one
way, instead of having lots of diVerent ways in which
they are made accountable for what they are doing.
Q145 Sir Paul Beresford: Local area agreements,
according to the Government, are a means of setting
you free.
Mr Hughes: Local area agreements are a massive
step forward compared with where we were, but
because you have to work it through a partnership
arrangement, it is very dependent on forging
relationships at a local level, which sometimes work,
and we believe we are doing really well at it, but it is
still diYcult to make all those things pull together.
Q146 Sir Paul Beresford: If I come back to my
original point, if you are sitting as a minister, and
you are looking at local government, you have, as I
have used the phrase before, the good, the bad and
the ugly, and I am not putting you into any of those
classes: how can Government broadly release more
down to local government than they are doing now
when it has such a piebald mixture of quality?
Mr Hughes: I give my own example, which is very
close to my heart, what we have to do to get funding
to do the refurbishment of New Street Station—
£400 million in total—three diVerent government
funding streams, three diVerent appraisal processes
to get it agreed, and then once you have the funding
agreed, we then have micromanagement of the
project. It all takes a lot longer than it should do.
Sir Richard Leese: Can I take issue with your
description of that I think “piebald” range of
quality? Actually most local government is now
good to very good, and the amount of poor local
government is very, very limited. Indeed, if we are
talking about ministers delivering their objectives, if
most civil service departments involved in delivery
were put through the same sort of competency tests
that local government is put through, they would not
come out anywhere near as good. So the first thing I
say to ministers is: if you really want your objectives
delivered, the best way of doing it is through local
government.
Q147 Anne Main: I would like to take you back to
the diVerent funding streams. Obviously there is the
complexity that you have said about the followthrough, but do you accept that if you were allowed
to do your own thing, shall we put it, you may have
diYculty accessing enough funding, because you
would not necessarily follow the priorities of the
Government?
Chair : Sir Richard
Sir Richard Leese: I do not think we are talking
about just doing our own thing, we are not talking
about some sort of anarchy of 400-odd local
authorities —
Q148 Anne Main: You may not be, but someone else
might be.
Sir Richard Leese: Well, we are not, and in our
evidence, that is not what we are saying. I think it is
quite clear that the LAA (Local Area Agreement)
structure, local government coming to a negotiated
agreement with central government, is something
that we think has real value. We virtually never
disagree about outcomes, by the way, it is always
about the processes by which we will achieve those
outcomes.
Mr Hughes: I think there is an argument about
whether we have enough resources, but actually
there are lots of resources already being delivered at
a local level, and what is not, I think, being done is
making best use of them. One of the problems is
where interventions to deliver outcomes are all
agreed on to deliver benefits for people other than
the person who is doing the intervention. So, for
example, if we do work which helps reduce crime
rates and people going to prison, there are benefits to
the police and the Prison Service, Probation Service,
but we do not necessarily at a local level capture
those benefits, and therefore, the actual cost of doing
that investment in the first place is much higher than
it otherwise would be.
Q149 Chair: Mr Hughes, just to qualify on that
example, the benefit is to your local population. The
financial saving may be to the police, but the benefit
presumably is to the people that your council is
responsible for.
Mr Hughes: Of course it is, but the point is that if you
could pool together the diVerent funding streams,
you could make a business case for making the
interventions which would reduce the cost to other
public agencies which we would not be able to do on
our own, because we actually would not have the
resources to do it. That is the point, you can make
better use of the public resources that are available.
Q150 Chair: Can I pick you up on that? Just one
paragraph in the Birmingham submission, I think,
actually suggests that “all public spend in a large
local authority area to go via the local authority.
Primary Care Trusts, the police and other public
agencies would then have to ask for money from the
local authority who would hold them to account for
performance.” I would be interested in Sir Richard’s
response to that one.
Sir Richard Leese: It is not a route that we would
look to go down, and there is a more powerful route
for local authorities being able certainly to set the
strategy for the area, and then we do have now,
through the LAA framework, a requirement for all
public agencies to deliver that agreed strategy. I do
not think our ability to hold those agencies to
account is strong enough, nor is our ability to
eVectively change the delivery method strong
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Ev 26 Communities and Local Government Committee: Evidence
10 November 2008 Mr Stephen Hughes, Sir Richard Leese CBE and Mr Eamonn Boylan
enough either, so we are about halfway down a road,
but actually we do not want to, in that sense, manage
everything in our area. What we want to do is to be
able to oversee the delivery of a strategy for an area,
for a place, I think the place-making role that was
described by Lyons, where currently we do not have
suYcient co-ordinating power to deliver on that.
Q151 Mr Betts: Can I just follow up? There are lots
of words around like “hold to account” and “set
strategies”, they all sound very nice, but what does it
mean in practical terms that you want to do? Say
with the PCT, should it be the council’s job to say,
“This is the strategy, we are approving it, you go out
and deliver it, and if you do not, we have got certain
sanctions against you”?
Sir Richard Leese: I think that is the position we
have to be in, and we are not in that position. We can
scrutinise, so we can call in people from the PCT and
ask them what they are doing and say, that is not very
good, et cetera. What we cannot do is then eVectively
say: No, you are going to have to change what you
are doing because you are not meeting the objectives
for [in our case] Manchester.
Q152 Chair: Just to press that, supposing
Manchester decided that, I do not know, heart
disease was more of a priority than cancer. Are you
asking that you should be able to get your PCT to
deviate from national priorities and put more money
into heart disease?
Sir Richard Leese: Yes, and there ought to be a
balance between them. If you take what is a real case
at the moment, there is a tension between
preventative health work and spending on acute
care, how do you stop hospital waiting lists being too
big? One way is to treat people fast when they get on
to those waiting lists; the second is to prevent people
getting there in the first place. There has been an
ongoing tension between local authorities, who
would like to see a greater emphasis on the
preventative side, as against the Department of
Health, who put the emphasis on acute care.
Q153 Chair: I thought that might excite people. Mr
Boylan, do you want to add something?
Mr Boylan: If I might, Chair, just to pick up on your
comment, it would not be a matter of us deciding
that heart disease was a more significant factor, it
would be based on a very clear and rational analysis
that shows that cardiac disease is actually one of the
things that makes Manchester one of the places with
the lowest life expectancy for adult males in the UK,
and it is not adequately reflected in terms of the
overall priorities that are being set nationally for
NHS delivery, so it is a matter of a mediation
between local circumstance and national priority. It
is not about exclusively one or the other. At the
moment, the balance, we believe, is wrong.
Q154 Jim Dobbin: That touches on the area that I
was concerned about. It is interesting, this debate
about the relationship between health and local
authorities, in particular Primary Care Trusts. You
mentioned balance of power; where does that put a
large regional health authority like the one that
covers the North of England, in relation to the
comments that have just been made about where the
power should lie?
Sir Richard Leese: Well, the regional health
authorities say it is part of the NHS Executive, which
as far as I can see is simply an intermediary between
a national and a local level. I think where it plays a
useful role is a lot of those acute facilities do not and
should not be provided simply on a local level, so
there do have to be strategies that are over and above
the local level, that are sub-national, I think there is
a role to play there. I have to say that I think primary
health and community health is an area of
expenditure that I could see at some point being part
of what a local authority provides within the area. I
would not expect to see acute care necessarily being
part of the same thing.
Q155 Anne Main: I was interested to hear you say
that you would like to, for example, decide
preventative care rather than acute care was the way
you would go as a local authority, if you could do
that. How would a neighbouring area feel then in
terms of a postcode lottery, if you decided to
withdraw yourself into that particular stance, and
somebody says, I am not going to get the treatment
I need in Manchester because actually they have
decided that they should have prevented what I have
got rather than treat it?
Sir Richard Leese: There is a fundamental argument
there about what is the role of local democracy, and
if local democracy is that everybody gets the same
wherever they live, then there is not any local
democracy. Again, I go back to what Eamonn said,
part of what we are talking about is a balance
between national and local, but are we going to get
diVerent things in diVerent places? Yes, I think not
only we are going to do that, but it is right and
proper that you should get diVerent things in
diVerent places. If the area next door thinks that is
unfair, then what they ought to do is elect a diVerent
council to get what they want.
Mr Hughes: It is also about how you measure these
inequalities. You might look at that in terms of
access to acute care, but you could also look at
outcome in point of fact that sizeable parts of our
population have a life expectancy of 10 years lower
than other parts of the city, or other parts of the
country. That should be concerning us as as great an
inequality that we need to address as inequalities in
access to acute care.
Q156 Chair: Can I just mop up a question in relation
to the local area agreements, which is whether you
have actually had any disagreements with central
government over the conduct or process relating to
LAAs?
Mr Hughes: We came to an agreement at the end of
the day, but we had a robust discussion along the
route about issues which individual central
government departments wanted to be included, the
level of the targets that they wanted to have, but at
the end of the day, the agreement we came to was one
which not only the council but our partners were
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10 November 2008 Mr Stephen Hughes, Sir Richard Leese CBE and Mr Eamonn Boylan
comfortable with, as was the government
department, so the process was robust, as you would
expect, but nevertheless, an agreement was arrived
at.
Sir Richard Leese: Yes, we do have disagreements, as
I say, generally about process rather than outcomes,
but if I give an example of a disagreement we had
with the Department for Work and Pensions,
JobcentrePlus, the targets we wanted to set locally
for tackling worklessness were far more ambitious
than those that JobcentrePlus wanted to set, so we
had a disagreement about that. There is a multi-area
agreement disagreement around how we tackle
skills, but this is rather more complex, because the
two government departments that are responsible
for diVerent bits of skills, they are having an
argument with each other as well, so it is a three-way
argument at the moment. And again, I think that
demonstrates what I see as part of the thing we ought
to be able to do at a local level, is to do that joiningup that those two government departments, with all
respect, will never be capable of doing.
Mr Boylan: Local area agreements are a huge step
forward, as has already been said, but I think they
have an important limitation, and that is that they
are defined around a specific target, and over a fixed
time period for the delivery of a single target, albeit
a range of them making up the totality of an
agreement. The approach we have tried to take with
the Greater Manchester multiple area agreement,
which is an important new development, because it
involves not one but all 10 of the Greater
Manchester authorities, working on the delivery of
outcomes that actually, in terms of worklessness and
health, would have national significance if they were
delivered, it is an iterative process. It is actually a
renegotiated process over a period of time, so
actually, it can monitor trend and performance and
not simply the delivery of a fixed target. Fixed
targets, by their very nature, tend to be out of date
rather quickly, and I think that is a limitation of the
LAA framework, although I think we could learn
from the multiple area agreement approach that has
been taken in Manchester and elsewhere.
Q157 Jim Dobbin: We are right in the middle of a
very diYcult economic process. What are your
councils doing to support your residents in
protecting the local economies through the global
recession, and how do you think the Government
could help you in that whole process?
Sir Richard Leese: One of the things we are trying to
do, Jim, is to get £3 billion worth of investment in
public transport infrastructure, and we have some
misguided people opposing us. Actually, we are
trying to get investment in our infrastructure. There
are a number of other examples where the City
Council is itself using public sector money to invest
and maintain momentum in other developments,
including commercial developments. We have
established a partnership with the Chamber of
Commerce that we do monitor, and make sure we try
and have realtime information of what is happening
in the economy, to make sure we can intervene
promptly if we have the capacity to intervene.
Clearly, the extent to which any local authority can
set itself against what is a global economic eVect is
somewhat limited, but we are doing what we can.
Q158 Sir Paul Beresford: The latest whizzkid idea of
central government in both parties seems to be
cutting tax. Presumably your local authorities have
cut your council tax?
Sir Richard Leese: If you look at Manchester’s
council tax, we have had an increase in council tax
no more than the rate of inflation for the last nine
years, in which period of time we have gone from, I
think, the third highest council tax in the country to
what, according to The Times, was the fourth lowest
average council tax in the country. So we have taken
a fairly consistent approach on that.
Q159 Sir Paul Beresford: So there is room for
improvement?
Sir Richard Leese: In terms of the financial issues, it
is one of the reasons why I have argued against
supplementary business rates, and said it is no
substitute for relocalisation of business rates,
because a supplementary business rate only allows
you to do one thing, which is to put it up, whereas
relocalisation would give us the option of being able
to put business rates down as well as put them up.
Q160 Sir Paul Beresford: So we warn Westminster
and Wandsworth you are going to beat them next
year?
Sir Richard Leese: There are clearly parts of the
country that have such special circumstances; for
any relocalisation, there has to be some equalisation
basis built into it, and I think we all understand that.
Q161 Mr Betts: Were you disappointed with the
Lyons report, in that it did not seem to think that
actually any devolution of financial responsibility
and accountability was necessary, that it was all a
matter of simply giving you probably a bit more
choice over how you spend the money that you
were given?
Sir Richard Leese: Yes. I think the power element of
this is the most important, but I think money means
power, power is money, and I think if we were able
to have far greater control over the money we raise,
then I think that would deal in a very
straightforward way with a lot of the devolution
issues.
Mr Boylan: If I can just pick up on that, as Richard
said, it is very much around power, and if you look at
the multiple area agreement that the 10 Manchester
authorities have put together, it actually does not bid
for any additional resources at all. It is purely and
simply a plea for better ability to manage the
resources that are currently being spent by the public
purse in the city region. I think that is the important
issue for us. I think that is where Lyons did stop
short.
Q162 Mr Betts: So you do not want to put the
council tax up any more, presumably, from what you
have said; you have argued, fair enough, for the
relocalisation of the business rate. What else would
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you want to do, in terms of additional revenue
raising powers that you would like to see local
authorities receive?
Sir Richard Leese: I think first of all, we would like
to see council tax made fairer, and I think a property
tax as an element of localisation is quite reasonable,
but we have argued for more balance, both top and
bottom, clearly for revaluation, because we are on
1991 values at the moment. I think in terms of
additional taxes, there are perhaps things we would
think about, like a tourism tax and so on, but we are
not looking really for substantial new taxes, we are
not finding lots of new ways of getting money out of
people. Even taxes like tourism tax would have to be
very, very carefully directed, and would have to be
done in such a way that there is a direct benefit that
went back to the people who were contributing to
that.
Mr Hughes: I agree with that. I do not think it is
about new tax revenue raising resources, but better
control over the resources that are already available
in the local area. There are some —
Q163 Mr Betts: So that is what Lyons said,
eVectively. Do you agree with Lyons?
Mr Hughes: What you I think said was Lyons was
not allowing local authorities to have control or
powers over the funding that is in a local area, and
that is something which we are arguing very strongly
for: that public spending in a local area should be
much more co-ordinated through a local authority,
if you like, but through some other one form of
accountability, rather than through all the myriad
that we currently have. Where I think there are some
arguments is about where, for example, local
authorities need to be able to capture some of the
benefits that are created by growth that occurs. One
of the proposals which the core cities are putting
forward at the moment is around advanced
development zones, which is like tax incremental
financing, in other words that within a particular
development area, all of the business rates which
occur as a result of development can come back to
that local area to fund the infrastructure investment
needed to make that redevelopment occur in the first
place. Again, it is about making better use of public
resources that are actually already there in a local
area.
Sir Richard Leese: Can I give two examples of things
that we would have done in Manchester if we had a
power of general competence with associated
revenue raising powers? Things that would not be
enormous, but we would have had mandatory
licensing of private landlords at least 10 years ago, if
we had had a power of general competence with
revenue raising powers; we would have had dog
licensing back probably about 20 years ago if we had
had that power of general competence, with revenue
raising powers. Those are the sorts of things we
could do and would have done locally.
Q164 Chair: Can I just press you on that? Are you
absolutely precluded from doing that with the
current powers? Could you not argue, I do not know,
through the Sustainable Communities Act or power
of general well-being?
Sir Richard Leese: The power of general well-being
is no, because it specifically excluded regulatory
powers within it. Yes, under the Sustainable
Communities Act, I guess we could come back with
a proposal to be able to do that. The point I am
making is if we had a power of general competence
with revenue raising powers, we would have done it
long ago and we would not have had to ask anybody
other than ourselves about doing it. The Sustainable
Communities Act is a rather clumsy way of us being
able to ask to do things that we ought to be able to
decide in our own right to do.
Q165 Mr Betts: There is always a bit of concern
about having extra revenue raising powers linked to
development, or the ability to charge people more in
some way. It simply means that those areas which
have a greater ability to collect money, whether it be
because they have extra development or they have a
wealthier population, are the ones that are going to
benefit from that; in other words, you get more
development, you raise more money on the back of
it, and you have the ability to actually create more
development.
Mr Hughes: Possibly to some extent, but if I can go
back to the example I quoted earlier around New
Street Station, we know that the redevelopment
opportunities that are created by the refurbishment
and regeneration that is going to take place there are
likely to generate something of the order of £30
million extra rate income per annum as a result of the
development that is taking place. Now that point is
that would have actually been enough to fund the
redevelopment of New Street Station on its own.
You contrast that with what the supplementary
business rate will give in Birmingham; it will raise,
for actually charging businesses more tax, £15
million. So the point about being able to capture the
value of development that is taking place in an area
is a much more powerful way of actually helping that
development take place than being able to charge
extra taxes.
Q166 Sir Paul Beresford: Would you not expect the
Treasury to look at your extra fundraising and reflect
that in equalisation?
Mr Hughes: That is the point; if you equalise away
everything, then there is no benefit at all, and that is
the current situation. Actually, I have an incentive to
reduce the amount of businesses I have in my area
and the number of properties that exist, because
actually, I do not have the pain of having to collect
the tax, and I get full compensation through the
grant system. That seems to be a very perverse way
of operating. We need to have some benefit from
those developments ourselves.
Q167 Chair: But to use the counter case, it is all very
well to argue that you are representing cities which
have good economic development, although under
the current circumstances that may alter, but if you
were representing a place whose major employer had
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10 November 2008 Mr Stephen Hughes, Sir Richard Leese CBE and Mr Eamonn Boylan
just gone out of business so that your local revenues
were falling, would you then have a diVerent
argument to put? Where is the funding going to
come from for an authority such as that, if there is
no equalisation?
Sir Richard Leese: I think equalisation comes
through a number of routes, and it is not solely
through the CLG budget formulae or the Treasury
budget formulae. For instance, Regional
Development Agencies are one form of equalisation
around the economy. If you look at the North West,
if you look at expenditure per capita, the bulk of
development agency money goes into deficit
economies, so Cumbria gets far more money per
head than Greater Manchester does. So there are
other ways of getting equalisation.
Q168 Chair: Can I also just get you to clarify, Sir
Richard, when you were talking about council tax
and being in favour of the reform of council tax, you
were not suggesting, were you, that if you had the
powers, you would reform the council tax in your
city alone?
Sir Richard Leese: I do think there is some limited
room for things that are national rather than local. I
can see the point of having a national benefits
system, I think that is a very good example of
something where I think rates ought to be set
nationally, although even then, how the benefit
system—although the rates ought to be set
nationally, how it is operated, there would be room
for local variation in order to be able to support
particular activities at a local level. Again, it is what
Stephen was talking about, how you recycle money.
If we are tackling worklessness, then using the
benefits system as part of how we tackle
worklessness is something that would be better done
at a local level rather than through a national
programme.
Sir Paul Beresford: So we would not have a National
Health Service?
Q169 Anne Main: I really would like you to expand
on how you would alter local benefits in a way that
you would not expect them to be where they are now.
You just said tackling worklessness, what sort of
thing would you be suggesting for that?
Sir Richard Leese: It would not be about changing
the benefit levels, it would be, well, it is now coming
through, I think, the national legislative programme,
but eVectively, the requirement of people on
incapacity benefit, unless they are classified as
having certain forms of incapacity, to attend an
interview to assess whether people are capable of
working in particular ways. I think in Manchester,
again, that is something we would have done several
years ago, if we had had the ability to do that. So it
is not about the benefit level, it is how you use the
benefits system.
Q170 Anne Main: Can I just expand that? You have
just used one that has already been agreed, that you
agree with, but would you, for example, say that in
Manchester, you would have to do community work
to get your benefit, for example? Or any other city.
Would you say that the benefit level may not alter,
but what you do to get your benefit may alter, is that
what you are saying?
Sir Richard Leese: That is what I am saying. The
particular example you have given, I have not
thought about, but I will go and think about it,
because it might be a good idea for us in some parts
of the city.
Q171 Anne Main: How about the other cities that are
here? Would they say that again, you would still get
the same amount of money, but what you have to do
to get it may be diVerent from city to city, or area
to area?
Mr Hughes: We are doing some of those things; the
Working Neighbourhoods Fund, part of it is being
used to ease the transition from benefit to work, so
extending benefit for a period of time once they are
in work, because that is a key issue. But the issue
around welfare reform I think is a really important
one, because one of the biggest problems about
getting people back into work is about raising their
aspirations that there is a diVerent way of living their
lives other than one that they are currently on, and
that is about changing the basis of incentives. Within
the proposed reforms, there are opportunities, I
think, for doing pilots along the kind of lines that
you have just suggested, and certainly Birmingham
is very interested in doing some of that. If we can find
a mechanism whereby, by doing certain
interventions, which has the impact of reducing the
benefit burden overall, some of that can be captured,
at a local level —
Q172 Chair: You mean the money could be
captured?
Mr Hughes: Yes, if we reduce the benefits of people
in Birmingham —
Q173 Chair: Because you get them back into work,
so they individually do not get less.
Mr Hughes: Yes, and then with some flexibility
about how the rules work, so that we can make
eVective interventions which will drive down
worklessness numbers, but give a public sector
benefit, but we need to see some of that benefit at a
local level.
Q174 Chair: Financially you need to see the benefit?
Mr Hughes: Yes, because otherwise we cannot do the
interventions which have that result.
Q175 Anne Main: Can I take you to another group
then, not just people who are seen as being workless;
what about, for example, community oVenders, or
people who are somehow in the system where they
have committed some sort of crime, do you think
that locally you should be able to decide what they
do, because currently there are strict guidelines on
what you can do with people who have oVended in
the community; would you like to be able to have the
autonomy to do something diVerent there?
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Mr Hughes: Through the local area agreements and
the partnership arrangements, we are already having
quite close conversations with the Probation Service
about how community service can be used to meet
local area priorities, so that work is already taking
place.
Q176 Anne Main: But could you see that maybe if I
lived in Manchester, and you might decide, I am not
talking about a Mayoral chain gang out weeding
flowerbeds, I do not know, maybe you are: if you are
talking about that, could you see that there could be
a conflict? In one area, you may be in the Probation
Service and you do not have to do anything, and step
over the border and I am there weeding flowerbeds
in my yellow boiler suit.
Sir Richard Leese: That already happens, even
within existing sentencing guidelines, the policies of
Magistrates Courts in some towns and cities is
diVerent to Magistrates Courts in other towns and
cities, so you already get that diVerential.
Q177 Anne Main: Yes, but how broad do you want
to make it? That is the point.
Sir Richard Leese: If we wanted to find new ways of
taking oVenders and rehabilitating oVenders, there
are punishments, there is restitution, I think we are
interested in rehabilitation; if we could have the
power that allowed us to innovate in new ways of
doing that, then that would be something we would
be very interested in.
Q178 Andrew George: First of all, my apologies, I
got on a train in Penzance at 10.00 this morning, and
I have only just arrived, so I do not come from a city,
I am sure you understand. I understand that you
have covered issues regarding city regions, but I am
interested, Sir Richard, in your comment earlier
regarding equalisation of budgets, where you were
saying there was a de facto nudge and wink as far as
the RDA appears to be concerned, that those deficit
councils seem to be compensated by the RDA. I just
wanted to explore the dynamics between local,
central and also regional government, and what
messages you are getting from central government,
and what encouragement you are getting, that you
can take a greater control both financially and in
terms of the kind of provisions you are taking.
Sir Richard Leese: I think that is not what I was
saying, but I would also say that given the condition
of the West Coast Main Line, in the past I have set
oV for London and not arrived at all, so it is not just
coming from Penzance that can be a problem. What
I have said is there are other ways of being able to
equalise that are not through funding formulae, and
I gave the RDA as one example of how it currently
chooses to allocate its funding.
Q179 Andrew George: But not based on need at all?
Sir Richard Leese: No, it is not.
Andrew George: They are not based on need, they are
based on deficit budgeting.
Q180 Chair: I think we are getting into areas which
are outside what we should be discussing. Do you
want to just clarify, Sir Richard, what you meant
by deficit?
Sir Richard Leese: By deficit, it is those parts of the
regional economy that in comparative terms are
performing worst. Cumbria has largely a declining
economy, so there is not—I think you are right,
Chair, we probably are straying, but there is an
argument about whether for a Regional
Development Agency, you put money into
opportunities for growth or you put them into
failing economies. At the moment, more money goes
into failing economies than into opportunities for
growth, which gives you an element of
redistribution.
Q181 Mr Betts: The Central-Local Concordats
hardly caught the public imagination. Has it caught
the imagination of local authority leaders?
Mr Hughes: Not really.
Sir Richard Leese: No.
Q182 Mr Betts: But there is a big issue in there, is
there not, somewhere in there, to be teased out? It is
interesting, say, in Parliament, when Scottish
legislation comes forward, it is treated as
constitutional legislation and it goes on the floor of
the House; when local government legislation comes
up, it is treated as any other legislation, it just goes
through as an ordinary bill. It is inconceivable now
that Parliament could just rip up the Scottish
Parliament legislation and bring everything back to
Westminster, but it is inconceivable it would do it
without the consent of the Scottish people. Is there
any possibility of getting local government on to a
similar basis, where there is some inherent
recognition of local government’s constitutional
position, and Parliament would do things by consent
with local authorities, rather than simply imposing
things?
Mr Hughes: There has to be an argument for looking
at that, to have proper constitutional protection.
Lots of other countries do, we do not, that is partly
because we have not got a written constitution
anyway, and the way in which local government has
evolved, but I think there are lots of things that could
be done which would have a much quicker benefit in
the shorter term than perhaps worrying about
constitutional matters. The priority, I think, for
Birmingham would be about not necessarily
changing the relationship in that way, but getting
clearer control over all of the public spending
resources that are occurring in the local area,
because we think that if we can do that, we can
deliver things much more eYciently than they are
currently being done.
Sir Richard Leese: I think there is a very powerful
argument for almost creating a constitutional
position for local government in England, because it
does not exist at the moment, but it would not be my
immediate priority, and questions about the current
economic state, what we have been saying about
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10 November 2008 Mr Stephen Hughes, Sir Richard Leese CBE and Mr Eamonn Boylan
worklessness; for me, the priority would be getting
powers that allows us to get on with doing those
things, rather than going through a period of
constitutional change. So perhaps when times are a
little bit easier would be the time to be able to do
that, but it is not a priority at the moment.
Q183 Mr Betts: So it is a medium or longer-term
objective rather than in the immediate future?
Sir Richard Leese: It would be for me, yes.
Chair: Thank you very much indeed, we have
enjoyed some of the points you have raised, and
teased them out. Thank you for your contribution.
Witnesses: Mr Peter Gilroy OBE, Chief Executive, Kent County Council, Mr Paul Carter, Leader, Kent
County Council, Mr David Petford, Chief Executive, Maidstone Borough Council, and Councillor Mike
FitzGerald, Chairman of the Balance of Power working group, Maidstone Borough Council, gave evidence.
Q184 Chair: Welcome, gentlemen. I think you were
all sitting in the back in the previous session, were
you? So you have heard some of issues we have gone
round. Before we start, can I just say how interesting
it is that Maidstone chose to set up a special scrutiny
committee to answer the questions that the
Committee posed in its evidence. It is a very
interesting example, I think. We are grateful for the
fact that you took this extremely seriously, and
obviously we too take very seriously what local
councils say to us.
Councillor FitzGerald: It went through cabinet and
then through full council before it came to you, so it
is a good example.
Q185 Chair: Thank you very much. Obviously since
there are four of you, on the whole, we would prefer
it if it is only one of you from each council that
answers each question, and do not feel obliged for
each council to answer each question. But we will
kind of take it as we go. I would like to actually start
on the issue of the use of existing powers with
separate questions to each of you in fact, so starting
with Kent, because as I understand it Kent seems to
pretty adequately use all the powers that it has
already, and is asking for some more. Do you
nevertheless expect ministers generally to devolve
powers to councils when, unlike yourself, most
councils seem not to be using all the powers that
they have?
Mr Carter: Thank you, Chair. I would like to think
that, as you are suggesting, Kent is taking full
advantage of its well-being powers, and also its
powers as an excellent authority to do things that
authorities that are not classified as excellent are not
allowed to do, like running trading businesses, where
we are involved in a number of innovative
entrepreneurial activities which add substantial
income to the overall County Council budget of
some £2.2 billion a year in providing to enhance and
run frontline services for the 1.35 million residents
that we represent. Yes, of course, and you will have
read from our submission that we are very keen, and
have an appetite to take up significant additional
powers. We are much encouraged by talk about
post-16 funding, LSC funding coming to Kent
County Council; we believe we have an enormous
amount to oVer in welfare dependency reduction,
based on a significant amount of innovation that has
gone through the Supporting Independence
programme, which was set up by Lord Sandy BruceLockhart in 2002, and our educational
transformation in preparing young people for
employment, both through apprenticeships and
sustained employment. So a whole raft of issues that
we would like to have enhanced powers over. As I
say, specifically, we believe we have an enormous
amount to oVer in the debate about welfare
reduction, particularly for the younger generation of
people entering employment.
Q186 Chair: So you still have not answered the
question though: do you think, given that most
councils do not use all the powers, that it is
reasonable to expect ministers to give councils
generally more powers still?
Mr Carter: I do generally believe in earned
autonomy, and I think we do not necessarily have to
apply a one size fits all policy, we have a completely
diVerent landscape of local governments, and I am
interested to see you have cities, you have two-tier
authorities, you have London boroughs that you are
talking to today. The landscape in local government
is highly complex. But why do we have to have a one
size fits all? Government could say to us, there you
are, Kent, we like your ideas, we like your
innovation, let us try it for five or three years and
review whether the outcomes for the residents of
Kent are better or worse than they would be from a
centrally managed, centrally administered direction.
Q187 Chair: If I can move to Maidstone, I think in
your submission, you were making the argument, I
mean, you recognise that councils including yourself
do not necessarily use all the powers that you have.
Would you like to tell us why you think you have not
used all the powers that you have? And indeed I
suspect your relationship with Kent.
Mr Petford: Yes, indeed, Kent are a very important
partner and we work well with Kent. I think the
question is not just about powers, I think there is a
diVerence for me between powers and duties and
responsibilities. I think there are strong arguments to
increase duties and responsibilities, in fact move
duties and responsibilities, so the complexity of
councils at diVerent levels in diVerent areas doing
diVerent things, but I think in terms of powers, the
legal power to actually-whether you can actually do
something is quite diVerent to that. I think currently,
with the well-being power, which is clearly the power
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of first resort, not last resort, first resort, that does
open up quite a wide range for most councils to do
lots and lots of things. So from that point of view, I
do not think powers for me is the issue, I think it is
more about whether we should be involved in other
areas and whether or not our duties and
responsibilities should be extended into other areas.
Q188 Chair: In your submission, I do not think it
would be too strong to say that you feel that Kent
County Council gets in the way of you exercising all
the powers or freedoms that you would wish. Do you
want to be more specific?
Mr Petford: Well, I think we are both top performing
councils, and we are both very ambitious councils,
and we are both keen to make a diVerence. So
because of that vibrant energy to try and do things
better, quicker, smarter, sometimes yes, we get in
each other’s way. I do not think it is just Kent
County Council, it is probably Maidstone just as
much as Kent County Council, but at times, we get
in each other’s way, because I think with a two-tier
authority, sometimes there is confusion on who does
what and all the rest of it, and perhaps that is an area
that could be looked at. Indeed, my own council has
the view that a unitary structure would be preferred,
but then there is a long debate, and one that my
council has not finished yet, what size should that
authority be? It is all about size rather than by the
merits of who should govern—
Councillor FitzGerald: Quickly, our evidence did say
the powers were not being used because they were
risk averse and created by inspections and constant
measuring and so on, so I suppose it is a nervousness
to move into a field that does not then get carried
through. So what they want is the greater-we have
the powers to do it, what we want is the freedom to
enact it.
Mr Gilroy: Chair, if I can just add one point about
health, it did come up in the last discussion, the
health economy spending is about £1.2 billion in
Kent, and it does seem to me that outside of scrutiny,
there does need to be a new dynamic about how we
work with the health economy, particularly now we
have the GP contracts out, we have a whole range of
things happening. For us, it is really important that
in terms of, for instance, assessment costs, I would
like to take more power on actually making
judgments about our global assessment costs, which
seem to be getting bigger within what I call the
systems of health and social care, and I do not think
we have enough power —
Q189 Chair: Sorry, can you just explain, what do you
mean by assessment costs?
Mr Gilroy: If you look at the way we all operate, we
all operate on the basis that the general public, when
they need healthcare, much of healthcare will touch
social care, and therefore people need assessments.
We have what we call single frameworks for
assessment, local government and health, but the
truth is it has become so convoluted, so confused,
that when I was going out visiting clients, the general
public, three or four months ago, the sort of message
you would get is everybody is really nice, but
everybody wants to do assessments, nobody wants
to do the washing up any more, it is that sort of
theme. From a commercial point of view, from a
business point of view, I would like to see much more
dynamic interplay between what those gross costs
are, because if you spend too much money on clinical
assessment, you are wasting a lot. If you suddenly
find that those costs are getting into 12, 14, 15% of
gross expenditure, somebody needs to be able to
look at that independently, not an individual silo,
and that is the point I am making. I think local
government could have a major part to play, added
to scrutiny, on that issue with some measure of
power, that would have the power to—not direct,
but the power to shape and influence much more
dynamically than we can at the moment.
Q190 Chair: Just a practical point, how many PCTs
are there in Kent?
Mr Gilroy: Two.
Q191 Chair: Only two? So each would cover several
districts presumably.
Mr Gilroy: Yes.
Q192 Sir Paul Beresford: So you, in eVect, like our
previous witnesses, would prefer to keep the core of
the N in the NHS, you want to look at it but not
control it?
Mr Gilroy: The NHS is a massive system, and what
you need to work out between local government and
the NHS is what bits of those services would be best,
as it were, managed globally. I have always said,
having worked in the Health Service, that primary
health is much more akin to local government and
community services, that is a personal view as a chief
executive. If I had a view, it would be that primary
health should be much more accountable to local
government in its commissioning function than
acute trusts or foundation trusts.
Q193 Chair: So the question we asked previously
was: how exactly would it be accountable?
Mr Gilroy: I would do it through the commissioning
part. Coming back to the earlier questions about
council rates or coronary heart disease, et cetera, I
do think, to be honest, if you look at Europe, if you
look at the US, we do tend to be overcentralised in
the UK. I mean, there are things that you could
decide as a government and say, “These things we
need to do better on”, cancer rates might be that, it
may be other things, but it seems to me that the
discretion should be much more open to having
diVerence. We have got into the lottery postcode in
a way that it is becoming now politically incorrect to
even talk anything against it, and I feel there needs to
be a bit more pragmatism about local communities’
diVerent needs, we should in commissioning terms
have much more power to determine, set against
what the Government’s broad policy objectives are.
I think at the moment, the Government has too
many policy objectives and too many targets, we
need to reduce those and give local government
much more say in how that is managed.
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10 November 2008 Mr Peter Gilroy OBE, Mr Paul Carter, Mr David Petford and Councillor Mike FitzGerald
Q194 Anne Main: Just on health, before we leave
that and go on to what I was going to ask you, could
I just ask you then, would you be in favour, for
example, in terms of raising local tax, say, for
example, having a local health insurance?
Mr Gilroy: Yes. You know, we are not alone in this.
Europe has the same problems, and I cannot see, in
certain thresholds, if a local community decides it
wants to have something special in its healthcare,
and that is what it wants, why should we not say yes?
We do it in other parts of our business.
Anne Main: So then would you stop someone from
a neighbouring authority using the special thing?
Q195 Chair: Mr Carter, you seem to be slightly
excited by this contribution.
Mr Carter No, but it all depends to a degree on the
distribution mechanism, the needs-led analysis in the
way funds are distributed for the health economy,
the same in local government. At the moment, we do
not have clarity, all I see is fog in how a revenue
support grant is distributed around the country, and
how the health funding is distributed. For example,
Islington, per resident, gets about £1,950 per
resident. Kent on average for both PCTs gets about
£1,100 per resident. If you looked at the index of
multiple deprivation in East Kent, it would match or
rate anything in the North or North East of
England. Yet where is the transparency and the
needs-led allocation? It comes back to Lord BruceLockhart, when he was chairman of the LGA,
suggesting that we have an independent body that
looks at the needs-led analysis and statistics before
the cake is carved up between authorities or between
PCTs, and before we start having supertaxes and
supercharging over and above the national
allocation, let us look in a common sense pragmatic
way at the way existing resources are distributed
around.
Q196 Chair: Can I just clarify, Mr Carter, we may
have it wrong in our briefings, but we think that
Kent County Council rejected the case for
establishing an independent commission to oversee
local government finance—on the grounds it would
undermine the principle of accountability of central
government to its electors, indeed.
Mr Carter: That is something I have never
subscribed to. I have always totally supported Lord
Bruce-Lockhart in his position on, as I say, having a
national body.
Mr Gilroy: As I understand it, I think the issue was
that if there was going to be a commission to make
these judgments, it should be a national commission,
not a sub-regional commission. There was a
question of whether these structures are going to be
further quango land, development of new
commissions in the nine regions. We say if you are
going to have a commission, just have one, do not
have more costs.
Q197 Chair: Just for clarity then, so Kent County
Council would be in favour of an independent
commission to sort out distribution if it were
national? Meaning England, presumably.
Mr Gilroy: Yes.
Q198 Anne Main: Can I just not leave the postcode
lottery? I am sorry, we went oV at a slightly diVerent
tangent, but you did say you believed an area should
be able to come up with a special project, maybe a
health project; how would you not be then
competing with other areas in terms of if they want
to use your project, or would you say it is local things
for local people?
Mr Gilroy: We have a bit of mythology already
about this question. The Primary Healthcare Trusts
across the country are all actually doing diVerent
things, and there has been example after example,
whether it be to do with drugs or whether it be to do
with services, we are talking about human beings
providing services. There will always be diVerence. I
do not think there will be a rush; there would be
some of that going on probably in the country
ultimately, but I think in the end, what you would be
providing is a much more coherent—if I could say
one other thing, the more you decentralise, and I
have found out in my own career, the more you
decentralise: for instance, we now give purchasing
power to citizens in Kent, big time, you have your
own purchase card for your own services. When we
started out on that journey, we were told this was
going to be terrible, it was going to be fragmented,
and the public would not use it. The public love it,
they are more frugal with the money we are
spending, we are controlling our money more
eVectively. So my argument is the same in healthcare,
the more you decentralise, the more you give
freedoms, citizens will be better, they will be
healthier, and it will be less driven by what I call the
centralised notions that you can run everything from
London. I think it is one of the dilemmas the
Government have had, and the previous
Government, if I am honest, and I just think we need
to change that.
Chair: Can we move on to local government finance?
Q199 Mr Betts: You have both put forward ideas
about how you would like to create greater financial
freedom, including relocalisation of the business
rate. Is that not because you are both quite wealthy
areas and you think you would do quite well out of
it?
Mr Petford: First of all, I think if you look at
Maidstone, I think we collect something like £35
million, and then we are allocated from business
rates, and I think from central government we get
something like £5 million back. So that does not
seem very appropriate, certainly from my members’
point of view.
Q200 Mr Betts: There is probably somebody else
somewhere else who is collecting £5 million and
getting £35 million back, and they probably rather
like it.
Mr Petford: I am sure they do, but they are not living
with the industry and the commerce and all that that
goes with the £35 million. Therefore, this gearing
seems certainly to my members and to me totally
inappropriate. The gearing needs to be looked at.
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Ev 34 Communities and Local Government Committee: Evidence
10 November 2008 Mr Peter Gilroy OBE, Mr Paul Carter, Mr David Petford and Councillor Mike FitzGerald
Also, if you are not using lots of the NNDR
(National Non-Domestic Rates) tax, the business
tax, you do not have that close relationship that I
think you really need with business. With taxation, a
relationship builds up, and it is far more fruitful if
you can show business where their money is going
locally. Business is contributing, as it sees it, to the
council’s funds, and if you can show business where
it is going, that seems far more appropriate. It just
seems the gearing at the moment, where you have, in
Maidstone’s case, and I am sure there are those that
are far worse than Maidstone, seven to one, seems
quite strange to me, frankly, quite odd.
Mr Carter: If I may, Chair, as well as being leader of
Kent County Council, I am also, for my sins,
chairman of the South East Regional Assembly, and
it is interesting to reflect on the amount the South
East region contributes to the Treasury, and how
much the Treasury spends on public services in the
South East. We are the most significant contributor
to the Treasury, between the net input and what we
get back, even compared to the whole of the GLA
(Greater London Authority) region. There is only
one other region in the country, which is the Eastern
region, which is a net contributor. Now our
argument is that we need again a fairer
redistribution, but somewhere along the line,
equalisation has to come in. I mean, I am not in any
way suggesting that we could retain all of the
commercial rates, but it is all dependent upon how
much revenue support grant you get back through
this opaque calculation about what Kent needs to
fund its provision of local government services. We
would like to see a reform of the LABGI (Local
Authority Business Growth Incentive Scheme)
because the thresholds are far too high, the local
business rate incentive, to find a way, I think in the
way that was suggested either by Manchester or
Birmingham before, that where you have new
economic development taking place, that you can
retain the commercial rates generated from that
economic regeneration and economic development
function to help support and fund the infrastructure
needs, which in Kent, with 7,000 homes a year being
planned between now and 2026, are massively
significant. Again, when you look at the regional
infrastructure allocation from the South East, where
we have the bread basket of the UK economy, the
distribution per capita is the worst of the country. So
if we are not careful, the South East region is going
to be shot in the foot by the distribution mechanism
which does not recognise the massive significance
that the component parts of the South East
economy play.
Q201 Chair: You are assuming it would come to the
county, I imagine the districts are assuming it would
go to them?
Councillor FitzGerald: I would just like to say, the
point is it will bring businesses on board and feel
more part of what is going on. I think we put in our
report about financial devolution is real devolution,
and as we see it, we have suVered in terms of electoral
support and the rest of it, and democratic support,
as a result of them not seeing that we have the power
to deliver for them.
Q202 Mr Betts: The business rate comes back, there
seems to be quite a widespread amount of support
for that, I think there is a general push in local
government, probably more support than I have
ever known, for more devolution. That seems to be
a common message we are getting right across the
board. But if the business rate went back, we have
really only turned the financial position back to what
it was before the poll tax. Is there something more
radical that you would like to see in terms of
financial devolution, and the ability to have even
more tax or revenue raising powers, or indeed the
right to simply decide how you will raise revenue,
full stop?
Mr Carter: And how that is diVerentiated. We all
know that local government finance is the graveyard
of many. But when you actually look at the
percentage of the turnover of a small business, the
commercial rates makes up of its component parts of
its expenditure, it is really significant, whereas for big
businesses, it is pretty peripheral, the significance of
the business rate to the bigger businesses. So it would
be lovely to be able to have your own way of
supporting small and medium-sized enterprises by
having a diVerent diVerential between what large
businesses are paying and what smaller businesses
are paying. Indeed, if we want to encourage the
creative industries into Kent, for example, to be able
to have freedom and flexibility in saying, well, for
five or 10 years, to get that underlying investment in
various technologies, various business sectors, we
could then discount the commercial rates to
encourage and incentivise new businesses of a
particular type coming into the Kent economy, that
would be a really useful tool to have. But at the end
of the day, everything is interdependent on A leads
to B leads to C, and the amount of pounds, shillings
and pence that we end up with to provide the local
government services within the family of local
government, including obviously the 12 districts and
the 12 boroughs.
Q203 Chair: I think Mr Betts was asking whether
there were some other things apart from business
rates.
Mr Gilroy: What you are raising is, for me, going
back to first principles. What is the relationship
between central government and local government?
Whether or not it requires a constitutional shift,
because one of the real issues certainly I feel acutely
as a chief exec, and have so for some years, is when
you have a government that sets its own policies and
its own aspirations, and it then wishes those to be
delivered, it is true, since the war, that governments
have not been very good at delivery, it is not
something they do well. If you look historically, local
government has been very good at delivering things,
when you go back in the last century, local
government has done very well in that. If you look
at how eVective local government as a family have
been, it is true, they have been more eYcient, over
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Communities and Local Government Committee: Evidence Ev 35
10 November 2008 Mr Peter Gilroy OBE, Mr Paul Carter, Mr David Petford and Councillor Mike FitzGerald
the last 10 years it has just been extraordinary. Now
they can get better, but if you really want to sweat the
public assets financially, it is not simply about the
business rates, it is actually about having a better,
more mature relationship with central government,
both in its aspirations, in terms of its policy, what it
wishes to achieve, and what local government wishes
to achieve. I always remember, we were one of the
first authorities in the country to do the public
service agreement 1, and we had a very simple
relationship with Government, very mature, the
strategic targets were very few, and we delivered all
of them, and they were all stretched targets. So I
would come back to whether it is a constitutional
change or whether it is just a simple change in the
relationship between central government and local
government, I think the time is right for that
conversation to happen, because I think you then
reduce your public expenditure in a way that you
would not imagine.
Q204 Sir Paul Beresford: So what you are actually
saying is the bureaucracy imposed upon you by
central government in checking up on everything
you do, setting targets, et cetera, costs you big
money, and that going over here, because of gearing,
costs the council taxpayer an enormous amount of
money?
Mr Gilroy: An enormous amount.
Q205 Sir Paul Beresford: Have you ever tried to
assess what it could be brought down to?
Mr Gilroy: If you look at the current attempt by
Government, and ministers I think have been
genuinely trying to reduce the burden, they called it
reduce the burden of PIs (Performance Indicators),
and I think they did, but if you look at what has
actually happened, all the regulators have said, yes,
we will go down to, whatever it is, 230 targets, but
quite frankly we still expect you to provide exactly
the same information as before, so in terms of this as
my business commercially, as I say, actually my costs
have not changed, they are still the same, so the
burden is still the same financially. So I think there is
a new relationship that we could develop which
would reduce that regulation, but it would still
deliver on a new relationship, the real things, the
important things that Government wants.
Q206 Chair: Mr Petford, do you have some
suggestions for additional sources of funds?
Mr Petford: I think it is important that the
Committee appreciates perhaps where the funds
come from. We have three areas, one is income,
about a third of our income in a District Council is
purely from car parking charges, crematorium,
whatever; there is then, of course, government grant;
and then tax. Now I do not think it is about more
taxation, because that is just not possible, the
economy cannot possibly deal with that, but I think
it is about more income, and councils could do a lot
more. You have given us freedom to trade, and that
is very good. But I think it is also about more
flexibilities around that, and we need to look at that
and get to the heart of that, what councils can and
cannot do. I mentioned right at the start about extra
responsibilities and duties, and I think if we could
look at that then we could free up some extra money
for local government, and I think one of the keys is
around income. I think the other is around
government grants, we have mentioned the business
rates, I think that is just—in some areas, it is just so
unfair, and we need to look at that, but I think you
have already accepted that certainly that needs to be
looked at. Whether you agree or not is another
matter, but I think around income, there is quite a lot
that we could do. I do accept that in overall taxation
terms, that is probably not possible, and certainly
not possible at the moment, but around income we
could do a lot more, given more flexibility and
freedoms.
Q207 Anne Main: Moving on to the eVect of regional
bodies on your ability to make local decisions,
speaking as someone from the East of England, I
have enormous sympathies with being a net
contributor. So do you think the funding stream
should be devolved down from, for example, the
RDAs to a more local level?
Mr Carter: Of course. I think that answer will be no
surprise to you. I am very disappointed by Lord
Mandelson starting to suggest that the centralist
model is going to come back. We were promised
some real prizes potentially under the sub-national
review, I very much hope that they are not removed,
on economic development, funds being devolved to
sub-regions. I have been the author of a paper called
The Kent Solution, looking at solutions for real
economic sub-regions where we can match the skills
agenda with the needs and economies of the
businesses within our local area. I ran population
massings of about 2 million populace, which has
gained considerable popularity actually, certainly
amongst all the South East leaders of all political
persuasions, and has been well received elsewhere in
the country. So I am very much of the belief that the
regional architecture needs to be dismantled and
sub-regions really need to be empowered. I accept
that the regions up and down the country are all very
diVerent, but when you have a region the size and
scale of the South East of England, where there is
very little commonality between Milton Keynes, the
Isle of Wight and a peninsular authority the size and
scale of Kent, big issues. Now how can an RDA
grapple with the diversity of the economies that are
functioning within that South East region? They
cannot. Therefore, devolve and empower to local
government to do what they know best in their subregion of the South Eastern economy.
Anne Main: I am sure you have a view on the fact
that, for example, the Government made a decision
to take 300 million away —
Chair: Can we not divert into that area, please?
Q208 Anne Main: No, I am not diverting away, it is
particularly germane to this: would you be saying
then that you would not want the funding to be
diverted oV into other government targets?
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Ev 36 Communities and Local Government Committee: Evidence
10 November 2008 Mr Peter Gilroy OBE, Mr Paul Carter, Mr David Petford and Councillor Mike FitzGerald
Mr Carter: Of course not.
Q209 Anne Main: And you would like to retain the
control over the funding, for new business, for new
housing, whatever?
Mr Carter: Yes, and likewise I think the real exciting
prize to be won is being able to determine how the
post-16 funding is spent, as I say, to match the skills
agenda —
Q210 Chair: Which you will be getting, with the
LSCs going.
Mr Carter: It depends. If they are still going to work
to a national prescribed formula, it is going to be a
massive missed opportunity. You talk to every FE
(Further Education) college principal in Kent, and
say if we had total freedom and flexibility in the way
that we spent that money, would we be running,
collectively with the FE principals, completely
diVerent FE post-16 institutions with our school
sixth forms? And the honest answer is yes, of course
we can, because of the ridiculous perversities in post16 funding, which is not matching the ambitions and
aspirations of young people to the ambitions and
aspirations of the local economy.
Q211 Andrew George: Can I just be clear, Mr Carter,
that you are saying that there is in fact no relevance
any longer in maintaining the existing structure of
quangos for planning, economic development,
transport and health within the government zone of
the South East?
Mr Carter: I think there is the need for a vestigial
function, which would be in strategic transport
planning and strategic infrastructure planning for
the Greater South East, and also looking at the
impact of the GLA to make sure that we respond to
whatever Boris may have on his list, and I am
meeting him later this week as part of the Eastern
region/South East region to discuss the impact of the
Greater London economy on the peripheral counties
and unitaries outside that. So I think there is a core
function, but it is pretty minimalistic, compared to
the current architecture in the regional landscape.
Q212 Andrew George: Would a better solution be the
creation of voluntary partnerships between the local
authorities working together, where there is clear
need for strategic —
Mr Carter: Absolutely, through multi-area
agreements or whatever.
Q213 Andrew George: And you are saying that the
economies of scale required for the delivery of some
of those decisions would be around the 2 million
mark, not the current —
Mr Carter: Well, if you are looking at a devolved
agenda, from Westminster, you cannot just sort out
the solutions in the South East, you have to have a
template that fits the whole of the country, and if you
end up with population massings of about 2 million
people, I think I am right in saying that including the
city regions built into that, you end up with about 28
to 30 sub-regions. Now could central government
from Westminster devolve and empower to 28 to 32
sub-regions and have a pretty good handle on what
is going on within them? Yes, I think it could. So
there is a logic, by the application of common sense,
in the empowerment with local government taking a
real strategic lead in the devolved powers that could
be delivered to those sub-regions of the country.
Q214 Andrew George: If you take the issue of
planning and say, for example, housing numbers,
where the regional spatial strategy largely sets the
tone and provides for the numbers in Kent, in what
way would the dynamics change, if you like, to the
advantage of Kent, as you see it, if you remove the
regional tier?
Mr Carter: We would be empowered with Kent and
Medway, Medway being a unitary, to sort out a
realistic housing growth agenda against a
government target that may be suggesting that the
numbers are there or thereabouts, and having a
really good dialogue with the 12 districts plus
Medway in working out the sensible allocation, the
infrastructure needs for the sub-region; as I have
said, working with retained function of a greater
area on some of the cross sub-region transport
infrastructure needs, which is absolutely essential
and absolutely important. The roads infrastructure
as well as the rail infrastructure will obviously be
part of it.
Q215 Andrew George: But a Secretary of State
would seek to impose through the examination
process the numbers which central government
required in the same way as they are through the RSS
(Regional Spatial Strategies).
Mr Carter: Yes, but it does not mean to say that the
sub-regional structure, in my view, would work
much better, be much more streamlined and much
more eYcient than regions trying to tell the unitaries
and the local government authorities what is good
for them when they do not have the democratic
accountability, and they do not have the intimate
knowledge of those sub-regions in the way that I
would hope I do in Kent and Medway.
Q216 Andrew George: But as a chair of a regional
assembly, you are democratically accountable,
presumably the majority members of that assembly
are also accountable, so are they not democratically
accountable indirectly for the decisions they take?
Mr Carter: You will know only too well, obviously,
that there is democratic fudge in all the regional
assemblies up and down the country. You have the
social and environmental lobby imposed in that
forum, and a sub-national review in the South South
East that is saying that we want a minimum of 60 or
70% of democratically elected leaders of councils on
the RDA body. That at the moment is causing John
Healey an enormous amount of tension and friction
in trying to resolve the sub-national review for the
South South East; a big issue, but it has to be
resolved, and in my view it has to engage democracy
in the appropriate way.
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10 November 2008 Mr Peter Gilroy OBE, Mr Paul Carter, Mr David Petford and Councillor Mike FitzGerald
Q217 Chair: Mr Petford, do you have any comment?
Mr Petford: I think in all of these things, size
matters. I think one thing that is clear at the moment
is the scale is too big. I think my council would agree
with Mr Carter, the scale is too big, it needs to be
smaller and more local. Where you pitch that is a
diVerent issue, and probably my council would take
a more localised arrangement than that explained by
Mr Carter. But certainly, size is a real problem. It
feels very remote. We are a growth point in
Maidstone, and traditionally, over the years, we
have certainly provided the houses over the years, in
recent years, we have provided quite a large range of
housing. We have achieved that, and done it rather
successfully, but it is only by working with
communities, understanding what communities
need, what communities want, and dealing with it
that way, so certainly it is far too big at the moment.
Councillor FitzGerald: We do want democratic
accountability. We are going to get empowerment as
it goes down, we will not get it unless we get
democratic accountability.
Q218 John Cummings: Whilst localism might be a
popular political stance, opinion polls indicate that
it is not very popular amongst the British public.
How do you think your residents would react, do
you think they would be in favour of local
authorities having additional powers, and if you do
think so, what evidence do you have to present to
this Committee to support that?
Mr Gilroy: It depends on what conversations you
have with your local residents on any given day of
the week. Localism is a jargon word —
Q219 John Cummings: That would be the same for
the local government in their opinion polls.
Mr Gilroy: If you talk to ordinary people about local
government, in the main, they are not going to be
terribly excited. We are doing this at the moment in
Kent on ICT (Information and Communications
Technology), on our mobile technology, talking to
youngsters about local government, and of course
the reaction you get is about their life, their personal
circumstances. People are interested in local
government when they need local government. It is
interesting, when we went down the route of a very
interesting dynamic in Kent which was Kent TV, a
broadband TV channel, I can tell you that most of
the pundits, the chattering classes, people like us,
were against it, and people would not wish to have
it. Well, we now have nearly a million people
watching it, and we have 40% of the video streams
being produced by local people. If you ask them a
question, would you wish your local authority to
develop these sorts of services for you, you will get
an absolute answer, yes. If you ask them on another
day, do you think —
Q220 John Cummings: Have you done that? Do you
have the evidence to support what you are saying?
Mr Gilroy: Yes, we have.
Q221 John Cummings: Can you present that to the
Committee?
Mr Gilroy: Not today I cannot.
Q222 John Cummings: But you would be able to
send it in?
Mr Gilroy: Yes, we can get you evidence to show
that.
Q223 Chair: Can we try a diVerent one? As indeed
did Birmingham or Manchester, you want control
over incapacity benefit to be handed to upper tier
authorities to ensure close co-ordination with
welfare to work programmes. Do you think you
would get a yes or no from the people in Maidstone,
and do you think you would get the same answer
from people in Margate?
Mr Carter: I referred to the Supporting
Independence programme, and the activities that we
have been on working in the most deprived wards in
the county of Kent, comparable with the rest of the
country, and had that analysed by Oxford
University, and the interventions that we have made
since 2002 on incapacity benefit, the conclusion that
Oxford University reached is that those people on
long-term incapacity benefit of maybe up to 10 years
or beyond have a 30% greater chance of getting back
into employment having had the interventions of the
Supporting Independence programme in the Kent
economy. We have statistics that Peter probably has
in his briefing note —
Q224 Chair: That is not quite the question. That is
the evidence the programme works. What we are
asking is whether you have evidence that your local
populations would support you getting those extra
powers.
Mr Carter: My answer would be, you talk to those
30% who have been on long-term incapacity benefit
now being able to enjoy employment opportunities
that were not there for them before. We have a
massive thrust on what we call our 14–24 unit for the
young people getting generational change by
making sure that we maximise the opportunity of
vocational programmes which we have been
pioneering for the last seven or eight years into
quality apprenticeships into sustained employment.
How can the public sector, I chair the public service
board in Kent, respond to creating more job
opportunities, with what I call reverse ageism in the
public sector? When you look at the age profile of
people under the age of 24/25, it is pretty small
compared to the population of the 45 pluses age
category. So what can we do, in the 12 districts,
roughly we have about 500 or 600 long-term
unemployed people per district in the Kent economy
under the age of 25, costing about £60–70 million a
year on the DWP or JobcentrePlus. We have some
massively creative schemes that we would love to run
with, but the freedoms and flexibilities that we are
given, we have been working with DWP for a
number of years —
Q225 Chair: Sorry, Mr Carter, I do understand that,
that is not the question that was asked. The question
was asked: before any of these powers are given,
have you checked with people beforehand and asked
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Ev 38 Communities and Local Government Committee: Evidence
10 November 2008 Mr Peter Gilroy OBE, Mr Paul Carter, Mr David Petford and Councillor Mike FitzGerald
them whether they want you to do it, and therefore
is there any evidence that local people, before the
power is given to you, actually want you to be given
extra powers? That was the question. Mr Gilroy?
Mr Gilroy: The answer would be yes if you are
talking to the particular users of that particular
service. If you talk about the generic population of
1.4 million, or nearly 2 million if you use the unitary,
the answer would be no, but it would be the same for
central government. Members go out and have a
manifesto and they tell local people what they are
going to do, the same as central government.
Anne Main: That is the bit I wanted to get to. You
probably say that politically, you would have to
ensure that this was spelt out as a political message:
does that cause any problems where diVerent
authorities operate on diVerent electoral cycles,
some coming up in thirds; for example, my own
district comes up in thirds. You would need an
electoral mandate at a local level to carry through
much of what you want to do. Do you see there is
some sort of need then to ensure that we have a
degree of maybe electoral reform to ensure this
happens?
Chair: We really do not want to go down that —
Q226 Anne Main: I am only talking about terms of
authorities —
Councillor FitzGerald: And we are on thirds.
Chair: And we need to get Maidstone in.
Q227 Anne Main: If you are on thirds, that is a good
question to you.
Mr Petford: I do not want to deal with the specifics,
but the diYcult questions I think are all about
engagement and leadership. To pick up your point,
sir, about localism, I think that again is about
engagement and leadership. As a council, my
cabinet goes round and visits every parish, calls a
parish meeting, and talks about its work, what it is
achieving, what it is not achieving, enters into a
dialogue. That is very time-consuming. I have to say,
when we first started it, as a chief executive, I
thought, hmm, we are not going to get much from
this; but it has been tremendous, the feedback has
been tremendous, and the council does things
diVerently because of that. I think you can do it on
a larger scale, we have had some diYcult issues in
Maidstone, so we have had meetings called a “big
debate”, and we have taken over the local picture
house and called the public, it has been packed out,
and the cabinet, and leaders of the opposition within
the council have had a debate with the public. Now I
think if you engage and you express those leadership
skills, you do move forward, and I think it is how
you do it. It is not about imposition, it is about how
you actually manage that process. It is hard, it takes
a long time, but it is certainly worth it in terms of
localism, and that for me is all that localism is about.
Chair: Thank you all very much. We have to move
on to the London boroughs, who have been sitting
here patiently. Thank you.
Witnesses: Mr Mike More, Chief Executive, Westminster City Council, Councillor Colin Barrow CBE,
Leader, Westminster City Council, Ms Moira Gibb CBE, Chief Executive, London Borough of Camden,
and Councillor Keith MoYtt, Leader, London Borough of Camden, gave evidence.
Q228 Chair: I am not sure whether you have been
here through both of the previous sessions?
Excellent, great. So I do not need to repeat the bit
about only one of you speaking unless absolutely
necessary on each question. Can I start oV then with
the issue of the use of existing powers, to ask each of
you whether you think that you currently have
suYcient powers to enable you to fulfil your placeshaping roles, and what you would do diVerently if
you had a power of general competence. I do not
mind which one goes first.
Councillor Barrow: I will take it first, if you like. I
think this is, if I may say so, not the biggest issue. The
issue is about being hamstrung. But we have the
powers to do really quite a lot if we want to. The
issue is that we do not have the entire freedom to
spend our money the way we might want to. That is
not the issue, because the power of general economic
well-being actually allows for much of what we
might want to do. The trick is to build in other
partners into that enterprise, people who spend vast
amounts of public money in our boroughs, to stitch
those people into a process is the much bigger issue
than having or not having the power of general
competence.
Councillor MoYtt: I think in the case of Camden,
our frustration again is not so much about the
powers that we have, but the fact that we have been
given the top possible score by the Audit
Commission, and yet we do not seem to be trusted to
run our aVairs. We are subject to an intense regime
of inspection and regulation that just does not seem
to match with that top score from the Audit
Commission.
Q229 Sir Paul Beresford: What does it cost you? All
of this auditing and CPAs and checking and
rechecking and revalidating by the government;
have you any idea what it costs?
Ms Gibb: We have not done the sums, but it is very
clear, and in a way it is diYcult because actually it is
a lot of time and preparation that is invisible, and
actually gathering it together, but just since the
Audit Commission came to us last December and
reported in May on our score, our top performing
children’s services has eight diVerent sets of
inspectors coming in to do diVerent things. We all
have a limited amount of attention, and I think our
concern is not so much about powers, but actually
trying to ensure that public sector spending is used
as well as possible. My analogy that I think is
relevant is combined heat and power, that so much
of the electricity is lost in the transfer—60%, I am
told, and I think that central government trying to
direct things locally just loses a huge amount of the
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Communities and Local Government Committee: Evidence Ev 39
10 November 2008 Mr Mike More, Councillor Colin Barrow CBE, Ms Moira Gibb CBE and Councillor Keith Moffitt
power, as it were. We are much better placed to
actually know what would work in a particular
setting. I think our sense is that they do not ask us
often enough, they set out to do things from the
centre without taking into account what our
experience and knowledge of the locality is. It’s a
kind of waste of resources.
Sir Paul Beresford: What is your council tax gearing?
Q230 Chair: Could we try and stick to the first point,
before trying to get on to a diVerent one?
Councillor Barrow: Could I answer Sir Paul’s
question from Westminster? He asked how much
does all this cost. We think we have about 45 people
doing the government’s bidding in the sense of
measuring what the government has asked, not just
delivering what the government has asked us to
deliver, but measuring whether we have done it or
not. That costs about £2 million a year.
Q231 Chair: Would you not have to measure it
anyway, for your own management?
Councillor Barrow: We would have to measure some
of it for our own purposes, but you could imagine
that some of it is unimportant to us, it is important
only to the government.
Q232 Chair: Can you give an example of that which
is unimportant to you and important to the
government?
Councillor Barrow: The amount of tactile paving
that is on the edges of our roads.
Q233 Chair: That is presumably quite important to
people with visual handicaps.
Councillor Barrow: It is, but it might not be
important to us, we might elect for it not to be
important to us. That is the point I am making. The
government does not get to choose what is
important for us. It can choose what is important
to it.
Q234 Sir Paul Beresford: So what is your gearing? In
other words, for every pound you spend doing this
stuV for government that you do not want, what
does it cost the council taxpayer?
Councillor Barrow: It is about four to one.
Q235 Chair: Just to go back to what you were saying
at the beginning, Councillor Barrow, about
partnerships, this is a diVerent point, so what is it
that prevents you from working in your partnerships
as eVectively as you would want to at the moment?
Councillor Barrow: Let me take worklessness. We
have some wards in Westminster where 45% of the
people do not work, where people have not worked
for three generations. Worklessness is a huge
problem, it is a cross public sector problem in the
sense that worklessness aVects life chances, aVects
life expectancy—life expectancy is diVerent in one
part of our borough from another—and it is
correlated with poverty and worklessness. It aVects
civil order, it aVects policing, as we all know, many
of you have been local councillors, you know exactly
how all this works. The only money that we have
been able to persuade our partners to put into the
public service pot to address the issue of
worklessness is the performance reward grant
attached to the local area agreement. It is not
possible to attach a bit of the DWP’s (Department
for Work and Pensions) grant which is
approximately three quarters, so the DWP’s funding
for work in Westminster, in benefits alone, is about
three quarters of the council tax entire spending; all
of our spending on education, all of our spending on
social services is approximately equivalent to the
spending on benefits by the Benefits Agency. Now it
has to make sense to be able to demand, with our
democratic accountability, that a part of that is
dedicated towards the relief of worklessness in the
area, because we can help to provide that economic
development, local knowledge, local understanding,
all those things, which are very diYcult to persuade.
Q236 Chair: Are you asking more than was put
forward by some of our previous witnesses, where
they were suggesting that if by getting people into
work, they reduced the total benefit expenditure in
their area, that they, the council, should be able to
keep that extra money; are you suggesting
something extra to that?
Councillor Barrow: I would not particularly want to
keep the extra money, but what I would want to do
is to enforce a regime of invest to save on all of the
public agencies who are working for the same end, it
is that. So I would like to be able to get a bit of that
money which they will save and say, “Let us have a
go at saving it together”, mutatis with the other
things.
Q237 Chair: I am not sure whether Camden actually
is using all the powers that it could do, is it?
Councillor MoYtt: We think we are very ambitious
in using the power of well-being, for example, in
social cohesion, which is a massive issue for
Camden. It is a very socially and ethnically diverse
borough, we have really pushed the envelope on
social cohesion. I am a great believer in measuring
what is going on in your borough before you try and
act on it, and we have carried out a series of social
capital surveys, and we actually use that as the basis
for our actions on social cohesion. We feel those
have been enormously eVective. So when we had two
of the bombs in Camden on 7/7, we were very well
placed, because of all the work we had done on social
cohesion, to react to that.
Q238 Chair: Apart from the necessity to report to
central government, are there any other things that
prevent you at the moment from doing things that
you want to do?
Ms Gibb: Probably resources, but I think that our
concerns are more about the relationship between
central and local government, rather than individual
powers, because again, usually resources are
required to go with delivering those. I think we
would welcome the sense of the local council, the
democratically elected body convening, I think
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Ev 40 Communities and Local Government Committee: Evidence
10 November 2008 Mr Mike More, Councillor Colin Barrow CBE, Ms Moira Gibb CBE and Councillor Keith Moffitt
Lyons’ view on that seems to me to make sense, to
have the opportunity to convene local services in the
way that others have referred to, in the interests of
the local community. I think everything that is
required to do to fit one size really makes us less
eVective and therefore ultimately Government and
public services less eVective.
Councillor MoYtt: If I could add something on
housing, that Colin just mentioned, it is a source of
great regret in Camden that we have lost £283
million because we did not go down the ALMO
(Arm’s Length Management Organisation) route on
decent housing. Again, it fell to us, as a top
performing borough, to be told we were going to be
dictated to as to how we could run our own housing,
it just did not seem right, and the people of Camden
are very aggrieved about that. Not just us as
councillors, but the people of Camden are upset
about it too.
Q239 Anne Main: Do you actually feel that you
should have more powers given back to you, because
then you can have greater decision-making, instead
of actually being dictated to, in the way you just
said? For example, you gave the ALMO as a
perfectly good example. Do you think there should
be more and more powers given back to you, and in
which case, which particular ones?
Councillor Barrow: Some freedoms and flexibilities
on housing would be helpful. For example, we have
quite a diYcult situation for housing, because not
only do we have, as in common with all other
Central London boroughs (very expensive property,
not quite as expensive as it was, but expensive
nevertheless, quite expensive property), and it is a
huge economic magnet for people coming into it, but
the bureaucracy that you have to go through to build
and deliver social housing on the ground is
phenomenally complex. I can add, I may be one of
the few people who does understand local
government finance, but I have to say, housing
finance completely leaves me in the dark. It is
unbelievably complex, and wherever you go, there is
a Pooh Trap about charity status, about tax, about
public sector borrowing requirement, about some
agency or another that is interfering with the whole
process. It really does need clearing out, and happily,
not solely in today’s trailer, but it needs some
attention paid to it, because it is not eVective, it is not
easy to do what we might want to do.
Chair: There is a review going on, of course.
Q240 Anne Main: If your authority is rated less than
excellent, say, do you think then it would be wise to
give additional powers to authorities?
Councillor Barrow: Yes. You have to make the
philosophical point that if an authority is rated less
than excellent, there are two ways to correct it. One
is to send in the men in the black hats, the other is to
send in the electorate, and those two are two
philosophically well-argued points that everybody
knows, but those are the two competing sources of
wisdom.
Q241 Anne Main: In which case then, how could the
police, for example, be accountable for delivering
national priorities if there were not national policing
targets, or are there certain strands that you say, no,
those have to stay with national targets?
Councillor Barrow: I think if colleagues spend as
much time in local community meetings as I do, they
will have heard exactly the same thing, that
approximately half of the views that the public
express to us are about policing. If ever there was
something where the connection of the police’s
activity with local demand needs to be there, it is in
that context. Is it murder or is it rioting, I do not
know, that is a national—but there are some things
that are very important locally, and residents have a
right to have a say about that. It is a pretty
disconnected picture; even in one where—I chair a
meeting every quarter with the police commander, a
great big public meeting, you have never seen as
many policemen in one room as for that meeting, it
is a very eVective partnership, but in the end, it is
dragging the police kicking and screaming into local
accountability, and they have come a long way in
the Met.
Councillor MoYtt: We are sometimes set conflicting
targets. There is a target about first entrance into the
youth justice system, our target is to get it down and
the police’s target is to get it up, so actually some
joined-up working on the setting of targets would be
extremely helpful.
Q242 Anne Main: But locally joined-up thinking,
and also trusting yourselves locally, because you did
say even if an authority is not rated excellent, it
should be allowed to make these decisions, so
whatever the rating of the authority, local priorities,
local targets and joined-up local thinking seems to
be, correct me if I am wrong, what you are
advocating.
Ms Gibb: Yes and I also I think I would say a respect
for local democracy. It often seems that those other
public services are directly accountable to the centre,
and do their best, I think, to join in partnerships, but
if we do believe that actually locally elected
representatives matter, then they ought to have a say
in those other services as well.
Q243 Anne Main: And no stepping in and rescuing
you if it looks to central government like you are not
doing it as well as they would like you to?
Ms Gibb: I think it has to be a settlement really, and
I think it is an issue of principle at the heart of this
that somehow or other we have been turned into the
children —
Q244 Chair: Right, there are two points we want to
bring in on that. One is directly to Westminster, who
I believe had some investments in an Icelandic bank,
and who, as I recall—and I will look for the piece of
paper with the actual wording—have actually
suggested that Government should help you out.
How is this consistent with you having freedom to —
Councillor Barrow: I do not think you will find that
Westminster will have said that, I certainly have not.
What I have said is that the Government is at risk of
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10 November 2008 Mr Mike More, Councillor Colin Barrow CBE, Ms Moira Gibb CBE and Councillor Keith Moffitt
shooting itself in the foot in what it is trying to
achieve in financial markets, because if it says to
local government, “You are on your own, good luck,
pal, you have invested in Iceland, too bad”, then the
corollary will be that local government will
inevitably say, “Well, we are going to retreat to much
more cautious investments”.
Q245 Chair: We understand that point, I will read
back to you from your own press release: “Along
with the Local Government Association and
London Councils, we will be lobbying the
Government hard to underwrite these deposits and
ensure far greater financial security and probity in
the UK’s banking system.” Is that consistent with
local authorities taking responsibility for their
failures as well as successes?
Councillor Barrow: If I may, Chair, I was halfway
through explaining what precisely it was we were
saying, which was that if the Government wishes to
restore confidence in the system, it cannot have £25
billion, being local government’s investments in—
being pulled out for safer waters, because that will be
the inevitable consequences of saying, “You are on
your own”. That is the slightly more indirect—
though there are people, and the LGA is one of
them, saying we should just be repaid, and we have
not taken that view.
Q246 Mr Betts: Just a couple of issues there: there
might be an argument for saying that actually local
government is an awful lot better run now than it
was 20 years ago, and one of the reasons is that
central government has insisted that standards get
raised, and has taken the opportunity to insist that
there are targets to measure that improvement by.
Secondly, if the alternative is you leave it to the
electorate, there are some rather bad examples, are
there not, like Hackney a few years ago, where the
electorate kept changing their minds about who they
wanted to run the council, but it still got run very
badly.
Councillor Barrow: Yes, it is a philosophical debate
to which I can adduce no evidence whatsoever. You
are asking for evidence, I am not going to give you
evidence, I do not have any.
Q247 Chair: Such refreshing frankness!
Ms Gibb: I was just going to say that if it is about
Government setting targets, then why is local
government the most improved part of the public
sector? I think local government must have done
something itself; I think it was challenged by various
target setting and regulatory inspection regimes, but
it has raised its game. It seems to me again that the
sense in central government is that actually, with due
respect to my political colleagues here, that it is the
management of local government, so there is a desire
to see it as just the administrative end of central
government, and actually I think the bit that is
missing is respect and a proper place for the
democratically elected government that is not local
administration, it is local government, and therefore
that central role in relation to the other public
services in their areas as well is very important and
has not had enough attention.
Anne Main: Can I just task you on that? That was
leading on to what I wanted to ask, about the respect
for the representatives of local government. I am
sure we have an excellent group of councillors here
in front of us, but some people have argued that the
very fact that we do not have very high quality
calibre councillors is because they are not actually
allowed to do a lot, and if actually they had more
influence and more say, you might attract younger,
more dynamic, more business savvy councillors in.
Chair: As they obviously are!
Q248 Anne Main: I am saying they are, but it is an
issue in some areas that people do not put
themselves forward.
Councillor MoYtt: It is an issue about retention. I
would say I have eight councillors under 30 on my
council, and they have given up four years of their
life at a point where a lot of people are pursuing their
careers very vigorously, and they are not really sure
how much influence they have. Equally, members of
the public come along to us and ask us to put things
right, and as Colin was saying, we end up saying,
“No, that is the police, that is TfL”, so that is a very
frustrating position to be in, so I think it means a lot
of people come into local government with high
hopes and then do not stay, which is very sad after
four years of learning and personal investment, that
they do not feel they can make suYcient impact to
want to stay.
Q249 Andrew George: The impression I get is that
despite the ambitions, you are relatively impotent
agents of central government, and that is very
frustrating to you. I just wonder whether I could test
your ambition and vision by asking you the magic
wand question, and that is the government comes
along and says to you, aside from war-making
powers, you cannot declare UDI, you cannot change
Treasury priorities, but underneath that, what two
policies would you deliver tomorrow, given freedom
to actually range very widely? So what are your
ambitions in terms of being given more freedom and
power, what would you take on, what would you do?
Councillor Barrow: Do you mean what would we
deliver, or do you mean what powers would we
want?
Q250 Chair: Both really. What powers, and what
would it allow you to do with them?
Councillor Barrow: I would like the power, as the
local democratic authority, to direct a proportion, I
do not know what that proportion is, but to direct a
proportion of the DWP’s, the police and the Health
Service’s budget to priorities determined by the
council, in the interests of the place-shaping role, be
that 20%, 10% or 50%, I do not know, I have not
thought about it in that much detail, but to be able
to ask for a proportion of that as being part of the
local authority scene, that would enable us to deliver
what I touched on earlier on, which is a
comprehensive programme of getting after the sort
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10 November 2008 Mr Mike More, Councillor Colin Barrow CBE, Ms Moira Gibb CBE and Councillor Keith Moffitt
of social costs of worklessness, and so on and so
forth, community cohesion, all that sort of nest of
things that I can explain but all obviously belong
together.
Q251 Andrew George: It is quite complex obviously.
Councillor MoYtt: If I could have one, I suppose I
would like to have that power that the public assume
you have: in my ward, we have a major transport
interchange that we would like to bring together. At
the moment, I feel impotent, it feels like waiting for
somebody else to come along and do something,
waiting for the private sector or TfL to come along.
I would like to be in the position maybe to issue
bonds, raise money and make it happen. Again, that
is the sort of thing the public imagine you can do, so
they imagine you are not very good at your job,
because you are not doing it.
Q252 Andrew George: Would that address the
fundamental issues which actually concern your
local population most?
Councillor MoYtt: That totally would. That is an
issue about transport, about safety, about economic
well-being of the community, and there is a danger of
having to wait for somebody else to come along and
come up with a solution, rather than putting it
forward yourself.
Chair: Which I think brings us nicely to local
government finance.
Q253 Mr Betts: So is the fact that you can actually
raise only such a small amount of the money you
spend yourselves a major obstacle to you actually
having a real ability to change the lives of people in
your communities?
Councillor Barrow: It is. Westminster is probably
unusual, Camden is pretty close, but in being host to
this massive shop window for England, being the
West End and the whole Central London thing.
Kensington and Chelsea, you, we, the City of
London, and so on, we all experience that sort of
thing. We have to deliver that, it is a sort of
responsibility to look after it, keep it warm and fuzzy
and functioning for the benefit of everybody,
because frankly, anybody who goes to Barnsley is
coming through London, if they come from abroad.
That is how it works. So we have a responsibility, but
we have to pacify our residents and so on and so
forth to encourage them to act as hosts to that whole
area, and we have to connect local people with the
employment opportunities. So that is a huge
responsibility that rests on us. The obvious
mechanism for expressing that responsibility is the
business rate, because we collect £1 billion in
business rate and we get back £154 million. You
might say, well, we are undeserving, and are we not
frightfully rich, and so on; we are not, we have four
of the most deprived wards in the country in
Westminster. I think we have the two most deprived
wards in the country. So it would be nice for two
reasons: firstly, to make those connections and
alleviate all of that, the second is that big business
needs big infrastructure. A lot of chaps were
concerned about how to fund Crossrail; we could
have done the whole thing, just us. But we would
have needed the business rate.
Mr More: Can I give an illustration of this dynamic?
If you take localism, it means that every area is
diVerent, and if you take the Westminster economy,
we represent, I think, nearly 3% of the total GDP of
the country in the eight and a half square miles that
is Westminster. We have 250,000 residents who live
in the borough, we have more than a million people
who visit the borough every day, be it for work, be
it for tourism or whatever, and we have the business
community. The sense of the council being able to
reflect and represent and engage with all of those in
a rounded way is a fundamentally local question. A
national system, which in a sense focuses on business
rate as if that is not the reality, that we are so
responsible for so much of the economy, is
potentially distorting the mechanisms of
engagement the City Council can have. We have
three business improvement districts, and they are
very good and very eVective, in Oxford Street, in the
West End and in Paddington, but they are distinctive
and particular, rather than opening up more general
openness to the business community.
Q254 Mr Betts: This is fine, the Treasury are going
to sit there and think, that is great, but currently we
are putting more business rate eVectively back into
some areas than we are collecting from them, some
of those are clearly deprived as well, and if we
localise the business rate, we as a Treasury are going
to have to fund or give extra money to those areas
without a great deal of ability to claim business rate.
So is there not an element of fairness in the current
system, just on the matter of principle that it is more
democratic?
