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House of Commons Communities and Local Government Committee

Localism Third Report of Session 2010–12

Volume I: Report, together with formal minutes, oral and written evidence Additional written evidence is contained in Volume II, available on the Committee website at www.parliament.uk/clgcom Ordered by the House of Commons to be printed 9 May 2011

HC 547 Published on 7 June 2011 by authority of the House of Commons London: The Stationery Office Limited £31.50

The 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. Current membership Mr Clive Betts MP (Labour, Sheffield South-East) (Chair) Heidi Alexander MP (Labour, Lewisham East) Bob Blackman MP (Conservative, Harrow East) Simon Danczuk MP Rochdale (Labour, Rochdale) Stephen Gilbert MP (Liberal Democrat, St Austell and Newquay) David Heyes MP (Labour, Ashton under Lyne) George Hollingbery MP (Conservative, Meon Valley) James Morris MP (Conservative, Halesowen and Rowley Regis) Mark Pawsey MP (Conservative, Rugby) Steve Rotheram MP (Labour, Liverpool Walton) Heather Wheeler MP (Conservative, South Derbyshire) Clive Efford MP (Labour, Eltham), Mike Freer MP (Conservative, Finchley and Golders Green) and George Freeman MP (Conservative, Mid Norfolk) were members of the Committee during this inquiry. 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. Publication 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/parliament.uk/clg. A list of Reports of the Committee in the present Parliament is at the back of this volume. The Reports of the Committee, the formal minutes relating to that report, oral evidence taken and some or all written evidence are available in a printed volume. Additional written evidence may be published on the internet only. Committee staff The current staff of the Committee are Huw Yardley (Clerk), Judith Boyce (Second Clerk), Josephine Willows (Inquiry Manager), Kevin Maddison (Committee Specialist), Emily Gregory (Senior Committee Assistant), Mandy Sullivan (Committee Assistant), Stewart McIlvenna (Committee Support Assistant) and Hannah Pearce (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 1234; the Committee’s email address is [email protected]

Localism

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Contents Report

Page

Summary

3

1

Introduction

7

2

Defining localism and its aims The Government’s definition of localism Localism in other government departments Localism and efficiency

3

Central government in a localist system Will Government prove able to rein itself in? Setting limits to localism

4

Localism without local government?

10 11 15 19 24 24 28 36

The Government’s view of local government’s role 39 The general power of competence 39 Local government resources 40 How do the policies of other departments reflect the Government’s vision for local authorities? 42 The value of democratic legitimacy 45 The role of local government in supporting localism 47 The challenges of improving local democratic engagement 50 The public’s willingness to participate 52 How will local authorities have to adapt? 54

5

Integration or fragmentation? Total Place and community budgeting Will community budgeting fulfil its potential?

6

Who will deliver localism? The Government’s plans to diversify service provision Who will deliver the Government’s vision? A retreating statutory sector? Barriers to greater diversity of provision Asset transfer The accountability of delivery bodies

7

57 58 61 66 66 68 71 73 76 77

Conclusion

81

Conclusions and recommendations

83

Annex—visits to Devon and Croydon

89

2

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Formal Minutes

100

Witnesses

101

List of printed written evidence

102

List of additional written evidence

103

List of Reports from the Committee during the current Parliament

106

Localism

3

Summary The Government has announced its intention to instigate a radical devolution of power to local level, giving new powers and opportunities to councils, communities, neighbourhoods and individuals. The Localism Bill embodies some of the specific changes the Government wishes to make to put this into practice, but the Government’s agenda is much broader than the measures in the Bill, and implicates all government departments. This inquiry set out to examine the interpretation and implementation of this policy throughout Government, whether the Government’s idea of localism is shared by other stakeholders, how local democracy and public service delivery might change in response to this agenda, and what obstacles might exist to those changes. The principle of localism is not controversial; it commands cross-party support, and we welcome the emphasis that the Government has put on decentralisation. The Government’s approach in practice, however, has thus far been marked by inconsistency and incoherence, not helped by a definition of localism that is extremely elastic. This has allowed individual departments to adopt definitions of localism that suit their other policy aims, rather than definitions that are internally consistent or developed in consultation with other stakeholders. Some policy areas remain notably more centralised than others. The Government has not produced a compelling vision of what its imagined localist future will look like and the functions and responsibilities of the players within it. Greater clarity and certainty is needed. The role of the Minister for Decentralisation promises to bring coherence, rigour and a sense of priorities to the Government’s programme for localism; his success in this will be crucial, and closely monitored. Localism should not be adopted purely as a way to achieve reductions in public sector costs, for it is unclear whether it will be able to deliver this in the short term. It is not certain that the financial benefits of more tailored services will immediately offset losses in efficiencies of scale. Stimulating greater democratic participation and civic activism will carry its own costs if it is to be successful and sustainable. There is not universal support for the idea that central government should retreat entirely from local affairs, allowing accountability to local people to replace performance monitoring from the centre. In particular, organisations representing vulnerable, marginalised or minority groups argue that these sections of the community need protection that cannot be provided by the current mechanisms of local democratic accountability. These mechanisms must therefore be enhanced and improved. National minimum service standards, in some form, may be necessary. Most importantly, clarity and consistency is needed from the Government about which tier of government will hold which responsibilities, and on what grounds it will intervene at the local level.

4

Localism

Devolution of power both to local government and to local communities are not always compatible aims, and the latter appears to be the Government’s priority. The infusion of the Government’s pronouncements on localism with ‘Big Society’ rhetoric implies a diminished, not greater, role for local authorities, and there are differences across government in the level of trust departments appear willing to place in councils. Lacking is any coherent vision for the future role of local authorities. The impact that the general power of competence and the review of local government resources will have are as yet unknown. Without room for local authorities to flex new muscles, little in the Government’s agenda would take local authorities much further forward in their ability to influence and shape their areas. The democratic mandate of local authorities is crucial in securing acceptance of greater variation in services between areas. The broad remit and powers of councils will also make them invaluable in facilitating the kind of low-level civic activism that the Government wishes to promote. Many councils are already engaging effectively with their communities to encourage participation in decision-making, although community development organisations are concerned that not all local authorities at present have the inclination or skills to do this robustly. New roles will need to be developed by elected members, so that, alongside the new tools in the Localism Bill, the tools already available to communities to get involved in shaping their areas become more widelyused and more effective. The local government sector has consistently sought decentralisation in such a way as to allow the joining up of services at local level—not just council services but those delivered by other agents such as Jobcentre Plus, health and the police. Various Government policies including reforms of the police, schools and health services threaten to fragment rather than integrate public services at local level. Total Place’s successor programme, Community Budgets, is welcome but so far limited; there is no guarantee or even indication at this stage that all government departments will be willing to devolve budgetary control to the extent needed to make it a success. Local authorities should therefore be given a power analogous to the ‘community right to bid’ in the Localism Bill: a right to challenge central government for the opportunity to deliver services. The Government has chosen to make diversification of the provider base for public services an important plank of its decentralisation agenda, with one aim being to encourage smaller, community-run groups to participate. Although many such groups exist, their ability or willingness to move into this kind of service provision has not been proven; changes will be needed to standard procurement exercises if they are to compete against other players, and funding cuts threaten to undermine their capacity. The Government’s ‘Big Society’ already exists in many respects, and so realism is needed about the extent to which it can further expand to take on services and functions shed by statutory bodies. If a greater range of service delivery bodies becomes involved, the mechanisms for holding them to account for their use of public money, and for intervention in the case of failure, will need to evolve accordingly.

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The Government will have to resist temptation to intervene in local affairs—a measure of restraint for which ministers have shown worryingly little appetite thus far. The litmus test of localism will be the Government’s reaction to local decisions with which it disagrees. Ministers, civil servants and parliamentarians will all have a part to play if a more localist political culture is to evolve and thrive. A more explicit statement is needed about where the dividing line between a central, light-touch framework and unwarranted interference will be drawn, lest the practice of ‘guided localism’ become the norm. This would reinforce the impression of mixed messages and unanswered questions about the type of localism the Government wishes to pursue, and how scrupulous it intends to be in living up to its own ideals.

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1 Introduction 1. The Coalition Government has from its inception cited a “radical devolution of power” to local level as one of its main aims. The Coalition Agreement stated that: The Government believes that it is time for a fundamental shift of power from Westminster to people. We will promote decentralisation and democratic engagement, and we will end the era of top-down government by giving new powers to local councils, communities, neighbourhoods and individuals.1 2. A series of specific actions were set out in the Agreement to contribute to this aim: a review of local government finance, reforms of the planning system, the end of ring-fenced grants and the Comprehensive Area Assessment, the establishment of directly-elected mayors in the twelve largest English cities, the creation of a “general power of competence” for local authorities, and new powers for communities to safeguard threatened local facilities and to bid to take over state-run services.2 Elsewhere in the Coalition Agreement, citizens were promised a power to instigate local referendums on any local issue and to veto “excessive” council tax increases.3 The Government announced its intention to support “social action” to “make it easier for people to come together to improve their communities and help one another”, including by creating mutuals, co-operatives and social enterprises to play a greater role in the running of public services. The Government stated it would train community organisers and support the establishment of neighbourhood groups across the UK, providing finance for such groups through a ‘Big Society Bank’, set up with funds from dormant bank accounts.4 3. A Localism Bill was published in December 2010, containing provisions to enact some of the measures listed in the Coalition Agreement. The intention of the legislation was described in the Queen’s Speech as “to devolve greater powers to councils and neighbourhoods and give local communities control over housing and planning decisions”. 4. Effective decentralisation of power along these lines is not in the gift of the Department for Communities and Local Government (DCLG) alone; it requires co-operation and impetus from all government departments.5 Nevertheless, DCLG is expected to be influential in and affected by the agenda more than most. The Secretary of State, Rt Hon Eric Pickles MP, told us that DCLG is central to the Coalition’s aims of localism and of devolving power down, and it also plays a significant, if not pivotal, role in putting flesh on the bones of the Big Society. […] I seriously think that over the next couple of years we are going to

1

HM Government, The Coalition: our programme for government, May 2010, p.11

2

Ibid., p.12

3

Ibid., p.28

4

Ibid., p.27

5

Ev w212

8

Localism

rewrite the British constitution and shift the balance of power towards local decision making.6 The crucial role of the DCLG is confirmed by the location within the Department of the first Government Minister for Decentralisation, Rt Hon Greg Clark MP. The Minister’s remit is to encourage decentralisation across all departments and to investigate how effectively they are taking steps to achieve it.7 5. Localism has been accorded such prominence in the Government’s programme that we felt it was important for this Committee to undertake scrutiny of the policy and the ways in which it will be pursued at an early stage in the Parliament. Although the Localism Bill, published two months into our inquiry, clearly contains many important and relevant measures, we decided not to consider the issue to be defined solely by the contents of the Bill, which concerns only DCLG responsibilities, nor to replicate the detailed legislative scrutiny undertaken by the Bill Committee. In particular—and having recently completed a separate inquiry into the abolition of regional spatial strategies—we decided not to delve into the detail of ‘localist’ reforms to the planning system.8 We are grateful for the written evidence received on this topic, but did not examine it in detail through our programme of oral evidence, and we do not intend to consider it at length in this report. 6. Instead, our inquiry was designed to examine the implementation of localism throughout Government, to consider the rationale for decentralisation, to assess whether the Government’s idea of what constitutes localism chimes with the views and ambitions of other stakeholders, to consider how local democracy and public service delivery might change in response to this agenda, and to discover what obstacles might exist to those changes. 7. Furthermore, our remit gives us an especial interest in assessing the role of local government in localism. Two other pieces of select committee work are particularly relevant here. In May 2009, our predecessors on the Communities and Local Government Committee published a report entitled The Balance of Power: central and local government.9 That report’s principal conclusion was that power in England remained too heavily centralised to be efficient or effective. It argued that a shift in the balance of power was needed and should be given a degree of permanency, in order to insulate local government from all-too-frequent changes in policy at national level. Consideration was given to ways of achieving permanency, for example by putting the European Charter of Local Self-Government on a statutory footing.10 Some respondents to the current inquiry have echoed these concerns; Barnsley Council, for example, argued that without a permanent constitutional settlement, no matter what the enthusiasms of the present

6

Oral evidence taken before the Communities and Local Government Committee on 13 September 2010, HC 453-i, qq 1, 5

7

HM Government, Decentralisation and the Localism Bill: an essential guide, December 2010, p.3; Oral evidence taken before the Communities and Local Government Committee on 21 December 2010, HC 699-i, qq 42–3

8

Communities and Local Government Committee, Second Report of Session 2010-12, Abolition of Regional Spatial Strategies: a planning vacuum?, HC 517

9

Communities and Local Government Committee, Sixth Report of Session 2008-09, The Balance of Power: central and local government, HC 33-i

10

CLG Committee, The Balance of Power, paras 134 and 149

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administration, “localism will continue to be buffeted by the winds of political preference”.11 8. Concurrently with our inquiry into localism, the Political and Constitutional Reform Committee undertook an inquiry into the prospects for codifying the relationship between central and local government, such as through a constitutional settlement. Although our areas of interest overlap, we have endeavoured not to go into too much detail on the issues central to the previous CLG Committee report, nor to anticipate the ground that will be covered by the Political and Constitutional Reform Committee. 9. In February 2011 the Public Administration Committee announced an inquiry into the Big Society, a concept closely related to (and in some manifestations practically indistinguishable from) the Government’s idea of localism; inevitably we will tackle some of the same questions, from different perspectives. We look forward to discussions with our parliamentary colleagues about how our Committees’ respective conclusions compare and complement each other. 10. We issued a call for written evidence in July 2010 and received over one hundred submissions, from local authorities, voluntary sector organisations, professional bodies, academics, think tanks and others. The themes and questions raised in these submissions were then explored through a programme of oral evidence from November 2010 to February 2011; witnesses who took part are listed at the back of this report. We also undertook visits to Devon and Croydon, during which we heard from a wide range of organisations about how they thought the Government’s localism policy would affect their communities, and ways in which they were already exhibiting the kind of activity that the Government wishes to encourage. We are very grateful to all those who allowed us to benefit from their knowledge and insight, to our hosts in Devon and Croydon, and to our specialist advisers, Professor Tony Travers and Iain Hasdell.12 11. All conclusions on this topic are necessarily provisional at this stage; this is a subject we anticipate returning to throughout the Parliament as Government policy and its practical workings continue to develop. We are mindful of one of the findings of our predecessors’ report into The Balance of Power: that many governments start out by trumpeting their intention to return power to the people, but most, over time, turn out to be considerably less localist than their early proclamations suggested.13 We intend to check periodically whether this will prove true of the current administration.