Councillor Barrow: I do not think it is actually more
democratic, just because it has been arrogated to
central government, it has gone from one democratic
level to another. What you have though is
disconnected the business from the rate. The
business has no vote, the business has no connection,
there is no partnership in relation to the business
rate, it is just taken into the centre and redistributed.
So there is no engagement. We actually engage with
very big businesses in the centre of town, over really
quite small sums of money, on Streetscape and that
sort of thing, because we cannot discuss the major
things that aVect major contributions to the business
rate, because it is all dealt with by the Treasury.
Q255 Mr Betts: Is it just the business rate where you
would like to see change in terms of more devolved
ability to raise finance, or do you have other ideas
about how you would raise more money locally if
you had the chance, or do you think you should just
be given the general freedom to raise money?
Councillor MoYtt: I mentioned bonds; to be honest,
I have not thought this through very carefully,
because it seems fairly unlikely to happen in
London, but maybe it is a response in the present
financial situation with the recession if local
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Communities and Local Government Committee: Evidence Ev 43
10 November 2008 Mr Mike More, Councillor Colin Barrow CBE, Ms Moira Gibb CBE and Councillor Keith Moffitt
government is going to take a lead in that situation,
take a lead in making investment, we need
fundraising powers.
Q256 Mr Betts: How, what? Any thoughts? Via a
local income tax, presumably.
Councillor MoYtt: Sorry, I was not speaking very
clearly, I did mention the idea about using a local
government bond to raise money, on things like the
interchange I have talked about. We are extremely
fortunate in Camden in fact we have a major project
at King’s Cross Central that still appears to be going
ahead, which is very helpful for us, but there are
certainly many other local authorities, I think, who
would welcome being in a position to inject money
into similar large scale projects, maybe not quite so
large, to be able to give their own economy a bit of
a push at the moment.
Councillor Barrow: As a matter of principle, I think
local government ought to be free to raise taxes in
whatever form it chooses, and exempt people from
taxes in whatever form they choose, and be
accountable to the electorate for those choices. I can
see no reason why not particularly. I am no fan of
more taxes, nor more types of taxes, but as a matter
of principle, it may be that successors of mine might
want to raise a tourist tax, because we have huge
numbers of tourists and so on and so forth. Might we
want to do that? Yes, we might. We are not going to,
but people might, and I do not see any particular
reason of principle why we should not be allowed to.
Q257 Andrew George: Can I just ask whether you
have made any kind of assessment about the
potential use of the Sustainable Communities Act
within your local authority, whether you have any
plans to use it; do you have any intention to consult
your local communities and to apply the provisions
of the Act within your own borough?
Councillor MoYtt: We are at a fairly early stage, I do
not know if you want to add anything, we think we
are doing a lot of the things already that the Act
would enable us to do. So to be fair, I think we are
not racing ahead in looking at its potential. Do you
want to add anything to that, Moira?
Ms Gibb: I think again, when you ask Government
why they are doing something, you often get the
answer, well, these authorities over here are not
doing anything, but we are; well, tough, you still
have to consult your community. Most of the things
that we are being asked to do, we do already, people
have lots of opportunities to be consulted, and we
would certainly consult on it, but it is again a
national directive to local government.
Q258 Andrew George: No, of course, theoretically at
least it is a route by which you can gain additional
powers if you make a good case, is it not?
Mr More: I think we in Westminster welcome the
Sustainable Communities Act, we see it as consistent
in the line of direction that we as a City Council have
gone down for some considerable time, giving
examples that we are engaging with local
communities in a structural, formal and informal
sense all the time. The level of engagement and
consultation is huge, the number of groups with
whom we work all the time is huge, and that is
consistent with that. We have initiated an audit of
public spend with which we have engaged with all of
the agencies who spend in Westminster, starting with
the City Council, breaking that down ward by ward,
and then looking to bring in PCT, DWP and other
spending, by all public spenders in the borough.
That is in part to inform for us the basis of beginning
to recognise the huge sums of money that will be
spent by public services in Westminster, and on that
basis, to begin to develop this idea, what can we do
to pool and to integrate? Also to use that as a topic
which we have not really touched on in community
yet, which is the concept of local commissioning, so
if we were to take the worklessness agenda, one of
the barriers that we find at the present time is that we
find it very diYcult to share data with the DWP and
JCP, and analyse data about worklessness and where
it is, we want that in order to be able to develop
meaningful strategies, to tackle worklessness,
natures of jobs, what sectors, what location. We are
actually barred, in a sense, from getting the full
benefit of the information and data from DWP and
JCP. So that is a matter of practice which is very
important, in terms of forming a kind of local
commissioning concept.
Q259 Chair: You are barred because of the Data
Protection Act, presumably?
Mr More: Various reasons—yes, absolutely. DWP
rules are not to give us, even though it is
anonymised —
Q260 Chair: Because government departments
themselves are not allowed to share either.
Mr More: That is a resource that is simply stopping
eVective commissioning, because if we are to deal
with worklessness on our estates, as the leader has
said, a significant proportion is getting that data,
developing strategies with JCP mean we are able to
do something much more tailored, so we would like
to use the analysis in there to build on that. Then on
that basis, we would want to move forward and take
the opportunity of the Act to look at transfer of
powers, so in the context of worklessness, the idea of
measured transfer of powers and responsibilities
under an umbrella of joint commissioning. So those
would be the kind of things that we would be looking
for the Act to do.
Q261 Mr Betts: You have probably heard previous
witnesses express, shall we say, limited enthusiasm
for the Central-Local Concordat that was
announced. I also asked them whether they thought
that there ought to be, at least in the medium term,
a change in local government’s constitutional
position, maybe not quite exactly the same standard
as the Scottish Parliament, but at least one where
central government did not come along every two
minutes and change the rights of local government
to undertake certain activities. Do you think there is
a need for a change, it is something we should be
working toward, to put local government in a firmer
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Ev 44 Communities and Local Government Committee: Evidence
10 November 2008 Mr Mike More, Councillor Colin Barrow CBE, Ms Moira Gibb CBE and Councillor Keith Moffitt
constitutional position where change happened by
consent with yourselves rather than by central
government or Parliamentary dictat?
Councillor Barrow: I have to say that we have not
spent a great deal of time in our political group
meetings discussing the Central-Local Concordat,
there has not been the demand for that debate. It is
disgraceful, and I promise I will rectify it
immediately, and report back to central government
on the progress that I am making with it.
Q262 Mr Betts: They will get one report on it.
Councillor Barrow: Let me just say that we are all on
the same page about worklessness and the recession,
how important it is, but in the last six months, it says
here, bidding rounds have opened for six diVerent
funding streams designed to help local people into
work. They are the Flexible New Deal; the Working
Neigbourhoods Fund; the European Social Fund,
with three sub-strands administered through the
DWP, LDA and London councils; the Child Poverty
Unit; JCP programmes; and the LSC adult
advancement career services pilot. Also, the
Government has issued 11 pieces of primary
legislation with significant implications for
Westminster in 2008, and 600 new regulations that
impact in some way on the City Council. It is pretty
expensive to work out what those all are, and what
we have to do, and there is a certain amount of
greyness about what a lot of those things are. Some
of them are obviously very black and white, but
some of them are very grey, and that paralyses us. We
do not just have the opportunity to get on and do
things. In France, if you stand for Mayor, you say,
“I want a tram over there, it goes from there to there,
and I want to stand for election on the basis that I
will deliver that tram”. You get voted in, and you
deliver the tram jolly quickly, because you only have
four years and you are up for election again. If you
are asking for a constitutional settlement, that is a
model of local government that could not be more
diVerent from what we have here. If that is what you
are talking about, I would absolutely welcome it.
Chair: I do have to say though, in the French system
they also spend a great deal more money.
Q263 Sir Paul Beresford: Have you not understated
those, because of course Government is giving you
that, and then it is going to audit it, and you are
going to have to audit it, and it is going to set targets
for it, and you are going to have to produce for the
targets, and then they are going to come back when
you send the information in, and your 45 men or
women working on this are going to be 60 or 100.
Councillor MoYtt: If I could just pick up a point on
the Concordat, I am sure your predecessor would be
very sad to hear you have not paid more attention to
the document he signed, but I think what I find
frustrating is the constant tinkering with local
government. Actually knowing where we stand
would be very helpful. Each new minister comes
along with a new set of initiatives, none of which
seem to have a very major impact. Here we are in the
middle of a violent recession, if you like, and we are
worrying about consulting on the 2007 Act, parish
councils and leadership models and so on; it feels like
the wrong time to be doing it, and actually having a
stable framework so everybody knows where they
are and what the relationship is, and hopefully a
relationship where local government is seen less as
the junior partner would be extremely helpful.
Chair: Thank you all very much.
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Communities and Local Government Committee: Evidence Ev 45
Monday 17 November 2008
Members present
Dr Phyllis Starkey, in the Chair
Sir Paul Beresford
Mr Clive Betts
John Cummings
Jim Dobbin
Andrew George
Anne Main
Dr John Pugh
Witnesses: Mr Andy Sawford, Chief Executive, Local Government Information Unit, Councillor Merrick
Cockell, Chair of London Councils, and Ms Anna Turley, Deputy Director, New Local Government
Network, gave evidence.
Q264 Chair: Can I open the second session on the
balance of power between central and local
government? All three of your organisations are very
strongly in favour of further devolution. Obviously,
the more devolution there is that will inevitably lead
to greater variation in delivery at a local level. I am
not talking about quality of delivery here, which
obviously varies from organisation to organisation,
but an intention to deliver a diVerent standard of
service in diVerent places, the so-called postcode
lottery. Do you think it is acceptable that some
councils will choose to deliver lower standards of
public service than others? I do not mind who starts.
Mr Sawford: We look at the postcode lottery debate
with the language of local diversity—meeting
diVerent local needs and meeting diVerent
individuals’ needs. We would support central
government, or parliamentarians for that matter, in
wanting to set minimum national outcome targets
for public services. When we think about areas like
healthcare and policing and education, they are
going to form a lot of the dialogue around election
times and be key in the manifestos of the political
parties. So we would expect you to still want to assert
a strong role, but we would also say that at a local
level community needs vary greatly and for some
time the performance framework in which councils
operate—the financial framework in which councils
operate, and the legal framework in which they
operate—limit their ability to meet particular local
needs. Specifically, just to finish from opener, we
would say that, given some of the challenges coming
up, like demographic change, given that we all know
we are going to have to deliver services in very
diVerent ways and probably get more bang for our
buck. In terms of the services that people receive,
that is going to involve a dialogue with individuals
about which services they want to access from a
package of local services about how best they want
their contribution to be put to work for them and
their needs, and unless central government shifts the
political accountability for what central government
fears out of the postcode lottery to a local level and
says: “You make the tough decisions at a local level.
If you want a hospital to be maintained in your area,
even though nationally we might judge it not to be
particularly eYcient, if you make those decisions,
you will also be aware that there are some
consequences of that”. It may mean less investment
in other areas of public service. It may mean diVerent
types of investment in other health services in a
community, but communities should absolutely
have the right to have those debates and to make
those decisions.
Q265 Chair: Councillor Cockell, your organisation
has argued indeed that political risk would be
transferred from the national to the local level. In the
light of the current furore about Haringey, and we do
not want to go into the details, obviously, do you
think that is a realistic assertion, that risk would be
transferred from a national to a local level and that if
there were a catastrophe in some council somewhere
people would not be demanding that the
Government does something?
Councillor Cockell: I do not suppose it would stop
people demanding that somebody does something,
but as for whether it is Government or whether it is
that local authority that had responsibility for either
the direct provision or the enabling or supervision of
local services, I do not know. Currently the system is
to demand that the minister or the Prime Minister
makes a statement and something must be done.
Quite clearly, what we are talking about is the whole
picture, as you say, not just one particular tragic
incident, so I still believe that national government
should pass down the risk and responsibility more to
local areas.
Sir Paul Beresford: I have been in both local
government and central government, and when you
sit as a minister you sit there looking at a sea of local
government. I have used this phrase before. You
have got the good, the bad and the ugly, and we have
had an ugly mentioned just now. They are not alone.
There are plenty of them, just as there are plenty of
good ones. Government has a National Health
Service and it has its national policies, et cetera. It
has to have some hold. How does it divide the whole
but release it in other areas so that you can go ahead,
because realistically at the end of the day, unless you
like the one that was just referred to, it is
Government that catches the backlash because they
set the policy?
Q266 Chair: Ms Turley, do you want to come in?
Ms Turley: Thank you. I completely agree with
Andy that we would love to see central government
maintain some sense of a strategic overview and a
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Ev 46 Communities and Local Government Committee: Evidence
17 November 2008 Mr Andy Sawford, Councillor Merrick Cockell and Ms Anna Turley
sense of minimum standards, but in today’s society
there is so much diversity in terms of demography,
ethnicity, the amount people move around in their
local area, that it is simply not possible for us to
maintain public services, the way they are structured
at the moment, to be able to provide the level of
standards that people need in a personalised and
tailored way. At the moment we already have a
postcode lottery in so many areas. You only have to
look at the life expectancy from one borough to
another or even from street to street to see that at the
moment it is simply not working, and so by allowing
local authorities much more ability to tailor and
focus their resources and their powers to provide
services in a way people need they would be much
more likely to have a substantially better outcome
than through a top-down restrictive framework.
Councillor Cockell: Could I just deal with Sir Paul’s
question about the good, the bad and the ugly? I
think there are fewer ugly local authorities than there
were, and one could quote the CPA (Comprehensive
Performance Assessment), certainly in London
where there are no failing authorities, but, more
interestingly, from the survey work done on local
residents’ perceptions in London, and I can only
speak for London, it is bucking a national trend so
there is better perception of local authorities in
London. However, I do think that the Government
is absolutely more than entitled, has a responsibility
to set appropriate minimum standards, whether that
is in the care of vulnerable children or in health or
whatever it may be, that are right and proper and
local authorities should at the minimum deliver to
those standards, but above that they should have the
flexibility to decide that some areas (indeed, our
services are all diVerent and we are doing that
generally anyhow) are of greater importance to their
local people than other areas and to focus spending
priorities in those.
Q267 Sir Paul Beresford: What should they do with
a failing authority?
Councillor Cockell: I think what increasingly we are
doing in local government and that is to sort it out
ourselves.
Sir Paul Beresford: This is the second time Haringey
in a very short space of years have had this calamity.
Q268 Chair: It is fair to say they are a three-star
social services authority as well, so generally
speaking they are judged good.
Councillor Cockell: I am trying not to draw
conclusions on something we are only beginning to
know more about. You could take another London
authority, Waltham Forest, which I think was the
fastest mover from zero to four-star, which was
recently declared. Waltham Forest did it partly—
and here I am as a Conservative quoting a Labourrun administration—with local commitment but
they also did it with all the other London boroughs
through something called Capital Ambition, which
is the regional improvement and eYciency grouping
that we run within London, and so all the boroughs
cross-party helped Waltham Forest to raise their
standards. We did not look to somebody else to wave
a stick over Waltham Forest to tell them to do it. We
knew in London they had to get their act together
because it was harming all of us if they were
performing badly, so I say we have the capability and
the record of doing that.
Chair: That is a very good example. Can we
concentrate on policing and health?
Q269 Mr Betts: I have got two issues here which are
very important to the public. I suppose there could
be an argument that the Department of Health has
been reorganising its PCTs (Primary Care Trusts),
probably trying to get them into better shape. The
Home OYce has got a Green Paper out looking at
how we might get direct elections to police
authorities, presumably making them more
accountable. With all the other problems that local
government has at present, all the issues it has got to
deal with, is there really a case for extending local
government’s remit into police and health?
Mr Sawford: We have worked with organisations
carrying out research with the public. We ourselves
regularly poll councillors’ opinions and you might
say they have a vested interest but I think they have
a perfectly legitimate right to have a say on this. Both
the public and councillors feel that there should be
stronger accountability at a local level around
policing and healthcare. Policing comes out as the
number one issue that people want a say over in their
community, and one where there is least opportunity
for them to do it. You will know this from your own
experience in your own communities. The
consciousness of what the Police Authority is, what
it does, who its members are, is variable across the
country and in many areas it is fairly low. I think
London is slightly diVerent. I think many people
would see because of the mayoral system being
diVerent, but in many parts of the country, certainly
where I live, that sense that you can really influence
decision-making in policing just is not there and that
is something that all the political parties nationally
accept and have all got diVerent proposals on, and it
is something that Sir Ronnie Flanagan has
mentioned in his report, and it is something that the
Government now are looking at. Where we diVer
from the Government is in the proposals they have
brought forward, and I know that is not the concern
today of this Committee, but in looking at proposals
around policing and proposals around the future of
health services, and obviously there is a debate about
the NHS constitution and other areas, we are doing
some interesting work (or at least I hope the
outcome will be interesting) around local
environmental stewardship. We have set four tests
and these are tests for the Policing Minister to take
up even though we come to diVerent conclusions;
which is that we should make our services more
democratic, more local, more joined-up and more
eYcient, and it is the joined-up element that we
would emphasise particularly as you as
parliamentarians make any comments around
policing. I know you are seeing the Police Minister
today, and as you look at the forthcoming Bill, which
is that separate and individual policy-specific
mandate around policing—and we are seeing it in
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17 November 2008 Mr Andy Sawford, Councillor Merrick Cockell and Ms Anna Turley
national parks and to a certain extent in a very
specific context in healthcare around foundation
trusts—are fragmenting local democracy and in our
view will have the potential to do so rather than join
up services and build on from what has been a very
welcome development of local partnership working
and local area agreements.
Q270 Mr Betts: The talk is about the public not
understanding arrangements but by the very nature
of them, given the size of many police authorities, it
is not going to be one individual council that has a
remit to oversee or direct or influence or even
determine what happens within the police’s work. Is
it not always going to be slightly convoluted and is
not the idea therefore to have direct elections,
something the public could very easily understand
because it is pretty simple?
Councillor Cockell: I was keen to intervene there
because the proposal that is included in our
submission to you relates to a whole variety of areas,
not necessarily currently within the local authority
area of remit of responsibilities. Policing is a very
good example where, certainly in London, there is
very good connection at a local level between the
police authority and borough policing. We think the
way ahead is for commissioning to be carried out
along with the budget for level one policing,
particularly neighbourhood policing, in other words
to be joined to the budget that local authorities
spend, which is often quite substantial these days,
pool those together and then for the local authority
to commission the borough commander to deliver
level one policing in our area. That brings in the
requirements of the Home OYce, so, rather like the
dedicated schools grant, it would come with strings
attached, literally, to the money, so there would be
national priorities there. There would no doubt be
priorities coming from the police authority, but
added to those would be local priorities and, that
said, that set of priorities would be commissioned by
the local authority for the borough commander to
carry out. It means you do not have to totally
reorganise the current structure. In fact, you do not
have to reorganise it at all; it exists, but the local
voice, the local needs of that community, have a real
chance of being heard and then followed rather than,
as we know, the nigh on impossibility of local views
being taken into account in direct policing
operations.
Q271 Mr Betts: Would the same apply to health?
Councillor Cockell: The same would apply to health.
Certainly the London Councils’ model is that it
would apply to PCTs, that we would be the
commissioners for local health services in our area,
or indeed that we would from our own choice agree
to form groupings to do it. It may not be necessary or
ideal to have 33 of everything in the case of London.
There may be very good reasons, again without
changing the structure of local government, to ally
together with neighbours or others to achieve certain
things better.
Mr Sawford: We developed a similar model. I will
not go into the detail except to say that
commissioning is the key and how you use local
commissioning, what an opportunity that presents.
It is the key to innovating, to getting people
involved.
Q272 Chair: Are you saying that commissioning is
more important necessarily than electing people to
some new body or whatever?
Mr Sawford: I think in the end what you will be
judged by and what councils will be judged by are the
services that people receive. Whilst particularly for
the Local Government Information Unit our whole
mission is to make local democracy work, we think
local democracy is important of itself, we also
recognise that unless the proposals we bring forward
really make a diVerence to people’s lives and
improve services people will not see our work to be
of great value. We join up a stronger element of local
democracy, and there is informal democracy
through commissioning, how you involve people in
the design and delivery of their services, but also
formal democracy, and finance is the lever in our
model, as in the London Councils model. It is the
lever whereby you put more of the power to the
elbow of councillors and in the end you get
accountability back to the ballot box.
Commissioning is where the opportunity is and
where the excitement is.
Q273 Anne Main: In which case would you be
arguing then for scrapping national targets, say, for
delivery of policing?
Mr Sawford: No.
Q274 Anne Main: That is simple and great, it is a no.
In which case, if you are not arguing for scrapping of
targets, how would you react to the fact that the
police would like to see in some areas the merging of
authorities because they believe they have a deficit in
the requirement to, say, deliver on counterterrorism? How do you react to that? If a local
authority says it needs that, as my authority said it
would like to have Bedfordshire and Hertfordshire
together because Bedfordshire had the terrorism
expertise and Hertfordshire did not have that
expertise, how would you react to that? How local
are you going to try and make this?
Ms Turley: This comes back to my first point about
how just how complex the issues are that both
central and local government are having to deal
with, and that is why in terms of devolution we really
need to think about the appropriate level for all the
kinds of services we deliver and the way we do that.
What we are starting to see and I am really
encouraged by are things like the multi-area
agreement process, which is where we have central
and local government sitting down as partners and
working through the way they deliver services, the
shared outcomes that they want to achieve. I think a
similar sort of approach on policing would be quite
helpful in that central government, of course, has to
maintain oversight on serious organised crime,
terrorism, financial crime, all kinds of things like
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17 November 2008 Mr Andy Sawford, Councillor Merrick Cockell and Ms Anna Turley
that, but we are seeing really good steps in terms of
local policing, neighbourhood policing and so on. It
is really important that local people—and we heard
it through the Casey Review—feel very strongly that
they want to have a say in their policing. My view is
that that is not necessarily by the creation of a new
elected representative on an authority which most
people, as Andy says, have very little awareness of
and which perhaps not only duplicates some of the
role of the local authority but may start to fragment
policing from the wider place-shaping agenda.
Q275 Anne Main: In which case, since you said no to
scrapping of targets, the other thing my police argue,
and I know this is a common argument, is that they
are driven to act in a certain way, which may not be
what the local community wants, because of
Government targets. You cannot have it both ways.
You just said, “We would like to deliver what local
people want on the ground”, but what local people
want on the ground is not a Government target.
How are you going to resolve that tension?
Ms Turley: That is where central government needs
to have a much better conversation and listen much
more closely to what local people need and ensure
that the resources it supplies are not solely focused
on what they want to achieve but that they allow
police the flexibility to maintain not only their links
with central government and with the overarching
targets but also with the local people.
Q276 Anne Main: You say “overarching targets”.
Given that there has been a plethora of additional
targets, are you saying fewer targets but not to scrap
all the targets?
Ms Turley: I think we need a fundamental look at
what the purpose of the targets is. There is absolutely
no point in having meaningless top-down targets.
They have to be ones that fit in, that the police can
deliver on and where central government can say,
“This is why we want this”, and have a proper
conversation with the police force and with the local
authorities to say why this is a priority, why this is
important, and then there may need to be a
conversation where local authorities will say,
“Actually, I am really sorry but that contradicts
what we are doing locally”. There have been some
quite strong discussions during the LAA process
where the Home OYce and other departments were
very keen to emphasise particular targets on local
areas and they were resisted, and I think it was quite
a constructive and ground-breaking conversation
between central and local where they negotiated
for that.
Q277 Anne Main: Are you suggesting then that every
time the Government wants to come up with a target
it is going to have to negotiate that target with the
local area? No. I can see some shaking heads. What
are you suggesting because I am a little bit confused
as to how you would like to scrap the targets that are
not appropriate for each local area but still have
overarching targets? Who is going to agree them?
Can I invite somebody else to give their view?
Councillor Cockell: We spend a lot of our time
negotiating targets with Government and through
the latest LAA quite eVectively. Government
accepted there were far too many targets. We
reduced the key ones down to 30 and within those
that still left a good amount of flexibility locally, so
I think we are equipped to do it, and I would have
thought, certainly at the level of policing I am
talking about, level one neighbourhood policing, the
targets would be fairly obvious. I think what we
want to get away from are fast-moving targets. If
Fleet Street suddenly decides that bicycle thefts are
truly very important and should take priority over
something else and we do not have problems of
bicycle thefts locally then a new national target
should not take preference over an agreed set of local
targets. I quoted the Dedicated Schools Grant and
on that we are given the minimum spending per
pupil, we are given the minimum spending per pupil
per school, areas of deprivation, so we are given the
context and then you can also have your own local
priorities to add to that. I think it is a model that is
workable in these instances, not just applied to
policing. If we are looking at the operation of local
government we cannot just have a diVerent
mechanism for each area we are looking at beyond
the current local authority responsibilities.
Q278 Chair: One of the areas where there were
troubles, so to speak, between councils and
Whitehall in negotiating of the LAA was extremism.
Extremism is clearly important at a national level. It
may be that council A has got lots of extremists in it
but they go out and do their extremism in council B.
That is not an area which could be up for negotiation
with council A, is it? If they have got them they
should be doing something.
Mr Sawford: That is specific language of its time. We
would always expect to see some national targets
around cohesion and around how people live their
lives alongside each other in communities. The
important thing in terms of what we would hope to
get out of engaging with this Committee is that we
cannot deal with all those tensions around the
relationship between national and local government
as sitting targets, but what we would like to do is put
some firmer foundations in place, a better
framework for that dialogue, and one of the
elements of that framework would be a stronger—I
was going to say “more mature” but that is a bit
pejorative—more helpful relationship between
central and local government, including a statutory
footing for that relationship. As you know, at the
moment we have a Central-Local Concordat, and I
know it is something you have looked at, but frankly
it is a very weak basis for that dialogue. It has signup only from CLG (Communities and Local
Government) and the LGA (Local Government
Association), not from wider central government,
not from wider local government, so the whole basis
on which we are having this debate at the moment is
very shallow. We are not saying “local good, central
not so good”. I fully accept that over time you might
want the opportunity to vary what kinds of targets
you set and the policy areas in which the focus will
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17 November 2008 Mr Andy Sawford, Councillor Merrick Cockell and Ms Anna Turley
vary. If you have an incoming government of a
diVerent political persuasion no doubt they will be
elected on some areas that bring a whole new focus
into Government and they might well want to push
that with some new targets, so it is always going to
be fluid but we just have to get a diVerent basis for
that dialogue, one in which local government’s role
and contribution is recognised.
Q279 Jim Dobbin: I am interested in this wish for
local government to have some involvement or some
accountability for areas like policing and health. The
issue I am raising is capacity, quite honestly, because
you would be taking on responsibility and would be
accountable for the largest employer in the country
at the present time with massive budgets. If I can just
describe my own constituency, I have got one
primary care trust which serves two constituencies; I
have got four district general hospitals which are
part of the second largest acute trust in the country,
none of them in my constituency, all of them in
diVerent boroughs. I am just illustrating a whole
system that would need to be addressed with great
care if you are going to go down that route. I am not
saying it is impossible. What I am saying is that it is
a gigantic step to take.
Councillor Cockell: If I may respond, our belief is
that locally elected people should be responsible to
their communities for locally delivered services and
you can apply that to any service. What we are not
saying, and I think we would be unwise if we did say
it, is that we should be providing those services.
Local authorities have moved in most respects, and
there are some pioneers here, from believing we have
to do everything to being accountable, being
representative and commissioning. We are back to
commissioning again, and that is, I think, the role we
have in future because how else can our residents,
our population, hold medical services to account,
the police to account, in a sensible, properly
moderated way, or any of the other public services
that do not currently fall into the ambit of local
authorities? We believe that that is at the very core of
changing people’s perception of the agreement they
have with Government at national and local levels.
Q280 Jim Dobbin: I am not disagreeing with you, but
why do you get involved in huge areas like that
which are delivering services? There has got to be a
finger pointing somewhere at times when those
services fail, and therefore you cannot divorce
yourselves from some accountability or some
responsibility.
Mr Sawford: But is it not the reality that the finger
points at politicians anyway? It certainly points at
national politicians; you all know that from your
own postbags, and it points at local politicians, and
local politicians get frustrated, particularly in
healthcare and in policing, because they have a
limited ability to influence them. When you look at
some of the best of councils around the country, and
there are many high-performing councils now
around the country, they are already taking on a
huge role in influencing health and policing. We
know that when you join up delivery of local
services, when you integrate commissioning, when
you bring professionals together from traditionally
diVerent disciplines, you can get big improvements
in services and real innovation. I do not think we are
talking about changing all the labels on the vans and
where will pay cheques come from. What we are
talking about is increasing the political
connectedness and the link back to the ballot box
through the commissioning process rather than a
wholesale moving people around oYces. I think
local government is probably getting better, getting
out of the psychosis of always thinking about
structures. It goes back to the policing debate about
level two crime. After what was a wasted
opportunity, to have a big national debate a few
years ago around terrorism and serious and
organised crime, police authorities have got on
themselves with creating their own structures with
varying degrees of success around the country and
collaborating not just within regions but across
borders and finding all sorts of diVerent
arrangements. We certainly would not want to get
too bogged down with structures which are
admittedly complex, going back to Mr Betts’ point
about local government’s complex structures; it
always is a problem when you try to move forward,
but, say, commissioning local strategic partnerships
and building on these, and there are many joined-up
bridges to healthcare like common directors of
public health.
Q281 Andrew George: I would like to be reassured
that local authorities want to use the existing
structures and have ambitions that way. You have
all, one way or another, expressed disappointment at
the top-down nature of local area agreements, but
have local authorities shown great ambition in this
area? Are they not happier and more comfortable in
the relationship which they traditionally have had of
pleading and appealing and blaming central
government rather than taking on powers which
they may be able to negotiate?
Ms Turley: I think partly some of that response is the
fact that 80 per cent of budgets have come from
central government, so it has created a bit of a
culture of pleading and wanting. I am really
encouraged and optimistic about the LAA (Local
Area Agreement) process and the way it has enabled
local partners to really come together. It has enabled
local areas to set out what their local priorities are
and get everyone behind a vision and say, “This is the
way. We are all moving forward together”, and
partnerships become much stronger. Perhaps when
the climate gets tougher financially it will put some
strain on these partnerships but at the moment we
are seeing a lot of enthusiasm to work together, to
pool and align budgets and to do a lot more joint
commissioning, whether it is through LSPs (Local
Strategic Partnerships) or through just better joining
up within diVerent parts of the local authority. There
is much more of a sense of that and the LAA has
become a focus for people to do that. A lot of local
authorities have also said to us that one of the
benefits of the LAA process for them is seeing
central government come together much more
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Ev 50 Communities and Local Government Committee: Evidence
17 November 2008 Mr Andy Sawford, Councillor Merrick Cockell and Ms Anna Turley
cohesively for the first time in a long time and have
some really good conversations between
departments and with them.
Andrew George: But it sounds to me like a rather
longwinded and complex diversion. What has
actually been achieved in terms of taking control
locally? Give me examples.
Q282 Sir Paul Beresford: Could I add to that? Many
of the local government people I talk to say the LAA
sounds good until Government comes in afterwards
with its checks. It is meetings, it is more meetings, it
is more and more targets, and that really it is a
bureaucratic nightmare for you, even though the
words are good. Yes?
Councillor Cockell: Bureaucracies have a habit of
adding bureaucracy and, whether it is CAAs
(Comprehensive Areas Assessments) or LAAs, they
can start oV with sounding much lighter than the
previous touch but very quickly they become more
and more complicated. I had the new partnership
manager for our CAA come to my local strategic
partnership last week and she told me that in future
she would be coming to all our meetings, which did
not seem much of a lighter touch to me from the CPA
process, and though we would be very welcoming it
was not quite what I was expecting to hear. I think
there is a common misunderstanding about LAAs,
as if the only things that local government did were
what they had agreed with national government
under LAAs. My authority went into the LAA
process trying to get as few LAAs listed as we could,
not because other things were not priorities but
because we wanted to focus within the LAA process
on things that really mattered and not just hit a
number as if the higher the number you could hit
showed how eVective you were. We thought it was
quite the opposite. It is a matter of changing
relationships and local government not always
looking to national government to tell them what to
do. I have been working with colleagues quite
recently on housing targets and going through with
them what would happen—this is in the context of
London’s diVerent form of housing targets—if you
stopped getting housing targets where the moment
you see them you go, “That is ridiculous. Who
dreamt up that number? How could we possibly
achieve it?”, to knowing that, especially with the
economic situation we are in at the moment, if you
want your area to be successful you have to be
looking at housing, you have to be looking at
bringing in businesses to have economic growth and
things like that. It is not a question of the
Government or other people telling you what to do.
You have got to do it for the sake of your community
and you have to work with your neighbours together
in order to achieve that. Again, it is without
somebody giving you a blanket figure that you are
supposed to just perform against. We all know
relationships like that do not work.
Mr Sawford: Partnerships are work in progress, but
specifically on your point, Mr George, local
government I think would accept, and we certainly
would acknowledge, that it has not been as
ambitious as we would like it to be. What you are
seeing now I think is a tipping point where councils
are no longer able to say, “We cannot do that”. They
are being challenged now. I think technology is a
driver in that. If you take the Post OYce as an
example, where Essex have done some good work
that we have been involved in around their local post
oYce network, all round the country I get other
councillors saying, “Blooming Essex”. People are
saying to me, “Why can we not sort out our local
post oYces?”, so you get challenged to be more
innovative. Specifically on your examples, we have
worked on a report that has been published today by
CLG with INLOGOV (Institute of Local
Government Studies) and others around the power
of wellbeing. It sets up a whole load of case studies
but I will just give you in a sentence two of those case
studies. One is how Nottinghamshire County
Council reduced its carbon dioxide emissions by
creating a non-profit renewable energy company—
and these are by no means the best; I am just picking
them at random—and another was how the London
Borough of Newham created a partnership with the
local PCT, which they called the Local Finance
Improvement Trust, and specifically you will know
that the power of wellbeing gives you an opportunity
to look at how you finance things in a diVerent way,
to build new premises and provide social care
services in three London local authorities. Councils
are being more and more innovative up and down
the country and I do not think they can hide in a
corner any more and say, “We are all being done to.
Central government is constraining us and we
cannot meet the public’s expectations”, but they are
getting better and better.
Q283 Andrew George: Are you confident though
that the opportunities available to local authorities
through multi-area agreements are going to be taken
up? Are you confident that central government are
going to respond positively to the kinds of
approaches which local authorities, I imagine, will
be wanting to make?
Mr Sawford: I would say two things and they are not
necessarily compatible. One is that I do not think
there is anything that a council cannot do if it really
wants to, and I would say that to any of the councils
we work with; and the other is, do not always look
to central government. Meet the expectations of
your community. On the other hand it could be made
a lot easier for them to do it and they could be
supported to do it on more fronts if they had a better
relationship with central government, if the balance
of funding was improved, if there was a better
statutory relationship between central and local and
if things were properly funded. This is a very relevant
important debate and just saying “You can do what
you want to do” does not mean that you should not
strive to make the framework easier and better for
local authorities.
Q284 Andrew George: Is there anything that your
organisations can do to assist local government here
because when I have asked the magic wand question,
“If you were given wide-ranging powers what would
your ambitions be?”, often what comes back is
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17 November 2008 Mr Andy Sawford, Councillor Merrick Cockell and Ms Anna Turley
something which really lacks ambition. It is the
development of a new road scheme which they have
been very ambitious to achieve for many years but
have not been able to. It is that kind of scheme, not
about bringing social services and health together
and providing a background service.
Mr Sawford: But they are still constrained.
Ms Turley: I would agree. There is certainly a greater
realisation that local areas should and can provide
leadership. There is progress in terms of some of the
funding through the ability to pool budgets, but
there are still restraints. My concern would go back
to your LAA point as well, that if more targets come
in and contradict them I would really like to see the
capability of local areas to say, “If this contradicts
our local area agreement process and our outcome
that we have agreed with you, we want to have the
ability to override it”. Some kind of safeguard like
that I think would be very important. For us as
organisations being able to share that ability, being
able to share capacity and to spread some of the
insight of what local authorities can do, using, for
example, things like the Sustainable Communities
Act, which is another tool, a good piece of
legislation, means local authorities really are starting
for the first time to realise the capability they have,
and also just by better dissemination of what is going
on out there and people just having the ambition,
because again capacity was a big issue. There
certainly is a lot of potential.
Q285 John Cummings: In your evidence it appears as
if the LGIU (Local Government Information Unit)
support the establishment of an independent
commission and yet the NLGN (New Local
Government Network) opposes the establishment of
an independent commission. Would you like to tell
the Committee where your diVerences lie?
Mr Sawford: We would like to see a radical reform
of the balance of funding but we, like probably many
of you because you have been in local government,
have looked on in frustration as successive reviews of
the balance of funding have been shelved and Sir
Michael Lyons’ excellent report sits gathering dust.
Where we are is fairly mealy-mouthed stuV. There is
a big agenda but we welcome the work that the
Conservative party is doing nationally. We are in a
dialogue with them looking at the model in Australia
where you take some of the politics out of grant
setting, out of the way that grant is allocated into
authorities, out of the way that the formula is
calculated, and we are certainly happy to engage
with the Conservatives if they are going to do more
than the current Government to really reform the
balance of funding.
Ms Turley: Where we would certainly agree is that
the system at the moment is fundamentally flawed
and really does need quite a radical shift. From
NLGN’s point of view we are cautious about an
independent commission because in a way it feels a
bit like rearranging the deck chairs, just taking the
power away from central government ministers who
may perhaps have quite a good understanding of the
need for some redistribution. We are always
conscious of unaccountable—to use the word
“quango” I think is a bit mean—but we are always
conscious of new bodies that are not necessarily
always democratically accountable in making these
kinds of decisions. We would rather see a more
fundamental approach to local government finance
that looks at better balancing those powers of fund
raising and so on at the local level and moves away
from this 80/20 split. An independent commission is
not enough in our view to fundamentally shift the
politics of the grant.
Q286 Mr Betts: Have you got one big idea about
how we could change the relationships between
central and local government, because the reality is
we could talk about who looks after police and
health and we could get an agreement but then in
two years’ time whichever government is in power
could change it. Parliament could pass an Act that
alters the relationship between central and local
government in a way that the Scottish settlement
now could not be undone without some degree of
consensus between Westminster and Scotland about
any change in arrangements in the future.
Councillor Cockell: I suppose I would comment,
bearing in mind I speak cross-party (London
Councils is about cross-party representation) that
the representation you have got is cross-party, and
the organisations either side of me, and indeed other
ones, have historically been seen as left of centre, I
think. There is a lot of common ground now I think
between the parties and between those involved in
local government that there could well be a
settlement which is not going to be changed by the
next incoming new government. I think people have
accepted that the current system of centralisation
simply does not work in a whole variety of ways—
the level of service accountability, transparency,
people feeling they have been dealt with fairly, that
they have some way of changing things, having an
influence on things, and the current system at a local
government level is not working either because we
are too reliant on the centre. We do not really,
overall, take the opportunities that are there, we are
less willing to take risks and things like that. I think
that can all change and I think that across the parties
there is an acceptance that we have to do something
diVerently and that if the default for local services is
that they are accountable at a local level then that
would seem a good principle to unite around. The
detail beyond that, the mechanisms, how to deal
with failing services, no doubt can be sorted out, but
the fact is we do not have a perfect system now and
there has to be a better way of doing it if we are all
united in saying that local is likely to be the most
eVective way. As far as a single independent
commission is concerned, I think it is transparency
we are after, whether it is a single person or a
commission or whatever. In London 28 out of the 33
authorities are on the funding floor. That indicates a
financial system that is bust.
Mr Sawford: Just on the one thing we would do,
because it is a nice opportunity, it is really boring, it
is not going to excite anybody else, it is not even
going to excite anybody watching us on the web,
even if they do, but I do think that if we had a new
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17 November 2008 Mr Andy Sawford, Councillor Merrick Cockell and Ms Anna Turley
constitutional settlement, something that we could
try to achieve at a national level, that would stand us
in good stead to make real progress in areas like
policing and healthcare where we can make a real
diVerence, but the silver bullet is finance. If you put
more control back in the hands of local councils
about how they raise their money and how they can
spend their money then we really could see a
diVerent approach from local government and a
much more innovative approach.
Ms Turley: I agree with those comments and the idea
of a debate on the constitution would be warmly
welcomed by us. We are really pleased to see regional
select committees and ministers, something we have
advocated for a long time, and I think the best
representation in Parliament is in terms of having
some kind of devolutionary scrutiny committee
along the lines of the overview and scrutiny
committees1, or perhaps instead of departments, of
having to do a regulatory impact assessment some
kind of devolutionary impact assessment. We want
to see local government leaders at the policy-making
table and involved much earlier in the conversations
around policy-making generally.
Chair: Thank you all very much.
1
Note by witness: My reference to ‘a kind of devolutionary
scrutiny committee along the lines of the overview and
scrutiny committee’ should have been the ‘Delegated Powers
and Regulatory Reform Committee’
Witnesses: Ann Keen MP, Under Secretary of State (Health Services), Department of Health, and Mr Vernon
Coaker MP, Minister of State (Policing, Crime and Security), Home OYce, gave evidence.
Q287 Chair: Welcome. The Department for
Communities and Local Government believes that
further improvements in local government
performance should be rewarded with further
devolution of funding and powers. Do your
Departments agree?
Ann Keen: The first thing to say to that is that over
the last five years elected representatives have had
the power to review and scrutinise our Health
Service and hold Health Service executives to
account, so from that perspective we have been
doing this for five years and we feel that those
powers are considerable.
Q288 Chair: Not through local councils for five
years though, is it?
Ann Keen: The overview and scrutiny committees
have been for five years, yes.
Q289 Chair: But what about pooling resources at a
local level between health and councils? Is your
Department in favour of that or not?
Ann Keen: Yes. I believe it was described by the then
Secretary of State, Frank Dobson, as, “The Berlin
Wall has to come down between social services and
health”, and I know most areas have progressed,
some better than others, but it is what we would see,
certainly in the next stage review of the Health
Service, as to how in particular long-term conditions
are managed in the community, so yes, we have had
that opportunity.
Q290 Sir Paul Beresford: Talking to local
authorities, which all of us do, the impression I get,
particularly in the Department of Health, is that the
wall has come down but you have climbed over it
with a shotgun. You look at the local authorities,
you check on them, you double-check on them, you
have got so many papers and pages and so forth for
everything that they have to do and not do. One
local councillor said to me that if he scratches his
nose with his left hand you have got the power to
come down and tell him it is the right. One example
that they have given me is looking on your website
for the requirements for adopting children.
Apparently these have just gone astronomically
bureaucratic. Have you looked at any of these things
or do you rely on the advice of oYcials? Have you
actually gone and looked at them yourselves?
Ann Keen: I am certainly not familiar with the
person you know because I do not know who you are
talking about or the area that you are talking about,
obviously I do not, but I am very familiar with my
portfolio and the Health Service which I have
responsibility for. I am exceptionally familiar with
that. Having also worked in the Health Service for
over 25 years I understand the Health Service very
well, so I am not quite sure what you are asking me.
Sir Paul Beresford: We are talking about the
relationship between local government and central
government, so you are here as a representative for
the Department of Health. I realise that you will not
be able to answer this, but I ask that you go and look
at some of the things that you as a Department inflict
on local government—the checking, doublechecking, targeting, monitoring, et cetera, and the
one example I have picked on out of the various ones
is the adoption of children.
Chair: Paul, I understand adoption guidelines are
Children, Schools and Families, probably.
Sir Paul Beresford: Are they? I am sorry; I apologise.
Q291 Chair: It is the general principle rather than the
detail, to be honest.
Ann Keen: Would it be helpful if I were to say what
the overview and scrutiny committees do?
Q292 Chair: No, I think we do know that. It is the
general principle rather than getting into the detail.
The feedback we get from local authorities is that the
Department of Health, and I will come to Mr
Coaker in a second, and the Home OYce are
particularly backward about signing up to the
notion of autonomy, basically. That is the point we
are trying to get to.
Ann Keen: But, Chair, what we do not do in the
Department of Health is stop local PCTs and local
authorities forming their own examples of how they
want a model of their democracy and accountability
to be. There are good examples in Hull, there have
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17 November 2008 Ann Keen MP and Mr Vernon Coaker MP
been good examples in Walsall recently. The
Secretary of State went to visit to see how they work
in very good partnership. With the money that is
spent on health, which is over £100 billion, you
would expect the accountability level also to go
straight to Parliament and to be accountable to the
Secretary of State. At the same time never at any
stage have we said, “You cannot within your local
PCT and local authority have a particular model of
your choice”, and what we will not do is insist they
do a particular model because the responsibility and
accountability have remained in Parliament. In
surveys that we did as recently as in the last few
months when we were consulting on the
constitution, which the NHS is adopting, people
wanted that to stay, but I think what they do want is
to have much more transparency as to how that
decision-making is done and why those decisions
are made.
Q293 Chair: Can I turn to Mr Coaker? The
suggestion that was made in the first session and in
our previous session last week was that level one
policing, neighbourhood policing, should move to
local authorities as commissioners. How does your
Department respond to that?
Mr Coaker: I do not know about local councils
controlling the police but certainly what we would
want to see is the strengthening of the partnerships
that already exist. They are already very strong
through the CDRPs (Crime and Disorder Reduction
Partnerships) and through the other relationships
that exist at a local level. What we want to see is the
CDRPs working even more eVectively across the
country. That involvement that local authorities
have in the CDRPs, where unit commanders go to
the CDRP, they talk with the CDRP, is immensely
important. The key issue here is that the involvement
of local authorities is much more than just about
policing. We see the involvement of local authorities
in a crime reduction role, a role which includes all the
various aspects that lead to communities feeling
safer and indeed tackling crime. That is particularly
important if you look at local councils in terms of
what they do with respect to graYti, with respect to
litter, with respect to lighting, with respect to council
housing. All of those matters are fundamental to the
importance of delivering safer communities, but on
their own are not necessarily connected strictly
with policing.
Q294 Chair: Can I just ask each of you a specific
question?
The
Central-Local
Government
Concordat was the centrepiece of showing the new
relationship between central and local government.
Can each of you tell me a couple of specific ways in
which the Central-Local Concordat has aVected the
work of your department?
Ann Keen: So that I properly understand the
question, Chair, you are asking for specific examples
of the relationship between health and local
authorities?
Q295 Chair: Whether the Concordat between
central and local government has aVected the way
your department works, because it is a two-way
thing, the Central-Local Government Concordat.
Ann Keen: I think I could mention the formation of
LINks (Local Involvement Networks) now which is
really strengthening what was at one stage the
Community Health Council’s Patient Forum, and
now LINks has very heavily involved local
authorities because they have that power of being
able to assess health services within the local
authority areas and it is a new example but it is a very
good example of people working together.
Mr Coaker: There have been two things. As I have
already mentioned, there is the role of CDRPs, but
alongside that is the essential way in which we are
now trying to set local partnerships free by
withdrawal of some of the targets, but with the
targets that we have set, with the new confidence
target now at force level, now taking oV and driving
through with respect to performance management,
having local area agreements, reducing the number
of targets there and focusing just on those
performance indicators. That was a very clear thing
that came from that Concordat about the need for us
to respect local government, to believe that local
government should be allowed to do the things that
it is best at and for central government to withdraw
in a sense from that. We think the new performance
framework that we have put in, whether you talk
about the national indicator set, whether you talk
about APACS (Assessment of Policing and
Community Safety), whether you talk about any of
that, has been and will be a fantastically successful
model which allows local people, local authorities
and local services to deliver according to the
priorities in their area, not according to what central
government says is necessary.
Q296 Anne Main: Would you trust a local authority
then to be able to make the decision that they would
like to make, as we heard last week they would like
to do, for example, in the Probation Service, to come
up with a local scheme that would ensure oVenders
within the Probation Service had to perhaps work in
a particular way within the community and give
something back? Would you trust them to be able to
choose to do that locally?
Mr Coaker: I think that is a decision sometimes for
these things to be made locally. That is the point I am
trying to make to the Chair. We think, with respect
to these decisions, that they are often decisions
which are made locally. Sometimes people say to me,
for example, “Is this the best crime reduction model
in such-and-such an area? Is that the best use of
provision? Is that the best this, is that the best that?”,
and what we are trying to do is to come back from
that and allow local people to take those decisions.
Q297 Anne Main: So why do they feel they cannot
do that? Are you not making it clear enough what
they can do locally because they seem to want that
power and do not think they have it?
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Mr Coaker: I think, with respect to all of these
things, there is a sense in which you are quite right to
say that sometimes people feel as though they do not
have the power to do certain things when they
actually do, or they do not have the confidence to do
that. I think part of that is about the new framework
that we are trying to develop, the new context that
we are trying to develop, to allow local providers,
local authorities, local people to determine what is
best in their area whilst retaining, as I say, the
oversight of it but setting them free to do that.
Q298 Anne Main: So why do they not know what
they can do? If they have got these powers, and they
are all asking for these powers; they seem to have
them but they do not know they have got them,
where has that communication gone so wrong?
Mr Coaker: It is a fair question to ask. I would make
it a broader point than that. I would say that often
local people say to me, “Why do we not have the
power to do that?”, and I say, “You do. You can
do that”.
Q299 Anne Main: But they think you are stopping
them from doing these things and they are asking us
to ask you for these powers and you are telling us
they have got them; they just do not know they have
got them. Do you not see there is a fundamental
communication problem?
Mr Coaker: I accept that sometimes there is a
communication problem between what national
government is saying and what local government,
local service providers, can do.
Q300 Anne Main: That takes us neatly back to the
Chair’s concordat—in which case it is not working,
is it?
Mr Coaker: It may not work in particular
circumstances in particular authorities and there
may be particular problems. Again, and I have been
quite honest about it, there are times when people
say to me, and licensing laws are another example
about that, “Why can we not do that?”, and so on,
and I say, “You can do that”. Sometimes there is a
mismatch between what people can do and what
they cannot do.
Anne Main: The licensing was a particular case when
the guidances came out late.
Chair: Do not go down that route.
Q301 Anne Main: No, I am not going down that
route. They were waiting for you to give them
guidance and I think that is part of it. We have had
numerous people telling us that they do not think
they can do this and if you are saying, “Yes, they can
do all of this stuV”, I either suggest that maybe they
are totally misinformed or somehow the
communication from your Departments is bad but
they do not know that.
Mr Coaker: I am saying that there is certainly a need
to improve communication between national
government and local government; in giving people
not only the knowledge as to what they can or
cannot do but the confidence to do that and the
capacity to do that as well. All of those things are
important and that is why, with the new
arrangements that have been put in place, in
particular since April of this year, I think that we will
see a considerable diVerence in what happens locally
and a build-up of both capacity and confidence.
Q302 Dr Pugh: Primary care trusts, like local
authorities, spend huge amounts of public money on
local priorities, and primary care trusts are looked at
by LINks, scrutinised by overview and scrutiny
committees and have certain obligations about
consultation. But at the end of the day the people on
the primary care trust are people who get there by
means we know not quite how and the people who
get on local authorities have to be elected; so they
have a definite vested interest in pleasing the
community that elects them. Primary care trust
members though would probably be more mindful
of the institution that appoints them. Why is there a
diVerence?
Ann Keen: There is not. Again, there is not anybody
stopping anybody using a model similar to the
foundation trust of a hospital where they can be
members. There are two examples—
Q303 Dr Pugh: Wait—a foundation trust is a
provider body. It does not commission, it does not
have any resources. A local authority has resources;
it spends them. A PCT has resources; it spends them,
but a PCT is constructed on an entirely diVerent
model from a local authority whereby none of the
people on it is elected by anybody and those people
on it, if they wish to have a career on it, if they wish
to go further within the health world, please the
people in the Health Service rather than please the
community, do they not?
Ann Keen: But equally back, with respect, they can
be on it, they can use a model where people can be a
member of a PCT, like what takes place at the
moment in—
Q304 Dr Pugh: If I may stop you there, they can be
if they go through an appointment process and
satisfy the people already on the PCT that they are a
worthy person to join them. They cannot, as you can
in the local authority, simply put their name on a
nomination paper and see whether anybody votes
for them.
Ann Keen: A name on a nomination paper directly
elected again would be entirely up to the local
community as to how they do it because local
representatives, local councillors, for example, of
course, can be on there, and again, back to the
overview and scrutiny committees, but I would
suggest—
Q305 Dr Pugh: You are deliberately missing the
point, are you not, because the fact of the matter is
that they can be on it? There are councillors on
PCTs; I know that. They get there because obviously
people on the PCTs like them or people in the Health
Service like them and think they will be useful
members, but if, for example, an ordinary member
of the public wishes to represent their local
community all they need to do is write their name on
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17 November 2008 Ann Keen MP and Mr Vernon Coaker MP
a nomination paper and curry favour with the
electorate, try and get elected and, if they disappoint
the electorate, they will get unelected. You can be on
a PCT forever, can you not, while you are
systematically displeasing the community?
Ann Keen: I am sure I am not deliberately not
answering you. What I am saying to you most
definitely is there are models where you, as a citizen,
as part of that community, can be very much
involved with the PCT. You can form your own PCT
foundation trust area. You can sit with the
commissioners. In particular, world class
commissioning is requiring the PCTs to have a full
day where it is scrutinised by the public2, by the local
press, by councillors, by people like ourselves as
Members of Parliament. There are people that come
from other organisations that sit in and that is an
annual check, which is absolutely essential, that they
have to have, along with the constitution which we
have publicly consulted on. That will very much
make PCTs more transparent. They cannot be
directly elected to the PCT to have the power of
decision making financially because the power of the
accountability and the responsibility still remains
very firmly with the Secretary of State and
Parliament, which is how it is.
Q306 Dr Pugh: On the business of devolving power,
PCTs in collaboration with local authorities can set
local health targets. That is a good thing, I think we
agree. How do you deal with the conflict that might
exist between local targets and national targets? For
example, there may be a national target about drug
addiction but there may be very little sympathy for
spending local resources on that particular project.
How are these sorts of conflicts to be reconciled?
Ann Keen: They have to set out objectives. PCTs
have to set out a minimum of3 ten objectives that are
agreed locally as to what will be their areas of
priority. That again is transparent and will be
monitored by overview and scrutiny committees and
other such bodies. Should they wish to change
anything—for example, a change within a
reconfiguration of maybe maternity services or
something in that way—they have to be totally
accountable to do that and they have to publicly
consult and they have to make it very clear why they
are changing a service or not adopting a service
which is a national priority.
Q307 Dr Pugh: What you are saying is that they
would be well advised to include important national
targets within their local targets but, if they do not
and they do not wish to, the mechanism would be for
them to consult with the public. If they could
demonstrate that people locally knew what they
were doing and they were quite happy to neglect this
national target, the Department of Health
presumably would say that is okay?
2
3
Note by witness: It is not accurate to refer to scrutiny “by the
public” here.
Note by witness: It is not accurate to refer to “a minimum
of” here.
Ann Keen: No. That is not what I said. What I said
was that the national target would be of such an
importance and we have very few national targets
within the Health Service that would aVect the PCT.
Those that will, some of those will of course be
mandatory and statutory. They have to. If you could
give me an example of what you are looking at, you
said on drug addiction and on drug misuse, I would
expect them to be working with all the statutory
bodies within the local community to make sure that
that was not being ignored.
Q308 Dr Pugh: I can imagine in certain areas that
dealing with alcoholics might not be a major
priority.
Ann Keen: They have to publish their ten key
objectives. Those key objectives have to be relevant
to the health needs of the community but also to the
direction that would be in the operating framework
of the National Health Service.
Q309 Jim Dobbin: This question might not be very
helpful to us today, but we are taking evidence from
local government and central government. We are
talking about constant change. There was a
comment made in the previous evidence session
about not talking about structural change
necessarily but eventually that is what happens. Do
you not think that the system needs a period of
stability? The professionals working in the system
for example do not always perform when they do not
feel secure in their roles or whatever they are doing.
I just feel, quite honestly, that we seem to have got
into a constant changing system. At some stage,
somebody has to give whatever system is introduced
time to settle down.
Mr Coaker: I think that is fair comment up to a
point. The issue as I see it is that you change not just
for change’s sake, but you change where it is
appropriate and where people believe that it will do
something better. I am sure the Committee, when it
comes to its deliberations, will make a series of
recommendations about changes that it would like
to see happen which it thinks will benefit policing or
benefit health and so on. Anne Main’s point about
probation, for example. One of the changes we are
going to introduce is about making them part of the
CDRPs, making sure that they are a statutory
partner in that. That is a change. That is an
involvement. You could say that is an additional
burden but it is actually something that people want
because of the issue around some of the points they
have got. It is not change that is the problem; it is
where change happens that people do not think is
necessary. I think sometimes change for change’s
sake is something that you hear. Where people
believe that it is addressing a problem or addressing
something that is wrong or has not worked, then I
think people are fine with that.
Q310 Anne Main: I would like to go back to the same
sort of theme as Dr Pugh about the need for directly
elected crime and policing representatives. We have
directly elected local councillors, often not on a very
large mandate. There is the concern, if you go down
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this route, you may have them elected on even less of
a mandate in a local election. Why are you doing it?
Why would you see the need to do it?
Mr Coaker: First of all, there has been considerable
evidence from the Casey Review, from what Ronnie
Flanagan said and, if you go back further, from the
Lyons Review about the need to address
accountability with respect to policing. We are
perfectly happy with arrangements which exist with
respect to CDRPs where you have the involvement
particularly of local councillors and the big crime
reduction community safety agenda with respect to
that. I think it is less clear with respect to police
authorities who obviously have a relationship with
the police and indeed with local authorities. If you
actually look at that, where is the accountability to
the public with respect to police authorities? From
our perspective on it, the election of crime and
policing representatives would allow us to actually
ensure that there is a direct, electoral accountability
between the police authority and the public.
Anne Main: Is it not just adding another whole layer
of bureaucracy and indeed cost?
Q311 Chair: More to the point, why is it okay in
policing but not okay to have directly elected PCTs?
Mr Coaker: People make judgments about where
they think elections are appropriate or not. With
respect to the area that I have responsibility for, with
respect to the Home OYce, we think the police
authorities are something where the injection of
some direct accountability, some democratic
legitimacy, will be of benefit to the local community.
In fact, if you look at all of the political parties
nationally, that is what—
Q312 Chair: My question to Mrs Keen then is why
is that not useful as regards PCTs? Why should they
not be directly elected?
Ann Keen: Because we have already said that they
can participate. You can have a model of
participation.
You
have
already
elected
representatives engaged with the public at all times.
If they want to be more involved they can be. The
present situation on the money that is spent and on
the accountability that is expected of us here is that
the Secretary of State remains accountable.
Therefore, the diVerence is fairly obvious.
Q313 Anne Main: It does not appear obvious to me
and I was asking the question. The diVerence
appears to be that you think it is right in one place
but not in the other. I will move on. Back on the
community deciding what it wants to do—I am still
very concerned about the whole cost of these
electoral policing representatives—should not a
local community agree safety targets and take
primacy over national targets?
Mr Coaker: This is the distinction that I am trying to
make to the Committee. Before we go on to targets, I
think local councillors, local authorities, have a very
real role to play through the CDRPs with respect to
the broad community safety agenda, of which
policing is a part. If you talk about police
authorities, that is a more general, policing specific
body. That is why we think that the injection of some
democratic accountability into them in a direct
election way would be of benefit. You will correct me
if I get this wrong: in terms of targets, Government
has moved away now with respect to targets and
what happens locally. We will have one target which
will be a confidence target on a force area for
individual police forces. That will be the only target
that we set nationally. Alongside that will be the
local area agreements which upper tier authorities
will negotiate with their partners to determine what
in their area, from the 196 performance indicators,
are appropriate targets for their area. They will come
to an agreement and within that are a significant
number of crime and disorder and policing related
performance indicators.
Q314 Anne Main: Would your crime and policing
elected representatives go out with some sort of little
manifesto like we all do as elected representatives
and have diVerent sets that the public would vote on?
How do you imagine this working?
Mr Coaker: With respect to Crime and Disorder
Reduction Partnerships, I think people understand
how they work. That is the local partnership which
is dealing not only with policing; it is dealing with
respect to litter, graYti, housing and all of those
issues that we all get. Separate to that, I think what
we are then talking about is the direct election and
the link between a police authority and the public.
That is where all the major political parties at the
moment rest. With respect to that, the operational
independence of the police remains but I think what
people will then see is that they will have people for
whom policing and how their area is policed is
something for which they can be held accountable.
Q315 Sir Paul Beresford: London has a directly
elected Mayor who is seen by Londoners as being
responsible for the Metropolitan Police. That is
democracy in action with the police. Do you think it
is good though that we should go down this way?
Should we apply it elsewhere? Do you think it has
worked?
Mr Coaker: With respect, obviously crime and
policing representatives will not apply to London
but with respect to London we have a Mayor but
there is also a police authority. If you are asking
me—
Q316 Sir Paul Beresford: Which he chairs.
Mr Coaker: Which he chairs. If you are asking me
outside of London whether I think the abolition of
police authorities and the election of one person who
is responsible for the police force is an appropriate
route forward, no I do not.
Q317 Andrew George: I just wanted to probe a little
further, Mrs Keen, the question of PCTs being
locally accountable. You were saying earlier in
answer to questions from Dr Pugh that they were.
Just taking examples of alternative providers of
medical services—independent treatment centres,
for example, centrally dictated policies within
certain areas, prescribing legislation, another
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example being the Pharmacies White Paper—to
what extent can local communities have a genuine
say in the way in which those services are provided?
Ann Keen: Very much on the commissioning side.
There are three specific areas that the PCTs have to
look at: safeguarding, competency and their
commissioning. They have to prove to us, to the
public, in their PCT area that they have a strategy on
finance. They have to prove that they are competent
to manage that. All the minutes are published.
Everything is accountable to the local scrutiny
committee which is made up of the local authority.
You cannot really have any sort of plan for your
local health service that is not known to the public.
You cannot exclude members of the public from
attending meetings, contacting their local
representatives in any way that they wish to. All
PCTs at the moment are looking at models that they
could involve people in more. At the same time,
taking Mr Dobbin’s point, the NHS does not need
another reorganisation. It needs a period of stability,
particularly when we have had five years of the
overview and scrutiny and LINks are in their infancy
and a constitution is being formed that has very
much involved the public, their rights. On the area
that does aVect people which I have heard raised
with me in many debates, particularly debates in
Westminster Hall, on the transparency of the PCTs.
Q320 Sir Paul Beresford: To come back to the point
about the London Mayor, democratically elected, he
chairs the Police Authority. The Metropolitan Police
are the biggest in the country. They are the most
important. They have national strategies as well.
Why could that not be necessarily applied to some of
the other police authorities?
Mr Coaker: If you are asking me about an elected
Mayor and one person being responsible for the
police force, I do not agree with that. One of the
suggestions in the Green Paper which will obviously
be a matter for discussion and debate as we go
forward is that one of the crime and policing
representatives should chair the Police Authority.
Those CPRs (Crime and Policing Representatives)
should be in the majority on the Police Authority.
We think the Police Authority model is one that is
good and can be built on and demonstrates eVective
oversight of what the police do. There is good
cooperation between chief constables and police
authorities where it works well. The issue that we are
trying to deal with is the fact that the public feel
disconnected from the Police Authority.
Q318 Andrew George: It has been transparent.
Perhaps the Berlin Wall has been taken down but
instead what has been put in place is a transparent
totalitarian state, centrally controlled.
Ann Keen: That is not happening in Hounslow.
Q322 Mr Betts: I do not think I have ever known a
time when there is more agreement at local level
between elected representatives, think tanks who
deal in local issues, right across the political
spectrum, about the need for more devolution of
power, responsibility, accountability of elected local
councillors. I think there is a feeling amongst
councils and the LGA that there is a resonance
coming into local government in terms of how they
see the world, a feeling that virtually every other
government department—there are two of them here
today—will pay lip service to this process. They will
talk a bit about scrutiny. They will talk a bit about
partnership but ultimately they are absolutely
resistant to giving away any fundamental power to
allow a more proper determination of policies and
delivery of services at local level by locally elected
representatives.
Mr Coaker: When you look and see how the
withdrawal of numerous targets for local authorities
and say to local authorities and local people with
respect to policing, the targets that are set will not be
dictated to by national government but will be
informed and developed through the local area
agreement, even the Assessment of Police and
Community Safety which is the new indicator with
respect to policing—many of the indicators within
that are indicators which almost replicate the
indicators in the national indicator set. We have tried
very hard to move back from local people, from local
communities and from local government and to try
to say to them, “You set the priorities for your area.
You know your area best and we will back oV.” That
is what we have done with one proviso: that we
maintain the confidence target.
Q319 Andrew George: Let us take the example of
alternative providers of medical services. To what
extent was that a Whitehall-driven initiative which
the PCTs had to roll out in their own area?
Independent treatment centres: the 15 per cent target
of planned surgery. All of these are centrally dictated
to the PCT. They may be transparent, you are
arguing, in the way in which they are delivering these
policies but they are certainly not decided locally,
are they?
Ann Keen: Decisions to reduce waiting lists were
decided nationally when the Government was
elected that said it would do that. The fact that the
PCTs have delivered that has only pleased the local
population. Their waiting list times and their waiting
times, whether in A&E or access to medical services
in a treatment centre—
Andrew George: That is a very good example
because a lot of surgeons tell me they did not have a
waiting list. They simply had a booking system, so
there was no waiting list at all. They were not
allowed to do that. They had to create a waiting list
so, instead of addressing the problem of there being
a waiting list, they had to create one.
Chair: This is a health issue which we are not
responsible for. Most of us are thinking where on
earth are these surgeons.
Q321 Sir Paul Beresford: Not in London.
Mr Coaker: CPRs do not apply to London. If we
look across the country, that is the issue that we are
trying to deal with and why we have come forward
with the suggestions that we have.
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Q323 Mr Betts: To suggest a way forward that has
been put to us, I think it applies in health even more
because there is some accountability in police
authorities but there is nothing in the Health Service.
The minister is the first point of elected
accountability. It is a nonsense. You are going to
have a situation where in the end the Secretary of
State is going to want certain guidelines for how the
Health Service is run. They are going to want a
budget which is delegated downwards in terms of
responsibility if you are actually spending on the
ground, but the budget is going to be a health budget
to spend on health matters. Why could we not have a
situation where, at local level, the primary care trust,
instead of being a group of people appointed by an
appointments commission—most people in their
area would not know who the members of the
primary care trust were, let alone who the
appointments commission were who do the
appointing—why could it not be locally elected
councillors, already elected to a council who can
have the responsibility for doing the commissioning
work of the PCT at local level within the guidelines
of the Secretary of State with the budget laid down
by the Secretary of State? Why would that be such a
terrible thing to happen?
Ann Keen: I am not saying it would or it would not.
What I am saying is it would require a massive
reorganisation.
Q324 Mr Betts: No, it would not. I am talking about
leaving the PCT there but, instead of the current
members appointed, you have elected councillors
elected as the PCT with no change of structures or
organisations.
Ann Keen: With respect, we already do sit on and we
already do share—
Q325 Mr Betts: Not automatically.
Ann Keen: The overview and scrutiny committee
does do that.
Q326 Mr Betts: No. It does not take decisions. It
comments.
Ann Keen: Joint planning arrangements, for
example, are—
Q327 Mr Betts: I am talking about the right to have
the commissioning done by elected people rather
than appointed people. It is a fairly fundamental
thing if we are really going to change the balance of
power in this country, is it not?
Ann Keen: The consultation that has been done on
this at its most recent, in the last few months, is
saying that people want Parliament to be
accountable for the health spending of their local
area. Every local health authority community is
encouraged as much as possible to involve local
people in that decision making for that transparency
to be there, for there to be those key objectives as to
what is important to that local health community
and for that to be agreed and to have as much joint
working as is possible and required. The examples of
Hull and Walsall, where they have gone wider than
that, are already very good examples but at this
moment in time that is the status of how Parliament
is going to be accountable.
Q328 Mr Betts: Is it felt that locally elected
councillors could not be trusted to do this?
Ann Keen: They are encouraged to work with us.
Q329 Mr Betts: Is it felt they could not be trusted to
do the commissioning?
Ann Keen: At this time our World Class
Commissioning has only just started.
Q330 Mr Betts: Is it felt that locally elected
councillors could not be trusted to do the day to day
commissioning?
Ann Keen: I do not think anybody is saying that.
What we are saying is everybody that has been
consulted at this particular time on this issue would
want it to stay as it is.
Q331 Mr Betts: I do not think that is true. What
evidence is there for that?
Ann Keen: The evidence I have is from the
consultation. If you want me to send some of that to
you, I would be very happy to do that.
Q332 Chair: That would be helpful because we could
see what questions were asked. If something went
wrong in a local PCT or a local crime and disorder
partnership wholly as a result of a local decision,
would you feel obliged as ministers to get involved or
would you say, “That was a local decision. You must
hold them to account”?
Mr Coaker: That is a very good question. Local
accountability has to mean local accountability.
Therefore, if people have taken decisions which are
purely down to the decision that they have taken
locally, then they have to be accountable for it. If you
are talking about individual chief constables,
individual police oYcers or indeed individual
councillors or others, in many respects, I think they
are. The blur comes when sometimes people feel they
have taken a decision because they are constrained
by something nationally. There is a straitjacket on
them and they have taken that decision and it has
not been a truly local decision; it has been a decision
that they have been, in a sense, pushed into. One
thing I do think is important—this is why I think it
is an important question—is, if we are talking about
local accountability, then we really have to mean it.
People at a local level have to mean it as well.
Therefore, if they want responsibility to take
decisions and we are trying to back oV, as we are,
with respect to many of the issues of CDRP and so
on, they also have to accept that when things go
wrong they allow themselves to be blamed in that
sense, allow themselves to accept responsibility and
do not just say, “We would have done it if only
national government had not got in the way.” There
is a time when national government gets in the way
but with accountability comes responsibility. I think
that is the message for local government and local
people as well. I think the majority accept that and
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17 November 2008 Ann Keen MP and Mr Vernon Coaker MP
would be only too ready to accept the responsibility
that comes with that accountability, but it has to be
recognised that they have to accept that.
Q333 Chair: Would you give a similar answer, Mrs
Keen?
Ann Keen: I would. I would also agree with Vernon
on what he said. We all have a duty of care.
Therefore, it would be a strategic health authority
which would also be monitoring very closely the
performance of their PCTs along with the whole of
the local health community. We have to work as a
team as well as individually and the local
devolvement of what has happened to the Health
Service in the last few years, where it has been more
and more devolved, still does require us to have an
overview of safety because it is absolutely essential
that people who enter into the Health Service in
whatever way they do are safe. Therefore, our
accountability to the patient within the community
at minister level is always there but, at the same time,
that local decision making as to why it was made,
who made it and what were the consequences of that,
people have to take that responsibility locally as
well.
Q334 Mr Betts: How is that responsibility put into
practice? Somebody holds their hands up as a PCT
and says, “We have got it wrong.” What happens?
There is no electorate out there to get rid of them,
is there?
Ann Keen: There is an employment practice. I could
give you many examples of where people have got
it wrong.
Q335 Mr Betts: PCT members get it wrong. How are
they held accountable?
Ann Keen: The PCT is accountable to the chief
executive, to the chair, to the strategic health
authority and to the appointments commission
which we are looking at.
Q336 Mr Betts: The strategic health authority are
also appointed, are they not?
Ann Keen: Not all of them, no.
Q337 Mr Betts: The strategic health authority are
appointed by the same appointments commission
that appoints the PCTs.
Ann Keen: Some members of it are appointed, yes,
but there would be employment practice people
would have to adhere to as to how they would be
accountable to the chief executive of the NHS. This
is a national service that has been devolved locally
and it is fairly obvious, Mr Betts, that you want it to
be more devolved. There is discussion to be had but
at this moment in time the accountability for the
money that is spent still lies with the Secretary of
State and that is the position we are in at this time.
Q338 Anne Main: There is a degree of anonymity
with PCT members that councillors do not enjoy.
They do put their work as public service and people
know who they are in various guises and know what
they are about. Many of the PCT members, even if
they do a good or a bad job, seem to be able to be
relatively remote from public gaze. I think that is a
big concern.
Ann Keen: If they are practising as they should be
and certainly in line with the future constitution,
that would not be as you said. There will be various
levels of communication skills that people have.
Anne Main: I would challenge my constituents to
name a single person on the PCT. They would
probably be able to name a handful of councillors—
certainly not the whole bunch, but they would be
able to pick a few of the ones that they see regularly
doing things. It has to be taken on board that that is
a major concern. These people operate in a world
that is not linked in to the public.
Chair: Thank you very much indeed.
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Ev 60 Communities and Local Government Committee: Evidence
Witnesses: Mr Ken Jones, QPM, President, Association of Chief Police OYcers, and Ms Jo Webber, Deputy
Director, NHS Confederation, gave evidence.
Q339 Chair: I could see that Mr Jones was there in
the previous session. I am not sure whether you
were?
Ms Webber: No.
Q340 Chair: Were you both there for the very first
one?
Ms Webber: No.
Q341 Chair: Thank you for being here. Can I ask a
bit about the way partnership works or does not
work at present? To each of you, do you think that
local area agreements provide an eVective way of
identifying and monitoring local policing or health
priorities?
Ms Webber: I think local area agreements are
obviously quite a recent thing across the piece, so
although they have been developed over time the
complete impact of them is still quite early days.
However, I think it does enable local strategic
partnerships to really get to grips with what the key
joint issues are, based obviously on the joint strategic
needs assessment that should cover both local
authority services and health services locally and
other services like crime and disorder reduction. In
principle, yes, it is absolutely the right way to go in
terms of bringing together targets where everybody
has a role to play in delivering good outcomes for the
local community. It is still quite early days to see how
eVective it is in practice.
Mr Jones: The accountability is not equally shared
and does appear to be unbalanced at times. People
at the table have varying degrees of accountability
according to the agency they represent, so that needs
to be evened up. It is a point that ACPO
(Association of Chief Police OYcers) makes quite
regularly.
Q342 Dr Pugh: Plato was against democracy
because he said that decisions were made by nonexperts and that was never a good thing. Local
authorities are non-experts in community safety and
health. They are not experts in the way that you two
clearly are. Do they have suYcient expertise to make
an eVective contribution to community safety and
health?
Ms Webber: Absolutely, from a health point of view.
It is very easy to confuse health with health care and
they are two sides of a similar coin. Whilst there are
some health care decisions that need that specialist
knowledge, particularly if you are thinking about
tertiary services, highly specialist services or some of
the acute services, there is a huge range of health
services that need a wider response, particularly
when you are talking about people with long term
conditions who may be in and out of hospital, where
you have to develop care packages that really meet
their needs and enable them to be as independent as
possible. Yes, very definitely local authorities have a
role to play.
Q343 Dr Pugh: When you look at your local
councillors, you think these are the sorts of chaps or
lassies who can make decisions about health and be
well informed and so on?
Ms Webber: I think they have a contribution to
make, very clearly. Social care, housing services and
a lot of other services provided through local
authorities have a role in ensuring that the right
services are there to keep people as independent as
possible.
Q344 Dr Pugh: I have had meetings with the NHS
Confederation from time to time and I know they
feel they know what they are doing when they are
running the hospitals and so on that they run. I was
intrigued by earlier discussions where people talked
about local and national priorities. There is another
set of priorities, are there not? There are the
professional priorities. The police must be aware of
it. There may be things the Government wanted to
do. There may be things the local community thinks
need to be done. There are also obviously going to
be things that you think as a professional you ought
to be doing. How do you square that with all these
other demands?
Mr Jones: Returning to the first point you made, I
agree absolutely that local, democratically elected
people are in the best place to make certain
decisions, strategic decisions, and it is our
responsibility as professionals to make sure they get
the right advice and that they are aware of what the
choices and the consequences are. I think that is
when the professional advice comes into play
because if you do X the consequences of A, B and C
are this. Provided people are given that advice—
because after all they have the ultimate
accountability at the ballot box.
Q345 Dr Pugh: That is exactly the system that
prevails on a local authority. People in local
authorities are not experts on social services by
nature or roads or things like that. They have oYcers
who say, “There are your choices and if you do this
the following will result. We advise this, that and the
other.” You are perfectly happy with that model for
the police, are you?
Mr Jones: Yes, I am, provided that we are allowed to
give our advice in an unbiased and unaVected way,
because obviously the palatability or otherwise of
various directions needs to be open and transparent
so that when decisions are taken people understand
why they are taken, who took them and who is
accountable.
Q346 Dr Pugh: All this supplementing of police
authorities with independent members, magistrates
and so on was unnecessary?
Mr Jones: ACPO’s view on that is that police
authorities are the least worst of the options
currently available to us. We are interested to see—
Q347 Chair: Think out of the box. If you could have
them the way you wanted them, what would you
think is the best way?
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17 November 2008 Mr Ken Jones and Ms Jo Webber
Mr Jones: I have a personal view which I can give
you.
Q348 Dr Pugh: Please give it.
Mr Jones: My personal view is there needs to be
more democratic traction of police authorities
somehow. I am not sure what the answer is.
Q349 Sir Paul Beresford: What about the London
model?
Mr Jones: The balance is beginning to be seen there
where the elected Mayor has some checks and
balances oVered by the Metropolitan Police
Authority. We will have to see how that settles down
but putting the influence in one individual is very
risky.
Q350 Sir Paul Beresford: The Mayor chairs the
authority.
Mr Jones: Yes, but he is subject then to be influenced
by the authority. He or she does not sit in sole
judgment over policing or health issues. He or she
has to take advice.
Q351 Sir Paul Beresford: He has the Home Secretary
lurking over his shoulder, if not sitting on it.
Mr Jones: There is a balance of power and
influence there.
Q352 Sir Paul Beresford: That is diplomatically put.
For the rest of the country of course it is likely as a
way forward.
Mr Jones: Police authorities were designed for a
diVerent purpose and they have delivered on that, by
and large. I think there now is a legitimate demand
for more accountability in a democratic sense.
Q353 Sir Paul Beresford: Where should we go?
Mr Jones: I have a personal view which is that we
need somehow to have more democratic traction.
Q354 Sir Paul Beresford: We elect a sheriV who
chairs it?
Mr Jones: We have given that feedback to the
Conservative Party. It is hugely risky and there needs
to be some thinking through about how such an
individual could be subject to proper constitutional
checks and balances.
Q355 Chair: As I understand it, ACPO’s view is that
they are against the directly elected—
Mr Jones: Yes.
Q356 Chair: But they are not for a particular model?
Mr Jones: No. I think police authorities have
delivered, by and large. We are aware of what the
challenges are in terms of accountability. We are
looking at models for having local people much
more involved in setting local priorities as a means
of addressing that issue because it is a real issue. As
the balance of taxation has shifted in recent decades
from central to local, it becomes much stronger. As
a chief constable, the annual rows with other people
about the precept got pretty testy. You could see,
particularly in areas like Surrey where they pay
locally well over 50 per cent of what their force costs,
there is a feeling that they cannot get at the people.
I think it was, “No taxation without representation”
that somebody said once. Many authorities raise
much lower than 50 per cent so they are not there,
but I think that is where we are going.
Q357 Anne Main: I would like to ask you the reverse
question that I asked the Minister about the crime
and policing representatives. He did not answer it, I
might add. How would you imagine that the public
would choose one of these individuals? What on
earth are they picking from? What qualities would
they be expected to look for?
Mr Jones: We have indicated that what we need to
think through, if we are going to go forward with this
reform, is how to manage that. You could have
individuals elected on a very narrow, local issue. You
could have individuals whipped in a party sense. We
advise that is not a good idea but the Green Paper
does allow that people can be double hatted. People
will see (a) there is no real diVerence because the
council oYcers are also the CPRs and (b) party
machines, quite legitimately, are going to get behind
individuals on particular issues. I think balancing
that is going to be diYcult but there are models
abroad—the States is one—where there is a much
higher degree of locally elected component.
Q358 Anne Main: Why are you against it then?
Mr Jones: We are against it because we think they
could be captured by pretty narrow interests. It
could disturb the current improvement.