11

Ev 226; see also Ev w10.

12

Tony Travers declared the following interests: employment at the London School of Economics, paid consultancy for organisations and institutions in the public, private and not-for-profit sectors, conference speaking and freelance writing, current consultancy for New West End Company and London Councils, member of DCLG commission on housing delivery and London First commission on infrastructure. Iain Hasdell declared the following interests: paid employment at KPMG as Senior Partner (UK Head of Local and Regional Government), Honorary Member, Institute of Chartered Accountants in England and Wales, regular paid commercial advice and consultancy to a range of public and private sector bodies, regular unpaid contributions to a number of national and regional publications.

13

CLG Committee, The Balance of Power, para 144

10

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2 Defining localism and its aims 12. On the surface, localism is an uncontroversial concept. The large majority of our witnesses were, with some caveats, appreciative of the Government’s intentions, enthused by the prospect of more powers being made available to local authorities, communities, and third sector organisations, and welcoming of more opportunities for citizens to influence how their services are designed and delivered.14 We took evidence at the outset of our inquiry from local government leaders from all three major parties, who emphasised that there is considerable cross-party consensus on the need for decentralisation.15 Cllr Richard Kemp, leader of the LGA Liberal Democrats, defined localism as: involving people, wherever possible, in the decisions that affect their life, and devolving to officers, members and civil society—that’s probably the easiest way to describe it—power to make those decisions at the lowest possible level, so we meet the real needs of local communities and individuals, not the perceived needs of people in Whitehall and town halls.16 Cllr Steve Reed, Leader of Labour-controlled Lambeth Council, said I think we’re looking at equalising the power relationship between the citizen and the state, or between public services and the people who use public services, so that citizens are able to become active shapers, rather than just passive recipients, of services. Localism is about putting in place the mechanisms that allow that transfer of power to happen and have meaning in terms of the services that people receive.17 13. Cllr Colin Barrow, Conservative Leader of Westminster City Council, summed up their agreement: “I think we all believe that decisions should be taken as close to the people who are affected by them as possible”.18 This sits comfortably alongside the Department’s own declaration that “Our guiding principle is that power should be held at the lowest possible level, whether this is individuals, communities, neighbourhoods, local institutions or local government.”19 These statements reflect the general thrust of the principle of ‘subsidiarity’; that decisions should be taken and power exercised at the lowest appropriate level. Decisions affecting a particular area should wherever possible be taken within that area, without interference from higher tiers of government. 14. We asked the Minister for Decentralisation, Greg Clark, what international examples the Government had in mind as models for the sort of localism it is seeking to promote. He did not cite a particular country, emphasising instead that the English system is “one of the most centralised” in the world. Mr Clark talked about the greater involvement of communities at local level in planning in the Netherlands, greater community ownership

14

For example, Q 216, Ev 198–9.

15

Q3

16

Q2

17

Q2

18

Q2

19

Ev 268

Localism

11

of rewards for development in Denmark, and the freedom of states in the United States; “Wherever you look you come to the ineluctable conclusion that we are very centralised to a dysfunctional extent.”20 15. We welcome the Government’s commitment to localism and decentralisation. We agree with the Government that power in England is currently too centralised, that each community should be able to influence what happens in its locality to a much greater extent, that there has been in the past too much central government interference in the affairs of local authorities, and that public services have been insufficiently accountable to their local populations. In these respects we concur with the conclusions of our predecessors in their report on the balance of power between central and local government. 16. Barnsley Council, however, identified why localism can in fact prove a contentious concept: the problem with ‘localism’ is that like sunshine, no one can be against it, which means that everyone is a ‘localist’. But the concept is sufficiently broad so as to invite a number of varying interpretations from a range of people and political parties. Often, this ensures that there is a perpetual sea of uncertainty and structural and functional change, some of which is genuinely supportive of localism, some of which, despite the stated claims, is profoundly not.21 The way in which localism is defined, and whether the Government’s definition matches that of other actors is, therefore, of crucial importance, but some confusion does exist on this front. The Association of Chief Executives of Voluntary Organisations, for example, reported that among frontline voluntary sector organisations, “there seems to be little common agreement on what is defined as local, how this is shaped and by whom.”22

The Government’s definition of localism Alongside the publication of the Localism Bill in December 2010, DCLG published Decentralisation and the Localism Bill: an essential guide. The purpose of this document, Greg Clark told us, is to make tangible what might otherwise remain “a rather abstract term to which it is easy to pay lip service”.23 It lists six actions for every department and every level of government: x

To lift the burden of bureaucracy—by removing the cost and control of unnecessary red tape and regulation, whose effect is to restrict local action;

x

To empower communities to do things their way—by creating rights for people to get involved with, and direct the development of, their communities;

20

Q 487

21

Ev 227

22

Ev 165

23

Q 496

12

Localism

x

To increase local control of public finance—so that more of the decisions over how public money is spent and raised can be taken within communities;

x

To diversify the supply of public services—by ending public sector monopolies, ensuring a level playing field for all suppliers, giving people more choice and a better standard of service;

x

To open up government to public scrutiny—by releasing government information into the public domain, so that people can know how their money is spent, how it is used and to what effect; and

x

To strengthen accountability to local people—by giving every citizen the power to change the services provided to them through participation, choice or the ballot box.

17. Some of these actions are ones that have long been identified with the ideas of localism and decentralisation: increasing local control of public finance, creating new avenues for people to affect how their area develops, and increasing accountability at local level. Others appear more tangential; increased transparency might well support localism, for example, but it is a policy aim in its own right whose effect should not only be felt at a local level. The case for diversification of the supply of public services being a policy of purely localist intent and effect is also uncertain. Notably absent from this high-level summary of the main actions to be taken is any mention of local authorities. These are issues to which we will return in later chapters. 18. The terms ‘Big Society’, ‘localism’, and ‘decentralisation’ have been used in conjunction in a variety of contexts by many commentators, and are explicitly linked by the Government.24 The three core components of the Big Society agenda have been defined by the Government as:25 x

Empowering communities: giving local councils and neighbourhoods more power to take decisions and shape their area;

x

Opening up public services: enabling charities, social enterprises, private companies and employee-owned co-operatives to compete to offer people high quality services;

x

Promoting social action: encouraging and enabling people from all walks of life to play a more active part in society, and promoting more volunteering and philanthropy.

With the addition of “social action”, these are elements already familiar from the six actions for decentralisation in the ‘essential guide’. 19. We asked the Minister, Greg Clark, how localism, decentralisation and the Big Society relate to each other. He answered: They are related. I see localism as the ethos, if you like, to try to do everything at the most local level. I see decentralisation as the way you do that. If you start from a

24

Ev 268

25

HM Government, Building a stronger civil society: a strategy for voluntary and community groups, charities and social enterprises, October 2010, p.3

Localism

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relatively centralised system, you decentralise to achieve that. […] If you do that seriously and comprehensively then I think you move from a position of a very centralised state to something we have called the big society. Therefore, localism is the ethos; decentralisation is the process, and the outcome is the Big Society.26 20. Not everyone is convinced that the Big Society and other elements of the decentralisation programme sit comfortably alongside each other, however. Reconciling a desire for greater service integration at local level with an approach expected to lead to a diverse pattern of service provision and community activity may be problematic.27 This, too, is a theme we will revisit in a later chapter. 21. The Government seems keen for communities and local organisations to take hold of the localism agenda and shape it to their own ends, deliberately therefore shying away from being prescriptive. It stands to reason that localism will look different in each community.28 Nonetheless, it is surprising that we have not come across a coherent, comprehensive vision of how public services and local democracy will change in response to the Government’s agenda. We asked the Minister to sketch out for us what the delivery of public services would look like in his own constituency in five years’ time. He responded: For a start, I think the county council and borough council—we have a two-tier authority—will be able to distinguish themselves from perhaps their neighbours and do things in different ways. For example, they might choose to target the town of Tunbridge Wells, which has a lot of potential as a tourist destination. It also has a degree of potential in some of the new media centres, so, for example, they could use the powers they will have, whether it is to vary business rates or promote particular aspects of the local economy. They can do that and make a pitch for distinguishing themselves from neighbouring councils. In other words, they are not just a vehicle for delivering services; there can be something more tangibly Tunbridge Wells about it. What I would also hope and expect to see is a much greater engagement and partnership with local communities and voluntary groups. It should be easier for them to access the provision of services. I think it should be less of a situation in which they are dependent on just the grants programme, but those boundaries around the town hall should be chipped away at so there is a greater flow. On planning, for example, I would like to see a good proportion of the neighbourhoods in Tunbridge Wells—the whole constituency, not just the town—express a vision of how they would like their community to be in the future. Therefore, I would like to see greater civic engagement from the grassroots and a greater sense of local difference, I suppose.29 We are struck by how little of this depends on any new powers or initiatives being introduced by the Government. With the exception of varying local business rates—on which a decision has not yet been announced—nothing in this description of Tunbridge

26

Q 482

27

Ev 151, w145

28

Ev 160

29

Q 492

14

Localism

Wells 2016 could not be achieved by creative local authorities within the existing framework. 22. No more compelling vision was advanced by Baroness Eaton, Chair of the Local Government Association, when we asked her what actions councils have been itching to take, but for a lack of powers or flexibility. Joint contracting between local authorities was one area where she felt the general power of competence might prove useful, but otherwise, “local authorities do not just go down the route of saying, ‘This is a major scheme we would like to do but we cannot do it, and it’s ready on the shelf,’ because it is costly of time and officers’ commitments”.30 Simon Parker, Director of the New Local Government Network (NLGN), suggested that local authorities views of what innovations they would like to pursue would develop in response to new permissive powers.31 23. For some stakeholders, clarity about what a localist system will look like in practice cannot come soon enough. The business community in particular has expressed its interest in knowing at an early stage how it will be affected.32 Anxiety on this front is heightened by the speed with which the Government has acted in the name of localism to remove some mechanisms—such as regional spatial strategies and Government Offices for the regions— without deciding on the successor arrangements.33 Edward Cooke of the British Council of Shopping Centres told us: we are not at a point where we can say wholeheartedly that we absolutely support localism in the structure that is to be presented because on the whole we do not know what it will look like. Our main concern is probably in the area of transition. We have had a fairly centralised system of Government over the past number of years. Rapid devolution of decision-making to local level creates a number of issues, not just about clarity of responsibility. We would like to see Government produce some constitutional settlement, or whatever it might be, that really identifies who is responsible for what.34 The use of a constitutional settlement to define the relationship between central and local government was one of the proposals advanced by our predecessors in their report on the balance of power between the two levels of government. The Central-Local Concordat and the European Charter of Local Self-Government were the two ready-made solutions suggested; putting either on a statutory footing would help to make concrete an unhelpfully malleable relationship. Our predecessors also recommended that the relationship be overseen by a new joint committee of both Houses of Parliament. 24. The explanations of localism and decentralisation that the Government has thus far provided invoke very diffuse aims from which it is difficult to construct a coherent picture of the end goal. There is little clarity about who will ultimately be responsible for what. Increasing the influence of local decision-making is bound to result in some

30

Q 343

31

Q 343

32

Ev 168

33

Ev w5

34

Q 162

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15

unpredictable outcomes, but we recommend that the Government undertake to provide a more detailed explanation of the framework within which it envisages such changes taking place and the limits that will be set to central intervention. A constitutional settlement, overseen by a joint committee, could provide such a framework, at least insofar as it relates to the role of local government. We are pleased that our colleagues on the Political and Constitutional Reform Committee have been undertaking a more detailed consideration of this topic and we look forward to seeing their conclusions.

Localism in other government departments 25. This somewhat elastic approach to the definition of localism is evident also in the way other government departments describe their contributions to the policy. Every department’s business plan includes a Structural Reform Plan with a uniform introduction, which emphasises the Government’s commitment to “a power shift, taking power away from Whitehall and putting it into the hands of people and communities”. The body of the Department for Work and Pensions’ business plan makes far fewer mentions of decentralisation or transparency among its priorities compared to, say, that of the Home Office. We took evidence from the Minister for Employment, Rt Hon Chris Grayling MP, and asked him why this was so; he told us “it depends on how you look at localism”.35 26. DWP provides a good example of how departments are not always going about decentralisation in the ways anticipated or asked for by other stakeholders. One of DWP’s biggest priorities since the change of Government has been the re-organisation of welfareto-work schemes into a single Work Programme. Local authorities have been vocal in their requests for greater powers to tackle worklessness in their areas, arguing that their intimate knowledge of local circumstances could make a decisive difference to the prospects for success. Despite this, the Work Programme is being organised on the basis of regional contracts, an approach characterised by some in the local government sector as strikingly “centralised”.36 Asked which services his council would like to tailor to local services in ways that are not currently possible, Cllr Stephen Houghton, Leader of Barnsley Council, told the Committee that tackling unemployment and worklessness would be a priority: The Government’s current position is that it will do that through nationally led training provider contracts. All the evidence suggests to us that the best way to tackle worklessness and long-term unemployment is by localising it, working in local communities and personalising services to the unemployed and using that local intelligence, context and need to shape what is being done. That is not what we have got at the moment. Under the national provider contracts, it is left to the contractors to decide what they want to do. We cannot even obtain from those providers any performance information.37 Dr Andrew Povey, Leader of Surrey County Council, expressed a similar view about which areas of Whitehall should be challenged to decentralise:

35

Q 392

36

Ev 152

37

Q 269

16

Localism

If I look across Surrey and at where most public expenditure is, I think the piece that is missing from the link is the DWP. [...] If in future you are to concentrate on those particular complex families that cost an enormous amount in all sorts of areas of public expenditure, you need the DWP on board.38 Baroness Eaton, Chair of the Local Government Association, told us that DWP had “closed the drawbridge” to local government.39 27. We put some of these concerns to Mr Grayling. He explained: a number of the welfare reform programmes we have brought forward are national by nature but will clearly be local by implementation. […] Broadly, what we have not done is devolve responsibility to local government. A lot of the delivery of our programmes will be handled through the third sector, the private sector and local community groups. [...] It has been a challenge to find the right balance, because in order to deliver a system of payment by results and the AME/DEL model that uses benefit savings to pay for the cost of the programmes that get people back into work, we have needed to approach overall contracting on a national basis. A number of representations have been made by local authorities to be part of the commissioning process. With respect to all of them, it is just not practical, because in theory we would be trying to work with a very large number of local authorities around the country to put together a complex commissioning process with ultimately one financial path that allows us to access and spend the money. It was simply impractical to try to do it on a fragmented basis.40 The Minister’s expectation was that the selected providers would form partnerships with councils at local level.41 However, on our visit to Devon we heard from Torbay Council that only one of the providers which had expressed an interest in the contract for their area had so far made contact with the council. 28. With regard to other DWP priorities, the Minister said that administration of the social fund would be an area in which local government would be heavily involved in the future.42 However, his expectation was that, rather than seeking to involve local authorities to a greater degree, administration of benefits will be done centrally when the universal credit is introduced: “You could not create a national benefits system but devolve it.”43 Mr Grayling elaborated on his Department’s approach to localism: I give you one internal example of what I seek to do. I want to devolve much clearer power and responsibility to Jobcentre Plus frontline staff. I want local managers to take far more local initiatives in their own right. In our programmes to try to address some of the employment issues, we are consciously not prescribing from the centre what they should look like and how they should be done; we are leaving local 38

Q 322

39

Q 381

40

Qq 390, 392, 396

41

Q 400

42

Q 392

43

Q 406

Localism

17

Jobcentre Plus managers to take those decisions and to form local partnerships, whether with employers or local authorities. [...] The localism agenda does not have to be about saying, ‘We will take powers and put them in a different organisation’; sometimes it is about saying, ‘We will interfere less from the centre.’44 He said that the keystone of localism is “more visible decision-making within a community”, which could include “greater discretion for the Jobcentre Plus manager who, if I come looking for a job and need to buy a new suit for an interview, has discretion to help me out.”45 This appears to us to be a description of individualisation rather than localism; the response of the service to the client would differ depending on the individual’s circumstances, rather than which part of the country they live in. Giving centrallycontrolled civil servants or contractors more freedom is not localism but administrative decentralisation. 29. We asked the Minister for Decentralisation, Greg Clark, how planned reforms in the health service, specifically the transfer of responsibility for commissioning to general practitioners, fit into a localist framework of giving more power to local councils or to communities. He responded, “It takes away a level of bureaucracy that was unaccountable in strategic health authorities and PCTs and gives much more influence to local people as to which GP they can go to, for example.”46 It seems therefore that accountability within local health services will largely be exercised by patients through their choice of GP, rather than through any more collective, formal or democratically-elected mechanism. But the Minister insisted, “In years to come we will look back to the devolution to GPs as one of the most empowering things we have done for local people.”47 30. In other departments, flagship policies are more readily identifiable as localism in action. We will return in a later chapter to the question of how new, directly-elected Policing and Crime Commissioners shed light on the Government’s attitude to local government, but the clear intent is to enable greater discretion over policing at a subnational level and to give people a straightforward, democratic means of influencing the service in their area. Local government is to be given new responsibilities for public health, although the grants that accompany these responsibilities will be ring-fenced—a clear inconsistency given the Government’s eagerness to remove ring-fences around other items of local government funding. 31. Allowing frontline workers to exercise their professional judgement is good management practice. Facilitating service choice and reducing bureaucracy may be laudable aims in their own right as well. None of these things, however, sits comfortably within a definition of localism. The Government is stretching its uses of the term in too many, sometimes contradictory, directions. Democratic accountability is privileged by some of these developments but not others; local government is integral to some but appears peripheral elsewhere; some policies contribute to integration while others seem

44

Q 403

45

Q 434

46

Q 501

47

Q 502

18

Localism

likely to entrench silos between services. We will return to these contradictions later in this report. 32. Some policy areas appear to have been granted an exemption from decentralisation. The priorities of the Department for Work and Pensions appear particularly resistant to the arguments for devolving power to local institutions, despite the eagerness of local authorities to be more involved in shaping the response to worklessness in their area. However valid the grounds, such exemptions will necessarily limit the radicalism of the Government’s overall vision. They also give the impression that the definition of localism is a matter only of tone and of convenience for the Government as a whole, with each department permitted to ignore localism or to adopt whichever strain of the policy will facilitate its other goals. The views of those outside Government about how the policy should be defined have not obviously been taken into account. We recommend that the Government undertake a formal consultation to gather the views of local government and other stakeholders about what sort of localism they would like to see. The Government did not make time for a white paper and consultation prior to publication of the Localism Bill, but we believe there is merit in such an exercise as it relates to the broader agenda and its application across all policy areas. 33. The Minister for Decentralisation, Greg Clark, described his role to us in December 2010: People who have their fingers on the levers of power at the moment often take them off reluctantly. You sometimes need someone to prise them off. [...] This is a response to a commission, from the Prime Minister to me, to make sure that every government department is doing what the coalition set out to do, which is to genuinely remove these silos and ensure that localities—where it makes sense to do so, and there is a good opportunity—have the ability to work together. It is my job to do that. [...] The initial report that I wrote to the Prime Minister set out the actions that we require of every department, and every department now knows what it is required to do. The Prime Minister has asked me to report in the summer of [2011] on what each department is doing radically to decentralise. It has been made very clear to me that that report should show substantial achievements, rather than a work in progress. Every department knows that.48 Mr Clark’s progress report to the Prime Minister is due in July 2011. The Minister announced his intention to judge departments against the six areas detailed in the ‘essential guide’, and while he readily acknowledged that “some will do better than others [...] there are leaders and laggards”, he was confident that every department would feel a strong pressure to perform well on this, one of the Government’s priorities.49 As to what action he might be able to take in response, he said “I cannot direct [departments] but I would hope to influence them.”50 He also indicated that it is part of his role to share good practice between departments.51

48

Oral evidence, 21 December 2010, HC 699-i, Q 43

49

Qq 496, 499

50

Q 497

51

Q 499

Localism

19

34. We welcome the appointment of a Minister for Decentralisation. We expect that it will be part of the Minister’s role to bring coherence and a sense of priorities to the Government’s localism agenda, and we look forward to the outcome of his first report to the Prime Minister about progress in each department. In the light of the evidence we have received, a clean bill of health for every department would be a surprising outcome. We anticipate taking the opportunity to scrutinise this and subsequent reports, and questioning Ministers on it at future evidence sessions. The response of other departments to the Minister’s analysis will be seen as a barometer of both the seriousness with which the Government is pursuing localism, and the capacity of the Department for Communities and Local Government to exert influence within Whitehall. We return to the potential content of the Minister’s report in further recommendations. 35. The influence of the Department for Communities and Local Government—and by extension therefore the position of the Minister for Decentralisation within it—has been questioned by some. A recurring theme of the reports of our predecessors in the last Parliament on the performance of that Department was that it needed to make progress towards being a “big hitter” in Whitehall. The evidence presented to this inquiry suggests that the Department is still some way short of achieving the degree of influence which will be necessary to deliver localism consistently across Government. The Cabinet Office, with its clear cross-Government remit and its closeness to the Prime Minister, might appear a more natural, and more influential, home for a Minister with as crucial a role as that of the Minister for Decentralisation. 36. For our part, we are reluctant yet to give up on DCLG as a Department capable of driving the localism agenda across Government. Nevertheless the Minister for Decentralisation will need to make more clearly demonstrable progress in influencing other government departments than he has done so far if questions about his role and his position in DCLG are to be answered positively. If such progress cannot be demonstrated, the Government will need to reflect seriously on whether the role needs to be moved to another, more influential, department such as the Cabinet Office.

Localism and efficiency 37. Support for localism, however defined, is usually founded on one of two grounds: either that localism will produce better services and outcomes, or that establishing government as close to the people as possible is a worthwhile end in itself. The practical argument leans on an expectation of greater service efficiency and effectiveness, whether framed as the strengths of local discretion or the deficiencies of governing from the centre. The advantages of local discretion are thought to be: x

opportunities to tailor service delivery to local needs and circumstances;52

x

decision-makers having better knowledge and understanding of those needs;53

52

Ev 231, 247

53

Ev 227-8

53

Ev 231, 247

20

Localism

x

local co-ordination adding value to services;54

x

preventing the waste of resources on ineffective, ‘one size fits all’ models.55

Central government, meanwhile, lacks first-hand knowledge of service delivery, and of local conditions and the concerns of local citizens. Many believe that centralisation stifles innovation and causes councils to neglect their electorate.56 Professors George Jones and John Stewart argued that decentralisation is necessary to allow national government to focus its resources on issues that can only be dealt with at the national level.57 38. Not all our witnesses were convinced that decentralisation is inevitably “the key to more effective public service delivery”, however.58 There has been little research into the impact of decentralisation on the effectiveness of service delivery.59 Lancashire County Council commented that, while “it is generally assumed that the dynamism of decentralisation is somehow more efficient than the current model”, Localist arguments may require more robust evidence to counter claims that centralisation generates economies of scale and is therefore inherently more efficient. There is also no clear evidence that decentralised, devolved systems would better target cuts. An obvious objection is that this would bring narrow self-interests to the fore and disadvantage the less ‘sharp elbowed’ amongst us.60 The National Council of Voluntary Organisations cautioned that, as a sole improvement mechanism, localism has its limits: “positive change will not come simply through transferring services from one sector to another or a change in the level at which decisions are taken.”61 39. Several organisations pointed out that the needs of some client groups would almost certainly be less well-served by a ‘hyper-local’ system, in which all services were determined at or below the level of the local authority. NASS, an organisation representing voluntary and private sector special schools, argued that regional-level planning is the most efficient way of catering for low-incidence special educational needs; if local authorities attempted to manage their own individual arrangements, bureaucratic costs would undoubtedly escalate.62 The Women’s Resource Centre also felt that an excess of localism could result in duplication and atomisation of services; access to a wider pool of expertise, better partnership working, and consistent access to services regardless of location could all be jeopardised.63

54

Ev 247

55

Ev 189

56

Ev 138, 156

57

Ev 138

58

Ev 231, w13

59

Ev 138

60

Ev 251

61

Ev 160

62

Ev w17

63

Ev w79

Localism

21

40. Ralph Michell, representing the Association of Chief Executives of Voluntary Organisations, added that if commissioning were devolved to too low a level it would become unfeasible to commission effectively for people with low-density needs, and that “the nightmare scenario for a lot of regional or national third-sector organisations is having to deal with hundreds of different commissioners who commission in completely different ways.”64 Cllr Colin Barrow summarised the basis on which decisions could be allocated to different levels of government: big organisations do try to systematise things in ways that mean that they don’t respond to local difference, so therefore you’ll get one solution that will be very efficient to procure. As long as you know that the solution’s the right one, it’s the best thing to do it centrally. If the solution may be different in different parts of the country, city or area, it’s much better to make that decision locally with a group of people who are sitting around in somebody’s front room, as you put it, trying to work out how best to do it. They will know how best to do it. They will not want to do it by way of some vast centralised procurement department. They will want to do it local, and local will mean cheap.65 41. However, Cllr Barrow also said that “the messy nonsense of democracy” was likely to be a less efficient, if ultimately more satisfactory, way of delivering something than simply “install[ing] civil servants to do the job”.66 ‘Efficiency’ may have to take a back seat to genuine involvement of local residents and organisations in decision-making and service delivery; the Community Development Foundation noted that “citizen engagement is not without costs, and involving a diverse group of local people can be slower than centralised decision making”.67 42. The Centre for Public Service Partnerships recalled that experiments in local neighbourhood management in the early 1990s were seen as successful by some local people, but also led to some confused accountability and higher costs, partly linked to supporting and building capacity in different community groups, seen as necessary to ensure involvement.68 Lorraine Roberts of the London Civic Forum told us, “I don’t think that power comes without money, and transferring power into the hands of the community is going to require some resources to make sure that it goes into everyone’s hands, so everyone has an opportunity”.69 The need for resources does not end when a group of local people have come together to identify what needs to be done in their area; community plans have to be turned into concrete actions if people are not to be left frustrated.