Q359 Anne Main: At least if it is a councillor you
know what you are getting?
Mr Jones: Yes.
Q360 Andrew George: If PCTs were entirely
democratically elected, how diVerent would services
be, do you think?
Ms Webber: It is very diYcult to say because what
we have is a combination now of national—I hate to
use the word “targets”; we are supposed to be
moving away from targets, but they still feel like
targets—
Q361 Anne Main: They still are.
Ms Webber: --- and locally decided priorities. You
are still going to have that mix because there are
some things where the general public feel that they
need that national consistency. If you look at things
like waiting times and some of the other issues
around the recent stuV on top-ups, what is allowed
and what is not allowed, the public want a national
consistency. There is always a balance in some areas
between that national framework within which the
public want the NHS services provided and the
degree of local flexibility that you need to actually
meet the needs of some local communities in the
most eVective way.
Q362 Chair: When you say the public want
consistency, we have inconsistency at the moment.
We have much longer waiting lists than Scotland and
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Ev 62 Communities and Local Government Committee: Evidence
17 November 2008 Mr Ken Jones and Ms Jo Webber
Wales because they have chosen a diVerent model of
health delivery. That is an expression of the
democratic voice of people in Wales and Scotland.
Why is it not possible on, let us say, a regional
English level, that people in the north east should
decide they do not mind waiting and they would
prefer more preventative health work?
Ms Webber: Within England there is a lot of
evidence that people want that national consistency.
They want local flexibility. They want both. They
want national consistency and local flexibility. That
is absolutely fine, but that is the sort of environment
in which we are working. If you look at the top-up
issues recently, the huge issue around topping up
treatment was around not having an England-wide
consistency about how that was done, people
wanting national criteria or at least a national
framework within which local decision making
could be used.
Q363 Andrew George: There are two potential areas
of diVerence. One is that greater local accountability
might result—this is presumably what the
Government may fear—in a diVerent quality of
person going on to the PCT and therefore a lesser
quality or a diVerent quality decision taking. The
other is that the lines of accountability are rather
inconvenient. In other words, a locally accountable
person will be playing to an entirely diVerent
audience to a PCT appointee who would be
presumably accountable to diktats from the centre.
Is that the reason why you think things will be
diVerent, because of where they believe their lines
like accountability are?
Ms Webber: People within PCTs at the moment have
a huge variety of accountabilities, both nationally
and locally. There are the national target
accountabilities.
There
are
local
target
accountabilities. There is the role of overview and
scrutiny and there is the new duty to involve. There is
the ability for local people to make their voices heard
through local petitioning. There is a variety of other
mechanisms such as the annual patient survey for
people to make their views very well heard about
what they feel about their local health services.
Q364 Andrew George: If you do not mind me saying
so, these are merely peripheral issues of consultation
and the ability for people to have a say. In terms of
making decisions, in answer to the original
question—how diVerent would services be?—you
were intimating that they would be diVerent if people
were locally accountable. They might resist some of
the national targets being imposed on them. Is that
the main diVerence you think there would be?
Ms Webber: I think there might be more ability
within the system to say locally we will strike out and
have our own way of delivering this, but I think you
would still need national frameworks because you
still need people to feel that the services, particularly
in certain areas—stroke care or cardiovascular
disease or diabetes care or dementia—do need to be
within a nationally consistent model. I think your
point about quality is well made. One of the risks
around this is how do you ensure the quality of
services when you have very much more local
accountability.
Q365 Andrew George: You have set quite a store on
consultation but can you give an example where
local scrutiny has resulted in any real, significant
change in the way services are delivered? That might
also apply to Mr Jones.
Ms Webber: I do not know oV the top of my head,
without consulting. I am quite happy to go back and
find the individual examples.
Q366 Chair: That would be helpful.
Ms Webber: I think there are some issues. For
instance, if you look at the next stage review, the
Darzi Review, that came out in June/July this year,
one of the key points there was to ensure that local
processes were part of this whole system so that it
was a local, whole systems approach to the way in
which health services were delivered. Decisions
about how reconfiguration might be necessary
locally were taken within the context of local
authority needs and local, strategic needs
assessments. There is a whole process there that is
still under way at the moment to ensure that that sort
of local accountability is there.
Mr Jones: I have been around this probably too
long. I remember first working for Clive Betts’s
authority some years ago and I have seen the culture
of local and central government change from my
service perspective, not always for the better. I have
seen some of the changes, which were properly
driven on eYciency grounds, take away some of the
vigour of agencies and produce a lot of ineYciency,
cost and bureaucracy. What we are hearing now
from ministers is very welcome if it can be delivered
because I think there is a need to recalibrate the
relationship between local and central and to get
away from the position where ministers now feel
they are accountable for every tactical failure and
sometimes success that happens out there, be it in
health or policing. I think that is just not a good
place to be. I think the Government’s job is to make
sure that agencies like ours are properly structured,
led and funded and then hold those people who lead
those agencies fully to account for what goes right
and wrong within them, but we have got ourselves
into a position where the public think otherwise. We
have found that incredibly disempowering over the
last decade or so. We hear all these changes and the
ones the minister was speaking about earlier, but I
think delivery is going to be very diYcult because it
challenges cultures in Whitehall and local
government. Frankly, this is a massive change under
way here and it does not suit a lot of people. On
behalf of the public, it has to be driven through. I
think we will then need to accept there might be some
postcode diVerences. In return for that
accountability goes the responsibility for that at
local level. Other countries do not have a problem
with this but we seem to have a media and a political
culture that has introduced quite a lot of weakness.
Our organisations are not as organic and resilient as
they were. One of the dangers of concentrating on
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17 November 2008 Mr Ken Jones and Ms Jo Webber
this is that you produce vulnerability and what the
military would call single points of failure as
opposed to the diversity that used to be out there,
which I think was move innovative and better served
the public.
Q367 Chair: What about the answer to Mr George’s
question about whether you have an example where
scrutiny at a local level has altered these services?
Mr Jones: I can think of lots of examples. Operating
within the culture we have now, where accountability
has shifted upwards, it is almost an inevitability that
if something goes wrong in an agency for which
locally there is not clear accountability, an inspector
or regulator is sent in. It will generate the change
necessary.
Q368 Chair: I am thinking about local authority
scrutiny of the local police service where it has then
resulted in change in service delivery.
Mr Jones: There are stronger and stronger links at
basic command unit level with local government
through those scrutiny operations. I cannot give you
the evidence today but I am fairly confident because
we are all operating within frameworks which,
provided they are given suYcient impetus and
sometimes funds, will generate the right outcome.
Q369 Chair: If there is an example and you find it
afterwards, can you let us know?
Mr Jones: I will.
Q370 Anne Main: Could I just take you back to the
postcode lottery? Would you agree that, if the
postcode lottery has been determined by those who
occupy the postcode, they see it slightly diVerently
than if they have had it imposed on their postcode by
on high?
Mr Jones: Absolutely, up to a point. The point at
which perhaps Government has a responsibility
which it cannot step back from is if a locality decided
on a service provision which put people at harm or at
risk and for which I think the state has to have some
responsibility. Up to a point, I agree with you. I think
we should all be grown up enough to make our
choices and pay for them locally and live with the
consequences. Somebody somewhere has to say,
“That is insuYcient. That puts children at risk” or
what have you and somebody will have to step in
and make sure there is a minimum standard or a
threshold standard below which diVerences in
delivery will not occur.
Q371 Anne Main: Why were police authorities only
relatively recently asking to be super merged into
large areas?
Mr Jones: It was driven by us as policing
professionals rather than police authorities. Police
authorities were very much against the majority.
Q372 Anne Main: Why did you wish to do that then?
Mr Jones: Operationally, there were clear scale
economies. We were sensing diminishing funding.
Q373 Anne Main: That was one of the criticisms of
it?
Mr Jones: The main driver was it was
operationally eYcient.
Q374 Anne Main: How locally accountable?
Mr Jones: That is one of the challenges and that is
one of the things that unpicked it because people
already felt some forces were—
Q375 Anne Main: Why are you arguing for localism
but you are in favour of that?
Mr Jones: Because I think you can find a way of
having your cake and eating it. You can have greater
answerability at local level and we are doing that
now through local neighbourhood policing, where
local priorities will be agreed sometimes on a street
level and people can be held to account for that; but
local people, in my experience, will never vote for
investment
in
counterterrorism,
homicide
investigation, information systems, helicopters, etc.
If you are giving people the appropriate capacity to
deal with the things that matter to them most locally,
it is absolutely right and proper that somebody
somewhere—and it has to be the state—has to say
that there is a threshold which cannot be dropped
below in respect of homicide investigators,
counterterrorism units, what have you. Local
people, bless them, rarely get sighted on that layer of
policing. We have presented a model of policing to
the public, a Dixonian model, which is oversimplified. It is about bobbies on the beat and their
front police station counter. It was when I joined but
sadly it is no longer.
Q376 Mr Betts: We are looking at maybe some
fundamental changes. We had a discussion with
ministers a few minutes ago. If you are going to
introduce some real changes, it is about giving
power, responsibility and accountability to locally
elected representatives. Would you feel comfortable
with a model where local councillors had the
responsibility to commission neighbourhood
policing or health services at local level instead of the
current arrangements through the PCT?
Ms Webber: What we would be comfortable with is,
to a certain extent, what we have already. It sounds
like it is a bit of a cop out. It is not meant to be. The
health and wellbeing services, the preventative end,
the end which is very much within the dual purview
of the PCT and the local authority, the amount of
joint commissioning that goes on in those areas
should be increased to the level where you can run
services that feel to the individual out there receiving
them that they are receiving something which is
joined up, seamless and works for them. For that,
you need to have that very close working
relationship that enables you to really know what
the needs are in a local area and to really be able to
be quite innovative about where the funding comes
from to deliver the services. I think there are some
health services that are very specialist. This is
probably going to get a diYcult response. Health
services might not want to get involved in waste
disposal for local authorities. Maybe local
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Ev 64 Communities and Local Government Committee: Evidence
17 November 2008 Mr Ken Jones and Ms Jo Webber
authorities might not want to get involved in
commissioning very specialist, heavy end, regional
or national specialty services where you need an
awful lot of very good professional knowledge of a
very small but very high usage group of people to
make the decisions.
Q377 Chair: PCTs currently commission.
Ms Webber: No.
Q378 Mr Betts: I was talking about PCTs.
Ms Webber: I think you are absolutely right. There
are some services that we should be joint
commissioning.
Q379 Mr Betts: Why does it have to be joint? How
is it that we have to have appointed people by some
faceless commission called an appointments
commission to determine who sits on a PCT, to
determine how health money is spent at local level?
Why cannot that be done by elected representatives?
Ms Webber: Ipsos MORI did some polling for us
with people, asking them who they would like to
make decisions about their local health services for
them locally. The information we got back from that
polling was that local people would rather clinicians,
people with knowledge of health, made those
decisions.
Q380 Mr Betts: They do not do it now.
Ms Webber: They do in terms of practice postcommissioning.
Q381 Mr Betts: Who is on the PCT? The PCT is not
full of clinicians.
Ms Webber: The Professional Executive Committee
which is the part of the organisation that very clearly
looks at what the development plan is for the PCT
and the way in which services are improved,
developed and delivered, includes a range of
clinicians.
Q382 Mr Betts: If we had all that involvement by
clinicians that we do now and, instead of being
appointed to a PCT, you had elected people, would
that be a problem?
Ms Webber: I think you would have to be very clear
in the way in which you dealt with what can be some
quite single issue politics locally. For instance,
closing an A&E department or closing a maternity
unit, and how you would ensure that you got a range
of people with a range of views, if they were elected,
to ensure that you had the discussions which covered
all of those issues in a fair and transparent way.
Q383 Mr Betts: Those decisions, by and large, are
decisions for hospital trusts rather than PCTs.
Ms Webber: No. PCTs commission their services.
Q384 Chair: To use a diVerent analogy, a council will
have to take decisions for example on closing
schools if the school age population is dropping and
they are not able to maintain standards. Why is
closing a hospital any more diYcult?
Ms Webber: Schools are exactly the same. It is a very
emotive subject and it requires a lot of local
consultation and a lot of local scrutiny as to how you
do that. I suppose the diVerence would be that the
funding that is involved in that hospital is very much
essentially taxation based, whereas a lot of the
education funding may be from local sources.
Mr Jones: In most police forces, their authorities are
already doing that. The professional advice is given
by the chief constable and commissioner and on the
basis of that strategic plans are commissioned and
funding allocated. How it plays out tactically is then
down to people on the ground at inspector level. We
would argue that that is already happening. How
much access the public seeks to that is very diVerent.
Unless there is a local issue that is controversial,
people tend not to get involved, but they certainly
are beginning to be around the precept issues, as you
know. They are looking for more traction over how
those decisions are made. We would see the police
authority as a commissioning body following advice
from the professionals. Then we go away and
deliver it.
Q385 Mr Betts: If the police authority changed into
something which was wholly elected, local councils
would have a role in that commissioning?
Mr Jones: Local councillors are on the police
authority now.
Q386 Mr Betts: It could be done at a more local level
because police authorities often cover a very wide
area.
Mr Jones: Yes, but we have a variation in force sizes.
Some of them are quite small. I think there is much
greater immediacy between the local democratically
elected councillors and their constituencies, even
though they are seconded by a district authority, and
some of the larger ones where I think the connection
is less obvious.
Ms Webber: In terms of appointments, we have done
quite a bit of work with the Local Government
Association on how you might look at strengthening
the scrutiny. One thing we also looked at is why there
should not be on appointment commission panels
local authority members to ensure that, when you
are particularly appointing non-executives for PCTs
and for health trusts, there is not a local authority
voice in the selection of people.
Q387 Mr Betts: You might be thinking the balance
of power change revolves around a bit more than
simply having a local authority rep.
Ms Webber: Absolutely, but also for a lot of PCT
boards they do have as co-opted members cabinet
members from local authorities or other local
councillors.
Q388 Anne Main: Forgive me if I am putting the
wrong interpretation on this but it appears from the
evidence you have given—and indeed the evidence
that we had previously from the ministers—that it is
almost as if the local councillors cannot be trusted
not to be political and that having someone faceless
would be seen as being not so political. Can I pose it
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17 November 2008 Mr Ken Jones and Ms Jo Webber
to you that actually people who are faceless may well
be able to make more reckless decisions because they
are not accountable? Perhaps they would make a
decision more quickly or out of step with what the
local population wants because nobody is there,
badgering them at their door, which is what makes a
politician political in the first place with regard to
their public. Could you think about that? Having a
degree of politics in at local level may actually be
good. It seems to be suggested by both of you that it
is bad.
Mr Jones: I hope I have not given that impression.
Ms Webber: I think the other thing is the duty to
consult, and PCTs take very seriously the duty to
involve patients and users of their services in both
the development of the way in which those services
are commissioned and also in terms of health
providers in the development of for instance
membership schemes to ensure that there is an
evaluation of the way in which services are being
delivered. I take your point about local politics but
I think there are also other ways in which local health
services try to make a direct engagement with them.
Q389 Dr Pugh: It is a bit of a broken record, is it not,
both from you and from the Health Minister? What
you keep saying all the time is that, yes, you have a
duty to consult; yes, there will be co-option; yes,
there will be this and that but, at the end of the day,
neither you nor the Minister have given the
Committee a plausible argument that diVerentiates
health from the police and makes it clear that locally
elected representatives cannot make decisions here.
There is not one, is there? What is the killer argument
that says it has to be diVerent?
Ms Webber: For me, there is an issue about who we
are eventually accountable to. I think we are
accountable to the local population. We are
developing ways of ensuring that the local
population is involved in both the commissioning—
Q390 Dr Pugh: But that is radically implausible to
suggest you do not want the local population to elect
people and thereby, by putting a block to that, you
are somehow more accountable to the local people.
Ms Webber: The evidence we have had was that local
people believed that the people who should make
decisions about their health services are clinicians
working locally with members of the—
Q391 Dr Pugh: I do not want to be antagonistic
about this but when you ask people, “Who do you
want to make decisions about your health care?” I
would much sooner it was an appropriately qualified
physician than any of us sitting round the table. If
you ask me who is to make the decision about where
the police should go tonight and how they should
react, I would much sooner it was the local constable
than the people on the police authority. When it
comes to setting the strategic template which those
organisations work from, it is not convincing at all
to say that the public say that because in a sense they
are answering a diVerent question.
Ms Webber: We are already part of the local strategic
partnership.
Q392 Chair: I was going to ask you whether you
thought the Department of Health was
fundamentally more Stalinist than the Home OYce.
Actually, it seems to be more: would you agree that
the health economy as a whole is fundamentally
more Stalinist than the police and community safety
partnership as a whole? That is what the divide
seems to be. It is not between the departments. It is
between health and policing.
Mr Jones: Given the taxpayer investment annually
in health, it dwarfs what we spend on criminal
justice. I think inevitably Government gets more
interested and draws more towards itself because it
feels it is handling a massive risk. I think that is what
has happened. We have this organisation which
follows from that. Policing is probably only five per
cent of it.
Sir Paul Beresford: A very large proportion of local
government is social services. That is very closely
linked to health and it has the Department of Health
peering over its shoulder with a microscope.
Q393 Chair: Just to pursue this analogy: these
examples may be poorly chosen but the Soham
murders for example appear to be a bit of a fault in
the police service and killed two young—obviously
the murderer killed them but I do not buy that really,
that policing is fundamentally less important to
people.
Mr Jones: It is not less important. I did not mean to
imply that. The other argument I would make is that
policing sprang from and is still accountable up to a
point to local communities in a way that probably
the Health Service did not post-1948. Elements of
that are still around. People’s attachment to their
local policing brand, their authority, is pretty
powerful compared to the health strategic
architecture which is totally diVerent, in my view.
That feeds the point earlier about mergers. I think
that came apart because of the strength of local
feelings against it, which was quite surprising. There
was a bottom up resistance to that.
Jim Dobbin: The Committee are anxious to find out
why in some instances there is a democratic deficit in
the system and to point to the fact that it would be
better if there were locally elected members to those
organisations. We are not naı̈ve enough to think that
some of those people who are appointed by the
appointments commission are not political
appointments, because they are. If you look down
the list locally, I know who they are and where they
came from. We all do. I think that is the point we
would like to highlight. They are not your local
experts, they might well have expertise in some
things—
Chair: Thank you very much. This has been a really
interesting discussion. Thank you for your
contribution.
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Ev 66 Communities and Local Government Committee: Evidence
Monday 8 December 2008
Members present
Dr Phyllis Starkey, in the Chair
Sir Paul Beresford
Mr Clive Betts
John Cummings
Jim Dobbin
Andrew George
Mr Bill Olner
Dr John Pugh
Witnesses: Professor George Jones OBE (Emeritus Professor of Government, London School of
Economics) and Professor John Stewart (Emeritus Professor of Local Government and Administration, The
Institute of Local Government Studies, University of Birmingham) gave evidence.
Q394 Chair: Good afternoon. Can I welcome both
of you to this session? As I am sure you are aware,
this is the third session in our inquiry on the balance
of power between central and local government and
indeed two of us here spent last week in Denmark
and Sweden learning everything there is to learn
about the relationship between local and central
government over there. We are very grateful to you
for being here at this session. Can I start with your
attitude to the Lyons Report where at least Professor
Jones has been quoted as saying that he was “very
pessimistic about the future of local government
after the Government’s negative and hasty response
to the Lyons Report”? Can I maybe ask Professor
Jones to start and then Professor Stewart to expand
on how optimistic you are about the future of local
government after the Lyons Report and whether it is
realistic to expect national politicians of whatever
party to devolve power to the locality?
Professor Jones: We were very disappointed with the
reaction to the Lyons Report by the Government. It
was rejected out of hand by the minister of state on
the same day it was published. Some of its leading
recommendations were just rejected and there has
been no further mention or attention paid to the
report in succeeding white papers or in the Act of last
year or the Bill that has just gone to the House of
Lords. It seems to have been totally forgotten. Our
view was that the Lyons Report was a step in the
right direction and it was a great pity that it has not
been taken forward. The most important thing that
the Lyons Report said, that we support of course,
was that the country—the Government—faces a
choice. There is a clear choice to be made: do you
want decision making on public services to be
concentrated on central government or do you want
it dispersed to a variety of elected local authorities?
That is a clear choice you need to make. Once you
have made that choice you can then design a local
government finance system to support your choice.
However, the Government has failed to choose. I
notice also that the Lyons Report has not really been
examined properly by Parliament or by a select
committee. There have been some debates, but it is
a missed opportunity; it is very sad for local
government.
Q395 Chair: Professor Stewart, why do you think
that the Government did not act on the Lyons
Report and what particular recommendations do
you think are the crucial ones to be implemented?
Professor Stewart: I just want to say something
about my general attitude to the Lyons Report first
because that will colour my answer. I found the
Lyons Report very strong in its analysis of the
situation, of the degree of centralisation, of the
degree of intervention and of its eVects on destroying
the confidence of local authorities. I found it much
weaker in its recommendations. It opted for an
incremental approach with many of the big issues
pushed into the distant future. My own view is that
an incremental approach is not enough. Choices
have to be made, such as the one that George has
spoken about and that really needs a major change
in the nature of the relationship, touching on some
of the things we have put in our evidence. The report
was weak for that reason and that was one of the
reasons why it has had little impact. I do not say it
would have had an impact on the Government, but
it certainly would have had a bigger impact on local
government and on the informed press.
Q396 Sir Paul Beresford: Would you not say that the
minister’s rejection would be in part because of what
you have just said but also because they have
actually answered the question and that is that they
want it centralised?
Professor Stewart: Of course there is a diVerence
between what one might deduce from their actions
and from their words. Their words are that they
wanted decentralisation. The Government is
committed to devolution to local government.
Q397 Sir Paul Beresford: Their actions are the
opposite.
Professor Stewart: There are some movements in
that direction but you could hardly say it was a
significant decentralisation so far.
Q398 Mr Olner: Following on from what Sir Paul
was saying, having been involved in local
government myself, it is a question of whether you
want local government to be aspirational in their
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8 December 2008 Professor George Jones OBE and Professor John Stewart
own communities or do you want local government
to be the police people of central government
dictats?
Professor Jones: It depends on what view you have
of the proper role of central government and its
relationship with local government. What has been
happening for the last 30 or so years is that
increasingly the central government has seen local
authorities as their executive agents, no diVerent
from other parts of the central government
departments. They are there to carry out the wishes
of central government departments in particular
services. They are very service oriented whereas local
government must be valued as providing
opportunities for local people to govern themselves,
to shape the development of their own local
communities and not just to be executive agents of
central government. This is the choice that has to be
made: do you want to go in the centralist direction
or the localist direction? The Government has been
fudging, in its rhetoric, by speaking out for
decentralisation to local government and to
communities and people, but the reality, despite the
reduction in certain targets and indicators, is that it
is still dominated by the desire to control what local
authorities are doing.
Q399 Chair: Can I just tease out what you have been
saying? If local authorities are eVectively delivering
a very large proportion of the services that local
people receive, is there not a pressure from the public
for there to be some sort of uniformity, at least in
minimum standards wherever they are living?
Professor Stewart: There is not really much evidence
of a pressure to have the same standard of service
everywhere. What the public want is a good
standard of service. The Lyons Report carried out
surveys of public opinion and if you ask the public if
they want a uniform standard of service they will say
yes. They will also say they want the local authorities
to have the right to decide. So a lot depends on the
question you actually ask. Interestingly, in relation
to that direct question about the standard of service
being uniform, they were then asked, “Would you
want that or would you object to there being
diversity?” If the public were consulted and they
were satisfied with the standard of service then 70 per
cent said that is just what they wanted. That is really
what the public wants; it wants a good standard of
service in local circumstances.
Professor Jones: I think if you move to a wholly
centralised system, let us take the National Health
Service which has been a centralised system for 60
years and yet it is still delivering unacceptable
variations in service because the most vivid examples
of the postcode lottery are in fact in the National
Health Service. If the Herbert Morrison approach to
a national health service had been carried out in the
1940s and local government had had a major role in
health, I do not believe that there would have been
such unacceptable standards of services. I see no
evidence that centralisation automatically gives you
acceptable minimum standards or indeed high
standards.
Q400 Mr Olner: Local authorities would have acted
diVerently as regards health delivery than primary
care trusts.
Professor Jones: Primary care trusts to me are
quangos. They are not democratically elected bodies
which is why we support a major role for local
government in the Health Service. There are various
steps that one can take to achieve this; ideally the
local elected authority—the local government—
should be the commissioning body for health. Sir
Simon Milton, when he was at the LGA (Local
Government Association), suggested other means
for strengthening the power of the elected council
over health, appointing certain key people and
perhaps being the funnel or the channel through
which grants have to pass before they go into the
health system or the PCT. Ideally I would like to see
local authorities, as I think Sir Paul once argued,
being the commissioning entity for health.
Q401 Sir Paul Beresford: Without saying where I
stand on this, would a minister not say that having
listened to you they have the opposite example in
child abuse and child protection recently with some
pretty appalling cases where the Government has
had to step in because local government has shown
those failings.
Professor Stewart: And the health authority has
shown its failings.
Q402 Sir Paul Beresford: Predominantly it starts
with the social services.
Professor Stewart: Predominantly it starts with the
doctors inspecting the child. There are failures in
every public body. Just to go back to the postcode
lottery, I regard the words “postcode lottery” as very
misleading. It is not a lottery, it is a postcode choice;
it is a choice made by people as to the standard of
service, the diVerence being the choices made in the
case of local government services where people are
responsible to local people and in the Health
Services it is made by people unaccountable to
local people.
Q403 Chair: We have rehearsed in earlier sessions
the issue of the relationship between the Health
Service and local accountability and it is clearly
something we will have in our report.
Professor Stewart: It does connect with the
postcode lottery.
Chair: Indeed it does.
Q404 John Cummings: I address my question to the
two witnesses, Professor Jones and Professor
Stewart. In all your vast experience in the matter
under discussion, what do you believe have been the
key positive developments and the retrograde steps
in the relationship between central government and
local authorities over the last decade?
Professor Jones: The most positive step I think is
included in the Local Government Act 2000 which
gave local authorities the power of well-being to
promote the economic, social, environmental wellbeing of their areas. It gave them a duty to prepare
a strategic community plan—it is now a sustainable
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Ev 68 Communities and Local Government Committee: Evidence
8 December 2008 Professor George Jones OBE and Professor John Stewart
community plan—and this to me was a ray of hope.
Here was a chance for local authorities to exercise
leadership without, I thought, a set of narrow,
niggling constraints. I still think that potentially that
is important. Local authorities are, in many areas,
starting to use those powers with imagination and
ingenuity and I think that was the one positive step
that I would attribute to central government in
enhancing the power and discretion of local
government.
Professor Stewart: I can come in on the negative
side. The negative side seems to me to be the general
approach of Government, excessive legislation. The
Bill that has just been presented to Parliament has
been quoted where the Government is proposing to
legislate on petitions submitted to local authorities.
Why it requires legislation is not clear. Nobody
knows; there has been no real research done on how
local authorities deal with petitions. If the
Government wish to emphasise the petition thing,
then they could use all sorts of statements by
ministers, but to legislate and lay down a complex
bureaucratic procedure seems to be unnecessary.
Secondly, where there is legislation, excessive
prescription; I often say the committee system of
local government lasted for a hundred years or more
on the basis of one clause in an Act and one
regulation. Now we have 190 pages of guidance; we
have 15 regulations, five directives and a very
detailed Act. The net eVect is to cut back the scope
for innovation and experiment, diVerent authorities
adopting diVerent approaches within an executive
model. It is that practice of excessive legislation and
excessive prescription. The third thing is the growth
of targets and their eVects on the working role of the
local authorities have been counter productive
leading to gaming by some bodies, distorting
practice in order to meet the standards required; it
can distort priorities because the best way to meet a
priority is to neglect other activities and services. It
has become a sort of tick-box approach. If you meet
the target you are all right; if you do not, you have
failed. It is a very narrow form of performance
management. Most of the literature on performance
management suggests that your target and your
performance relationship is the basis for discussion
and analysis. In fact it may be that what is wrong is
that you have met the target.
Q405 John Cummings: Do you think civil servants in
a department could do with perhaps spending a year
in local government?
Professor Jones: Increasingly I have come to the
conclusion that the fault for much of the
centralisation that John has described lies with the
Civil Service. I do not think I am going to blame
ministers as much as civil servants because it is civil
servants who are involved in drawing up this
legislation; it is civil servants who put in all the
details and the over-prescription. I can understand
their attitude. They are conscientious, they want to
work hard and do what they think their minister
wants and they of course feel that they are superior
to local government oYcials; they think they are
more competent but in fact I doubt that because the
local government oYcials are there on the ground
close to where the problems are happening, close to
the people. I would much prefer to trust the local
government oYcials than remote control by
bureaucrats in Whitehall.
Sir Paul Beresford: Ministers can say no.
Chair: Can we bring back John because he was midquestion.
Q406 John Cummings: I would like Professor
Stewart to make a contribution as well.
Professor Stewart: I was going to answer your
question on whether I was in favour of civil servants
gaining experience in local government. The answer
to that is yes. I would not necessarily want to lay it
down as a law or as a regulation but I believe that
anybody who has any dealings with local
government should have some experience of
working in it. Those people who have, have told me
it was one of the most revealing experiences of their
working life, first of all to be impressed by much of
what they found and secondly to be surprised at the
sheer range of things that a senior local government
oYcer would have to deal with as opposed to
somebody in an equivalent position (apart from the
permanent secretary and the very highest oYcials)
who has a much more limited remit.
Professor Jones: I hope you will not be led up the
garden path of a unified public service. Some of the
people giving evidence to you may put this. I fear
that that would lead to a set of oYcials dominated
by central government. I believe there is great value
in each local authority having its own staV, loyal to
it and not to some entity called the unified public
service.
Q407 John Cummings: Do you believe that we need
radical or incremental change in the relationship
between central and local government?
Professor Stewart: Radical change. We have had
incremental change; radical change is needed. If we
believe that the balance is distorted and out of kilter
then it is not going to be helped by minor changes; it
needs fundamental changes in the relationship which
also would involve changes in the internal way of
working in central government itself.
Q408 Sir Paul Beresford: To take you back to your
answer on retrograde steps you listed examples
which I agree with, do you think that those negative
steps and eVects on local government have been
partly or to a large degree responsible for the
increase in the council tax over that period?
Professor Stewart: I am sorry? Responsible for
what?
Q409 Sir Paul Beresford: Do you think that negative
and retrograde bureaucratic control has been at least
in part responsible for the increase in council tax
over the last decade? The cost in other words.
Professor Stewart: I think that a lot of the things that
I spoke about have had a harmful eVect on local
authorities, first of all by curbing innovation and
secondly they have taken up the time of senior
oYcers and senior councillors. I reckoned, purely
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8 December 2008 Professor George Jones OBE and Professor John Stewart
impressionistically, that about 50 per cent of the time
of senior oYcers is spent dealing with the plans
required by Government, dealing with forms and
reports, dealing with inspections and so on and so
forth. That naturally takes their attention away from
the running of the services. I do not know whether
50 per cent is right, but nobody does know. Central
government itself should know the impact of its
actions. The LGA has not done any work to actually
find out how much time it actually takes. Whether or
not that has led to an increase in the council tax due
to an increase in expenditure or, in some cases, has
led to worse services being provided, I am not
certain. However, if you talk about the relationship
between service and the cost; naturally with all it
impacts upon the situation, it has had a harmful
eVect upon that.
Professor Jones: Sir Paul has raised a very important
question.
Chair: Professor Jones, we are very time-constrained
not least because we have a vote coming up at the
end of the session after this one and therefore I am
very conscious that we need to move on to some
other questions that members want to ask, otherwise
the next lot of witnesses will get squeezed down. I
know that is unsatisfactory but can I ask the pair of
you not to necessarily each answer and to try to keep
your answers short and to the point. If you think you
have not been able to say everything, send something
in in writing afterwards.
Q410 Andrew George: Do you think that the
dynamics of political and media discourse in the UK
at the moment would ever create the favourable
conditions for a meaningful decentralisation?
Professor Jones: That is very diYcult. We are a small
country. The media are a national media; they are
plugged in much more to national events and
national politics. You only have to look at the way
the media, particularly broadcasting, treat local
elections. Who are the people they have on their
programmes? National politicians; ministers,
shadow cabinet people commenting on the
significance of these local elections. We do have a
very highly nationalised media. We also have MPs
who, despite their experiences in local government,
once they get to Westminster seem to switch their
perspective and seem to be supportive of central
government.
Q411 Andrew George: To give you an example, say
we get an extreme child welfare issue which hits the
national press. It is arguably a local authority issue
but inevitably ministers are then asked to appear to
be decisive and relevant on those occasions and
therefore call for certain actions to be taken. It is that
kind of discourse that I am talking about, the need
for ministerial intervention on issues which appear
to be at least decisions and services delivered at local
authority level.
Professor Jones: Ideally ministers should say, “This
is not my responsibility; this is the responsibility of
the local authority” and stand up to that.
Q412 Andrew George: They will not say that.
Professor Jones: If our recommendations had been
accepted and the choice for local government
responsibility had been made, then ministers would
be much more easily able to say “It is not my
responsibility, go to that authority or that authority,
they are to blame”. It gets back to Sir Paul’s question
about who is responsible for council tax. I know you
have asked other people giving evidence. What is
wrong with our present system in the relationship
between central and local government is that it is
impossible to answer the question “Who is
responsible for council tax increases?” because each
side blames the other and they make a plausible case
because the financial arrangements are so devised
that responsibility is shuttled from one to the other.
Each blames the other. We are saying—and Lyons
did and Layfield did—that there must be a choice
and you must have a financial system that supports
that choice so you will be able to say who was
responsible.
Q413 Andrew George: May I ask Professor Stewart
do we presently have a local government structure or
are they merely agents of central government?
Professor Stewart: We have a local government
structure but to a degree they become agents of
central government but not entirely. Local
authorities still have the substantial discretion, if
they care to use it; they have the new duties, the new
powers. One of the things that actually happened is
that the impact of what has been happening in the
extent of guidance, in the extent of prescription, in
the setting of targets and so on and so forth, the
confidence of many local authorities has been
destroyed. This is a point made strongly by Michael
Lyons and an important part of his analysis. One of
the mistakes at the moment is that local authorities
are so in the habit of getting detailed guidance that
they now—some of them at least—automatically
ask for guidance. If you ask civil servants why they
give so much guidance they will say that local
authorities ask for it. One of the results of that is the
impact of all the Government action. There have
been some statistics just recently that showed that a
local authority had been asked to reply in September
and October to 30 diVerent pieces of consultation.
Clearly that is going to absorb the time of the senior
oYcers. In a sense we begin to establish a habit of
looking up centrally rather than looking down
locally.
Q414 Andrew George: You still both say that local
government is better at eVective service delivery than
is central government. Can you give examples or
evidence to prove that that is clearly the case?
Professor Stewart: The evidence would lie in the
comparison between the capacity studies of
government departments—which are not even done
by an independent body but by civil servant bodies
themselves—and the results of inspections of local
authorities. The results of the inspections of local
authorities suggest that the standard of service
provided and the organisation is good. I have
criticisms of the inspectorate; I have criticisms of the
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8 December 2008 Professor George Jones OBE and Professor John Stewart
belief in their infallibility. There is a doctrine of not
papal infallibility but inspector infallibility. I think I
would rather see inspectors as partners in shared
learning.
Andrew George: Do you think the local people feel
the same way? Are they champions of a more local
democracy or do they not really follow the
distinction between a PCT and a local authority?
Q415 Chair: Professor Stewart, can I just piggyback
on this? When you are comparing capacity studies of
government departments and local councils, for the
most part government departments do not deliver
any service at all so you are comparing apples and
pears. What about if you compare local authorities
with PCTs where they are indirect service delivery?
Professor Stewart: I would say that when you are
comparing you are comparing the eYciency of
management and the eYciency of management is
there whether or not you are running a service or
whether or not you are managing the situation, so I
believe the comparison is valid. I have not actually
studied the figures comparing PCT inspections with
local authorities; it might be worth the Committee
looking at it.
Q416 Mr Betts: Last week three members of the
Committee went to Denmark and Sweden to look at
how they operate in terms of their local and central
relationships. All the politicians we met could not
get their heads round the Baby P approach in this
country; they could not understand how national
politicians who, even second hand could not be
aware of what was going on in a particular local
authority’s children’s department, wanted to take
ultimate responsibility for those actions and the need
to put it right. They have a very diVerent relationship
there which is embodied in the constitution. I just
wondered what your thoughts were about trying to
get a more formal constitutional position for local
government, bearing in mind Scotland and Wales
now have devolutionary positions which are agreed
by this Parliament but there is no way that this
Parliament would seek to fundamentally change
those now without the agreement of the Scottish and
Welsh people presumably through a referendum.
There is a diVerent constitutional position to be
taken and I just wondered whether there is anything
we can do in terms of local government that would
embody local government in a more formal
constitutional arrangement.
Professor Jones: We recommended that the
Concordat be beefed up. I look on the Concordat as
very much a first step in devising a constitutional
settlement that would encompass the relationship
between central and local government. Michael
Lyons called for this settlement and I think
explained to you how diluted was the Concordat
compared to what he had in mind. We envisage a
statute—not a written constitution but a statute—
that lays out important aspects about the
relationship between central and local government.
For instance, local government’s role is to be
responsible for the government of its area and the
development and well-being of that area. The local
authority should be primarily responsible to its own
local voters and not to central government
departments. There are a certain number of features
that could be put into a statute and the value of
having a statute is that it would not be altered except
by an explicit Act that was debated and considered
by Parliament. Too much of the relationship
between central and local government is determined
in the inner recesses of Whitehall without much
public or MPs’ knowledge. We are calling for a
constitutional settlement embodied in a statute.
Q417 Mr Betts: One piece of law is very much like
another and if Government comes along and
legislates on something to do with housing or
education that is in conflict with that previous
statute about the relationship between central and
local government, well Parliament passes it and that
is it. You do not have to pass anything special, do
you, to alter it in practice?
Professor Jones: I think we have reached the view on
having a statute that that is certainly better than the
present Concordat about which both local and
central government seem to have totally forgotten. It
is not ever prayed in aid; it has been forgotten. You
could not forget if there were a statutory provision.
We have reached that position also because we are
sceptical about the time it would take to write a
constitution, to have a full scale codified
constitution that is entrenched which is what these
other countries have. We are not going to get that
here.
Q418 Mr Betts: Would this statute then be
something that all future legislation involving local
government would have to be tested against, a bit
like the human rights test on legislation which is
weak but at least it is there.
Professor Jones: We also envisage, as you know, that
the central/local relationship should be monitored
by some sort of independent body either an
independent commission or a joint committee of the
two Houses. There should be a body monitoring
what is going on and if there was an incompatibility
between that basic statute and some more recent bill
they would be there making a statement as well as
giving to Parliament and the public an annual review
of the state of central/local relations.
Q419 Mr Betts: Going back to something you said
before, Sweden clearly has a more devolved local
government where there seems to be a general
consensus across all the political parties that that is
what it should be, but central government does lay
down minimum standards and people seem quite
relaxed about that as though it is reasonable to have
certain minimum standards across the country
which local authorities can then go beyond. You
seem to be against minimum standards almost per se.
They said that central government thought that
mental health services were not up to scratch in some
areas so they laid down some minimum standards
but they gave local authorities the money to meet
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Communities and Local Government Committee: Evidence Ev 71
8 December 2008 Professor George Jones OBE and Professor John Stewart
them and everyone felt quite comfortable about that
sort of arrangement. Is that something you still
would not want to see?
Professor Jones: Personally I do not think we want
to see minimum standards. We have already
suggested our scepticism about the minimum
standards approach. You cannot really at the centre
devise a minimum standard for every aspect of every
service and again there are diYculties of enforcing it.
We do not believe that the centre can really
guarantee a minimum unified standard. We have
already quoted the Health Service as showing the
worst, most vivid examples of the postcode lottery.
However, on your first aspect, to achieve our
constitutional settlement requires cross-party
agreement on these rules of the game. It is absolutely
essential that this issue does not become a battle
between the parties. I would hope that this select
committee, as a cross party committee, would, as it
were, start the campaign to get cross party
agreement on the need to rebalance the relationship
between central and local government.
Q420 Chair: Both of you I think have called for an
independent commission to monitor central/local
relationships. What was your view on the other
suggestion that others have made which is that you
just have an independent commission to allocate
local government finance?
Professor Stewart: We are against that. That is a
decision about the distribution of resources. We see
this as essentially a political decision and therefore it
is right that it should actually be made by Parliament
and by ministers. It would also defeat the aim of our
proposed independent committee because it would
mean that it was taking an active part in the
relationship rather than monitoring the nature of
that relationship.
Q421 Dr Pugh: Across the LGA there are various
sorts of bodies representing the local authority
family, if I can put it like that, and it was hoped the
LGA would actually perform a significant role in
being an advocate for local government with central
government and maybe with the public as well, but
what we have seen, I guess, is that they have
established a bureaucracy, they have aVordable
things like training, they produce a lovely—but
singularly uninformative—magazine every week.
Do you think that the LGA are performing a real
and valuable function as an advocate for local
government?
Professor Stewart: The LGA is a very strange body.
Indeed, I have often said that the local authority
association in any form is almost a contradiction in
terms because local government exists to be diverse
and diVerent, and an association exists to reduce that
complex of views to one particular view. That is one
of the dangers facing a local government
association. The second is that their working
relationship, their day-to-day practice, the things
that come to them all tend to make them part of the
village of Whitehall and they come to accept the
assumptions of the village of Whitehall over time.
Obviously they have to have a working relationship
with Government but at times they have gone too far
in accepting the views of central government. They
have not pressed the constitution issue that we have
referred to. They have not highlighted the very
complex accountability issues raised by the local
area agreements where local authorities appear to
be, according to the legislation, being held
accountable for the activities of the various
appointed bodies in the area for which targets are
set. It is a very confused situation and yet the
association let itself be browbeaten into signing the
Concordat even when it was not really satisfied with
it. I would argue that most of these things derive
from the fact that they have almost become part of
the village.
Q422 Dr Pugh: It is not a very eVective advocate.
Professor Stewart: It is not as eVective as it could be.
Q423 Mr Betts: Do you regard the whole issue of the
lack of availability for local authorities to be able to
raise their own finance as absolutely central to the
issue of rebalancing power back towards local
authorities?
Professor Stewart: We were members of the Layfield
Committee and we began by expressing that choice,
the choice that George has spoken about. Once you
have made that choice it has to be faced what it
means in terms of finance. That was the way Layfield
put it. Layfield did not say, as some people often
seem to suggest, that if you do this then
automatically central government will stop. What
Layfield said was that a choice has to be made as to
where the main responsibility lies. If you decide the
main responsibility for the functions of local
government applies locally then you should devise a
financial system that supports that. Without making
that change the words you have said about passing
responsibility are unlikely to happen.
Professor Jones: It is very important that you avoid
the trap of thinking that local authorities can be
responsible and accountable simply for spending
money. I think they have to have the responsibility
for taxing as well so that when they and the public
have to consider whether they want higher services,
better value, improved services, at the same time
they have to consider the consequences in terms of
raising the money to finance those services. That is
the only way we can have really responsible local
government.
Chair: Thank you both very much indeed. We have
packed a lot in and we are very grateful to you.
Thank you.
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Ev 72 Communities and Local Government Committee: Evidence
Witnesses: Professor Vernon Bogdanor CBE, Professor of Government, Oxford University and Professor
Tony Travers, Director of the Greater London Group, London School of Economics, gave evidence.
Q424 Chair: I will just say again that there is likely
to be a vote at 5.35 so that is when we will disappear
and our session with you will end and we will come
back after exercising our duty as Members of
Parliament to then deal with the last lot of witnesses.
That is why we are quite keen to motor through the
topics. Can I start oV with the issue of why each of
you thinks that local democracy is important for the
health of the nation? As a kind of flip side to that,
why do you think there are such low levels of public
trust and participation in local democracy? I guess I
was very struck by the point that Professor
Bogdanor made in his written submission which is
where he is suggesting, I think, that the main barrier
to a rebalancing of power is not the constitution, it
is a whole cultural, political thing out there which
presumably includes the public as well.
Professor Bogdanor: I do believe that the main
barriers, as you suggest, are not constitutional but
cultural, but I also believe there may be institutional
ways of helping to change that culture. I have, in my
written evidence, suggested various reforms: a
reform of the finance system, greater use of
instruments of direct democracy, reform of the
electoral system and, more directly elected mayors.
As to your question on why local government is a
good thing, I think there are a number of answers to
that. Firstly it is government by lay people who are
not professional politicians and therefore it will
enable more people to understand the workings of
democracy. There are around 24,000 elected
councillors who are mostly not professional
politicians and they are able to understand the
diYculties of making decisions in a democracy. That
must be good, surely, for the health of the country.
Secondly, I believe that diversity is a good thing in
itself and I believe that it will help to produce better
public policies. I have given an illustration—I think
a very graphic one—in my written evidence from
John Kay of the Financial Times who talks about the
experiment with comprehensive education in the
1960s. He said that it was not inherently foolish but
what was wrong was the scale of the experiment and
the absence of honest feedback on progress. I think
we are more likely to get that in a diversified system.
Finally, I think that a good local system can
stimulate local patriotism. People may say in
Oxfordshire, the county where I live, that they do not
get enough money from central government but
their schools are very good and they have done
wonders with very small amounts of money. No
doubt in Berkshire they say the same and in
Buckinghamshire and so on—so there is healthy
competition. Devolution may be stimulating that
sort of sense between Scotland and England, a sense
of healthy competition. I feel the danger with
services run at a national level is that they sometimes
tend to institutionalise grumbling because if you say
in a national service that things are not going very
well the Government will say, “Splendid, we will
switch resources to some other service in that case”
so you always have to say in a national service that
you need more money and that things are good
enough. That does not give you a good sense of
morale in a public service.
Q425 Chair: I might point out that some of us
started our professional politician career in local
government where we learned the skill. I would
quibble with you as to whether they are not
professional politicians; we were just not paid when
we are in local government.
Professor Travers: I build on what Professor
Bogdanor has said. The issue of distance I think is
important in understanding trust. This point has
already been touched on: if decisions are made by
politicians in Government who are a very long way
away from what are often relatively local
implications and local results of those decisions, I
think it is impossible to imagine the politicians
concerned being able to get any signals directly,
other than through Members of Parliament that
they speak to, when they come to make those
decisions. The capacity for any individual to
influence the person making the major decision in
Whitehall or Westminster is very, very unlikely to
occur. It is very likely to be that kind of capacity to
influence those making decisions. That distance I
think will aVect trust. To answer your first
question—why would better and stronger local
democracy be good for the nation?—the strength of
local democracy and the powers of local government
are, I think, enormously tied up with the whole
operation of politics. It is where people learn about
democracy, which is the point you just made
yourself, Chair. If local government and local
democracy were to wither and die—or were to wither
too much—it is inconceivable that it would not
aVect Parliament because they have the same roots.
The one root goes through the other into local
political activism. Local democracy is essential for
parties, parties in our system are essential for
democracy and therefore Parliament itself depends
on local government and local democracy.
Q426 Mr Olner: I take issue with the connection,
Tony. I can well remember when the first shackles
were put on local government; that was when the
lovely Ken Livingstone lived over the way and upset
Margaret Thatcher who was the prime minister of
the day. That prime minister of the day took away a
lot of local autonomy from local authorities. That
was a political action against local politicians who
were politicians. The other thing was actually the
right to buy council houses when there was
absolutely nothing that the local authorities could
do to put back into their communities the problems
that the sale of council houses would do for them.
Professor Travers: I think we are agreeing, actually.
My point is that if decisions are made to remove
power to the centre then it sends a signal within the
locality that local democracy is less powerful
therefore fewer people are likely to be interested and
involved in it and therefore, over time, there will be
less political activism but that will not only aVect
local government. As you will know better than me,
local activists are what make up politicians, local
parties, that help you fight elections. That is the
simple point I am making.
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8 December 2008 Professor Vernon Bogdanor CBE and Professor Tony Travers
Q427 Andrew George: Professor Travers, you say at
the end of your evidence that “Parliament, as the
pinnacle of British democracy, would also gain from
a revival in local government”. That sounds to me
that if you make that argument and you can
persuade Parliament, then we are on to a winner.
How are you going to persuade us that actually it is
in Parliament’s interest that we will benefit so much
from a revival in local democracy?
Professor Travers: It is an extension of the point I
have just made. If local democracy were truly
vibrant and really galvanised then my hunch is that
for all the political parties represented here you
would have more activists locally; there would be
more people joining political parties, interested in
government and politics, taking an active part in
conventional political activity. That would not only
strengthen local democracy but it would therefore
directly strengthen Members of Parliament’s
capacity to compete and all parties would benefit
from that. That would strengthen democracy not
only at the local level but at the national level.
Q428 Andrew George: You both argue, I think,
passionately in favour of stronger local democracy.
I do not know whether it is fair to assume that you
prefer decentralisation to happen at as fast a pace as
possible, but how do we achieve the speed of change
to decentralisation? What does the Government
need to do in order to achieve the kind of speed of
change to decentralisation which you feel might be
required?
Professor Bogdanor: I think one would need
politically to strengthen local government and I
think one of the ways in which one might do that
would be by directly elected mayors, particularly in
the conurbations. There are very varied views about
the Mayor of London and his predecessor, but I
think few would deny that both Boris Johnson and
Ken Livingstone have made local government more
exciting. It is interesting that the turnout in the
recent London Government elections was 45 per
cent which is higher than the average turnout in local
authority elections. Various views are held about
both Boris Johnson and Ken Livingstone but they
are independent minded figures and independent
minded figures who can stand up for their particular
authority. I think it would be only to the good if we
had similar people in Birmingham, Newcastle,
Manchester, Leeds and so on who would be Mr or
Miss Birmingham, Newcastle, Manchester, Leeds et
cetera and stand up for their authorities. I think such
people would be more likely to be able to resist the
depredations of central government.
Q429 Chair: Do you see this as universal model or
only for cities and regional bodies, which is
essentially what London is?
Professor
Bogdanor:
Yes,
well
Regional
Government as I understand it: I think here is a
strong intellectual case for regional government. But
it has been rejected by the voters of the North East
and I imagine that it is not on the political agenda
now, but certainly if other authorities would like a
mayor—I suppose in rural areas you would call the
person a sheriV—or a directly elected political leader
I feel that would contribute greatly to the strength of
local government.
Dr Pugh: You are saying it contributes to the
strength of local government. The argument you
have given so far is that it increases the turnout and
that is not the same thing, is it? You could argue that
it would increase the turnout at a general election if
we elected a president at the same time. What is the
benefit of a mayor as opposed to a broadly based
representative group of politicians reflecting their
own individual areas?
Q430 Sir Paul Beresford: Can I piggyback on that?
I personally think that that is a red herring. If you go
back to the 1980s there were a large number of strong
leaders, including Ken Livingstone, who had the
same sort of role and in local government elections,
certainly in London, the turnout was 65 to 70 per
cent. So it is actually more the fact that they were
freer and they had the personalities. If you do not
have the personalities it does not matter whether it is
the leader of a council or a mayoral candidate.
Professor Bogdanor: If one looks at the history of
British local government there are very few people in
its history who have built a strong local government
base for themselves—Joseph Chamberlain, Herbert
Morrison, Ken Livingstone—it is diYcult to think
of a large number of other people. I think the
increase in the turnout is an important point because
I think the low turnout is a sign that people do not
value local government as much as they might. One
of the reasons for that is they sometimes find it
diYcult to identify with their local authority.
Surveys have shown that very many fewer people are
able to name the local authority leader than they are
a mayor; the mayor is much more publicly
identifiable not only in London but in other areas
that have chosen mayors as well. Secondly, mayors
are less likely to be the tightly organised party figures
that there are in local government. I said in my
evidence that local government is now much more
tightly organised from a party point of view than the
House of Commons itself. I think that puts some
people oV local government; it is too tightly
organised.
Chair: I am quite keen that we do not spend the rest
of this session arguing about mayors, especially as it
is becoming increasingly evident that if we do make
any recommendations as a Committee it is not likely
to be along the lines of that wished by Professor
Bogdanor since most of us seem to be against them.
I would like to move on because I do not want to get
hooked on that constitutional point. Andrew?
Q431 Andrew George: You both seem to imply that
at local authority level both turnout is low and there
is a perception amongst the public that the capacity
is rather questionable as well. How do you overcome
the perception or existence of low capacity or lack of
capacity at local authority level? Is it a question of
front-loading the powers first or do you need to
build up the capacity or perceptions of local
government?
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Ev 74 Communities and Local Government Committee: Evidence
8 December 2008 Professor Vernon Bogdanor CBE and Professor Tony Travers
Professor Travers: I am not sure, especially given
that the Chair has made the point that many of the
people sitting round the table here have been
members and/or leaders of local authorities, I am
not sure I actually agree with the contention that
there was a lack of skill and expertise and wisdom in
local government. I think many of the best local
authority leaders are extraordinarily good at what
they do, even if their names are not that well-known.
Of course there will be those who are less good
because it is a very large number, as the point has
been made clear (we are talking about 20-odd
thousand elected representatives). But you are
definitely correct that if local government was seen
to have more power then more people who were
interested in political power would be drawn into it.
I just use a very simple rather stylised way of putting
it. If local government set income tax levels I do
assure you that turnout would go up and I do assure
you that more people would be interested in going
into local government.
Q432 Mr Betts: Three of us have just been to
Denmark and Sweden where they have a more
formal constitutional position. The Danes, for
example, would claim that they actually inspired the
whole idea of a European Union charter of local selfgovernment which we have signed up to but I think
a lot of people would think signing it has not made
a lot of diVerence; it is hardly worth the paper that it
is written on in terms of application in this country.
Do you think we can do anything more to actually
enforce it and make something real out of it?
Professor Bogdanor: As I said in my first answer, I
think that constitutional statements, although
valuable, need to be backed up by a renewed
political strength in local government and therefore
I believe that reforms are needed in our current local
government system. One of the other reforms I
suggested to make local government stronger is a
reform of the electoral system which would mean
you have fewer uncontested wards in local
authorities and, secondly, a greater degree of direct
democracy—double devolution in the jargon—so
that the people themselves can help to make
decisions. People already have the right to call for a
referendum on an elected mayor—I am sorry to
mention that again—and if you give them that right
on that limited issue why not rights on other local
authority issues? Why should there not be petitions
on other issues? I gather the House of Commons is
currently looking at reforming the petition system.
The initiative at local level would go beyond the
petition because it has a specific consequence but it
might excite further interest in local government and
once people get interested in local government they
are more likely to defend their local authorities
against the depredations of the centre. At present
local government does not have a powerful enough
constituency.
Q433 Mr Betts: In terms of Scotland and Wales we
have got de facto a constitutional arrangement now.
In the end it is just an Act of the UK Parliament that
has created the devolved parliament and the
devolved assembly, but I do not think that anyone
could conceive a situation where this Parliament
could simply legislate now to terminate the Scottish
Parliament or the Welsh Assembly or substantially
alter its powers without agreement. Is that not a
diVerent constitutional position?
Professor Bogdanor: Certainly. The reason for this I
think is that referendums were used to establish
Scottish and Welsh Parliaments but there might be
another way in which you could entrench it and that
would be the way in which the Human Rights Act
was entrenched. As I understand it, the Human
Rights Act states that all legislation must be
interpreted in accordance with its provisions
whether passed before or after the Human Rights
Act. So later legislation which impliedly goes against
the Human Rights Act would be met by the courts
with a declaration of incompatibility. If you treat the
charter for local government as an analogue to the
European Convention of Human Rights—a kind of
communitarian analogue—you might have
something of that kind, in saying that legislation
which goes against this charter ministers should at
least have to declare it goes against the charter, and
give their reasons and you might want to bring in the
courts if you really wanted to entrench such a
provision. That would be something you could do
without a complete constitution.
Professor Travers: I think that Britain’s
constitutional history makes the creation of a full
constitution at this point very, very diYcult. I think
the flexibility of the British model of government is
so treasured by those who operate it that however
much intellectuals and others may push for a
constitution they may be struggling for some time to
come. However, that does not mean that our
constitution is at all times incapable of oVering
something akin to constitutional protection and it
would have to come, I think, if it is within the
existing system, from Parliament because
Parliament can do what it wishes and therefore
Parliament would be free to build in quasi
constitutional protection for local government if it
so decided. I think it can be done but hoping for a
British constitution to save everybody will mean
waiting too long.
Q434 Chair: Can I just ask about this idea of the
independent commission? There are two
suggestions, I think. One is the suggestion made by
Professors Jones and Stewart about an independent
commission that would oversee the kind of
constitutional relationship and the other one is an
independent commission that would dish out the
money basically. Can I get your views on either or
both?
Professor Bogdanor: On the second of these
suggestions I very much agree with what Professor
Stewart said, that this is a highly political question
and not for an independent commission. On the first
suggestion I think the function would be better
performed by a joint committee of the two Houses,
perhaps analogous to the Joint Committee on
Human Rights. I mention this because I think that
the Council of Europe does regard the Charter for
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Communities and Local Government Committee: Evidence Ev 75
8 December 2008 Professor Vernon Bogdanor CBE and Professor Tony Travers
Local Government as being a kind of
communitarian analogue to the Human Rights
Convention: the one defends the rights of
individuals, the other defends the rights of
communities. Therefore, perhaps by analogy with
the Joint Committee of Human Rights, you could
have a joint committee on central and local relations
whose function it would be to report each year on the
state of relations and on the state of local
government. I think that would be of great value.
Professor Travers: I agree. They are separate
functions. If this House and the House of Lords
decided to provide constitutional protection then
that is one function. There is a separate function
which could be fulfilled by an independent grants
commission which personally I think I would
support. However, I realise that for politicians to
give up that degree of freedom, even if it is a desirable
thing, is optimistic. I would have them as two
separate functions.
Q435 Mr Olner: The Baby P case came to the fore by
being raised nationally. Do you actually think that
national politicians are frequently held to account
for the failings of local government and how can we
redress that problem?
Professor Bogdanor: Yes they are; I think that is
absolutely correct. That is not simply due to national
politicians seeking power for themselves, it is
because voters hold them to account. I agree with
what Professor Travers said a few minutes ago, that
in theory a local government system should be more
accountable because it is much easier to complain to
your local councillor or to a local oYcer than it is to
find the oYcials who are responsible for a national
service.
Q436 Mr Olner: I accept that, Professor Bogdanor,
but they find national politicians to complain to and
hold to ransom.
Professor Bogdanor: Indeed and this began in the
1970s with the education service when there were
worries about it; people were not satisfied with being
told “Go and see your local councillor”. They said,
“You, the Government, promised to improve the
education service” and so governments took the
power to go with that responsibility. If governments
were held responsible they were going to take the
power to go with that responsibility and we need to
change the attitude of the people if we going to alter
that situation. I entirely share the premise of your
question that all too often national politicians are
held to blame for local matters and that is
incompatible with a healthy local government
system.
Professor Travers: Again I agree. We are trapped in
a world of our making. The implication of what we
have just heard is that this is something that to some
degree the public wants and eVectively it puts the
prime minister in the position of being mayor of
England. Everybody expects the national politicians
to answer for really quite small issues and that puts
pressure on national government and the opposition
to react accordingly. It is like a nightmare from
which you can never escape. It would require action
across the political divide to some degree to put an
end to it. That would be diYcult for the opposition
of the day because it would require them to hold
back while the world moved from the world we are
in to the new world, letting the Government oV the
hook apparently. I think it would have to be done
with some all party agreement in order to move from
the world we are in. The public would have to be
convinced, as Professor Bogdanor has said, as we
moved along.
Professor Bogdanor: May I just add a very brief
point to that? It may be that devolution will
stimulate this demand for diversity and for hands-oV
politics because politicians at Westminster are no
longer in practice responsible for domestic matters
in Scotland and Wales in education, health and so
on—
Q437 Mr Olner: Not if you read Hansard. If you
read Hansard and what is discussed, what the Welsh
Nationalists and the Scottish Nationalists bring up
in Parliament, they are following the same routes as
local government holding the national politicians
to account.
Professor Bogdanor: Although Parliament is
sovereign most ministers accept that they cannot
now be responsible for education and health in
Scotland and one wants a similar sort of selfabnegation in England which devolution could
possibly help to stimulate.
Q438 Mr Betts: Coming back to the issue of money,
the Lyons Report talks about a lot of the issues and
powers and the balance of powers between central
and local government, but really on money we are
saying, “Yes, it will be here and there but it is not
really central to change”. Do you agree with that or
do you think that if we do not sort out the
proportion of the income that local authorities can
raise we are ever really going to get to any local
democracy in this country?
Professor Travers: The Lyons Report—for which I
was a friend or indirect advisor—was in many ways
trapped in the world in which it lived; it could not
escape the heavily centralised world and quite
understandably decided that the only way out was
by small incremental steps in another direction. The
diYculty is that ever since the Layfield Committee
successive governments have committed themselves
to making small steps; the steps have never really
materialised and I agree with the tenor of your
question, Mr Betts, that the only way away from
where we are now would be a big move to something
diVerent. That would include very significantly
greater local discretion over taxation. It is worth
remembering that overwhelmingly for local
authorities in England most of the money that their
tax payers pay in all taxes just goes up to Whitehall
and then is handed back in various means to them or
to other institutions in the area by the Government.
So most of the money in SheYeld is paid by SheYeld
tax payers and then handed back to SheYeld in a
way that could easily be by-passed by SheYeld
keeping more of the money.
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Ev 76 Communities and Local Government Committee: Evidence
8 December 2008 Professor Vernon Bogdanor CBE and Professor Tony Travers
Professor Bogdanor: I agree a hundred per cent
with that.
Q439 Andrew George: On the related matter of
relating national to local discretion, if we extend it to
the issue of planning, particularly the contentious
issue of housing numbers, to what extent do you
believe that the way to settle issues of aVordable
housing need are better left to the discretion and
idiosyncrasies of local authorities deciding oV their
own back, rather than the method which we are
certainly witnessing at the moment and has been
going back for decades which is central government
pretty much indirectly setting those figures for local
authorities.
Professor Travers: This is a fascinating question
because in many parts of the country it would appear
that if left to their own devices local authorities
would resist housing which national government
believes is necessary. It is precisely related to the
question that Mr Betts raised on local government
finance because at the moment when local
authorities give planning permission for new homes
or for new businesses, because of the way the grant
system operates, they get no benefit. That is for every
extra pound that is paid in council tax or business
rate as a result of a decision made to give planning
permission the grant system will take away a pound
in grant. If we had a diVerent grant system or a way
of allowing authorities to keep some or all of the
resources that were generated by new housing or new
business premises, I think their decisions would
change. Milton Keynes has experimented with a
roof tax which is on the way to trying to create a
form of section 106 type taxation. I think that if the
incentives were diVerent local authorities would be
less likely to turn down housing than they are at the
moment.
Q440 Chair: Is there anything the Local
Government Association could be doing which
would help to change the relations between local and
national government?
Professor Travers: Yes. I think the LGA needs to act
slightly more as battering ram on national
government to make the case for some of the issues
we are discussing here. There is a powerful argument
for a whole array of relatively minor freedoms in the
short term—bigger ones in the long term—which the
LGA could lobby for very hard and occasionally
needs to be a bit tougher on the Government than
it is.
Q441 Andrew George: Regarding the dynamics I was
talking about earlier with the previous witnesses,
national discourse in the sense of ministers always
having to appear to be relevant and decisive on the
recent childcare case in Haringey. Who is responsible
for that? Is it because the national politicians are
wanting to appear to be relevant? Or is it because of
the media? Who is to blame for that? Rather than
going to the national level the media should be going
to the local authorities or those taking decisions at a
local level.
Professor Bogdanor: I suppose it is because
politicians believe that these are matters of electoral
significance and that flows, as I have said before,
from cultural factors within Britain which may not
be there in other countries. Local people are not
prepared to hold their local councillors to account
for local matters but demand accountability from
national politicians and therefore national
politicians acquire the power to catch that
responsibility. Again, as I said earlier, I think these
habits are changing in Scotland and Wales because I
suspect that on matters connected with Scottish
education people in Scotland now do not necessarily
blame central government if they think things are
wrong, they blame the Scottish Parliament and it is
possible that this may encourage an understanding
and a demand for greater diversity which would
mean that less would be attributed to national
politicians. They would be held responsible for less.
Professor Travers: This is the curse of the postcode
lottery really. It is hard to blame either national
politicians or the media in a sense because it is hard
to see where it all began. It probably began with the
failings of the LSE (London School of Economics)
in the early 20th century, but wherever it began we are
stuck with this world and the only way to escape
from it would be in the first instance to get away
from the presumption which is very widespread that
diVerences from authority to authority would mean
a race to the bottom. There is no evidence that it
would be a race to the bottom. If you look at 19th
century local government in Britain major
municipalities actually tried to have the best public
services; they did not try to have the worst public
services. Do we honestly imagine that left to their
own devices the great cities and counties of England
would all fight to have the lowest possible service?
They would fight to have the best.
Professor Bogdanor: It is worth pointing out very
briefly that in London you get the opposite
phenomenon to the one that Mr George mentioned,
that people attribute more responsibility to the
mayor than he actually has and not less. And that I
think, if I dare mention it, is a sign of the
strengthening of local government.
Chair: Thank you both very much indeed. The
Committee is adjourned until after the last vote.
The Committee suspended from
5.35 pm to 6.04 pm for a division in the House
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Communities and Local Government Committee: Evidence Ev 77
Witness: Rt Hon Lord Heseltine, a Member of the House of Lords, gave evidence.
Q442 Chair: First of all, apologies for the fact that
the timetable has gone completely awry but you will
of course understand exactly why. Although the
number of members here may not be quite as great
as earlier on the, quality is very high. All of us here
have had local government experience as well as
being parliamentarians. Can I start with a question
about local government finance? One of the issues
that has come up very strongly from previous
witnesses is that unless local government raises more
of its finance itself it is going to be quite diYcult for
voters to see the accountability between what they
pay and what they get. Obviously as a minister you
had considerable experience about local finance
systems so can I ask you whether you think the
current council tax system needs to be reformed or
whether a much larger change is required to get a real
change in balance of power financially between local
and national government.
Lord Heseltine: No, I do not think there is a
necessary linkage. I think there are a whole stack of
things that could happen to change the balance and
I believe that that balance should be changed. I have
spent a lot of time looking at the alternatives to local
government finance and the only coherent one I
think is income tax and I would not be in favour of
doing that. All the others will lead to a very heavy
dependence of many authorities on central
government redistributing grant so you would be
back where you are.
Q443 Chair: Do you think the proportion of money
raised by council tax and maybe business rate should
be greater?
Lord Heseltine: Personally I would not touch the
financial arrangements because it would take too
long and it will not actually improve the situation
significantly.
Q444 Sir Paul Beresford: How do you explain the
fact that the council tax has risen tremendously over
the last three years?
Lord Heseltine: It will be part inflation, part
Treasury squeezing the grant. The Treasury has a
dilemma: it wants to try to contain expenditure so it
squeezes the grant and the gearing ratios of all the
systems—it is true of the rating system, it is true of
the poll tax, it is true of the council tax—means that
there is a disproportionate increase in the level of
what the local people are left to pay.
Q445 Sir Paul Beresford: Local government would
say that they have had more to do and had more
burdens put upon them.
Lord Heseltine: That is part of the argument and
there is a certain amount of truth in that because this
place spends its life imposing more duties and
obligations or expectations on local government and
they are never fully funded, although you could of
course argue that local government significantly
gold plates what it is expected to do. You have plenty
of room for blaming both sides, but that does not go
to the heart of the matter; the heart of the matter is
the gearing of the grant relationships.
Q446 Mr Betts: How do you change the gearing if
local authorities are responsible for raising 25 per
cent in total of the money they spend? Surely that is
what gives the gearing.
Lord Heseltine: Indeed, that is an important point,
but then you have to ask yourselves what are you
going to do by way of a change. As I say, I think the
one that is the intellectual runner is income tax but
then you will have a situation where you get national
governments wanting to reduce income tax and local
governments putting it up. There would then be a
battle which the public will not fully understand as
to whose responsibility it was or is.
Q447 Mr Betts: We have just been on a trip to
Sweden and Denmark where they have a local
income tax and, in Sweden’s case, a local income tax,
a regional income tax and a national income tax and
it seems to work reasonably well. The feeling there
amongst all the political parties we spoke to is that
there is a settlement in both financial and power
terms which is generally reckoned to give more
power and influence to local authorities and the
parties are in support of it and the public seem to be
in support of it as well.
Lord Heseltine: I have not studied the Scandinavian
position but I know what the reaction is here and the
idea that you can actually introduce a financial
system which causes the local people to look to the
local authority to account has not stood the test of
time. The poll tax was the most obvious example
where the Government thought that it would make
local accountability through the poll tax system
when actually it became the millstone round the
Government’s neck.
Q448 Mr Betts: In some way they are long lasting
changes, not the poll tax because the poll tax was
eventually reversed back to a council tax with its
origins in a property based valuation. The real
change was that the business rate which used to be
collected by local authorities and spent within local
authorities was centralised as part of the poll tax
arrangement and that has not been reversed. Would
that not be a change you could make?
Lord Heseltine: You could make the business rate,
certainly there is an argument for that, and you can
do it in whole or in part on the incremental element
that they have created. There is certainly flexibility
there. I do not think it would make a great deal of
diVerence to people’s accountability of the local
government; it would certainly make a diVerence to
the enthusiasm of local government to generate
extra rateable value.
Q449 Mr Betts: It would aVect the gearing as well
significantly.
Lord Heseltine: In those areas which are lucky
enough to have the potential, but we will not have
many of those in the next couple of years.
Q450 Sir Paul Beresford: If you went down that road
you would need equalisation to slant it back.
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Ev 78 Communities and Local Government Committee: Evidence
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Lord Heseltine: Yes, that is what the Treasury will try
to do but given that in theory this is within the gift
of Government it does not necessarily have to
happen. In practice the Treasury will try to do it, yes.
Q451 Chair: Can I just take you back to when you
were a minister, Lord Heseltine, do you think the
relationship between central and local government
has changed?
Lord Heseltine: Over the 40 years enormously and to
the detriment, in my view, of the way we run this
country.
Q452 Chair: Can you give one or two specific
examples?
Lord Heseltine: All governments have done it, they
have hollowed out local government. Local
government is now a creature of Whitehall and the
process of management is much more dependent on
the loyalties that the individual specialist
departments in local government feel towards their
parent department in Whitehall than to any local
community of self interest within the community.
That is reinforced and has been over many years by
all the traditional methods we are very familiar with:
the growth of quangos, circulars, directives,
ringfenced grants. You name it, we have done it. I
think it is enormously to the disadvantage of the
proper balance in this country. We now have a deeply
centralised and conformist society.
Q453 Chair: What specific powers would you push
back to local government?
Lord Heseltine: I would start with the one thing that
always matters in life and that is looking at the
person in charge. I would go for directly elected chief
executives; I would combine the chief executive and
the leader into one job; I would pay properly; I
would have a franchise of the whole authority. I
would then have a bonfire of the controls which
central government has created and I would abolish
most of the big quangos that have become the
vehicle for capital expenditure. I could name £10
billion pounds of easy money starting with the
Housing Corporation, English Partnerships, the
Regional Development Agencies; you name them,
they are all there. This is over £10 billion a year, this
is on capital account. I would move to a system
which is really City Challenge built large; it would
not just be the impoverished communities, with up
to 30 000 people, which we dealt with in City
Challenge, it would be the whole authority and the
authority would bid for capital funding based on
corporate plans spread over a five or ten year period
and they would get money dependent upon the
ability of the community1 to satisfy central
government that they would use the money
eVectively and that they have a lot of local support
for additional cash to add to what the public sector
provides.
1
Note by witness: “community” should read authority
Q454 Chair: How would that devolve power to local
communities if they are just bidding into central
government?
Lord Heseltine: They would be creating a plan of
their own based on local requirements, local
interests, local experimentation and there is not the
slightest doubt that anyone who looked to see what
City Challenge did would realise that it had the most
profound eVect on the head of local authorities both
in the way in which they harnessed local enthusiasms
and extra cash from diVerent aspects of the local
community. Perhaps even more so for the first time
the oYcials in local authorities had to look at the
community interests as opposed to the functional
interests from which their money came.
Q455 Sir Paul Beresford: I would agree with almost
everything you said except the very first part. When
you were secretary of state back in the 1980s local
government had much more freedom than it does
now I believe. There were some quite big names—
some of which you liked and some of which you did
not like—who were leaders and did the same as you
are talking about of elected mayors without being
elected. One of the diYculties with the elected
mayors point or leaders point is that if we do not
have the characters and the strength to do it it does
not work.
Lord Heseltine: I understand that argument and it is
a very depressing argument: we have bad leaders, we
cannot get good leaders therefore we accept bad
leaders. I do not personally think we should be as
negative as that. My own view is that one reason why
we do not have a range of the sort of talent that one
could look to—although there are some exceptions,
it must be said—is that you expect people to do a
totally thankless job seven days a week, 24 hours a
day for £30,000. That is not real. The guy who runs
the authority gets between £150,000 and £200,000;
that is real and it is preposterous frankly that the
chief executive of a major authority is earning in the
top decile of income in his or her community
whereas the leader is in the lowest decile. If you want
a formula for disaster administratively that is it.
Q456 Mr Betts: Some might argue that in the past
the leaders might be better paid, but to concentrate
more power in the hands of one individual what
happens if local communities do not want that
particular model? Would it be enforced on them?
The point we had discussions about before, if you
concentrate power in the hands of one individual,
does that not actually undermine the whole roll of
political activism at local level and eventually take
away the life of the political party?
Lord Heseltine: I do not think that activists have
ever found a limitation on their abilities to activate
whatever system of government exists. If you look at
Stansted today activists have emerged to give a
message. I think you have to look at the scale of the
challenge. Running a great city is an enormous
responsibility with huge significance for the macroeconomic policies. I think it needs people of talent
and energy and it needs a certain amount of time. It
needs leadership and trying to get that leadership out
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8 December 2008 Rt Hon Lord Heseltine
of the checks and balances of the present councillor
system is not compatible with the scale of the
challenge. We all know, let us be frank, that every
party now ends up grubbing around trying to find
candidates to stand for these council seats. This is a
highly professional world; people are busy. There are
not a lot of people wandering around with the time
available to do the sort of thankless task that being
a councillor involves. You have a very limited
number of people prepared to do it and that tends to
mean you are going to get certain sorts of people
doing it, a rather narrow choice. Once they have got
there then you have got all the compromises that
come from having 40 or 60 people all wanting their
share of the action and I do not myself believe that
that is what drives a great city. So it is a balance. You
are perfectly sensible in asking the question, but it is
the wrong way for the present balance in the 21st
century.
Q457 Andrew George: Could I come back to the
image you gave us of the Heseltine Mark II, if you
like, reforms of local government where, let us say
we have had the bonfires and the abolitions and the
re-organisation of a much more involved local
government where they are no longer the creature of
Whitehall. How do you put in place a mechanism or
a structure to stop the slide of power going back
again into Whitehall? Is there a need for a
constitutional change? Is there a need for something
to happen to ensure that local authorities are able to
keep their powers once they have been given?
Lord Heseltine: I would not put that anywhere near
any list of priorities that I have in mind. First of all,
the Commons would never accept a final barrier of
the constitutional bill of rights or anything of that
sort. Governments are elected; governments will
change the rules as they are elected to do. Unless you
are going to start having a British constitution I
think it would be unrealistic to say that we are going
to have a local government constitution.
Q458 Andrew George: You know, as a former
minister, that whenever there is a crisis at a local level
ministers are demanded to be responsible or at least
to answer, whether it be a childcare issue in
Haringey, ministers are called upon to have an
opinion about it and sound decisive, to intervene
and to have something to say on the issue.
Lord Heseltine: Yes they do and I think that is one
of the weaknesses of our system, that that is exactly
the background where they have created a
paraphernalia of detailed control in order to give the
impression they are in charge and that they can do
something. The fact is, they cannot. If you think
about what a minister can do, they are sitting in
Whitehall, they get very good advice from very
dedicated oYcials and, as a result of that, they come
up with a set of proposals which are broadly the
compromise the system demands. Then they impose
a pattern of behaviour that is supposed to fit every
community in the land. Then something goes wrong.
As we are a very small geographic country and we
have a national press which is unlike most other
countries of our sort, the whole thing focuses on
what Parliament wants to do. I cannot think of
many ministers who have ever done it, but they have
not turned round and said, “Look, this is not my
responsibility; it is the leader of the council’s
responsibility”. I wish to goodness that there was
such a dialogue. There should be because they have
no sense of reality about what ministers can and
cannot do.
Q459 Mr Betts: At an earlier discussion it was
pointed out that that position may be starting to
change a bit with regard to the Scottish Parliament
where ministers now would not assume they were
responsible for everything. You are saying with the
British constitution it would change the
constitutional base of local government, but without
a British constitution we have changed the basis on
which Scotland relates to the United Kingdom now,
by an act of Parliament I accept, but one which this
Parliament would not be able to change in practice
without some agreement with people in Scotland. Is
there not a model there of some kind?
Lord Heseltine: Constitutionally they could change
it. I do not say for a minute they will or should, but
they could at the moment. However, I think that
argument then comes back to reinforce my point.
What conceivable argument is there that with the
level of public expenditure that sustains the Scottish
economy, that they should have a degree of
devolution and yet Birmingham or London, with
bigger wealth and less public expenditure, should
have far less power? I do not understand that
argument.
Q460 Chair: Can I just clarify something, Lord
Heseltine? When you were talking about these
elected chief executives, were you thinking about
those simply for cities or do you think that is a
universal model that you could have in rural districts
and counties as well?
Lord Heseltine: You may possibly remember, but I
was the person who was responsible for creating
unitary authorities.
Q461 Chair: It did not go far enough in my view.
Lord Heseltine: In Scotland and Wales I did and if
you ask me a second question—I am not going to tell
you what it is— but if you asked me what it is, I
would have to give you quite an uncomfortable
answer. In England it was not possible to go as far as
I would have liked, but I put in place the mechanisms
and I am delighted to see now that the mechanisms
are being used and the counties have become unitary
and of course the big cities always were—or they
have been for a very long time—unitary.
Q462 Chair: Some have suggested that the
distribution of finance between local authorities
should be done by an independent commission. Do
you think that is a good idea or a bad idea or not
politically feasible?
Lord Heseltine: It is not politics. I spent hours
looking at the printouts of grant mechanism
distribution. Every government has its own idea of
what makes sense by way of a distribution pattern,
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8 December 2008 Rt Hon Lord Heseltine
but none of us ever found a way of getting a uniform
consistency into the distribution pattern. You
thought you had got it; you damped here and you
levered there and you put in this and that and then
up popped one of your safest, most loyal
constituencies that was hammered to hell by this new
process whereupon the oYcial said, “I’m very sorry,
Secretary of State, we have done 45 diVerent
printouts and it has to go the printers tomorrow”.
That ends your political career in ignominy.
Q463 Mr Betts: Why did authorities not go further?
What stopped it? Is that the question you did not
want to be asked?
Lord Heseltine: It is not the question but I will
answer it. I will tell you what the second question is
because it is quite fun really. Why was it possible to
do unitary authorities in Scotland and Wales?
Because there were not any Tory councillors. The
reason why you cannot get the sort of qualities that
I am talking about advanced easily through the
House of Commons is because you would be
creating Mr Bigs more important than the local MP
and local MPs do not like that; they want to be the
number one character. I want to see the leader of the
council the number one character.
Chair: Thank you very much, Lord Heseltine.
Witnesses: Rt Hon Nick Raynsford MP and Baroness Hamwee, a Member of the House of Lords, gave
evidence.
Q464 Chair: Thank you very much, particularly
Baroness Hamwee who has sat through the session.
I want to start really by asking each of you, do you
think the balance of power is in the right place at
present between central and local government? If
not, where should it go?