64

Q 135

65

Q 21

66

Q 10

67

Ev 195

68

Ev w215

69

Q 194

22

Localism

43. Community enterprises and voluntary sector groups—particularly small ones—will require time, flexibility, support and resources if they are to take on new responsibilities.70 The Local Government Information Unit (LGiU) told us that local authorities would be fearful that “the cost of stimulating the market of community involvement and of supporting it will offset any savings that have been realised through divestment of services and assets”.71 Especially in neighbourhoods where the voluntary sector is currently underdeveloped, the need for capacity-building might place a substantial demand on local authorities. This theme is explored in more detail in Chapter 6. 44. Direct democracy can be costly, too. Cllr Ben Adams of Staffordshire County Council told us: We have just had a referendum under the 1970s Local Government Acts, with the support of six town councillors. They got less than 16% of the vote on the referendum and it cost them £14,000. That is not a good way to spend public money and it will not get public support when that is made clear.72 45. Opinion is divided about whether it is wise to attempt a decisive shift towards a localist system at the same time as public expenditure is being significantly reduced. Local government consultant Henry Peterson warned that devolving power in such a way as to make local bodies accountable for the consequences of reduced budgets risked “forever associat[ing] greater local autonomy and place-based budgets with much increased austerity”.73 He considered that “a critical window of opportunity has been missed” by not putting in place the expertise, institutional capacity and governance frameworks to support integrated decentralisation when public sector resources were plentiful.74 Lorraine Roberts of London Civic Forum commented that “propelling localism in an arena of such austerity could be tripping the toddler up before it gets to run”.75 46. Simon Parker, Director of the New Local Government Network, commented that the localist cause would be harmed “if it is seen as localising the chop”. He continued to say that “I do not think that is what will happen because, if I look at what a lot of local authorities are doing, they are starting to look at how they transform their services and how to innovate and do things differently”.76 Councils’ ability to do just that in the current context was questioned, however, by Lambeth Council Leader Steve Reed, who told us that the frontloading of reductions in local authority budgets “doesn’t give us the space we need to invest to transform”.77 47. Stian Westlake of NESTA, however, believed that financial crisis in the public sector “could be an opportunity to do things in new ways”. He cited the example of Aberdeen

70

For example, Ev 242, w76, w145.

71

Ev 151

72

Q 274

73

Ev 149

74

Ev 145

75

Q 212

76

Q 367–8

77

Q 23

Localism

23

City Council, which he said had faced its own financial crisis in the recent past but under strong leadership was able not only to restore its financial position, but to engage more deeply with local communities in the process.78 Cllr Richard Kemp also thought there was an opportunity to be grasped in less than ideal circumstances: “My view is we shouldn’t waste a good financial crisis. Let’s use the lack of availability of money to really power change in a way that we haven’t been able to for the last 10, 15, 20 years”.79 48. The Government must be wary of assuming that decentralisation will reduce public sector costs in the short or medium term. It should not be quick to declare localism a failed experiment if efficiency savings do not instantly materialise. Indeed, the chances of localism transforming the way the country is governed may be hampered at the outset by a lack of resources to prime the pump by building community capacity. Localism is a goal worth pursuing no matter what the fiscal circumstances, but realism is needed about how fundamental change will be achieved without resources to support it.

78

Q 182

79

Q 21

24

Localism

3 Central government in a localist system Will Government prove able to rein itself in? 49. For a localist ethos to take root, central government—both Ministers and civil servants—must voluntarily refrain from intervention in issues that are properly the purview of local agencies.80 Professors George Jones and John Stewart among others were sceptical about the sustainability of such a ‘hands off’ mentality in Whitehall: Past experience shows it is easier to announce a policy of decentralisation than to ensure it happens. The reasons lie in the working of central government departments. Even when the initial policy is accompanied by measures of decentralisation it is not long before the operations of departments reassert the dominant centralist approach. Michael Heseltine, when Secretary of State for the Environment (1979–83) held ‘a bonfire’ of 300 controls. Over time new central controls more than replaced the number abolished.81 Professors Jones and Stewart went on to diagnose some of the tendencies that can make Whitehall resistant to localism: each department’s own policies being prioritised above a general policy of decentralisation, lack of confidence in local government on the part of “an elitist civil service”, failure to consider the cumulative effect of all Government decisions on local authorities, and the privileging of accountability to the department rather than to local electorates. Baroness Eaton, Chair of the Local Government Association, evinced a certain suspicion of the civil service mindset, even when answering to Ministers who are avowed localists: “Sometimes we wonder whether the advice is perhaps as flexible as ministerial thinking”.82 50. Rt Hon Chris Grayling MP and Rt Hon Nick Herbert MP, respectively Minister for Employment and Minister for Policing, told us that they had not encountered any cultural resistance from their officials to the decentralisation agenda, although the latter admitted it could be challenging for the Home Office to identify areas in which power could be exercised other than by the Department.83 Mr Herbert commented that old habits die hard, even outside the ranks of the civil service: “We often find that the police service asks Ministers to intervene and do things and prescribe because that is the world they are used to”.84 Secretary of State Eric Pickles told us in September 2010 that cultural change in DCLG was a work in progress: “I think our officials are in a different place in terms of decentralisation than when I and my colleagues first arrived. There is no criticism meant there at all, but to push power down does mean that you yourself are going to lose influence.”85

80

Ev 212, w215

81

Ev 140

82

Q 348

83

Q 403

84

Q 404

85

Oral evidence, 13 September 2010, HC 453-i, Q 7

Localism

25

51. For Ministers, as well as the temptation to retain levers of influence, there can be powerful political counterweights to decentralisation.86 Think tank IPPR North argued that Perhaps the most important barrier to localism in Britain is a political culture which tends to hold Ministers responsible for all actions of ‘the government’ most broadly conceived. Local problems often result in the desire to ‘hang the Minister’. The most obvious example of this is in the health service where the Secretary of State is expected to answer for every hospital infection or dirty ward. The reasons for this are complex. In part this is because the doctrine of ministerial responsibility is deeply ingrained in the national psyche; it is partly because central government fails to exercise restraint, and wades into arguments and it is partly because it is not obvious who is to blame if it is not the Minister, and the lines of accountability are too opaque.87 Oxfordshire County Council posed the question: What will any Minister do when a journalist calls him about a spending decision made at a local government level and which the journalist brands as evidence of a postcode lottery? If the Minister reaches for a telephone to instruct the local council to conform to a national template, localism is lost.88 Parliament, too, is culpable. MPs and Opposition spokespeople frequently ask Ministers to answer for issues that are strictly operational or local in scope.89 This can set a tone for debate within which recourse to localism becomes politically very difficult. Our predecessors concluded in their report on the balance of power between central and local government that MPs should set themselves a higher threshold before raising and debating essentially local matters on the floor of the House.90 52. Thus far, despite its localist rhetoric, this Government has not escaped criticism for a tendency to interfere in local matters, particularly in the way councils are run.91 The performance of waste collection services in wintry weather, the salaries awarded to senior officers, and the fate of a house in which Ringo Starr once lived are all matters on which DCLG Ministers have sought to exercise influence or make known their disapproval.92 Cllr Steve Reed deprecated the ministerial habit of “knee-jerk making of pronouncements on TV”, complaining that it makes no sense to say you want localism, and then for the Secretary of State for Communities to say you must stick with the weekly waste collection, for instance. What if [...] a particular community would rather have fortnightly waste collection in order to spend some of that money on some other service that is more important to

86

Ev 265–6

87

Ev 159

88

Ev w93–4

89

Qq 10, 404

90

CLG Committee, The Balance of Power, para 137

91

Q 266

92

“Minister Bob Neill angry at councils’ rubbish ‘complacency’”, BBC News online, 5 January 2011; “Time to halt council chiefs’ gravy train”, Daily Telegraph, 5 June 2010; “Let it be”, Daily Telegraph, 2 January 2011

26

Localism

them? That might be youth services; it might be filling in potholes because the roads are substandard. Why is the Secretary of State telling that community they can’t do it, if they want to do it?93 53. The Local Government Association has drawn attention to the number of points within the Localism Bill at which powers are reserved to the Secretary of State, arguing that this is contradictory in a piece of legislation which is supposed to be about divesting central government of power.94 By the LGA’s count, there are 142 such instances in the Bill.95 Baroness Eaton commented: Some of the things that are coming up from those are, for example, around the referendums. The Secretary of State has the ability to decide what is localist—what is a local issue. That is the top telling local people what are the important local issues. To me, that seems a very inconsistent and unnecessary potential order within the Minister’s gift. [...] A lot of the things referred to are very, very local, like community assets. The Secretary of State decides what is an asset of community value. I would have thought that the people in my ward are more likely to know what is a valuable asset to the community than the Secretary of State.96 54. In a previous report, we criticised changes to the Code of Recommended Practice on Local Authority Publicity on the grounds that they run counter to the principles of localism by prescribing how local authorities conduct their own business.97 The Minister for Housing and Local Government, Rt Hon Grant Shapps MP, disagreed that issuing such a Code was an anomalous move for a Government so committed to decentralisation: perhaps most people misunderstand what is meant by localism. It does not mean, for example, that Government simply ignores what is going on and turns a blind eye to reality on the ground; it actually means that the Government puts in place a framework to make sure that localism can flourish.98 Exactly where the dividing line is between ‘putting in place a framework’ and unwarranted interference has not been explicitly defined; it appears at the moment simply to be a product of the objectives the Government wishes to achieve. Suspicion is thereby fuelled that the Government will continue to intervene when councils and other local bodies exercise new or existing freedoms to act in a way that excites its disapproval.99 There is a trade-off between populism and localism. 55. One example is the debate about how local authorities should use funds that were formerly ring-fenced but have now been rolled into the general Area-Based Grant. These

93

Q 19

94

Ev 258 ff.

95

Q 337

96

Q 353

97

Communities and Local Government Committee, First Report of Session 2010–11, Proposed Code of Recommended Practice on Local Authority Publicity, HC 666, para 53

98

CLG Committee, Local Authority Publicity, para 48

99

Ev 140, 151

Localism

27

include Supporting People grants for housing-related support for vulnerable adults. In December 2010, Secretary of State Eric Pickles told us You will no doubt recall that for the past couple of years the programme has been ring-fenced, but within the Department’s DEL100 as opposed to local government DEL. All we did was simply to take it to its next logical step and say, ‘Well, actually, local government has ownership of that.’ I am aware of some places in the country that are taking significant cuts in Supporting People—I completely deprecate that. But most local authorities are protecting the scheme, not just to help vulnerable people but because it also makes enormous economic sense. One of the consequences of localism is that you have to allow local communities to make decisions about where that spending goes. Most sensible local authorities will come to the conclusion that £1 spent on Supporting People will probably save them £5 or £6 further down the line. […] It would be a brave local authority that cut Supporting People, protected the centre and continued to have very large middle-management costs.101 Grant Shapps concurred that “the idea that local authorities should use Supporting People as their front line for reductions is completely against everything that we would expect to see”. The Secretary of State concluded: “In short, while we would not make this a general rule, we are happy to offer a degree of guided localism”.102 56. We asked Greg Clark whether there would be a cultural change within Government so that Ministers would not continue to castigate local authorities for making the ‘wrong’ decisions. He said: I think it is the right thing to decentralise and not respond to every situation by taking yet more powers to the centre. But does that mean you do not have an opinion on things and you regard anything that is ever done as being for the best in the best of all possible worlds? Clearly not. What the Secretary of State has said on occasions, whether it is do with bins or whatever, is to express his view, but you will notice that he has not taken a power to require weekly bin collections. […] All of us in public life are elected to give an opinion on things, especially if we see things that could be done better.103 57. Ministers must rein in their interventionist instincts if the Government’s localism agenda is to be credible. Central government cannot have it both ways—on the one hand giving local authorities the freedom to make their own choices, and on the other maintaining that only one of those choices is the ‘sensible’ one. The Government must make its own choice: does it wish local authorities to exercise local discretion, or does it want to continue to prescribe and recommend courses of action centrally? The litmus test of localism will be the Government’s reaction to local decisions with which it

100 Departmental Expenditure Limits 101 Oral evidence, 21 December 2010, HC 699-i, Q 86 102 Oral evidence, 21 December 2010, Q 85 ff. 103 Q 562

28

Localism

disagrees. The concept of ‘guided localism’ is an unhappy compromise which is neither helpful to local authorities nor as radical as the Government seems content to believe. 58. Ministers are not alone in needing to curb their appetite for intervention. Changing the cultures of the civil service and of Parliament to support a more localist system will be crucial. The former will be decisive in ensuring that Ministers’ intentions are put into practice, and the latter in altering the parameters of debate to reflect the distribution of powers to local agencies. Opposition spokesmen, too, bear some responsibility for ensuring that central government is not tempted to interfere beyond its proper remit.