Mr Raynsford: If I can kick oV and say that I do not
think it is. I must apologise that because of other
commitments I have not been able to sit in here for
the rest of the proceedings so far today, but I did hear
the relevant part of Lord Heseltine’s comments and
I found myself very much in agreement with him. We
still have a position where ministers in central
government too readily believe that they should and
can take decisions that ultimately should be taken
locally if we want to have a vibrant local democracy.
I do believe the balance should continue to shift if we
want to have eVective local government.
Baroness Hamwee: I think it has moved enormously
and it is now so ingrained in the culture of local
government that they cannot do things, they cannot
use powers which probably they have; the finances
are so restrictive that the focus is always on the
council tax and not necessarily on the overall
budget. Frankly I see council colleagues almost as
ground down by what has happened over the last
few years.
Q465 Mr Betts: We have had various witnesses in
front of us and most will be arguing persuasively in
favour of more devolution to local authorities until
we get to ministers. That would be true of current
ministers, past ministers and no doubt future
ministers of whatever political party. Why is that
the case?
Mr Raynsford: Let me try to give an answer to that
because I think when I was the relevant minister—
the local government minister—I put together a
white paper which was published in 2001 and which
did advocate a substantial series of devolutionary
measures. That was part of a package which was also
about giving clear incentives for improved local
government performance. What I believed was
absolutely crucial was the need to demonstrate to
colleagues here that local government performance
could improve and that they could have confidence
that local authorities would respond well on the kind
of issues they are concerned about. While they take
a view that on the whole local government is not
going to do things very well, while they feel nervous
that their priorities are not likely to be implemented
successfully at a local level, I think there is very little
chance of getting them to agree that there should be
more devolution. However, we did put in place in
that white paper significant devolution measures. I
slightly take issue with Baroness Hamwee because
frankly local authorities were very, very slow to
make use of many of those powers. Where I would
agree with Baroness Hamwee is that I think there is
a degree of deference in local government. Whether
that is something that has been acquired over a
period of years or whether it is something to do with
the local government psyche I do not know, but too
often local government waits to be either told by
central government to do something or to be given
explicit sanction. Too rarely does local government,
in my experience, take the initiative and try to do
things which often they can do within the powers
they have available, including the power of wellbeing.
Q466 Sir Paul Beresford: Recently in particular local
government has had from central government
checks, re-checks, audits, boxes to tick, stacks of
paper, et cetera, et cetera. The comment made by
many people in local government is that the fun has
gone out of local government because they cannot
do their own thing without being checked on
constantly. In fact when you were talking about it,
you were talking about checking local government.
Mr Raynsford: Yes, but I do not think it was very
much fun if you were a resident in Hackney (which
was a disastrously run authority under Labour
control), in Walsall (which was a disastrously run
authority under Conservative control) or in Torbay
(which was a disastrously run authority under partly
Conservative and partly Liberal Democrat control).
I make those observations because there is nothing
party political about this. Poor local government
performance both irritated local residents hugely—
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quite rightly so—and also was the key factor that
prevented central government ministers accepting
the validity of the case for more devolution. I would
say there has been a significant improvement in local
government performance in recent years. I do not go
along with all the checks and all the details but there
is no question that the comprehensive performance
assessment framework that was put in place to give
a more rigorous performance management regime to
local government has helped raise standards and
that, in my view, is fundamental to getting central
government’s agreement to a devolutionary agenda.
Q467 Sir Paul Beresford: It is possible to use the stop
gap, that is if local government was appalling,
whatever its political complexion, Government
could step in. Therefore it was possible to give them
the freedom but still have that stop gap at the very
end if needed.
Mr Raynsford: We did and we have actually
intervened in Hackney as you know very well. I
think that was absolutely the right thing to do but we
were also extremely reluctant to intervene unless it
was absolutely the last resort and there was no other
way of getting a result. That should be, in my view,
the correct relationship.
Q468 Chair: One of the witnesses that we had
earlier—Baroness Hamwee will have heard him,
Vernon Bogdanor—was saying that actually if you
look back to the 19th century municipalities were
competing with each other to be the best not the
worst and that therefore, his argument was; if you
freed up local authorities there is no evidence that
they would compete to be dreadful, they would
compete to be good.
Baroness Hamwee: Yes, I think they would compete
to be good but at the moment the focus is so much
on playing to the performance indicators, doing the
things which are going to be measured and which
they know are going to be measured and, as I say
financially, on council tax. When I was a councillor
in Richmond my ward bordered on Wandsworth.
On my side there was local authority housing and
quite large houses on the other side of the road in
Wandsworth. Richmond council tenants were
paying much more in council tax than people in
Wandsworth. You could explain it but you would
lose them within 30 seconds. There were good
explanations (I am looking at Sir Paul Beresford) but
how can you ever take people along with the
complexity of that. I think that that undermined
people’s confidence in local government
enormously.
Mr Raynsford: I do not think any local authority
starts out to be a bad local authority but
unfortunately the evidence is that some local
authorities failed very seriously in performing their
responsibilities. It is essential to have a mechanism
to keep local authorities on their toes. Unfortunately
the financial regime we have is one in which it is so
opaque—I agree absolutely with Sally’s view—that
it is very diYcult for the average voter to have an
idea as to who is responsible for either an unpopular
council tax increase or a failure to deliver a service
which they want because in some cases the council
will say it is the responsibility of central government
and we are not given enough grant, in other cases
they will say, “Actually it is nothing to do with us, it
is the county council, a precept from another body
that is responsible for the increase” and the public
are absolutely mystified. I often tell the story how, in
2003, when council tax increases were provoking a
lot of anxiety in various parts of the country, I went
to attend a public meeting in Exeter. There were a lot
of very angry people there. The four components of
the council tax increase levied in Exeter were the
district council which had levied the smallest
increase but got most of the flack, the county council
which levied a much larger increase and got a certain
amount of the flack, the fire authority which levied a
precept which was even larger than that and which
was virtually unscathed, and the police authority
which levied the largest amount of the lot whose
chairman actually said she was concerned that there
was a risk of public unrest because of high council
tax increases.
Q469 Andrew George: Can I take you back, Mr
Raynsford, to your comment that you had not been
here for the other evidence and in fact we gathered
from the other evidence—four academics and Lord
Heseltine and certainly the written evidence as well
which is clearly all moving in the same direction—
that powers have been denuded from local
authorities. You have advanced here at the end of
our evidence session the argument that in fact what
we need to do is to continue to shift the powers back
to the local authorities as if in recent years those
powers have been shifting. The evidence which we
have had from a variety of people points out the
prescriptive nature associated with legislation, the
proliferation of targets and performance measures,
the role of inspectorates backed by the threat of
intervention from central government, the
centralised financial arrangements, the movement of
functions away from local authorities to locally
appointed boards and quangos, the proliferation of
requirements on local authorities to submit plans to
central government as well as, I might add, the
competition for funds and awards and other means
by which money is not actually given directly in the
basic grant. How can you possibly argue that there
has been a tendency or a trend towards the
decentralisation of Government?
Mr Raynsford: There are a whole series of controls
over local government that central government had
previously put in place which were removed. I will go
through them: the power of well-being I have
referred to already gave greater power for local
authorities to do things if the wanted to; there was
no longer the problem of ultra vires. The borrowing
approval regime which had severely restricted local
government’s ability to borrow was replaced and the
prudential borrowing regime was introduced. There
were a whole series of other measures. I remember
introducing the ability of local authorities to remove
discounts on empty second homes, a very popular
issue among local government, and again we gave
them more power to be able to charge for
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discretionary services they had not previously had. If
we want to sit here for a great deal longer I could go
on over a whole series of other changes that have
been made. That is why I say there has been a wish
to give greater say, greater control and greater power
to local government but it has not been easy without
the confidence that local government would perform
well which was, in my judgment, necessary to
convince colleagues that it was right to go down
that route.
Q470 Andrew George: Are you concerned that you
are the only person who has presented evidence to
suggest that the trend has been going in that
direction? Do you disagree with any of the list which
I read out to you which came from the written
evidence of Professors Jones and Stewart? Do you
disagree that there has been a trend in the direction
that I have just listed?
Mr Raynsford: I do disagree for the reasons I have
just explained. Obviously there has been, as part of
the principle that I have set out, the application of a
performance management framework to ensure
high qualities of performance in local government. I
do not pretend that every aspect of the
comprehensive performance assessment and what
replaced it has been right. There has been, in some
cases, too much supervision and probably too much
targeting and some of it is probably not focussed on
the right things, but that was the quid pro quo for
substantial additional powers to local government
for the items I have described to you which I think
Professor Jones and his colleagues might not want to
say because they have a diVerent agenda, but they
would have to admit that a number of the previous
restrictions on local government have been removed
in the last ten years. I think the Government has
been quite right in doing that.
Q471 Sir Paul Beresford: The answer from local
government was that on the face of it you are right
but in respect of the actual actions you have taken
instead of it being front door checks it was back door
checks and there are checks on everything so that
you can prove to yourself presumably and to local
government and to your other ministers that local
government is successful. All these checks and so
forth that Andrew George has just read out still
exist; they exist behind it. As for the borrowing side,
well of course there is always a revenue side to capital
and that automatically restricts it for the local
authority in any event.
Mr Raynsford: I think there are a lot of people in
local government who would agree with my analysis.
I point you no further than the editorial in the latest
issue of the Municipal Journal which says something
very much along those lines. It is up to local
government to prove in the aftermath of the
Haringey incident—Baby P—that local government
can be trusted and will deliver a good service. I think
that is absolutely right; I want to see that happen.
Q472 Andrew George: Can we nevertheless agree on
this, that we need to push decentralisation out still
further? Even if we disagree with the analysis of what
has happened in the last ten or so years, we still agree
that more needs to be done. If that is the case, then
where should we start? What should be the first
things that any government should be doing in order
to achiever greater decentralisation?
Baroness Hamwee: It seems to me, the impression I
get—I may be quite wrong about it—is that either
the releasing of powers or indeed the imposition of
more responsibilities on local government comes
from Whitehall with next to no discussion with the
local government world and I think to start I would
like to see a local government bill drafted by a joint
working party coming from the two areas. I would
love to see a minister standing up in Parliament and
saying, “I am sorry, I cannot answer that; it is a
devolved matter”. At least one hears it a bit on
London now; that does not seem to stop people
asking questions about London, even in Parliament,
and trying to pin responsibility on ministers.
However, more joint working because it should not
be top down, it should not be Government saying,
“We’ve been sitting in our department for however
long and we’ve come up with this idea, now you react
to it”. I do not think it should work like that. Local
government is being told to work in partnership all
the time and it would be nice to see that applied at a
higher level or at any rate negotiation for
announcements. Again, I may be wrong but I do not
believe that there was discussion with local
government before the announcements about
money for swimming and what local authorities
should do about providing free access to pools for
older people and younger people. That sort of thing
should come from joint working I think. The issue of
secondments has arisen earlier this afternoon; I
would like to see a lot more secondment. There
seems to be very little understanding among civil
servants of what it feels like to be working within a
local authority.
Mr Raynsford: I would diVer on that. Firstly I would
say that in the course of the period that I was in
Government we brought in some very, very senior
civil servants. The civil servant who headed the
Department dealing with local government matters
in what is now CLG (it was then ODPM, OYce of
the Deputy Prime Minister) came from the LGA
where he had been working for the previous seven or
eight years on secondment. We brought in others
directly from local government; it was a deliberate
policy. I have to say there was detailed discussion
with local government about all the major changes
we introduced. I remember the discussion about a
comprehensive performance assessment went on for
more than a year to ensure that we continued to
refine and change the system to get it better. So I do
not accept the argument that there is not proper
discussion between central and local government. In
answer to the question about what is the key thing,
it must come down to finance. While it is not clear
to the electorate who is responsible for decisions—
whether it is central government because of the large
control they have over grant, whether it is diVerent
authorities because of the system of precepting,
whether it is local government because of the share
of the council tax that it ultimately determines—it is
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simply not satisfactory at the moment. Until we get a
larger balance of funding within the control of local
government and local government can be seen to be
responsible for its financial decisions, I do not think
we will ever get a framework of really good, eVective
and accountable local government.
Q473 Mr Betts: How would you achieve that? I agree
with the points you are making about the powers
being pushed incrementally in some cases to local
authorities and they have to use them and show that
they are willing to, but I agree that the financial
question is absolutely vital. We are really left with the
same system we had in 1997 and almost everyone
seems scarred by the poll tax and what happened and
nobody dared touch the whole arrangement. We had
a possibility with the Lyons Report that we would
have some radical change. The one thing they looked
at really was the issue of the business rate and they
even, in my view, bottled out on that, which would
have been the first obvious step to take towards
rebalancing. We have got the situation where we
cannot even manager to revalue, can we, for the
Council Tax and I know that you are bitterly
opposed to that decision, which you spoke on quite
vociferously. What should we be doing then, in
practical terms to try and get this rebalancing?
Mr Raynsford: I do think it has to be incremental. I
think the evidence of the poll tax gives a very clear
warning against trying to do big bang changes in
local government finances. I think the work that was
undertaken in the balance of funding review which
then led onto the Lyons Report set out options for
an incremental series of changes partly to do with
reform of the council tax, partly to do with the
introduction of additional revenue sources and we at
least are seeing the introduction of an element of
Supplementary Business Rate which is a very
modest step in the right direction. For someone who
advocates an incremental approach I am pleased to
welcome the small bit of progress that is being made;
I would like to see that built on.
Q474 Mr Betts: What would you do about capping?
Mr Raynsford: Capping is the one element in the
2001 White Paper that I was unsuccessful in carrying
forward the pledge that we would remove capping
progressively. I will tell you quite openly why. We
said that we would start by exempting authorities
that secured an excellent category in the
comprehensive performance assessment. In the run
up to 2003 we saw those very large council tax
increases I have referred to in which the largest single
increase in the country was posted by Wandsworth
council which increased its council tax by 50-plus per
cent, having cut it by 25 per cent the previous year
which happened to be election year. That left me as
Minister in a position where it was clearly
completely irrational for me to cap other authorities
when the authority that was responsible for the
largest increase in council tax in the country could
not be capped because we had pledged that we would
not cap excellent authorities that year. That forced
us into a position of reconsidering the pledge and
that is the one pledge in the 2001 White Paper that
was not implemented. The other devolutionary
measures were all implemented.
Q475 Chair: Why could you not just have scrapped
the whole thing since it demonstrated exactly how
councils can play around with it? In fact, if they cut
it by 25 per cent and increased by 15 per cent, then
over a two years they had actually cut it—
Mr Raynsford: It was 50 per cent, not 15,50, five o.
Q476 Chair: So it had gone up, but it demonstrates
that the whole system is ridiculous. Why was it not
said that it was unworkable and get rid of capping
full stop?
Mr Raynsford: That was the background for the
setting up of the balance of funding review. I have
already alluded to the work we did in that review
over the period through 2003 and 2004 to try to
establish a way forward. Sadly that work was not
completed before the 2005 general election and
subsequently I was out of Government. All I can say
is that the subsequent work that Lyons did I felt was
generally going in the right direction and I
supported it.
Q477 Sir Paul Beresford: The problem with your
argument I think was pointed out to you by John
Humphrys on the Today programme when he
pointed out that 50 per cent of not very much is still
not very much and Wandsworth still came in with
the lowest actual average council tax throughout the
country. Therefore the answer still stands. Capping
should not have been there.
Mr Raynsford: It did not stand at all because clearly
if the Government was to take action and there was
genuine concern around the country about the high
level of council tax increases (I have alluded to the
public unhappiness in Exeter but there were many
other parts of the country where that applied) and
we were being called on to use to the capping powers
which still existed, it was not feasible to use those
powers if the authority with the largest increase
could not be capped because of the pledge that had
been given. That was the basis on which we had to
withdraw that particular pledge.
Q478 Andrew George: If we were to move, taking the
incremental argument, from a situation where local
authorities were less dependent on central
government support as a proportion of their overall
expenditure and more to a larger extent on locally
raised income, in order to ensure the evening out of
the inconsistencies across the country as a whole,
what is the lowest level do you think that central
government, if you like, support grant can be
brought down to in order to assist the kind of system
you are talking about?
Mr Raynsford: There have been changes since I left
Government and changes can aVect these issues
quite dramatically, for example the changes in
education funding has been a very significant one.
Certainly at the time when I was conducting the
balance of funding review we felt there was little or
no diYculty in achieving a position where, on
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8 December 2008 Rt Hon Nick Raynsford MP and Baroness Hamwee
average, local authorities should be able to account
for at least 50 per cent of funding within their area
without that interfering with the equalisation system
which most Members of Parliament would agree is
fundamental to achieving a fair distribution of
resource.
Q479 Mr Betts: Did you ever look at an alternative
to capping? We have just been to Denmark and
Sweden looking at their systems. In Denmark the
central government takes the view that local
authority expenditure is important simply in terms
of its macro-economic policy and the amount of
taxation that has been levied on its citizens and
therefore it sits down and agrees with local
government as a whole through the local
government association what the total expenditure
and taxation for the local authority should be and
then leaves it to the association and its members to
work out that arrangement between themselves. It is
a completely diVerent way of doing things.
Mr Raynsford: I will just remind you that we did
pledge in the 2001 White Paper that we would
progressively end capping starting with the excellent
authorities and, assuming that all went well, then
extending to other authorities. That was the pledge
in that White Paper. It was not conditional on other
things, it was a pledge. Unfortunately it backfired
for the reason I have explained and it gave a lot of
my colleagues here, I am afraid, a view that local
government, if given the opportunity, would actually
increase council tax unreasonably. In that situation
we are back to a position which is further back from
what I would ideally like to see than we were in when
we set out that pledge in 2001.
Q480 Mr Betts: Could I just comment to your
colleagues because I think some of us might feel that
ministers within the CLG and indeed oYcials are
now on a path of wanting to devolve—it might be
less quick than some of us would like it, and it might
not always be in the right direction. There is a
feeling—this goes back to your time as well—that it
was the right way to go to try to create a new balance
between central and local government. There is also
the feeling that that commitment did not always
extend beyond that department and local
government clearly has a lot of interest in other
central government departments. I will just give you
one or two examples. We had the draft Regional
Assemblies Bill and I do not think there was a power
that any other central government department apart
from ODPM (as it was at the time) were willing to
give up to the regional assemblies. There was the
issue you just mentioned about education grants,
which I felt for you on because you had just given
commitments about reducing the level of specific
grants for local government and then the
Department of Education simply went and said that
the whole lot is going to be passed down to schools
eVectively. Local government could pass it on as a
postman, but that was all the power they had, so that
was changed. When we had the Health Minister
before us, Anne Keen, she is almost terrified of the
idea that local authorities might become
commissioners for local health services instead of
appointing PCTs. It appears that the commitment to
devolution is almost within one department and not
spread out. Is that a fair assessment?
Mr Raynsford: I think it is an over-statement but
there is an element of truth in this because
unquestionably
other
ministers
in
other
departments tend to see issues from the point of view
of how their particular concerns are implemented
and if they are the responsibility of local government
to implement them they want to feel confident that
that will happen. There is a degree of reluctance
unless they are confident that things will happen
well. In the course of my discussions with my
colleagues—I had endless discussions with very large
numbers—on a lot of issues we gained ground, we
won support for the approach which was a
devolutionary approach but it was a conditional
one, it was conditional on evidence of improvement
in performance. I think that is the only way to go. I
think it is the way it should be resumed and sustained
in the future, but I am not going to pretend that it is
going to be easy.
Baroness Hamwee: I think there is a diYculty in
authorities not going forward more or less at the
same rate because of being judged on council tax—
I keep coming back to it, but you did as well, Nick—
against what other authorities in the same area or
what they are told by the press are charging. If one
gets into a position where some authorities are given
the opportunity to charge more unless they know
that that is going to be understood as a nationwide
position then I think they will have real problems in
grasping that.
Q481 Mr Betts: Coming onto the constitutional
position, we had the discussion earlier about the fact
that Scotland and Wales now have a constitutional
settlement which will be varied and added to at
various times, but it is inconceivable now that the
UK Parliament would row back from that
settlement by passing an Act without agreement
from Scotland and Wales. Is there any way we could
get some agreement on the constitutional position of
local government? We have had ideas put forward
about a Central-Local Concordat, which has almost
disappeared without trace, being put into legislation.
Or the charter of local self-government being put on
the same basis as the Convention of Human Rights,
on a legal footing where there could be a joint
committee of both Houses to oversee and monitor
the relationship between central and local
government. Do any of these ideas appeal to you in
trying to create a more constitutional settlement
between local and central government?
Mr Raynsford: I have to say I am a bit sceptical
about constitutional approaches. You referred to the
particular example of the framing of the regional
assemblies legislation. When central government is
required to define what it is going to delegate or
devolve it will always find reasons to be cautious. I
have a view that the right way forward happens to be
one that tries to both incentivise and empower local
authorities to do better and to win confidence that
actually they are well capable of delivering services
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excellently. I do agree very much with the view that
Lord Heseltine set out, that having powerful and
eVective unitary authorities is definitely part of that
process. I think that a series of measures designed to
create strong, powerful authorities with devolution
to parish councils and other bodies to ensure that the
local concerns are not ignored, coupled with a
reform of finance along the lines I have described,
coupled with the maintenance of a performance
management framework, that that is the right way
forward to build more eVective, more confident local
government and to make central government more
confident to agree, through arrangements like LAAs
(Local Areas Agreements) and MAAs (Multi Area
Agreements) that local government with its partners
can play a bigger role in defining the priorities for
their area.
Baroness Hamwee: I do not see a major piece of
legislation trying to set out the constitutional
position as likely to be as eVective for local
government as I would want to see it. This country
tends to do things incrementally. The idea of a joint
committee of both Houses does appeal to me. I
would like to see the local government world,
whether it is the Local Government Association
(and some disappointment perhaps was expressed
earlier, I share that disappointment.) I think they
should be much more ambitious but I think they
need to play a part in that not, as I read what
happens with the Local Government Association,
they are too supportive of what is going on and are
not suYciently critical either of central government
or frankly themselves.
Chair: Thank you both very much indeed.
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Ev 86 Communities and Local Government Committee: Evidence
Monday 15 December 2008
Members present
Dr Phyllis Starkey, in the Chair
Mr Clive Betts
John Cummings
Anne Main
Witnesses: Mr Jeremy Smith, Secretary General of the Council of European Municipalities and Regions,
(CEMR), appearing in a personal capacity, and Mr Martin Willis, Director of the Institute of Local
Government Studies, (INLOGOV), University of Birmingham, gave evidence.
Q482 Chair: Can I welcome you to this session in our
inquiry on the balance of power? As I am sure you
are aware, we have had a number of sessions already
and we have also had a visit to Denmark and Sweden
to look at the system of local government in those
two countries. What do you think are the key lessons
that we could learn in this country from the local
government system of our European neighbours?
Mr Smith: Thank you for inviting us. My main
lesson from quite a few years working in the
European domain is that you really have to look at
the whole system of a country and you cannot
necessarily pluck bits and pieces out of it. Having
said that, as I put into my written submission, I think
the UK as a whole—especially England—is an
outlier in the more centralised scheme by
comparison with anyone else. That therefore creates
a political culture which we would argue needs
rebalancing. On the issues, in most countries there is
an interest obviously in the quality of services. In
some countries like France it is considered almost
unthinkable that the central government intervenes
in the local domain but, for the most part, there is no
question of the degree of central inspectoral system
that we have had in this country over recent years. I
think that raises a question to think about. The issue
of finance which other witnesses have talked about
as well is obviously very important. If you look at the
system as a whole we are certainly not the weakest
financially, but the amount of control and discretion
is very limited in this country by comparison with
many others. Lastly, the lack of constitutional status
in any shape or form in the UK seems to make us not
absolutely unique but in a very, very small minority
amongst European countries. I still believe that,
although constitutional issues are not the final word
in anything, it is essential if we are to rebalance our
whole democratic system that there is some
restatement, probably in legislative form, to get
there.
Q483 Chair: Mr Willis, do you want to add
anything?
Mr Willis: The key point I want to add is the issue
about size. It is an issue that we emphasised in the
written evidence that we put forward. There is the
enormous contrast in the ratio of councillors to the
numbers of people they are representing from as low
as 100 to 200 in France up to figures of fewer than
1,000 in most of the comparative European
authorities that we looked at; whereas in the UK we
are up to figures of well over 2,000 and approaching
3,000. In some authorities that are being developed
now there are over 4,000. That key issue of size is one
about the extent to which it is possible for local
councillors to know their local people, to have a
relationship with local people, to have
communication with local people and vice versa and
for that to be the life blood of democracy. The other
contrast to that is the evidence we showed,
particularly from the BMG Research survey that
was done alongside the Lyons Report. It was
probably more dispiriting than we expected in terms
of the degree to which people not only did not know
who their local councillors were and did not have
contact with their local councillors, but felt no
degree of aYnity with their local councillors. That
contrasts with some of the evidence from Europe.
Q484 Chair: Mr Smith was talking about the need to
look at the whole system. Of course in places like
Denmark and Sweden they have proportional
representation so, although the ratio of electorate to
councillor may be smaller, the link between a
councillor and a specific area is less clear than it is in
this country. Do you take that into account?
Mr Willis: That is absolutely right but nonetheless,
if you have the number of people who are
represented by a councillor, whether it is through a
single, transferable vote or whether it is through any
other system of proportional representation, there is
still that linkage which is more purposeful than if
you have 4,000 or 5,000 people that somebody is
trying to represent, or in some instances within the
UK we are talking about average populations per
councillor of over 100,000.
Q485 Anne Main: That would beg the question then
how on earth can any Member of Parliament
understand and have a linkage with our constituents
if you are saying it is a sheer size thing, but I will pass
on from that. Would you not have concerns if you
made the link as small as, say, a couple of hundred
per councillor that you would have such a large
volume of councillors that it would lead to a sclerosis
in the system in terms of getting anything done?
Mr Willis: My colleague, Jeremy, will give you more
examples I am sure of how this works in the
European context. What we are talking about is a
relationship between representative democracy and
participative democracy. Most local authorities at
the moment have extensive systems of trying to get
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15 December 2008 Mr Jeremy Smith and Mr Martin Willis
public voices heard through public meetings,
through citizens’ juries, focus groups, young
people’s parliaments and so on. Where you have a
system of local representation where local people feel
that they are represented by somebody whom they
know, they then become the voice of the local
community. Through systems of representation,
they then form the regional, local council or
whatever else that might be. We are not talking
about 1,000 people sitting down and making
decisions.
Q486 Anne Main: What about at parish level—I
have been a parish councillor as well—where you
can be representing a small number of people but it
is not the engagement that is the problem; it is the
lack of power that is the problem. I wonder how
really crucial size is to this?
Mr Willis: You are absolutely right. In terms of
parishes, I think they spend less than half of one per
cent of local government expenditure. The parish is
crucial. You have to have a system whereby a person
who represents a small community can have access
to decision making about key issues, whether it is to
do with larger services such as health or services such
as the police or the current local government services
which are within the local domain.
Anne Main: Therefore it is not necessarily size; it is
power.
Q487 Chair: Can we turn to the issue of powers and
talk about the additional powers that you would
want local government to have in this country that
it currently does not have?
Mr Smith: The first thing is to get out of the ultra
vires trap. There is a lot of debate in the country
about whether local authorities are using the
wellbeing power and I think that is a false question.
The wellbeing power should be the power of general
competence i.e., the power to do anything at local
level that is relevant to local interests unless it is
clearly ascribed to some other part of the
governmental system. We have to make sure the
judges and the courts understand that as well
because of the whole history of hundreds of years of
the ultra vires doctrine, but there should not have to
be a question of whether you are doing this for the
wellbeing of the community as against under some
other statutory hat. The question should be are we
doing it for the wellbeing of our community almost
irrespective. Although there are clearly statutory
functions that need to be performed to do with
education, social services and all the others, we
should be moving away from this division. The other
issue is the question of whether there are services
now run in terms of health, the police and others
through the quango systems and whether local
democracy should have a say. I believe that the
answer is yes but we need to look carefully at what
are the various options for doing that instead of
reorganising wholesale everything all at once. Some
degree of local democratic control over the health
service seems to me to be something that we ought to
be aspiring to.
Mr Willis: There are two levels to the answer. One is
a level of talking about individual services such as
police and health, where more local, democratic
control would mean a people’s voice at local level. I
know that other people at the Committee have
talked about that. The issue that I would like to
focus on is the issue of strategic commissioning in
relation to place shaping because that is work that
currently at INLOGOV we are doing with a number
of diVerent local authorities. That gets you into
influencing in a very diVerent way. It gets you into
looking at things from a people base. For example,
in Birmingham where I live, you are looking at what
makes Birmingham a great place to live in, what
makes Birmingham a great place to grow up in—
even what makes Birmingham a great place to die in
so that people are not moving away. You are then
saying, “What powers do people have?” People’s
powers then become much broader. When you are
talking about older people, you are not talking
particularly about health and social care because
those are simply issues at the periphery of most
people’s experience most of the time. You are talking
about shopping, going to the libraries, transport,
buses, the police, what is happening at Tesco and
Sainsbury’s, how people are getting into town, how
people are making sure that they are getting
neighbourhoods which they feel safe in. It is perhaps
surprising when you start with a blank piece of paper
but the strategic issue becomes things like the quality
of the pavements which I know some councillors
have criticised and said, “All people are interested in
is the quality of pavements.” Without good
pavements, people cannot get out and see friends or
go to the shops. People cannot get to school if they
are taking children to school. Those then become the
issues that make independence so crucial to people
within a neighbourhood.
Q488 Chair: How could you possibly describe that
as a strategic issue? I can see absolutely why
pavements are important, not least in making sure
people do not end up in A&E, but it is not exactly a
strategic issue. It may be an issue that would be
highlighted by the public, which would not be
highlighted by council oYcials or councillors, but it
is not strategic.
Mr Willis: It is strategic because it is strategic to
people’s experience of every day life.
Chair: I think I am losing a grip on what
“strategic” means.
Q489 Mr Betts: I am not sure where this big division
is about powers that are needed. We have mentioned
the police and health. You rightly said we have
already had discussions that have identified two
areas where there is real potential for local
authorities to have more responsibility on local
issues. I am not sure what more a local authority
could do if it had a power of general competence as
opposed to the wellbeing power. What would be
allowed by a power of general competence that is not
currently allowed? In any case, local authorities are
not using the wellbeing powers, are they, by and
large?
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Ev 88 Communities and Local Government Committee: Evidence
15 December 2008 Mr Jeremy Smith and Mr Martin Willis
Mr Smith: My argument is that that is not a question
that should continue to be the question that bothers
us because the wellbeing power, in legal terms, is an
add-on to the other functions of local authorities. It
should be treated as being the basis for action by
local authorities. Rather than thinking: am I using
the wellbeing power or another power, it should be
a judgment in terms of what is called place shaping
or doing things that are of local importance to
citizens. It should be a choice that is made because
of what you want to achieve, not because of looking
back on the legal powers that exist to do it. I am not
bringing you with me obviously. In other countries,
if I may try again, if you look at all the constitutions,
they say everything that is not given to someone else
is open to the local authorities to do. I am trying to
argue that that is what we need to get to so that there
is that sense in the local authority that we can do
anything lawful that is for the benefit of our
community and we should not be worrying about
whether it is wellbeing or social services.
Q490 Mr Betts: Instead of local authorities having to
look for a specific power to do something, somebody
would have to look for a reason in law why an
authority could not do something?
Mr Smith: Yes. That is what happens in most
European countries.
Q491 Anne Main: One of the biggest things that gets
my constituents agitated is planning because they
believe that is place shaping at the ultimate level
locally, but they feel that they have to abide by
regulations that are brought down from
Government or even housing targets. How would
you resolve that? The argument for many people is
stop letting Government tell us we have to have X
thousands of houses. Let us decide what sort, what
density and so on. You said what is not decided by
somebody else can be done locally. From my
experience, they want some of the things decided by
someone else to be done locally. Could you comment
on that?
Mr Smith: Yes. Any planning system is a shared
competence, not in the sense that everyone does
everything, but in the sense that there has to be a
clarity about the legal framework as to what is
decided at national level, at regional level in
countries where there is a regional form of
Government and what is local planning. If you
included parish and community councils in the
British setup as local authorities, we would look very
normal compared with other countries in Europe. It
is the fact that they have so little power that means
we kind of ignore them for most cases. Therefore, the
question of what is appropriate for planning
frameworks is in any country an issue that has to be
worked out. There is not an absolute model as to
what is the very local planning and what is done
from the regional or the central level. It has to be
worked out as to what is suitable to the local
community.
Q492 Anne Main: How do you make this work then?
I am still struggling to see which strategic thing you
would want repatriated to a local level where local
people can say, “I do not care what the Government
is saying. This is what we in X town should have.”
How do you make that happen so that they feel they
have control?
Mr Smith: My argument is for the basic services such
as health, particularly primary health; you can also
include the natural monopolies which have been
mainly privatised but which are public services in the
sense that they are given to the public to have some
say. I am not saying control; I am saying to have a
greater say on behalf of your citizens in relation to
those services for example. The issue is not so much
the repatriation of things like planning at a local
level or all aspects of planning because you have to
have strategic planning. You have to have regional
planning.
Q493 Anne Main: It is just having a greater say?
Mr Smith: It is a question of having fewer controls.
In health, it is a strategic choice, if I may say so, for
us as a country as to whether we wish to have, as in
some countries, the whole of the health service being
subject to the local democratic process; or whether
you want an existing health service such as we have
with a greater local, democratic input to it. That is a
discussion to be had.
Anne Main: What do you mean by “local,
democratic input”? Does that mean they can say yes
or no to things?
Q494 Chair: You were both quite vague about how
exactly you would get local accountability over the
police and the health service for example. If you felt
able to be a bit more specific, that would be helpful.
Mr Willis: There is a number of diVerent issues. Can
I come back to the issue about a general competence,
which your colleague asked, and then I hope
progress in terms of the other questions that have
been asked? A lot of what we are talking about is
about mindsets rather than simple answers that are
yes or no. You have heard from others at this
Committee about the extent to which local
government feels it cannot do anything now without
checking whether first central government is
approving of it. You have heard other people talk
about how a lot of the pressure for guidance comes
from local government. People say, “We need the
guidance before we can determine what we can do
locally.” There is now this mindset where people feel,
even though the powers exist at local level to do
things in a way which represents local people’s views,
they cannot do things unless central government has
prescribed it, even though that is not what central
government itself has intended. How do we then get
back down to a local level and local selfdetermination? If you look at diVerent cities and
diVerent towns, there is considerable diVerence in
the amount of investment they put in play areas, in
swimming pools, whether they have central areas
without traYc and so on. What we are talking about
is the balance in terms of the extent to which local
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Communities and Local Government Committee: Evidence Ev 89
15 December 2008 Mr Jeremy Smith and Mr Martin Willis
people can have an influence to determine their own
town, their own city, their own community in the
way that they themselves want to represent it.
Q495 Mr Betts: One of the big areas where people
have thought change might be appropriate is
financial autonomy. Do you think that a greater
ability to raise a higher proportion of councils’
revenue, rather than having a grant from central
government, is essential if we are going to have a
truly free and independent local government?
Mr Willis: The straightforward answer is yes.
Money is a means of communication. It is the way in
which we conduct certain transactions between
people and hold people to account. A key issue at
local level is, if I am paying money, am I getting value
for money? Am I getting something which I think is
valuable to myself, to the community and seeing that
relationship as being tangible and transparent? Yes,
we would argue strongly that a higher proportion of
money for local government should be raised locally
and held accountable to the electorate locally.
Q496 Mr Betts: Michael Lyons thought all we
needed to concentrate on was local authorities’
freedom to spend the money they had and really we
were getting distracted by the arguments about
increasing proportions of money being raised locally
and that always got bogged down in rows and
disagreements. He felt that was really almost a side
issue that we should not get pushed into.
Mr Willis: As others have said, Michael Lyons’s
analysis was trenchant. I think his recommendations
were timid.
Mr Smith: If I may come to the European Charter of
Self-Government which has those principles in it,
one is that there should be an ability to raise own
resources and, secondly, that as far as possible grants
should not be earmarked. There should be discretion
within the use of them. That is what we have signed
up to as a country. The problem with the British one
is also that we have no diversified system of local
financing which means the gearing impact makes it
very, very expensive as you know to add to local
taxation, even if were not capped. The present
system needs greater diversity in the tax base and we
also need greater discretion in terms of how the
money is spent.
Q497 Mr Betts: Amongst a number of organisations
and people involved with local government are MPs.
There could be general agreement that local
authorities need a greater ability to raise money
themselves. More money should come from local
sources rather than central government grant and we
should have a bigger variety of sources for local
authorities to draw from. The harder question to
answer is what precisely should those new sources of
taxation be. That is where the disagreements usually
begin for individuals who might have common cause
on the general issue. What are your prescriptions
then?
Mr Smith: I am here in my individual capacity but I
have members who are in the LGA and they may
have diVerent perspectives. At a personal level, I still
believe that you need some link with a kind of
business rate or something similar to that that has an
ability to determine locally. That is very important
because I think the link between the local authority
and the business community does need to have that
aspect to it.
Q498 Mr Betts: If we transfer the business rate back,
that would hardly get us to around 50 per cent of the
money being raised locally which does not put us in a
terribly favourable light compared with many other
European countries.
Mr Smith: There are many diVerent taxes but they
are also being squeezed in some ways as well. Some
of them are not countercyclical. If you have some
taxes on business or some taxes on business activity
or hotel taxes and things like that, they can raise
more in good times.
Q499 Mr Betts: What are you recommending?
Mr Smith: My view is you need a wider property tax.
I think that some form of income tax, the use of
income tax is worth pursuing, personally. That is a
personal view.
Mr Willis: A straightforward local income tax is a
tax that people understand. It is a tax where people
see the relationship between what they earn and
what tax is being spent. It is a tax where people can
be held to account.
Q500 Anne Main: Would you say that local income
tax raised locally would stay absolutely local?
Mr Willis: Yes.
Q501 Mr Betts: Are you arguing for a local income
tax by itself or together with the council tax or
together with some other taxes?
Mr Willis: You are asking for a degree of detail
which I would not feel confident in giving. The most
important point is this point of principle. If people
themselves are paying locally, then they are more
likely to be excited and concerned about the
relationship between what they are paying and what
they are getting. It is that which is the principal issue
which we are wanting to put forward in terms of the
link between local income taxes or local taxation and
local democracy.
Q502 Anne Main: How local is local for raising an
income tax, in your estimation? What would you say
would be local?
Mr Willis: In this context I think it is going to be
substantially similar to local authority boundaries at
the moment. The diVerence with a much smaller
representation is that you have many more people’s
voices being brought into that context, but in a
district context.
Q503 Anne Main: A local, district income tax?
Mr Willis: Yes.
Q504 John Cummings: Mr Smith, I see that you are
here in a personal capacity. Is that because your
organisation does not take any viewpoint at all?
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Ev 90 Communities and Local Government Committee: Evidence
15 December 2008 Mr Jeremy Smith and Mr Martin Willis
Mr Smith: No. My organisation is a European one
and speaking in a UK capacity I do not have a
mandate to speak specifically.
Q505 John Cummings: We are part of Europe, are
we not?
Mr Smith: Yes. That is why I can give the views of
my organisation which I am about to on the issues
of the constitutional side, if you are going to ask me.
Q506 John Cummings: I was wondering why you are
here in a personal capacity rather than as an oYcial
representative.
Mr Smith: It was because I did not have the explicit
authority from my president or anyone to give
evidence to this Committee.
Q507 John Cummings: Did you seek the authority
to come?
Mr Smith: No, I did not as such. We have
longstanding philosophical and political positions in
favour of local self-government which I am
articulating, or trying to.
Q508 John Cummings: Could you tell the Committee
whether you believe that Her Majesty’s Government
is compliant with the European Charter of Local
Self-Government?
Mr Smith: Thank you for the question. I did a little
study a few years ago on this. I think in most respects
the answer is yes or probably yes, but there are one
or two points where I think the answer is no. The
first—and the one I would like to call to the attention
of this Committee—is in Article 2 of the European
Charter of Self-Government which says that the
principle of local self-government shall be
recognised in domestic legislation and, where
practical, in the constitution. Although we have laws
on local government, I do not believe that any
principle or principles of local self-government are
set out anywhere in our domestic legislation. This is
a weakness and that compares adversely with not
absolutely every country but a very large majority of
European countries. The second area that we can
argue about is on finances. The issue of a suYciently
diversified and buoyant character of the tax base is
one where I think we do not have it at the moment
under the existing system and also the system of
more specific grants is an issue where probably we
are in breach. Most importantly—it is quite
complicated language—Article 8 of the European
Charter deals with administrative supervision.
EVectively it says that administrative supervision of
local authorities shall normally aim only at ensuring
compliance with the law and with constitutional
principles. “Administrative supervision may also be
exercised by higher level authorities in respect of
tasks the execution of which is delegated to local
authorities.” In many European countries you get a
division between local tasks and ones which are
given to local authorities by central government on
its behalf. Those it can look after more deeply.
Q509 John Cummings: In view of what you have
said, does it really matter whether the Government
is compliant or not?
Mr Smith: Yes, it does matter because this is an
international treaty which the United Kingdom
Government signed in May 1997 and was ratified by
both Houses of Parliament in 1998. It is therefore a
solemn, binding undertaking.
Q510 John Cummings: Who is policing it?
Mr Smith: As you know, a lot of international
treaties are not policed in a rigid sense. It is de facto
looked at by the Council of Europe which has a
congress of local and regional authorities who do
monitoring visits and report to the Government.
That is how a lot of international ones are dealt with,
but the fact that there is no direct policing and no
police force that will land on us does not mean that
we should not be implementing it. I believe it is a tool
that the Local Government Association have started
to take up and I think it is one that is not properly
considered by Government when they test
legislation. It has hardly been in the thinking of
Government since they ratified it. It was put on the
shelf.
Q511 John Cummings: Would you tell the
Committee whether you believe the Central-Local
Concordat has had any impact?
Mr Smith: To my knowledge, to some extent but not
a huge extent would be my understanding.
Mr Willis: I think the answer is very limited indeed.
The central question from my point of view is
whether or not local government is seen as the
administrative arm of service delivery for central
government, whether it is direct service delivery or
through procuring services; or whether local
governments are seen as local parliaments. My
concern is the extent to which local people do not see
local governments as part of local democracy. I think
that is something to be regretted. What I feel both
the Concordat and the charter were designed to
achieve is that notion of local governments as local
parliaments with people feeling that they do have a
representation at local level.
Q512 John Cummings: Once again, how would you
police this matter and how do you believe it should
be enforced?
Mr Willis: Ultimately, I think it is for people
themselves to police it but the Concordat does not go
far enough. I would much rather see something
which was in statute which is how the charter itself
is designed. One of the principles of the charter is
that there should be something in statute stating
what the relationship is between central government
and local government. Ultimately, I think it is for
people themselves to police that and the Concordat
and the charter might give them the tools by which
they can exercise that power.
Q513 Chair: Do you think Parliament should have a
role in doing that? One of the suggestions has been a
parliamentary committee that for example is
analogous to the regulatory powers one which
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15 December 2008 Mr Jeremy Smith and Mr Martin Willis
would check that no new legislation took powers
away from local government. Could such a
parliamentary committee essentially monitor
compliance with the European Charter?
Mr Smith: I put in my evidence that I believe to
comply with the charter anyway but also for the
greater good we need an Act of Parliament which I
think has to be seen as being of a constitutional
character within all the limitations of our system and
therefore should be based, as far as humanly
possible, on an all party agreement as to what those
principles are which are set out and put into an Act
of Parliament, which includes the principles in the
European Charter supplemented by some aspects of
the Concordat which tie it to a specifically British or
English situation, depending on whether it is UK or
English legislation. Secondly, a select committee—
but I would like to find some means with local
government representation from the LGA etc. on
it—o deal with the monitoring which in many
countries is the case. We have seen quite a lot of
countries, through either the second chamber or
through specific ways, bringing local government
into some of the monitoring exercises.
Q514 Andrew George: I have just come up from the
European region of Cornwall on a delayed train so
my apologies for my late arrival. Given the fact that
there are no mechanisms for enforcement of the
European Charter on local self-government and no
one can appeal to the European Court and nor is
there a body which is properly monitoring and
assessing, it does seem, as my colleague said, a rather
toothless charter as far as the UK is concerned.
What can be done for those people who believe that
it is a good charter and should be enforced? What
can be done either at the UK level beyond that of
parliamentary scrutiny or even at the European level
to strengthen the teeth of this particular charter?
Mr Smith: I was arguing that it is necessary that we
should have an Act of Parliament that sets it out.
Ultimately that means it is justiciable and I do not
think we should shy away from that because in most
countries that is possible. It does not need to be in
heavy language. It is no diVerent in character from
many other conventions like the Convention on the
Elimination of all Forms of Discrimination Against
Women, which is a UN one which has its own way
of looking at whether countries are complying or
not, but which does not have an external police
force. Very few do. Only the European Convention
on Human Rights has that direct sort of enforcement
that we are talking about. It is perfectly natural and
normal for all sorts of European and international
treaties to be dealt with in slightly softer ways. Inside
the Council of Europe there is a mechanism. It could
be strengthened if all the Member States wanted to.
I do not see that yet but through the congress of local
and regional authorities there is a monitoring
exercise which has acted in relation to the UK, which
has criticised certain aspects of how we perform and
the Government has disagreed. That is where we
have got to on that. What we now need to comply
with the terms of it is to set it out in an Act of
Parliament with some sort of committee process of
both Houses of Parliament. I am not an expert on
parliamentary procedure.
Q515 Andrew George: For example, the Framework
Convention for the Protection of Regional or
National Minorities requires each nation to report
on an annual basis what it has done to comply with
that particular convention. Do you not think it
would be sensible to require the nations that signed
up to this particular charter to report back on each
of the Articles to demonstrate how they are moving
towards achieving the objects of those Articles?
Mr Smith: I think this could be a good additional
form. The UK Government and others are putting
forward new protocols for the European Charter of
Local Self-Government at the moment so there
could be a method by which this is raised in the
Council of Europe committee which deals with
these. I would be in favour of a stronger one at
European level but the urgent thing is to start
complying with the requirement to have the
principles of local self-government set out in our
own laws.
Q516 Chair: We are talking at the moment about
constitutional changes but one of our previous
witnesses, Vernon Bogdanor, who is a constitutional
expert, actually said that he thought that the
problem in Britain was that our whole political
culture of people, media, everything, was much more
centralist and that it is that we need to change and
that the constitution was not terribly relevant. Do
you agree or disagree?
Mr Willis: Jeremy was sharing with me a text from
the 1930s which was saying much the same thing as
many witnesses in this Committee have said, about
the centralist tendencies and the degree to which
local government is seen as simply the service arm of
central government, so I agree—
Q517 Chair: Not just seen by Government as that
but seen by ordinary people as that.
Mr Willis: However, the issue I would part company
with Vernon Bogdanor on is whether or not
constitutional change has a role in changing that
culture. I think it does but it is only as a stepping
stone. The charters and reports, as your colleague
has indicated, are a means of trying to say we are
serious but in the end we are talking about mindsets.
You talked earlier about the possible role of a central
government committee policing or having some
scrutiny element. Yes, if its scrutiny was looking at
other central government departments and acting
tough where they are doing things which are
undermining local democracy and local people,
justifiably in the context in which it has been agreed,
are able to make decisions about things that matter
within a local area.
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Ev 92 Communities and Local Government Committee: Evidence
15 December 2008 Mr Jeremy Smith and Mr Martin Willis
Mr Smith: This book is called “A Century of
Municipal Progress 1835–1935” and it is a wonderful
way of looking at local government from now. It has
some great essays I would like to recommend. There
was one 50 years later which is “50 Years of
Municipal Decline” so we are rather hoping to lift
this again.
Chair: Thank you both very much.
Witnesses: Councillor David Shakespeare, OBE, Vice-Chair, Local Government Association and Leader of
the Conservative Group (Buckinghamshire County Council), Councillor Richard Kemp, Deputy Chair,
Local Government Association and Leader of the Liberal Democratic Group (Liverpool City Council),
Councillor Keith Ross, Deputy Chair, Local Government Association and Leader of the Independent Group
(West Somerset District Council), and Councillor Sharon Taylor, Deputy Leader of the Labour Group,
Local Government Association (Stevenage Borough Council), gave evidence.
Anne Main: I do not know if I need to declare this but
I know Councillor David Shakespeare through the
South West District Council.
Q518 Chair: I know him too through
Buckinghamshire. Can I welcome the four of you
and explain why we are very happy to see four
diVerent voices for the LGA? I hope you will be four
diVerent voices. We do have a written submission
from the LGA. We are very keen in this inquiry to get
discord, disagreement and radical views so please
feel free to be as radical as you like. Do not worry if
you are speaking ad personem rather than necessarily
toeing the line of your individual groups because I
think we will get a more interesting discussion that
way, if I may incite you. Can I start oV with the role
of the LGA? What do you think is its primary role
and do you think, as many of our witnesses have
suggested, that the LGA is too close to Westminster
government and too deferential to central
government?
Councillor Kemp: It was good trying to get us to
separate but we will be quite aggressive towards
central government and quite united perhaps as a
Local Government Association. It is a significant
fact at the moment that all four parties—in some
ways it is three—are quite antagonistic towards
some of the proposals coming out of our own
colleagues in the three parties. One only thinks of the
Police Bill at the moment which has been the subject
of rancour between all three parties. The LGA’s role
is very simple: to represent the needs of local
government and some other partners to central
government and a range of central bodies. It is to
improve the standards of local government and to
ensure that best practice is followed and to advise
councils how to do it. Are we too close to central
government? Sometimes we have to act as diplomats
because if we were to say everything that we had
achieved by talking to ministers then perhaps we
would not go through the doors of ministers. I think
the important point we would like to make is that we
are united in what we want. It is very clear what we
want and what we do not want. We have not come
here today to ask for more legislation. We have not
come here to ask for more powers. We have come
here, very much following your last question, to ask
for cultural change in the way that central
government and its organisations relate to the LGA
and to our member councils. We are saying that a lot
of what you have provided us with is imprecise,
which stops us working eVectively, such as the
wellbeing duty which sounds fine in theory but in
fact, if you try to do anything major through it,
would be in an accountants’ and solicitors’ charter.
What is stopping local government working as
distinct from local councils, because there is a
distinction between the two, is a silo based activity in
which we try and promote a local mandate, because
we have a local vision based on that mandate; but
although there has been a theoretical loosening
through LAAs (Local Area Agreements) and LSPs
(Local Strategic Partnerships), too many of the
quangos and the government oYces and
government departments still defer to Whitehall for
whatever reason. Sometimes it is training.
Sometimes it is permanent secretaries and
sometimes it is ministerial interference. They have
not been given the opportunity to work with us on
priorities that they know to be right because they still
report vertically to Westminster rather than
horizontally to people through local councils with a
mandate.
Q519 Chair: Can I incite anybody to diVer from
that?
Councillor Taylor: I agree with what Richard says
but perhaps to put a slightly diVerent slant on it; if
we want to create a vision for our local areas, we are
increasingly moving towards doing that through
things that the Government has put in place like
local strategic partnerships and local area
agreements, to create a joint vision with our other
public sector partners. As council leaders, we can
bring whatever we bring to the table. We can bring
finance, the political will to do it and we can bring
something very powerful which is our mandate in
the people we represent. The other people who sit
round the table are not always able to do that and I
think that is very important. Sometimes they do
come, not with the mandate, but with all of the other
things that I have mentioned. Sometimes they are
not able to do that. Creating a joint vision between
the whole of the public sector at local level—I am a
leader at district level so this is perhaps coming at it
from a district perspective—is quite diYcult. My
partners round the LSP table have their central
targets to meet. They may also have county or
regional targets to meet. What we want to do is
create a culture where the people at local level are
enabled to develop a joint vision with the people of
that area and with the partners involved and take
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15 December 2008 Councillor David Shakespeare, Councillor Richard Kemp, Councillor Keith Ross and
Councillor Sharon Taylor
that forward, an enabling culture that enables them
to do that. Some of the things that have been
suggested in the LGA submission will, I think, help
to do that.
Q520 Mr Betts: Is it a remedy giving you greater
power over the other partners round the table or
separating these partners from the remit they have
simply to defer to their central organisation?
Councillor Taylor: I would absolutely stress that
what we are not looking for is more power. I have the
power I need to do the things that the council needs
to do as part of that partnership. What we want to
do is develop a culture. I speak about my area
particularly but it applies to everybody and
everywhere is diVerent; that is the point, so what I
want to do is to create what I need to do for the
people I represent and work in partnership with
those other people but everybody being equally
enabled round that table to do what they need to do
to create that vision for the local area. It will be
diVerent everywhere. The centrally imposed targets
that we all face—we all accept that there will always
be central targets—are one side of it. The other side
of it is being enabled to do the things locally that
need doing and I think that is really important. It is
not about more powers for anybody. It is about
having an enabling culture that lets everybody work
properly in partnership.
Q521 Mr Betts: How do you truly enable people
sitting round a table who have no democratic
accountability?
Councillor Shakespeare: Can I come in on the first
question about being too close to Westminster?
Q522 Mr Betts: Firstly, how do you enable people
who have no democratic accountability? You can
enable the civil servants from the regional
government oYce all you like, but in the end they are
civil servants.
Councillor Kemp: That comes back to the central
role of the council. We have a very clear mandate for
our areas because we put it to the electorate. We are
the only people who have that. With due respect, you
have a mandate but it is a diVerent type of body. We
are the only people who bring together all the
partners round the local strategic partnership. Some
of them talk to each other. They all talk to us. The
way to do this is for the Government to both let go
of the apron strings and train and support their
oYcers to understand what they can do to support
the objectives set by the local council. Sometimes it
is not a question of more money; it is a question of
better use of the money that is already available to
those bodies. Culture is very important because
there is a key distinction between power and
influence. Power would be a grab saying, “I used to
be chair of housing. Everything was a council house.
Let us have that power back from the Housing
Associations.” We are not asking for that. We are
asking for influence to make sure that people follow
the lead which we are uniquely able to provide.
Q523 Chair: If we turn to the police for example,
how are you suggesting you would have more ability
to influence them without any changes in the current
structures?
Councillor Ross: With the health service as well I
believe—I think we all believe—that a better way of
doing it, as we are democratically enabled through
the ballot box, is that we can take that to the health
service, to the PCTs, to the Police Authority, as we
do with the Police Authority at the moment. There
is a certain number of indirectly elected members
who are not democratically elected as members of
councils. We do not have that opportunity in PCTs
any more, where we used to in the health service, so
it is perhaps redressing the balance there, ensuring
that we have the ballot box behind us when we are
making those decisions because at the moment there
is no democratic mandate.
Q524 Chair: The suggestion has been made to us by
earlier witnesses that councils should directly
commission health services.
Councillor Kemp: For certain types of service, yes.
Not for all of them though.
Q525 Chair: A similar model for the police?
Councillor Kemp: Can I respond with a question to
you? You all have to consider this because the Bill
will be before Parliament. By and large, local
government is extremely satisfied with the
relationship we have with the police. If we were to
choose an exemplar, we would say local government/
police relationships are sound. What about the
Learning and Skills Council? What about
Connexions? What about the Environmental
Agency? There is a whole range of organisations
which do not operate that way. If every relationship
were as sound as that between local government and
the police, we would be in a much stronger position.
The question has to go back to every MP who is
going to vote on the Police Bill. If it ain’t broke,
don’t fix it.
Q526 Chair: The question was do you think that it
should be done by indirect elections, not simply with
the police but with the PCTs for example. The LSE
powers are going back to councils anyway. Do you
want a whole series of indirectly elected
representation?
Councillor Ross: Yes.
Q527 Chair: Or do you want to see direct
commissioning by councils?
Councillor Ross: Even in the regional development
agencies there is a case there where power is being
taken away to some extent and given to the RDAs
(Regional Development Agencies) who have very
little democratic responsibility.
Councillor Taylor: There is a degree of
accountability here as well. I think we have to have
an eye to accountability. We have probably the
partnership relationship that works best and I think
it is true to say that, with the police, the structures
that most of us have put in place around
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neighbourhood policing are working extremely well.
We have good accountability in most areas. We are
building on that all the time and it is not just at
district or county level. It also works right down at
neighbourhood level with good accountability to the
people that the police and all the other members of
the public sector serve. We need to be building on
those accountability structures. Yes, there is the issue
about indirect representation on bodies that do the
close scrutiny, but there is also the direct
accountability to members of the public that we have
all made huge eVorts to build. I think that is very
important. I think that will be diluted by having
another directly elected body. Who do people go to?
Do they go to their local councillor if they want the
criminal damage in their area sorted out or do they
go to this directly elected representative? It just
dilutes the accountability process.
Q528 Anne Main: In light of recent events in
Haringey, do you think the public would support
further devolution of powers to local authorities? I
would like you to specifically bear in mind some of
the press reports and press and media calls for action
that were being bandied around at the time when
you consider your answer.
Councillor Shakespeare: I can understand a lot of the
media frenzy that has gone on. I can understand
people being appalled by what has happened there.
From a local government point of view, I am also
very much aware that the safeguarding parts of local
government are probably the worst centrally funded
parts of local government. They are desperately
under funded so I am feeling some sympathy with
public servants trying to organise services without
the resources to do it. I think that lies at the heart of
the safeguarding problem.
Q529 Anne Main: Part of the criticism, as has come
to light again through media investigation on this
matter, is that there was a degree of satisfaction
being expressed by the local authority until a light
was shone on it, shall we say, in which case should it
be that a local authority can have even more powers
coming back to itself if, when things go wrong, the
public say, “How on earth did this happen? Why was
it they were allowed to (a) get away with it and (b)
what can be done?”
Councillor Kemp: I think we would all agree that
nothing anyone in this room can do—
Q530 Chair: We do not want to get into the specifics
of the Haringey case. It is an example of the general
principle.
Councillor Kemp: I accept that. No system that any
of us put in place will ever work right every time. The
facts about child protection are that this is one of the
best countries in the world. Wherever we find
councils doing things badly or wrongly as an
association, we are the first to go into that council.
There are questions that we need to raise there about
the role of inspectorates, about the way the
partnership works, about the role of some of our
partners who also misdiagnose. If you are then
asking: is this a question of public perception, I do
not know whether people come into your advice
centre with these questions. No one has ever come
into my advice centre in 35 years as a councillor
saying, “Councillor, I am really bothered about the
structures.” What they are bothered about are the
outputs and the outcomes. The constitution does not
matter to people. They want to see delivery. I think
we can deliver. We do deliver. The Treasury says we
are the most eYcient part of the public sector and
who are we, mere councillors, to disagree with the
Treasury?
Q531 Chair: I think you are slightly missing the
point, if I may say so. The issue is that in cases such
as the Baby P case, which I think all of us would
agree is a matter for that particular council to sort
out, the reality in our political culture is that
immediately MPs and leaders stand up in
Parliament and demand that action is taken. Indeed,
you get the national press running a campaign for
particular members of staV to be got rid of and for
the Prime Minister to do something. We were told
certainly when we were in Sweden and Denmark
that that would be unthinkable. That would not
happen. The national press would not do that. The
Government would not be demanded to do that.
That is a function of our political culture. That is
what we are asking about. What do you, at the local
government end of it, think you can do to change
that so that when that sort of thing happens people
look to the local council and say, “Why have you
allowed this to happen?”?
Councillor Taylor: The fact is there is a degree of
accountability. Where there is a catastrophic
failure—thank God there are not that many—
people can be voted out. Where you have
organisations that are run by quangos or non-elected
bodies, there is no possibility for the public to say, “I
am sorry. That is just not good enough. Those people
are not capable or competent to run that service.
They have to go.” We are the only part of the public
sector locally that has that degree of accountability.
It is very important to us.
Q532 Chair: It does not seem terribly important to
the public. That is the point. The example of the
Baby P case was that the public did not say, “Oh,
great. We can make sure that those people get voted
out.” They and everybody else demanded that the
Government did something.
Councillor Taylor: Can I come back to your point
about the LGA as well? One of the things the LGA
can do—and we are doing this all the time—is look
to our own improvement. That is a very important
role for the LGA. We work very hard all the time.
Can I just give you an example from the district
perspective, because this is what has happened in the
last two years? We wanted to do some more work on
how districts work and how we work more in
partnership with counties to deliver better services to
our people at district level. The LGA has got all the
people in districts together and got us working on a
joint agenda with the county councils’ network, so
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15 December 2008 Councillor David Shakespeare, Councillor Richard Kemp, Councillor Keith Ross and
Councillor Sharon Taylor
we work together on that, to drive that improvement
agenda forward. We work with IDeA (Improvement
and Development Agency) as well. We have been
very successful within the local government sector in
working for improvement together.
Q533 Anne Main: We have come back to where it is
working. Let us pose a diVerent side to the same
argument. The whole point about allowing a local
area to self-determine and self-govern as much as
possible is that they are going to get it wrong
sometimes. That is life. The public expect, when it
goes wrong at local level, that heads not only roll at a
local level but that some kind of government should
have stepped in. If an area has a lower level of local
services because it might be the choice of their
council or they are rubbish and incompetent, is that
acceptable or should the Government somehow sit
back and say that whatever is done locally is selfdetermining and democracy at a local level: “It is not
up to us to step in and sort it out”? At the moment
the public thinks it is.
Councillor Kemp: You cannot have it both ways,
can you?
Q534 Anne Main: No, you cannot.
Councillor Kemp: We are a heavily regulated sector.
Some councils spend £8 million a year being
inspected, if you are a big council like Bradford. You
lot ask questions of ministers. You write things in the
local paper. You will take something up here before
you will take it up, appropriately in my view, with the
council leader. We are talking about a centralised,
political culture for which we must all take some
responsibility. You can see that by going back to last
year. Do you remember the case of the chief
executive of a hospital trust? People died because of
MRSA. There was exactly the same outcry, exactly
the same eVect at the end of the day where the health
board trust eventually sacked the chief executive
after due inquiry. We believe in that. I defended the
work of Haringey because they were having a proper
inquiry, they were going to do it, but that is diVerent
from being the lynch mob which was suggested by at
least one of the local papers
Q535 Anne Main: Interestingly, in the Haringey case
the complaint eventually somehow got filtered up to
a government minister who sent it back for local
determination and investigation and then the
problem came out eventually. It had been looked at
locally and I think that has been part of the problem.
People had tried to whistle blow at a local level, it
had escalated up higher, it had been sent back to the
local level, not been dealt with properly, so as a result
the public are now saying, “What on earth went
wrong in the system?”. It is great when the system is
robust and works well, but you have to accept that
some systems do not and some people will then say
to their MP or the minister they may write to, “Look
at my area, it’s doing this badly. I’m worried about
a child or a hospital or an elderly person”. What I am
trying to say to you is should Government always
stay out of it?
Councillor Kemp: No, because the Government is
the public sector of the last resort and there is a right
for them to come in at some stage. Whether they do
that routinely, which is what they do, or whether
they do it in extremis is the case that you have to
discuss. The fact is there is far too much interference,
but that does not mean to say we are not all
accountable before the court of public opinion, and
Parliament at some stage might want to extrapolate.
Would we abolish councils or decide to give them
more or less influence on the same grounds that we
might decide to give PCTs more or less influence
because one PCT failed? Occasionally there will be
failures in the system, it is a question of the
robustness with which we deal with those failures
that counts.
Councillor Ross: What we did do at a very early stage
was oVer support to Haringey in this particular
instance and that support was accepted. We had
oYcers from other good councils going in there
helping and supporting the whole of that sector.
Chair: If we may move on to look at issues related to
further devolution.
Q536 John Cummings: Do you think it is acceptable
that some councils should have lower standards of
public service than others?
Councillor Shakespeare: The easy answer to that one
is no, of course.
Councillor Ross: We would all agree on that one.
Q537 John Cummings: As a national association,
what influences can be brought to bear to ensure that
everyone reaches the required standard?
Councillor Ross: What we do is help support and
even train the sector. With the IDeA particularly, we
have put a lot of support mechanisms in for councils.
At the moment, my council is accepting that support
from the IDeA through the Regional improvement
and eYciency partnership with funding to have
IDeA peer mentors and oYcer support to help us
improve.
Q538 John Cummings: How will you achieve peer
pressure?
Councillor Ross: It is oVered by the IDeA and I
would say all councils accept that oVer of support.
Councillor Taylor: It is also very helpful because if
you are struggling either in all areas of your council
work or in one area in particular, to have an IDeA
peer who has the same political values as you have
come in with all the good practice they have seen as
they go around the country doing their work is
extraordinarily helpful. I think the Peer Mentoring
Scheme has worked extremely well in improving the
overall standard of public sector working
throughout local government. Again, it is another
great strength of the LGA that we are able to do that.
Q539 Chair: Can I turn Mr Cummings’ question
around because I was really quite surprised by the
answer. Would it be acceptable for some councils to
choose to have a higher standard of service than
some others?
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Councillor Shakespeare: Yes, absolutely.
Q540 Chair: Does that not mean your first answer
was inconsistent?
Councillor Shakespeare: Not at all, but I think it is
right that all councils should deliver a minimum
agreed service.
Q541 Chair: That is not quite the same thing.
Councillor Shakespeare: Local choice and diversity
is one side of the coin and other people will say
postcode lottery on the other side of the coin, but it
is the same thing. I think councils should be able to
respond to local demand for the level of service that
they want and they are willing to pay for.
Q542 Chair: The minimum standards would be set
by Parliament?
Councillor Shakespeare: I think they should be
agreed with local government so we both know what
we are trying to achieve.
Q543 John Cummings: To take that a stage further,
would you accept there are some services where a
variation in standards is not acceptable?
Councillor Kemp: It comes back to the point which
was just being made before. A variation is acceptable
providing it is a variation above a minimum which is
acceptable. If Liverpool chooses to spend more on
this than that, that is a contract between us and our
electors. Some things do not need national
mediation. It is the responsibility of all of us to keep
the streets clean, we do not need anyone to tell us
that. We might choose to spend more on this or more
on that. We are talking about matters of critical
illness—if I could go back to the Baby P case without
mentioning it again—there are some standards
which have to be set by local government.
Q544 John Cummings: On setting standards, do you
think the Local Government Association is
equipped to indicate where that standard should lie
rather than relying upon central Government?
Would you take on the role of being a policeman?
Councillor Kemp: We do.
Councillor Taylor: It is a joint process to develop the
standards together, but then without cramping or
trying to stop the innovation which goes on in local
government, to take things beyond where you would
say a set standard is. In both of those roles, both the
setting of what should be a minimum standard and
in the development and innovation of creative ideas
to drive local government forward, I think the LGA
works very well with all of us. There are huge
numbers of people involved in local government, so
it is not an easy task to do that together with all of
local government. It is the one body which consults
with all of us about new legislation that is coming
out, guidance which is coming out, inspectorate
work and so on, and does so very eVectively.
Q545 John Cummings: Can you give an example of
where you do believe a level of central Government
intervention is acceptable?
Councillor Ross: My feeling about all of this is the
people who we forget in all of this are the people
ourselves as the electors, as the residents of a place,
they are the ones who are going to set the levels of
how better we do things. I am a localist, I believe in
a community having that choice of what level of
service they get.
Q546 Andrew George: I am staggered by what I have
heard so far, particularly in relation to all of the
evidence we have received from a variety of bodies.
You are the supreme body representing local
government. You have the opportunity of this
inquiry, after decades of having powers removed,
being micromanaged by central Government,
having targets set, having your finances constrained
and, I would say, being humiliated by having to
compete for money which should be, in fact, core
parts of your function. This has happened
increasingly over the years and you come here and
you tell us you are not asking for more powers and
you repeat that. You say that is not what you are
asking for, you are asking to influence, you are
asking to enable things, so, in fact, the body we are
looking to as the supreme body of local government,
having listened to all the evidence we have had from
others who are urging you to be ambitious for the
future of local government, you are happy for local
government, in fact, to carry on being the agents of
central Government, in eVect that is what you are
saying.
Councillor Shakespeare: No, we are not.
Councillor Kemp: No, no, no. That has got us going!
Q547 Andrew George: I am afraid that is the only
conclusion I can draw.
Councillor Shakespeare: I think what we are looking
for is a change of culture. I have spent most of my
time in local government feeling that central
Government is doing it to me rather than with me.
That is the key to the whole change in the culture of
the way we work together. We talked about setting
national targets, setting national standards. If it is
going to be a real partnership, then those are the
kinds of things we would work up together and find
out what is achievable on the national basis. To be
absolutely frank with you, the people who know best
what is positive and able to be done at a local level
are local councillors and they are the people who are
not involved. The LGA tries very hard to represent
them, but time and time again central Government
tells us what is going to happen rather than asking us
to help work up the policies.
Q548 Andrew George: Where is the evidence that
you are biting back? You are told how many houses
you have got to build in your own areas, you are told
what you can spend, you are told how much you can
raise in council tax, every aspect of your work is
constrained by targets and guidance from central
Government, you are constrained from the start.
Councillor Shakespeare: We are forced by the
inspection regime, that is true.
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15 December 2008 Councillor David Shakespeare, Councillor Richard Kemp, Councillor Keith Ross and
Councillor Sharon Taylor
Q549 Andrew George: Exactly, yes. How many
decisions can you take of your own volition?
Councillor Shakespeare: When you say biting back,
we are all trying very hard to create LAAs which
work. Certainly my own authority was told that it
had to accept the Government’s housing target,
otherwise we would not have an LAA, and say,
“Okay, in that case, we won’t have an LAA” and
that focused minds on being a bit more flexible.
Councillor Kemp: Mr George, if I remember rightly,
you have been to Liverpool this year and you will
have noticed, for example, that we are the European
Capital of Culture for another 15 days. The quality
of leadership from a council can be absolutely
crucial to the future of our area. At the end of the
day, we are realists, we are pragmatists and we are
coming here to talk to you not about what we would
like to see in some great theoretical exercise if we all
sat down and did a Bretton Woods and redefined the
constitution; we are coming here to say in our
opinion what is deliverable by central Government
and what would really help us, not in ten years’ time
but tomorrow, a culture change from the way that
the people who sit round the LSP (Local Strategic
Partnership) table will deliver results for our
councils and therefore our constituents within days,
weeks, months. That is what we are here to try and
achieve today.
Q550 Andrew George: I am not asking you to be
unrealistically blue-skies in your thinking, but I
would like you to look beyond the horizon of
immediately tomorrow, please. I think the purpose
of this inquiry is to at least look and see what might
be possible if we were to put pressure on any central
Government to rebalance the relationship between
local and central Government. What I do not hear
from any of you is any ambition to, in fact, take
away the shackles under which you operate. Every
decision you take is a decision which is the result of
a preordained formula of constraints which central
Government places upon you, you have to accept
that.
Councillor Ross: We do what we can within the
limitations, but fundamentally we need more cash to
do a bigger job and there are ways to do that.
Chair: That brings us rather neatly on to the next set
of questions, which are about finance.
Q551 Mr Betts: Is one of the key issues the ability to
raise a greater proportion of the money which you
spend at local level? Is that fundamental to operating
a relationship between central and local
government?
Councillor Ross: In my district we raise it and then
we do not get it back. Last year we raised £11 million
in business rates and we saw £2 million back.
Q552 Mr Betts: Let us go on to the issue of how we
might address that, but, in principle, is that
fundamental to the change? Lyons looked at it over
many years rather than months and came to the view
that what was important merely was local
authorities’ ability to be able to spend the money
they had in the way they chose rather than any
ability to raise more of the money themselves.
Councillor Kemp: There are two issues there: should
we raise more and, therefore, have the direct
relationship with our constituents, with the people
and, yes, we believe we should, quite clearly we have
a view on the reallocation of the business rate on
that, but then the subsequent thing is there is always
going to be redistribution to places like SheYeld and
Liverpool from places like Buckinghamshire.
Q553 Mr Betts: I think Liverpool gets a bit more
than SheYeld out of it!
Councillor Kemp: I was trying to generalise on that.
The fact is when it comes in, it is not ours to spend
anyway, so you are conflating two diVerent issues.
There is the right to raise money, then the right to
spend the money which comes to us from whatever
source because we have the local knowledge. Then
when you also say for every pound we spend, the
public sector spends £2 within our communities,
over which we have no control and direction, which
I am very ambitious—pulling it into our orbit and
influencing—to make sure they spend it properly
rather than directly controlling the doctor or the
chief executive of the housing association, then you
are talking about a place in which we rightfully lead
public expenditure within our communities.
Q554 Mr Betts: I can see a good fringe meeting
coming on at the next Liberal Democrat
Conference here.
Councillor Kemp: We always have good fringe
meetings!
Q555 Mr Betts: Coming back to the issue of how
should any additional money be raised by local
government, perhaps we may have a diVerent set of
views. The business rate is an obvious one that has
been raised which could be given back to councils,
but even if that was done alone, it would still only
allow councils to raise about 50 per cent of what they
spend on average. Should we go further?
Councillor Taylor: I think there is a good case for the
issue around having, as Lyons reported, some kind
of independent commission into the equalisation in
the grant distribution because there are some real
anomalies. Anybody who has been anywhere near
local government knows about the anomalies which
come out of the grant formula and so on, and it has
got so complicated now. In all honesty, I cannot
explain to my residents how we end up with the
amount of grant formula we end up with. It really
needs to be much more transparent than it is and we
need to have some kind of commission which is
saying, “How are we looking at these issues around
grant?” With grant, we know there has to be a
distribution arrangement, we all accept that across
local government, but how it is done really needs a
proper examination.
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15 December 2008 Councillor David Shakespeare, Councillor Richard Kemp, Councillor Keith Ross and
Councillor Sharon Taylor
Q556 Mr Betts: Is that an examination or is it
handing over the power to an independent
commission?
Councillor Taylor: There needs to be a commission
involving local government which comes and talks
to local government about how this is done, but the
commission should be deciding on how the
distribution and grant works.
into European legislation” and to make sure that
when Parliament passes that legislation, they do
understand the impact at local level. I think there is
a good case to be made, on the financial side but for
other things as well, for there to be a way of local
government inputting into legislation to say, “Just
what will the impact of that be at local level?”
Q560 Mr Betts: That is another issue, is it not, about
the new burdens situation?
Councillor Ross: It is all part of the same issue.
Q562 Mr Betts: I want to come back on the new
forms of taxation in a second because we have
forgotten about that one, it has not really been
answered. Coming back to a model we saw in
Denmark, which was quite interesting, where each
year central government and the Danish local
government association sit down together and work
out first of all from a central government point of
view what they think the totality of local government
spending should be because they say, as central
government, from a macroeconomic policy point of
view, “We have a right to have a say in that”. Then
they look at any new burdens and assess the cost of
them and then they agree the total amount of local
government spending. Then the local government
association goes back and negotiates with its
members which local authority should spend what.
They do not have a capping system individually,
eVectively they have an agreed cap which the local
government association helps to enforce. Does that
appeal?
Councillor Shakespeare: I think if we were oVered
that we would bite your hand oV.
Councillor Taylor: We would!
Councillor Shakespeare: That would be an
aspiration to work towards. We just talked about
councils raising more of their own income, just
talking about the equalisation factor, the
transparency in that would be a big move forward if
we could understand it. At the moment, as I said—
you talked about councils raising more of their own
revenue—year after year of relentless equalisation in
my own authority has meant we are already raising
81 per cent of our own funding and only 19 per cent
comes from central Government. That is what it has
done to many, many authorities in the South East.
For example, following that, it was the Government
that had to invent its own safety net to stop a
meltdown in public services in the South East, the
floors and the ceilings were there to try and soften
the blows which were coming out of resource
equalisation.
Q561 Mr Betts: You think there should be at least an
independent element brought in to examine the real
costs of new burdens and the equalisation process?
Councillor Shakespeare: That would be really good.
Councillor Taylor: OV course, in Europe there is this
process—I am a Committee of the Regions (CoR)
Member in Europe—so anything that is likely to
impact from European legislation at a local level we
have the opportunity to examine. I do not pretend
the process is perfect, because it is not, but we do
have the opportunity to have a look at new
legislation which is coming from Europe and saying,
“We think this is what will happen to this once it goes
Q563 Mr Betts: Do you not think 50 per cent is
enough then because if you transfer the business rate
back, you have got 50 per cent?
Councillor Kemp: No, it is far more complicated. If
you remember the Lyons Report, he gave a very
diYcult to read thing which had all 400-ish local
authorities which said at one end there were about 30
authorities that got and at the other end there were
30 authorities that gave and about 300 authorities it
was very little diVerent. That is the point David is
making. The question then comes as to what you do
in cities like mine and yours—I was trying to make
the point—where there is a bigger aggregation of
Q557 Mr Betts: This is local government arguing for
accountability at local level, willing to pass over one
of the key issues of equalisation to a quango.
Councillor Kemp: No, it is not our power we are
taking down.
Q558 Mr Betts: It is our power.
Councillor Kemp: It is your power we are taking
down, yes. Let us be quite clear, we are not taking
anything up, we are bringing it back down because
we do not see the transparency in the system. As I
say, when it comes to us, it is usually constrained. A
third of our budgets are already ring-fenced.
Chair: That is a slightly diVerent point, let us stick
with the commission and equalisation.
Q559 Mr Betts: We could argue, I suppose local
government could argue, that really local
government itself should determine the equalisation
process. In some ways ministers might wash their
hands and say, “Thanks very much”, but come on: I
have been in the equivalent of LGA meetings and
seen the arguments that go on and when at the end
of the day every council has had its say about how
much more money it should get relative to somebody
else, they are always very pleased, are they not, the
Secretary of State is going to take the decision, so
they can all blame them. That is how it works, is it
not?
Councillor Ross: Here is an example. Two years ago
when we had the national concessionary bus fare
thrust upon us, a wonderful initiative, and who pays
for it? There is not enough funding to support it and
that is a principle, is it not, if Government is going
to do something for the people using us as an
intermediary then we have to be funded properly,
and we are not funded properly for that.
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15 December 2008 Councillor David Shakespeare, Councillor Richard Kemp, Councillor Keith Ross and
Councillor Sharon Taylor
poverty which cannot be met from the local
resource. How then do you put the money into the
Liverpools of this world? I am quite clear that we still
need support over and above what we could hope to
gain locally, although our economy is doing very
well at the moment. That is where the diYculty
comes. We must not confuse that with the general
issues against those councils.
Mr Betts: I understand that. Various studies have
shown that you could probably go up to about twothirds raised at local level and then a third from
central Government would be suYcient to achieve
full equalisation, but you could do more. In Sweden
it is interesting, they work on a 15 per cent
government grant roughly for equalisation
purposes.
Chair: It is not a government grant, it is collected by
the rich authorities and then given to the poor.
Q564 Mr Betts: That is true. If you want to shift
from 50 per cent up to 66 per cent, what would you
do?
Councillor Kemp: You are quite right, you are edging
us towards trying to point out a diVerence between
us and the diVerences are then quite clear, are they
not, just as they are between the parties in
Parliament. We do not share a common view on how
you would collect that last element of money to
bring you up to the equalisation gap, if I can put it
that way. We have diVerent views on that and those
need to be sought out. There are some things we are
quite clear on though, for example revaluation. If
you are going to have a property tax, you cannot set
it on a 1981 level and keep it there forever, so we have
some things in common. It is pointless us saying that
we are not like yourselves, party politicians, and
there are some areas in which we will diVer.
Q565 Mr Betts: Something like revaluation is
something you could give to an independent
commission to oversee.
Councillor Kemp: Theoretically it is if it was allowed
to do it, it has not been allowed to do it because the
valuation and tribunal thing is an independent body.
Andrew George: May I go back to the issue of
powers?
Chair: Yes, and then I want to wrap up the
constitution bit at the end.