Setting limits to localism 59. Although the balance of opinion among our witnesses was clearly in favour of devolving more power to local level, a significant minority disagreed with the idea that central government should retreat entirely from local affairs. Their worry was not that the Government’s interpretation of localism would be too timid or half-hearted, but that the Government would in fact follow its intentions to their logical conclusion. A range of organisations representing the interests of vulnerable, marginalised or minority groups expressed fears that a decentralised system in which ‘bureaucratic accountability’ mechanisms had been dismantled would leave services for such groups at the mercy of the vagaries of local politics and funding choices made under the pressure of cuts. 60. It was argued by these groups that sections of the community that are small in population terms, politically invisible or unpopular, or that are not geographically concentrated, lack recourse to the ballot box as an alternative form of accountability.104 Examples included gypsies and travellers, sex workers, rough sleepers, and young people seeking an exit from gang culture.105 Distrust of local electoral accountability was expressed most pointedly by supported housing provider Cosgarne Hall: Services like ours, which are mainly about providing support and accommodation for chronic alcoholics and drug addicts, are seen by many as helping people who do not deserve help. [...] at election time, the candidate who announced that his policy was to close hostels for alcoholics and drug addicts, to get rid of inmates and cut the council tax, might stand a good chance of dislodging a responsible councillor from his seat in a marginal ward.106 61. Age UK pointed out that, when given the chance to set their own priorities in the past, for example by selecting Local Area Agreement indicators, most local authorities have not chosen to prioritise the needs of older people.107 David Congdon of Mencap told us The concern is that when decisions are taken at a local level, they are inevitably based on pressures at a local level. People at a local level—councillors, in particular—know best what needs to be done in their area, but there is a danger that minority-group 104 Q 141, Ev w84, w192 105 Ev 207, w45 106 Ev w86 107 Q 215

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interests can be missed out, although that does not necessarily have to occur. The generalised example that I would give is that things that are very visible tend to be […] the things that will be protected. I probably shouldn’t mention street cleaning in the current climate, with snow all over the pavements, but things like that are very visible, as are things like town centre environmental issues. If the eligibility criteria for social care services to individuals with, say, a learning disability are cut, and those individuals see their day activity decline from, say, five days a week to three days a week, the only people who know about that are the individuals concerned and their families. That is the danger. A general point would be that, with increasing localism, there is a need to have mechanisms in place—a framework for accountability is the sort of thing we need. It is very hard to define exactly what that should contain, but we need something to ensure that, as far as possible, what the Government will through funding—most funding for local authorities comes from Government— actually gets delivered at a local level.108 62. The current imperative for austerity could leave vulnerable groups in a precarious position if they are seen as a soft target, particularly when the relevant services were not prescribed by a statutory duty.109 There was concern, too, that local authorities would choose to cut services whose overall benefits are felt only on a national scale or to other service providers, or preventative services whose benefits are realised only over the long term.110 Sitra, a membership organisation for supported housing providers, argued that decentralisation has not led to more effective public service delivery of housingrelated support. It is our contention that those groups of people who are in receipt of non-statutory services are significantly worse off as these services are being reduced or cut in order for local authorities to make savings.111 Chief Executive Vic Rayner called the removal of the ringfence around Supporting People funding “a kind of microcosm of the impact of localism”, with bleak ramifications for the future.112 She reasoned that policies could be attuned to local circumstances without central government washing its hands of responsibility for what happens locally.113 Others expressed the opinion that it is entirely legitimate for Government to dictate how certain monies are spent in the pursuit of particular policy goals.114 Sense, which represents deafblind people, argued that there is already too much local scope for local variation, with each local authority being able to set their own threshold for social care services which substantially affect quality of life.115 The Audit Commission noted that the public considers

108 Q 213 109 Q 141, Ev 204, 208, w79, w84, w155 110 Ev 207, w84 111 Ev 206 112 Q 213 113 Q 217 114 Ev w88 115 Ev w2

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national levels of quality and cost to be desirable in the case of services whose users have little or no choice, such as social care.116 63. Organisations representing vulnerable or minority groups, therefore, commonly argued that a degree of continuing centralised control and prescription was essential.117 The removal of the Comprehensive Area Assessment and the prospect of fewer national indicators were a cause for concern.118 They favoured clear national policies, whose implementation would be monitored by the Government, quality control and inspection regimes and continued ring-fencing of funding streams (or at least transparency about specific allocations). Local authorities, by contrast, have by and large welcomed promises that the machinery of central oversight will be dismantled. The scrapping of the Comprehensive Area Assessment was popular with councils; Staffordshire County Council claimed that this move “indicates that the Government is prepared to shift responsibility away from nationally-imposed regimes and towards the local government sector”.119 Voice4Change England and Urban Forum conceded that a focus on top-down targets had in the past produced some unintended adverse consequences, and welcomed the opportunity to put new emphasis on the views of service users within a new framework for performance management […] where service providers are answerable to local citizens and service users, rather than to national government; that safeguards against service failure and against discrimination; and where citizens have a clear understanding of what they can expect, and what to do when things go wrong. Monitoring of standards to assure quality should be done through involvement of service users, residents and peer review. [...] This is not to say that there need not be accountability to central government. Central government’s role in this new framework should be to provide minimum standards in core areas, and ensure regulatory compliance, including equality and human rights requirements in law and robust use of Equality Impact Assessments to ensure decisions about resources and policy development are made with consideration of the needs of all sections of the community, including the most disadvantaged and marginalised.120 64. Groups speaking on behalf of vulnerable people were not the only ones concerned about the potential impact of a more laissez-faire attitude from central government to local affairs. Ben Kernighan of the National Council for Voluntary Organisations was anxious about how it would affect the influence exerted by and the resources available to voluntary sector organisations: In terms of the arguments around localism, CLG is now saying, ‘We’re sorry, this is a new era; we can’t instruct local authorities what to do about [ensuring Local Enterprise Partnerships involve the voluntary sector].’ If there is too much of ‘we can’t instruct’ or ‘we can’t set out advice’, then in many areas both the voluntary and community sectors will do much worse. It is not a party political point. We looked at

116 Ev 220 117 Ev 203, 209, w2, w17, w155, w200 118 Ev w169 119 Ev 235 120 Ev w221

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where cuts have taken place, and discovered that there are good local authority areas and poor ones—it does not cover party boundaries. Following the useful comment by the Prime Minister urging local authorities not to cut [funding to the voluntary sector], some have not done so but others have made massive cuts, before the Comprehensive Spending Review.121 Mr Kernighan argued that a strong Compact is important in ensuring that the voluntary sector is treated fairly by different local authorities, but existing Compacts are of variable effectiveness.122 The Association of Chief Executives of Voluntary Organisations argued that “central government must retain its oversight over the actions of individual local authorities to ensure against unjustified local agendas or malpractice” in their treatment of the voluntary sector.123 Secretary of State Eric Pickles announced in April 2011 a “social responsibility deal” for councils, proposing that they avoid disproportionate reductions in funding for the voluntary sector, or give three months’ notice and enter into discussions about how the service can evolve if cuts are made.124 65. The implications of greater local discretion also worried representatives of the business sector. The Federation of Small Businesses (FSB) foresaw “the emergence of damaging differences between areas in terms of environments conducive to business growth”.125 Matthew Pinner of the FSB told us, “business likes certainty and consistency [...] a level playing field”.126 The British Retail Consortium commented that “local variations in some policy areas could significantly increase the regulatory and administrative burdens for business”.127 These bodies therefore argued that it was important to retain strong central government oversight and leadership; of local government performance generally, with regard to planning and infrastructure, and over policy objectives regarded as difficult to achieve on a local basis, such as environmental sustainability.128 66. The single greatest concern of business organisations was the possibility that local authorities might be given more powers to raise revenue by setting their own business rates.129 The Federation of Small Businesses argued that “the present models of accountability at local level would be insufficient to create the necessary safeguards required for this level of decentralisation”.130 The issue of accountability for decision making and spending at local level, said the FSB, is of vital significance to local businesses. Although local residents will have a redress through the democratic process, this is not an avenue directly available to business

121 Q 134 122 Q 138, Ev w136 123 Ev 166 124 “Action to boost support for voluntary sector and cut red tape for councils”, Department of Communities and Local Government press notice, 13 April 2011 125 Ev 167 126 Q 160 127 Ev 168 128 Ev 167, 168, 170–1, 173 129 Q 168 ff., Ev 167, 169, 173 130 Ev 167

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[…] it is vital that mechanisms are put in place to ensure that the business voice is heard. 67. As a way of mitigating the risks of unacceptably poor service, counterproductive inconsistency or neglect of the vulnerable, many organisations advocated adoption of some sort of national minimum standards for services.131 Local authorities tended to emphasise that minimum standards should be framed at a very high strategic level, and to focus on outcomes, leaving considerable leeway for councils in how they set out to meet them.132 Dr Andrew Povey, Leader of Surrey County Council, told us that the role of central government in a localised system is to set the framework and the overall direction. You are a set of politicians, so you have a set of priorities; that is what you should be setting out for us to deliver within our own local frameworks. [...] You have to set out themes, if you like, rather than detail.133 68. A contrasting view was offered by Westminster City Council Leader Colin Barrow, who said that those who thought local government should follow a uniform set of standards were “the enemies of localism”.134 Andy Sawford, Director of the Local Government Information Unit, commented that the imposition of any sort of standards or outcome targets would in all likelihood “feel to local councillors much like the performance system that we’re all celebrating the removal of”.135 Steve Freer, Chief Executive of CIPFA, told us that it was “proper” to institute national standards across a range of services, but that the critical issue is to what extent you then put in place arrangements to try to performance manage those standards and ensure that they are applied on the ground from Land’s End to John O’Groats, as it were. [...] I think that the challenge for us is to step back from over-elaborate arrangements for monitoring and to try to get back to the sort of fundamentals of trusting local accountability to tell us whether appropriate standards are being delivered on the ground.136 69. One of the key tests of the Government’s localist credentials will be the attitude that it takes to the risk of failure in local services.137 Will it in fact be willing to trust in local accountability to hold service providers to appropriate standards? Certainly central government will have to let go of certain assumptions about uniformity of service delivery and the ability to replicate successful models nationwide—assumptions that may always have been false but are nonetheless beguiling.138 Several witnesses argued that the risk of failure must be accepted as inherent in decentralisation. Cllr Steve Reed told us that “if you

131 Ev 195, w192 132 Qq 112, 324, Ev 157 133 Q 324 134 Q 3 135 Q 112 136 Q 235 137 Ev 151 138 Q 90, Ev 195

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want to find out new ways of doing things that will work, you have to allow for new ways of doing things that will fail. As long as the failure isn’t repeated but is learned from”.139 Professors George Jones and John Stewart wrote that “the guiding principle should be that central government should intervene only when there is a clear national interest requiring action. This action by central government should require explicit justification”.140 70. We have been conducting a separate inquiry on the subject of the audit and inspection of local authorities, following the Government’s decisions first to discontinue the Comprehensive Area Assessment (CAA) and then to abolish the Audit Commission. CAA and its predecessors were the principal means by which the previous Government sought to ensure that local authorities were delivering services of a sufficient standard and were pursuing further improvement. The inspection regime was much criticised for being overbearing and too interventionist, and its demise has not been greatly lamented. Nevertheless we recognise that the Government has both a continuing duty to ensure proper accountability for public money and a legitimate interest in promoting better value for money, and whatever the new audit environment looks like, it will need to reflect that. We will consider this issue in greater detail in a forthcoming Report. 71. Others saw central government continuing to act as a failsafe. Cllr Richard Kemp accepted that Government “needs to have at minimum a step-in power of enforcement” where sector-led support had failed to improve unacceptably poor standards.141 Professor Michael Chisholm, Professor Steve Leach and Dr Mark Roberts envisaged a role for both central and local government in “protecting localities from the most severe consequences of failure and enabling them to learn from their mistakes.”142 72. If the direction of travel is away from ‘bureaucratic’ accountability and towards local, democratic accountability, the arguments we have heard for continuing central control indicate that democratic accountability needs to be greatly strengthened in order to command confidence. London Civic Forum talked about ways in which performance evaluation could involve citizens and service users.143 Dr Rob Berkeley, Director of the Runnymede Trust, reported that We had an extensive structure of race equality councils across the country. In 2007 there were 100, now they are down to 42 and they seem to be declining. [...] I am keen to go with the spirit and suggest that localism can deliver, given local accountability to local citizens, but the structures need to be in place. I suspect that they are not currently. I do not hear any plans to support and establish those local organisations that might begin to hold local authorities to account a bit more on equality.144

139 Q 10 140 Ev 138–9 141 Q 43 142 Ev w22 143 Ev 181 144 Q 218

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73. One specific tool for local accountability which has received little attention in the Government’s localism agenda is council overview and scrutiny. Local authorities themselves, and others, viewed effective scrutiny by non-executive councillors as a necessary complement to greater local discretion and less central oversight.145 The Centre for Public Scrutiny argued that as an accountability mechanism, the scrutiny function is credible, legitimate and proven to have genuine impact on services.146 Councillors acting in this official capacity arguably stand a much better chance than an informed minority of public ‘armchair auditors’ of making effective use of spending data.147 Scrutiny is a way of addressing performance that is more public-facing than, for example, peer review, and several organisations pointed out that its scope could be broadened to involve other stakeholders alongside elected members.148 Suggestions for further enhancing the function included formal involvement of the voluntary and community sector, perhaps by establishing independent, community-based scrutiny officers.149 It is a cause of concern to some, therefore, that the Localism Bill contains measures to enable local authorities to revert to the committee system that preceded statutory overview and scrutiny functions.150 On the other hand, Unison argued that scrutiny has been under-resourced and too subject to political control by the majority party. It welcomed the prospect of a return to the committee system on the grounds that this might enable individual councillors to develop a deeper knowledge of the services they are expected to scrutinise.151 74. Localism has its critics, and they have legitimate concerns: about fairness, about the need to safeguard vulnerable people, and about services underperforming. Some stakeholders and sections of the community evidently do not trust the present forms of local democratic accountability to look after their interests when the apparatus of centralised, bureaucratic accountability is dismantled. We recommend that the Government consider how best to help these groups use the available means for holding their local service providers to account, beyond the ballot box. In particular, the Government must address the contribution to accountability that can be made by robust—and if necessary enhanced—local authority scrutiny functions. 75. We accept the case for some form of minimum national standards in services such as adult social care and child protection, where the needs of the most vulnerable must be protected. We recommend that where such standards are adopted they are formulated in consultation with local government, in order to ensure that they reflect the level of central government oversight appropriate to a localist system and do not simply recreate an overly-interventionist performance regime. 76. We recommend that the Government make clear the principles on which it will determine at what level different decisions will be made, and the grounds on which intervention in local services will be deemed necessary. These questions should not be 145 Ev 190, 252, w2-3, w62, w83 146 Ev 211 147 Ev 214, 217, w82 148 Ev 90, w66, w223 149 Ev w179 150 Ev 213, w106, 108 151 Ev w197

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decided purely on a case-by-case basis. Communities need clarity about which decisionmakers they should be seeking to influence, and an explicit statement of the Government’s intent would help to forestall campaigning groups’ reliance on national government to enforce acceptable standards of service. A constitutional commitment to decentralisation would be one way of achieving this clarity; in the shorter term, we will expect the forthcoming progress report on localism in each department to be an opportunity to flesh out the principles on which the departments are expected to act.

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4 Localism without local government? 77. The Minister for Decentralisation described localism as the Government’s ethos and decentralisation as the means by which it would be implemented. The New Local Government Network was one of the few organisations from which we took evidence that attempted to draw a distinction between ‘localism’ and ‘decentralisation’, saying that the former was about devolution to local government, and the latter about giving power to individuals and communities: The two concepts can lead to very different policy conclusions. A localist might be sceptical of free schools because they weaken democratic control over education, while a decentraliser might support the same policy because it appears to give parents more choice. A localist would favour giving councils a large degree of influence over all local public services through area-based budgets, while a decentraliser might prefer to go beyond the council and make services directly accountable to individuals through individual budgets. Such approaches are not necessarily mutually incompatible, but issues of clarity about democratic accountability and coherence across local public services are likely to come to the fore.152 We are not necessarily convinced by the attribution of these policy choices to those particular terms, but NLGN were not the only organisation to claim that confusion could arise from pursuing, or appearing to pursue what are two distinct aims.153 Some of this confusion was felt to arise because of a failure on the part of the Government to be clear about whether its main priority is to devolve power to local authorities or directly to communities, and how the two will relate to each other in practice.154 78. Local government consultant Henry Peterson suspected that a long-term cultural divide between Westminster and Whitehall and local authorities contributed to the Government’s apparently ambivalent stance. He wrote that while the rhetoric of localism has been ramped up, many Ministers and MPs appear still to see locally elected politicians as an insufficiently credible locus for devolved decision-making. […] advocates of local government often struggle to understand why local councils are not seen as the natural option for providing integrated and accountable localism. Following the series of reforms over the past decade, does the quality of decision-making and priority-setting at local level still have to justify itself? Is it notably worse than that at national level? […] Ministers and Whitehall have gained more respect for local government in recent years, but historic perceptions of councillors as ‘a bit dim and often self-important’ still run deep. As does the prejudice that civil servants possess ‘Rolls Royce minds and local government officers motorcyclists’ minds’.155

152 Ev 263 153 Ev 139 154 Ev 211 155 Ev 148–9

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79. The rhetoric of ‘the Big Society’ and the Government’s enthusiasm for community activism have given rise to a worry that the Government wishes to “bypass” local government, seeing it as an obstacle to its aims rather than a means to achieving them.156 Westminster City Council stated that: Central government’s definition of decentralisation is the devolution of powers to citizens and grass roots organisations. It identifies local government as a barrier to this process, when in fact our democratic accountability makes us central to any model of localism, and enablers of the Big Society. [...] We recognise that decentralisation does not stop at local government level, and we are committed to giving more power to grass roots organisations through the Big Society. What must also be recognised, however, is that local authorities are central to making a decentralised model work, because they are the only locally elected, democratically accountable body. They are the enabler of Big Society and localism, not the barrier that central government suggests.157 Professor George Jones accused the Government of “a lack of forethought” in circumventing local representative democracy and seeking to pass decision-making on to other local groups.158 80. Several organisations detected inconsistencies across different departments in the degree of trust they appear willing to place in local authorities. Kent County Council argued: At present, local government’s role in the localism agenda is interpreted differently in each departmental policy; for example the de minimis role for local government in the proposed reforms for education and policing, conflicting with the approach taken in the NHS White paper proposals to increase the role of local government in public health and GP commissioning. These different messages undermine the legitimacy of local authorities to act as enablers of localism, and make their role ambiguous.159 Knowsley Borough Council also found the Government’s approach to be erratic: The different spatial levels of decentralisation across Whitehall departments also precludes a consistent approach. The proposed allocation of NHS budgets to GP consortia is different to the support offered directly to individuals under the Work Programme which is different again to the emergent proposals around business support to be covered at the level of the functional economic area. This is unhelpful at one level and counterproductive at another.160 81. Rather than seeking to exploit the representative function of local authorities, the Government believes that “the most obvious way to replace bureaucracy with democracy is

156 Qq 5, 265, Ev 149, 265 157 Ev w67–8 158 Q 66 159 Ev w11 160 Ev w81

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through the ballot box”.161 The Localism Bill contains several measures that will expand citizens’ recourse to direct democracy. The Bill will require a principal local authority to hold a referendum on a local issue if 5% of more of the electors for the area sign a petition requesting a referendum, or if one or more members of the authority request it, or if the authority passes a resolution to do so. The results of the referendum would not be binding, but a local authority choosing to take no action must publish the reasons for its decision. The Bill allows for the Secretary of State to provide by order that an authority will adopt a directly-elected mayor, an arrangement which the Coalition Government pledged to introduce in the twelve largest English cities outside London. These orders will be followed by an unusual device, a “confirmatory referendum” on the new arrangements. Finally, the Bill provides for binding local referendums in the event that a local authority wishes to raise council tax by an amount deemed to be excessive. 82. The plans for referendums have been criticised—as referendums usually are—on the grounds that they undermine representative democracy and usurp the role of elected representatives in exercising their judgement on complex issues.162 Cllr Ben Adams of Staffordshire County Council commented, “For me, the referendum is the problem. You elect somebody for four years to make decisions and then can potentially second-guess them every month with a 5% referendum.”163 Simon Parker of NLGN told us that the “potential explosion of direct democracy” will challenge representative democracy, but it is unclear as yet whether it will also weaken the standing of elected councillors:164 No matter how much direct democracy you introduce, you will still need locallyelected councillors to take a strategic view across the area and make trade-offs. Do I think that what the Government want to see happen is stronger locally-elected government? You would have to ask them. It would be good to hear them talk a little more about that role, because I do not think we have heard a great deal from them about strengthening the role of officials elected to local government.”165 83. Indeed, there is inconsistency across Government in its attitude to direct democracy. Asked if local referendums could apply in the future to policing activities, Home Office Minister Nick Herbert told us: The power over a budget, the appointment of a chief constable and setting the plan will rest with the elected police and crime commissioner. The local authorities or directly elected mayors will have an influence in relation to their membership of the police and crime panels. It seems to me that a local referendum could indicate a view, but it could not cut across the power of the police and crime commissioners to do those things according to their mandate and the legal powers we are giving them. I repeat: somebody has to stand up the force, appoint the chief, set the plan and do all the things that relate to the proper governance of policing.166

161 HM Government, Decentralisation: an essential guide, p.11 162 Ev 228 163 Q 274 164 Q 369 165 Q 376 166 Q 430

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The Government’s view of local government’s role 84. Some of our witnesses had the impression that the Government had not yet decided what it felt the role of local government should be, and therefore had no clear vision for how it should develop in the long term. Jessica Crowe, Director of the Centre for Public Scrutiny, argued that “we don’t really have a definition of, or a clear agreed consensus on, what local government, as opposed to local administration, is for. I think it’s quite difficult to talk about some sort of localism in the absence of that clarity.”167 The Local Government Information Unit set out two possible paths for the future: CLG will have to answer the question whether it believes that councils exist not to serve as the local arm of government but as the governmental arm of local communities, not just to deliver services or act as a strategic commissioning agent, but to provide the stage for an ongoing dialogue between people about the places they live in and the power they wield.168 Simon Parker, Director of NLGN, told us that in his view the Government’s approach “is one of creative destruction; if we shake everything up, local government will be forced to change or risk slowly becoming irrelevant”.169 The general power of competence 85. The boldest move the Government has made to empower local government is the provision in the Localism Bill for a ‘general power of competence’ for local authorities in England. The power would give councils the ability to act in the same was as an individual person with full capacity, in other words to do anything that is not specifically prohibited by law. The Bill would allow authorities to charge for and trade in services offered under the general power (though not for services they already have a statutory requirement to provide). The power is intended to supersede the wellbeing powers introduced by the Local Government Act 2000 and extended in 2003, which permit principal local authorities to do anything they consider likely to promote the economic, social and environmental wellbeing of their areas, unless explicitly prohibited in other legislation. 86. Cllr Stephen Houghton, Leader of Barnsley Council, expressed some scepticism about the extent to which the general power of competence would represent a significant expansion of local authorities’ horizons: From our perspective, we need to see what the detail of that means. At the moment we have got the power of economic, social and environmental wellbeing. If it does not take it much further than that, there is probably little added value, so the devil is in the detail. [...] I have never particularly had a huge problem with powers. Very often it has been a lack of resources with which we have struggled to get things done. But with environmental wellbeing or the new powers that may be coming, in the end we still need a good lawyer to interpret that for us and see how far we are able to do it. [...] Does the general power of competence that may come out mean we can do 167 Q 227 168 Ev 153 169 Q 369

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what we want with education, adult social care or other services? Clearly, the answer to that is no because Government has its own agenda for that.170 Helen Riley, Assistant Chief Executive of Staffordshire County Council, pointed out that the power would not necessarily enable councils to achieve outcomes that depended on partnership with other bodies, if those organisations did not have a similar power.171 87. The general power of competence was welcomed by Baroness Eaton, who expressed the hope that it would be less open to legal challenge than the wellbeing powers, although her enthusiasm was tempered by suspicion of the number of occasions in the bill which permit the Secretary of State to intervene.172 Simon Parker said the power represented “a very important philosophical shift” but that there was a need for “confidence and clarity” about how the power could be used. Existing statute would inevitably limit its scope quite considerably.173 Local government resources 88. A further component of the powers those in local government wish to assume is a much greater degree of control over their resources. While flexibility over spending has been increased by the removal of ringfences, the real prize is flexibility in raising funds. Baroness Eaton commented that “if we want true localism, that really would be a time when all money was raised locally in one form or another, whether or not by local taxes.”174 The LGiU and NLGN both named a target figure of at least 50% of funding being raised locally.175 This, it is argued, would contribute to visible local accountability. Steve Freer of CIPFA said: for localism to work really effectively we need to align local decisions with locally raised resources. I think that’s when localism works most effectively, because I think that’s the arrangement that local people can get their heads around, as it were. They can see who’s responsible. They can see where they need to put pressure in order to secure accountability. I think where we have a mixture of local decision taking but resources raised at the national level and allocated to local authorities, sometimes accountability can get quite confused.176 89. The Government’s ‘essential guide’ to decentralisation states that “there can be no local innovation without local control of resources”.177 The terms of the review of local government resources were announced by the Government in March 2011. The review, the first phase of which is due to report by July 2011, is to consider how to give local authorities greater financial autonomy, changes that might be made to the business rates system, and

170 Qq 261, 262, 264 171 Q 264 172 Q 337; see also Q 262, Ev w10. 173 Q 338 174 Q 381 175 Ev 154 176 Q 227 177 HM Government, Decentralisation: an essential guide, p.5

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how to deliver tax increment financing.178 The terms of the review made it clear that an important part of the context is the incentivisation of economic growth and regeneration, rather than simply a desire to empower local government. The Government has already made a commitment that businesses will not be subject to locally-imposed increases in taxation that they do not support, and it seems likely that, while councils may be able to retain more of the proceeds of business rates in their area, they will not be given powers to set local rates. 90. It remains to be seen whether the outcome of the review satisfies those who wish to see local government acquire many more options for developing its revenue streams, such as charging and trading, greater borrowing powers, adjusting tax rates and reliefs, and establishing localised banking facilities and credit services.179 Simon Parker told us that NLGN “would like to see not only more money being raised locally but for that money to come from a much more diverse and buoyant range of sources”.180 91. We asked the Minister, Greg Clark, whether the Government’s brand of decentralisation was primarily about passing power to individuals and communities, or to local government. He argued that decentralising to local government only would constitute “a very crude form of decentralisation”:181 The process of decentralisation we have adopted […] is both. It involves transferring powers from central Government to local government, a clear example of that is getting rid of a lot of the ring-fencing. But it also imposes some requirements on local government to transfer powers to communities, so that right to challenge neighbourhood planning in the Localism Bill takes what was, as it were, the monopoly preserve of local government and gives people in communities the power. Therefore, it is both; it is a double deal, if you like. […] Even when we are empowering local communities, for example in neighbourhood planning, I very much see a leadership role for local councillors. […] It would be wrong to see this just as a shift between central and local government. It would be equally wrong completely to ignore local government and put the focus exclusively on individual citizens and communities.182 92. So would local government have more or less power, and more or fewer resources at its disposal, in five years’ time? The Minister told us that “what they have will be increasingly up to them in a way that it is not at the moment”. The general power of competence would be a significant step forward, but “some will choose no doubt to go further than others in terms of innovation”. As for resources, the New Homes Bonus and changes to the Community Infrastructure Levy “are about getting more local control of finance”. The requirement in the Localism Bill for raises in council tax to be subject to a local referendum was branded as an opportunity for a council to “make the case” for the increase.183