Q566 Andrew George: Given that I was raising issues
about the devolution of powers and we had a bit of
a discussion on the broad-brush issues of that and
given that the issue on which you have become most
animated has been policing powers, and that is
certainly something which is certainly very much
part of the inquiry, an area we are looking at, as I
understand it, in the Policing Bill your objection to
the directly elected crime and policing representative
is that this is creating another body outside that of
the work which the councils do with the police. Is
that your primary objection? It is not that it
introduces an arm of accountability locally, it is that
it is creating yet another body that is coming into the
frame. Is my understanding correct?
Councillor Kemp: All three parties have proposals
for the sheriVs, directly elected police boards or the
CDRP (Crime and Disorder Reduction Partnership)
which we all oppose. We oppose it on the practicality
that it will not introduce localism because we do not
think localism needs introducing because we think it
is working well. We think it will stop things
happening, it will stop partnership, it will expose the
police to extremism, because at the moment they are
partly sheltered, and the political parties will not
appear at their best when we start fighting police
bodies because we will be fighting. For example, the
BNP have made it very clear they want to come into
this picnic. There is a whole series of practical
reasons. We do not have the opportunity to expose
that, but our colleagues are appearing before the
Home AVairs Select Committee tomorrow to talk
about that.
Chair: I think it is interesting that you are all agreed,
and at a national level—I would not speculate about
the three of us—the parties are divided. That is
actually quite interesting.
Q567 Andrew George: If I can relate it, which is what
I am trying to do, to this inquiry. If there was an
opportunity for local authorities to have greater
powers, greater say in the way in which the resources
available to the police are deployed, decisions which
are currently taken via the Chief Constable or the
constabulary and, in fact, the local authorities may
well be consulted about the way in which the police
establishment is deployed across its own patch,
would you not welcome that opportunity and the
addition of such powers?
Councillor Ross: I would welcome more coterminosity because my own force straddles four or
five authorities, so how can we have a meaningful
conversation? Our indirectly elected members at the
moment are coming from diVerent authorities, so I
think there is a job there as well.
Councillor Kemp: In terms of where we are with the
police, again it comes back to this power or influence
thing. I am very satisfied on Merseyside that the
Chief Constable listens, works very closely at
conurbation, city, district, neighbourhood and ward
levels, that we know who we are relating to and that
the money is reasonably well spent. I do not think we
would have more than five per cent diVerence if we
controlled the budget than the Chief Constable does
now because we are talking about a place in which
we have massive influence on what the Chief
Constable and the police authority already do. That
is what we want to achieve with all the other partners
around the LSP table. If you were going to choose
examples, we would choose other ones to have a go
at in the public sector, like the Environment Agency,
the Government OYces, the Regional Development
Agency, things like that.
Q568 Chair: Can I move on to constitutional issues
and first ask each of you whether you believe the
Central-Local Concordat has had any impact and, if
so, whether you can point me to something where it
has had an impact?
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Councillor Taylor: I think the answer to that
question is not as much as we would have hoped it
had and I think we all need to work on that. It is clear
that there are things which still remain to be done in
terms of this Concordat between central and local
government and it is work to carry on with. We have
not got as far as we would have liked to have got with
it. The point I raised earlier about local government
contributing to the debate about legislation before it
becomes legislation is what I would want to do. I
would want to have a great deal more consultation,
firstly, on the financial burdens which are coming to
us and, secondly, on the impact of legislation at local
level before we get to the position of it already being
in place or debated in Parliament.
Councillor Ross: I cannot argue with that.
Councillor Shakespeare: I would certainly agree. The
Concordat was signed with a flourish, but if I got out
my microscope and looked at the outcomes, they
would be very tiny indeed.
Councillor Kemp: I would agree that signing a piece
of paper does not change things, it is what you do
with the piece of paper when it is signed. Something
else which happened last year was the Local
Government Act 2007, supported by all the parties,
there is a duty to co-operate and that is what the
Concordat is about, we co-operate nationally and
everyone is supposed to co-operate locally. All the
people, the 23 agencies which were named on the
face of the Bill as having a duty to co-operate with
local government, you go and ask them what they
are doing about the duty, because I have tried this,
most of them do not know yet that they have a duty
to co-operate and that takes a big culture change to
move things on from central government.
Q569 Chair: Turning to central government, which
central government departments would you finger, if
I can put it that way, as being particularly poor at cooperating with local government?
Councillor Ross: The information I have, and I will
not be backward in coming forward, is Defra.
Q570 Chair: In what way? Do you want to give an
example?
Councillor Ross: We have a Rural Commission and
historically it worked extremely closely with Defra
on many environmental issues, and the message I am
getting is that work is not as good as it used to be.
Councillor Kemp: My own preference, if we were
fingering one, and we could finger a number for
diVerent reasons, would be Ed Balls’ Department,
Department for Children, Schools and Families. We
have great diYculty in many cases in bringing in the
universities, the colleges at a strategic level.
Q571 Chair: No, that is a diVerent department.
Councillor Kemp: This is why I am getting a bit
confused. It is the education sphere generally. When
it comes down to schools, for example, because of
the local management of schools, although it has got
‘Liverpool’ or wherever on the front, people think
we can influence things and we often cannot bring
the local management of schools into the
partnership in our ward which is desperately needed.
I must say, and I do not want to go back to Baby P,
having worked alongside Ofsted inspectors, I think
they are on another planet altogether.
Q572 Chair: Councillor Kemp, do you think
devolution applies from councils downwards as well
as from Government to councils?
Councillor Kemp: Absolutely.
Q573 Chair: Your most recent remarks about local
management of schools being a bad idea rather
suggests you do not think it should be.
Councillor Kemp: Absolutely not, but what local
management of schools has done has reinforced a
silo to make sure that if the head teacher is good,
they come in and work with us, but if they choose not
to, they and their governors just say, “We don’t care
about anything else”, so it is the way it is being done.
I think we should not ask for more influence as local
government unless we are prepared to give more
influence in our turn. I would be happy to send you
a copy of a booklet we produced, which Mr George
has already had, about the politics of the community
and community politics, which is all about this.
Councillor Taylor: If we have got a local agency that
is not delivering or we feel does not understand what
the priorities of our community are, it is our
responsibility as councillors to bring that agency to
the table and say to them, wherever it is, come and
be accountable to the people that you serve in this
area. I would like to turn that round and say it is part
of the council’s responsibility to do that. Whether it
is the Police Service or the Health Service or
Children, Schools and Families, whichever agency it
is, if we are not there asking them why they are not
delivering our communities’ priorities, it is
fundamentally part of our role to do that. We should
be more demanding of them at local level and I think
that is something we are all looking at in the LGA to
say just how do we do that. That is not saying we can
make them come, but what we have been talking to
you about today is creating a culture where the
whole delivery of public sector work for our
communities forms part of the public’s ability to
come and talk to all of us about what we are doing
and what we are not doing, which is even more
important.
Q574 Chair: I think you were all sitting here when we
were talking to the previous witnesses about the
European Charter of Local Self-Government. Do
you have a view? Do you think there should be, for
example, a parliamentary committee which checks
that everything the Government is doing is
consistent with the European Charter of Local SelfGovernment? Do you think there should be a joint
parliamentary local government committee that
did that?
Councillor Shakespeare: I think somebody should.
Jeremy was quite reticent about what it should be,
but there are powers at the Council of Europe to go
on inspection visits and write reports, but I am not
sure anyone takes a great deal of note of what those
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15 December 2008 Councillor David Shakespeare, Councillor Richard Kemp, Councillor Keith Ross and
Councillor Sharon Taylor
reports are if they are reporting on a national
government like the UK one. Something
independent within the UK which is policing those
kinds of constitutional issues between central and
local government relationships and partnerships
would be very useful, yes.
Q575 Chair: Sort of oV-Gov?
Councillor Shakespeare: Yes.
Councillor Kemp: I also have the European portfolio
at the LGA at the moment. First of all, I think there
are many lessons we can learn, as you have tried to
do, by going to see the way other local government
systems work. I am delighted that you have been to
Denmark. I think you ought to widen the question
because there are a number of ways in which you
should be saying how will councils who deliver a lot
of what legislation introduces be involved in the
scrutiny process. For example, I would like to see
appropriate council leaders, and not something for
the leader of the council, it might be an education
portfolio holder looking at an education bill, joining
in the scrutiny process as part of a select committee,
bringing very practical experience to bear as the
theory is discussed by Members of Parliament. What
are the Regional Select Committees? I have not got
a clue and, in fact, I would guess that very few people
know who the regional ministers are. There are a
number of interactions which we would propose
from the LGA if you wanted us to do that to make
sure legislation, whether it originates in Brussels or
elsewhere, is actually more eVective and of more
worth for local government.
Councillor Taylor: I think it was disappointing to see
that local government is not included in those
Regional Select Committees. It would have been a
big step forward, I understand that, but it would
have been a very good step forward because all of the
issues around economic development and spatial
planning are things which we fundamentally do on a
day-to-day basis. It would have shown a great step
forward for Government and local government
working together to include both parts on those
Regional Select Committees so we are both
examining what is going through as it happens. That
would have been fantastic but, regrettably, it was
decided not to do that.
Q576 Chair: I did make precisely that proposal in my
evidence to the Modernisation Committee but
obviously I was not suYciently persuasive! Thank
you all very much indeed.
Councillor Kemp: Can I say we too will be giving you
some reading. On the press at the moment is One
Country, Two Systems; how national and local
democracy can work together to improve Britain’s
boosting culture. If we have failed to make our point
because of our nervousness at the intellectual
hothouse we have been in today, our oYces have put
it in writing on our behalf, Chair.
Chair: Excellent. Thank you very much.
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Ev 102 Communities and Local Government Committee: Evidence
Monday 12 January 2009
Members present
Dr Phyllis Starkey, in the Chair
Sir Paul Beresford
Mr Clive Betts
John Cummings
Jim Dobbin
Andrew George
Mr Greg Hands
Anne Main
Dr John Pugh
Witness: Rt Hon Hazel Blears MP, Secretary of State for Communities and Local Government, gave
evidence.
Q577 Chair: First of all, welcome, Secretary of State,
and Happy New Year to you. We are very pleased to
be starting oV the new year with this final session in
our inquiry on the balance of power between local
and central government. We will try to keep our
questions brief and to the point and we would be
very grateful if you would keep your answers equally
brief and to the point. After all, if we think you have
not answered it adequately, we can ask you to do a
bit more. I want to start oV by trying to clarify the
position of the CLG itself on where exactly this
balance of power should be between central and
local government. I think it would be fair to say that
many of the witnesses we have had thus far have
accepted that there has been a shift but not enough,
they would disagree about how far it should go.
Could I ask you, what is the ultimate objective of
your policy on local government reform? Where
exactly do you think the balance should be?
Hazel Blears: First of all, could I start oV by wishing
the whole Committee Happy New Year and,
secondly, by saying that I am delighted that the
Committee is doing this inquiry. From looking at the
list of witnesses you have already had in the four or
five sessions, you have had a really broad range of
opinions and views and I am very pleased about that
as well. For me this whole process of devolution is
not an academic exercise, it is not an intellectual
exercise about where the right balance of power
should be in a constitutional sense. For me this is
about saying ‘where can we get to a position whereby
local people get the very best services, the very
highest quality, not just local government but
partners at local level working together to deliver
something that is practical and tangible.’ Certainly I
think the evidence is that, where people have
flexibility, discretion and the ability to make
decisions which are relevant to local people, then
those services will be better quality, more relevant,
more accessible and probably be better value for
money as well. For me this journey on the balance
between central and local is very much about what it
can do rather than simply an academic, intellectual
exercise in a constitutional framework.
Q578 Chair: In that context then, the Government
has reduced the number of performance indicators
but there are still 200 indicators. Is that still on the
way to even fewer or is that what you regard as a
light touch and an appropriate balance?
Hazel Blears: If you look at the scale of the reduction
from 1,200 to what was initially 198 and is now 189,
then I think that is a significant change. That is not
just fiddling about at the edges of a performance
framework, that is a significant change. I think the
indicators have got to retain suYcient breadth to be
able to cover the range of services that we are
looking at and now that we are looking in a
partnership sense, the CAA (Comprehensive Area
Assessment) will be an assessment of how well the
partners are working together across this range of
indicators, I do think that you need some breadth. I
would not say to the Committee that I envisage us
moving towards a situation where perhaps we only
have a dozen of those indicators and it may well be
that in the current economic circumstances we need
to look at some of the content of those indicators,
are they reflecting the priorities of changed
circumstances for example. I think we have made a
big shift. If we can do more and it is sensible and
practical to do that, then of course we will consider
it, but I would not want to give the Committee the
sense that we are moving away from a broad spread
of indicators because the job of local agencies now
is really quite complex and it delivers across a whole
range of services. If this is the only place where the
conversation and the interface is taking place
between central government and the locality, it has
got to have enough strength and depth to be able to
cover it.
Q579 Chair: If local government and other agencies
in a locality are delivering a good level of service that
their local community is happy with, do you believe
they require the same degree of central control as
maybe the less satisfactory authorities?
Hazel Blears: I think this debate has been raging for
quite a period of time and the direction of travel has
always been that when local government and its
partners improve their performance, then that is the
point at which the centre can step back. I absolutely
subscribe to that, where there is excellent
performance, where local authorities and partners
are doing well, then there is less need for central
government to intervene. In fact, I think we have got
four out of five local authorities now that are either
excellent or good, which is a dramatic change from
where it was in the early 1990s. As a result of that,
that is why we are seeing the performance
framework change; moving from the 1,200
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indicators, the unring-fencing of funds, the
reduction in specific grants from 83 down to 48 and
£5.7 billion of unring-fenced funds going in, so you
are seeing a lighter touch. I do think it is important
that where you have examples of poor performance,
particularly in sensitive areas as we have seen around
safeguarding of children, just to give a recent
example, then there is the power to have a ladder of
intervention from central government that runs all
the way from an initial discussion to quite significant
intervention if that is required. Basically, this is the
deal: if you are doing well, then there will be more
devolution and more freedom; if you are not doing
well, then there will be more intervention.
Q580 Anne Main: Can you not accept, Minister, that
at a local level people feel that the big decisions are
taken away from them? That was a frustration that
came through time and time again. They are not
allowed to decide on planning issues, housing totals,
green belt revisions, they are dictated to and they feel
that the control of Government means locally they
cannot make those decisions. Do you accept that
frustration?
Hazel Blears: I accept that sometimes people feel
frustrated if they have a particularly strong point of
view and if they are not able to get a resolution which
accords with what they believe should happen, then
I understand that sense of frustration but, equally, I
would not apologise for saying that there are some
national priorities for the country which are
important for us to achieve. Whether that is
increasing the supply of aVordable housing, which is
a national need for the whole country, or driving our
economy forward, which is absolutely essential at
the moment, I think that it will always be a
negotiation, it will always be a discussion. At the end
of the day I would not apologise for saying that
central government spends public money, it will have
some national priorities, we may well need to talk
about minimum standards in certain areas and I do
not believe simply in a free-for-all and ripping up the
whole of a performance framework. I think there are
things that the country has to try and achieve in
terms of our national interest. I am always
somebody who wants to try and give people as much
say as I possibly can in making that happen, but
sometimes there will be national priorities.
Q581 Anne Main: In which case then local councils
that say, “These are the things we want control over.
We don’t want this to happen, we are not happy for
this to happen”, and they tell you that, basically it is
not going to make any diVerence because you are
saying there are certain things that the centralisation
is going to keep to itself at the centre and dictate to
local people.
Hazel Blears: I think the evidence belies that
proposition. If you look at the performance
framework now, the 35 top priorities that each local
authority and its partners chooses are actually
negotiated with central government. There is a
discussion that goes on and sometimes the locality
will prevail; sometimes the centre will prevail;
sometimes there is a meeting of minds. That never
happened before. Despite us having 189 indicators
that we measure for everyone, the top 35 priorities
for your community are based on the things which
your people say are the most important to them.
Q582 Anne Main: You are aware that in your own
backyard you have some issues over planning and
development and the unhappiness that local
communities feel when they are told they must do
something.
Hazel Blears: Obviously there is a process for
planning whereby there is a planning application,
very often there is a planning inquiry, it might be
written representations, there might be an oral
hearing, people do get a say about what they feel
about their local area and then there is a planning
legal framework against which decisions will be
measured and tested. I think that is a fairly robust
system in this country. There will always be people
who are unhappy at the outcome of a specific
application and I entirely understand why they are,
because that is very important to them. Our legal
framework in this country provides that you can
have a local voice but also then you have to test it
against national planning policy and a planning
framework. Increasingly in the major infrastructure
projects people will have a bigger say than they do at
the moment in terms of making those big decisions
which obviously attract a great deal of controversy.
Q583 Chair: Could I ask you, Minister, whether you
believe you can deliver your current vision for local
government within the current framework or
whether there are further, more radical changes that
you are planning?
Hazel Blears: For the last 18 months or so I have
certainly been on a journey and I think the local
performance framework has been developing very
much in quite an evolutionary fashion but
nevertheless with a clear purpose. If you look at the
Local Area Agreements now, 150 of them with
statutory basis, 35 top local priorities negotiated
with the centre, not imposed, a reduction in the
number of indicators and then if you look at the
Multi Area Agreements—and in fact this afternoon
the Prime Minister signed a further three agreements
in Leicestershire, Liverpool and Pennine
Lancashire—I think that is a big step forward,
relatively new. We have now got ten of those Multi
Area Agreements and there, where local authorities
and their partners are prepared to put their
diVerences to one side and say, “These are our
priorities around planning, housing, transport and
skills”, key economic drivers, again they will get
more devolution from the centre, not just from CLG
but from DIUS (Department for Innovation,
Universities and Skills) and DCSF (Department for
Children, Schools and Families) and I think that is
the next big stage. We have then got the Bill in
Parliament at the moment which, where local
authorities want it, will give a statutory basis to the
MAA (Multi Area Agreements) in terms of an
economic prosperity board. Then with the
announcement of the PBR, made by the Chancellor
we expect to approve at least two applications,
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providing they are good enough quality, for people
to go even further along that journey of getting
devolution or funding and authority from the centre
towards the sub-regional economy, which will help
not just to cope with the downturn but absolutely
critically get us in a position that when the economy
turns up, those areas will be able to drive future
prosperity.
Q584 Chair: There are no more radical changes
beyond that?
Hazel Blears: No. That is quite a radical journey for
me. It leaves me slightly breathless, let alone the
people out there who have got to deal with it.
Chair: We are going to explore the response of other
government departments slightly later on so if we
could not go down that route now.
Q585 Sir Paul Beresford: I was going to touch on
that but the answer will obviously come later. I hear
what you say about targets, et cetera, and what local
government is saying is the same thing and you have
reduced the number of targets but other departments
have not but this is going to be covered later. In fact,
the claim by much of local government is that the
number of targets from other departments has
increased. Where your Department is concerned
they listen to the partnerships ideas and they go
along with them and so on, but they find that rather
than having targets, they have got audits, reviews,
reportbacks and volumes of papers, which make the
matters and their diYculties just as great as they were
before. In doing your partnerships are you conscious
of the fact that local government does not want you
on their back and need not have you on their back
as they progress through these agreements?
Hazel Blears: Yes, I am very conscious of what the
Chair said at the outset, that people acknowledge
there had been a shift but wanted to go further and
that is always going to be the case, that people are
ambitious to do more themselves and to have more
autonomy. I am very conscious and aware, and I am
monitoring this very closely, that when we reduce
targets sometimes there is a temptation for people to
institute softer controls, whether that is reporting,
accounting frameworks, whatever. I am keeping an
intensely close eye on all of that because what I do
not want is for our genuinely devolutionary, lighter
touch framework to be thwarted by people wanting
to come in at the edges with other forms of control.
When you say that other government departments
are increasing their targets, then we will explore that
later but certainly that is not my sense at all. As
CLG, we are keeping a really close handle on all of
this on behalf of the whole of Whitehall.
Q586 Andrew George: You just described local
government as being genuinely devolutionary and
lighter touch, that is your approach. Why has most
of the evidence to this inquiry so far concluded that
the power has become, and remains, too centralised
in this country?
Hazel Blears: I think I could probably explain that
by saying that most of the people who have given
evidence were the people who said that perhaps. I do
not know, I have not read all of their evidence and I
will make it my business to familiarise myself with all
of that. It is probably from people in local
government who want to do a great job, who are
eager to have more responsibility. I hope they are
eager to have the accountability that goes with
responsibility and power—and I am sure they are—
and they will keep pressing me to do more on behalf
of central government. I think that this Government
has shown a great willingness to take steps in that
direction through LAAs (Local Area Agreements),
MAAs, the Sub-National Review, the Reduced
Performance Framework but, as I said before, it has
to be a deal and this has to be about delivering
tangible improvements for local people. Now I think
the system is beginning to change, but I am
ambitious as well for this agenda. I would like to see
more genuine partnership working. At the moment
we have got the duty to co-operate, which goes
across public services at a local level into the Health
Service, the police service, those partners. I would
like to see that have more content to it and one of the
things I would like to explore is whether or not we
could do more pooling of budgets. We have now got
targets, inspection regimes and the indicators
aligned. I think there is more we can do in changing
the system to free up people to be more innovative
and say, “Look, this is our problem in our area. We
have all got these budgets. How can we bring them
together in order to get better value out of what we
want to do?” That is the next stage on and that is
something we need to explore.
Q587 Andrew George: If I give the example of
Professor George Jones and Professor John Stewart,
in their evidence to us they listed the prescriptive
legislation, the proliferation of targets and
performance measures, inspectorates, audits, threats
of intervention from central government, centralised
financial arrangements, the movement of functions
away from local authorities and boards, quangos,
the requirement to submit plans to central
government on a regular basis and of course the
competition for funds for, in fact, what are core
statutory duties or rather should be. Do you
recognise that general pattern of treating local
government in that manner?
Hazel Blears: No, I do not, genuinely. I would say
that there is a direction of travel here and I think we
have gone in the opposite direction in recent times. I
have not had a sense of more centralisation, in fact I
am constantly negotiating with my colleagues across
Government about how can we devolve more, how
can we free up people more. Getting from 1,200 to
189 indicators did not happen by accident. That was
a very tangible change.
Q588 Andrew George: You got up there in the first
place.
Hazel Blears: I do not recognise that caricature of
the picture. I would put back to local government a
little bit of challenge around some of the powers that
we do have now: the power of well-being, which is
recognised by nine out of ten local strategic
partnerships, only used by one in 12 local
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authorities, the powers around prudential
borrowing which are only used, I think, by 60 per
cent of local authorities and the trading powers,
again perhaps not utilised to the extent that they
could be. My challenge to local government is that
where there are powers, before asking for more
powers let us make sure that we are using all the
powers we have got to their fullest extent.
Q591 Sir Paul Beresford: Would the revenue side of
capital and the stranglehold on that be one of the
reasons for the diYculties on borrowing?
Hazel Blears: I have not received a specific response
on that from either the LGA or local authorities and
it is a prudential borrowing regime so we have to
make sure that the decisions taken under it can be
repaid and that it is a prudent regime.
Sir Paul Beresford: That is a yes.
Q589 Andrew George: For example, the South West
Regional Spatial Strategy, many years in drafting,
local authorities coming together to produce a plan
which then after a great deal of preparation inquiries
themselves, then the Secretary of State’s response
was almost an entire rewrite of the project itself.
Hazel Blears: Mr George, perhaps I could
congratulate you on raising the RSS (Regional
Spatial Strategy) in the South West. You will know
that I am not in a position to comment on that detail
and if I say to you that I am very, very conscious of
the breadth of views that were expressed,
particularly in the adjournment debate and various
representations that have been put forward to me.
Because of propriety I am not in a position to
respond, but I do acknowledge the strength of
feeling around all that and I can assure you that all
of those responses are now being properly analysed
and taken into account.
Andrew George: I realise the context and I do
apologise, but I would urge you to look at the very,
very comprehensive rewrite of that particular
document as an example.
Q592 Andrew George: I think the questions about
rewarding high-performing local authorities have
largely been covered. If I may, we will move on to the
question of the public perception of devolution and
whether your Department has undertaken any kind
of assessment of public support for further
devolution, whether the public is happy to see the
Government stepping in and taking decisions on
many occasions over the heads of local authorities.
I know that you do not agree with that
characterisation of the way things operate, but has
there been any kind of assessment of public
perceptions within the Department?
Hazel Blears: The public perception surveys that we
do really centre around the standard of services that
people get, whether the streets are cleaned, what is
their perception of antisocial behaviour. The Places
Survey is a regular survey about how people perceive
that so that does not really address the issue and it
is a fairly academic question to put, “Do you want
Government to step in?” I think what you find is
when you get a real problem, a problem on the
ground, for example with the Haringey case, then
absolutely people expect not just central government
on its own but they expect the people who have the
power to do something about things to act.
Similarly, with the economic downturn I think
people expect both national and local government to
act to help them through the current diYculties that
people are experiencing. I do not think people would
subscribe simply to a free-for-all, tear up all your
performance regime, let the local people make the
decision, irrespective of whether it is good, bad or
indiVerent. I think people have an expectation of the
Government they pay their taxes to, both local and
national, to deliver for them.
Q590 Chair: Secretary of State, to pick you up on the
list you gave of powers that local authorities have
but are not using, or rather not all of them are using,
and ask whether the Department has asked local
government why they are not using them, for
example prudential borrowing might not be being
used because of the fear that the higher interest being
charged would then lead to a council being capped?
Hazel Blears: Yes, in fact I think John Healey has
written to the local authorities to raise these issues
with them about the various powers that are
available, are there any barriers to them using these
powers and we are more than happy to explore that
with them. We did make some changes to the
prudential borrowing regime last year with, I think,
the MRP (Minimum Revenue Provision) figure
which is the amount you have to set aside in order
to meet the repayments to try and make it a little bit
easier. If you look at the prudential borrowing
regime post-2004 and compare it with the pre-2004
regime, it is an awful lot more flexible than it used to
be, you only used to be able to borrow from a certain
group of lenders, it was a very constrained regime. It
is freer now and we are certainly trying to say to local
government, “Look, are there any issues around
this?” I was not making a cheap point at all, I was
just saying that there is always pressure for more
powers. We have got to make sure we are utilising the
ones that already exist in the best way.
Q593 Andrew George: Yes, except that you have
never asked the question, in other words, of who
should decide housing numbers, how aVordable
housing should be met, how economic development
funds should be spent, local people elected locally or
government quangos or government ministers, you
have never asked that kind of question. You have
asked about the service and service delivery but you
have not asked where those decisions should be
made.
Hazel Blears: I think probably the most helpful
information we have got is from the citizenship
survey that we do, again, on a regular basis, which
asks people do they feel they have any influence over
decisions which are made that aVect them and would
they like to have more influence. That information is
very interesting because I think something like 70
per cent of people say they would like to have more
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say, less than 40 per cent of people feel they do have
an influence over the things which happen locally,
therefore that is the reason why we have done the
Communities in Control White Paper, why we have
got the provisions in the Bill in Parliament at the
moment to try and give local people a bigger say.
Now we can have budget meetings at local level
where people can have a say. Hopefully we will have
participatory budgeting in 50 local authorities by the
end of the year. That is beginning to happen more
and more because people do want a say, they do not
necessarily just want their elected organisations to
make the final decision.
Q594 Chair: Minister, should there not be a
distinction between issues where a decision taken in
one locality will have an eVect in other authorities or
as part of a national target? We do not want to go
into the detail, but an issue such as the Baby P case,
where the issue was children’s services in a particular
council area. Is it really sensible, for something
which was entirely under the control of the local
council, for public opinion in this country to focus
on the Secretary of State to change it rather than
focusing on the council that they elected, which was
actually responsible for the mess-up? That is the
issue about public opinion and why in Britain, as
opposed to Denmark, where we went, for example,
the public seem to hold the Government responsible
for things that go wrong locally rather than the
people actually responsible, which is the council?
Hazel Blears: I think that is part of our culture. If
you think about Nye Bevan who said when we set up
the National Health service, “I want to hear the
reverberations of a bedpan that has been dropped in
the TaV Vale Hospital or whatever, I want that to
reverberate around Whitehall”. When we set up the
NHS there was that sense of it being the big national
institution. Partly that was a reaction to having had
a fragmentary system out there which for the first
time was going to have some minimum standards
and oVer to the whole population. There is
something in our culture which looks to the centre. I
am not saying about the Baby P case because I think
those were very tragic circumstances, but probably
ministers would breathe a sigh of relief if they
thought the small things which happened did not
end up on their desk but unfortunately in this
country they do. What I think we have to then do is
push some of that back to the partners. It was not
just the council even in the Baby P case, that is about
how do you get the system, which includes GPs, the
hospital, the police in some cases, to respond in a
better manner. I do think that is a genuine concern,
both of national government and of me in particular
at the moment, I want that system to be much better
at responding to people’s concerns.
Chair: Can we move on to response to the Lyons
Review.
Q595 John Cummings: Minister, can you tell the
Committee why you have not yet produced a formal
response to the Lyons Report?
Hazel Blears: We were very grateful to Sir Michael
for the report which he did, and I think it was
received formally at the Budget in 2007 and there
was an initial response at that time. Many of Sir
Michael’s recommendations were longer-term
recommendations and he acknowledged that
himself, he said they would stretch into the future.
We have responded to some key recommendations
he made. He said there should be less ring-fenced
grants for local government and, as I said, I think we
have put in £5.7 billion extra in this three-year
settlement out of ring-fenced grants into the general
grant. Sir Michael wanted more flexibility for local
government in that way. He wanted there to be less
funding streams and I think it is fair that we had too
many diVerent funding streams which made people
work in silos rather than work together, those have
gone down from 83 to 48. He wanted us to reduce the
performance indicators because he thought there
were far too many and far too detailed and we have
gone down from 1,200 to 189.
Q596 John Cummings: Why have you not responded
formally?
Hazel Blears: We never intended to do one single
response to Sir Michael. As I said, we have done at
the Budget 2007, and as we have made these various
changes, we have drawn on Sir Michael’s evidence
and his report in quite some detail. Many of his
recommendations were very useful; some others, we
have not adopted.
Q597 John Cummings: You do not intend to respond
formally?
Hazel Blears: No, not afterwards, but we will
continue to draw on the recommendations he has
made.
Q598 John Cummings: So you do not intend to
respond formally?
Hazel Blears: No.
Q599 John Cummings: Can you tell the Committee,
which of the Lyons’ key recommendations have you
implemented?
Hazel Blears: I have just been through some of those
in terms of finance, performance framework and the
freedoms and flexibility for local government to
identify its own priorities.
Q600 John Cummings: So it is ongoing?
Hazel Blears: Yes.
Q601 John Cummings: How do you monitor it and
how do you ensure that recommendations are taken
onboard and are implemented?
Hazel Blears: When we are developing our policy
programmes and our direction of travel between the
central and local relationship, then we are always
aware of the work Sir Michael did, the
recommendations he made and his report. As I said,
some of them were immediate things we could do,
some of them are much longer term, but we will
constantly be drawing on the work he did.
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Q602 John Cummings: You are incorporating them
into your overall future strategy?
Hazel Blears: Yes. That is a much better way of
putting it than I did!
Q603 John Cummings: What further plans do you
have to make sure his recommendations are
implemented?
Hazel Blears: We would not necessarily implement
every single one of Sir Michael’s recommendations,
and we will be very clear when we adopt his evidence
and his analysis in forming our future strategy as you
put it, Mr Cummings, that is what we are doing.
Where we decide not to take a step, again we will be
clear about that. For example, the issue about
revaluation for council tax purposes has been raised
on a regular basis. We have taken a very specific
decision not to revalue in the lifetime of this
Parliament. Our current three-year local
government finance settlement lasts until 2011-12, so
that will be beyond where we would have a
parliament in any event. That is one of the
recommendations where we said, “No, we don’t
intend to do that” and we are very clear about that.
Q604 Chair: Secretary of State, do you think it was
a good investment of two years of Sir Michael
Lyons’ time to bring forth the report, where, frankly,
the Government has rejected almost every radical
change, it has just done a few moderate tinkerings?
Hazel Blears: I would contest that changing the
performance framework in the way we have is only
a modest reform, I think it is very radical. As it plays
out, the whole architecture of the relationship
between the centre and the locality has changed and
will continue to change. I think it is by having a
framework in this way that you are able to get real
change. It is very easy to say top-line messages about
a desire, a direction of travel, giving local people a
say, the challenge is how do you have a system which
maintains it for the long-term going forward which
is not just about local government, but draws in the
Health Service, the police, Jobcentre Plus and a
whole range of agencies. I think you are seeing a
radical shift. If you combine that with multi-area
agreements, city region economies, you start to see a
real shift in the balance of power between the centre
and the locality. I think it was an excellent use of Sir
Michael Lyons’ time and eVort and we draw on his
analysis in our policy-making.
Q605 Anne Main: Minister, can I take you back to
the revaluation of council taxes. One of the
fundamental parts of the report was an area being
able to get more of its funding based on the
properties that it has there. It was felt at the time,
being rejected within hours, given that it was so well
considered by Sir Michael Lyons, that it was rejected
for political reasons rather than given any real
consideration about whether it would deliver better
funding for local areas. You have just touched on the
fact that it was for the life of this Parliament. Does
that mean that perhaps that council tax revaluation
would come back in in some way, shape or form or
are you fundamentally opposed to it?
Hazel Blears: I am certainly not going to set any
hares running at this Committee and I want it to be
very clear, that was a decision we made because
various people have tried to say there was an
imminent revaluation and there is not and we have
been very clear about that.
Q606 Anne Main: The life of this Parliament is until
2010, there is not exactly very long to go.
Hazel Blears: Indeed.
Q607 Anne Main: Are you saying it is rejected out of
hand because fundamentally you disagree with it or
just for the life of this Parliament?
Hazel Blears: I think it was right that we made a
decision quickly in order to give people certainty
because if we had not done, then all kinds of
speculation, which certain parties have tried to
revive, would have been out there.
Q608 Anne Main: I am still trying to understand why
it was rejected.
Hazel Blears: It was rejected to give people certainty.
Secondly, because Sir Michael Lyons himself in his
report said that it was not necessarily the case that if
you had a larger local income stream people would
feel more control, and he did not necessarily say this
was a panacea. Thirdly, the amount of disturbance
to people, the numbers of winners and losers in the
system outweighed the benefits of adopting that
course of action, therefore we decided to reject it and
I think it was the right thing to do.
Q609 Anne Main: It is rejected for the life of this
Parliament.
Hazel Blears: I have been very clear about that.
Anne Main: But not fully rejected.
Q610 Mr Betts: Secretary of State, I am sure around
this table we would all accept your personal
commitment to devolution and working in
partnership with local government and, indeed, the
same would be true of your colleagues within CLG.
We all know, do we not, that enthusiasm does not
always extend to other colleagues and other
departments and, indeed, to other departments and
their oYcials, does it?
Hazel Blears: I have been encouraged and heartened
by the response, not just of my political colleagues
but of the Whitehall system. It would be wrong of me
to come here and say that it has not been a challenge,
on occasions, to get down from 1,200 indicators to
189. It has required a huge amount of work,
explanation, persuasion and negotiation, but I think
the fact that we now have this architecture accepted
by the whole of Whitehall, as the place where the
conversation and delivery will happen of their own
PSA (Public Service Agreements) targets, is a
significant accomplishment. I really do believe that.
The fact that we had permanent secretaries from
other government departments as negotiating
champions in the LAA process really did bring home
to them how important it is to try and give the local
delivery partners some flexibility about meeting
those targets. There is an acknowledgment now
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across Government that you can hit every target but
not deliver the things which are important to people.
That acknowledgment is growing. I still think we
have further work to do but I genuinely have a sense
that it is growing.
Q611 Mr Betts: I might push you on the ‘further
work to do’ because if you talk to people in local
government, they will say to you, will they not, there
is a diVerence in culture in diVerent Whitehall
departments and that some are much more receptive
to that form of working than others? They might tell
you that trying to get Jobcentre Plus to work in cooperation at local level is not always the easiest thing
in the world. They might tell you the Department for
Transport sees Local Area Agreements and regional
arrangements as ways in which national policy
should be implemented, another vehicle for doing
that, rather than a way in which policies can be
changed by discussion. The Department of Health
lives in another world of its own, does it not? We had
the Minister, Ann Keen, before us a few weeks ago
and she saw local authorities as being able to
comment on what the Department did at local level
or even monitor it, but the idea that they would
really have any eVect on decisions was something
which could not be contemplated. That is almost the
evidence we had, if you have read it.
Hazel Blears: Let me deal with those various things.
In terms of the NHS, I think what you will find now
in many local authorities there is joint
commissioning going on, whether that is for social
care or other broader services. There are quite a few
now where we have got joint appointments,
particularly around the public health agenda.
Traditionally, public health was a local authority
function before it went to the NHS, now it is very
much back in local authorities’ purview. That is why
I made the point at the beginning about the power of
well-being. I think there is a lot more which could be
done around this economic, social and
environmental well-being agenda which would give
local authorities more of a grip and a handle on some
of these other areas. At the moment we are working
on trying to align some of the operating framework
of the NHS with our performance framework
because, you are right, if one section of your system
is looking to the centre and up rather than looking
out to its citizens, which is what we are trying to get
the whole system to do, then you are in danger of
getting a dislocation there. I think there is more work
to do, particularly with health, to try and align some
of the operating framework, which is their kind of
‘must dos’ in the system, more with the local
properties which local people are setting. I do think
there are places now where they have acknowledged
that getting local government and health really
working together gives you better value for money.
Again, services would be more accessible and more
relevant and if you look at social care, where we are
working together now on the Green Paper, that is the
biggest challenge this country is going to face,
therefore having more local authority health service
co-operation will be essential.
Q612 Mr Betts: I was interested that you are putting
it in the context of moving in directions rather than
having got there yet. One of the ideas which has
certainly been around, given the split in the Health
Service now between the deliverers in the trusts but
also the primary care trusts who commission, would
be the possibility of introducing an element of
accountability and democracy back into the Health
Service at local level by having local authorities
having the right to do the PCT jobs as
commissioning, in other words take over the
function of a PCT at a local level, particularly in
those areas where the boundaries are co-terminous.
Maybe even if that was a step too far to do it in total,
to at least allow one or two pilots to be generated in
local authorities which have got very high
performance ratings. Would you favour us at least
looking at that as an approach? Go on, say yes, it is
quite easy!
Hazel Blears: One of the reasons why I am pleased
the Committee has embarked on this inquiry is
because I think it is right to challenge the services
and to say, “Is there more you can do through
collaboration
and
partnership?”
because
partnership is a much abused word which, if we are
not very careful, ends up as a process when it should
be about making decisions and delivering. In terms
of the commissioning, I am pleased that we are
making some progress; I would like to see us making
more and faster progress, particularly on joint
commissioning. I do not necessarily think one party
should take it over from another party because then
you tend to get boundary disputes and empire
arguing. What you need to say is what are the skills
you require to have competent commissioners who
are accountable and are prepared to explain the
decisions they make to local people and what
operating framework do you have which sets the
standards for that? Again, I think there is more work
we can do with local government and with DH.
(Department of Health) As I say, we are working
with them on world-class commissioning and they
have been very, very open to that agenda. You are
pushing me, Mr Betts, and I am keen to push to get
more synergy, but I do not think I would frame it in
the way of local authority taking it over from the
Health Service because I think that is a bit of a recipe
for arguing about who does what rather than the
more important thing, which is what do local
people get.
Q613 Mr Betts: Let us put it another way then, a
PCT is currently an appointed body, it is a quango at
local level. Ultimately, there is only one accountable
person, who is the Secretary of State, for every single
thing that PCTs do in terms of democratic
accountability. Would it not be better at local level to
have this PCT comprised of elected people
accountable to their local community rather than
appointed people with everything eventually
ultimately having to end up on the Secretary of
State’s desk?
Hazel Blears: It is not for me to make policy on the
constitution of the NHS at this meeting, but what I
would say is I think there is benefit to having
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accountability which is more out to local people
than always up to the centre. There are some ways in
which you could achieve that. I am very interested,
for example, in the Foundation Trust model that we
have got for hospitals. There is far more that can be
done in terms of membership, governance and
accountability. The possibility of looking at
Foundation Trusts around PCTs, that is a debate
which has been around for quite some time and who
might be the membership of that and how you might
have some say around that. As I say, it is not for me
to determine governance of the NHS, that is a matter
for the Secretary of State for Health. What I want to
try and achieve is that the system which provides
healthcare, local authority services and community
safety, so it includes the police, does have some
coherence so that people act together. That is why
aligning inspection, targets and budgets is a way to
achieve that kind of synergy which is better.
Q614 Mr Betts: Fine, but can I put it to you that at
the end of the day, local people will only really see
that if they think they can influence it themselves and
the influence which local people ultimately have is by
elections. If those decisions are made by people who
are not elected, then in the end the public are not
going to wear this, are they, they are not going to
wear the fact that there is any real change? You can
have all these new committees in the world and all
this joint working but, ultimately, if they cannot
change the people who make decisions through the
ballot box, it really is not change at all, is it, as far as
the local community is concerned?
Hazel Blears: There have been a lot of surveys
around the Health service and some people will say
there is not an appetite for people to vote for people
who make the local decisions. That is an argument
still very live out there. Again, I would contest
whether or not the right to vote every four years is
the only way in which people can have influence and
accountability on public services. One of the reasons
I am doing participatory budgeting, the asset
transfer programme, the expert patients’
programme, for example, in the National Health
Service, where local people get to design the service,
is because that is a real way of influencing change.
The fact that we are extending the duty to involve
people, a statutory duty from April to involve the
community in all kinds of decisions right across the
partners at local level, will probably do as much in
terms of changing the system as anything else that
we could put in place. It is not just about voting, and
obviously it is a current debate as to whether or not
there should be elections in the Health Service.
Sir Paul Beresford: To follow on from what Clive
was saying, it was not so long ago that local
authorities would appoint a councillor or
councillors to NHS quangos. That is an approach
along the line that he is suggesting, what is wrong
with that?
Mr Betts: The Community Health Council.
Q615 Sir Paul Beresford: No, not the Community
Health Council.
Hazel Blears: No, in very many cases local
authorities have members of their PCT, they have
members of their hospital.
Q616 Chair: Secretary of State, I will have to stop
you there. We had this argument with the Health
Minister. It is not the same thing having a person
who is elected appointed to a PCT as having a
person elected to a PCT. We have been around that
one with the Health Minister and we were not
convinced.
Hazel Blears: No, I thought Sir Paul was asking me
whether or not there was a provision for them to be
on the board and clearly they can be on the board
and in very many cases they are.
Q617 Anne Main: Why do you think many local
authorities take the view that other government
departments are still very centralising and do not
help you deliver your agenda, they are delivering
their own agenda?
Hazel Blears: They are not delivering their own
agenda. If we look at Government departments and
say somehow their agenda is not the people’s
agenda, I think—
Q618 Anne Main: Communicating your vision to
other departments was a criticism in one of our
earlier reports.
Hazel Blears: When you say ‘departments delivering
their own agenda’, for example, if you are in DCSF,
you are not about delivering DCSF’s agenda, you
are about improving Early Years, you are about
improving education standards in schools; if you are
in DIUS, you are about improving access to further
and higher education. This is what people in their
communities want to see happen. This is not a turf
war and should not be a turf war, “Is it your agenda
or my agenda?”. That is where I started in giving my
evidence to the Committee. It should be about
saying, “What is it that people want and how do we
get the best system which delivers as much freedom
and flexibility out there but commensurate with
improving standards and making a diVerence and
not a free for all?”
Q619 Anne Main: Minister, let me give you an
example. We did a report into community cohesion
and integration and part of the problem they felt was
the agenda to have a greater level of migration had
put enormous pressures on local authorities. I think
you described it yourself as a free for all and local
authorities such as Barking and Dagenham,
Peterborough and Burnley which we went to see
were absolutely tearing their hair out of having to
deliver this immigration agenda without having the
local ability to deal with it.
Hazel Blears: I also talk to very many council leaders
and chief executives. I held a round table on the
impacts of migration just a few months ago. It was
undoubtedly the case that people felt there were
pressures and we tried to ensure that they were in a
position to meet that with the extra £50 million for
cohesion—I am smiling at the Chair, the Chair well
knows, she and her authority have been very keen on
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all of this—and trying to make sure the figures in
particular were more up-to-date than they currently
are in terms of the settlement. Equally, other people
in those communities were saying at that time their
economies would have struggled enormously if they
had not had the migrant labour to be able to fill those
jobs. That is a diVerent situation now.
Q620 Anne Main: I think if you read our report on
that, Minister, with all respect, it was the pace of
change, it was the fact that local areas felt imposed
upon in terms of how much was expected to happen
and without any real consultation with how they
could deliver it locally and it was that tension which
was reflected in the range of councillors that were
suddenly elected, for example, in Barking and
Dagenham who were supported by BNP (British
National Party). That came through really, really
strongly from various ethnic groups that were there.
It was the fact that the community felt imposed upon
and were not consulted with. That is why I am saying
other departments can wreck your consultation or
wreck your desire to have local democracy working
at a local level if people feel imposed upon by other
departments who say, “We’re actually going to
deliver this agenda”.
Hazel Blears: That is why it is important that we
have a system, as I was explaining, so you do not just
get one-oV decisions that can cause huge diYculties
locally, and that is why I think we have more work
to do with other government departments to try and
make sure that the conversation that happens
through the local area agreements, the relationships
that are built up with local partners, are robust,
strong and sustainable. That way I think you
minimise the prospect of people being faced with
surprises from out of the blue which are diYcult for
people to cope with, and I acknowledge that. I think
we have more work to do on getting those
relationships right, but this is the first time we have
had a system that enables that to happen.
Q621 Mr Hands: Can I just come in on that,
Secretary of State? How much work have you done
with, say, the Home OYce representing local
authorities? It is not just about other departments
delivering to local authorities; it is also representing
the views of local government to other government
departments. How much eVort have you put in in
recent months to represent the views of local
authorities to the Home OYce in regard to
immigration?
Hazel Blears: I think it is fair to say that my
relationships with the Home OYce are second to
none. A huge amount of the work that the Home
OYce has responsibility for impacts on local
communities, whether it is immigration, whether it is
guns, gangs, knife crime, young people or antisocial
behaviour. All of these are absolutely top priorities
for local communities. That is why many of the
indicators are in the top 35 priorities that are chosen.
My relationships with the Home OYce are extremely
good. I personally, as does the Home Secretary, put
in a huge amount of eVort to making sure that we are
informing people about the views. In fact, the Home
Secretary has attended, together with myself,
various joint meetings of local government and
policing. We work very closely on the Preventing
Violent Extremism agenda. There is no question
about that.
Q622 Mr Hands: Okay, but the question was how
much have you represented the views of local
authorities, both collectively and individually, to the
Home OYce on the subject of immigration. Your
comments were about the immigration free-for-all,
for example. Is that something that you have said to
the Home OYce you believe is what local authorities
are feeling?
Hazel Blears: I have communicated the views of
local authorities after holding round tables, so they
are not my own views but the views of local authority
leaders, both to the Home OYce but also more
widely across Government. If, Mr Hands, you had
seen the Migration Impacts Plan that we published
about six months ago you would have seen that that
was a document based on a cross-government
approach, not just Home OYce, not just CLG, but
looking, for example, at Children, Schools and
Families, at the impact in education, the need to get
extra teachers in, the impact on the Health Service. It
drew together the responses and the practical things
that we could do to ensure that the impact of
immigration on some of those communities that
have not experienced it before was mitigated as far
as it possibly could be.
Q623 Mr Hands: So can I ask you if it is your view
that local authorities do think there is an
immigration free-for-all in this country, or is that just
your own view?
Hazel Blears: No, and that is not what I said. The
situation is that we did have a massive spike in
asylum applications some years ago. That has now
reduced dramatically in this country, and I think the
introduction of the points system, the much firmer
immigration system that we have, the border
controls, which are now much more rigorous than
they were previously have helped achieve that. If you
talk to people in local government they will
acknowledge that some years ago there was a big
increase. I think it is a diVerent situation now. It is
still there, particularly from eastern Europe, but I
think most local authorities will acknowledge that
steps have been taken to try and ensure that the
impact of those changes to communities has been
mitigated as far as it can be.
Chair: Just before moving on to Dr Pugh, can I make
the point that it was the lack of local tax autonomy
and the lack of flexibility on the part of councils to
raise additional finance which exacerbated the
inability of the councils to respond to rapid change?
That is a very strong argument as to why greater
flexibility on the part of local councils on the
financial front would enable them to respond to
rapid changes in a local sense, whether it is migration
or anything else.
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Q624 Dr Pugh: Can I ask you about Whitehall
culture? Do you think within the corridors of
Whitehall there is a good understanding of local
government or in fact much respect for local
government? My suspicion is that there is a slightly
dismissive attitude towards local government.
Hazel Blears: Because I am an optimist I think it is
improving. I think probably in the past there was not
a great deal of experience of local government
finding its way into Whitehall. I think many of us
have now tried to get secondments, exchanges, have
tried to get some of our civil servants working in
local government and in local delivery
organisations, and I think there is a much better
understanding of what local government can do. If
there was not I do not think you would have seen the
sign-up to local area agreements in the way that we
have seen happen in the last 12 months; I genuinely
do not think you would. If there was not respect for
the fact that local government has improved its
performance dramatically in the last ten years to the
point where four out of five are good or excellent,
again, you would not have the trust of the centre to
be prepared to depend on local partners to deliver
the PSAs. We have many more central techniques for
trying to get round that system, so I think it is
getting better.
Q625 Dr Pugh: I am moving onto local area
agreements, but can you give us any kind of figures
or data that indicate the number of top civil servants
in your own Department that will have local
authority experience? Have you any idea what
percentage of them would have either worked for a
local authority or been on a local authority?
Hazel Blears: I do not have the figures. I think it is an
excellent question and I will find out because I would
love to know.
Q626 Dr Pugh: Could you couple that with a note on
the number of heads of government oYces in the
various regions that have had direct experience of
local government? Turning to local area agreements,
they sound a jolly good thing, but if, say, by happy
mischance they should all be lost one day--and they
do contain a lot of things local authorities would do
anyway along with a couple of things they say they
are going to do because the Government wants them
to do them—but if Local Area Agreements
disappeared how would things be diVerent on a dayto-day, practical basis?
Hazel Blears: First of all I think you would lose your
focus on the things that really matter. When we had
1,200 priorities it was very diYcult to say that
anything was a real priority. When you have 35 it is
more realistic to be able to say that we are going to
focus all our eVorts on these particular things that
local people have told us are important to them, so
I think you would have less focus. I think you would
have much less systems change to draw in the other
delivery partners, whether it is Jobcentre Plus,
whether it is the Health Service or the police, or,
indeed, the private sector and the third sector which
are essential partners of the local area agreement. I
think you would probably also see much wider
variation in performance because it would be very
diYcult to see who was really good at doing
whichever bits of business there are.
Q627 Dr Pugh: So your honest belief is that there
would be less partnership working around and less
focus? Local authority activity would be more
diVuse?
Hazel Blears: I do not think it is the agreement per
se, the words on paper, that give you that but the
framework that says to local partners, “The idea is
that you all sit round”—in a meeting like this—“and
say, ‘What are our top problems here that could be
diVerent from another place and how are we going
to bring our energies, our money and our skills and
expertise on those things that really matter to local
people?’”.
Q628 Dr Pugh: And if a formal agreement was not
there that would happen rather less?
Hazel Blears: I think so.
Q629 Dr Pugh: We mentioned briefly before multi
area agreements and how they fit into the local
agenda. I think you said that the more of these there
were the more local authority would be dispersed
from the centre. There is a trade-oV here though, is
there not, because if, just for the sake of argument,
Salford agrees to a multi area agreement in the
Manchester area, the priorities are not necessarily
the top priorities of Salford; in every respect they will
be the top priorities that are shared right across the
piece. If you are an ordinary citizen of Salford
though and you are looking at it and you are told
that as a result of this agreement with the other
authorities there is more freedom around, how
would that register? Might you not think you have
actually lost just a little bit of control over what is
happening around you?
Hazel Blears: If the alternative is that those decisions
are made in Whitehall then if those decisions are
going to be made in greater Manchester you might
feel that you have got a little bit more influence, a bit
more power, because you elect the people who do it.
Q630 Dr Pugh: But you might think that some of
your metropolitan district powers have been sucked
upwards and there has been a loss there as well as a
gain from Whitehall.
Hazel Blears: I see the point that you are making.
That is absolutely the reverse of what we want to see
happen through the multi area agreements.
Q631 Dr Pugh: Is it? That is very interesting.
Hazel Blears: This is genuinely about, on strategic
issues like transport and skills which cross local
authority boundaries, inevitably, and drive the
economy, drawing powers down from Whitehall and
certainly not up from the local level. That is
absolutely fundamental to the MAA as a concept. It
is about saying that where you are up for this, where
you are ambitious and you think you can deliver,
then the challenge is to the centre here and to myself
and colleagues to say that we are prepared to let go.
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In fact, the best way to deliver on benefits and skills
in some of these areas is at the sub-regional level, not
at the national level.
Q632 Dr Pugh: Thanks; that is helpful. You did say
earlier on that the basic policy of the Government
was that if people were doing well they would be
given more freedom, and “doing well” was your
expression. When you talk of Haringey social
services and so on you can clearly identify what
doing badly is all about, but would you not
acknowledge that at times “doing well” can be a
matter of political contention and debate? If I can
give a historical example, Derek Hatton thought he
was “doing well” when he was building lots of
council houses in Liverpool but central government
did not. Can you not see that it is not as
straightforward a principle as you might think?
Hazel Blears: Yes, I can see that. What I would say
is that if you have a system and I am sorry to say this
“S”. word so often because I am not a technocratic
junkie, but I am quite excited by the LAAs, the
MAAs and the new comprehensive area
assessments. I never thought I would be excited by
alphabet soup in this way, but if you have a system
for saying locally what really matters to you, when
you have a system that says in your sub-region how
you are going to drive the economy and how you can
get more freedom to do that, and then if you have an
inspection regime that instead of, as the CPA
(Comprehensive Performance Assessment) did,
measuring an individual’s performance, but actually
measures whether you are making a diVerence in
your whole community and that the measures in that
CAA are much more about citizen perception—
what do people think, whether the outcome is right,
are you doing a good job, are you doing a better job
than you used to do, you have got bottom-up
pressure then in a system which genuinely means
that the centre can step back because you will have
got more of this grit in the system.
Q633 Dr Pugh: So a local authority that satisfied its
citizens, even if it did not do exactly what the
Government wanted it to do in terms of priorities,
would still be considered by the Government as
“doing well” in some sense?
Hazel Blears: I think so, and again one of the reasons
that the CAA is quite a big shift into citizen
perception and outcomes which will be measured
under the place survey and some of the citizenship
survey is to say, “What do your people think of
you?”. The police have just changed their
performance framework so that they only have one
target now and that target is about local people’s
confidence in whether or not the police are doing a
good job locally. That is a massive change in a
performance framework to citizen perception and I
think that is really quite a dramatic change.
Q634 Chair: Can I just ask about the money in
relation to local area agreements? Where money is
being pooled does your Department have
information on how much of that money is coming
from local government and how much from the
other partners? If you do not have it now can we
have it later?
Hazel Blears: Certainly. I do not have that
information with me but I will certainly ensure that
the Committee gets it.
Q635 Chair: The perception is that it is largely local
government money that is put in and not much else.
Hazel Blears: And not other people’s; right.
Q636 Andrew George: On multi area agreements can
I just be clear how “multi” multi area agreements
have to be? In other words, could it simply be a
partnership of two authorities, just so that I
understand the basis for what you are thinking in
your Department, the size, either in population
terms or numbers of authorities?
Hazel Blears: We have not got a strict limit. This has
been again a very bottom-up exercise in that people
have had to volunteer. They have had to come
forward and say what their plans are. I have been
quite heartened by the fact that it has not all been
about urban cities. We have got Bournemouth,
Poole and Dorset working very well. We have got
PUSH (Partnership of Urban South Hampshire),
which is South Hampshire, and I think north Kent at
the moment are in dialogue about these issues. There
was a sense when we first started on this agenda that
it would just be the Leeds, Liverpool, SheYeld,
Nottingham places, but actually groups of local
authorities are now seeing that they have things in
common around their local economy so that by
coming together and pooling their abilities and their
competencies they can make quite a big diVerence.
Q637 Andrew George: Just extending that to the
concept of city regions, you said, I think in
November, that the Government wants to place
those on more statutory footing. I just wondered
how you see the roadmap to delivering city regions
generally.
Hazel Blears: It started as very much a voluntary
process, “If you want to do this and you want to get
these powers, band together, come forward with an
application. We will see if it does deliver and then we
will sign your agreement”. In the Bill now we have
the possibility of having a statutory basis, so you can
become an economic prosperity board—not another
level of government, not a bureaucracy but simply a
more eVective unit of organisation. If you have a
statutory basis then you are a legal personality, so
clearly the prospects of more devolution are more
secure because if you do not have a legal basis then
the governance agreement that you have reached
could be quite fragile. One partner could walk away
and if that happened you would not any longer have
the system to deliver it. That is the next stage, if you
want to be an economic prosperity board, and again
it is voluntary, if that is what you want to do, and
then the announcement at the PBR that we would be
looking for at least two areas which want to go even
further on this agenda.
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Q638 Andrew George: Just to finish oV this point, on
the issue of the city regions in the Local Government
White Paper about three years ago there was a
recognition that there would be a rural equivalent to
city regions where it did not fall within the hinterland
of the city region. Is that something within the
Government’s thinking at the moment, that a rural
equivalent to city regions might be brought forward?
Hazel Blears: I am just thinking about Cornwall at
the moment. It is going to be a big unitary authority.
Q639 Andrew George: What a very good thought.
Hazel Blears: I do not know why I think about
Cornwall when I see you. Obviously, that is a unitary
and a very big unitary, and therefore will have a lot
of clout and ability to make a diVerence. If I think
about one of the agreements I have just signed this
afternoon, that is Pennine Lancashire, not
something people would normally associate with a
city environment, but they have got a lot of relatively
small towns which could be quite isolated up in
Pendle and Accrington, and what they have decided
is that transport is their big issue: how do they get
better transport links so that they can access more
economic drivers? They want to come together on
that. We are not hidebound in one model. It is really,
as I started with in this evidence, what makes a
diVerence for the people out there in terms of their
economy.
Q640 Jim Dobbin: I think it is really interesting that
if you look round the table here most of us have had
long periods in local government, including yourself,
Secretary of State.
Hazel Blears: Including myself.
Q641 Jim Dobbin: And it is going to be interesting at
the end of this evidence-taking session to see just
how many of us are still in agreement with
everything that is decided. I just think it is an
interesting session. My questions are on local
variations in service provision and the standards and
whether those standards should be consistent across
local authorities. Is it acceptable for some councils to
have lower standards of public service than others?
Hazel Blears: I think probably most citizens would
want minimum standards in the essential services
that they rely on for their daily lives. Certainly that
applies in the Health Service in terms of postcode
lotteries, access to drugs. I think it also applies in
relation to education standards in their schools and
the prospects for their children to do well in their
exams and to get on, so I think there are some core
areas where people very definitely want minimum
standards. I think there is room then for variation in
terms of how much money do you want to spend,
how much investment do you want to make, how
much council tax do you want to pay in order to have
a higher standard of service, or have you got a
particular focus. For example, and this is what the
LAA enables us to do, in Leicester they have decided
to go very much for climate change, the
environment, recycling, and make that a really big
theme of the city’s future prosperity, so they might
want to do higher standards than some other place
which has decided on a diVerent theme and vision for
their area. I think it is minimum standards, variation
after that, and absolutely it is a matter for people’s
choice.
Q642 Jim Dobbin: Do you think there are any areas
of service delivery where in some local authorities
they do not achieve those standards, and do you
think that is not acceptable?
Hazel Blears: Yes. If you look at the inspection
regime that we have around the safeguarding of
children, I think there were four authorities that only
scored a one on the recent area performance
assessment, and clearly local citizens will be
concerned about that. That is why we have to have
an inspection process that does draw out where there
is poor performance and why we have to have an
intervention regime that says if things are going
wrong then, quite rightly, steps will be taken to put
them right, and I think that is what local people want
to see happen. Luckily now local authority, in
general, is performing at a much higher standard
than it used to be but there will always be some
outliers on specific issues where they are not as good
as they might be and I think national government
has a responsibility to keep an eye on it, to monitor
it and to intervene if that is necessary.
Q643 Jim Dobbin: Would a power of general
competence make it easier for local authorities to
play a much stronger leading role in their
communities?
Hazel Blears: I do not necessarily think so. What
worries me is that the power of wellbeing is virtually
a power of general competence. The power to do
anything which promotes the economic, social or
environmental wellbeing of your community—I
cannot think of much that falls outside that kind of
definition and yet only one in 12 local authorities is
using that power. We recently wrote to local
government to say, “We are worried about this. Are
there any particular concerns as to why you are not
doing it? Have you got any ideas that you would like
to do but you feel constrained from doing?”, but we
have not had very much back and it will be quite
interesting to see the impact of the Sustainable
Communities Act which asks local authorities and
communities to come up with things that they need
freedom around in order to make happen. I think the
first tranche of those ideas is going to be submitted
fairly soon, but I do not have a general sense that
there are lots and lots of things that local partners
want to do that they are prevented from doing
because they do not have a legal base.
Q644 Chair: Secretary of State, it has been pointed
out to me that in fact there has been a court case
against London Councils challenging them in a
proposal they were intending to do and saying they
could not do it under the wellbeing power. If there
are instances like that where it is obvious that the
general power of wellbeing is not allowing councils
to do it, is your Department monitoring it and will
it be thinking of changing the law so that they can?
Your contention is that councils can already do
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everything, that there is a power of general
competence that will allow them to do that, and yet
the courts’ view is diVerent.
Hazel Blears: I would want to look very closely at
the power that exists, how much it is being used,
what it is stopping people from doing, and if it is
stopping people from doing things which would be
beneficial and are proper things for them to do then
obviously I want to examine whether any changes
would be necessary.
Q645 Jim Dobbin: Clive raised an issue about local
authorities being involved in delivering other
services and he mentioned the Health Service. To be
able to do that would local government need more
powers? For example, another couple of areas that
they might want to get involved in and have been
involved in in the past have been policing and
transport. If they showed a willingness to go down
that route would you be willing to give them more
devolutionary powers?
Hazel Blears: Yes. I think the best example is in the
multi area agreements. As the Local Transport Bill
was going through Parliament there was a provision
adopted that enabled the integrated transport
authorities to align with the multi area agreements so
that you could be exercising transport powers as part
of those city regions and that was a good example of
joined-up government that provided the right
powers in the right place to be able to work on
transport. Over the next few months I am about to
embark on a series of, not visits, but workshops with
local authorities and their partners to look at the
local area agreements and see whether there are
other improvements that we could make at the
centre which would enable them to make more
progress. My first visit is to Barnsley on 26 January
and the Secretary of State for Work and Pensions is
coming with me because Barnsley is particularly
focusing in its LAA (Local Area Agreement) on
worklessness and skills. I want them to tell me what
they are doing first of all in terms of delivery, but,
secondly, whether there are things that we can
change in the system that will enable them to deliver
even more. I am then going to go to Essex and I am
going to Sunderland. There will be a whole series of
these and it will be proper, hands-on work around
the LAA, how they are coping with the economic
downturn, is there more that we can do to free them
up to give them the ability to deliver at a local level,
and I am hoping to take other secretaries of state
with me. I think the one in Sunderland is particularly
around health inequalities. Essex is around skills in
the economy, so that again we get that whole
government approach around what is happening on
the ground as a result of this new architecture.
Q646 Mr Betts: But eventually we have to get round
to money. Michael Lyons said he was disappointed
to some of us but he did conclude that what local
government wanted was not the ability to raise more
of the money it spends itself but the ability to
determine how the money was spent to a greater
degree. Do you agree with that conclusion?
Hazel Blears: That local authorities wanted to be
able to —?
Q647 Mr Betts: That they wanted more power to be
able to determine how to spend the money they had
rather than the freedom to raise the money they
spend.
Hazel Blears: I think local authorities are pretty
sensible about this. They know that there is only a
finite amount of money that you can raise, whether
that is locally or centrally. There is a finite pot
around what you can do and I do think that local
authorities have wanted to have more say about how
they can spend the existing money out there without
necessarily raising vast amounts of extra money. I
would hope that through the new framework that we
are providing they have got more say. They now can
set those 35 priorities, albeit in a negotiation with the
centre, and it is a pretty robust negotiation, but for
the first time they have got that instead of top-down
1,200 indicators and 88 separate ring-fenced
schemes telling them every “i” they should dot and
every “t” they should cross, so I hope they have got
a bit more flexibility. They will always press for more.
Q648 Mr Betts: If we look at international
comparators, and that is not an unreasonable thing
to do, particularly with the democratic countries
within the EU with whom we may have a reasonable
comparison, whatever has been achieved in terms of
extra powers for local authorities—more flexibility,
less control from the centre, fewer targets--in the end
any comparison would show that we are the most
centralised country in terms of one thing at least, and
that is the very small amount of money that local
authorities spend that they raise themselves. We
went on a trip as a committee to Denmark and
Sweden recently where it is almost the reverse
position: they raise more than 80 per cent of their
own funds at local level, not around 20 per cent.
Hazel Blears: Obviously, there are diVerent cultures
and diVerent historical ways in which various
countries have organised themselves in terms of the
balance between central and local funding. I do not
necessarily think that debate is as resonant as it is
portrayed because, no matter where your funding
comes from, you are going to have some kind of
performance framework and if you look at the
performance framework in Denmark and Sweden, it
is there and central government expects certain
things to be delivered. In other places there is less
performance framework than in those Scandinavian
countries, and in fact when I visited the mayor of
Karinya, I think about 18 months ago, I asked him
about his performance framework and he said to me,
“Well, I get elected every four years. That is my
performance framework”. I am sure that was
slightly tongue-in-cheek but there was very little
national determination of what should happen. As I
said earlier on, I do not make any apology for saying
that in this country I think people have an
expectation of a certain level of good services,
whether that is health, local government or policing,
and I do not think they would accept simply, “Here
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is the money. All right, you raise 50 per cent of it
locally. You get on with it and do what you like
with it”.
you have this degree of ability to raise money locally
automatically things will be better in your
community. I do not make that relationship.
Q649 Mr Betts: That does not really answer the
question, Secretary of State, with respect, does it?
You could still have national standards and an
expectation that certain things will be delivered to a
certain standard at local level, but in the end, given
that we have this incredible centralisation of the way
money is raised for local government to spend and
the passing on of that 80 per cent of what local
authorities spend with no discussion at all about
how it is raised or how much is raised at local level,
you have got this incredible gearing factor, so if local
authorities do want to choose to go beyond
minimum standards the impact on the percentage
increase in the council tax is enormous. We know
what the gearing is; it is around four to one. That
means that it cuts straight across local
accountability and local democracy, does it not,
when you have that sort of impact on local decisions
that local authorities take?
Hazel Blears: I think it is a bit of a trade-oV as well
though because if you want to try and have any
degree of equity then the larger the amount you raise
at local level and the more freedom there is to spend
that at local level then again you find the tax base
comes in as part of that consideration. Poorer areas
with a smaller tax base could well find themselves
losing out as a result of that, and I think
Government has a responsibility to look at equity as
well as autonomy.
Q651 Mr Betts: But the type of agreement is then one
you are making as Secretary of State, is it not? You
are denying the right to the local community to make
that decision for themselves.
Hazel Blears: Oh, no.
Q650 Mr Betts: I do not know if you could think of
another country where only five per cent of total
taxes are actually raised by local government and
even then central government caps the amount that
can be raised as well. This is a real constitutional
problem, a complete imbalance between central and
local level. Are we ever really going to tackle the
issue of the almost subservience of local government
to central government and put it on a slightly more
equal footing unless we tackle the taxation issue and
the ability to raise money?
Hazel Blears: I do not see this in the same terms, as
a kind of supplicant master/servant relationship. I
think it is what I have tried to say throughout this
evidence, that I do not think it is the system, I do not
think it is about who has the power in the system
necessarily. I think it is about what are you able to
deliver out there. That is where you get your respect
from. That is where you get the sense that you are an
important player in our constitution, not by, if you
like, winning the argument with the centre. It is
about what can you do to make a diVerence to the
people that you serve. If your system inhibits you
from doing that then you need to look at the system.
If your system is not inhibiting what you can do then
I think the challenge is what is your system now,
what are the bits that stop you doing things you want
to do? Come and tell me about that, whether that is
in a multi area agreement, whether it is in your local
area agreement. I do not think it is just about a
constitutional settlement that then says that because
Q652 Mr Betts: If the community wants to spend an
extra five per cent on the services basically it cannot,
can it? It is capped.
Hazel Blears: It is capped if it is excessive. It is not
capped if it is not.
Q653 Mr Betts: But the Secretary of State
determines what is excessive.
Hazel Blears: Again, I think we have a responsibility
to protect people. Last year council tax went up by
3.9 per cent, the lowest rise for 14 years. I think
people broadly welcomed that. Local government
has had to make some diYcult decisions; I am under
no illusion about that, but some of the increases that
took place in previous years were very high indeed
and in the current economic climate when people are
struggling to pay their bills, again, I think the
pressures will be on councils to try and keep those
council tax rises at a reasonable level.
Q654 Mr Betts: But should not the community be
putting those pressures on? Whenever the Secretary
of State rides in and says, “It is my responsibility”,
there is not that relationship between the elected
councillors and their community. You undermine
that completely to cut right across local authority
accountability when you say, “I in the end am going
to fix the maximum amount by which councils can
increase their council tax”. Is there any possibility
that you are going to remove the capping powers?
Hazel Blears: No, and I do not necessarily agree with
that. I think there is accountability in terms of the
choices that you make, the way you spend your
money, are you any good at it, do you get value for
money, what are your standards like, what are you
doing to make things work better in the local area,
how much do you involve local people, do they get
a say, do you do participatory budgeting? All of that,
I think, contributes to local accountability. If you are
intending to put your council tax up by an excessive
amount then I think national government has a
responsibility to protect taxpayers.
Q655 Sir Paul Beresford: I think we agree with all of
the last preamble that you have gone through, except
that Clive was putting a point really early on, and
that was that changing your expenditure has an
enormous eVect, a four-fold eVect. What are you
going to do about that, and, secondly, you do talk
about percentages and yet in your last answer you
were talking about amounts. Why is it that a local
authority with very low expenditure and good
services is clobbered if it has a slight change and lists
a slight change in money terms but a huge change in
percentage terms?
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Hazel Blears: Let me try and deal with those two
issues. The first one is about the gearing, and I know
this is a subject of great concern and irritation and
frustration for local government and clearly goes to
the heart of the current system whereby a small
amount is raised locally and the majority of it is
raised nationally. If we were to change that we would
have to look at the whole system. I can say to you
that we constantly keep the system under review. We
have had Michael Lyons’ report, we have had
various analyses. I think there are more documents
in the bottom drawers of people in CLG about the
council tax system than we could possibly imagine.
I do not think there is an easy answer to that without
fundamentally rebalancing the system, and it may
well be that the Committee decides to make some
comments around that. At the moment we have no
plans to change that in terms of how it operates. The
second issue I used to come across when I was the
Police Minister, and when police authorities were
asking to put up their precepts by 20 per cent they
would say to me, “It is the equivalent of a can of
Coca-Cola a week and people are prepared to pay
this in order to keep their streets safe”. That may well
have some merit in it but the fact is that the
percentage increases are the things that people
experience, that is what they feel, and, no matter
what arguments you make around small amounts on
lower taxing authorities, I think that council tax is
the most visible tax. People pay it every month. It
does not get taken out of your wages. It is an
unpopular tax. No taxes are popular but council tax
is very unpopular. People have seen increases in
recent years and I feel quite strongly that as far as we
can we have to protect people from the increases,
and percentage increases are what they get faced
with, unfortunately.
Q656 Mr Hands: I have a question on the future of
council tax itself. Obviously, there has been pretty
much a concern over the last 15 years or so not to
touch it. I guess the collective wisdom is that the
danger of touching local government finance far and
away outweighs any potential benefits from serious
reform. How close an eye are you keeping—and I am
not trying to elicit a party political answer—on what
is going on in Scotland and the merits of the debate
there on a move towards local income tax, whether
that might be something that could inform a change
across the UK and whether—and I am assuming
that you disagree with what the Scottish
Government is proposing—you might at least
concede that it is a brave move for them to consider
that change.
Hazel Blears: We could probably spend a whole
session discussing the merits and demerits of local
income tax, and I am sure we would all have a variety
of views around that in terms of the way in which it
would shift liabilities between diVerent parts of the
population and who would have to pick up the bill. I
think it reinforces one of my points to Mr Betts, that
there is a finite pot and at the end of the day
somebody has to pay for it, whether it is local,
national, which balance of individuals pays for it.
There appears to be a consensus that having some
element of property tax is a sensible thing to do in
terms of fairness and collection and the fact that it is
more diYcult to evade than local income tax. There
is a whole debate around all of that. I am keeping
very close, obviously, to developments in Scotland.
One of the interesting things is that we have a
proposal to abolish council tax; we do not have a
proposal to abolish council tax benefit, and many of
the calculations are done on the basis that although
there will be no council tax there will still be
something like £3 million of council tax benefits, so
the figures are not exactly as robust as they might
have been presented.
Q657 Dr Pugh: If I may pursue Clive’s question,
what would be the objection to the Department if it
were the case that they wanted to cap a local
authority but the local authority could prove that
the increase they had scheduled had the
endorsement, by referendum or whatever, of the
local population? There could be no argument
against that circumstance, could there? Under the
Treasury argument you are increasing public
spending but then that means you are not
safeguarding the population from the council tax;
you are doing something else altogether.
Hazel Blears: I think first of all you have to have a
fairly robust regime that says, “We want to protect
people from excessive council tax rises”, and I will
argue and protect that. I think the legal framework
now provides that you can have referenda and it also
provides that the Secretary of State, I think, in
determining what the principles of “excessive” might
be, should take into account the views of local
people in terms of reaching a view on whether or not
that is excessive and therefore complies with the
principles that you set. There is provision to have
that say and I am not aware of a situation that has
arisen of the kind that you have set out. In fact, there
have been some referenda around council tax rates
and in most of them, I think I am right to say, people
have either gone for the middle option or very often
they have gone for the cheapest option when they
have been asked in the referendum what they would
like to pay.
Q658 Mr Betts: Is it not all too diYcult really, trying
to reform local government finance? That is the
impression. One of the obvious things that could be
done and that is not very diYcult would have been
the transfer of the business rate setting back to local
councils and link them together, as the old domestic
and non-domestic rates were, so you cannot increase
business rates without the council tax being
increased. In fact, would it not be relatively simple to
do and halve the gearing eVect overnight?
Hazel Blears: I think it is diYcult to make decisions
in this area. All the decisions have diVerent
implications and in the modelling that goes on you
see winners, losers, people who would be hard hit as
a result of changes and you would have to be
constantly aware of destabilising the system. At the
moment we have something like 97 per cent council
tax collection, which is pretty high and pretty good.
Clearly, we are in diYcult economic circumstances at
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the moment but having that destabilisation I think
would be quite a problem. In terms of business rates,
obviously, we have got our Supplementary Business
Rates Bill in the House as we speak, so there will be
some more flexibility around that. If you simply
allow the business rate to lie where it falls then again
you come up against the issue of equity in the places
which perhaps do not have the capacity to draw in
as much business as other places will find themselves
in a worse position. Again, I see the attractiveness of
saying, “You have got the business, you have got the
fumes, you have got the industrial capacity”, but for
those places that are not able to do that they would
lose out.
Q659 Chair: Just asking about another aspect of
local authority finances, which is local authority
reserves, which I believe are about £25 billion–£30
billion, do you have a view as to whether those
reserves might not be more usefully deployed in
putting a Keynesian boost into the economy, for
example?
Hazel Blears: Some local authorities have already
decided to go down that route in terms of the
assistance that they can oVer to their communities.
Part of the purpose of my visits to various places
across the country will be to explore what local
authorities and their partners are able to do to
mitigate that and assist people during the downturn
in terms of homes and jobs. I am sure some places
will be looking at some kind of fiscal boost if they
can. The reserves are clearly an issue. They are
required by auditors to be prudent and to have an
appropriate level of reserves, and they have a threeyear settlement now, and therefore they do need to
have some contingency and flexibility to meet
requirements. That is a good thing about the threeyear settlement, that they are able to do that, but I
would want to discuss with people what more they
can do to try and help people during this economic
situation because I think that is probably the biggest
responsibility that all of us have.
Q660 Mr Betts: When we went to Denmark and
Sweden we saw two models of local authority that
you could argue have got more local accountability
and democracy and are less centralised than ours.
The Swedish local authority seemed to have the
ability to spend at levels they felt were appropriate in
their community, both individually and collectively.
Denmark had a slightly diVerent approach, where
the local government association sat down with
central government each year and recognised that
central government had a right, from a
macroeconomic policy point of view, to determine
the overall amount that local government spent or to
influence it very strongly, and they reached an
agreement about the totality of local government
spending, and the local authority association went
away with its members and looked at how that
should aVect the budgets of each individual council
throughout the country. Do you think that might be
a more grown-up way of doing things than we do in
this country?
Hazel Blears: I was just about to say that sounds like
a very mature system that has probably developed
over a fairly lengthy period of time. I would hope
that the direction of travel that we are now
embarked upon is about that growing maturity. I
hope members of the Committee will have seen in
recent times much more joint activity between
Government and particularly the LGA, the IDeA
(Improvement and Development Agency for local
government), the other organisations that come
under the umbrella of the LGA, and I think you are
seeing a diVerent kind of relationship. I cannot say
to you that next year we are going to get the LGA to
set the budgets of individual councils because I do
not think we are anywhere near that stage, but I
genuinely do have a sense that the LGA are moving
on from simply being a lobbying organisation to
being much more about partners in delivery. I
welcome that enormously and I think that is a sign
of the maturity of the sector and I am very keen to
do more work in that area. If you look at the
Concordat, I have taken the opportunity to refresh
myself on that, and I think it is paragraph 9 of the
Concordat which asked central government to do
certain things when we signed it a year ago in terms
of reducing inspection regimes or reducing the
performance indicator requirements and freeing up
flexibility on ring-fenced grants, all of which we have
managed to do. I think it is quite important that we
take a look at regular intervals at that Concordat
and see just how far we can move to perhaps a more
mature relationship. I would love to go to Sweden
and Denmark and have a look for myself. I will have
to see if I can get out of the oYce.
Q661 Mr Betts: One of the recommendations from
Lyons that has been put to us in some evidence is
that, given that central government is likely at least
to pursue in future to determine what you said, the
vast majority of what local government spends,
there should be at least some sort of independent
oversight of that, probably greater transparency, a
greater ability to provide independent and unbiased
evidence to Parliament about what is precisely going
on, so I think for some sort of independent
commission to be established which might even go
so far as to determine the settlement between
authorities but certainly would give Parliament an
unbiased and authoritative view about precisely
what was going on in terms of extra burdens on local
authorities and what the real eVects of the financial
settlements were. Would you support that?
Hazel Blears: I would much rather the
parliamentary system, including select committees
like your own, had the opportunity to have a
minister in front of them and not the head of an
appointed commission. I fundamentally believe that
it is right for Parliament to scrutinise people like
myself who are elected to make decisions, other
secretaries of state, and be able to inquire in that way.
The more transparency we can get the better and I
think the local government finance system is a bit
Byzantine to most people, so making it more
straightforward I think is right, but I think the
accountability absolutely should be with ministers.
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Q662 Andrew George: Moving on to constitutional
issues, given that the Government signed up to the
European Charter for Local Self-Government in
1997 and they ratified it in 1998, to what extent
would you say that the Government is compliant
with that Charter?
Hazel Blears: I think we are pretty compliant with
the Charter. I went along to what I think was a
Council of Europe meeting in Valencia last year
which was looking at the implementation around the
Charter, both in terms of regional government but
also in terms of local government and citizen
involvement, and I think on all of those criteria we
were making quite significant progress.
Q663 Andrew George: The Council of European
Municipalities and Regions and others also in their
evidence have suggested that we are not compliant
with Articles 2, 4, 8 and 9. Would it be possible for
you to perhaps provide a note to us to demonstrate
the extent to which the Government is compliant
with those articles in particular?
Hazel Blears: I am certainly more than happy to do
that. I think there are diVerent interpretations about
what compliance looks like, depending on your
perspective, but I would be more than happy to
supply the Committee with that.
Q664 Chair: Can I ask finally about whether you see
Parliament as having a role in monitoring the
relationship between central and local government?
There have, for example, been suggestions of maybe
a joint Commons/Lords committee which would,
like the Regulatory Reform Committee, monitor
what was going on and make sure that no new
legislation was shifting the balance of power in the
wrong direction, from local to central government,
so would protect the current settlement though allow
more devolution if the Government wished to do it.
Do you think there is a role for that?
Hazel Blears: I think I remain to be convinced. I am
never in favour of more committees unless there is a
real reason for doing it because sometimes I worry
that that takes resource and focus that ought to be
properly being used to deliver things to people and
sometimes I think ordinary citizens get a bit
frustrated if everything is about process. It takes me
right back to the beginning: it should be about
delivering better jobs, more skills, better health
services, so I remain to be convinced of the merits of
that suggestion but I would be perfectly happy to
look at it.
Q665 Mr Betts: But there is something diVerent, is
there not? The Scottish people know that they have
a devolution settlement which in reality even the UK
Parliament or central government really could not
change without the consent of the Scottish people. In
this country, in England, say, with local government,
for all your nice words today, which many of us
might agree with, it could all be reversed at the
switch of a departmental decision. The Treasury
could have a look and change it, the Secretary of
State could change many of those things and just
reverse the process without the consent of local
government, without the consent of local
communities. Is there anything we can do to ensure
that there is more permanence to the sorts of changes
that you are bringing about and want to see
developed in the future?
Hazel Blears: I think it is always a fascinating
debate, and I say that in a genuine way because I
wrestle with some of this. We have a system in this
country of parliamentary sovereignty. We do not
have a written constitution. Governments that are
elected and take a mandate from the people have
virtually untrammelled power other than European
frameworks of human rights, but within that they
have fairly untrammelled power to change the way
in which this country runs and to do that by passing
Acts of Parliament. It is not just the decision of a
secretary of state. You have to take your legislation
through Parliament, you have to argue through it
and you have to win it. That, I think, is quite
precious in our system. If we had a written
constitution that set out people’s rights,
responsibilities and our institutions, then I would
want to see local government as part of that
framework. I think the Concordat that we have
signed is the first time that there has been an external
statement of principles signed between national
government and local government, and if we had a
written constitution then I would want to see a
strong place for that devolutionary settlement but
we do not have that in this country and at the
moment I think where we are is that governments
that get elected by the people have the right to
change things in the way the system works.
Q666 Chair: We have a slight interact with our
signing the European Charter of Local SelfGovernment, for example, because if you are saying
that Parliament has untrammelled powers, would
the signing of the European Charter of Local SelfGovernment actually limit Parliament’s powers to,
should it wish, convert us into a totally centralised
state?
Hazel Blears: I am not going to get drawn into
speculation but the parallel would be the European
Convention on Human Rights. If you want to come
out of that the implication is that you have to come
out of the EU. I am not sure whether coming out of
the European Charter of Local Self-Government
would have the same implications and I shall look
into it.
Chair: Thank you very much indeed, Secretary of
State.
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Written evidence
Memorandum by The West Midlands Business Council (BOP 01)
The West Midlands Business Council brings together over 20 mainly business representative organisations
to speak with one voice on the key business issues across the West Midlands region, when appropriate.
Further information regarding the West Midlands Business Council can be found in Annex A.
This submission focuses on one aspect only of the Committee’s inquiry—which is the role of regional
public bodies and its inter-relationship between central and local government.
Regional Public Bodies and Local Government
The West Midlands regional business community would be very concerned at any changes to the balance
of power between central and local government which does not take into cognisance the regional public
agencies which have been established as part of the constitutional structure of the United Kingdom.
We see the concept of regional public bodies from a purely business perspective. The West Midlands is
largely a homogenous travel to work area. Statistics provided by the West Midlands Regional Observatory
and Centro—the West Midlands conurbation passenger transport executive—demonstrate that the vast
majority of the administrative area of the West Midlands region has strong and established travel to work
patterns.
This is one of the clear economic indications of a de facto regional economy being in place. In addition,
statistics provided by a range of bodies, such as UK Trade and Investment as well as the West Midlands
Regional Observatory, demonstrates clear commonality of economic interests across the region—such as
agriculture in Worcestershire and Herefordshire, for instance, with urban markets in the West Midlands
conurbation.
We therefore consider that regional agencies charged with developing the regional economy have a basis
in commercial reality and we can therefore see the need and necessity for such a model.
Over recent decades, while the regional economy has continued to operate in response to market demands,
the decline in traditional manufacturing industry has led to the need for an economic stimulus to exist to
jump start the regional economy. One of the outcomes from the decline of mass production heavy
manufacturing is that the West Midlands region is one of the worst performing regions in the United
Kingdom in terms of low levels of adult attainment in skills.
In addition, the regional economy which is reliant on eVective good transport networks, has suVered from
severe shortcomings in the transport infrastructure. This has impacted on trade flows around the West
Midlands region and across to other regions.
In addition, due to various economic and historical factors, the West Midlands region has one of the
lowest rates of business start ups across the United Kingdom. The West Midlands region also has one of the
lowest rates of R&D investment in the UK.
None of these issues can eVectively be addressed by central Government or local government. While the
policy direction of the Government and national macro economic stability is critical to regional economic
growth, the issues outlined above requires a regionally based solution because many of these problems,
though not all, are based on how the regional economy has developed over the years and is not necessarily
just linked to the need for national macro economic stability.
We also consider that local government alone can not fully address such matters. The dynamics of the
regional economy go beyond local administrative boundaries and therefore structures need to be in place to
address this reality.
Local Government and the Economy
We support the Government’s intention for economic development responsibilities to be part of the remit
of local government. However, it is the caveat that the Government has also added in this context—that such
activity needs to be aligned with the Regional Economic Strategy—which is critical for eVective delivery.
The Sub National Review envisages delivery of economic delivery services from a regional level to a local
government level. In essence, we are not against this. However, such a policy would put back regional
economic development if this policy was adhered to in a doctrinaire fashion and responsibilities were
devolved to poorly performing local authorities. Therefore we support a public interest test to take place
before devolution of powers to any local authority takes place. This would recognise the correct balance
between the Government’s strategic role, the role of regional economic development mechanisms as well as
the democratic accountability of local government.
Business is concerned that the guidance for the development of Local Area Agreements does seem to be
leading to a doctrinaire approach with the development of LAA bids. This has been most clearly
demonstrated in the West Midlands region in respect to the issue of business crime.
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Ev 120 Communities and Local Government Committee: Evidence
We were concerned that when we contacted all local authorities in the West Midlands region, most stated
that LAA guidance precludes them from seeking funds for business crime prevention measures despite the
fact that, according to the Government OYce for the West Midlands, business crime is costing the West
Midlands region £14,000 per hour.
We developed additional guidance for local authorities, which was supported by the Government OYce
for the West Midlands, which outlined how funds for business crime prevention work can be applied for via
the LAA process. However, recent evidence to the West Midlands Business Council has shown that most
local authorities are taking cognisance of the Department for Communities and Local Government
guidance and so these funds are not being sought.
We do not believe this state of aVairs was the intention of the Department but we are concerned that the
example we have cited is occurring in other areas which are also of importance to economic growth.
We therefore propose that the guidance makes clear that there is suYcient flexibility for LAA bids to take
account of local concerns and that a doctrinaire reading of the LAA guidance should not take place which
precludes necessary investment for the local area.
Local Government and City Regions
There is no doubt that there is concern that the direction of Government policy has led to confusion
regarding the balance between the roles of individual local authorities, the role of regional public agencies
and the role for regional collaborative working. One good example is that of City Regions. In the West
Midlands region, the City Region covering the West Midlands conurbation and Telford and a City Region
covering north StaVordshire and south Cheshire were encouraged to be established.
It remained unclear how these City Regions related to the sub regional structures the Regional
Development Agency (RDA) itself had established such as the Regeneration Zone in north StaVordshire
and numerous Regeneration Zones in the conurbation and Telford city region, alongside other
geographically designed RDA led delivery vehicles.
In addition, the slow progress of these City Region indicate that there may be uncertainty as to how the
individual responsibilities of each local authority relate to assumed responsibilities in the form of
collaborative working. This seems to deter such collaborative activity as a consequence. We believe that
guidance needs to be issued to local authorities to clarify such matters, possibly as a consequence of
discussions between the Department for Communities and Local Government and the Local Government
Association.
While Government actively encouraged the establishment of City Regions, it did not clarify how these
structures relate to the RDA. As a consequence, progress in the City Regions in the West Midlands region
has been haphazard with very little activity in north StaVordshire and limited activity in the conurbation
and Telford city region. Business proposes that clearer guidance is required so that clarification of roles and
responsibilities can lead to a step change in delivery of policy objectives.
Local Government and Taxation
We note that the Committee is considering the potential of local government to raise a greater proportion
of its expenditure locally. It is in this respect, that we would like to express our severe concerns with plans
to introduce a Business Rate Supplement (BRS).
We believe any process that enables a sub regional economic development authority to fit into the local
authority performance framework would be flawed if the terms of the BRS introduction—and the impact
on market confidence as a consequence—is not taken on board to ensure there is a consistency of approach
and a level playing field in this process.
The business community sees a worrying trend in terms of Government seeking to enable Local
Authorities to levy a number of new charges upon businesses with little or no statutory direct accountability
to the private sector. The proposed BRS may well be accompanied by a combination of a Community
Infrastructure Levy, road pricing, and possible Workplace Parking Levies. Additional local charges on
business can result in companies deciding to leave the area (or the country), a souring of relationships
between the business community and the Local Authority and a level of unpredictability for businesses that
severely damages their ability to plan for their company’s future. They may also stifle private sector
willingness to engage in and invest in much needed development and regeneration.
We support the national stance of our colleagues in the British Chambers of Commerce, Confederation of
British Industry, Federation of Small Businesses and Institute of Directors, who have outlined the following
principles for BRS introduction.
Despite Government claims that the model for a Business Rate Supplement contains significant levels of
protection for businesses we remain extremely concerned that, in their current form, the proposals will do
little to prevent widespread abuse of the extensive powers you are intending to devolve to local government.
Without the adoption of clear protections it will be impossible for the business lobby to support the
introduction of any scheme of BRSs.
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The necessary safeguards are:
— A mandatory business vote before the introduction of any BRS (ideally the Business Improvement
District [BID] model), requiring a dual majority of those voting on the day.
— Local Authorities commitment to being the funder of last resort in the event of project overruns.
— Mandatory oVsetting of current and future BID payments against any BRS levy.
— Maintain the commitment to protect smaller businesses from disproportionate burdens by
ensuring properties liable for business rates with a rateable value of £50,000 or less will be exempted
from paying supplements; and for this threshold to be reassessed at revaluation in 2010 and
increased in line with overall increases in Rateable Value.
— Maintain the upper limit of 2p.
— BRS funds must be hypothecated for necessary and additional economic infrastructure projects.
In addition there needs to be a clear definition of precisely what is meant by the term “Economic
Development”.
— Establishment of a formal mechanism for local businesses to have strategic (and ongoing)
oversight of the project.
— A robust, and transparent, cost benefit analysis of every project that requires some element of
financing from a BRS.
— That the cost of a ballot would not be passed onto businesses, or come from the projected BRS
budget.
— Require sign-oV from the Secretary of State (DCLG) before the introduction of any BRS.
We do not agree with the view that each tier of local government should be able to levy a supplement on the
business rate, and that there should be no threshold to protect smaller businesses from exposure to increased
occupancy costs.
We are concerned that the private sector is increasingly being seen in some quarters as an additional
revenue source to fill the gap in poorly funded local authorities. The private sector already makes a
significant contribution towards local government finance, through general taxation, section
106 agreements, BID levies and voluntary contributions to local projects, and will continue to do so.
However if operating costs continue to rise then these forms of local community investment will no longer
be viable.
Conclusion
In conclusion, we would believe that any consideration of the balance between central and local
government must take into cognisance the need for regional economic activity to exist. Otherwise, the aim
for jobs and prosperity across all localities will be harmed as a consequence.
Annex A
(a) The West Midlands Business Council (WMBC) is a UK First—the first time independent business
representative organisations have chosen to come together to speak with one voice on the key
regional business issues. No other region of the UK has such an organisation;
(b) WMBC is an umbrella organisation for the whole West Midlands region—covering Herefordshire,
Shropshire, StaVordshire, Warwickshire, & Worcestershire together with Birmingham/Coventry/
Wolverhampton and the West Midlands conurbation.
(c) The member organisations of WMBC are:
Asian Business ForumAssociation of Colleges
British Ceramic Confederation
Business in the Community
Chartered Institute of Building
Confederation of West Midlands Chambers of Commerce
Co-operatives West Midlands
Country Land and Business Association
Engineering Employers’ Federation
Federation of Small Businesses
Institute of Chartered Accountants in England and Wales
Institute of Chartered Secretaries and Administrators
Institute of Directors
Institution of Civil Engineers
Midland Association of Restaurants, Caterers and Entertainment
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Ev 122 Communities and Local Government Committee: Evidence
National Farmers’ Union
National Federation of Retail Newsagents
Royal Institution of Chartered Surveyors
UK IT Association
West Midlands Developers Alliance
West Midlands Higher Education Association
West Midlands Minority Ethnic Business Forum
September 2008
Memorandum by Birmingham City Council (BOP 02)
Summary
This submission argues strongly that local government, in particular the core cities and their city regions,
must have greater autonomy and more freedoms to raise funding locally.
This argument is based firmly on the need to achieve better outcomes locally—specifically the need to
improve the economic performance of the core cities so that they make their full contribution to the UK’s
prosperity. We set out what Birmingham will seek to achieve given these freedoms.
We argue for a power of general competence, further new local taxation and investment tools, a further
reduction in central targets and inspection and further reforms to the Local Area Agreement system.
We argue that council cabinet members for community safety should sit on police authorities and that
there is a strong case for primary care trusts to come within the ambit of local authorities
1. Our Focus: Achieving Outcomes
1.1 For Birmingham City Council, the question of the balance of power between local and central
government starts from the issue of what we are trying to achieve—we are not interested in constitutional
or structural changes for their own sake. Our case for more autonomy and devolution is simple: the UK will
be benefit economically and socially from returning to local government some of the powers and
independence it has lost over the last century. We believe that Birmingham’s history and its enormous
modern potential should stand as a testament to the truth of that statement and we will continue to put
forward this argument until a government is bold enough to let go and restore to our great cities the
independence they deserve.
2. Birmingham: A Proud Past and a Stunning Future
2.1 Today’s over regulated, centrally driven and nationally financed local government system would be
unrecognisable to our predecessors. Birmingham became known as “the best governed city in the world”
because it had the autonomy to act in innovative ways to address the problems it faced. Municipal borrowing
was enormous by modern standards, but fully supported by the income streams the city was able to create
through municipal gas and water supplies and imaginative use of local assets. Because of this local selfdetermination the business leaders of the city were able to commit to the city’s future through enlightened
self interest, realising that collective investment would lower costs for all and therefore create a more
prosperous city.
2.2 Central control of local government has grown through the decades and under governments of all
parties with the best of intentions. As central government became more active, created the welfare state and
sought to standardise the schools and social care systems it inevitably came to legislate to define the precise
role and duties of local councils. As expenditure grew it became necessary to support local budgets from
national taxation and to develop re-distribution mechanisms to ensure that the poorer areas could deliver
the expected services. Governments of diVerent parties have come to assume that their mandate requires
them to impose targets, initiatives and programmes on local government, rather than allowing councils the
freedom to set their own priorities. There have been gains from the creation of this system, but much has
also been lost. It has reached the point where this system is a barrier to innovation and the solving of local
problems. It is now imperative that the balance between local and central government is corrected.
2.3 This cannot be achieved without some reform of the system of taxation which will enable a greater
proportion of revenue to be raised locally (and more local choice about how it is spent). However in this
submission we want to concentrate on another aspect of this re-balancing: the re-creation of the freedoms
and flexibilities needed to enable us to deliver our plans for the further regeneration of Birmingham.
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2.4 We have truly audacious plans to regenerate and transform the city. The Big City Plan and the growth
of the city will lead to a 10% increase in population, the creation of over 100,000 jobs and the building of
75,000 new homes over the next 20 years. We aspire to take Birmingham into the top 25 cities in the world
(as measured by the Mercer quality of life index).
2.5 Our plan has five key pillars:
— Creating a High Speed Rail Link—High Speed 2 (HS2). The proposed HS2 high-speed rail link
from London to Birmingham with direct links to Heathrow and the European High Speed network
will deliver many economic benefits. Cutting journey times to London to 45 minutes will greatly
improve connectivity and position us closer to the high growth areas of London, South East
England and Continental Europe—improving Birmingham’s oVer as a place to invest and locate
a business in, and enhancing Birmingham’s visitor economy. HS2 will reduce congestion on the
roads, as well as provide a sustainable alternative to short haul flights between Birmingham and
Europe—contributing to climate change carbon reduction targets.
— Implementing the Big City Plan in full. The plan includes exciting proposals to expand the city
centre and make it more family oriented, create new streets, squares, parks and diverse mixed
communities, foster new enterprises, provide new schools and libraries, generate a Birmingham
brand of housing and a Birmingham School of Design, make Birmingham the focus for new
creative industries and create new cultural quarters.
— Growing the Communities of East Birmingham. Transformational regeneration in East Birmingham
is a key part of Birmingham’s growth agenda with significant economic and housing growth
ambitions. Home to a third of the city’s population, the area has both significant challenges and
opportunities for delivering economic growth, housing renewal and sustainable, cohesive
communities through the creation of a new town or centre at Medway.
— Holding a Birmingham World Expo. Building on Birmingham’s Science City status and our climate
change strategy the city will showcase environmental and medical technologies, showing how we
will turn the challenges they pose into opportunities for Birmingham’s business, homes and people.
— Building Stronger Communities. We will take forward the lessons learnt from the New Deal for
Communities and other neighbourhood initiatives and develop a comprehensive neighbourhoods
programme, covering all the priority areas of the city. Our focus will be on strengthening
individuals, families and community and voluntary groups to enable them to take on the challenges
faced by our more deprived neighbourhoods. Our priorities will be to enable people to get into
work and stay employed and to create safer neighbourhoods where children of all backgrounds can
enjoy opportunities to learn and to grow.
3. Delivering the Future: Why Devolution Matters
3.1 There are four main reasons why shifting the balance to local government (particularly in our great
cities) will deliver better outcomes:
— Greater autonomy in raising finance will mean that investment is sensitive to the needs of the
locality, supported by the local business community and proportionate to local assets (as it was in
the era of Chamberlain).
— Local management of fund raising and projects will accelerate investment, bringing an end to years
of delays for transport and other infrastructure projects.
— Local political leadership can galvanise public support and focus on delivery—programmes
delivered from Whitehall risk remoteness and lack of conviction or over-the-top bureaucracy in an
attempt to ensure compliance. It is not the absence of directly elected mayors that holds us back
but the absence of the powers that mayors routinely have across Europe and North America.
— Devolution fosters innovation—allowing us to find fresh new ways to work with the private sector
to create new economic opportunities. Centralisation leads to standardisation and drives out the
risk takers and the innovators.
3.2 Most importantly we need the capacity to respond flexibly to local investment opportunities, raising
money locally rather than having to go cap in hand to the Treasury. A key opportunity for the city is to
investigate innovative funding mechanisms to best enable delivery of the Big City Plan. Accelerated
Development Zones, a concept based on Tax Increment Financing, would allow Birmingham to “participate
in the growth dividend” by allowing the city to capture incremental value in the form of tax revenues
generated from new development. These could then be re-invested, enabling further development and
infrastructure investment—achieving accelerated growth. The first 18 projects are already in development
across the city region.
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4. Specific Questions put by the Committee
Does local government need greater autonomy from central government? If so, in what ways?
4.1 We have answered this very strongly in the aYrmative and given an account of what will be achieved
above. There are three main reasons for the current lack of autonomy, which seriously undermines the
capacity and ambition of local government:
— The over centralised taxation and local government funding system—see comments below.
— The national statutory basis of many services and the absence of any constitutional framework for
local government
— The culture of targets and national inspection systems which means that councils too often respond
to national rather than local priorities
4.2 The UK (with the exception of the recent partial devolution to Scotland, Wales and Northern Ireland)
is a unitary state. There is no constitutional basis for local or regional government, which could provide the
platform for greater autonomy. Autonomy in the past has rested on the absence of central structures and
the relatively weak status of cities with royal charters, rather than on the constitution. Given the
Government’s current interest in constitutional change and in moving towards a written constitution, there
is scope for looking at the reforms that could edge us towards greater autonomy.
4.3 Local government could be given a “Power of General Competence”—ie to do anything that it wishes
to do—and to raise any money that its local residents and tax payers consider appropriate and necessary—
to advance local democracy and local service provision, as long as what is proposed is not explicitly illegal.
This is the reverse of the current “ultra vires” approach which prohibits councils from doing things they are
not specifically empowered to do through legislation. The Government has argued that the power of well
being introduced in the 2000 Act amounts to the same thing, but this is legally doubtful and this reform
would send a powerful signal about the future role of local government.
4.4 Parliament could also seek to define the categories of local authority more formally in legislation, in
particular providing a full recognition of the status of the core cities and their city regions. This could be a
mechanism to provide for governments to devolve more power and resources to these areas, for example in
regeneration, transport and raising funds for investment. The devolution of powers to pass bye-laws is also
very welcome and could be the start of a process which gives councils more legislative powers (giving them
some constitutional independence). This could be extended to taxation (see below) and to other regulatory
areas, especially in the core cities who could be given a specific legislative status.
4.5 The culture of setting targets and measuring the performance of other organisations serves only to
propagate the stranglehold of central government over local government, increase bureaucracy at national
and local levels, and divert much needed public funds from front line services. The Government has
responded to this positively by streamlining inspectors, reducing the number of targets and shifting to a riskbased performance assessment regime. But it is a mark of how much further there is to go in this direction
that 200 indicators is regarded as a light touch approach and the Audit Commission will still be measuring
all 200 for each local area, regardless of whether they are included in LAAs! Local Area Agreements are great
improvement on what has gone before. They are a useful approach to planning and allocating resources and
we recognise that central government has the right to ask local authorities to prioritise certain issues (very
often in practice these priorities are shared and the government need have no fears about them being
ignored). But the agreements should be just that—they should contain no targets that have not been
specifically accepted by the local authority.
Do local government’s role and influence need to be strengthened in relation to other public services, such as
policing and health?
4.6 We support the progressive development of partnership arrangements across the local public sector,
including shared budgets and increasingly integrated planning and the duty to co-operate introduced in the
2007 Act. However there is concern that this system is developing in parallel with the accountability
provided by elected councillors and that there need to be moves to integrate the two more thoroughly (for
example by requiring LSPs and CEOs to report to full council meetings).
4.7 In health, the time has come to ask whether it would be appropriate for the primary health system to
become formally part of the local government system (ie for PCTs to be accountable to councils with
contiguous boundaries). The case for devolution of hospitals and other acute providers is less clear cut, but
we believe it is time that the government came to terms with the idea of a partly localised NHS.
4.8 In police, we are opposed to the proposals to create separately elected representatives on police
authorities that can only undermine the role of existing councillors and councils. We also recognise the
concerns of police about politicization of their role. Therefore a better approach would be to legislate so
that council cabinet members responsible for community safety make up the majority of police authorities,
ensuring a democratic link to the LAAs and the plans of local councils.
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4.9 A really radical idea would be for all public spend in a large Local Authority area to go via the Local
Authority. Primary Care Trusts, the Police and other public agencies would then have to ask for money from
the Local Authority who would hold them to account for performance. The result would be that only the
Local Authority would be accountable to Government, so negating
To what extent do the current arrangements for local government funding act as a barrier to local authorities
fulfilling their “place-shaping” role? In particular:
— Does local government need greater financial freedom? If so, in what ways?
— Should local government be able to raise a greater proportion of its expenditure locally?
— What eVect does the capping of council tax rises have on local accountability?
4.10 The over-centralisation of the tax system and the funding of local government is a fundamental cause
of the lack of autonomy and the imbalance in powers in our system of government. Any system in which
80% of funding is raised by central government and re-distributed according to complex funding formulae
is bound to lead to too much central government determination of priorities and service design. Rigid
Treasury rules mean that, even where money is delegated there is a culture of centralised monitoring and
assessment.
4.11 The council tax system cannot sustain a significantly larger proportion of local expenditure, unless
there is a dramatic switch from income based to property based taxation, which is probably not desirable.
Alternatives such as local income tax also present the prospect of tremendous upheaval and a significant
number of losers as well as winners. Reforming this balance overall will therefore require a cross-party
consensus and bold and imaginative moves to protect those who would lose out.
4.12 In the meantime our emphasis on economic regeneration points to where we believe the priority
should lie for tax and funding reform. Additional freedoms to raise investment funds are urgently needed
(as described above). LABGI and the Supplementary Business Rate are also welcome. The Government
should also move to re-localise business rates as a further incentive to councils to promote economic
development. In addition serious consideration should be given to further discretionary local taxes such as
roof and bed taxes. Government must begin to trust councils to tax sensibly and to explain to local
businesses and residents how the funding will benefit the local area.
4.13 Council tax capping makes a mockery of local accountability and should have been removed many
years ago.
Existing Powers
To what extent are local government services a product of national or local decis-making?
Does local government make adequate use of its existing powers, such as its well-being, charging and trading
powers? What scope is there for greater use of those powers?
4.14 At present the balance between local and central determination is wrong. We recognise that certain
local government services may require a national framework to be in place but it is essential that how we
deliver such national frameworks in the local context should be a matter for local decision making by
democratically elected members of the Council and not by civil servants or ministers in central government.
National legislative and regulatory frameworks create a culture in which the lowest common denominator
prevails—instead we want a culture of excellence where new services and extraordinary performance are
promoted.
4.15 The economic, social and environmental well being powers under the Local Government Acts have
been helpful in moving the agenda forward but, as indicated above, a power of general competence is still
something that would be far better in the long term. Along with the freedoms on financial grounds, the
additional powers could then be utilised in more eVective and eYcient ways.
Improving the Relationship between Central and Local Government
What diVerence has the central-local concordat made to central-local relations?
Should an independent commission be established to oversee the financial settlement for local government?
4.16 We welcome the various initiatives the Government has taken to improve the relationship between
central and local government and readily admit that relations are better than in previous less positive periods
for local government. However we are not persuaded that there is any “diVerence” from the central-local
concordat to central-local relations, save that there is a recognition that the two parties have to work
together to deliver local/national agendas. The position would be a lot stronger if local government were
permitted as indicated above to address issues of local concern and to be allowed to raise funding at the local
level. To make a real diVerence, the Concordat should be given a statutory status (through the Constitutional
Renewal Bill) and it should be independently reviewed annually to assess how well central and local
government are adhering to the agreement, though the value of such an assessment would be critically
dependent on how strong government and Parliament’s commitment to devolution was in practice.
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The Constitutional Position
Given the UK’s constitutional settlement, what protections should be placed in law to ensure local government’s
ability to fulfil its responsibility as a balance on the powers of central government?
What role should Parliament have in the protection of local government’s position within the UK’s
constitutional settlement?
4.17 There are good arguments on both sides with regard to constitutional status. On the one hand it
would clearly strengthen local government against centralising tendencies but on the other it might make
the position too inflexible. So we are not entirely persuaded that the protection is necessary, in law, so long
as the practical issues relating to greater autonomy in powers and financial matters, as indicated above, are
addressed. Some form of formal recognition that local government plays an important part in the machinery
of UK governance, although helpful, would only be stating the obvious unless the autonomy and flexibility
indicated above are also put into eVect by central government. Framing stronger constitutional laws would
present diYculties in distinguishing between what are rightly centrally defined and funded services and what
is the extent of autonomy to be granted. A public debate on this would however be welcome and we are
disappointed that the Governance of Britain debate has largely ignored local government.
4.18 We are not persuaded that there is a need to formally enshrine the role that Parliament would have
in the protection of the local government’s position within the UK’s constitutional settlement. A lot will, of
course, depend on how the government of the day responds to local government concerns and, as a
safeguard, the court system will remain available to local government to challenge executive decisions of
central government departments.
4.19 However some of the suggestions we make above may be of interest to the committee.
5. Conclusion
5.1 We are disappointed that the government has not included local government in its wider debate on
modernising the constitution and feel that this indicates a perception in Whitehall and Westminster that local
government is a second order issue for the constitution. In fact it is the very heart of our democracy—of we
cannot give local councils back some of their autonomy and status then there is little hope of reviving
democratic engagement.
5.2 But our argument for devolution and greater autonomy rests firmly on the outcomes we wish to
achieve—in particular the need to boost the economic contribution of the core cities if they are to perform
to their full potential. This cannot be achieved without empowering local political leaders and giving
councils the powers to raise funding and invest in success.
Memorandum by Emeritus Professor George Jones and Emeritus Professor John Stewart (BOP 03)
Introduction
Why local government?
Why is local government important? Four values provide the justification for local government—for its
potential, because some local authorities may fail in practice to realise their potential.
1. First, Pluralism: local government avoids concentrating governmental power in one place, which
makes it a significant part of our constitutional arrangements of checks and balances. Local government
has its own legitimacy, rooted in election, and its own taxation, the council tax.
2. Second, EVectiveness: local government promotes eVective service delivery, since is has a better
knowledge of local conditions, has a better sense of local priorities and can better join up a variety of services
into a coherent package than can central government or a series of separate local boards and commissions.
Governing at the local level can be more manageable than at the national level, because there are fewer
elements to be taken account of—there is less complexity. Local government is able to recognise and react
quicker to problems that arise in society, because it experiences them first, responding more speedily to
changing conditions and tastes. It is able to innovate, trying a variety of solutions in diVerent authorities to
policy problems, while the centre propounds only one, from which little can be learned.
3. The third value is EYciency: local government can encourage eYciency, if most of its revenues are
raised from local people, because they will be better able to assess the balance between their spending
aspirations and the taxation needed to finance them. Citizens can see a closer connection between the taxes
they pay to their local authority and what they receive from their local authority than they can from centralgovernment expenditure and taxation.
4. Fourth, Democracy: local government provides more opportunities, than can central government, for
people, as citizens, to participate in governing themselves, or in controlling their representatives who govern,
and in exercising control over the organizations that provide and produce public services.
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5. The role of local government should depend upon the value of pluralism and the expression it gives to
eVectiveness, eYciency and democracy. While local government gives expression to pluralism, central
government gives expression to eVectiveness, eYciency and democracy through uniformity based on
centralized decision-making. A choice has to be made. Sir Michael Lyons in his recent report on local
government and its financing posed the question that we both faced as members of the Layfield Committee
over 30 years ago:
“whether all important governmental decisions aVecting people’s lives and livelihood should be taken in one
place on the basis of national policies; or whether many of the decisions could not as well, or better, be taken
in diVerent places, by people of diverse experience, associations, background and political persuasion.” (Lyons,
2007, p.40) and (Layfield, 1976, p. 299).
The role of local government
6. Local government is the government of diVerence, representing, responding to and creating diversity,
as local authorities respond to the needs and aspirations of their areas and the communities they represent.
They show in their responses diVerences in ideas and approaches that are the source of innovation. Against
the government of diVerence, central government determines national policy, brings forward national
legislation and sets national standards. It imposes uniformities in the name of the unity of the national state.
7. An eVective system of government in a complex and changing society should recognize the importance
of diversity within, while recognising the necessity of certain uniformities. The problem is to achieve a
balance between them through a balance of power between central and local government. We consider that
the present balance is out of kilter because of the undue dominance of national prescription that allows too
little place for the diversity that reflects a dynamic society. Limits have increasingly been set to the
boundaries of local choice, yet it is local choice that enables diversity and justifies elected local government.
8. Diversity has a value in a system of government creating the capacity to respond not only to diVerences
in needs but also to diVerences in aspiration, helping to build a basis for democracy at local level where it
is easier for citizens to be involved. A capacity for diversity adds to the capacity for learning both in
government and in society, as diVerent approaches are developed to the problems facing communities and
are tested in practice. The tendency to uniformity of approach, inherent in government at national level,
means learning is limited to a single approach. It is often assumed, in alarm over the so-called post-code
lottery, that uniformity ensures equality, but equality may require diVerences of response and of local choice
on that response.
9. The diVerence between local diVerence and national uniformity and between national and local choice
defines the central-local relationship and constitutes a necessary tension within that relationship. The
policies of recent governments have sought to resolve that tension by asserting the supremacy of national
policy over an ever-increasing range of issues and in ever-greater depth of detail. These actions have limited
local choice and weakened the accountability of local authorities to their electorate on which the
eVectiveness of local democracy rests.
Central government and central-local relations
10. Central-local relations have become dominated by a central-government approach based on
command and control whose eVect has been to reduce local choice and therefore the scope for local initiative,
substituting accountability to central government for local accountability. This approach rests upon
assumptions of the superiority of the central mandate and of the knowledge and experience of those who
operate at the centre. While certain important steps have been taken by this Government that could have
widened the scope for local choice, by the powers of well-being and the development of the local authority’s
role in community leadership, these changes have been less eVective because of the dominant practice within
central government of command and control over the working of local authorities. Central government has
tended to see local authorities not as political institutions in their own right, but as agencies for the delivery
of services in accordance with national requirements.
11. Command and control have been given expression in:— The tendency to legislate as the first response without considering the impact on local choice and
whether a statutory requirement is necessary. This attitude is illustrated by the government’s
proposal to legislate on how petitions should be handled by local authorities without any detailed
investigation of how local authorities handle petitions.
— The detailed prescription associated with legislation. This approach is illustrated by the detailed
prescription through at least 15 regulations, three directives and 150 pages of guidance on political
structures, constraining local choice and therefore innovation on the form taken by the executive
models introduced under the Local Government Act, 2000.
— The proliferation of targets and performance measures. The number of targets has been recently cut
back, but still retaining 35 national targets as well as at least 16 statutory targets in education and
early years. The Committee should investigate the extent to which, apart from targets, local
authorities have still to report performance on other activities. 1,200 plus such measures had to be
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reported to central government by local authorities. An investigation for the Government
concludes that 80% of the time spent by local authorities on performance reporting was upward
to central government rather than to their local electorate (DCLG, 2006).
— The role of the inspectorates backed by the threat of intervention by central government. There are
dangers that the process of inspection limits local choice by making assumptions as to how local
authorities should operate, criticizing practices that are outside those assumptions and may be
important innovations. There is an equal danger that the Government assumes too readily that
the inspectors are correct in their judgments—the assumption of inspectoral infallibility. There is
a further danger that inspections take up too much of the time and attention of senior managers
and councillors that could be better devoted to their ongoing responsibilities and local concerns.
The process of inspection can make it more important for authorities to satisfy the inspectors
rather than their local electors. Yet despite all these problems, there has been no detailed
investigation of the impact of inspections on the working of local authorities.
— The centralized financial arrangements. The impact of capping, the undue dependence on
government grant and the growth of specific grants all combine to limit local choice and weaken
local accountability, as discussed later in this paper.
— The movement of functions away from local authorities to local appointed boards or quangos
accountable to central government. This shift has transformed the pattern of local governance,
reducing the range of activities under local elected control, and limiting local choice and local
accountability.
— The proliferation of requirements on local authorities to submit plans to central government. Research
by the Government established that 66 such plans had been imposed on authorities (DTLR, 2002),
and even that was later found to have left out a number of plans.
12. These changes have had a combined eVect in limiting local choice, weakening local accountability and
absorbing the time and attention of councillors and senior staV, turning their attention away from local
people to meet the requirements of central government and the inspectorates.
13. Many of these developments happened over time in a series of separate steps without consideration
or possibly even knowledge of their impact on the role and working of local authorities, on central-local
relations and on the pattern of local governance. Each step was justified on its own merits as seen by the
department initiating the change, and too little regard was had the cumulative eVect of such changes—the
machinery to consider the eVect of such change did not appear to exist. The Government has taken certain
steps to meet these issues: the Committee should consider whether they are working eVectively. Although
there have been attempts to reduce the number of targets, the plans required, specific grants and inspections,
it is not clear how far this trend has gone. The combined impact of the pressures discussed above remains
significant, and the attitudes that led to these developments remain embedded in the working of central
government. As in the past a reduction of controls can be eroded over time as new controls are created, as
happened following the “bonfire of controls” in 1979–1980.
14. The dominance of past attitudes is seen in the continuing process of legislation and the detailed
prescription associated with it. Change is likely to be eVective only if a new style of working is introduced
in central government’s approach to local government. As discussed later in the paper, an enabling approach
should replace command and control. The approach required was summed up by Professor Helen Sullivan
in calling for “explicit acknowledgement by Whitehall that central policy judgments do not necessarily
trump local judgment where the two conflict” (Sullivan, 2008, p 35). There is no point in local choice if the
only choice is to do what central government wants.
Local Government and Central-local Relations
15. In a relationship problems are unlikely to arise on only one side. The problem in local government
has been the growth of deference as too many authorities have come to accept the requirements of command
and control as normal. In doing so they have accepted the limits on local choice and therefore on innovation
and initiative. Some authorities have almost invited the limitation on local choice by asking for guidance,
giving central government a justification for the detailed guidance described by Sir Michael Lyons as “soft
controls” (Lyons, 2007, p 79).
16. We accept Sir Michael’s analysis that “the centralisation of governmental and public service functions
has confused the accountability for local service delivery. This has generated a relationship that ’crowds out’
local government’s role in responding to local needs and priorities, and limits local government’s
contribution to the kind of society we want. I believe also that this downgrading of the local has contributed
to a sense of powerlessness among some local politicians and oYcers, which needs to be reversed if local
government is to deliver its full potential in helping to meet the challenges we face in the 21st century”.
(Lyons, 2007, p 173).
17. There is a need to strengthen local democracy as a basis for a more confident local government. The
low turnout in local elections is a symptom of a wider weakness, found also in national elections. Like
national government local democracy is, and has to be, based on representative democracy, and will remain
so as the practical approach to government. The primary issue for all those concerned with the state of
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democracy is how to strengthen representative democracy. Participative democracy can strengthen
representative democracy, but cannot replace it. It strengthens representative democracy by enabling
interactions between representative and citizen.
Further Devolution
Does local government need greater autonomy from central government? If so, in what ways?
18. It follows from the arguments that we have put forward that local authorities need greater autonomy
from central government, or as we prefer to put it, the capacity for local choice should be enhanced and local
accountability strengthened.
19. We emphasize the need to reduce the extent of detailed prescription and to challenge the assumed need
for excessive legislation to secure the government’s aims. Government should consider whether detailed
prescription limits local choice unnecessarily and whether the changes sought through legislation require it
or whether there are other ways to encourage change in local government.
20. There is a need to review the existing body of legislation, regulation and guidance to see how far it
can and should be reduced. In part the Task Force on Lifting the Burdens is undertaking this review, but
the Government’s response to its reports is not yet clear and is in some cases disappointing. A progress report
from the Task Force for 2006–07 stated, “Ministers may have widely accepted that the regulatory regime
has gone too far and is now inhibiting the improvement of public services. This view seems to be shared by
senior civil servants too, but there is still a mindset that the burden is every other department’s fault, not
their own, and central government still knows best” (DCLG, 2007, p 7).
21. In any case the Task Force, according to its terms of reference, is concerned with “reducing
unnecessary burdens and [sic: should be ‘on’] opportunities for improving performance arrangements”,
(Lifting the Burdens Task Force, 2006) rather than extending local choice. A review is required of whether
existing provisions unduly constrain local choice. Thus it could be found that where legislation was
considered necessary to establish a practice, it was now no longer necessary. Once a practice is established,
prescription may not be required. If the practice proves unsatisfactory, and local authorities have tested it,
they should be free to change it. In certain cases sunset legislation and sunset regulation could be introduced,
setting a time limit to prescription. Duties can be turned into powers, leaving for local choice whether and
how they are used.
22. One example of where change is desirable is the extent of prescription on political structures. There
could be much greater variation and scope for innovation within executive models The reverse has happened
since the Local Government and Public Involvement in Health Act, 2007, prescribes the tenure of Leaders
in ways that make it diYcult to see how they can be fully realized in practice and increases their powers in
ways that could previously be determined by each authority
23. We draw specific attention to three areas in which the extent of local choice should be extended:
(i) The powers to make by-laws should be freed from the requirement for ministerial approval. Part
6 of the Local Government and Public Involvement in Health Act removes the requirement in
respect of DCLG, but those provisions should be extended to encompass other departments.
(ii) The provisions under Section 107 of the Local Government and Public Involvement in Health Act,
2007, enabling The Secretary of State to require a local authority to make changes in the Local
Area Agreement should be removed. It is hardly a local area agreement when changes are imposed
by ministers rather than agreed.
(iii) Changes may be required in the powers of well-being in the light of decisions by the courts if
sustained on appeal. In the recent [2008] decision on the case of Regina (Risk Management
Partners Ltd) v Brent London Borough Council and Others it was held that the financial well-being
of the authority was not the same as the economic, social or environmental well-being of the area.
The Act could not therefore be construed as authorizing a local authority to do whatever it
considered would be likely to promote its own well-being. If the decision is upheld, it is the first
sign of a judicial process limiting the use of the well-being powers. Surely the eVectiveness and
eYciency of an authority contribute to the well-being of an area. Parliament should be prepared
to clarify the position if necessary after the appeal process has run its course.
Do local government’s role and influence need to be strengthened in relation to other public services such as
policing and health?
24. Our answer to this question is “Yes”. Indeed we would go further and say not merely influence, but
powers over such public services.
25. One of the most important and welcome developments in the Government’s programme for local
government has been its recognition of the role of the local authority in community leadership. In Its
1998 White Paper the Government stated it would “enshrine in law the role of the council as the elected
leader of the local community with a responsibility for the well-being and sustainable development of its
area” (DETR, 1998, p 8.10), in eVect extending the authorities’ capacity for local choice beyond the services
for which they were directly responsible.
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26. This commitment was given expression in the Local Government Act, 2000, which provided local
authorities with the powers of well-being and the duty to prepare what have now come to be called
sustainable community strategies in consultation with other local bodies and local communities. Local
authorities have been encouraged to form Local Strategic Partnerships [LSP] under their leadership,
composed of their partners and representatives of the local community. Part 5 Chapter 1 of the Local
Government and Public Involvement in Health Act, 2007, laid a duty on local authorities to prepare and
submit a local area agreement [LAA] setting targets for improvement not merely for its services but for its
area generally including the services of its public partners. Only the local authority has the statutory duty
to prepare and submit the LAA, although its public partners have a duty to co-operate with the local
authority in determining the targets and to have regard to the targets in exercising their functions.
27. The local authority’s role in community leadership is clear under the legislation; it is accountable for
its performance of that role and in particular for the LAA and its implementation; but it lacks the means
to ensure the performance of that role because it lacks any powers over its public partners. Without those
powers it can be held accountable for issues beyond its control because they are the responsibility of other
public bodies of which the most important are those concerned with the police and the health services.
28. Until recently the Government argued that local authorities could exercise their community
leadership role in relation to their public partners through influence and persuasion, and without any
statutory requirement on those partners to pay heed to local authority views. Consensus would be achieved
between a local authority and its partners. Consensus, although normal, will not always be achieved, and
influence and persuasion may not be enough to achieve it. Disagreements can exist on priorities in the
community strategy, and targets in the LAA can be neglected; yet the local authority is given the
responsibility for the strategy and the LAA and will be held accountable for them. In an attempt to meet
this problem the Local Government and Public Involvement in Health Act, 2007, has laid an obligation on
the public partners to co-operate in the preparation of the LAA although not specifically in the preparation
of the sustainable community strategy. The Act also requires the public partners to have regard to the targets
in the LAA. The Act does not, however, give the local authority any powers over the public partners if these
uncertain requirements on the public partners prove ineVective, as they will where no consensus emerges.
The Government has stressed investigations through the overview and scrutiny role of the local authority,
but again the local authority has been given no powers to enforce the findings of such investigations.
29. We consider local authorities require powers to enforce their community leadership role, since they
have been given that role by Parliament. It has been suggested that the local authority be given responsibility
for commissioning the services of its key partners, by, for example, assuming the commissioning role of
primary care trusts. They could be given the responsibility for approving the payment of all or part of
government grants to the partners as the basis for such commissioning. Sir Simon Milton, when Chairman
of the Local Government Association, suggested the local authority should have responsibility for “hiring
and firing police and health chiefs”. (Milton, 2008, p 6)
30. We recommend that the local authority should be in the driving seat of LSPs and in the final resort
that the public partners should be obliged to follow the lead of the local authority. We recommend that the
Committee should consider more generally how the powers of the local authority should be enhanced to
support the role of community leadership.
Existing Powers
To what extent are local government services a product of national or local decision-making?
31. There are no simple answers to this question, because in practice there is continuing interaction
between national and local decision-making, the nature of which varies between services and local
authorities, and over time. As one example of the diYculties in answering the question because of the
interactions, innovation by a number of authorities can lead to national prescription. Looking over the postwar period, concessionary fares and even free travel for the elderly, comprehensive education, smoke control
and competitive tendering for basic services were all pioneered by local authorities before being adopted as
national policy. National policy may then limit the possibility of further innovation by local choice if
enforced by detailed prescription.
32. The scope for local choice and therefore the importance of local decision-making has been reduced
by a change in the nature of legislation described by Professor Loughlin in Legality and Locality, the Role
of Law in Central-Local government. “Though local government has since the nineteenth century been
placed on a statutory foundation, positive law has not been a primary determinant of the relationship.
Statute law has established a facilitative framework through which conventional arrangements for
regulating central-local relations could evolve and which, in eVect, constituted a non-juridified structure of
administrative law. One consequence of the Government’s recent actions in subverting the administrative
network has been to transform law into a primary instrument of regulation” (Loughlin, 1996, p 418).
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Although Loughlin was writing about the position reached by 1996, his conclusions are equally applicable
to 2008. A facilitative framework of law in central-local relations has been replaced by a regulatory
framework that has reduced the scope for local choice.
33. This regulatory framework is reflected in the detailed prescription highlighted earlier. There remains
a degree of local choice for local authorities with the confidence to exercise it, recognising that much
guidance does not have statutory force. There has always been a tendency in some local authorities to
exaggerate the extent of statutory constraint or, put another way, to accept “the myth of statutory
constraint” (Stewart, 1983, p 148), even in the period of the facilitative framework of law.
34. The Layfield Committee on Local Government Finance sought to establish the extent to which local
government expenditure was mandatory or discretionary which, if discovered, would go a long way to
answer the Committee’s question. “We asked many witnesses how a systematic classification might be
achieved, but even those who had advocated separation of discretionary and mandatory expenditure as a
first step in changing the financial system were unable to suggest how it could be done…The diYculty we
encountered throughout was that the categories of local government expenditure which are manifestly either
totally discretionary or totally mandatory are very limited: the bulk of local government expenditure falls
somewhere between the two extremes, being determined not by formal requirements alone nor by free local
choice alone but by a complex mixture of pressures and influences. Informal advice and exhortation from
government departments, inspection, nationally accepted standards, accumulated past practice,
professional attitudes, political influences and actions by pressure groups, national and local, all play a part
in determining local government expenditure, along with the statutory provisions” (Layfield, 1976, pp
403–4). To this complex of influences should now be added public attitudes, local and national.
35. The finding that most local government expenditure is subject to national requirements, normally
based on statute, but within which local authorities have discretion, has been confirmed in the few
authorities that have tried to classify their expenditure into mandatory and discretionary. They have had to
place most of their expenditure into a third category, mandatory as to the activity but discretionary about
how the activity is carried out and the level of expenditure. There has been no equivalent study of decisionmaking generally; such a study would almost certainly have reached a similar conclusion to that about
expenditure. Our own impression is that the scope of discretion for local decision-making has been greatly
reduced, but significant discretion remains for those local authorities with the confidence to use it. The
readiness to use that discretion, however, has been undermined by the prevalence of greater prescription,
detailed guidance and the time and attention required to meet the demands made by central government.
Does local government make adequate use of its existing powers, such as well-being, charging and trading
powers? What scope is there for greater use of these powers?
36. The three sets of powers are examples of the scope for local choice being extended. The Government
has indicated its disappointment on the limited use made of these powers, and there is certainly scope for
their greater use by local authorities, but the reasons for the limited use must be explored.
37. These powers and, in particular, the well-being powers represent a major change in the role of local
government. Local authorities traditionally have been organized around their established functions and
have focused on the problems at which those functions have been directed. Use of the powers of well-being
requires thinking beyond the problems which the authority is organized to deal with and for which it already
has the powers required. Some authorities have used the powers of well-being imaginatively, but the failure
of others to do so reflects their lack of confidence and the growth of deference. Despite the Government’s
complaint about the limited use made of the powers, the main demands made by central government
departments relate to their existing functions. These demands have required the attention of senior
management and councillors rather than the use of the new powers.
38. The extent of use of the powers can reflect local political choice. One political view may oppose the
use of greater charging for public services. A diVerent political view may oppose any extension of trading
functions in competition with the private sector. Local choices are not necessarily the choices that would be
made by the Government, but local choice is what local government is about.
39. Certain uncertainties about these powers need clarifying if they are to be more widely used. The recent
judicial decision described above has raised doubts about the scope of the powers of well-being and have
confirmed the fears of those who have argued the powers fell short of the powers of general competence
found in many countries. There has been some uncertainty about the extent to which charging powers can
be varied according to need and to the income of those charged, and about the extent to which trading
powers can be used to make a profit for the local authority.
40. There is a need to recognize uncertainty about the powers, and that local political choice can vary in
the use of the powers. But above these factors it is important to recognize that the demands made by central
government on local authorities turn attention away from the use of the powers.
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Financial Autonomy
To what extent do the current arrangements for government funding act as a barrier to local authorities fulfilling
their “place-shaping” role? In particular:
Does local government need greater financial freedom? If so, in what ways?
Should local government be able to raise a greater proportion of its expenditure locally?
What eVect does the capping of council tax rises have on local accountability?
41. The problems with the local-government finance system, and how to correct them, were clearly
identified in the report in 1976 of the Layfield Committee. The Lyons report of 2007 praised the approach
of Layfield, recognising that the same problems still bedevilled local-government finance. But Lyons
strangely failed to consider the central recommendation of the Layfield report. The problems remain today
and Layfield’s main recommendation is still relevant for enhancing both democracy and eYciency in local
government.
42. In 1976, as now, a major concern of people was with increases in local tax bills, then domestic rates
and now council tax. The first question to address is who is responsible for council tax increases. Central
government says local government, and local government says central government. Each blames the other
in an annual ritual when no one is prepared to accept responsibility. Here is confusion of responsibility.
Layfield’s approach was that this confusion must be eradicated. The main responsibility for local
government spending and taxing should be laid somewhere, either on central government or on local
government. That was a political decision for the Government to take, and then having made the choice,
the next task is to devise a local-government-finance system to sustain the chosen allocation of responsibility.
43. If the centralising model is adopted, then it is appropriate for central government to control local
expenditure and local taxation, doling out the lion’s share of local government funding in the form of grants,
leaving local authorities with responsibility for spending those resources, and being held accountable for the
way they spend the resources.
44. If, however, the decentralising model is adopted, then it is appropriate for local authorities to control
local expenditure and local taxation, and to be accountable for those spending and taxing decisions. This
latter model was Layfield’s preferred choice, which we have championed since 1976.
45. The Lyons report, like Layfield, recognised that the Government had first to decide whether it wanted
a centralised or decentralised system, and came down on the side of decentralisation. The Committee, also,
must make the choice between the two models, which we advocate should be, as Layfield and Lyons urged,
the local government model. We advise the Committee not to seek some “middle way”: that path has been
followed for years and has led to the present confusion and disarray. A hard choice has to be made.
46. Having made the initial decision, the Government must devise appropriate financial arrangements.
Layfield argued that taxation matters. A decentralised model of governance could not be sustained if central
government grant was the predominant source of local government’s revenue. Local responsibility and
accountability should be sustained by local taxes bearing on local voters. Central grant had to be reduced,
and replaced by local taxation.
47. At this point it is necessary to note two erroneous objections to our position. First, we are not saying
that shifting from a predominantly grant-financed system to a predominantly locally-financed system will
automatically lead to a decentralised model. There has first to be a decision in favour of decentralisation,
and then, to support that decision, a change from the predominance of grant to the predominance of local
taxation. Second, we are not saying that grants will disappear. They will still be needed to help authorities
with scarce resources and high needs-to-spend, to put them on a level playing field with better-oV areas. This
equalisation can be achieved with much lower levels of grant than now, and distributed by mechanisms
independent of central government.
48. The next question to address is what sort of local taxation. Both Layfield and Lyons liked a property
tax for local government: indeed it is an ideal tax for local government. Lyons favoured making it fairer, by
adding new bands at both the top and bottom ends, with regular revaluations, and turning council tax
benefit into an automatic entitlement and not something that had to be applied for. Layfield argued that
property tax alone could not finance local expenditure. After reviewing other possible taxes it advocated a
Local Income Tax, not to replace the property tax but to supplement it. We have a virtual local income tax
now: it is that part of national income tax that goes from localities to the national Exchequer and is returned
to local government in grant. Layfield advocated that this hidden local income tax should be made explicit,
and determined by local authorities accountable to their local voters.
49. Lyons did not take this step. For some reason, still unexplained, the Lyons report contained nothing
about Layfield’s proposal for council tax to be supplemented with a local income tax that would reduce
central grant and hence national income tax. The Committee should put this option back on the agenda.
HM Treasury should welcome this reform as a way to make local authorities its allies in seeking the wise use
of resources. No longer would local authorities be like drug addicts calling on central government each year
for their fixes of grant. Instead they would be incentivised to be responsible local decision-makers, balancing
their spending against their taxing decisions.
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50. The Government seems to think that local accountability can be eVective if it covers only the way
local authorities spend the money allocated to them in grant: accountability for expenditure not for taxation.
That approach is too narrow. If councils are not accountable for their taxing decisions to local voters, and
only account for they way they spend money, then councillors and voters are encouraged to behave
irresponsibly. They do not have to balance their desires for extra spending, higher and improved service
standards, with the inevitable consequences of those decisions on local tax demands. Responsible decisionmaking by councillors and by local voters can occur only if spending and taxing decisions are fused.
51. The rebalancing of funding away from national grant to local taxation would remove the problems
that flow from the gearing eVect whereby small changes in grant are magnified in local tax changes, giving
distorted signals to local voters about the expenditure decisions of their local authorities. Without the
gearing eVect voters would see clearly in the changes of local tax rates the consequences of the spending
decisions of their local authorities.
52. At present the confusion of local-government finance system is a barrier inhibiting local authorities
from being community leaders, and place-shaping their localities. As Lyons recommended, capping should
be abolished, and local authorities given more financial freedom: and, we go further, not just over spending
but over taxing too. Capping is not appropriate for the decentralising model, since it undermines local
accountability and makes central government responsible for decisions on local budgeting.
53. DCLG seems to have forgotten about Layfield and Lyons. Within a few hours of publication of the
Lyons report the then Minister of State at DCLG rejected recommendations from Lyons about the abolition
of capping, regular revaluations, extra council tax bands and transforming council tax benefit into an
entitlement. The Local Government and Public Involvement in Health Act, 2007, and the white paper of
2008 [Cm 7427], Communities in control: real people, real power, failed to address the central issue of local
government finance. The Committee should ensure that DCLG tackles the problem that has eroded local
government for so many years: the confusion over responsibility and accountability for local government
finance.
Improving the Relationship between Central and Local Government
What diVerence has the central-local concordat made to central-local relations?
Should an independent commission be established to oversee the financial settlement for local government?
The Constitutional Position
Given the UK’s constitutional settlement, what protections should be placed in law to ensure local government’s
ability to fulfil its responsibility as a balance on the powers of central government?
What role should Parliament have in the protection of local government’s position within the UK’s
constitutional settlement?
54. To reinforce the choice to rebalance the system of governance in favour of local government, and to
protect that choice against centralising encroachments, there is need for a Constitutional Settlement,
embedded in statute, about the relationship between central and local government.
55. A first step in doing so was taken on December 12th 2007 when the Government and the LGA signed
the Central-Local Concordat on central-local government relationships. It seems to have disappeared
without trace. Local authorities rarely refer to it, while central government has paid it scant attention.
Despite the Concordat, inconsistent central government messages continue to flow. The reason lies in the
weakness of the Concordat. It needs reassessment, rewriting and then a statutory basis to ensure it makes
an impact on both central and local government.
56. We are concerned that the Government does not regard local government as part of the Constitution.
A Constitution lays down the rules of the game, the main institutions and processes of government, the
relationships between the various institutions, and the relationships between these institutions and the
people. The Concordat does none of those things. Its main feature is a list of service outcomes agreed by
central and local government, revealing that central government regards local government as an instrument
for service-delivery not for local community self-government.
57. Local government is part of the Constitution: rooted in elections, an example of representative
democracy; with its own local tax, council tax; an array of services to run and functions to carry out; a
responsibility for the well-being of its people and areas; and shaping the development our cities, towns,
counties and villages. It is often written into the Constitutions of other countries. Sir Michael Lyons called
for a constitutional settlement and has already told the Committee in oral evidence [Q 2, 23 June 2007] that
the Concordat is a “diluted version” of what he had recommended. We urge the Committee to recommend
a statutory constitutional settlement with the following elements. It should:
(i) Recognise the constitutional position of local government, indeed that local government is part of our
constitution, requiring care and respect befitting a basic institution of our system of government. This
point was not explicitly stated in the Concordat. It did, however, reaYrm that “The Government
is committed to constitutional reform and will work with the LGA to ensure the roles and
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responsibilities of local government are reflected in proposals as they are developed.” [para 1] To
that extent the Concordat is an interim statement, and the Committee should press for a full
recognition of the position of local government in the constitution.
(ii) Contain a clear statement that the primary role of local authorities is the government of local
communities, enabling their well-being. The Concordat contains statements of such a role for local
government, but it is not set out as the primary role that should determine its rights and
responsibilities. Rather the Concordat emphasizes some specific services delivered by local
authorities and hoped-for outcomes, not the shaping of the development of the locality.
(iii) Contain a clear statement that local government needs the powers and resources to carry out this
primary role. The Concordat does not go far enough in asserting the rights and responsibilities
necessary to sustain the primary role. There is no indication that central requirements should
normally be set out in primary legislation, limiting detailed interventions that arise from overprescription and over-regulation. There is no recognition of the importance of the quasi-legislative
powers of a local authority to set by-laws in the interest of the local community, free from central
control. The suggestion in the Concordat of the need for flexibility of funding is ambiguous,
avoiding such fundamental issues as the balance of funding and the freedom of local authorities
to determine their own expenditure and level of local taxation.
(iv) Clarify that the primary accountability of local authorities is to their electorate. The Concordat says
too little about accountability, and yet this issue needs clarification to avoid the danger that local
authorities are seen as accountable to central government rather than to their electorates. The
constitutional settlement should emphasize clarity of accountability to avoid the confusion in
accountability exposed by the Layfield committee in 1976 that has increased since its report. Local
authorities have to act within the law, the scope of which has been greatly extended by the powers
of well-being, but they should be explicitly accountable to their electors for their actions.
(v) Express a commitment to give local authorities powers to ensure quangos and appointed boards at
local level should be accountable to local people through local authorities for their contribution to the
government of the area. Paragraph 16 of the Concordat does recognise the need to increase local
accountability for key public services, and Sir Simon Milton suggested how this need could be met,
proposing that local authorities have powers to remove key oYcials in the health and police
services. We hope the Committee will lead a discussion of this and other approaches, including
giving local authorities the role of commissioning such services.
(vi) Recognise that the primary role will entail local authorities responding to diversity between diVerent
areas and creating diversity between them. This diversity should be welcomed, indeed celebrated,
as an expression of local initiative and innovation.
(vii) Promise to establish an independent Commission or Joint Committee of both Houses of Parliament
to monitor central-local relationships. The Government has said that it and the LGA will monitor
the Concordat, which could lead to revisions. But there is need to go further to create a firm
framework for central-local relations as is appropriate for a constitutional relationship and provide
protection for it. An authoritative body is needed, not dependent on either central or local
government. This body would keep the financial relationship under review, including the grant
settlement, but should not itself make that settlement which is and should be a political
responsibility, since it involves issues of national distribution and redistribution. The role of the
independent body would be to appraise and report on that decision about the settlement.
58. The Concordat recognises that changes are required in the behaviour and practices of central
government in the same way as change is required of local authorities and other local bodies. The change
required of other local bodies is to recognise their accountability to local people. The change required of
local government is to regain confidence in showing initiative and innovation in community leadership. The
change required from central government is that its departments should accept that the Concordat requires
they exercise restraint in prescription and regulation. The Government must ensure that the words and spirit
of the Constitutional settlement are accepted in the deep recesses of departments.
Further Issues
Should central-local relations be based on national standards?
59. Even some champions of local government are reluctant to take the decentralising path because they
fear it will lead to unacceptable variations in standards of services, the so-called post-code lottery. The
Committee should confront and demolish this thesis, and show the value of diversity.
60. Central Government’s line is it needs to be suYciently confident that controls are in place to prevent
unacceptable inequality in service provision as a result of poor provision in some areas. It wants to end
postcode lotteries, whereby in some parts of the country standards fall way below the rest—but who is to
judge, why central government and not local people?
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61. Do people really want uniformity, the same everywhere? If they do, then that is not necessarily a
justification for central government enforcing its standards, since local authorities, responding to their local
people, would, if they had discretion to make their own choices, voluntarily choose the same. The need to
enforce a standard is a sign there is no consensus about the standard.
62. Another problem arises because most people don’t know what’s done elsewhere, and know only what
takes place in their area. Their own experiences shape their perceptions and motivations, not what happens
elsewhere. What they want is something better than they now have—improved services, higher standards,
excellence close at hand, while paying lower taxes than now. Inconsistent? They are the confused messages
that politicians elected by the people have to reconcile.
63. Centralisers rely much on polls of public opinion that, they claim, show the public, when asked to
choose between, on the one hand, national standards, where the government ensures services are exactly the
same everywhere, and, on the other hand, minimum standards, with local government having the ability to
vary standards above the minimum by levying higher council tax, choose by a large majority, between 60%
and 70%, national standards (www.ipsos-mori.com). But the question asked surely prompts that response.
Who in their senses would ever want to choose the “minimum” of anything, and have to pay more for what
they really want above it? A “minimum” standard has no rhetorical appeal for most people. Would MPs be
happy to campaign for a minimum standard of anything?
64. Some think local government could flourish if central government confined itself to minimum
standards. This issue divided the Layfield Committee (Layfield, 1976, pp 302–15). The dissenting minority
said the centre should fix minimum standards and pay for them, leaving local government free to adopt
higher standards to be paid for out of local taxation. Such an approach, the minority argued, would resolve
the confusion of responsibility. You still hear this approach urged as a way ahead.
65. How does one define a minimum standard for a service and cost it? We are told not to assess
performance by inputs, or throughputs, or even outputs—we should focus on outcomes; but again how does
one define, measure and cost them, and enforce them? Imagine the controversy over calculating for each
local authority the costs of providing the minimum standard of each service. And if there were a failure to
meet the standard, how do you decide whether it was the consequence of ineYciency by the authority or of
conditions beyond the control of the authority? And how do you enforce the minimum standard if there
is failure?
66. Another key question is: could minimum standards be stable? Since no one would be satisfied with
just a minimum, central government would be constantly under pressure from all kinds of groups, lobbying
to raise the minimum. These pressures for ever-higher standards, all focussed on the centre, would make it
impossible for the centre to stick to a minimum. It would be continually revising the minimum upwards,
curbing local discretion and causing instability.
67. The standards approach, both for minimum and higher standards, is artificial and restrictive,
concentrating attention on particular elements in particular services, and it fails to have regard for the local
impact of the totality of services or of the interactions between services and organisations. It ignores the
complexity of policy.
68. National minimum standards would stifle creative thought in local government about policy. All a
local authority would have to do is to check it had met the national standard and tick the box. It would have
to think no further. It would not have to explore changes in local circumstances and wishes, but simply
follow the national standard.
69. Some worry that without minimum standards local authorities would allow their services to
deteriorate, in a race to the bottom. But that’s unlikely: local authorities operate in the same atmosphere of
public opinion as does central government, responding to similar pressures and views about what is
acceptable, and if services became unacceptable the local electorate could vote them out. Common
standards would tend to prevail, but they would have been adopted freely, not imposed from the centre, and
they would fit local conditions and wishes. Some authorities would go beyond even common standards, and
compete to have better standards than others. Sir Michael Lyons’ report attacked those who deplored
“postcode lotteries” in service provision. He argued that an approach based on local choice, leading to
diVerences in services in diVerent areas, would achieve a more eYcient balance between needs, preferences
and resources than would a centralised system. It’s not only a more eYcient use of resources overall, but also
fairer, as long as all areas have that choice.
70. The concept of national standards is inherently centralising. It displays the arrogance of centralists
who think they know the answers to complex social problems and are justified in imposing their uniform
solutions everywhere. Society’s problems are too complex to be captured by such an inflexible approach.
Far better to have many local authorities devising not just their own ways of implementing national policies
but their own policies to suit their distinctive localities. Local authorities could learn from each other, and
not be just arms of central government.
71. We urge the Committee to celebrate decentralisation and diversity and reveal that fears of post-code
lotteries are groundless.
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What is the role of the Local Government Association in central-local relations?
72. In considering the relationship between central and local government we are concerned with much
more than the relationship between the Local Government Association and central government. We are
more concerned with improving the relationship between central government and local authorities and the
impact they have on each other, or fail to have. But the LGA has a role to play, particularly in mediating
the impact that local authorities seek on the policies and practices of central government.
73. The LGA faces a dilemma, since it has to represent the diversity of views and practices in local
government, based on the principle of local choice, making a national association of local government
almost a contradiction in terms. It faces two dangers—first it may reduce the diversity of views in local
government to a uniformity that does not and should not exist: second, operating in close contact with
central government, it can come to accept the assumptions made in Whitehall about local government.
EVective central-local relationships at this level require the LGA to be aware of these dangers and avoid
them. The Committee should consider how far the LGA avoids these dangers.
What Should be Done?
74. We urge the Committee to recommend:
(i) A significant reduction in the extent and scope of legislation on local government, based on
consideration of whether legislation is required or whether local government could deal with the
issue concerned without legislation. Let legislation be the last resort.
(ii) Where legislation is undertaken, detailed prescription should be avoided. The principle should be
that where a duty is imposed on local government, local authorities should be given freedom as to
how that duty is carried out.
(iii) Targets and performance reports should be reduced to a minimum—a minimum that has not yet
been achieved.
(iv) A major review should be undertaken of the work of the inspectorates to establish their impact on
the operations of local government, including the time taken to deal with them, and to establish
whether they encourage local initiative and innovation or whether they discourage changes that
do not conform to the inspectors’ concept of good practice.
(v) The financial arrangements should support local choice and local accountability.
(vi) Changes sought by central government departments in both the structure of local governance and
in central-local relations, such as the creation of new local appointed boards or quangos, new
specific grants, planning procedures, targets and performance reports, should be considered not
merely on their individual merits, but for their impact on the overall structure of local governance
and the working of local authorities, to avoid the danger of the unexpected cumulative impact of
such changes. The Committee should consider whether changes in the procedures for handling
such issues deal adequately with the problem.
(vii) There is a need for regular reviews of the state of central-local relations and of the impact of changes
on the relationship. These reviews should be reported annually to Parliament and whenever a
special report is required on a proposed change. These reviews should be conducted by an
independent body, which could be a Joint Committee of both Houses or a permanent independent
Commission. Central government and the LGA should carry out their own reviews as a basis for
giving evidence to such a body.
75. These changes are unlikely to take place without changes in the style of working of both central
government and local authorities. Central government’s command and control model is based on its
assumptions about the superiority of central government’s mandate and about its superior knowledge and
experience. Such assumptions about the superior mandate expressed in parliamentary sovereignty and
statutory powers should not be allowed automatically to trump local decisions; otherwise there would be
little point in elected local government and local choice, themselves created by Parliament. Nor can it be
accepted that knowledge and experience in central government are superior to the knowledge and experience
of those in local government who face daily and directly the problems of local communities. Central
government has much to learn from local government.
76. We argue for an enabling style in central government’s approach to relations with local government,
based on an appreciation of the value of local government and on respect for the knowledge, experience and
the ability of those who work in and for local government. It would be expressed not merely in consulting
local government on policy but in involving its representatives in developing that policy to a greater extent
than at present. It would mean that where central government were concerned with an issue it would work
with local government to find out whether that concern was shared, how it should be dealt with, rather than
assume almost automatically that legislation was required. Discussion and mutual learning are
characteristic of the enabling style, and powers are often more relevant than duties.
77. An enabling style should also characterize the inspectorates and the approach of the central
government to their findings. Central government’s approach should not be based on an assumption of
inspectoral infallibility, recognizing that the knowledge, experience and ability of those inspected are often
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greater than that of the inspectors. Inspectors should recognize the dangers of absorbing the time and
attention of local authorities and the danger of curbing initiative and innovation if inspectors assume that
they rather than the authority know the right approach to its tasks. The danger is of inspectors acting as
commissars rather than as partners in shared learning recognising they have as much or more to learn from
the authority as the authority has to learn from them.
78. From local government a new confidence is required, abandoning unthinking deference to the centre.
Its mottos should be “Never ask for guidance; if you ask, you may not like it” and “Work it out for
yourselves”. Confidence should grow if local democracy is strengthened, and that requires strengthening
representative democracy, based on interactions between elected and electors. Participatory democracy
should reinforce that interaction, and can in this way strengthen representative democracy rather than be
seen as an alternative to it.
79. The Committee should recommend a rebalancing of the relationship between central and local
government in favour of local government in the ways we have proposed. This choice for decentralization
should be reinforced by local-government funding arrangements designed to reduce local government’s
dependence on high levels of grant by establishing local taxation based on a fairer property tax and a local
income tax. A statutory Constitutional Settlement that protects the place of local government within the
Constitution should further reinforce this choice for decentralization.
References
DCLG [Department of Communities and Local Government], 2006, Mapping the Local Government
Performance Reporting Landscape, London: DCLG.
DCLG, [Department of Communities and Local Government], 2007, Lifting the Burdens Task Force,
Bringing about a new relationship between central and local government and citizens, Report for 2006-2007,
London: DCLG.
DETR [Department of the Environment, Transport and the Regions], 1998, Modern Local Government; In
Touch with the People, London: DETR.
DTLR [Department of Transport, Local Government and Regions], 2002, A Review of Local Authority
Statutory and Non-Statutory Planning Requirements, London: DTLR.
Layfield [Sir Frank], 1976, Committee on Local Government Finance, London: HMSO. Cmd 6453.
Lifting the Burdens Task Force, 2006, London: DCLG.
Loughlin, Martin, 1996, Legality and Locality; The role of law in central-local relations, Oxford:
Clarendon Press.
Lyons [Sir Michael], 2007, Place Shaping; a shared ambition for the future of local government, London: The
Stationary OYce.
Milton [Sir Simon] Speech to the New Local Government Annual Conference, 22nd January. London: Local
Government Association.
Stewart [John], 1983, Local Government: The Conditions of Local Choice, London: George Allen and Unwin.
Sullivan [Helen], 2008, “Rediscovering Local Judgement” in Iain Roxburgh (Editor), Next Steps for Local
Democracy, London: New Local Government Network.
September 2008
Memorandum by Lancashire County Council (BOP 05)
Summary
— Local government needs greater financial autonomy from central government but otherwise has
suYcient power fully to perform its duties and obligations.
— Local authorities are well-positioned to improve scrutiny and oversight of other public bodies,
both regionally and nationally.
— There is scope for a national statutory or other formal settlement that validates the current healthy
state of local government in England.
— As a vastly improved sector, local government wants to collaborate with central government on
policy research and development and is ready to engage with Westminster and Whitehall at a much
deeper level than in previous years.
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Further Devolution
1. Does local government need greater autonomy from central government? If so, in what ways?
1.1 Governments—no matter what their colour—have tended to “talk up” the empowerment of local
authorities. Implementation of concrete steps toward devolution has, however, fallen short of these
rhetorical claims. Lancashire County Council is somewhat sceptical of high-profile promises of devolution
due to central government’s historic aversion to decentralisation. Continued confusion over the precise
nature and strength of devolved responsibilities following the Sub-National Review is but the latest example
of an issue that remains frustratingly unresolved.
1.2 Despite our serious misgiving about local government finance mechanisms and the government’s
future vision for regional structures, Lancashire County Council acknowledges some aspects of the huge
transition made possible by the modernisation agenda. The new powers and duties granted to local
authorities in the 21st century have proved suYcient for the County Council. Lancashire now delivers more
and better services than ever before and our capacity to serve is reflected in our retention of 4-star status.
Whitehall removed the “top-down” Best Value Performance Indicators and gave us the freedom to decide
our own priorities with our local partners through the new Local Area Agreement: Lancashire took full
advantage of such latitude during the recent revision of our sustainable community strategy. Liberating areabased grants from ring-fenced restrictions is another step toward true empowerment for local government.
1.3 However, local government needs greater financial autonomy. Existing limits on local government
tend to relate to funding constraints and the quality of communication with central institutions.
2. Do local government’s role and influence need to be strengthened in relation to other public services, such as
policing and health?
2.1 Local accountability of the public sector is a huge contributor to the health of our democratic system.
Lancashire County Council has developed a number of innovative and eVective ways to engage with the
community and other public service providers. Through our local strategic partnerships, joint district and
County council decision-making committees like our 12 Lancashire Local committees and our pioneering
eVorts to web cast council meetings, we have aimed to bring policy making closer to the public.
2.2 In addition, our Overview and Scrutiny committees hear testimony from other public service
providers, including NHS primary care trusts. Our status as a democratically-elected body with a duty to
ensure the well-being of County residents means we are ideally placed to enhance the scrutiny and
accountability of other public sector bodies. At present, there are no clear fiscal mechanisms that keep other
public sector organisations accountable to the people they are supposed to serve. Many of these groups are
legally obliged to engage in partnership work with local authorities but, ultimately, there are no sanctions
or incentives to ensure eVective co-operation with us. Central government may wish to investigate the scope
for formal and balanced local authority oversight of police as well as health authorities. Assessing the
appropriateness of granting Select Committee-type power (or other statutory powers) to local government
Overview and Scrutiny panels may be a potential starting point in this regard. Or government may consider
extension of local government scrutiny of fire and probation services, utility companies, or the higher
education sector.
2.3 Recent suggestions that policing or health should adopt separate democratic mechanisms to ensure
public accountability are misguided. In addition to creating wasteful taxpayer expense, directly-elected
health or police boards could confuse voters, especially in three-tier areas like Lancashire. Local government
structures currently in place are more than capable of coping with an additional duty to monitor policing
and health policy delivery in their areas.
2.4 The recent Policing Green Paper (“From the Neighbourhood to the National: Policing Our
Communities Together”) states the government’s intention to introduce elected Crime and Policing
Representatives (CPRs) and approve their automatic chairmanship of Crime and Disorder Reduction
Partnerships (CDRPs). Crucially, this new development is not a point for consultation with local authorities.
Hitherto, local authorities have been promoted by central government as the “first among equals” in Local
Strategic Partnerships and local government is understand to have to a community leadership role in
determining local priorities and working with all partners to achieve them. So, the green paper represents a
contradictory message from central government and goes against the spirit of partnership previously
required by them. So, the green paper represents a contradictory message from central government and goes
against the spirit of partnership previously required by them.
2.5 CPRs will lead to increased pressure on police solely to address traditional crime priorities rather than
empowering their community safety partners to tackle the underlying causes of crime. Much of local
government reform has focused on giving us the freedom and flexibility to address cross-cutting issues (like
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crime) through partnership working. The introduction of CPRs will undermine this positive development
and gives the impression that central government lacks confidence in its strategic vision. For example, the
2006 Police and Justice Act’s guidance document, Delivering Safer Communities, mandated that Crime and
Disorder Reduction Partnerships should include the elected member from the relevant local authority with
portfolio responsibility for community safety in order to ensure a democratic mandate and accountability.
Two years later, the government appears to have changed its mind.
Financial Autonomy
3. To what extent do the current arrangements for local government funding act as a barrier to local authorities
fulfilling their “place-shaping” role?
3.1 Local authorities are unique within the public sector because the public is aware that a specific tax
exists to fund their operations. Unlike the NHS or police, the link between taxes and local governmentprovided services is highly visible. The media and public spotlight is always on local government and, as a
result, we are much more accountable to the public than primary care trusts or police authorities.
3.2 The Local Authority Business Growth Initiative (LABGI) serves to illustrate many of the problems
that beset the central-local relationship. Lancashire County Council, in common with local authorities
generally, is not able to rely on LABGI as a dependable income stream because of concerns over the scheme’s
complexity; the changes to the distribution methodology; the unpredictability of allocations; and the
diYculty in identifying the cause and eVect between the timing and incidence of economic development
activity and subsequent LABGI allocations. Lancashire County Council feels that the allocation of LABGI
grant awards in the final quarter of the financial year does not support sound budgeting and long-term
planning. This does not appear to reflect the Government’s support of long term planning for local
government, most prominently illustrated through the introduction of three-year grant settlements. Coupled
with the unpredictability of allocations, this necessarily leads to this and many other authorities to treating
the funding as one-oV and so precludes its use for the funding of ongoing projects. We are making our views
on proposed reforms to the LABGI scheme known to Communities and Local Government and HM
Treasury and future developments will demonstrate the eVectiveness of this latest consultation exercise.
4. Does local government need greater financial freedom? If so, in what ways?
4.1 Currently, the way in which council services are funded makes it diYcult for local authorities to have
financial autonomy. Although the Government has made substantial improvements in recent years in
removing the earmarking of its specific grants, individual Government departments and ministers continue
to act as if the ring fencing and hypothecation were still in place. There are still messages being sent that, if
money is not spent in line with Government priorities, it will jeopardise future grant distribution to
authorities. This tension continues even in the recent development of Area Based Grants (ABG); the newly
created ABG pot for each authority is in theory a general grant, but the Government’s identification of the
sums building up the pot, and of specific new additions to it, continues the (unspoken) pressure to tie
spending to the previously specific grant funded areas from which the ABG pot was created. This point also
applies to a lack of flexibility on some major schemes on the method of funding and procurement. We have
little doubt that the current Building Schools for the Future programme—a crucial part of the County
Council’s eVorts to improve the life chances of young people in Burnley and Pendle—could have been
completed far more eYciently with significantly lower cost had a diVerent funding and governance regime
been in place.
5. Should local government be able to raise a greater proportion of its expenditure locally?
5.1 In terms of the balance of funding to be raised locally, the position has changed significantly by the
introduction of the new schools’ grant funding (the dedicated schools’ grant) which has largely removed the
funding responsibility for schools from local authorities. The ramifications of this, fairly hasty, decision, are
still being worked through in practice but it has produced a financial dislocation at a local level which cannot
be healthy for a vibrant place shaping role.
5.2 What it has done means that, for County Councils, the previous proportions between national and
local funding have been reversed for the remaining expenditure, excluding schools. In Lancashire, council
taxpayers fund 60% of our net budget of £683 millioin in the current year; 35% is provided by our share of
the non-domestic rates income; and only 5% is provided by revenue support grant. This has not only changed
the gearing ratio applicable to marginal increments of expenditure, but also raises significant questions as
to the legitimacy of the degree of control and influence the Government continues to exercise over the
delivery of these services.
5.3 Local Government has long campaigned for the return of non-domestic rates to local control,
although this would now produce distributional complexities if not complemented by a reversal of the
schools’ funding charges.