178 HC Deb, 17 March 2011, col 19WS 179 Ev 157, 228 180 Q 378 181 Q 497 182 Qq 483–4 183 Q 490

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How do the policies of other departments reflect the Government’s vision for local authorities? 93. The Police Reform and Social Responsibility Bill, if passed, will introduce directlyelected Police and Crime Commissioners. The Commissioners will take over most of the powers of police authorities, and will have responsibility for budgets and for appointing the Chief Constable.184 The Commissioners will be supported in their duties by newly created Police and Crime Panels, made up of locally-elected councillors and independent and lay members. The Panels’ role will include taking a “robust overview” at force level, and ensuring that the Commissioners’ decisions “are tested on behalf of the public”. The declared aim of the reforms is to improve the local democratic accountability of policing. Minster for Policing Nick Herbert told us that Very few people have any idea who the chair of their police authority is. I think that to create that greater visibility will be helpful in allowing people an outlet and somebody to go to, knowing who is responsible, and in turn that that person is responsive to the community because that individual is elected by the community.185 94. Although few vigorously defend the existing system of police authorities, opposition to the introduction of Police and Crime Commissioners has come from some in the local government sector on the basis that it would be preferable to extend councillors’ responsibility to explicitly cover policing. The LGiU, for example “has long campaigned against directly elected police representatives, arguing that local councils and councillors already have an electoral mandate and should be the natural representatives to hold policing to account within communities”.186 Gateshead Council expressed regret that the current model is to be scrapped rather than adapted: “We feel that the key to improved local accountability is to further enhance the relationship between the local authority and the police authority, which could be lost by the appointment of a Police and Crime Commissioner at a broader spatial level”.187 95. We asked Nick Herbert what his view was of the role of local authorities in the Government’s localism agenda. He answered that “I do not see the decentralisation agenda as being purely about returning power to local government”.188 We asked if the establishment of Policing and Crime Commissioners implies a lack of faith in the capacity of local authorities to take on these responsibilities. Mr Herbert responded that this was not an option that had been considered, because police force boundaries and local authority boundaries are not co-terminous: “I do not think anybody wanted to see the break up of forces like the Thames Valley or West Midlands to create smaller units that could be accountable to local authorities”.189 Asked whether each local area should have been allowed to decide for itself how to hold the local police to account, Mr Herbert said

184 Home Office, Policing in the 21st Century: reconnecting police and the people, Cm 7925, July 2010 185 Q 434 186 Ev 152 187 Ev w66 188 Q 393 189 Q 415

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If we allowed this reform to develop piecemeal across the country, it would raise a question about the interoperability of police forces and the way in which they need to co-operate in relation to things like serious and organised crime. [...] We cannot just cut police forces loose; they are monopoly public bodies. [...] Therefore, it is very important that police forces answer to someone, and there would be a problem in the Home Office deciding where we were able to let go and where not if some forces had stronger local accountability and others did not.190 96. Invited to outline what further areas of responsibility or budget may be devolved from their respective departments in the future, Nick Herbert suggested an enhanced role for local authorities in the criminal justice system, and Minister for Employment Chris Grayling responded, “I have no specific additional proposals right now for powers to be handed over to local authorities. That does not mean we would not look at areas in future where we could do more”.191 97. Major reforms are also underway in the health service. The Health and Social Care Bill would abolish primary care trusts and strategic health authorities, require local authorities to establish ‘health and wellbeing boards’ to encourage integrated working in health and social care, and establish commissioning consortia of GPs. ‘HealthWatch’ organisations will replace Local Involvement Networks as the main vehicle for community and patient consultation. 98. Westminster City Council, among others, welcomed the enhanced role for local government in leading strategic thinking on health and wellbeing as set out in the White Paper preceding the Bill, calling it “a key opportunity to further integrate health and social care services to produce efficiencies and a smoother service for patients and clients.”192 One particular strand within the reforms will bolster the powers and influence of local government: councils will be given responsibility for public health improvement. However, as noted above, the resources councils receive to support this new responsiblity will be ring-fenced, in contrast to the direction of travel for other local authority resources. 99. In terms of local democratic accountability for health services other than public health, the reforms do not appear to represent much of an advance. Health and wellbeing boards will be located in local authorities, but their statutory membership includes only one elected councillor. Social Care Minister Paul Burstow MP emphasised that this is the minimum requirement, saying that “the aim is to make sure that [the boards] are led by elected members”.193 Nonetheless, the proposals will arguably result in bodies even less obviously accountable than the soon-to-be abolished police authorities, and the Government is reluctant to prescribe their operation any more closely.194 Commissioning of health services locally will be the responsibility of GP consortia, which are no more transparent as institutions than the primary care trusts they will replace. While GP consortia will be obliged to co-operate with health and wellbeing boards, there are likely to

190 Q 418 191 Q 445 192 Ev w68 193 Q 451 194 Q 452

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be issues of co-terminosity, and the LGiU’s opinion is that establishing a close working relationship between GPs and councils will depend on “a huge cultural change”.195 100. The Minister told us that, “for the first time local government will not be just a commentator on commissioning activities of health; it will also be an actor, actively shaping those decisions by commissioning consortia”.196 However Mr Burstow also told us that the option of transferring the responsibilities of primary care trusts to local authorities had been dismissed because the Government’s intention was to give more control to clinicians.197 101. The Government’s attitude to local government is inconsistent, and local authorities’ role in localism unclear. A parallel democratic structure is being established for policing, schools are to be further removed from council control, and there are to be binding referendums on council tax increases above a certain level. Assets of the former regional development agencies are to be transferred to central rather than local government or Local Enterprise Partnerships. All these developments imply that the Government may be more interested in circumventing local government than further empowering it. On the other hand, local authorities will have a new general power of competence and new responsibilities for public health. The Government must decide what it wants the role of local authorities to be and how it should develop, what powers they will have and how they will exercise them in relation to other bodies. We recommend that each department set out how it will devolve further powers to local government, and we look forward to seeing clear evidence of this in the Minister for Decentralisation’s progress report. 102. The manner in which the general power of competence is interpreted, and the outcome of the local government resource review may hold some answers to this question. The Government has been reluctant thus far to say what the general power of competence is for, telling us that “it is not for Government to say how councils might use the power”.198 However, an answer to that question would be an important indicator of how the Government intends the role of local authorities to develop, as well as giving impetus to local authorities to think more creatively about what they do. We recommend that the Government work with the Local Government Association to set out examples of specific ways in which the general power of competence will enable local authorities to extend their role beyond that conferred by the well-being powers. In particular, it is unclear what activities currently carried out by central government might be taken over by local authorities using the new power. We recommend also that the Government undertake an assessment of the extent to which exercise of the general power of competence will be restricted by existing regulation and statute. If there is in practice little room for local government to expand into, the power is likely to have very minimal impact.

195 Ev 153 196 Q 464 197 Qq 478–9 198 Communities and Local Government Committee, General Power of Competence: written evidence, HC 931, May 2011

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103. Greater financial self-sufficiency for councils is a crucial foundation for localism. If the Government truly wishes to promote far-reaching decentralisation, we expect that the more radical options for reforming local government finance will be considered as part of the resource review. In particular, the case for increasing and broadening the tax and revenue-raising powers of local authorities, and their ability to borrow, must be central to the review. Decisions reached on these matters must be justified in terms of localism.

The value of democratic legitimacy 104. In contrast to the government departments we took evidence from, many of our other witnesses—including, naturally enough, most of the local authorities—put a heavy emphasis on the expanded roles that local government could play in the localism agenda. These witnesses identified the democratic legitimacy of councils as the distinctive characteristic qualifying them to occupy a prime position in a decentralised system.199 The County Councils Network described local government as “the only partner that can legitimately unite the range of public services in an area—working with other partners in the private and third sector, and leading the delivery of agreed locally-relevant outcomes for local people”.200 Steve Freer of CIPFA argued that accountability is clearest and most effective when focused on a single institution: “That critically for me makes the case for the local authority’s leadership role in a locality”.201 105. The Government’s Essential guide to decentralisation and the Localism Bill notes that some people object to the philosophy of localism because they fear a ‘postcode lottery’ of inequitable services. To this the Government responded that: Decentralisation will allow different communities to do different things in different ways to meet their different needs. This will certainly increase variety in service provision. But far from being random—as the word ‘lottery’ implies—such variation will reflect conscious choices made by local people.202 Some believe this perspective will be a hard sell. Lancashire County Council stated: Where we differ from traditional localists is that we do not underestimate the public's appetite for strong geographical equity, defined as the same or similar services or level of entitlement from one place to another. It may well be that, under a more localist system, varying levels of provision or service design would be a pure function of political choices which lead to better outcomes due to a locality's particular socio-economic needs or history compared with another's. But localists must take seriously the potential for intense media and public criticism (and its longer-term effects) if service provision falters. Sizeable sections of the media and public remain largely unaware or unconvinced of performance improvements made

199 Ev 138–9, 152, 234, 248 200 Ev w99 201 Q 245 202 HM Government, Decentralisation: an essential guide, p.5

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by councils over the last ten years and have come to expect uniform provision, especially in health care.203 The New Local Government Network posited that fear of inequitable provision is the principal reason that “the people of England are deeply ambivalent about devolution of power”.204 106. However, the majority of our witnesses agreed with the Government about the need to embrace such differences, provided that ‘postcode variation’ is a legitimate reflection of local people’s choices.205 Eugene Sullivan, Chief Executive of the Audit Commission, said that “the important question under localism would be: is the variation intentional, and is it agreed locally and held accountable locally, or is it just something that happened?”206 The bodies enacting these choices need to be visible and transparent, and local people need to have effective means of both holding them to account and influencing their decisions.207 The Centre for Public Scrutiny (CfPS) argued, for example, that fears about inequitable health services largely arise because of the low profile of primary care trusts and the lack of obvious means to influence PCTs’ decisions.208 CfPS’ Executive Director, Jessica Crowe, told us: A lottery implies that there is no rational basis for the choice that has been made, and I think that if there was a process by which the choice could be made—and, importantly, influenced before it was made—then it would feel less like a lottery for people. [...] I think that it is having that opportunity for influence and being clear about the reasons for a decision that matter. I think that that could be most appropriately done by elected representatives who can be held to account for making that decision, informed by professional advice where that’s appropriate.209 107. The role of the local authority in legitimising local differences is, therefore, vital. The Runnymede Trust acknowledged that local democracy was not perfect, but was nonetheless a necessary corollary to the extension of local decision-making: Making collective decisions suffers from two problems: how to adjudicate competing claims, and how to ensure the resulting decisions are legitimate and accountable. Democratic decision-making institutions are the best way of responding to these difficulties, so currently local authorities and local councillors appear the best institutional mechanism for ensuring accountability. To the extent that local people are not always engaged with these institutions, those decisions will neither accurately reflect everyone’s interest, and nor will they be fully accountable. But if we ‘localise’ service provision or collective decision-making further—and to institutions or

203 Ev 250 204 Ev 263 205 Ev 139, 144, w68 206 Q 233 207 Ev 250 208 Ev 211 209 Q 234

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people that have no democratic standards—this will not only lead to resentment, but further undermine people’s faith in institutions and democracy generally.210

The role of local government in supporting localism 108. Councils have practical advantages as engines of localism beyond their democratic mandate. The LGiU pointed out that local authorities “have capacity unlike any other actor in the local state with procurement capabilities, resources, convening power, and a whole area view”.211 NLGN argued that the broad remit of councils, cutting across all public policy at local level, puts them in a unique position to lead collaboration and co-ordination between services.212 109. Moreover it cannot be assumed that devolution of power from local government to other local organisations would reduce the role of councils; NLGN posited that such plans in fact “create an important need for local authorities to retain a democratic oversight of these services and to act as convener and facilitator of the myriad of agencies in the field”.213 Even if councils are responsible for less direct service delivery, they will retain responsibility for monitoring the performance of services that are contracted out.214 Professors George Jones and John Stewart foresaw in the Government’s vision of the Big Society the possibility of conflict between competing groups, neglect of deprived areas, domination of community groups by small elites, and abuse of public funds and corruption; local authorities would be best placed, they argued, to safeguard against these eventualities and arbitrate where necessary.215 110. The more ‘municipalist’ of our witnesses called for central government to devolve powers to local government, and then simply leave councils to get on with the task of further devolution to communities.216 Professor George Jones commented: I think it’s very bad for central Government to be doing [devolution beyond local government level], to be pressing it, to be sending community activists out to do it. This is a proper role of local government. Indeed, I would say we need a statute that lays a duty on local government to promote this sort of localism. They’re the people best able to encourage it and to support it, and to make up for any deficiencies that may happen when you promote it.217 111. Local government leaders that we spoke to argued that it will be difficult to stimulate greater civic action or democratic participation without utilising the unique remit and powers of local authorities. Cllr Richard Kemp was asked what would be the risks if central