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6. What eVect does the capping of council tax rises have on local accountability?
6.1 There is no doubt that, whilst capping is very eVective in curtailing council tax rises, it is also
damaging to local accountability. The two main eVects of capping have been, firstly, a bunching of increases
each year just under the capping ceiling and, secondly, a perception that the Government is to blame for the
increases in the first place. There is a significant body of research that suggests that this has been very
damaging to local accountability and this has translated itself into a general apathy with regards to the local
democratic process culminating in low turnouts in local elections.
Existing Powers
7. To what extent are local government services a product of national or local decision-making?
7.1 The advent of regional institutions necessarily complicates any answer to this question. New freedoms
for local government have masked to some degree the emergence of these subtle forms of centralisation,
accelerated by the creation of new quangoes. It remains to be seen whether changes to regional governance
following the Sub-National Review (SNR) serve to enhance or hinder the central-local relationship.
Lancashire County Council has made its views on the SNR known to central government through a series
of consultations. In short, we remain concerned that newly-empowered regional agencies will not live up to
their devolutionary promises.
7.2 It is this sense that local-central relations can be governed by mutual scepticism which prevents truly
co-operative policy making. While huge strides have been made toward involving local government in
decision making, concerns remain about how and where policy is implemented. Lancashire County Council
councillors and oYcers report widespread reservations about central government’s basic knowledge of the
geographic and demographic facts of the County. Civil servants’ repeated failure to appreciate that
Lancashire is a two-tier area serving more than a million people in 12 separate and distinct cities and
boroughs gives the impression that they are not fully aware of the issues facing Lancashire residents.
7.3 For example, CLG allocated $50 million in cohesion funds to the Lancashire sub-region (the County
Council plus the unitary councils of Blackpool and Blackburn and Darwen) in 2008. The money was
distributed via area-based grants—meaning that funds went directly to district councils (as the administrator
of funds). However, in two-tier areas, this meant that upper-level councils had no influence over the use of
resources, despite a raft of obligations (eg PSA 21) in this area of policy. So, there is a common disconnect
between resources and responsibilities.
7.4 Suggestions by the Department of Children, Schools and Families, for example, that the County
should regularly convene meetings with all of Lancashire’s head teachers ignores the logistic and numerical
impracticalities involved in such an enterprise. Similarly, Lancashire often faces criticisms over policy
outcomes—school test results or pupil absence rates, for example—that are based on simple absolute figures
rather than a percent of the total. Such was the case when schools ministers launched the National Challenge
this summer. Given the County Council’s size (we are the 4th largest local authority in the country), any
review of outcomes that focuses solely on “counting” statistics will automatically distort Lancashire’s
achievements. The lack of contextual awareness by national decision makers complicates policy
development and implementation much more than the balance of freedom and accountability between
central and local government.
7.5 The London-centric nature of national policy development serves to reinforce these concerns. While
unavoidable in one context, it is nevertheless reasonable to suggest that civil servants go beyond the south
east to experience local policy in action. We were disappointed, for example, that a promised series of
regional events around this year’s Draft Legislative Programme failed to materialize. Again, it is noted that
improvements in consultation and monitoring mean that central and local government are, to some extent,
closer than ever. However, we should take full advantage of new mechanisms (such as the Government OYce
Network) to communicate with central government more eVectively in the future. Whitehall’s insistence on
“one-size fits all” policies, while a common and long-held criticism by local government, remains an issue for
us, especially when data and other evidence on Lancashire’s needs, strengths, performance and population is
readily available thanks to new and better technology.
8. Does local government make adequate use of its existing powers, such as its well-being, charging and trading
powers? What scope is there for greater use of those powers?
8.1 With the exception of greater financial autonomy, central government has aVorded us with suYcient
powers to endeavour to do all we can for the people of Lancashire. For our part, we have validated central
government’s trust in our capacity to deliver highly-rated services. Prior to the modernisation agenda, local
government was threatened by the transition of core services—adult social care and education—to nonelected bodies. But the duties placed on local government over the last decade have led to positive changes
and we are now the most eYcient part of the public sector, according to the Audit Commission. Municipal
government now enjoys a renewed vogue for “localism” and the rhetoric of empowerment. However, new
structures developed over this time—especially in partnership working—would not have been necessary if
our “place-shaping” abilities had not been truncated by previous governments. The ebb and flow of the local
government debate over time points to a need finally to formalise the role of councils in the national political
settlement.
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8.2 Taking our work on community safety as an example, we are confident that we have the necessary
powers to make a diVerence. What is desired is the freedom and flexibility to use the power or powers most
appropriate to the policy issue to be addressed. Central government may want to know why we are not using
a specific policy tool but the local context may mean that one power has more relevance over another. We
want the freedom to use the policy instrument most appropriate at our spatial level—not central government
insistence that we use all of the possible policy interventions developed at the centre.
8.3 For example, Lancashire’s Youth OVending Team was challenged by the Home OYce and Youth
Justice Board on why Individual Support Orders (ISOs) had not been rolled out across Lancashire. Central
government should be aware that such prescriptive interventions require a good deal of labour-intensive
planning and coordination and in some cases reallocation of resources, not least in the arrangement of
positive activities for youths issued with ISOs. Moreover, additional burdens are placed on local authorities,
such as the requirement to monitor activities and ensure oVender compliance. Central government grants
additional powers to local authorities but almost immediately wants these powers used regularly and
without consideration of impact on other areas of work. Another example of Central Government trying
to drive local delivery was the Home OYce review of the number of ASBOs that were issued and the
challenge to some areas across the country of why more were not being issued.
8.4 Central government monitors the police on their use of “sanction detections” (ie crimes for which
someone is charged, summonsed, receives a caution or other formal sanction). At the same time, the
government has been largely supportive of our eVorts to implement innovative restorative justice models as
part of our community safety strategy. Resolving criminal cases using a restorative justice model has led to
successes in reducing first-time entrants into the criminal justice system. It is this type of innovation that the
government wishes to see in local government. However, such innovation means that individual cases do
not count as sanction detections and consequently the local police and the community safety partnerships
are potentially not in synch. Central government wants to encourage innovation in policy development and
service delivery but they do not always provide the appropriate performance management environment for
this to occur. The previous focus on sanction detections took discretion away from police oYcers. The
current policing green paper may well have addressed this particular issue but the example demonstrates
that potential contradictions in government policy development must be assessed before new guidance or
duties emerge.
8.5 Local government needs a chance to evaluate policies to see whether they are eVective. We certainly
agree with the need to remain accountable but we often have not ascertained the eVectiveness of a specific
policy before further intervention from central government must be entertained. This point relates to one
raised above; Central government continues its attempts to influence the choice of indicators and related
funding in area-based grants even though such funding is not supposed to be restricted in this way.
The scope for greater use of these powers rests with the willingness of central government to acknowledge
the improvement in our sector, trust the rigour of the performance management framework and allow the
evolution of local government to continue.
Improving the Relationship between Central and Local Government
9. What diVerence has the central-local concordat made to central-local relations?
9.1 Councillors and oYcers both report that the CLG-LGA concordat does not enjoy high name
recognition and has made little, if any, diVerence to central-local relations. For example, the changes to
public representations on police matters mentioned above necessarily limits the influence of local
government on community safety. However, we were not part of the discussion on this issue, even though
the concordat says we should have been consulted.
9.2 While we value many of the services provided by the Local Government Association and work closely
with them, central government should be wary of seeing any one organisation as a conduit to reaching the
entire local government community. Nevertheless, the goal of responsible collaboration represented by the
concordat is fully supported by councillors and oYcers alike. Formal, transparent, enforceable and
monitored engagement between central and local oYcials will go a long way to making the informal promise
of the concordat a reality.
10. Should an independent commission be established to oversee the financial settlement for local government?
10.1 The fact that the idea of an independent commission should be established to distribute central
government funds to local government represents in itself a general distrust about the fairness and lack of
clarity in the current Revenue Support Grant system. A number of representative bodies, including the
Society of County Treasurers, and leading academics have produced fairly extensive research highlighting
the many flaws in the current grant distribution model. The main criticisms are a general lack of openness
and clarity over its operation; an inflexibility which prevents it dealing equitably with, for example,
structural change or reorganisation; and most importantly the degree of “ministerial judgement” which is
applied before the grant distribution is finalised. It is this last point in particular which has led to calls for
an independent commission to oversee its operation in order to remove any suspicion of political bias. In
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our view, the current four block grant distribution system is so flawed, it should be replaced by a simpler
and more objective method without the element of ministerial judgement being a part of it. Once that is in
place, the need for an independent commission would reduce significantly.
The Constitutional Position
11. Given the UK’s constitutional settlement, what protections should be placed in law to ensure local
government’s ability to fulfill its responsibility as a balance on the powers of central government?
11.1 The local government community of course recognises the sovereignty of Parliament in the UK’s
constitutional settlement. Along with this acceptance of our role comes a commitment to ensure that
democratic rights are assured in regional and local policy. We remain concerned about the “democratic
deficit” created by the rise of unaccountable regional “buVers” such as the Northwest Development Agency.
Local government is made up of truly democratic institutions that should serve as a check and balance on
growing central power in the regions. Greater local government scrutiny of regional agencies, properly
resourced and balanced, would formally recognise our democratic remit and improve the accountability of
public bodies.
12. What role should Parliament have in the protection of local government’s position within the UK’s
constitutional settlement?
12.1 The pace of change in local government policy over the last 10 years has been swift and constant.
Local government is the most scrutinised and eYcient part of the public sector. It could be that practitioners
do not as yet fully appreciate the changes undergone by the sector. Certainly, for our part, we wish to
concentrate on using the powers we have to their fullest extent rather than lobbying for new non-financial
powers. At the same time, we would welcome a definitive settlement that gives statutory validation to the
current healthy state of local government in England. At present, it appears that national policy makers are
at odds themselves about how to empower local government while ensuring quality policy and service
delivery across the country. The uncertainty over the precise role and responsibilities for (and scrutiny of)
new regional ministers is a case in point. Similarly, Government OYce Network oYcials or newlyempowered regional agencies may be at risk of becoming just another buVer between local government and
Whitehall and often act as advisors on implementation rather than agents of true empowerment. Multi-Area
Agreements or the new Corporate Area Assessment both hold the promise of eVective devolution but these
hopes still rest on government’s willingness to listen to local authorities. Lancashire welcomed the
opportunity to work with government throughout the development of the new Local Area Agreement and
this process—a broad-based central government framework informed by local acumen and prioritysetting—oVers a blueprint for the future of central-local relations. Whitehall cannot continue to promulgate
overly-prescriptive regulations while at the same time call on local government to display more flexibility.
12.2 The central-local relationship will always benefit from open and meaningful dialogue. We feel that
statutory clarification of the relationship would improve policy development and service delivery and fits
with the spirit of constitutional reform detailed in the Governance of Britain Green Paper and the recent
empowerment White Paper. Formal recognition of our place in the constitutional firmament and
enshrinement of our consultation and scrutiny rights would put central-local relations on a footing that
reflects improvements in the sector and updates our constitution in time to face the policy challenges of an
ever-changing Great Britain.
29 September 2008
Memorandum by the London Borough of Camden (BOP 06)
I refer to your letter of 20 August 2008, asking local authorities for:
— practical examples of how your council is using existing powers. such as the power of wellbeing,
to deliver changes that local people want to see; and
— what simple changes, such as removing barriers or a piece of regulation from the centre, could be
made to allow greater freedom in delivering our ambitions or vision for the council.
I hope that this response is helpful in informing the work of the select committee, and indeed, any wider
debate on this issue.
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Existing Wellbeing Powers
There are only a few examples where Camden explicitly invokes the well-being power, but it is implicit in
much that we do. For instance, we are under no statutory duty to undertake activities that promote
economic development in the borough. Yet the council has, and continues to, focus on combating
worklessness, arguably an implicit use of the power of wellbeing. We also lead the LSP and LAA delivery,
and are focusing on healthy neighbourhoods, and pushing both the council and other organisations to
respond to feedback from local people.
The explicit example that comes to mind was in supporting residents against the developers at St Pancras
over 24 hours tunnelling. This not only succeeded but won prizes for the Council afterwards.
Barriers to Further Progress
Whilst central government will rightly claim that new LAAs, the new performance framework and less
ring-fenced funding have gone a long way toward delivering devolution, examples of prescription and
unnecessary regulation from the centre doggedly remain. This “command and control” mentality continues
to stifle local innovation. Often, “opportunities” given to local government feel like they are matters which
have proven too diYcult for central government to arrive at a conclusion about, and so the solution has been
to give local determination.
Central departments need to do what they expect local authorities to do, eg. join up, work together and
communicate. Work underpinning the developments of LAAs, and the progression of initiatives such as the
Lifting the Burdens Task Force, show that issues such as the burden of the performance reporting culture
are recognised, but in practice central departments often continue to work in silos, and see their priorities
as the most important across the piece. There is little evidence of the much-vaunted “earned autonomy” for
the highest performing authorities. There is also a very real issue that as resource allocation becomes tighter,
there needs to be greater consideration of how resources in the ”watching” area can be released and
redirected to the frontline.
It is probably also useful to note that other frameworks also have a direct impact on the eVective and
eYcient running of local government. For example, The Employment Law framework has a number of
unnecessary burdens that prevent flexibility and create practical problems. A significant example of this is
the Code of Practice on Workforce Matters. This statutory guidance adds costs and doesn’t achieve what
it sets out to achieve.
Central Regulation and Control: Camden Case Study
As an example of some of the issues raised above, in Camden the council and the police have been working
together to develop better links between our local area forums and Safer Neighbourhood Panels. Some
residents have questioned why the same issues are being discussed in two diVerent types of meetings within
the same ward. Often residents are unsure which meeting is best for them to attend to discuss their
community safety concerns. We want to create a clearer picture for residents to ensure they are better
informed and better able to influence local decisions and actions around community safety. It is sensible that
we do this through the neighbourhood engagement mechanisms that we have developed in Camden.
We recognise that this aim is consistent with national government policy direction which is focussing on
greater joined up working between public services at neighbourhood level, and specifically closer integration
of neighbourhood policing with local authority-led neighbourhood management. Within this context,
Louise Casey’s recent oVer to the council to work with us to support better integration of service delivery
and engagement on local crime is very welcome. With the oVer, however, comes an unnecessary degree of
prescription in terms of how the council and police will deliver these aims—to the point of setting out, in all
but name, a job description for a new post.
The consequence of this may be that Camden is not able to align and integrate area forums and SNPs in
the way that would most make sense for the council, the police and local residents. This ultimately
undermines local partnership working and does not deliver the best and most locally appropriate forms of
community engagement.
Letting Go of the Reins: Camden Case Study
The preventing violent extremism funding is part of the new area based grant and therefore un-ringfenced.
Councils are, in theory, free to allocate the money to priorities in their particular area, although there is an
assumption from government that it will be directed towards the Muslim community. Recently through the
Government OYce for London (GOL) there have been worrying signs that reporting requirements are being
introduced that exactly mirror requirement that previously existed under the old ringfencing system. In
particular, informal announcements have been made by the by Government OYce for London that councils
will be required to account to government for their spending at the end of the year.
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Conclusion
Camden supports greater freedom for councils and their local partners to innovate in how they meet the
big challenges for their areas, in exchange for greater accountability for their actions and the consequences.
This “freedom to be accountable” approach will mean councils can no longer look to central government
to “bail them out” or to “pass the buck (or blame)”. But it also means central government will need to stop
micro-managing processes, such as the examples mentioned above, and judge councils’ success by outcomes.
29 September 2008
Memorandum by Somerset County Council (BOP 07)
I am responding to the invitation to local authorities to submit evidence to inform the above Inquiry.
1. Since 1997, when the Labour administration signed up to the European Charter of Local SelfGovernment, local government has responded positively to the opportunities oVered by a series of enabling
legislative changes. In particular local authorities have risen to the challenge of putting their well-being
powers into practice to bring about changes which local people want to see. The following practical
examples give you a flavour of how we are using our well-being powers in Somerset:
Active Living Centres
We have created an Active Living Service as part of mainstreaming our successful POPP project
and have 61 Active Living Centres serving local communities throughout Somerset. They are run
by local community groups, with most being sustained entirely by local volunteers. Core funding
for the centres is provided by a joint fund established by the County Council and Somerset PCT.
Age Concern Somerset continues to play a key role by ensuring that local clubs and groups are
linked into the wider active living network within their area. The service is overseen by a multiagency steering group.
Rural Re-generation
The County Council has used its land assets as a driver of re-generation in economically vulnerable
communities and acted as facilitator to broker agreement between a wide range of agencies. This
example relates to an exciting development situated in the coastal market town of Minehead. The
key site development includes 13,000 square feet of high quality business workspace, public realm
improvements to a prominent town centre site, additional tourism facilities including the landmark
re-installation of the railway turntable and, potentially, a young peoples’ centre. This is a
£6.5 million scheme, with significant leverage of RDA and European funding plus active
community engagement with its concept and design.
Connecting Somerset
The County Council led the initiative to drive up the adoption and application of broadband and
e-commerce. Somerset has been transformed from a position of competitive disadvantage to the
most e-connected shire county in England. We have achieved value added by brokering and coordinating the activities of various public and private sector bodies in this sphere.
Somerset Fuel Poverty Partnership
An example of the PCT, DWP, the Centre for Sustainable Energy and Somerset local authorities
working together to reach the maximum number of vulnerable people and make it easier for them
to access support and advice.
2. So what simple changes could be made in allowing us greater freedom to deliver our vision and
ambition for Somerset? I would reflect that although many of the legislative changes over the last 10 years
set out to be enabling, arguably the much closer inspection regimes and fundamental dependence of local
government on central government funding with its attached controls means that local authorities are less
able to do things on a local basis which fully reflect local needs and aspirations for fear of losing funding,
breaching central grant conditions or slipping in the assessment tables.
3. A practical example of central funding controls relates to the recurrent capital grant for community
safety. Most community needs are revenue rather than capital and the flexibility to spend the grant at a local
level on either revenue or capital would enable local authorities to respond more eVectively to local
circumstances whilst delivering improved outcomes.
4. With regard to the central performance regime we welcome the move from Corporate Performance
Assessment to the Comprehensive Area Assessment. The new framework is broadly sensible and we support
a more integrated approach to inspection and a reduction in key indicators. However, if the new
performance framework is to succeed then it is important that successful authorities are trusted to get on
with delivery and not subjected to micro management with time and capacity distracted and diluted by a
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lack of joined up processes between central and regional agencies. Already we are seeing a plethora of self
assessment requirements emanating from the Audit Commission, Government OYce and Regional
EYciency and Improvement Partnership.
5. In the past the allocation of functions has felt somewhat piecemeal and we would welcome a more
coherent programme for the future. For example, why are the local decision making processes on whether
someone gets planning permission or a liquor licence (sometimes for the same premises) fundamentally
diVerent? It seems that every statutory function has a diVerent statutory scheme under which it is operated
and the methodology changes between functions and over time in a way which isn’t helpful or often
practical, locally.
6. It would be helpful for any future devolution or transfer of functions to be achieved through a
consistent framework. The developing of an integrated tool-kit of best practice business design processes
which can be used to devolve any further decision making to a local level would be a step forward.
7. In addition, many initiatives emerge from central government direct to local government with each
council taking a view whether to respond and in what way without the opportunity to consider a sector led
approach. A good example of this is the Local Employment Partnership (LEP) scheme which supports
disadvantaged people into work. This County Council was amongst the first to respond and others have
since followed. However, early brokerage between the central government, relevant central departments, key
agencies and local government would have helped to give this initiative real traction in the sector, avoiding
a more piecemeal approach. The LGA is well positioned to make a significant contribution here.
In summary, it would be helpful for the Committee’s review to consider the extent to which the change
agenda envisaged by the European Charter has been delivered—this could inform the scope of future
devolution.
30 September 2008
Memorandum by The Federation of Small Businesses (BOP 08)
Introduction
The Federation of Small Businesses (FSB) welcomes the opportunity to present this submission to the
Communities and Local Government Committee inquiry into the balance of power between central and
local government.
The FSB is the UK’s largest non-political lobbying group for UK small businesses, existing to promote
and protect the interests of all who own and/or manage their own business. With over 165,000 businesses in
England, our members are drawn from small and micro businesses across all sectors.
Before addressing the specific questions set out the Committee’s briefing paper, we wish to present as
background the role of small businesses in the community and their relationship with both central and local
government.
Background
— Small businesses are the life-blood of local communities. It is the independent local shops, farmers,
craftsmen, accountants, solicitors and the many others who give towns and neighbourhoods their
distinctive character. They are the creators of wealth and employment.
— In addition, these same business owners frequently support their local community in other ways.
They sponsor local sports teams, help local arts events and give of their time to help others.
— Much of their contact with local councils comes about because local authorities are responsible for
enacting some 80% of Government legislation. This responsibility ranges from collecting business
rates, enforcement of trading standards, health and hygiene, issuing of licences to planning matters
and a host of other duties.
— Unfortunately, when it comes to consultation by local councils with the public and the wider
community, small business owners often feel side-lined. Strategic plans seem to concentrate on
housing and neighbourhoods with the needs of business and the need for business added as an after
thought. Too many Local Strategic Partnerships (LSPs) have little or no participation from the
local business community.
— Meetings are frequently held during weekday working hours when owners are busy running their
businesses. This is a pity because many business men and women do wish to play a fuller part as
evinced by successful town centre partnerships and business improvement districts (BIDs).
— Regarding the financing of local government, business already contributes through business rates,
Section 106 agreements and licence charges.
— Although there are calls for the relocalisation of business rates, to which the FSB is opposed, it
must be remembered that many local authorities benefit from the equalised distribution of the total
rates revenue.
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— Now the Government has proposed a Community Infrastructure Levy and a Business Rate
Supplement both of which will be paid only by businesses. British property taxes are already among
the highest in the world without the possibility of further levies. It might be thought that
Government considers business a “soft touch”.
Answers and Comments to Questions Posed in the Committee’s Briefing Paper
Further Devolution
Does local government need greater autonomy from central government? If so, in what ways?
1. Yes. There needs to be a slackening of central control to allow local authorities the freedom to pursue
policies geared to their own unique localities. But to work authorities need greater in controlling their
own finances.
Do local government’s role and influence need to be strengthened in relation to other public services, such as
policing and health?
2. The FSB is not clear what would be gained from this exercise. It could give rise to another set of
Quangos. Over the past years we have seen a huge explosion of quasi autonomous non government
organisations (Quangos) that are dealing with the public on the government’s behalf and yet are not
accountable to those whom they serve.
3. A Home OYce Green Paper, July 2008, suggests police authorities should be elected and not appointed
from local councillors. However, what is to stop elected councillors standing for election to police authorities
so nothing changes?
Financial Autonomy
Does local government need greater financial freedom? If so, in what ways?
4. Only by allowing local authorities the freedom to use Government grant monies as they see fit can
greater power at a local level be exercised. The Scottish model is a good example where after satisfying
statutory expenditure requirements for education, social services, etc, local authorities in consultation with
their local citizens spend the rest as they see fit.
Should local government be able to raise a greater proportion of its expenditure locally?
5. The FSB believes in strong local authorities, delivering for local communities.
6. The FSB opposes the relocalisation of business rates.
7. Businesses should not be treated as a “soft-touch” when it comes to raising local revenues. The
perpetual increases in parking charges, the imminent Business Rate Supplement, Section 106 Agreements
and the proposed Community Infrastructure Levy all take money away from local businesses.
8. A balance should be sought between what level of service a business can expect from a local authority
from paying business rates (though this money is transferred to the Treasury) and what level the business
community is expected to contribute to improve the footfall and sustainability of a local community.
9. The FSB believes that small businesses should not be made to pay for the funding shortfalls of local
authorities, and certain large scale projects that the Business Rate Supplement is intended to pay for
enhances the whole community, not just the business sector.
10. The government needs to study the findings from the Balance of Funding Review 2004 and the Lyons
Inquiry Report 2007 to see how local authorities are funded elsewhere.
What eVect does the capping of council tax rises have on local accountability?
11. The FSB feels that council tax capping by government restricts growth and can have a negative impact
on small businesses. Local authorities will need to make up the decrease in income and levies, charges and
extra taxes on small businesses is one method of doing so.
12. We are not convinced that the capping technique increases eYciency, but rather local authorities
simply cut costs in areas such as the arts and green spaces.
Existing Powers
To what extent are local government services a product of national or local decision-making?
13. The vast majority are a product of national decision-making. 80% of Government legislation is
enacted by local authorities. People think that it is their local council imposing restrictions, charges, etc but
it is at the behest of central government.
14. Local authorities must be given more flexibility within current and forthcoming legislation to
accurately reflect local communities and the diversity that exists within business, skills and demographics.
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Does local government make adequate use of its existing powers, such as its well-being, charging and trading
powers? What scope is there for greater use of those powers?
15. The FSB would like to see all local authorities stop using their trading powers as it impacts most
strongly on local businesses.
16. The FSB has seen the trading powers used by Kent County Council, and we strongly believe that it
is not the place of local authorities to become involved within the private sector.
17. Local authorities will have an automatic advantage in accessing finance, acquiring contracts and
employing staV, which are to the detriment of local businesses.
Because the last three questions under Existing Powers and the Constitutional Position are constitutional
issues the FSB does not comment on such issues.
September 2008
Memorandum by West Sussex County Council (BOP 09)
West Sussex County Council has been a party to the response made by the County Councils Network
(CCN) and endorses the broad thrust of their response—in particular, that increased freedom and flexibility
for local government would be an important step towards delivering improved services in a more costeVective way, and streamlining central control would allow national politicians to focus more strongly on
key priorities.
WSCC supports the emphasis in the CCN response on improving the coherence, responsiveness and,
therefore, eVectiveness of services to meet local residents’ needs by:
— developing a framework for a mature discussion between central government and local authorities
on the balance to be achieved between national standardisation of services and the need for local
variation to take account of diVering local contexts;
— reducing the extent, and inflexibility of, national accountability measures;
— highlighting the key role that local government should have in helping to shape service delivery by
other public sector agencies, and the potential damage to this role if parallel and separate
democratic structures are established for particular agencies (for example, the police);
— supporting moves towards Council control over a broader range of revenue-raising options, and
towards greater transparency and consistency in the mechanisms whereby central funding is
allocated to local authorities;
— maintaining, and preferably enhancing, the accountability of locally elected Councillors for
regional planning; and
— challenging moves by central government to remove local planning from local democratic control.
In addition, we would highlight the following points of detail:
The Balance between Local and National Accountability
1. While the CAA proposals do address some of the weaknesses of the discredited CPA system, we still
have major reservations about how eVective CAA will be in achieving its objectives, and about the burden
of cost that the exercise will continue to place on local authorities. We have a particular concern that, with
the advent of a new inspectorate for adult social care, any new assessment framework should be fully
integrated with, and not duplicate, the CAA process.
2. While we also welcome the reduction of the national indicator set, we still regard NIs to be insuYciently
flexible, and in some cases to be measuring the wrong things—thereby potentially distorting priorities to
improve service for our customers. For example, the new NI set for Adults’ Services continue to focus too
much on activity rather than outcomes.
The Relationship between Local and Central Government
3. While there have been improvements to the ways government ”field forces” interact with local
government, there are still too many such interactions which add very little value and which incur significant
costs in terms of oYcer time. An obvious example would be the DCSF-sponsored national strategies which
appear to be having little impact on raising standards, particularly in primary schools. The considerable
amount of funding that goes into these agencies could be much better spent much closer to front line
service delivery;
4. There continues to be a flow of ad hoc initiatives by central government, for example in the area of
community safety, that require local authorities to bid for funding at very short notice. These bids often
require detailed involvement of partner agencies, and it is impossible to secure their engagement in the time
available.
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Financial Autonomy
5. When funding is granted, it often comes with so many strings attached that the flexibility to fit in with
local arrangements becomes impossible. An example of this was a grant for collecting assault data from
hospital A&E departments. The outcomes of this project could have been achieved eYciently and eVectively
at one of our hospitals using an existing agency who were experienced in the collection of this data. However,
their involvement was excluded by the terms of the grant, which resulted in a 12-month delay to delivering
the service and significant additional cost as other staV had to be trained to take on the work. As a result
of this experience we will not be engaging with central government in achieving these outcomes in other
hospitals.
September 2008
Memorandum by Manchester City Council (BOP 10)
Further Devolution
Does local government need greater autonomy from central government? If so, in what ways?
1. Local government does need greater autonomy from central government. We welcome the
devolutionary principles of the Sub-National Review, but believe that government needs to recognise that
diVerent forms of governance are appropriate in diVerent places. In particular, cities—the engines of growth
for their regions—need more autonomy than they have now. At a time of economic challenge, it is even more
important that the key drivers of the nation’s economy, are given suYcient freedom to maximise their
potential contribution to national economic growth and stability. We need to create room for cities to
develop their own governance arrangements, which build in stronger, more direct, accountabilities.
2. To really empower the best leaders in cities we need to allow local government in cities to come up with
their own solutions that are fit for the people and places they represent. Government should therefore take
the necessary powers to give governance models in individual cities statutory backing, but retain the power
to grant or not grant proposals from cities for new governance arrangements as a safeguard.
3. The basis on which Government would make decisions about diVerentiated devolution would be that
the degree of power devolved from central to local government would be proportionate to the impact it could
have. We suggest that there should be two core criteria, subject to debate and negotiation with Government.
First, the levels of autonomy granted should be based on the scale of opportunities presented for economic
growth and for reducing poverty and deprivation. Individual local authorities would be challenged to
provide hard evidence demonstrating their potential to drive further economic growth and to connect the
benefits of this to our most deprived communities.
4. The second criteria would be an assessment of the capacity and capabilities of each authority to create
the required growth, and to deliver their full potential contribution to the economic growth and well being of
the nation. Part of this judgement about capacity and capabilities is about how robust local or sub-regional
partnerships are, what steps have they taken to ensure good decision-making and proper local
accountability.
5. The Greater Manchester MAA submission presents a very strong case for granting greater freedom
to the sub-region to drive forward our jointly agreed economic and social priorities. Government needs to
acknowledge that capacity and capability for greater sub-regional governance has developed at diVerent
speeds in diVerent places and whilst challenging, should adopt a diVerential approach to devolution which
rewards those areas, like Greater Manchester, which have taken the bold steps necessary.
Do local government’s role and influence need to be strengthened in relation to other public services, such as
policing and health?
6. Local authorities are the essential lynchpin of ensuring eVective public services for our communities.
Our leadership of Local Strategic Partnerships gives us a pivotal role in ensuring the alignment of priorities
across local public services. We believe that this role should be exercised through partnership and
negotiation, and that the duty to co-operate is currently suYcient; although there would be a case for
strengthening the power of scrutiny. However, while exercising this role, we regularly come up against the
issue of national versus local priorities. It is important that local targets are given equal weight with national
targets so that national priorities that are not relevant locally do not pointlessly dominate.
7. Within the area of crime and disorder for instance, diYculties are often created between conflicting
local and central government priorities. National announcements within this area do not always take local
agreements into account. Even at the sub-regional level, there is also the issue of partners within the same
field using diVerent performance measures. This is the case in Manchester with the Police using diVerent
criteria to the Crime and Disorder Partnership. We also believe that supervision and inspection needs to be
consistent, with the contribution all partners make to tackling the priorities of a place being taken into
account. At present local government gets judged, in part, on what other agencies do or don’t do. We would
argue for a clear contractual commitment from all partners to the delivery of jointly agreed priorities;
contractual, so that failure to deliver their part of the bargain has consequences for that organisation.
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8. This said, local government is free to take innovative steps in this regard without Government
proscription—which is our approach in Manchester. As an example, the Chief Executive of the Manchester
Primary Care Trust is a full member of Manchester City Council’s Senior Management Team.
Financial Autonomy
To what extent do the current arrangements for local government funding act as a barrier to local authorities
fulfilling their “place-shaping” role? In particular:
— Does local government need greater financial freedom? If so, in what ways?
— Should local government be able to raise a greater proportion of its expenditure locally?
9. We support the LGA case for a reform of local government funding and for local government to have
access to more of its own income. This would mean nationally that there would be less of an eVect on the
council tax from spending decisions; currently a 1% increase in spending can lead to a 4% increase in
council tax.
10. Manchester, with a low tax base and a high need to spend, has a higher than average level of ”gearing”
as only 20% of our net revenue funding requirement is covered by Council Tax. As such, our Council Tax
would have to increase by 5% for each 1% increase in our budget over that provided by central government.
This limits the ability of the Council to raise funds to pay for local priorities.
11. The current system is neither easy to understand nor transparent and does not provide clear
accountability for decisions on budgets and Council Tax levels. The complexities of the system mean that
it is diYcult to pin down what drives local decisions leading to service changes or increases in Council Tax.
12. There are also concerns that the Council Tax by its nature does not meet the requirements of a ”good”
tax. It is not buoyant in that the tax base on which the tax is charged (domestic properties) does not increase
in line with the general improvement in the economy. To increase revenue from the tax each year to meet
increased costs, it is necessary to increase the tax rate. Because of the gearing eVect this has led to high
increases in past years across the country.
13. Council Tax is also an ”unfair” tax. The regressive nature of the Council Tax means that it is a higher
relative burden to the less well oV and continued high increases in Council Tax will eventually make it
unaVordable by the more deprived members of society (even after benefits are taken into account).
14. We would therefore support a call to give local government greater financial freedom and would want
to see a higher proportion of our funding needs raised locally. We believe that creating a stronger link
between local spend and local funding will strengthen accountability and help the Council to become more
engaged with local voters.
Proposed Options
15. In the short term, we would argue for reform of the current Council Tax system to address some of
the concerns about the nature of the tax. We have in the past proposed widening the number of bands used
for Council Tax purposes by adding additional bands at the top and bottom. We have also argued that the
tax paid by those in the bottom band and those in the top band should be widened from the current 1:3 (this
means that households in the highest band only pay three times more tax than those in the lowest band).
These two options together would help make the tax less regressive and less of a burden to the generally less
well oV. But in a Manchester context such a change is likely to reduce the proportion of funding raised locally
and further increase our gearing ratio.
16. Therefore, we believe there is also a case for the re-localisation of the National Non Domestic Rate
(NNDR). This would widen the tax raising powers of the Council and move the balance of funding back
towards the levels pre 1990. It would also help the Council to engage more meaningfully with local businesses
to help ensure the Council are better meeting their needs. It would also provide a direct incentive to the
Council of increasing the level of business activity in the city. We recognise that this will bring with it the
responsibility to ensure that tax in Manchester remains competitive and provides good value for money as
we appreciate the impact on businesses of high tax levels. Discussions have taken place within the
Manchester business community on this issue and they are sympathetic towards our case.
Going Further
17. As well as exploring the re-localisation of the business rate we are considering, at city-region level,
joint powers of prudential borrowing and finding innovative ways to deploy the assets of various public
sector partners to facilitate investment and help lever maximum value to the public purse. Cities like
Manchester need to invest substantially in their infrastructure if they are to remain competitive. Most cities
in the US and Europe are able to deploy a variety of methods in order to do this. Alongside the other 7 Core
Cities, Manchester is making a case for the devolution of more funding to regions and sub-regions and for
the piloting of innovative financial tools to enable us to invest in the big ticket items such as transport
infrastructure which are so clearly needed.
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Ev 150 Communities and Local Government Committee: Evidence
— What eVect does the capping of council tax rises have on local accountability?
18. Manchester has a long history of Council Tax Increases that have been held below inflation, this will
be the 9th consecutive year now and as such capping has not been an issue for Manchester during this period.
However, capping cuts across local accountability and local spending decisions and as such Manchester
would support its removal. We have also previously recommended that a number of bands be increased at
the top and bottom of the range and that the proportions at the top and bottom
Existing Powers
To what extent are local government services a product of national or local decision-making?
19. Bold devolution, diVerentiated by each city’s potential to release further economic growth and its
capacity to connect the wealth generated to people in deprived communities is an issue for cities because it’s
in our most deprived communities that people most need to see change geared to local needs not national
priorities.
20. New LAAs have reduced targets for local government but other public services are still tied own by
input and process controls. Whitehall needs to let go and enable all public services be held accountable
locally. The people of a city need a mesh of services to create genuinely sustainable communities: better
educational attainment, higher skills, better employability, longer life expectancy, less crime and antisocial
behaviour, better transport etc. The precise choice and mix of targets will be city specific.
21. Each individual in each deprived community in our cities is not a collection of problems for public
services to sort out. We need to empower and individuals and communities. We need to break through cycles
of deprivation; to reverse cultures of dependency. Public services need to help people invest in themselves,
in their own futures to raise their own individual ambitions and self esteem. We need governance of cities that
reinforces and rewards individual and community self-improvement. Helping people to be more resilient to
the problems of deprivation and to be better able to take the opportunities being generated by the success
of our cities can never be achieved through command and control. It can be achieved through local
leadership and within sensible and sensitive governance arrangements that change the way public services
see their role.
Does local government make adequate use of its existing powers, such as its well-being, charging and trading
powers? What scope is there for greater use of those powers?
22. Manchester City Council makes good use of the powers that it has.
Improving the Relationship between Central and Local Government
What diVerence has the central-local concordat made to central-local relations?
23. We welcome the sentiment of the concordat, however, it is too early to judge whether it has made any
real, lasting diVerence to relations between the central and local tiers of Government.
Should an independent commission be established to oversee the financial settlement for local government?
24. We support the view expressed in the LGA’s document “A new vision for local government finance”
that there should be a new independent “public finance commission” to oversee and maintain a sustainable
local finance regime. This would allow for a depoliticised approach to be taken, similar to the precedents set
for this in banking and finance eg independence of the Bank of England and lighter touch to the Financial
Services Authority. The commission would not be involved in making political choices, but could provide
independent evidence evaluation and advice to both central and local government around key issues.
25. Such a commission would provide the opportunity to devolve from Government a number of tasks
which are probably better regulated outside the government, including:
— Stewardship of overall funding regime including determination of the distribution and equalisation
of mechanisms and maintaining an overview of accountability arrangements.
— Keeping data and tax base valuations up to date, in the latter case by commissioning contract work
from valuation oYces.
— Regulation of a devolved regime of fees and charges, and to investigate and advise on new or
alternative charging regimes.
— Provide the regulatory framework for the relocalisation of business rates.
— Research and advice, to support the integrity of the system.
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The Constitutional Position
Given the UK’s constitutional settlement, what protections should be placed in law to ensure local government’s
ability to fulfil its responsibility as a balance on the powers of central government?
Under the current settlement, local government will always be subject to the whims of central government.
A new constitutional settlement is required that enshrines the rights of local government and local
democracy.
What role should Parliament have in the protection of local government’s position within the UK’s
constitutional settlement?
No comment.
September 2008
Memorandum by Mansfield District Council (BOP 11)
Set out below is evidence for the above Inquiry which focuses on three areas of interest to the Inquiry:
— Further devolution—evidence is presented from the experience of a directly elected Mayor in a
two-tier local government structure, focusing on the mismatch between the expectations of the
public and actual power and influence of a District Elected Mayor.
— Financial Accountability—evidence supports the inappropriateness of finance ceilings for the rate
support grant and capping powers that have they eVect of providing a mechanism to deflect
accountability.
— Existing powers—evidence is presented to demonstrate the inappropriateness of the Secretary of
State’s powers to determine planning consent and historic building consent for local planning
decisions.
1. Further Devolution
1.1 The importance of local autonomy and consequently local accountability in matters relating to local
government are important if local elected community leaders are to be seen by their communities as
instrumental in local place shaping.
1.2 The development of executive structures for local authorities since the Local Government Act
2000 has done much to increase the sense of local accountability. In Mansfield, local people have embraced
the concept of local accountability more so than in many other parts of the country through the election of
a directly elected Mayor.
1.3 Local peoples expectations of the powers of a directly elected Mayor, however, in many instances,
exceed the true position, as a consequence there is a growing sense of the Mayor being held accountable by
the electorate for issues beyond his field of influence or autonomous control, such as the provision of health
services, policing levels, and in Mansfield, a District Council area, children and adult services which remain
the responsibility of the County Council.
1.4 Central Government has expressed the wish for more visible and accountable local leaders and see
an increase in directly elected Mayors at a local level as the preferred route to achieve this outcome. The
recent White Paper Communities in Control, Real Power, Real People, suggests incentives to encourage the
adoption of these arrangements, setting out the expectation that directly elected Mayors would chair Local
Strategic Partnership’s and sit on Police Authorities.
1.5 These incentives and much of the ambition to make directly elected Mayor truly accountable locally
for the decisions that shape their locally do not, however, take account of the current two-tier form of local
government which persist across much of England.
1.6 Local people generally do not recognise the distinction between the responsibility of diVerent tiers of
local government or who is responsible for the provision of health and police services. The accountability
that the government seeks for local leaders through the mayoral form of local government executive can
only be truly meaningful alongside unitary local government and coterminous health and policing provision
for which Mayors should have statutory powers; responsibility for provision of heath services in Unitary
Councils with coterminous Primary Care Trust’s and a statutory place on local police authorities, with local
police divisions coterminous with Unitary Authority boundaries. In the absence of unitary local government
where a directly elected Mayor is in place the statutory right to serve on the Police Authority and
coterminous police division is the minimum requirement for meaningful influence by Mayor at a local level.
However, whilst this evidence supports the creation of Unitary local government as the preferred model for
local government in England, the current presumption towards county area unitary local government is
unlikely to lead to an increase in Mayoral executives. The size of county area unitary authorities is unlikely
to be as meaningful to local people from the point of view of place shaping. There are currently no elected
Mayors in county areas.
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2. Financial Accountability
2.1 A local government finance settlement formula that sees local finance settlements restricted by finance
grant ceilings for some authorities in order to cushion the impact of the reduced settlements to areas of less
need cannot be supported and completely undermines a local authorities place shaping role.
2.2 Likewise, where a local authority has set out its plans for developing its area and local services,
centrally imposed Council tax capping undermines local accountability. In both cases local decision makers
could use the existence of these central government imposed measures to deflect the responsibility for local
decision making to the government, and indeed some will try to do so. However, more often, local people
will erroneous blame local decision makers for decisions not to invest locally in matters of local importance
despite the fact that local decision makers may not be free to do so due to Government imposed limits to
grants and spending.
3. Existing Powers
3.1 Ultimately, the quality and quantity of local public services is limited by resources available from
central government to develop and deliver them. As mentioned above, however, the existence of Central
Government restrictions can provide a shield behind which local government decision makers can chose to
hide if they wish to do so.
3.2 Well being and trading powers are welcomed and probably could be used more by local government.
However, there is one area of law which flies very much in the face of local autonomy and decision making
and reduces the ability of local leaders to carry out their place shaping responsibilities in an eVective and
timely matter.
3.3 This relates to the Secretary of States role in relation to various local planning issues.
3.4 Departures from the local plan and historic building consent are both cases in point. The requirement
to refer such matters to the Secretary of State can and does build in long periods of delay to decision made
locally about the nature of a place and its development which are at the core of the place shaping agenda.
3.5 The delays experienced are often diYcult to explain to the local electorate and appear to be
unnecessary tiers of bureaucracy. The experience in Mansfield has been that local people believe the Mayor
should be able to implement his proposals without central government interference. By way of example the
decision to demolish a dilapidated twentieth century indoor market extension to a Grade II Listed Town
Hall in the centre of Mansfield; proposals for which are supported by a qualified Conservation OYcer for
the Council, the Planning Committee, local Police, business community and local electorate, continues to
be delayed by over eighteen months due to the requirement to refer to the Secretary of State. As a
consequence the Mayor stated ambition to rid the Town Centre of an eye sore and vandalism hot spot as
part of wider proposals to redevelop the Town Centre are being delayed.
3.6 Reform of this legislation would restore balance between central and local government firmly placing
important planning decisions in the hands of those elected and held accountable locally to do so. A call-in
power, rather than the responsibility to refer such applications would be suYcient to ensure the appropriate
checks and balances are in place.
September 2008
Memorandum by Gateshead Council (BOP 12)
Further Devolution
Does local government need greater autonomy from central government? If so, in what ways?
1. In our view, the key issue for local government is not the granting of new powers, but the need for a
period of stability for local government, to allow the sector to embrace its changing role as a community
leader and place shaper. We would therefore support, in general, the principle of greater autonomy for local
government.
2. Local government now has significant powers at its disposal. The general power of well being
contained in the Local Government Act 2000, has underpinned (if used ambitiously) a community
leadership role, which Gateshead Council embraces. The key challenge for local authorities is to ensure that
these powers are used for specific well-defined purposes, which are based on sound evidence and which have
widespread local support. We would consider powers of “general competence” for local government to be
too wide.
3. Local authorities have demonstrated their ability to change and evolve over time, as well as their ability
both to achieve significant eYciencies, and to improve the quality of their services, as evidenced by the broad
upward trend in CPA scores nationally.
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4. However, there have been two significant White Papers and associated legislation on the role and
function of local government in two years—the Local Government White Paper 2006 and the Communities
in Control White Paper of 2008. The latter, in particular, is now being followed with six additional
consultations and guidance notes in advance of the publication of legislation.
5. We would also suggest that the recent Communities in Control White Paper illustrates a tendency for
central government to prescribe how local authorities should operate in far too much detail. Central
government should set out a national framework, and then empower local authorities to deliver this
eVectively at a local level without further prescription.
6. Faced with this degree of guidance and prescription, local authorities are being asked to continually
change the way in which they operate, with new proposals emerging before existing proposals have been
fully explored—a constantly shifting policy context does not enable eVective local working. Not only does
it create additional activity in interpreting and responding to guidance and consultation documents, but also
it serves to stifle innovation at a local level, by removing incentives for local government to develop genuinely
local solutions and interpretations that best meet local needs.
7. We would suggest therefore that central government should, as a matter of course, consult the Local
Government Association under the terms of the concordat on whether new guidance is needed, and whether
this should simply be issued via the LGA/IDEA as best practice wherever possible.
Do local government’s role and influence need to be strengthened in relation to other public services, such as
policing and health?
8. In the existing statutory framework, current powers are suYcient for local authorities to engage
productively with other public services. The duty to cooperate provides a mechanism for working with a
wide range of other public services, and we have taken opportunities locally to ensure that they are also
engaged in our scrutiny functions throughout the whole process.
Policing
9. I would like to make some detailed comments on the relationship between local government and
policing, which are influenced by some of the proposals contained in the recent Policing Green paper.
10. I am concerned about proposals in the recent Green Paper that I feel have the potential to undermine
the role of the local authority in respect of policing. I have written directly to the Home Secretary on this
issue, and want to take the opportunity to address some of these issues in this response.
11. Whilst I welcome the objective in the Policing Green Paper to increase service accountability at a local
and area command level, in my opinion we already have this with a Police Authority made up of:
— Nine democratically elected councillors who are answerable to the community at large, as well as
their own local area; and
— Eight independent members, including three magistrates, who bring a wealth of diVerent
experience to the authority.
12. The Authority has a responsibility to ensure the provision of an eYcient and eVective police service
across the whole of Northumbria, and this diverse group of people allows the Police Authority to operate
in an independent, fair and balanced way.
13. As a “Responsible Authority”, a police authority—along with the local police force, usually the area
commander—already works in partnership with local councils and other organisations to reduce crime and
disorder. This work, which is often through the Crime and Disorder Reduction Partnerships, focuses on
local and neighbourhood issues. Following the implementation of the recent review of the partnership
provisions of the Crime and Disorder Act 1998, members also represent the Authority at a strategic level on
these partnerships. This representation and involvement ensures the Authority is aware of local
neighbourhood issues across the whole force area.
14. With this in mind, I am concerned that if members of a police authority have a mandate to address
local crime and disorder issues, then focus on this strategic overview could suVer.
15. Taking these points into consideration, I believe the Government can make police authorities clearly
accountable to the electorate by linking the democratic legitimacy of the elected members on the authority
to the chair: ie by requiring that police authorities are chaired by an elected local authority member.
16. I would welcome the opportunity to attend a meeting of the Select Committee to expand on this
issue further.
Health
17. In respect of joint working with health partners, my view is that there are suYcient powers to enable
local authorities to work in partnership with health agencies. A proactive approach to partnership
arrangements, such as shared budgets, and a strategic and planned use of each other’s resources, can bring
real health benefits. In Gateshead, the appointment of a Director of Public Health is shared between the
Council and the Primary Care Trust.
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18. The power of Overview and Scrutiny to scrutinise health arrangements is seen as extremely positive.
19. However, I am concerned about the absence of any real degree of accountability in the health sector.
The recent Communities in Control White Paper says little about the intention to increase the democratic
accountability of Strategic Health Authorities or Primary Care Trusts. I think there is a debate to be had
about whether local government should be given a greater opportunity to influence health bodies, either
through greater representation on Boards, or through a more formal role as a commissioner of services.
Financial Autonomy
To what extent do the current arrangements for local government funding act as a barrier to local authorities
fulfilling their ”place-shaping” role? In particular:
— Does local government need greater financial freedom? If so, in what ways?
— Should local government be able to raise a greater proportion of its expenditure locally?
— What eVect does the capping of council tax rises have on local accountability?
20. Capping of council tax increases conflicts with the role of local authorities as being accountable for
local decision-making. National spending on local government will increase by only 1.5%, 0.8% and 0.7%
above inflation over the next three years. This inadequate level of resources and the constraints on council
tax is likely to result in cuts in services.
Council Tax
21. Although the Government has previously announced its intention to undertake a revaluation for
council tax purposes, the lack of this clearly continues to penalise council taxpayers in deprived urban
authorities outside of London and the South East, such as Gateshead, who are predominantly in lower
valued properties. The lack of action on the significant relative movements in house prices since 1991 means
that Band D council taxes in Gateshead are significantly greater than they should be.
22. The merits of council tax are its predictability and ease of collection but it needs reform as follows:
— Increase the number of bands—band A should be split into two bands and at least one further band
added at the top end of the bands to better reflect diVerences in property values, wealth and income.
Reforming council tax by adding new bands will reduce bills for those in the lowest value
properties, paid for by increased bills for those in higher value properties—there should be no
increase in average council tax bills as a result of this;
— Revaluation—the significant relative movements of house prices since 1991 means that Band D
council taxes in Gateshead are significantly greater than they should be. Government should
conduct a revaluation of all domestic properties for council tax, ensuring transitional
arrangements to ensure households do not face steep increases from one year to the next.
Subsequent revaluations should take place regularly and automatically at intervals of no more than
five years;
— Revise tax benefit system by increasing the savings limit and changing from a means tested benefit
to an entitlement benefit in order to improve take-up.
Re-localisation of Business Rates
23. This is capable of significantly shifting the balance of funding. If the business rates were returned to
local control, it would bring the balance of funding back in line with a 50:50 split. This would help in
restoring the balance of funding, reducing the eVects of gearing and taking some pressures oV local
authorities.
24. Currently, rates are collected into a national pool and are re-distributed to local authorities according
to population figures. Increases in rates are linked to the retail price index (RPI); therefore, the contribution
of business to local authority expenditure has decreased from 29% in 1990–91 to 19% in 2004–05. As local
government expenditure has increased since 1990 by significantly more than inflation, this has increased the
pressure on council tax to fund local authority expenditure.
25. Removing the link with RPI is crucial in halting the declining business contribution to council
expenditure. It is also an administratively straightforward way of increasing the local government tax base.
Existing Powers
To what extent are local government services a product of national or local decision-making?
26. Current service provision is necessarily a product of a combination of central and local priorities. The
new LAA framework gives a greater sense of shared responsibility, but negotiations are still subject to
agreement from central government, and the scope for purely local priorities to be addressed remains low.
This is further evidenced by the financial system, which eVectively reduces the ability of local authorities to
deliver key priorities and to allocate appropriate resources through the perverse ”gearing” eVect.
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Does local government make adequate use of its existing powers, such as its well-being, charging and trading
powers? What scope is there for greater use of those powers?
27. Evidence seems to suggest that well-being, charging and trading powers are being used to varying
degrees. Gateshead has utilised the well-being powers in an aspirational and innovative way in a number of
initiatives, which support its “community leadership” role.
28. On trading, the Local Government Act 2003 provides that the trading power can only be exercised
through a company within the meaning of Part V of the Local Government and Housing Act 1989 (ie
Companies Ltd by shares or guarantee or a Provident Society). This leads to two issues:
— We would question why trading needs to be exercised through a company at all. Authorities already
provide public services eVectively in competition to the private sector. There would be appropriate
safeguards within the procurement, anti-competition and state-aid legislation to ”protect” the
private sector from an authority’s ability to trade within that sector.
— Specifically, it would appear that the legislation does not allow an authority to trade through a
Limited Liability Partnership. This is a corporate vehicle, provided for by legislation, which may in
some circumstances be the most appropriate vehicle. The legislation creating LLPs [ie the Limited
Liability Partnerships Act 2000] came into force before the LGA 2003 so could have been included
within its definition of bodies able to trade.
Improving the Relationship between Central and Local Government
What diVerence has the central-local concordat made to central-local relations?
29. The concordat provides a useful mechanism to manage the relationship between central and local,
but the perception remains that it has not provided the radical shift in the balance of power that it was
designed to.
Should an independent commission be established to oversee the financial settlement for local government?
30. We would support the idea of an Independent Commission. This would be a potential way of
identifying the full range of options available. However, we would wish to seek reassurance that the
Government would be willing to consider the recommendations from such a Commission.
The Constitutional Position
Given the UK’s constitutional settlement, what protections should be placed in law to ensure local government’s
ability to fulfil its responsibility as a balance on the powers of central government?
31. Gateshead Council supports the system of local representative democracy first comprehensively
embedded in law by the Local Government Act 1972. It further supports an ongoing legislative programme
that deals not just with the provision of public services but ”enables” and encourages a community
leadership role for authorities.
32. Gateshead endorses the LGA’s call for councils to be at the heart of constitutional reform. In
particular it is considered appropriate to:
— Reform the local government finance system, including the abolition of the capping.
— Put a statutory duty on government to devolve decision making from the centre to the lowest
appropriate level.
— Make the audit commission directly accountable to Parliament.
What role should Parliament have in the protection of local government’s position within the UK’s
constitutional settlement?
33. No specific comments.
September 2009
Memorandum by Telford and Wrekin Council (BOP 13)
Summary
— The issues covered by the Inquiry have been canvassed on a number of occasions, most notably
in the Lyons Inquiry. This response contains similar messages to those in our submission to the
Lyons Inquiry.
— We believe that there needs to be an open strategic debate across government about the most
appropriate policy and delivery mechanisms for services. Where local government is responsible
this should be supported with the necessary powers and freedoms to act in the best interests of
the locality.
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Ev 156 Communities and Local Government Committee: Evidence
— The European Charter for Local Self Government needs to be explored further by the Inquiry. The
principles it contains are critical success factors for any reform.
— As a fundamental principle of the local democratic mandate, we believe central government should
no longer be able to limit and cap Council Tax increases by local authorities.
— We believe that a revised and refreshed Local Area Agreement (LAA) model would have the
potential to act as a bespoke negotiation mechanism through which there can be a balancing act
and a focusing of key national and local priorities which would deliver a form of “double
devolution dividend”—improved and responsive local services and value-for-money. The current
LAA model does not facilitate this adequately.
1. The Constitutional Position
1.1 The Inquiry has a major opportunity to “mainstream” the European Charter for Local Self
Government and use it as a driver of change and a means to clarify and define the way forward in central/
local relations. The Charter, ratified by the Government on 24 April 1998, enshrines the concept of
subsidiarity and should be at the heart of any debate about the nature of central/local government
relationships and the promotion of a new local democracy. In our view, the Charter has not been an adequate
driver of recent White Papers and other guidance and legislation. Articles 4 and 9 (see below) in particular
include a number of core principles by which to measure the current central/local relationship and should
be considered as part of any reform. These factors include:
Article 4—Scope of local self-government
— Local authorities shall, within the limits of the law, have full discretion to exercise their
initiative with regard to any matter which is not excluded from their competence nor assigned
to any other authority.
— Public responsibilities shall generally be exercised, in preference, by those authorities which are
closest to the citizen. Allocation of responsibility to another authority should weigh up the
extent and nature of the task and requirements of eYciency and economy.
— Powers given to local authorities shall normally be full and exclusive. They may not be
undermined or limited by another, central or regional, authority except as provided for by
the law.
— Where powers are delegated to them by a central or regional authority, local authorities shall,
insofar as possible, be allowed discretion in adapting their exercise to local conditions.
2. Further Devolution/Existing Powers
2.1 Central and local government, in reality, have a shared set of objectives that relate to our local vision
of creating a “successful, prosperous and healthy community which oVers a good quality of life for all”. Both
tiers of government must work together eVectively to deliver this shared agenda. The new relationship must
therefore be based on the philosophy and language of partnership working with eVective (vertical and
horizontal) arrangements and accountabilities put in place. In this context, the focus should be on achieving
a set of shared strategic outcomes and the debate should be about identifying the most appropriate policy
and delivery mechanisms.
2.2 In our view, the debate on form and function of local government should have at its heart two core
considerations if local democracy really is to be renewed and revitalised through this process:
— Which local public services is it appropriate and desirable to have under direct local democratic
control?
— How can other local public services, where direct local democratic control is not deemed
appropriate/necessary, be held to local democratic account?
2.3 We see the power of well-being as a key potential determinant of future functions that could be placed
under more direct local democratic control. Of course, the transfer of responsibility for services alone is not
enough. Whatever form local government ultimately takes, its success can only be maximised through clear
powers, access to adequate resources, and freedom to act in the best interests of its community.
2.4 The importance of sub-regional working also needs more recognition as a means to deliver priorities
and enable greater flexibility in policy approaches. Indeed, the Sub-National Review of Economic
Development and Regeneration highlights the importance of decisions being taken at the right geographic
level. It would seem evident that the right level to deliver the majority of public services with and for
communities, people and business is at the local level. Depending on the nature of communities and the
services to be provided, local may refer to “district” level, but in respect of issues such as economic
development and regeneration is most likely to refer to the local strategic partnerships led by upper tier
authorities, or groups of local authorities. Some issues will inevitably require a wider geographic
consideration and response. Often these will be sub-regional rather than regional.
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2.5 In looking to the future, we endorse much of the Government’s comments in its recent publication
“Excellence and Fairness—Achieving World Class Public Services”. In particular, Government identifies its
role as needing to provide strategic leadership by “setting a clear vision, a stable framework, adequate
resources and eVective incentives”. It then goes on to say that it must reject “the temptation for government
to micro-manage from the centre”. We endorse this assessment as such an approach is key to both a
productive central/local relationship and to enable eVective local delivery. However, there remains a gap
between theory and practice as there is some way to go before Government Departments “let go” fully. There
can still be a tendency to over-prescribe how things should be done in a locality. Indeed, some of the
Government’s more recent proposed policy approaches and guidance could be seen as by-passing rather
than bolstering local democratic arrangements.
3. Financial Autonomy
3.1 In our view, Article 9 of the European Charter for Local Self Government includes a number of core
principles that act as critical success factors in terms of any proposals for financial reform:
Article 9—Financial resources of local authorities
— Local authorities shall be entitled, within national economic policy, to adequate financial
resources of their own, of which they may dispose freely within the framework of their powers.
— Local authorities’ financial resources shall be commensurate with the responsibilities provided
for by the constitution and the law.
— Part at least of the financial resources of local authorities shall derive from local taxes and
charges of which, within the limits of statute, they have the power to determine the rate.
— As far as possible, grants to local authorities shall not be earmarked for the financing of specific
projects. The provision of grants shall not remove the basic freedom of local authorities to
exercise policy discretion within their own jurisdiction.
3.2 One of the key “decisions” that local government has is around the raising of local revenue through
Council Tax. However, the Government has adopted the annual approach of eVectively putting a ceiling in
place to limit any rise (and, as a consequence, limited the nature of any engagement), with the threat of
capping powers to enforce this limit.
3.3 It is also a fact that with constrained, “damped” or capped budgets, the things that matter most to
people in localities (liveability issues)—and which are the issues that they are most likely to engage around—
are the things that are most “squeezed”. This is likely to lead to community disengagement and impact on
local accountability if decisions are about marginal or cosmetic issues and councils are unable to make a big,
fundamental diVerence on key local priorities.
4. Improving the Relationship between Central and Local Government
4.1 The current system still tends towards centralist management and one-size-fits-all with the consequent
potential to stifle innovation and flexibility. The proposed new Comprehensive Area Assessment may also
unintentionally reinforce this. While on-going assessment, rather than “event-based” inspection/
assessment, may have some advantages, there is a danger that this could lead to authorities/LSPs becoming
more risk-adverse and less innovative in implementing solutions. There needs to be a medium-term
perspective to assessment otherwise the process can become too short-sighted and “knee-jerk”. The Local
Area Agreement/National Indicator Set present major performance challenges on issues where tangible—
and sustainable-improvement will only be realised in a medium to long-term context.
4.2 The new LAA had the potential to rise above this but, in our view, has failed to do so. Our
Government OYce was clearly under pressure from Government Departments to ensure the inclusion of
some indicators despite the premise that the LAA should be about a locality deciding what its priorities are
rather than this being done nationally.
4.3 We believe, however, that a revised and refreshed Local Area Agreement model still has the potential
to act as a bespoke negotiation mechanism through which there can be a balancing act and a focusing of
key national and local priorities. This should be underpinned by a negotiated level of Government resources
and appropriate policy and delivery mechanisms based on the principles of true partnership and subsidiarity.
It would also deliver a form of “double devolution dividend”—improved and responsive local services and
value-for-money. This will be particularly important if we are moving into a period of recession from one
of steady economic growth.
September 2008
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Memorandum by Warwickshire County Counil (BOP 14)
About Warwickshire County Council
The county of Warwickshire lies to the south and east of the West Midlands conurbation in a two-tier
local authority area with five District/Borough areas.
The County Council serves a population of some 526,700 people. The population has been growing for
the past three decades and is now home to 69,000 (15%) more people than at the start of the 1970’s. Despite
the focus of population within the main towns of the County, a significant part of Warwickshire is rural in
nature. The population of Warwickshire is projected to reach a total of 637,400 by 2031.
Summary
— The Council welcomes the opportunity to respond to this Inquiry. It believes that whilst central
and local government have complementary roles they are currently out of balance. The Council
endorses the response of the County Council’s Network and West Midlands Local Government
Association.
— The Council believes increased freedom and flexibility for local government is the best way to
secure improved and cost eVective local services. That local government should be given a general
power of competence to allow innovative solutions to be found. This would reduce the regulatory/
legislative burden which currently surrounds local government.
— The Council also believes that central government needs to recognise that local government is the
centre of local democratic accountability and it needs to be empowered accordingly in relation to
other local public services.
Further Devolution
1. It is probably true to say that at the moment local government does not take the full role it should in
determining local priorities and solutions. Local priorities are overridden by a concentration on national
priorities which are then micro-managed by central government through a host of regulatory provisions,
performance targets and statutory guidance.
2. Whilst local government needs to be more assertive with central government, central government also
needs to relax its controls to allow local government to take its place as a true partner. This requires a greater
level of trust from government and with it the freedom for local government to find local solutions. Local
authorities want to be contributors and implementers of high level policy where we create solutions fit for
purpose.
3. A more focussed leaner regulatory/innovation industry which is made to work together, could replace
the current universal micromanagement with targeted risk management. “One size fits all” targets and
performance measures do not allow for local variation or diVerences in local priorities. Variation in service
delivery is not necessarily a negative but a positive reflection of the diVerences between communities.
4. Whilst the principles behind local area agreements are welcomed in practice they are a classic example
of the skewing of local decision-making to meet national drivers rather than local priorities. Central
government needs to reduce further the amount of targets and performance measures set for local
government if there is to be any real opportunity for local choice. Alongside this the other public service
partner agencies need similar levels of freedom to allow them to participate fully in finding solutions at a
local level. Whilst the LAA and partnership working is high on the DCLG agenda we are not so sure that
a similar level of importance is attached by other government departments.
5. Local Authorities still do not have a general power of competence. Whilst the well-being powers and
the general power to contract go someway towards this aim local government is still often bedevilled by a
complexity of legislation that inhibits confidence in innovation. A general power of competence would put
local authorities on a firm footing for moving forward in partnership with others, provide confidence in its
ability to respond and deal with local issues. It would also remove the need for some of the tortuous
legislation that currently exists.
6. Central government and local government both have a democratic mandate. Other public services
should be accountable to local government as the democratic centre at the local level. The increase in
partnership working in order to achieve local integrated solutions has left a democratic deficit in the
accountability of local decision-making.
7. Current systems of accountability for health and police services fail because they are too complicated
and fragmented for the citizen to understand, for example, health accountability is largely to the Secretary
of State and then at a local level there are Local Strategic Partnerships, Health Overview and Scrutiny
Committees, Local Involvement Networks, Non-Executive Directors on NHS trusts and the new
Foundation Trust arrangements.
8. Where does the citizen go if there is a major failure in health or police services at local level or if
dissatisfied with the strategic direction of services? How do local elected representatives deliver solutions to
complex problems if decisions about local issues are made elsewhere or ensure that public funds are spent
most eVectively in their area? Currently local government is responsible for the delivery of social care but
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this is rarely delivered in isolation from health services. However the ability of local elected representatives
to eVect major change in health service spending at a local level is severely hampered. One option is to give
local authorities responsibility for commissioning local public services to enable them to manage the
complexity of relationships between services. Further proposals scheduled to be brought forward in the
Community Empowerment, Housing & Economic Regeneration Bill look likely to further complicate the
landscape with proposals for local authorities to act as community advocates in response to petitions to
Primary Care Trusts.
9. The excellent record of local authorities in delivering Gershon eYciency savings compared to other
parts of the public sector indicates that political will is a powerful tool to drive out waste and provide the
platform for new ways of working.
10. Whilst the development of overview and scrutiny goes some way to providing oversight it is does not
provide any real democratic accountability. Public agencies can eVectively walk away or simply pay lip
service to any views expressed. Replacing scrutiny with a regulatory power located in localities whereby the
public agencies have their joint activities subject to peer process with an ability to enforce activity shifts
across the public bodies “from the perception of the end user” would enable more eVective solutions at a
local level.
11. The duty to co-operate needs to be strengthened into a duty to deliver outcomes in an integrated way.
Other agency funding needs to be brought into the Area Based Grant vehicle to ensure monies can be moved
around more imaginatively and encourage those who oVer innovation.
12. Overall central government needs to concentrate on broad outcomes, and leave local delivery to local
government.
Financial Autonomy
13. Currently central government has a heavy hand on the amount of resources available locally to deliver
services. This influence is in the form of the amount of central government grant and the limitation of locally
raised council tax through capping. This severely limits the freedoms and flexibilities of local government.
14. While greater freedom can be exercised through fees and charges this misses the real issue of a
fundamental redesign of local government funding. Sir Michael Lyons spent a number of years looking at
the problem of local government funding and it was very disappointing that significant changes did not
materialise from his work.
15. Local authorities should be given greater freedom to raise income locally and they should be able to
deliver standards of service which reflects the ability and willingness of the local community to pay. This
means central government accepting that there may be variable standards of service. Although there may
need to be some broad agreement over minimum service levels -the extent, the how and the way in which
services are delivered should be a matter for local discretion.
16. Local accountability goes hand in hand with the control of fund raising. Capping undermines the
notion of local accountability. Because of capping local communities cannot be given the choice of paying
more for a higher level, or wider range, of service.
17. Government is pushing participatory budgeting at the margins but seems reluctant to allow
democratically elected bodies similar freedoms in determining the priorities for spending in its area.
18. Local authorities could use charging and trading more if the legislation were simplified. The
legislation has too many checks and balances which in turn generate uncertainty and discharge the use of
the powers. The Audit Commission report “Positively Charged” comments quite extensively on the current
use of these powers and some of the constraints and barriers, including those arising from legislative
provisions for example:
“While there are valid reasons for these restrictions on freedom to charge, they create diYculties
for councils and give rise to considerable debate. It is not always clear to councils or the public:
— what the rationale is for applying charging restrictions to some services and not others;
for example, why councils cannot charge for lending printed materials from libraries, but
can charge for lending audio-visual material; or why councils can make surpluses on
charges for parking or cremations but are restricted to cost recovery in other areas;
— why councils have the power to set their own charges for services where a uniform
approach to charging might be preferable; for example, those which the public considers
to be necessary, rather than a matter of choice, for the service user, such as personal care
services. This debate is heightened by the distinction drawn between these services and
nursing and health services, which must be provided free of charge; and
— that the original rationale remains valid given changes in the context in which services are
provided; for example, councils now provide building control services in competition with
approved inspectors, reducing the monopoly position in the market which originally
justified a price control.
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Ev 160 Communities and Local Government Committee: Evidence
Even where, as in the case of nationally set fees, the rationale is clear, to ensure a uniform approach
to charging across the country, there can be significant financial consequences for councils that in
turn impact, unequally, on local taxpayers. In the case of fees for planning applications, the
government’s own research reports that fees commonly fail to provide full recovery of the costs to
councils of the activities they are required to undertake”.
Existing Powers
19. Local government services currently tend to be more nationally than locally driven through a plethora
of regulation, ring fenced resources, centrally driven targets and guidance. Educational provision in
particular is bound by significant levels of prescriptive guidance which considerably limit the ability to make
local choices. An example is the guidance and regulations around proposals to establish post 16 provision,
but there are many others. The fact that Local Area Agreements have 16 mandatory education indicators
speaks for itself. How do we encourage people to engage in local democracy and empower communities to
believe they can make a diVerence when there is this level of prescription?
20. There is a lack of trust in the way central government currently approaches local government and the
messages from the various departments are mixed. While the government is currently pursuing an agenda
to empower people, promote democracy, and encourage local authorities to become “place shapers” it is
also consulting on proposals to hold public elections for members of police authorities. Why complicate
when you can simplify the arrangements at a local level and allow local government to take its proper place
as the centre of democratic accountability? What sort of message does it send to the public about local
government when central government ignores the democratic representatives which already exist to create
new ones?
21. If local government are to be place shapers they need to be given the tools to do this. You cannot
empower people eVectively without empowering local democratic structures. The barriers to eVective place
shaping are well known. Partners who sign up to common local targets then struggle to maintain a focus on
local relationships and priorities because of sudden changes in top down direction, organisational barriers
which prevent local services integrating to meet local needs. These are further compromised by financial
complexities which prevent decisions being implemented. Continual restructuring proposals in other parts
of the public sector (notably health) distract from the partnership agenda.
22. Local authorities should have a general power of competence. They should be able to create arms
length “Foundation Trusts” not dissimilar to the NHS model nationally, eg in the areas of Children’s
Services, Adult & Primary Health Care, Sustainability, if that is what the local solution requires.
23. A general power of competence could be accompanied by a general power to charge which could
remove some of the complexities in the system. Central government would only need to legislate where
charging should be prohibited supported by clear policy reasons. It would then be for the local authority to
decide how and in what other circumstances it would levy charges for services.
24. Relationships between central and local government could be improved through the provision of an
integrated training and development programme for local government oYcers and civil servants. This would
make inter-changeability much easier with long term aim of a single workforce model.
Conclusion
— The Council believes that whilst central and local government have complementary roles they are
currently out of balance.
— The Council believes increased freedom and flexibility for local government is the best way to
secure improved and cost eVective local services. That local government should be given a general
power of competence to allow innovative solutions to be found. This would reduce the regulatory/
legislative burden which currently surrounds local government.
— The Council also believes that central government needs to recognise that local government is the
centre of local democratic accountability and it needs to be empowered accordingly in relation to
other local public services.
September 2008
Memorandum by CSS (formerly the County Surveyors’ Society) (BOP 15)
Summary
— CSS welcomes continuing the debate on devolving powers and responsibilities to the local
government level. We consider that devolution to this level has the eVect of increasing direct
democratic accountability to communities and enabling improved responses to local situations.
— CSS considers that while there have been advances in the powers available to local authorities,
there has not been accompanying progress in supplying the local government level with the
required resources to fully exploit available powers.
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— We would oVer broad support to reforms to the local government funding frameworks, including
allowing a greater proportion of local government expenditure to be raised locally.
Introducing CSS
1. For over 120 years, from its origins as the County Surveyors’ Society, CSS has been providing the
leadership and expertise required to tackle some of the country’s most pressing issues. The Society represents
an extensive range of local authority senior technical and professional specialists working at the forefront
of the sustainability challenge.
2. Operating at the strategic tier of local government, our members are closely involved in crucial
transport, waste management, environment, planning, energy and economic development issues. We also
have the experience as strategic leaders to comment on a whole range of agendas.
Increasing Local Autonomy
3. Our members have responsibility for delivering a range of services, infrastructure and initiatives to
support their local communities and contribute to “place-shaping”. We experience first hand the diYculties
inherent in balancing central prescription and resource allocation with locally identified priorities and needs.
4. We support the existing initiatives to empower communities and ensure that decisions aVecting local
areas are taken at the local level, except where there is a compelling case for central government to intervene.
This approach allows local government to provide strong leadership and better reflect and respond to the
aspirations and needs of their communities.
5. Despite the provision of extended powers, such as those relating to well-being, there remain barriers
preventing local government from fulfilling their place-shaping role. In particular, a lack of financial
autonomy hinders the local ability to fully exercise these powers.
6. While Local Area Agreements have provided a welcome opportunity for local government to identify
and agree targets based on local priorities, we would argue that at present there remains a strong theme of
central control underpinning this system and demanding certain targets be set. We consider that the decisionmaking and accountability within the LAA system should be firmly set at the local level.
Financial Barriers
7. CSS has concerns that in the current system of financial settlement, the damping arrangements within
the local government grant system have the undesirable consequence of placing a greater demand on local
Council Tax. In particular, government support for the financing costs of capital spending is no longer
outside of the revenue grant settlements. Capital spending is therefore subject to the same constraints as
revenue and this has seen a number of authorities having to significantly reduce spending on areas such as
transport.
8. Furthermore the fact that, in eVect, council tax is capped by central government leads councils to limit
local services and reduces scope for using new powers. Moreover, defining capping in terms of percentage
increase rather than an absolute level is a further challenge for those local authorities that have historically
kept rates low for their residents, but are now obliged to find additional funds to provide services.
9. The combined pressures of limitations with the grant system and the threat of capping can result in
local government finding itself without the resources to invest in longer-term, structural and preventative
action. Instead, it is driven to address immediate and shorter-term issues, which often deliver less value for
money than a more strategic approach. Consequently a new approach to financing that provides local
government with the opportunity to take a long-term approach to address local matters is required.
10. CSS is also concerned about centrally imposed fiscal instruments, with potentially detrimental eVects
on local authorities. For example, in March 2007, central government more than doubled the Landfill Tax
escalator with very little notice. Despite assurances from the Secretary of State for Environment, Food and
Rural AVairs that mechanisms have been put in place to reduce financial pressure on authorities, CSS
remains concerned at the lack of a clear demonstration about how Landfill Tax is being returned for the
purposes of investing in waste infrastructure. This necessarily inhibits the capacity of local government to
contribute to the development of sustainable waste management.
11. Furthermore, the whole Landfill Allowance Targets system is widely acknowledged to be a blunt fiscal
instrument from central government that has driven significant progress whilst diverting resources from
other local authority services. The proposals for a system of carbon trading—whilst it is acknowledged that
the implications of climate change must be addressed—is therefore a potential cause for concern as another
such fiscal instrument.
12. There are also financial barriers specific to certain sectors. The inclusion of maintenance and
integrated transport allocations in the forthcoming RFA process raised concerns within CSS that spending
could be transferred away from maintenance and integrated transport in total. The suggestion that a region
might change the distribution of monies allocated to local authorities seems to undermine the considerable
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work of recent year to develop a formula basis, broadly based on need and past performance. CSS considers
that the balance between maintenance and integrated transport and how those elements are spent should
be a local decision.
Raising Income Locally
12. The call for evidence introduces the issue of increasing the amount of Council expenditure that is
generated locally. CSS considers that this would improve the connectivity between local spending and raising
finances. We support the Local Government Association’s views on generating local income and the need
to apply some degree of equalisation where Councils struggle with the capacity to raise funding locally.
13. We would however draw attention to existing situations where central government policy has
sometimes constrained the freedom of local authorities to spend locally generated income in the most
appropriate fashion. For example, the 2004 TraYc Management Act places a duty on local authorities to
ensure “expeditious movement of traYc” and allows for mechanisms such as permit systems to raise income
at a local level. However, any funding generated is ring-fenced to that particular activity, leaving other
implications of the Act—such as funding the role of traYc manager and providing notices of work—without
the necessary resources to implement them eVectively. As such, the capacity of authorities to address local
issues of congestion and traYc flow can be restricted.
An Independent Commission
14. With regards to the suggestion of an independent commission to oversee financial settlements, CSS
considers that, while there may be some value in providing a depoliticised opportunity for those authorities
wishing to question the distribution of settlements and the basis for such allocation, there are concerns over
a non-representative body undermining the democratic mandate of national and local politicians who are
held accountable for the decisions regarding financial settlements by the electorate.
Closing Remarks
15. Broadly, CSS welcomes the continued interest in improving the balance of power between central and
local government. We are supportive of the principle of enabling greater self-determination at the local level.
However, if further devolution is pursued, this must be done with due consideration of the diVerent tiers of
local government and the most appropriate scale at which activity should take place. Furthermore, while
new powers and responsibilities for the local level are warranted, these must be accompanied by increases
to funding and resources and an appropriate balance between the raising of funds locally and centrally, as
well as the freedom to apply resources as best fits the local circumstances.
September 2008
Memorandum by Kent County Council (BOP 16)
Kent County Council (KCC) welcomes the opportunity to respond to the Communities and Local
Government House of Common Select Committee Inquiry on the Balance of Power: Central and Local
Government.
As a 4 star local authority, KCC has pushed to the limits what we are able to deliver and achieve for local
people within the current boundaries set by central government. Covering a population of 1.4 million,
overseeing a gross budget of £2.2 billion and with a string of successful inspections of services under our
belt, we would like our record of achievement rewarded through a process of genuine empowerment.
We believe that the balance of power is unfairly cast towards the national and regional tier, at the expense
of local democracy, accountability and voter turnout.
As a 4 star authority, KCC calls for:
— devolution of powers, functions and expenditure from the national and regional tiers on economic
development areas such as transport, skills and planning to sub-regions and individual councils
through a process of “earned autonomy”;
— national government to set the framework of minimum standards, and let local people hold local
authorities to account;
— recognition from central government that local authorities need to undertake economic
development—and not economic assessment only as indicated in the Sub-National Review—in
order to properly fulfil our place-shaping role and exercise our powers of wellbeing in the economic,
social and environmental arenas;
— high performing upper tier authorities to be able to bid to run other public services such as health,
probation, prisons and policing within their localities;
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— central government to trust well performing councils to take on greater powers and to make real
inroads in reducing welfare spending for people of working age, provide skilled workforces to
match the demands of local economies and take full control over economic development in their
areas;
— control of Incapacity Benefit to be handed to upper-tier authorities to ensure close coordination
with welfare-to-work programmes;
— local government to be strengthened and empowered with improved financial autonomy. This
would include a return of the National Non-Domestic Rate to local authorities, enabling councils
to attract particular industries to their areas and thereby create a competitive edge;
— the budgets of local authorities, regional and local public agencies be pooled through the Area
Based Grant, linked to joint objectives and outcomes outlined in Local Area Agreements and
Multi-Area Agreements; and
— a new constitutional relationship between central and local government, acknowledging and
properly empowering local government to undertake a true “place-shaping” role.
Background
1. KCC has a population of 1.4 million people and oversees a gross budget of £2.2 billion. In the past
year, the County Council has been awarded the following accolades: another 4 star rating in its Corporate
Performance Assessment; the highest level four award by the Audit Commission for its use of resources
despite ever tougher criteria; the top possible rating for Adult Social Services by the Commission for Social
Care Inspection (CSCI) for the sixth consecutive year and an OFSTED inspection which graded services to
children and young people in Kent as good with “service management and capacity to improve” rated as
outstanding.
2. This string of successful inspections of KCC’s services reflects the expertise, knowledge, capacity and
sound use of resources that reside at county level to provide personalised, tailor made services designed to
meet individual needs and wishes.
3. KCC believes that localities are best placed and fully capable of finding and implementing their own
solutions to many of the complex problems that face modern society. With strong leadership and close
collaboration, Kent’s local agencies have agreed shared outcomes and discovered new and eVective ways of
meeting the needs of local people. This is why Kent agreed to pilot the first round of local public service
agreements (2001); pioneered and introduced the Kent Service Board (2004) and in 2005 we were one of
21 pilot local authorities in the first round of Local Area Agreements. Our objective has been for KCC to
influence the totality of public spending in Kent, some £7 billion, and to encourage all parts of the public
sector to collaborate in the delivery of local priorities. As each successive scheme has been negotiated,
however, there seems to be a tension between having narrowly defined targets determined at the centre, and
holding on to the big picture of what it is we are trying to achieve. This year we signed oV Kent Agreement
2, but the tensions remain.
4. We would like to be empowered to do much more and believe that our track record in delivery earns
us the right to assume strategic decision-making powers on issues currently determined by executive and
regional agencies. We fully back the approach promoted by the Lyons Inquiry that local authorities should
develop arrangements between themselves to take strategic decisions on economic development issues like
transport, planning and skills. This must be through a process of “earned autonomy”; and we agree with
Lyons’ view that central government should test those arrangements to ensure that they are robust, sensible
and capable of taking hard choices.
Stop Micro-managing Local Government: Empower and Devolve
5. KCC has fully stretched the boundaries within which we can operate and we would like to do much
more, dependent on genuine empowerment. Central government must adhere to the principle of
decentralisation with flexibility and innovation being a key ingredient to outcomes. Underpinning all of this
should be an aspiration to continue to transform some of our public services to become more outcome
focussed and customer centric. Kent would much rather enter into a serious debate about the half dozen or
so longer term public policy outcomes facing residents in Kent rather than subject ourselves to the micro
management of 35 short term targets.
6. Local government therefore requires greater autonomy from regional as well as central government in
order to properly fulfil its place-shaping role and exercise its powers of wellbeing in the economic, social,
environmental and health arenas. KCC would like to see real devolution from the national and regional level
to local authorities. Multi-functional authorities and sub-regional partnerships would generate greater
eYciencies and joined-up working in tackling crime, lawlessness, youth and long-term unemployment and
the transition from education to work, as well as achieve significant reductions in welfare dependency.
7. The Local Government Act 2003 granted excellent, good and fair councils the power to trade for a
profit by operating any of their ordinary functions through a company in which the council in question has
an interest. Operating under the same principle, and following on from the Lyons Inquiry, councils rated as
excellent and good should be eligible to run other services such as health, probation, prisons and policing
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if they so wish. It would be a process of “earned autonomy”, with central government able to call back in
services if judged by the Audit Commission to be poorly run. We support the approach the Government is
taking on requiring local authorities to come together at a sub-regional level in distribution of LABGI and
LSC monies, but we believe that other funding streams should also be devolved from regional to subregional level.
8. However, the Sub-National Review (SNR) signifies further reinforcement and strengthening of the
regional tier at the expense of local government, although the rhetoric suggests otherwise. Although we were
pleased to see in the SNR recognition of the importance of local government in the requirement to undertake
an economic assessment of their areas, we also feel that local authorities have the expertise and capacity to
deliver economic development programmes as was mentioned in the first version of the SNR.
Devolve and Cut Welfare Spending
9. We believe that a more localised system of delivering welfare to work programmes could help to make
significant reductions in benefit dependency. In Kent, around £800 million is spent each year on benefits for
people of working age. Significant decisions on welfare are made nationally with little regard to local
circumstances or need.
10. The Kent Supporting Independence Programme (SIP) operates to support welfare dependent people
back into work and towards financial independence. It is just one example of how a national challenge can
be eVectively addressed by a pioneering local government programme backed up by coordinated local action
and strong political leadership.
11. A key target in the first Kent Local Area Agreement was a support programme managed and delivered
by KCC to help long-term Incapacity Benefit (more than two years) claimants back into full-time work. We
have helped at least 105 people into work in 18 months through the Kent NOW programme. If we assume
that these 105 people had stayed on benefits for another year, we have saved the public purse £940,000 in one
year. These people instead have actively contributed to the economy rather than being reliant on Incapacity
Benefit, Housing and Council Tax payments. If we exclude pump-priming and reward monies from the Kent
Local Public Service Agreement to establish the scheme, the total saving is £590,000.
12. The average length of time an Incapacity Benefit claim lasts for is nine years. Using this calculation,
getting 105 people oV Incapacity Benefit and into work has saved over £8.1million in benefit payments, all
for an initial outlay of just £350k. Since the Kent SIP was launched in 2002, independent research by Oxford
University suggests that a benefit claimant living in a disadvantaged community which receives targeted
action through the SIP is 30% more likely to exit welfare dependency than someone living elsewhere in the
South East.
13. Greater autonomy for local authorities to deliver welfare to work programmes would therefore reap
benefits for central government in reducing the overall welfare bill. KCC calls for a localisation of welfare
to work budgets, including upper-tier authority control of Incapacity Benefit, which would enable a much
more responsive, tailor-made approach to local demands and circumstances. In addition, benefit savings
made locally should be reinvested into further preventative or back-to-work activity in the local area.
Interventions to meet local conditions (eg around timings of benefit payments) should be permitted and
targeted towards local priorities and priority groups.
Devolve and Upskill
14. The Government has acknowledged in the SNR that economic development can only be achieved
through devolution from the centre to localities, and it needs to do the same with skills. Upskilling of the
workforce is vital to improve the economic performance of the UK economy and local government needs
to be equipped with the levers to make this happen.
15. If as a country we are to be eVective at meeting the skills challenge, and we accept that the education
and training system needs to be matched to the needs of local economies to benefit students and employers
alike, then it abundantly clear that the education and training framework needs to be shaped on a subregional basis to match local sub-regional economies. National or regionally imposed solutions that do not
reflect the real sub-regional economy will not work.
16. However, Education and Skills funding is also geared towards the regional level at the expense of local
authorities. For example, employer-led Employment and Skills Boards have been established throughout
England. These will play a key role in promoting economic prosperity at the sub-regional level through
bringing together key partners to provide joint demand-led solutions for employers within each area.
However, Regional Development Agencies have been tasked to work with local authorities and Education
and Skills Boards to identify priority areas in each local community, including those for labour force
development and employment. However, small businesses prefer to liaise with organisations that are closest
to them, not remote regional agencies that could be hundreds of miles away. Local authorities are best placed
to take the lead on working with a range of stakeholders to ensure that skills needs within localities are
addressed and funded.
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17. The move towards demand led skills and training system is welcome, although we have argued that
a fully devolved system to local government would allow both greater transparency and a more integrated
delivery than the system outlined in “Raising Expectations” can deliver. Central to tackling the skills agenda
is a huge increase in the number of apprenticeships for young people as a real option to the traditional
academic route. However, the Government’s approach has been to establish a national quango in the form
of the proposed National Apprenticeship Service (NAS) with primarily a regional “field force”. Yet, the
reality is that local economies are sub-regional in nature, and regional and national delivery structures do
not have the local intelligence, flexibility or links to local businesses—especially Small and Medium Sized
Enterprises (SMEs)—necessary to understand local needs and make the system work. In Kent, we have our
own apprenticeship service in the form of Kent Success. Launched in the autumn of 2006, KCC currently
has 130 apprentices within the organisation and our target is to have 250 KCC apprentices by 2010. Through
the Kent Partnership (our Local Strategic Partnership), KCC is also actively working across the public,
private and voluntary sectors to promote the employment of 1000 apprentices in Kent by 2010. Our local
scheme has been able to deliver due to its proximity and relationship building with local partners and
business that just is not possible when delivery is based on a national and regional scale. We would like to see
the role, function and budget of the National Apprenticeship Service devolved to local government which is
ideally placed to meet the apprenticeship challenge.
Devolve Transport
18. We would like to see a significant strengthening of local government’s role in running local transport
services. The current system is also highly confused, with motorways and trunk roads the responsibility of
the Highways Agency and all other non-private roads the responsibility of upper-tier authorities. We believe
that upper-tier authorities should be granted Highways Agency powers for non-motorway trunk roads,
along with maintenance budgets and transport planning powers residing within their boundaries.
Trust and Empower Local Government to Spend According to Local Needs
19. The Committee has posed a series of questions about financial autonomy for local authorities. There
is a contradiction at the heart of public service reform since 1997, which is where the real question about the
balance of funding should be addressed. The contradiction lies in the conflict between a centrally driven
target culture reflecting siloed thinking between Government Departments coming down to local
government, and the joining-up of local services to provide seamless services to the public. The target culture
has been used to drive performance, but at the same time, the policy challenges that matter most to people,
such as safer streets and healthier lifestyles, depend on local joining-up of public services. The former have
thrived at the expense of the latter.
20. Delivering joined-up services requires greater devolution to sub-regions to set priorities and spend
budgets. As part of a deal with central government reflecting KCC’s track record of delivery, we would like
to see pooled budgets in the county between local authorities and public agencies to spend on preventative
health, welfare to work programmes and post-16 education for example. Whilst we welcome the greater
flexibility for local authorities in allocation of local resources that the Area Based Grant (ABG) permits, it
should include a wider category of revenue streams to allow for greater coordination between public bodies.
The ABG does not for example include preventative health monies, although the County Council’s
Corporate Strategy, Towards 2010, and Kent’s Public Health strategy is targeted towards encouraging
people to exercise and take care of their health. The lack of a coherent approach between funding streams
can inadvertently provide disincentives to work towards positive outcomes, such as investing in preventative
care of the elderly to avoid hospitalisation.
21. We therefore believe that the ABG should be administered through Local Area Agreements, which
would permit public authorities in a given area to work together, define their own priorities and shift policy
emphasis where they see fit. A single funding pot for place shaping and delivering personalised services
would encourage true partnership working between a range of public agencies to overcome silos and allow
greater eYciencies. Expenditure currently controlled by regional and sub-regional agencies should be
aligned to joint objectives and outcomes contained within Local Area Agreement and Multi-Area
Agreement processes.
22. The failure to provide a joined-up approach to funding is evident. For example, Accident and
Emergency services are being reduced at Maidstone Hospital and a specialist A&E service is being developed
at Pembury Hospital in Tunbridge Wells. But transport and access from Maidstone to Tunbridge Wells is
poor, and there is no funding allocated in the Local Transport Plan to build the desperately needed Colts
Hill Bypass which is essential to enable residents from Maidstone (some 15 miles away) to get there. The
lack of a coordinated and strategic approach to decision-making occurs when there is a fragmented system
of delivery. As a result, local residents suVer.
Trust and Empower Councils to Set their Own Spending Priorities
23. Greater financial freedom for local authorities should be granted through local determination over
the split between capital and revenue funding, with a local power to vary according to need and to support
innovation and allow people to manage their own care, for example use of innovative technology to support
independent living. KCC’s approach is to support preventative services and equip people with technology
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to be able to live independent lives within their own homes for as long as possible. This requires a move away
from the “bricks and mortar” approach, for example construction of new residential homes, and towards
new technologies that enable people to commission and procure their own care packages, tailored to meet
individual needs and wishes. Allowing councils greater flexibility over how they allocate expenditure
between capital and revenue streams is essential to respond to the needs of individual clients. Capital
investment also requires significant ongoing revenue expenditure, which is increasingly diYcult to find in
today’s troubled financial climate and with an ever-increasing demand on services. A new approach to
developing services tailored to individuals is therefore a necessity to ensure that we meet our service
obligations.
24. Debate has focussed for many years on the powers councils should or should not be given to raise a
greater proportion of their expenditure locally. However, we believe that residents are more concerned about
how public money is spent, regardless of whether it is raised centrally or locally. It is therefore imperative
that local authorities raise their game in communicating with residents how their money is being spent in
more innovative ways than the annual Council Tax bill. The issue we feel is more important is that local
government should have greater discretion over how it spends its budgets, so that we are able to respond to
a greater degree to locally defined priorities rather than centrally prescribed targets.
25. We would however like to see greater discretion for councils in the levying of National Non-Domestic
Rates (NNDR). In the early 1980s, councils were dependent on central government for just over half their
funding. That figure is now around 75%. At the end of the 1980s, before business rates were centralised, 30%
of local government income derived from this source. Although the issue of equalisation would need to be
carefully considered, the NNDR should be re-localised, allowing local authorities the freedom to vary
business rates to attract a range of industries to locate in targeted areas. For example, if an upper-tier
authority wishes to attract creative or high-tech industries to their area, they should be equipped with the
appropriate levers to attract such businesses in order to create a competitive advantage for their local
economy. Re-localisation of NNDR must go in hand with sub-regional devolution as local authorities
cannot have a significant impact over economic development in their areas if one of the main financial levers
is held elsewhere.
26. Capping undermines the principle of local accountability and should be abolished. Instead, local
authorities should make the case to residents if they feel compelled to raise local taxation beyond 5 per cent.
Capping is seen as an instrument to threaten and punish local authorities, but delivering service priorities
within an increasingly restrictive funding envelope requires hard choices between service cuts or increasing
council tax. Local politicians are accountable for their decisions via the ballot box and that is the exercise
of true accountability and genuine democracy.
Evidence of “Regionalisation” of Local Government Power and Spending
27. Recent years have seen increasing centralisation of government funding, particularly in relation to
transport. Any project of £5 million in value (a rough estimate is that this would buy less than 1km of single
carriageway) or more requires central approval before proceeding and a complex transport planning
environment with local plans assessed centrally for robustness. Furthermore, the current Regional Funding
Advice exercise being undertaken by the Government signals a further strengthening of the powers of
Regional Development Agencies (RDAs). For example, RDAs have been asked to advise on the £1.3 billion
per year currently allocated to local authorities in “block funds” for capital highways maintenance and
smaller projects to enhance traYc management, public transport and road safety. The Treasury document
states that these funds should be “allocated in ways which are consistent with regional strategies as well as
national objectives”. This reflects an increasing regionalisation of local powers and expenditure, which will
further curtail the ability of councils to fulfil their place-shaping role and the power of wellbeing.
Delivering Services Tailored to Local Needs
28. Local authorities have considerable discretion to deliver services of their own making rather than
central government prescription. In 2007, KCC was the first local authority in the country to launch Kent
TV, an on-line broadband television channel. It was launched with the desire to communicate with people
on a modern platform and marks a step change in the way local government communicates with local people
and the wider public.
29. The Kent “Gateway” model, initiated by KCC in partnership with district councils across the county,
is a uniquely innovative retail-based concept that seeks to oVer seamless access to public services for local
people. Gateway is complementary to web, telephone and traditional home-visiting and operates on the
principle that services follow customer need—not the other way round. By Spring 2009, seven Gateway
centres will have opened in Kent, oVering convenient physical access to front-line customer advisers and
oYcers from over 30 agencies covering central and local government and the voluntary sector. Within five
years we would hope that all 12 district areas of Kent will be covered by Gateways. We would also like to
extend services to private sector partners, for example pharmacies. Services range from careers advice and
help to tackle substance misuse, to smoking cessation, GP referrals and assistance for victims of domestic
violence, among many others. Internet access and housing and business advice is also provided along with
information on adult education courses. Gateway is a natural delivery channel for joined up services from
Local Strategic Partnership in line with the place shaping role of local government. This model seeks to
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implement the principle of responsive services and empowered communities as enshrined in the Local
Government White Paper 2006, by devolving power to communities and giving local people a greater say
and influence over local public services.
30. The Kent Freedom Pass is another example of innovation in local government in the exercise of the
discretionary power. KCC first introduced the Kent Freedom Pass scheme in June 2007, providing bus travel
free at the point of use to students aged 11–16 attending school in three pilot areas. Since then it has proven
very successful, encouraging young people away from car travel and on to Kent’s bus network. The scheme
has been extended to a further four pilot areas, with the entire county being covered by 2009. This has
benefits for the Kent environment and transport system in helping to reduce carbon emissions and the
number of cars on the roads.
31. We have taken the principle of Direct Payments for social care a step further through an innovative
scheme known as the Kent Card, which makes it easier for clients to manage their own support by
automating the payment process, thereby improving eYciency and cost eVectiveness. The client card has
been developed in partnership with the Royal Bank of Scotland. It works like a debit card by enabling clients
to pay for services using funds supplied by KCC. The card is supplied to people with support needs.
Cardholders can top up the card with their assessed contribution or additional money they may wish to use
to pay for their service/support. Because the Kent Card is VISA badged, it can be used in over 20 million
outlets world-wide and 843,000 outlets in the UK, including online and over the telephone.
32. At KCC we see our role as empowering staV and residents to work together to create safer places to
live. For this reason, in 2002 KCC established the Kent Community Wardens scheme. This began with a band
of 12 wardens as part of a three-year pilot scheme. It delivered such early success that numbers were
increased within six months and in March 2005 a new training centre—the first of its kind in the UK—was
opened to help bring the team of wardens up to 100. Community wardens aim to help the people of Kent
to live safely and independently in their neighbourhoods and communities. They provide a visible uniformed
presence to tackle anti-social behaviour. Many wardens are regarded as the focal point for the communities
they serve and their mobile telephone number is accessible to all. Wardens work closely with Police, local
authorities and other agencies and are a useful source of information. Alongside tackling anti-social
behaviour, Community Wardens also raise community awareness of problems such as bogus callers preying
on vulnerable people in their homes. They address environmental issues such as fly tipping, graYti and
vandalism and engage with the young, elderly and vulnerable in activities such as youth clubs and sporting
events, coVee mornings and advice surgeries. If they don’t know the answer to a query, they know someone
who will. This scheme has proved very successful in providing a reassuring presence to local communities
in Kent.
Use of Trading Powers
33. As already mentioned, well performing councils have the ability to trade in any of their ordinary
functions by establishing a company in which they have an interest. KCC was one of the first authorities in
the country to take advantage of this freedom granted under the Local Government Act 2003. KCC spends
more than £840 million on buying goods, services and works from suppliers every year. We formed KCC
Commercial Services to provide goods and services for the council’s own directorates and for a range of
approved public bodies. Some of its services are also available to local businesses and other commercial
companies and to schools, sports groups and charities. It is a self-funding unit, tasked to deliver products
and services that represent best value for money and meet local government purchasing legal requirements.
Its staV are experts in their respective fields and provide a quality service.
34. We now operate a “one-stop shop” for educational supplies, stationery and some furniture; a
complete design and printing service, with bulk-mailing option; the largest local authority energy purchasing
organisation in the UK—KCC acts for 70 local authorities and conducts business valued at £191 million
per annum—and provider of energy management consultancy services; grounds maintenance, landscape
construction and street cleaning services; maintenance and repair of electronic and electrical equipment, and
gymnastic equipment; fire extinguisher servicing and training; professional passenger transport
procurement for our council services and other users; supply of lease cars, commercial vehicles and
minibuses for local authorities, schools and other users and provider of vehicle hire without driver; a wide
range of vehicle maintenance, conversion work and other transport engineering services and Passenger
Services and provision of public and school transport services and vehicle hire with driver; and minibus and
coach driver training.
35. But trading as a publicly owned operator within a commercial environment has been beset by red
tape. For example, if we wish to purchase goods and services that cost more than £144,000 we are required
under EU procurement laws to advertise our requirements in the OYcial Journal of the European
Communities (OJEC). We are then bound to follow strict timescales and seek at least five tenders before we
can proceed with a decision. In eVect, from start to finish the process can take six months including a two
week cooling-oV period where we are required to provide, if requested, feedback to unsuccessful tenderers.
In the meantime, we are not allowed to give the go-ahead to the successful contractor to proceed until the
two week period has expired. Whilst we appreciate the need to demonstrate fair treatment and transparency
in our processes, local authorities cannot operate on a level playing field compared to private sector
operators who are not obliged to follow these requirements. To put it into context, the simple purchase of
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a coach for our transport arm has to go through this laborious process. We appreciate that all public agencies
across the EU are subject to this regulatory environment, but it is an issue of which the Committee needs to
be aware in relation to the limits on local authorities being able to trade eVectively. Private companies are
not bound by these procedures and can operate in an environment relatively free of trading restrictions
compared to local authorities.
Approach to Charging
36. We are opposed to charging for many services, as we believe that this acts as a double whammy on top
of council tax. It is akin to asking people to pay for services twice, unless they are very clearly discretionary or
new services, for example charging for elderly care transport. While we could introduce more charging, we
are opposed to it on the grounds that it tends to impact unfairly on the elderly and disabled that we want to
support. However, sometimes diYcult decisions have to be made between cutting services and introducing/
increasing charging.
Exercise of Wellbeing Power
37. In relation to exercise of power of wellbeing, KCC was the first local authority in the country to jointly
appoint with two Primary Care Trusts a Director of Public Health. This was followed by publication of a
Public Health strategy devised in partnership with the 12 District Councils and two Primary Care Trusts in
Kent. Most of this strategy is aimed at promoting health whether through improving well-being, preventing
disease or promoting healthy living for those with short and long term conditions. The document also
outlined our commitment to and ongoing work with parents and the voluntary sector to promote health and
wellbeing in Kent.
38. We have already utilised our power of wellbeing to provide housing or new types of community homes
for the older population. The multi-million pound Better Homes, Active Lives Private Finance Initiative
(PFI) will deliver 340 units of new social housing for vulnerable people in Kent. We have procured the project
on behalf of and in partnership with10 local district councils. It is one of the largest projects of its type in
the country and will receive PFI credits from the Department of Communities and Local Government. The
partnership between the district councils and the county council has provided a local perspective as well as
the strategic capacity to bring stakeholders needs together within a single project. It is regarded as a flagship
project nationally and we often receive requests for advice from other local authorities who are looking to
undertake PFI projects in partnership with their neighbouring councils. The private sector recognises that
the partnership has produced considerable eYciencies in bringing together a number of small clusters of
housing from across local authority boundaries. After a year of negotiations, Housing 21 has signed a deal
with the partnership between KCC and ten of the district and borough councils in the county to build and
run a total of 340 apartments across Kent.
39. The power of economic, social and environmental wellbeing also extends to regenerating areas to
attract jobs, new homes and investment. We were disappointed therefore that the revised SNR document
incorporates an economic assessment duty rather than economic development duty for local authorities as
published in the first version. Local authorities should be equipped with full economic development powers
in order to fully exercise this duty as has already been argued here.
The Central-Local Concordat
40. The Central-Local Concordat states that both central and local government have the responsibility
to use taxpayers’ money well and devolve power. In the local arena, however, local quangos bypass local
authorities and are estimated to account for up to 60% of local public spending. Such bodies include
Jobcentre plus, the Learning and Skills Council, the Housing Corporation, health trusts, the Environment
Agency and others. We do not believe that this is a sound use of public money nor good news for democracy
and accountability. The SNR does not give local authorities grounds for significant optimism either
regarding the empowerment of councils, although we welcome the approach towards sub-regional working
as long as it is underpinned by real devolution.
An Independent Commission to Oversee Local Government Settlements
41. We do not believe that an independent commission be established to oversee the financial settlement
for local government. This would act to undermine the principle of accountability of central government to
its electors. The elected administration of the day should explain how and why it has prioritised expenditure
in particular policy and geographical areas.
Local Government: The Constitutional Position
42. Local Government has no legal mandate to act as a balance on the powers of central government.
Ministerial prerogative as well as our parliamentary system means that local government is defined by
statute of Parliament with its structure, composition and function changeable at the behest of the majority
(governing) party. The de-facto protection for local government arises from central government’s increasing
dependency on local government to deliver its programme and priorities, the unpopularity of local
government reform per se with the public who have aYnity and connection with their local councils, and
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the financial costs of local government reform often outweigh the net financial benefits in the short-medium
term. However, none of the above is a de-jure means of protecting local government, as the recent local
government reform programme has highlighted decisions about the future basis of local government
generally and in specific localities fundamentally remains a matter of ministerial prerogative.
43. It is diYcult to see how local government could have some form of legal or constitutional protection
without significant change to the current constitutional arrangements in the UK, either through embedding
the right of local government to exist, with its functions, finance and structure incorporated within a codified
(written) constitution which would could only be amended with special measures (ie by a two thirds
majority) by the legislature with independent oversight through the courts.
September 2008
Memorandum by the Local Government Information Unit (LGIU) (BOP 17)
The Local Government Information Unit (LGiU) is an authoritative and informed source of comment,
information and analysis on a range of local government and public policy issues. It has provided support to
councils and championed local democracy for 25 years. Our 150-strong local authority membership includes
Labour, Conservative and Liberal Democrat councils. The LGiU shares its expertise with government and
campaigns to extend local authority best practice, freedoms and responsibilities. Our teams of policy
analysts provide policy advice, training, consultancy, public aVairs services and other resources to our
members and other organisations. The LGiU was awarded Think-tank of the Year 2008 by Public AVairs
News.
LGiU welcomes the opportunity to submit written evidence to the Committee, and would value the
opportunity to expand on the issues we have raised in oral evidence.
Summary
Although progress has been made towards devolution, we believe that government in Britain remains
over-centralised, that devolution from Whitehall to localities needs to go further and faster, and that strong,
energised local councils should provide the framework for local democratic engagement.
1. Decision-makers are not suYciently accountable to local people about service delivery, particularly
where service providers are primarily responsible to Whitehall. We propose:
(a) A new model for accountability with local authorities commissioning policing and health
services, including services for the ageing population: these services would be self-managed,
but would be financially accountable to local authorities.
2. Many bodies are responsible for services locally but have limited accountability to local authorities or
local people. We propose that this could be mitigated by:
(a) Quarterly public question time events for appointees, non-executive directors and staV of
quangos and boards. In the case of Primary Care Trusts, Health Question Time events could
include councillors with health portfolios.
(b) Immediate assessment of how bodies such as Foundation Trusts can be held to account by
council Overview and Scrutiny Committees.
3. Progress towards devolution made in the last decade needs to be built upon and protected by including
a set of principles within a constitutional framework that has cross-party support. This will energise local
government by providing authority for the responsibilities created in Strong and Prosperous Communities
and subsequent White Papers. There is now a tremendous opportunity to balance the various obligations
and recognise the overall responsibilities of local authorities and their interaction with citizens and central
government in one place.
We propose as a set of principles :
(a) A statement of the purpose of local government, for example:
(i) to promote the economic, social and environmental well-being of their areas; and
(ii) to enable and promote democratic understanding and participation in communities and
neighbourhoods.
(b) A statement improving local accountability by recognising and protecting the roles and
responsibilities of elected representatives.
(c) A commitment to a formal concordat between central and local government.
(d) A commitment by government to consult and involve local government on all matters aVecting
its responsibilities.
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(e) A statement that administrative arrangements for ensuring local authorities comply with their
responsibilities should be proportionate and serve a clearly defined purpose, and that any
intervention by central government should be proportionate and with the aim of supporting
improvement.
(f) A commitment that local authorities be able to control and exercise discretion over their
financial resources, so enabling them to tailor expenditure to local needs and priorities.
(g) Provisions strengthening arrangements to ensure that central government expectations are
fully funded.
(h) A statement that local authorities hold the stewardship of natural resources locally.
4. The central-local concordat needs to be more transparent and accountable. We propose that the
concordat should be negotiated on a statutory basis, and should be monitored by parliament.
5. There is a lack of parliamentary oversight over the central-local relationship and the balance of power
between central and local government. We propose:
(a) Government submit annual or triennial reports from government to this Select Committee
which would allow the Committee to monitor the operation of the concordat and of the
central-local partnership.
(b) Options for monitoring the operation of a new constitutional framework could include prelegislative scrutiny Public Bills, and assessment of the appropriate degree of subsidiarity in the
allocation of responsibilities and level of decisions, and the funding of mandates.
6. The present balance of funding creates an accountability gap, with councils less accountable to local
people than they believe them to be. If local government is to be seen as a political institution with a strong
community leadership role which allows a degree of local choice and diversity, then it needs the authority and
means to act, including adequate financial resources and a reasonable degree of autonomy and discretion in
relation to local taxes. In our view this will involve at least 50% or a much larger proportion of funding raised
local through:
(a) the return of business rates to local control;
(b) local authorities having access to a range of local taxes; and
(c) radical reform of council tax and council tax benefit.
7. LGiU would support an independent commission to monitor and review local government finance,
with the ability to initiate inquiries and produce its own findings and recommendations. It would be
necessary to reach a cross-party consensus over what the role of an independent commission should be.
There are real questions about whether it is appropriate to further depoliticise the financial settlement
process or whether it is desirable to do so.
Introduction
1. LGiU welcomes the Committee’s Inquiry, which comes at an important point in evolution of the
relationship between central and local government. Some important steps have been taken towards
empowering local communities, but governance in Britain remains among the most over-centralised in the
world. LGiU has welcomed the moves in accountability from the centre to community partnerships and
away from constraining targets, but believes more is needed. A fundamental shift is needed in the balance
of power from Whitehall towards the local, and devolution from the centre needs to go further and faster.
2. At present, decisions about services and public spending priorities are taken too far from the people
who will be aVected by them, and who want to influence them. Yet challenges for communities at a time of
scarce resources and environmental pressures can be best managed at local level. It is urgent that
communities, neighbourhoods and citizens are engaged on issues that aVect them, and strong responsive
councils should be the framework for achieving this.
3. The welcome changes that have occurred over the last decade are the foundation of further
decentralisation and devolution. In this transitional period the Committee has the opportunity to set out
what needs to be achieved to energise local government and so make the localised agenda real.
Increasing Local Accountability for Policing, Health and other service providers
4. Greater accountability to local people can be achieved by bringing commissioning duties for external
public services within local authority decision-making structures. Commissioning is a multi-staged process
that encompasses local accountability: a comprehensive assessment of community needs and aspirations;
agreement of priorities in dialogue with communities, stakeholders and providers; identification of
appropriate providers; procurement of appropriate services (from a range of providers, including the local
authority itself); monitoring services (including managing demand), and review of services to ensure that
they have addressed the priorities identified in the needs assessment. All of this needs to be conducted in
dialogue with the community.
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5. In practice, services such as police and primary care trusts are primarily accountable to Whitehall: this
lack of direct accountability has an immediate impact on the ability of these services to respond to local
priorities and meet local concerns. The commissioning mechanism would shift responsibility for local issues
from the centre to local decision-makers. Little structural change would be needed, and accountability to
citizens and across existing organisation boundaries (eg between social care and health care, and between
local authorities and the police), would increase. These services would be self-managed, but would be
financially accountable to local authorities. There would be an emphasis on agreement between councillors,
chief executives, and citizens.
Policing
6. LGiU has found significant opposition to current Home OYce plans for directly elected crime and
policing representatives. Of those attending a recent LGiU conference on policing, only 8% supported the
proposal for directly elected representatives, with 70% saying they would not increase confidence in local
policing. The LGiU has devised four tests for police accountability, which have been backed by the Minister
of State for Policing, Security and Community Safety as capturing the aims of reform. The Home OYce
scheme raises concerns against all these measures. It is very complex and would be diYcult to communicate
to the public and administer. It does not devolve any powers from the centre to the local level, or integrate
well with Neighbourhood Policing. It does not provide any drivers for increased eYciency, and it has the
potential to undermine the progress in joined up government that have been made within local strategic
partnerships.
7. There is a consensus, however, on the need to increase police accountability. 95% of delegates to our
conference agreed—a result backed by a national survey of councillors undertaken by the LGiU earlier this
year. LGiU considers that the commissioning model would provide greater police accountability in a way
that builds on existing partnership, democratic and neighbourhoods structures, motivates eYciency and
increases public transparency.
Health
8. Central government is committed to lessening the one-size-fits-all approach to the health service, so
local accountability can take over the responsibility of oversight: local accountability will also ensure local
priorities are met and lessen health inequalities locally. Research shows that the public expects to be involved
in decisions, not just about their own care but about strategic priorities and that the views of the public are
echoed by councillors. The majority of 506 elected members contacted in a recent LGiU survey believed that
elected members should be accountable for local health services through new mechanisms. The survey
showed a considerable degree of consensus on the need for greater local accountability amongst all political
parties and all types of local authority.1
9. LGiU recommends that a system of health accountability which answers to the needs and aspirations
of local people and which is clear and accessible would include:
(a) the public health and commissioning functions of local authorities and primary care trusts
(PCTs) to be merged within existing democratic structures;
(b) targets and priorities for all public services to be set locally within a broad national framework;
(c) a number of accountability measures including regular public question time events for nonexecutive directors of PCTs and local authority portfolio holders; and
(d) overview and scrutiny committees to have more prominence and capacity to hold
commissioners and service providers to account.
Ageing population
10. The All Party Parliamentary Local Government Group, supported by the LGiU, considered services
for older people earlier in 2008, and backed the local authority commissioning model as the obvious
mechanism to provide clarity and eYciency over the respective roles of central and local government. The
APPG Inquiry found a clear direction of travel towards much closer working between local authorities and
in health, blurring the boundaries between organisations, and concluded that there should be a staged
movement towards integration. It found that the local authority is best placed to coordinate services across
the spectrum of need and additionally, that a strong democratic input is needed when making diYcult
decisions about resources. Pilots should aim to develop a model that oVers a plan for transition from joint
planning to fully shared commissioning.
1
Local Government Councillors Survey Feb to Mar 2008, carried out by ComRes for LGiU. Fieldwork dates: 21 Feb to
11 Mar 2008.
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Increasing the Accountability of Quangos and Boards
11. Many bodies are responsible for services that have a significant local impact, have a primary
responsibility to central government, and have limited accountability to local authorities or local people.
The duty to cooperate in the processes of a Local Area Agreement, where it applies, will in practice have
limited impact. There is no obligation on partner authorities to do more than engage in dialogue with the
relevant local authority—no targets can be included in the LAA without the organisation’s consent. The
extension of the “duty to involve” as promised in the Communities in Control White Paper will not tackle
the accountability deficit that exists where an organisation that is nationally oriented cannot be required to
account for the local impact of its activities.
12. LGiU would recommend that this situation be mitigated to some extent by adopting open forms of
accountability, which could include Quarterly Public Question Time events for appointees, non-executive
directors and staV. This model would have a wider application in the public sector. As already mentioned,
in the case of Primary Care Trusts, Health Question Time events could include councillors with health
portfolios.
13. In addition, immediate consideration should be given to assess how quangos and bodies such as
Foundation Trusts can be held to account through overview and scrutiny, building on the extension of
scrutiny of external bodies recently introduced by Parliament in the Local Government and Public
Involvement in Health Act 2007, and considering how recommendations can be given force. This could be
part of a major review of the role and governance of quangos and local boards.
Principles of Local Democracy and Self-government
14. LGiU believes that the ability of locally elected representatives to make democratic decisions and to
represent and support the participation of people locally should be protected within the constitutional
framework. The chequered history of local government over the last fifty years shows widely varying views
on the role and responsibilities of local government on the part of central government. The progress made
in the last decade should be built upon and protected within a constitutional framework that has crossparty support.
15. There is a need for a broad statutory statement of the role and responsibilities of local government
in order to:
(a) Create the foundation for a positive and sustainable partnership between central and local
government by providing clarity and mutual recognition.
(b) To provide a coherent framework, necessary as the complexity of multi-level government
expands.
(c) To underpin further devolutionary measures such as those we suggest.
(d) To bring balance to the framework incorporating the three spheres of central, local
government, and the citizen, confirming that the primary accountability of local authorities is
to local electorates.
(e) To energise local government by providing authority for the responsibilities created in Strong
and Prosperous Communities and subsequent White Papers.
Creating a sustainable partnership
16. A broad statutory statement would ensure clarity and continuity as the basis for a sustainable
partnership between central and local government:
(a) Clarity in three spheres : among politicians locally and nationally; among civil servants in
departments responsible for services that have an impact on localities; in the courts, as a guide
to the interpretation of legislation.
(b) Continuity, because careful parliamentary and sectoral consideration would be needed before
it was amended in the future; this will be stronger if the principles are based on a consensus
when they are agreed.
(c) Sustainable partnership: in the form of a concordat gives practical eVect to the partnership and
provides a positive culture among both national and local politicians, civil servants and
oYcers.
Bringing balance
17. The role of councils in empowering communities will shortly be put on a formal basis by the new duty
on local authorities to promote democratic understanding and participation.2 In parallel, the Government
is promoting an amendment to the European Charter of Local Self-Government, which would result in this
responsibility becoming an obligation under the Charter. The principles of subsidiarity and local selfgovernment that inform the balance of power between central and local government that are embodied in
2
In the forthcoming Community Empowerment, Housing and Economic Regeneration Bill.
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the Charter should also be given similar formal eVect in UK law. This is a tremendous opportunity—to
balance the various obligations and recognise the overall responsibilities of local authorities and their
interaction with citizens and central government in one place.
Energising a positive local government culture
18. A confident, lively and energetic local government culture is essential for the promotion of local
democracy. Sir Michael Lyons reported finding a culture of dependency during the period of his Inquiry,
caused partly by centralised financial structures, partly by a perception that it was necessary to be provided
with central government guidance in situations where councils had considerable discretion. There are many
decisions and activities that are best carried out at local level: a set of principles will enable local authorities
where caution prevails to shake oV a culture that has developed over decades, and enhance the strength and
capacity of others.
Using existing powers
19. Sir Michael described finding that authorities reported needing fuller guidance before using the wellbeing power more fully. This power provides a high level of local discretion, and research suggests that there
are a range of reasons why it is less used than central policy makers may have expected. Experience in other
jurisdictions suggests that it can take a period of years for changes that allow opportunities for innovation
to be assimilated and to have impact.3 It seems that at present there is a “patchy” level of awareness and
understanding within local authorities and a low level amongst partner organizations, but research suggests
that interesting and innovative activities are being undertaken using the power.4 There may be a number
of reasons why this power has not had the attention that that it might in the period since it was introduced.
Promotion of the possibilities generated by the well-being power could have value in generating confidence
and understanding. More dynamically, a statutory framework recognising the broad functions of promoting
economic, social and environmental well-being would provide a substantive framework and encourage use
of existing discretionary powers.
Stewardship of the environment
20. Local authorities’ stewardship of the environment and sustainable development provides a good
illustration of the national and local advantages in promoting a sense of authority and confidence in local
government. The success of LGiU’s Carbon Trading Scheme illustrates how local authorities are best placed
to carry out many of the activities necessary to make real advances in averting climate change and promoting
environmental sustainability: making informed local decisions on complex subjects, communicating
eVectively in a climate of ignorance where long term change is needed, and negotiating diYcult priorities.
It appears that councils do have the necessary powers to play this role: the barriers to their doing so could
be partly due to confidence in dealing with the scientific issues involved, partly unwillingness due to
uncertainty over central government support and over use of the well-being and other powers. A statement
acknowledging this powerful role would have considerable impact in energising local government and
ensuring it was recognised in Whitehall. LGiU believes that this statement should go further and specify that
local authorities hold the stewardship of natural resources locally. We suggest some of the implications of
this more substantial approach in appendix A.
A set of principles for the role and responsibilities of local government
21. Any statement should recognise the local democratic mandate, the leadership role of local
government and of councillors in the world of local governance, and include:
(a) A statement of the purpose of local government, for example:
(i) to promote the economic, social and environmental well-being of their areas; and
(ii) to enable and promote democratic understanding and participation in communities and
neighbourhoods.
(b) A statement improving local accountability by recognising and protecting the roles and
responsibilities of elected representatives.
(c) A commitment to a formal concordat between central and local government.
(d) A commitment by government to consult and involve local government on all matters aVecting
its responsibilities.
(e) A statement that administrative arrangements for ensuring local authorities comply with their
responsibilities should be proportionate and serve a clearly defined purpose, and that any
intervention by central government should be proportionate and with the aim of supporting
improvement.
3
4
Kitchin, H A Power of General Competence for local authorities in Britain in the context of European Experiments in Local
Government, CLD 1996.
Formative Evaluation of the Well-Being Power, Annual Report 2006, DCLG.
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(f) A commitment that local authorities be able to control and exercise discretion over their
financial resources, so enabling them to tailor expenditure to local needs and priorities.
(g) Provisions strengthening arrangements to ensure that central government expectations are
fully funded.
Central-local Concordat
22. The central-local concordat should be a practical and dynamic expression of the relationship between
the spheres of central and local government. The current concordat was signed by the leadership of the Local
Government Association and the Secretary of State for Local Government in December 2007. It sets out
broad statements which (other than the negotiation of Local Area Agreements) are indications of intent
rather than solid commitments; indeed, government compliance with the concordat has been questioned on
at least two occasions since it was agreed. The parties agreed to come together in a renewed central—local
partnership, which would be responsible for monitoring the agreement and revising it as that became
necessary.
23. At present the concordat has an essentially informal status: despite a reference to the concordat in The
Governance of Britain, it has not so far been included in parliamentary scrutiny of the Green Paper. While the
government will refer to the negotiation of local area agreements as indicating that significant progress has
been made under the concordat, the agreement continues to run on an informal basis: according to a
response to a Parliamentary Question in late July the future role and terms of reference of the central-local
partnership have not yet been clarified.
24. LGiU believes that the concordat, if it is to have impact, should be transparent and the players
accountable to parliament and to those with a stake in local government more widely for implementing and
reviewing its provisions. There should be a mechanism for the operation of the concordat and the centrallocal partnership being discussed and tested in the parliamentary arena.
25. A survey of 480 councillors conducted in early September 2008 on behalf of LGiU5 shows a positive
attitude towards the concordat, but suggests that there is a lack of knowledge about its provisions and what
it means, and that there is a lack of faith in the processes adopted for its eVectiveness, monitoring, and review.
The great majority of those that had heard of the concordat agreed that it is right to agree common priorities,
objectives and partnership arrangements, and there appears to be significant support for putting the
concordat on a stronger basis. In particular:
(a) Most agreed that the negotiations should be put on a statutory basis and agree that it should
be monitored independently, for example by a parliamentary committee.
(b) There is strong support for arrangements that bring all relevant government departments to
the table with the LGA on a regular basis.
26. The survey showed support for the negotiation of the concordat being established more formally on
a statutory basis. This could be achieved as part of the framework of a set of principles, or separately, and
either in the Constitutional Renewal Bill or the Community Empowerment, Housing and Economic
Regeneration Bill. The Joint Committee on the Constitutional Renewal Bill recommended that the scope
of the Bill be opened up to allow wider debate.
The Role of Parliament
27. The role of parliament in maintaining an oversight of central-local relations and the balance of power
between central and local government would diVer according to the proposals made in this submission
(a) In relation to the concordat, compliance with a statutory requirement could include the
submission of annual or triennial reports from government to this Select Committee which
would allow the Committee to monitor the operation of the concordat and of the central-local
partnership
(b) In relation to a statement of principle setting out the roles and responsibilities of local
government, a number of options would emerge and could include pre-legislative scrutiny for
the implications for local government of Public Bills, assessing the appropriate degree of
subsidiarity in the allocation of responsibilities and level of decisions, and the funding of
mandates.
Local Government Finance
Balance of funding
28. LGiU has long argued that a shift towards a fairer balance of funding would demonstrate a real shift
in the balance of power between central and local government. This would involve radical changes in
funding as well as a cultural and political change, with central government departments being ready to trust
local authorities to decide their own priorities within a national policy framework.
5
Local Government Councillors Survey August 2008, carried out by ComRes for LGiU. Fieldwork dates: 28 August to
5 September 2008.
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29. If local government is to be seen as a political institution with a strong community leadership role
which allows a degree of local choice and diversity, then it needs the authority and means to act, including
adequate financial resources and a reasonable degree of autonomy and discretion in relation to local taxes.
In our view this will involve:
(a) the return of business rates to local control;
(b) local authorities having access to a range of local taxes; and
(c) radical reform of council tax and council tax benefit.
30. The present balance of funding creates an accountability gap, with councils less accountable to local
people than they believe them to be. It is also the basis of an environment that undermines the ability of local
authorities to respond to changing needs and circumstances quickly and eVectively and so fully undertake a
place-shaping role.
31. The Lyons Inquiry finally placed emphasis on the need for greater local discretion rather than changes
in the financial structures of rates and taxes. However, it is diYcult to see how a council can fully grasp its
own agenda without, for example, radical reform of council tax. LGiU wants to see at least 50% or a much
larger proportion of funding being raised locally using the measures that we have identified.
32. The European Charter of Local Self-Government requires that local government be able to rely on
a finance system that allows a reasonable degree of discretion and is “suYciently diversified and buoyant”. It
is clear that the current system requires further amendment before it complies with the letter and spirit of
the Charter, and before it provides an eVective framework for the government’s broader expectations of local
government and matches the commitment that it has made in principle in the Central-Local Concordat.
An Independent Commission to oversee the financial settlement
33. LGiU would support a commission with a remit to monitor and review the impact of government
proposals for local government finance, and the ability to initiate inquiries and produce its own findings and
recommendations. In particular, we believe it would be valuable for such a commission to:
(a) examine proposals for new responsibilities and consider how any burdens involved would
be funded;
(b) assess the implications and reasonableness of eYciency targets; and
(c) play a role in a review of council tax.
34. It would be necessary to reach a cross-party consensus over what the role of an independent
commission should be. There are real questions about whether it is appropriate to further depoliticise the
financial settlement process or whether it is desirable to do so.
APPENDIX A
LOCAL STEWARDSHIP OF NATURAL RESOURCES—“LOCAL SONAR”
1. Standards on the quality and/or quantity of natural resources should be set locally (as devolved as
practical). This could mean the local authority or for some resources eg air quality—neighbourhood
standards. These standards would be a transparent part of the electoral process.
2. The Local Authority could commission agencies like the Environment Agency or Natural England to
carry out works that help them achieve the local standards.
3. The mechanisms needed for local communities to influence the standards appear to exist within the
community empowerment agenda, which needs development to include environmental concerns.
4. Disputes between local and national government on targets would be subject to an arbitration process
rather than the current top down command culture.
5. Funding for Local-SONAR should be integrated into normal funding streams and not in separate
funding pockets to ensure that SONAR becomes part of the core democratic process and for example,
hidden choices about air quality versus mobility are more transparent.
6. Standard setting and implementation should be part of the representative democracy process (as in 1)
but also has a significant participative democracy element.
Memorandum by Oxfordshire County Council and Oxfordshire District Councils
excluding Oxford City Council (BOP 18)
Summary
— The Oxfordshire local authorities believe that the freedom to raise and spend funding is critical to
the success of further devolution.
— We believe that reducing the amount of ring-fenced funding would enable local government to
deliver successfully a greater range of local priorities than at present.
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— We support the proposal that local government be able to raise a greater proportion of its
expenditure locally, providing that authorities can decide how to spend the funds and that central
taxation is lowered to an equivalent degree—there needs to be a shift in the balance of funding.
— Further, we believe that capping prevents local accountability and removes local responsibility for
the delivery of services.
Further Devolution
Does local government need greater autonomy from central government? If so, in what ways?
1. This revolves around finance, there can be no autonomy without the funding to match the powers.
2. This is about the freedom to raise and spend funding, rather than more money necessarily.
3. It is not an easy process to change the balance of funding between local and national, however business
rates are the obvious power to devolve to local government. If so, there would need to be an enforced
relationship between council tax and business rates increases to prevent councils having low council taxes
oVset by high business rates.
Do local government’s role and influence need to be strengthened in relation to other public services, such as
policing and health?
4. Any strengthening must be obvious and transparent to the general public.
5. Current arrangements regarding policing allow little influence from local government and the recent
green paper is likely to make this worse.
6. It is not clear “who does what” in terms of delivering services and taking decisions; the powers made
available in the Sustainable Communities Act will further complicate the issue, though this may or may not
be of concern to the public.
Financial Autonomy
To what extent do the current arrangements for local government funding act as a barrier to local authorities
fulfilling their “place-shaping” role? In particular:
— Does local government need greater financial freedom? If so, in what ways?
7. Overall, we would wish for a light-touch from central government.
8. There should be less funding that is ring-fenced or funding with conditions attached, allowing local
government more control over where to spend it.
9. A framework of minimum standards which can be achieved without prescription of how much should
be spent could be adopted.
10. Too much funding is CPA/target driven and the focus should be on incentives for good performance
rather than penalties for poor performance. Further, greater autonomy could be granted to higher rated
authorities.
11. Funding freedom is required for duties other than “place-shaping”.
— Should local government be able to raise a greater proportion of its expenditure locally?
12. Yes, if local government can decide how to use the funding and if central taxation is lowered to an
equivalent degree—there needs to be a shift in the balance of funding.
13. This should be raised through the council tax mechanism, being simple and accountable to the
electorate.
14. However, we believe that some funding could be raised nationally that are now raised locally, for
example the Policing budget.
— What eVect does the capping of council tax rises have on local accountability?
15. Capping prevents local accountability.
16. Councils are accountable for their council tax rises and capping removes local responsibility for
delivery of local services.
Existing powers
To what extent are local government services a product of national or local decision-making?
17. Services are driven by available funding, thus they follow national priorities. Though this varies to
an extent, dependent on the service (eg LTP oVers little flex).
18. The three areas that concern the public the greatest—police, health and education—we have no
control over. Further, these services are divided by government in terms of delivery streams, leading to a
fragmented, unjoined-up approach at the local level.
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19. National decision-making can have a major financial impact on authorities. For example the
concessionary bus fare scheme has had a very substantial impact on the budgets of local councils in
Oxfordshire.
20. Regarding health, there is a proposal from some local members for locally elected representatives
(councillors) to take on full time positions to form a board to set direction and agree the budget
Does local government make adequate use of its existing powers, such as its well-being, charging and trading
powers? What scope is there for greater use of those powers?
21. Trading powers are used but there is greater scope for expanding this—perhaps local government
could be braver in this regard.
22. Motivated councillors are key to expanding our usage of these powers.
23. However, we feel that there is a lack of advice, money and time available to support and make full
use of these powers.
Improving the Relationship between Central and Local Government
What diVerence has the central-local concordat made to central-local relations?
24. Most councillors (and many oYcers) were not aware of its existence—thus little impact so far.
Should an independent commission be established to oversee the financial settlement for local government?
25. We are unsure what this question is asking, as setting the national budget is clearly a political decision
for the government of the day. However there is some local sympathy for the idea of a government politically
allocating a pot, then a commission making the decision about how it should be divided between authorities.
The Constitutional Position
Given the UK’s constitutional settlement, what protections should be placed in law to ensure local government’s
ability to fulfil its responsibility as a balance on the powers of central government?
26. Places could be given in the Lords to local government, acting as a brake on misuse of powers.
What role should Parliament have in the protection of local government’s position within the UK’s
constitutional settlement?
27. We would like the central-local concordat established in legislation but not necessarily as part of a
written constitution.
September 2008
Memorandum by Knowsley Borough Council (BOP 19)
Introduction
1. Knowsley Council is a key deliverer of services for its 150,000 residents and has a leading role in the
Liverpool City Region. The ability to deliver eVective and eYcient services that meet the needs of its
residents relies in part on the relationship it has with national government and it is with in this context that
this submission is made.
2. The council’s submission is in two parts; the first raises a number of general observations on the
balance between central and local government including form should follow function and the need for a
constitution to clarify the roles and responsibilities of both national and local government. The second part
of the submission deals with the financing of local government and the need to properly fund what ever
functions it is called to provide.
General Observations
Form follows function
3. We need to understand what Local Government is for before we can develop an understanding of the
balance we between local and national government—is it to provide services or represent local views. In this
paper it is assumed it is to provide services.
4. The publication and enacting of the Local Government White paper last year dealt largely with the
form of local government, rather than its function. It seems to me that the debate is the wrong way round
and we all need to be clear what the function of local government is for—the white paper promised a
constitution that never materialised the government has never set out clearly what it wants local government
to do. This debate might be a start—then the form should follow.
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5. Local government provides a range of personal services including:
— Waste collection.
— Social services.
— Strategic education.
— Regeneration.
— Culture, sport, leisure, libraries.
6. However it could provide a range of additional services including:
— Social housing—Government could decide to abolish English Partnership (government
regeneration body) Knowsley’s Housing Strategy.
— Health (fully integrate the PCTs into Local Government to promote the health is wealth debate
Health is Wealth).
— Economic development and worklessness—Govt could abolish the RDAs and passport the money
direct to Councils Knowsley’s Economic Regeneration Strategy and Employment and Skills
Strategy.
7. It is worth noting that local government did have control of many more services in the past including
water and power but they were removed from local authority control without a debate and in order to meet
Govt objectives at the time; now may be the time to encourage Govt to reconsider this decision.
8. All that Central government would then be left to deliver is defence, strategic transport and energy
policy—whilst this may be unrealistic but it may be worth investigating as part of this debate.
Constitution
9. Much of the welfare state has always been national (National Health Service, national entitlements to
benefits and education) and as long as citizens look first to national government to deliver in these areas,
national government will not be ceding responsibility to others. Newspapers are always highlighting the
“inequalities” of “postcode lotteries” rather than the democratic choice; diVerence will always be the result
of more devolution and we don’t seem to want that.
10. A further suggestion would be to develop a constitution setting out the roles and responsibilities of
central and local government—this needs to be agreed by all political parties so it would provide long term
stability (may be 20 years but as much as 50 years) on what we are asked to do. What ever we do we need
to do the basics right, focus on what residents want us to do within the constitutional framework and it be
adequately funded.
Funding and service delivery
11. Local government is often seen as a dumping ground for all the services that the government either
finds too hard to do ie congestion charging or recycling or has no answer to. The adoption of Sustainable
Community Strategies and LAAs, SCS/LAA should help us to focus on service delivery and resourcing
however having had a below inflation settlement allied with a 3% eYciency saving, the issue of LG funding
is crucial particularly in an area like Knowsley where the opportunity to generate resources via local taxation
is limited.
12. Financial freedoms depend on a fair distribution of resources from central government. The ongoing
formula review must tackle the inequalities that remain such as resource equalisation, and should give
greater emphasis on need (deprivation factors).
13. Knowsley supports the strengthening of the role and influence of local government on Policing and
Health, building on the Local Strategic Partnership. The ability to pool budgets and commission services
authority wide enables the targeting of local priorities
14. Local government will not become more independent while such a high proportion of its funding
(exceptional by international standards) is controlled by central government, either through grants or the
distribution of the NNDR pot. Furthermore, the capping power of government over council tax is a
draconian measure, which undermines local accountability and reduces the flexibility that local authorities
require to respond to the needs of local residents.
15. It would be interesting to explore further the committee’s suggestion of establishing an independent
commission to oversee the financial settlement for local government, which could help make local-national
relationships less tense. What is important is that local authorities must be involved in any discussion or
debate on local government funding to ensure that local needs and priorities are addressed and fully funded
through the finance settlement.
16. The lengthy and thorough analysis of Lyons is all that is needed to inform the select committee on
finance.
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City Regions
17. It’s promising that the importance of local decision-making to the economic fortunes of cities and
city-regions, informed by academic work comparing the UK to continental and north American cities, has
been taken on board by government and reflected in innovations such as the Sub National Review and
MAAs. On Merseyside the development of the City Employment Strategy is an example of this devolution.
The next steps, which it would be good if the select committee could be encouraged to back, would be Core
Cities’ proposals in the Unlocking City Growth report for Accelarated Development Zones (requested
amongst the “Asks” in our draft MAA) and Regional Infrastructure Funds. However, poorer localities
should also welcome the fact that the balance will still be struck between such devolution and national
government’s stake in regional development and equalising outcomes (Eg in National Indicators focussing
on improvements to wellbeing locally and PSA7 on regional economic performance).
Addressing the political deficit
18. Central government via the empowerment, active citizenship and volunteering, ownership of assets
agenda are attempting to address the political deficit at a local level which will be diYcult due to years of
central government systematically stripping LG of power funding and credibility. Planning powers have
consistently been removed from local government with the introduction of the Planning Infrastructure
Commission being the latest example of this process. There is a need to introduce more credibility into the
political process and address the political deficit at a local level, for example, local councils should have the
power to determine even potentially large planning applications and be held to account accordingly, an
example of this is the Kirkby Regeneration project.
Relationship with Europe
19. The real issue in many people’s minds is not the relationship between national and local government
but the one between national and European government. The recent survey by Ipsos Mori encapsulates this
as people do not wish to be involved in local politics. Power has been ceded to the EU with a majority of
legislation being taken through parliament being EU directives. Often central government agrees limits and
targets with the EU and then expects LG to meet them without fully costing the implications—the collection
and recycling of refuse is a case in point
Financial Issues
Does local government need greater autonomy from central government? If so, in what ways?
20. If further devolution leads to greater freedoms and flexibilities to prioritise where resources can be
directed based on local need then this would be welcomed. Central Government’s role should be to provide
leadership by setting a clear vision, a stable framework, adequate resources, eVective incentives as well as
accessible and consistent information on performance. Local government need to be given the resources to
achieve this vision as they and local people see fit.
21. Tackling the problems at the roots of communities need to be directed by locally elected Members
who have the knowledge about what is required and works in their community. Local government need to
ensure that resources are available to communities to support these initiatives. If local government is able to
demonstrate that it has the mechanisms to facilitate this then this would strengthen the argument for greater
autonomy.
Financial Autonomy
To what extent do the current arrangements for local government funding act as a barrier to local authorities
fulfilling their “place shaping” role? In particular: Does local government need greater financial freedom? If so,
in what ways?
22. Financial freedoms depend on a fair distribution of resources from central government through the
formula grant. The ongoing formula review should tackle the inequalities that remain such as the area cost
adjustment, and should give greater emphasis on need ie deprivation factors.
23. The continued use of ring fenced grants by the Government leads to the ineYcient allocation of
resources and undermines the ability to place shape and manage the achievement of targets. However, the
move to non ring-fenced grants, such as the area based grant is a favourable method of funding for new
government initiatives. It is important that the Government fully funds any new initiatives. For a floor
authority, such as Knowsley, any increases in formula grant can result in no additional funding to implement
initiatives as floor grant is merely replaced with formula grant.
24. It is also possible that specific ring fenced grant, which are restrictive in the way local authorities retain
management and administration resources would enable further resources to be passported to communities
to place shape. The infrastructural costs that accompany initiatives may be reducing the impact of new
resources on improving standards.
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Should local government be able to raise a greater proportion of its expenditure locally?
25. For an authority such as Knowsley with a low tax base, the opportunity to raise a greater proportion
of its expenditure locally is very restricted. The ability to raise income from fees and charges is minimal and
is incomparable with the income generation potential of some boroughs, such as London Boroughs. The
ability to generate income needs to be taken into account as part of methodology for distributing formula
grant as part of resource equalisation, which will not disadvantage those local councils with low tax bases.
26. The delay in council tax revaluations has lead to continued inequalities between council taxpayers
across the country. The Lyons Review recommended the addition of a new upper and lower band to
redistribute wealth between the very rich and the poor, which should lighten the tax burden for many
residents within Knowsley. The Lyons Review supports the continuation of the council tax system in
principle, but highlights that it is a tax which is progressive to income if council tax benefit is fully utilised.
Before any alternatives to council tax can be considered, which could lead to financial autonomy, trust must
be secure between residents and local government.
27. If the introduction of a local income tax is successful in Scotland then it could provide the backdrop
to English council tax reforms. How the potential funding pressures, resulting from the exemption of
Council Tax Benefit receipts from the aVordability calculations, are managed by central government will
have a bearing on the feasibility. The Barnett Formula will be under close scrutiny to determine whether the
proposal in Scotland is viable.
28. Arguments about the rate of increases in business rates in comparison to council tax increases suggest
businesses have been treated leniently. However, in tough economic conditions the eVect of significant
increases in business rates would be felt by all businesses. Since business rates have been distributed
nationally, œ1billion has been redirected from local government funding to support other national
government priorities. As business rate receipts finance the majority of the formula grant allocations to local
authorities their impact on financial freedom lies in the fairness of the formula and the quantity being
released. The three year settlement protects local government from cyclical fluctuations in business rate
receipts and enables some stability to forward plan.
What eVect does council tax capping have on local accountability?
29. The cap on council tax is a draconian measure which undermines local accountability and reduces
the flexibility that local authorities require to respond to the needs of local residents. The cap is not the only
factor restricting council tax rises. Political and social constraints are equally restrictive. The balance
between increased revenues and aVordability of residents has to be monitored. The ability to fund local
services is getting increasingly diYcult, especially for floor authorities facing the prospect of a tapered floor.
Residents are unlikely to diVerentiate between local and national governmental responsibility but when
given the opportunity, in whatever elections, are likely to vote for change, if they feel worse oV.
Existing Powers
To what extent are local government services a product of national or local decision making?
30. The movement away from target setting to outcome based monitoring, as with the Local Area
Agreement has meant a transfer of accountability to local government.
Improving the relationship between central and local government
What diVerence has the central-local concordat made to central-local relations?
Should an independent commission be established to oversee the financial settlement for local government?
31. The benefits of an Independent Commission to oversee the financial settlement for local government
may include financial settlements being less of a political tool ie Ministerial decision and therefore, in theory,
fairer. Disadvantages depend on whether local government has a voice, and whether the commission has a
greater understanding of local needs. The two components of the settlement are the distribution method and
the quantum. Central government would need to provide adequate resources for the Independent
Commission to distribute resources fairly, and should be subject to calls to account from the Independent
Commission if resources are withheld by the Government.
Conclusion
32. In the context of the discussion about the future relationship between central and local government
it is important to establish some key principles.
(1) Subsidiarity—the need to balance the eYciency of regional service delivery against local
democracy and local responsiveness;
(2) Common Boundaries—experience suggests that people can understand public services better when
they are delivered in common boundaries which also make it much easier for organisations to
deliver real joined-up services (this is an approach Knowsley has been pursuing with the PCT for
a number of years) ; and
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(3) Strong Local Government -people have in the past strongly supported local government and this
support needs in the future to be the centrepiece in service delivery and local democracy. Without
it local government may as well be regarded as a branch of national government
33. Such a statement of principles would serve to ensure that both central and local government are
working to a common vision and ensure that the allocation of functions takes place in an environment of
trust, mutual regard and the common cause of providing integrated public services meeting the needs of
our citizens.
34. Such principles and vision could form the basis of a constitution between central and local
government and be part of the Prime Ministers desire for a written constitution for all. The constitution
enforceable in the courts would set out the clear roles and responsibilities of central and local government.
The constitution possibly along the lines of the BBC’s charter would be developed after far reaching
consultation and have all party agreement. It would be reviewed after an extensive period of time.
35. The key to ensuring a proper balance between local and national government power and fulfilling the
vision and core principles is clear, transparent and accountable fund raising powers. It is funding which is
the key to ensuring the balance between local and national government powers and whilst this has been
recognised by the current government in the commissioning of the Lyons Review—little if anything of real
substance has emerged; the committee may wish to look at how the review has been implemented.
September 2008
Memorandum by Association of North East Councils (BOP 20)
Introduction
1. The Association of North East Councils is the political voice for local government in the North East.
It represents all 25 local authorities in the region, throughout Northumberland, Tyne and Wear, Durham
and the Tees Valley on issues of concern to them and the communities they serve. It is a cross-party
organisation, with all of its members democratically elected and accountable politicians.
2. The Association welcomes the opportunity to give evidence to this inquiry, which touches upon some
of the most important issues facing local government today.
Further Devolution
Does local government need greater autonomy from local government? If so, in what ways?
3. A good starting point for answering this question is the Local Government White Paper of October
2006 “Strong and Prosperous Communities”, which set out a vision of “revitalised local authorities, working
with their partners, to reshape public services around the citizens and communities that use them”. A key
element of this is the role of local government as a strategic leader and place shaper. At the local level, the
council provides strategic leadership, bringing together local agencies and groups to address local problems
and challenges. At the neighbourhood level, the local councillor is advocate and champion for the local
community, while at the same time working with his/her fellow council members to ensure that priorities are
identified across the council’s area, resources are equitably shared and strategic priorities—such as social
cohesion or the response to climate change—are addressed.
4. The local authorities that the Association represents are committed to pursuing this vision in
partnership with central government. What local government needs is both suYcient autonomy to pursue
the vision without being distracted by other policy innovations that are at odds with it, and the confidence
that central government will be consistent in its approach.
5. Much of what Government has done in recent years has been valuable in supporting the White Paper
vision. Furthermore the importance of the role of representative democracy expressed in the recent Ministry
of Justice paper “A National Framework for Citizen Engagement” should be underpinning the Government’s
approach to local government (this point is developed further in paragraphs 26–27 below). Some examples
of where the Government has supported its White Paper vision include the following:
— the Local Government and Public Involvement in Health Act 2007 recognises local government
leadership by requiring partners to cooperate in achieving Local Area Agreement (LAA) targets;
— LAAs are an important vehicle for working with partners to reshape services around communities’
and individuals’ needs;
— Multi-Area Agreements extend this principle across geographical and institutional boundaries;
and
— the Sub-National Review gives local government a key role.
6. However, there are also examples of Government initiatives and proposals that point in the opposite
direction and/or potentially undermine the role of local councils and councillors. There could be said to be
three strands to this:
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— “bypassing the Town Hall”—an apparent belief that power should be removed from elected
representatives and vested in groups and individuals in the community. As the recent Communities
in Control White Paper says: “This is what empowerment is all about—passing more and more
political power to more and more people through every practical means”;
— “micromanagement”—the same White Paper puts forward a wide range of initiatives (some of
them no doubt highly worthwhile) which local authorities are expected to take on board; these are
to be followed up by six detailed consultation papers. The impression is that local government
cannot be trusted to think for itself. A more distant but still significant example of the same
approach can be found in the Licensing Act 2003 which specified, in primary legislation, the
composition of a local authority Licensing Committee. Details of internal organisation really
should be left to individual local authorities; and
— creating competing electoral mandates. This is most clearly seen in the Policing Green Paper which
proposes the direct election of Crime and Policing Representatives who will form a majority on
police authorities and chair Crime and Disorder Reduction Partnerships. This will detract from
the accountability of local councillors, create confusion in the mind of the public as to who is
responsible for community safety issues in their neighbourhood and risk undermining successful
partnerships between councils and the police. It could also let in single-issue or extremist
candidates.
7. The exact degree of autonomy to be aVorded to local government will always be a matter of debate
but we would like to see local government having at least suYcient autonomy, not to mention a period of
stability, to enable it to pursue the vision set out in the Strong and Prosperous Communities White Paper.
Do local government’s role and influence need to be strengthened in relation to other public services, such as
policing and health?
8. Local authorities have had a great deal of success in recent years in building up strong partnerships
with other public bodies, not least in the fields of police and health. However, we believe that there are still
opportunities for ensuring greater accountability of public bodies through a deeper engagement of the local
authority, with its democratic mandate. Most if not all councillors have had the experience of being
approached by constituents to resolve issues which formally relate to health or policing, over which the
authority has, of course, no formal powers. The public see their local council, whom they elect, as the proper
body to deal with such issues. We could go much further towards making this a reality.
9. Real accountability could both:
— improve outcomes by ensuring that services are more attuned to the needs of users, that users have
real opportunities to influence service provision, and that there is strong joining-up of service
provision; and
— contribute to democratic renewal by recognising and reinforcing the value of political processes and
the role of public agencies.
10. Policing and health are two prime examples both of what has been done and what could be done. The
Policing Green Paper, for example, includes a welcome recognition of the need for police authorities to be
able to hold their police forces to account for such things as deployment of resources and improvements in
productivity. In health, there has been a movement towards greater accountability at PCT level through such
measures as power for council overview and scrutiny committees to review local health services (an
opportunity that has been well developed by authorities in this region); encouragement for PCTs to appoint
a councillor to sit on their Board as a non-voting member; more joint working on commissioning and more
joint appointments and shared management structures. This could be taken further (see below) but it is a
good start.
11. For NHS Foundation Trusts, the Health and Social Care Act 2003 established a framework of
“membership communities” whose members can stand as, and vote for, governors of the trust. However,
the evidence suggests that this attempt at securing democratic accountability is of relatively limited value,
since membership is generally low in relation to the potential catchment area, and while the Directors of the
Trust are obliged to consult the governors, they are not obliged to follow their wishes.
12. An alternative would be to explore a commissioning model under which the local authority would
hold the budget for, and be responsible for the commissioning of, local health and policing services.
Commissioning decisions, while ultimately the responsibility of the council, would come out of an
assessment of local needs and priorities into which local people and frontline councillors, as well as the
council’s partners, would have a major input. This would be a bold innovation but it would take us a long
way forward in securing democratic accountability. We suggest that it should be trialled in the first instance
in a few authorities. Undoubtedly authorities in the north east would be willing to pilot such an approach.
13. The issue also needs to be seen in the context of the new arrangements for Comprehensive Area
Assessment (CAA). These arrangements, while focusing on the performance and potential of localities,
propose organisational assessments for local authorities and fire and rescue services but not for other
agencies whose support and commitment to deliver outcomes is essential. The draft guidance states that the
organisational assessment will be designed to “ensure local accountability at an organisational level,
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including delivering contributions to Local Area Agreements and wider sub-regional or regional strategies”.
It goes on to say that each organisational assessment “will summarise how well the council or fire and rescue
service manages performance, covering how well it is delivering services, outcomes and sustainable
improvements in its priorities that are important locally”. CAA does not set how organisational assessment
of other agencies would take place to ensure they are influenced to maximise the prospects of delivering LAA
and other targets.
14. Local government’s position as community leader is articulated in successive Local Government
White Papers and, to some degree, in legislation (see paragraph 5 above). Success in the role of community
leader is, however, dependent on councils being able to adequately influence other local, sub-regional and
regional agencies to ensure delivery of the outcomes set out in (for example) LAAs. While there is much
evidence that partnership working continues to grow and strengthen, there remains a vacuum in terms of
accountability and influence should one or more partner agencies fail to accept their responsibilities under
the LAA.
Financial Autonomy
To what extent do the current arrangements for local government funding act as a barrier to local authorities
fulfilling their “place-shaping” role? In particular:
— Does local government need greater financial freedom? If so, in what ways?
— Should local government be able to raise a greater proportion of its expenditure locally?
— What eVect does the capping of council tax rises have on local accountability?
15. Local government is largely dependent on central government for its financial settlement which makes
it diYcult for it to have true autonomy in fulfilling its place-shaping role. Currently, local authorities receive
an average of 75% from central government (including Dedicated Schools Grant) and 25% from council tax.
At the heart of the problem is the gearing eVect, with a 1% rise in spending requiring a 4% increase in council
tax. This distorts accountability.
16. Sir Michael Lyons’ report into local government finance made some key recommendations in relation
to future financial management arrangements for local government which would have addressed these
issues. It is disappointing that there has been so little action on Lyons’ recommendations (except to reject the
abolition of capping) and we believe that the Government should now set a timetable for considering them.
17. We welcome the introduction of the business rates supplement but it is disappointing that the
maximum level has been set at 2p in the pound as opposed to the 4p recommended by Lyons. More generally
we would like to see real incentives for councils to develop locally raised sources of income—unlike some
of the current incentive schemes (LAA reward grant for example) which are in reality centrally controlled
grants.
18. Capping of council tax increases also conflicts with the accountability of local authorities for local
spending decisions. While the overall responsibility of government for the totality of public spending is
recognised, the reality for local government is that national spending on local government services is set to
rise by only 1.5%, 0.8% and 0.7% above inflation over the next three years, making it diYcult for local
authorities to meet the additional pressures on services that will undoubtedly arise.
19. Measures to support local financial autonomy and accountability should include, at minimum, a
revaluation for council tax purposes. The lack of action since 1991, given the significant relative movements
in house prices, penalises council taxpayers in deprived urban areas outside of London and the south east.
We would also support the return of local business rates to local control, a measure that would significantly
shift the balance of funding.
Existing Powers
To what extent are local government services a product of national or local decision-making?
20. Current service provision is necessarily the product of a combination of central and local priorities.
The new LAA framework gives a greater sense of shared responsibility, but negotiations are still subject to
central government agreement, and the scope for purely local priorities remains low. This situation is
compounded by the financial system which, because of the gearing eVect, significantly reduces local
authorities’ ability to deliver key priorities and to allocate appropriate resources.
21. To develop this point, the new LAAs are undoubtedly a move in the right direction in terms of
devolution. In the LAA negotiation process leading to sign oV in June 2008, there was a much more open
and mature dialogue between councils and their partners at the local level, and central government, over
priorities to be included. There remains, however, a continued emphasis from some parts of central
government on ensuring that “their” targets are included. The refresh of LAAs which will take place over
the coming months could be unduly influenced by central government departments to amend targets in
response to central pressures rather than local priorities. While we accept that devolution and LAAs are a
journey (and comparison of the old LAAs with the new illustrates this), localities remain relatively powerless
to ensure their LAAs genuinely reflect local priorities.
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Ev 184 Communities and Local Government Committee: Evidence
Does local government make adequate use of its existing powers, such as its well-being, charging and trading
powers? What scope is there for greater use of these powers?
22. While our member authorities are all using these powers to varying degrees, there are concerns that
the legal framework means that the powers are, in reality, by no means as extensive as they might appear at
first sight. For example, the trading power can only be exercised through a company (or other trading
vehicle) and this inevitably presents complex legal, financial and taxation issues to any council that might
be thinking of going down this road.
Improving the Relationship between Central and Local Government
What diVerence has the central-local concordat made to central-local relations?
23. The concordat provides a useful mechanism to manage the relationship between central and local
government, but the perception remains that it has not provided the radical shift in the balance of power
that it was designed to.
Should an independent commission be established to oversee the financial settlement for local government?
24. This concept was endorsed by the Lyons report and we would support it. It would take away at least
some of the politicisation of the current process for arriving at the financial settlement under which decisions
can be taken by the government of the day for political purposes rather than being based on an objective
assessment of the needs of local government.
Given the UK’s constitutional settlement, what protections should be placed in law to ensure local government’s
ability to fulfil its responsibility as a balance on the powers of central government?
25. Going back to the beginning of this evidence, we suggest that local government legislation should be
underpinned by recognition of the role of local government as convenor of local public services and placeshaper through its democratic mandate. It may be opportune as well to recognise in law the primacy of
representative over participatory government as there are signs that this is being eroded by the desire to
delegate power away from those who are democratically elected and therefore accountable to those who
elected them, and by proposals to create alternative democratic mandates—notably for policing but for
other functions as well, including National Park Authorities.
26. In this context we consider that attention should be paid to the recent Ministry of Justice paper “A
National Framework for Greater Citizen Engagement”, which sets out a coherent framework for considering
these issues. It starts by asserting the primacy of representative democracy, which enables people to exercise
power over politicians through the vote; allows for a fair distribution of power among all citizens (one
person, one vote); and gives government (both central and local) the ability to tackle complex issues and
make complex decisions about competing priorities.
27. As the MoJ paper recognises, representative democracy faces some challenges, not least the decline
in formal engagement, and needs to be reinvigorated by designing eVective public engagement which taps
into people’s willingness to engage at the local level. But this kind of engagement is not a panacea: it can
over-simplify complex decisions and be vulnerable to manipulation. Engagement mechanisms should
therefore complement and not challenge the supremacy of representative democracy. They should also be
accessible, transparent and embedded in the policy-making process (not one-oV “gimmicks”).
28. We consider that legislators should firmly adhere to the fundamental principle of the primacy of
representative democracy and ensure that any legislative proposals for devolving power to (non-elected)
local people should be subjected to the kind of analysis outlined above.
What role should Parliament have in the protection of local government’s position within the UK’s
constitutional settlement?
29. We consider that the CLG Select Committee itself, with its role in the scrutiny of draft legislation, is
very well placed to secure the protection of local government’s constitutional position and the primacy of
representative democracy.
September 2008
Memorandum by The County Councils Network (BOP 21)
About the CCN
The County Councils Network is pleased to provide evidence to the Select Committee Inquiry into the
Balance of Power—Central and Local Government. The County Councils Network works on a cross-party
basis to represent all 37 English Shire Counties, which in turn represent 48% of the population and provide
services over 87% of the land mass of England.
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Communities and Local Government Committee: Evidence Ev 185
The inquiry comes at a time when the Government is working to take forward policies which empower
citizens and communities, in particular through the proposals arising from the Communities in Control
White Paper. In this context, the CCN believes it is important not only that communities and individuals
are able to express their priorities to local government, but also that local government has suYcient powers
and freedom of action to act on those priorities.
Summary
— The CCN recognises that diVerent functions and decisions are properly exercised at diVerent levels
of Government, and it is the debate around the proper role of each level which is the core of this
inquiry: balancing the need for local services to be adapted to suit local circumstances with the
Government’s desire to implement national initiatives, and the media dread of the so-called
“postcode lottery”.
— The CCN believes that the public are more widely accepting of local variation when it is the result
of democratically accountable local decision-making in which they have had the opportunity to
participate.
— The CCN supports the positions taken by the Local Government Association in relation to the
Inquiry, and would also commend the work of the Lifting the Burdens Task Force established by
CLG, which is a repository of practical examples of where deregulation could enable services to
be delivered in a more responsive, financially eYcient way.
— The CCN believes that increased freedom and flexibility for local government would be an
important step towards delivering improved services in a more cost-eVective way, and streamlining
central control would allow national politicians to focus more strongly on key priorities.
CCN Response
Local Priorities and Local Needs
1. The CCN believes that it is important to recognise the reasons for variation in public services, enabling
a mature discussion to be held between central and local government about the extent to which particular
services should be standardised to some degree on a national basis, and the extent to which they should be
delivered in a way which takes account of diVerences in local needs, priorities, and resources. Undertaking
this discussion could then underpin future decisions in a way which reduces the likelihood of decisions
having to be taken in the glare of a media crisis.
2. The CCN therefore welcomes the direction of travel indicated by the spirit of the Concordat, the move
to Comprehensive Area Assessment, the reduction of the national indicator set and the new LAA regime.
This has increased the opportunity for local authorities and partners to identify from a range of central
priorities those which best fit with the needs of their local area, and for local members to act as community
leaders within their electoral division and to shape wider “communities of place”. Nonetheless, the CCN
remains concerned that the new arrangements need to demonstrate a reduction in the administrative burden
of inspection, and about the quality of some indicators.
Delivery through Local Partnerships
3. County Councils are well placed to continue leading LAAs, as authorities holding the ring of
democratic accountability, and of a suYcient scale to have strategic capacity to undertake public
engagement and detailed needs analysis. The CCN would therefore argue for a minimum of prescription and
central pressure in the selection of local indicators, for continued recognition of local priorities in inspection
regimes, and for maximum flexibility in the choice of local delivery mechanisms. It is for this reason that the
CCN has supported, for example, a strong local voice in planning, and maximum flexibility for local
authorities in delivering development—including a restoration of the right of local authorities to
commission aVordable housing directly.
4. The duty to co-operate is also an important step forward in helping local delivery of these priorities,
and will have the greatest impact in a regime in which other public sector bodies have the flexibility to act
according to them and demonstrate to local people that they have done so, rather than following a rigid
central model. At present, there is a great deal of variation between diVerent public sector bodies, largely
driven by the extent to which particular Whitehall departments follow a devolutionary or a centralising
model.
5. The CCN would therefore argue that local government has a key role to play in shaping service delivery
by other public sector actors, such as the police and healthcare providers, and the recent trend in police
accountability is therefore not welcomed by CCN members, who feel strongly that local accountability is
generally best exercised through existing democratic structures rather than by setting up further elected or
unelected bodies. The CCN feels that the requirement for local authorities to work closely with partner
organisations is not always reflected in the level of local engagement by those organisations—this is most
keenly felt when those organisations are driven by central government targets outside the LAA process.
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Local Government Finance
6. While the CCN feels that a greater proportion of Council revenue being raised locally would enhance
democratic accountability, the politics of this are currently very challenging. The CCN would support the
LGA view that Councils should have control over a broader range of revenue-raising options, including
deregulation of some fees and charges which are set nationally. This would include more local discretion than
currently exists under the capping regime. There is widespread support amongst CCN members for allowing
some local control of revenue raised from business rates, and for a minimum of ringfencing of
government grants.
7. Resource equalisation will always mean that some revenue comes from central government, and that
this amount varies from authority to authority. The CCN al