210 Ev 196 211 Ev 152 212 Ev 265 213 Ev 265 214 Ev 251 215 Ev 139 216 Ev 139 217 Q 68

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government decided effectively to bypass local authorities and transfer powers directly to communities: A massive waste of money. A place like Liverpool has to function as a city for some things, as districts for some, and as neighbourhoods for others. If you simply had a whole series of people in the neighbourhoods they want to talk about, competing for resources without strategy, without direction, you would be chucking money away, in my opinion, and you wouldn’t be giving people the service they want. Because a whole series of services that you or I might think are vital wouldn’t feature at all. One of the most important things I do as a councillor is to be a corporate parent to children in care. I don’t think in 30 years as a councillor anyone’s asked me how well I perform that service. Some services just aren’t in public understanding, and would drop out and have their resources cut.218 112. A large proportion of the local authorities from whom we received evidence were at pains to point out that they consider themselves to be already ‘doing’ localism. Although, as with central government, there is a problem of definition—leading some to simply label everything that happens in their patch as evidence of localism in action—it is clear that many local authorities do make concerted and creative efforts to engage more deeply with their residents and promote opportunities of the kind that the Government is seeking to introduce through the Localism Bill. Participatory budgeting, community-led planning, area forums, devolved budgets, community partnerships of various designs and community asset transfer were all cited by councils as live examples of localism in action. 113. Many councils allocate budgets to ward councillors for distribution to community groups and maintain area forums which consider decisions at local level or feed local views into decision-making processes.219 County Durham, for example, described the success of its Area Action Partnerships in involving thousands of residents in decision-making.220 Staffordshire County Council cited its Neighbourhood Highway Teams, which deal with small maintenance problems that affect the appearance and environment of local areas; the work programme is designed in discussion with community representatives, often parish councils.221 South Gloucestershire Council attributed an increase in the proportion of residents who feel able to influence decisions in their area to the effective administration of twenty Safer and Stronger Community groups, which encourage communities to get involved in taking action as well as just feeding in their views and concerns.222 114. Mark Hebditch, Chair of the Community Partnerships Executive North Dorset, talked about the impact of community views on the Local Development Framework in North Dorset, channelled through four partnerships based around the district’s market towns: the results of all town and parish consultations have been incorporated. When I read the core strategy I can read words that I know I have written and spoken and this is

218 Q 11 219 Ev 232 220 Ev w112 221 Ev 233 222 Ev 238

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part of the district council policy. There is no question about it. There is a real influence being brought to bear by people in communities on the way basic core policies, of which planning is one, are formulated to the point where the notion spelt out in the Localism Bill of having 50% support of voters through a referendum to initiate a neighbourhood plan seems totally redundant, indeed subversive of good practice at local level.223 115. Cllr David Milsted, leader of the opposition group at North Dorset District Council, told the Committee: I think we rather have been getting on with the job [...] over the last four years we have been doing a lot of what is now called localism. [...] One of the questions you asked was, ‘Will the Localism Bill make it any easier for your council to do this kind of thing in the future?’ I think some aspects of it might have made it a bit easier for us four years ago when we started doing what we have done, particularly the general power of competence. That would have been helpful. But in our particular case, without denigrating the Bill in any way, I do not think it will make an awful lot of difference.224 Simon Parker of NLGN commented, “It is certainly right to say that probably there is not much in the Bill that a local authority somewhere is not doing in some way. The question is one of scale. Are we now moving towards turning some good exemplars in some places into a new way of doing governance?”225 116. Witnesses from community development organisations and the voluntary sector emphasised that good practice is not followed by all local authorities, and argued that leaving further devolution in the hands of councils would lead to very variable results. Ben Kernighan of the National Council for Voluntary Organisations (NCVO) asserted that “it would be a disaster if power is passed down from national government to local government and gets stuck there”.226 This group of witnesses believed that this second level of devolution, to communities, is one of the ways that the replacement of centralist accountability with local accountability can be made more robust.227Alison Seabrooke of the Community Development Foundation reported that we have seen evidence of some very good local authorities who’ve worked with and engaged their local communities, but we also have a significant amount of evidence from local communities that the biggest barrier that they have encountered to date is actually working with their local authorities. […] It’s quite difficult in some local authorities to get out of the mindset of, ‘We are the democratically elected body to do this work and therefore we know how to deliver policy in the way that we believe we understand our communities’.228

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Ms Seabrooke also questioned local authorities’ estimation of their own suitability as conduits of opinion and community facilitators: Just looking at local authorities as the democratically elected body that should know how to deliver the localism agenda is quite contested at a very local community level. For example, a couple of years ago people were talking about democratically elected local members being community leaders. Actually, if you work at a very local, granular level within a community, many people don’t know who their local elected member is. Particularly if you’re talking about marginalised groups and who they would identify with, it probably isn’t their local elected member. Elected members get called into play when people have started to negotiate their way through the local systems and power structures. When you’re talking about some of the most disadvantaged communities, they haven’t even surfaced at that level yet.229 117. We asked the Minister, Greg Clark, why central government was not content to simply leave the job of devolution to communities to local government. He reasoned that central government needed to put safeguards in place to ensure that all councils, not just the best performers, empowered communities: I think that imbalance of power between those who have it and those who are excluded from it needs to be addressed. That is why we need a programme of government to make that happen, because unless you do, people, frankly, are pretty pleased to have the power they have. Sometimes you need almost physically to prise their fingers off the levers of power if you are to make that difference. […] It is certainly true that the good councils engage with their communities and often help to nurture and support a very diverse range of civic organisations […] but it needs to be something that is not exceptional or relies just on the good will of the council. I think people should have the right to do things differently.230 Localism should not, he said, be “discretionary” for councils.231

The challenges of improving local democratic engagement 118. Despite the success stories given to us by councils, there is clearly a demand for greater creativity and rigour in the methods employed by local authorities to involve their residents in influencing services and making decisions.232 Methods of engagement need to be flexible and imaginative, to change to suit different communities, and to promote dialogue other than at election time.233 Sarah McAdam of the Commission for Rural Communities urged that town and parish councils not be neglected as avenues for engagement, being “not synonymous with community but very close to community”.234

229 Q 180 230 Qq 493, 494 231 Q 494 232 Ev 194 233 Qq 179, 180, Ev 177–8 234 Q 184

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119. The accuracy and completeness of the intelligence held by local authorities about local needs is also disputed.235 The voluntary and community sector (VCS) often has an understanding of local circumstances which is complementary to that of a local authority.236 These organisations—particularly those led by minority groups—could therefore be utilised by councils as effective brokers for civic engagement as well as sources of insight about community needs.237 NCVO argued that these roles should be fostered by local government over and above the roles that VCS organisations may play in service delivery.238 120. Some minority or special interest groups feel particularly ill-served by current engagement mechanisms.239 Mencap argued that many people with a learning disability are excluded from the democratic process.240 Age UK reported that older people were less likely than others to feel they could influence decisions made locally or nationally.241 The Women’s Resource Centre and One North West, an umbrella group for black and minority ethnic community organisations, stated that women’s organisations are poorly represented within current local decision-making structures such as Local Strategic Partnerships, and only 0.8% of councillors are BME women.242 Voice4Change England and Urban Forum argued that “if decision-making is to be devolved to all communities, the mechanisms by which this happens must be more representative”.243 Superficial engagement with no outcomes can be as frustrating as none at all; Dr Rob Berkeley of the Runnymede Trust told us there are numerous black and minority ethnic forums up and down and around the country. The people who take part say that they had a very nice afternoon. Whether that actually has left them feeling more involved or more engaged in decisionchanging, they are not sure.244 121. Witnesses argued that care must be taken to ensure that services are not designed according to the needs of the most articulate or confident in society, or those with the most ‘social capital’ and resources at their disposal.245 Professor Michael Chisholm, Professor Steve Leach and Dr Mark Roberts noted that “there is a genuinely held fear, not only amongst councillors, but also amongst residents themselves, that small groups of activists who have little democratic legitimacy within communities may ‘capture’ local projects and turn them to their advantage.”246 Alison Seabrooke commented that “one of the biggest

235 Ev 204, w193 236 Qq 154–5 237 Ev 165, 208, w80, w136 238 Ev 161 239 Qq 215, 219 240 Ev 203 241 Ev 199–200 242 Ev w78, w170 243 Ev w220 244 Q 222 245 Ev 196 246 Ev w23

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dangers is that localism will become the playing field for people who know how to work the system”.247 122. The Community Development Foundation also pointed out that “the needs and demands of local people are based not only on their surrounding environment, but also on their interests, faith, ethnicity and any number of networks and factors that are not necessarily tied to place”.248 If community engagement is pursued primarily through neighbourhood structures, therefore, there is a risk that ‘communities of interest’ not centred on a particular locality will be overlooked.249 123. We asked community development organisations whether they felt that central government ought to insist that local authorities devolve power further, and to prescribe good practice for achieving that. Sarah McAdam of the Commission for Rural Communities acknowledged that such prescription would run counter to the localism agenda, but there did need to be “some very clear expectation” about active engagement with communities.250 Lorraine Roberts of the London Civic Forum told us that there does need to be some degree of requirement, through either carrots or sticks, to provide safeguards to ensure that communities are given the opportunity and the support that they need to engage with the local authorities—to get involved and take part not just in service delivery [...] but also the planning and design.251 Witnesses argued that it was important to build the capacity of local communities, and to inform them about practice elswhere in the country, so that they could challenge their local authority if need be about opportunities to influence decision-making.252 The public’s willingness to participate 124. Local authorities will not always be pushing at an open door in their attempts to stimulate greater democratic participation or civic activism, however. NLGN observed that: many people are not very inclined to become involved in managing their own local services. Only one-in-ten of us is currently involved in local civic activism. These objections and barriers must be overcome politically before the Coalition Government’s vision of a localised and decentralised Britain can become a reality. This is partly about Ministers having an honest debate with the public about the likely impact of localism, but it may also involve a more thoroughgoing renewal of local politics and civic activism. The UK is not yet a nation of localists.253

247 Q 193 248 Ev 191 249 Q 194, Ev 247, w169 250 Q 178 251 Q 178 252 Qq 191–3 253 Ev 263

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Simon Parker of NLGN considered that the Localism Bill has the potential to stimulate greater democratic participation, but we must also recognise that arguably we have had 40 or 50 years of creeping centralisation and disengagement. It will take time to re-engage people […] This is increasing the supply of opportunities to participate. I think the next step is to increase the demand for those opportunities.254 South Gloucestershire Council concluded from survey data that “the benefits of localism itself need to be promoted in order to persuade more people to want to get involved”.255 125. Public interest is more easily piqued by specific issues of very local significance, and especially by threats to services or facilities or a proposed development which they oppose.256 London Civic Forum noted that individuals coalesce more readily around a local service rather than a political structure: “park user groups, Parent Teacher Associations, and ‘keep our library open’ campaigns are often strong and effective, whereas many councils find that their local area-based structures struggle to attract large numbers of residents”.257 Local planning issues, parking, community safety and street cleaning may arouse interest, but effective engagement on broader issues may be severely time-limited. 126. Involvement in specific projects can be a first step to more sustained activism. Lorraine Roberts commented that people have jobs and they care about that, they have their families and they care about that. That means they can be encouraged to see that those things link into schools, education, the streets they walk their children to schools on, rubbish tipping, all of that sort of thing. [...] In Southwark, we supported a group of young mothers, and one of the problems they had was that they were walking to the nursery, but they were going up an alley that was used largely as a male urinal in the evenings and was particularly unpleasant. From just discussing this they got together, they lobbied the council and got a toilet put at the end of it; from that, they went on.258 127. It matters what type of involvement is being sought. Cllr Richard Kemp observed that “most residents are more intelligent than the rest of us; they don’t want to spend their evenings in church halls or going to meetings. They’d rather lead their lives”.259 Gemma Bradshaw reported Age UK research on NHS reform proposals that showed that 60% of the older people surveyed agreed that more local decision making was welcome. They also agreed that they would like to be involved in some way; but when asked if they wanted to be on a committee or involved in a consultation, less than 10% of responses were positive.260

254 Qq 360, 363 255 Ev 237 256 Q 272, Ev w23 257 Ev 177 258 Q 198 259 Q 8 260 Q 219

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128. Local authority witnesses argued that the community’s willingness to engage is sapped by limits on local powers, such as when council planning decisions are overruled by the Planning Inspectorate.261 Cllr Ben Adams of Staffordshire County Council hoped that If the Localism Bill does nothing else, it will take power and deliver it back to local democratically elected people. When that happens, communities will want to get involved again. The idea at the moment that they go to a planning committee and something is thrown out by that committee and then turned around by a national inspector makes nonsense of local democracy. For me, it is a massive step: we pass the power back, and let things go right or wrong, because people will engage at every level.262 Of course, this hope depends on the legislation actually resulting in local elected agencies having greater powers; not a foregone conclusion, as we have discussed above. 129. Willingness and capacity to get involved also vary by area. Professor Chisholm, Professor Leach and Dr Roberts suggested that “the potential for local civic engagement is strongest in areas in which there is already a strong sense of local identity.”263 People living in rural areas are generally more likely than town dwellers to feel a strong identification with their neighbourhood, to feel that they are involved in local decision-making, and to volunteer.264 Conventional wisdom is that areas of deprivation are less likely to have a culture of active citizenship.265 However, South Gloucestershire Council reported from their community engagement work that the correlation is not absolute; more influential is a tradition of getting involved and a strong sense of local identity.266

How will local authorities have to adapt? 130. If local authorities are to be in the vanguard of localism, therefore, they will have to change, in ways both practical and cultural.267 In addition to, or in place of, their traditional role as service deliverers, local authorities will have to become commissioners and marketshapers. Rather than trusting solely in the ballot box to involve residents in decisionmaking, they will have to facilitate participation and build capacity in community groups and neighbourhoods. ‘Community development’ will become a core task. Cllr Steve Reed explained the change as he saw it: If you pursue this model all the way through, the council becomes a big set of tools that supports the community doing the things it needs to do. There will be platforms; there will be compliance that groups need to meet to meet legal requirements, procurement rules that need to be gone through. Recruitment support potentially needs to be given, and IT platforms that they could link into. If you turn the council

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into platforms of that type, which you want communities to link into, then we need people who are more community facilitators and enablers to link communities in to the support systems they need and also, to some extent, to link the different groups in communities up together. Over time, you develop a different set of competencies that councils will need in order to facilitate the community doing the things it needs, and to facilitate them accessing the resources they need to access to make it happen.268 131. Local authorities might find themselves ill-equipped for working differently with the community.269 NESTA commented that local government has traditionally found it difficult to support genuinely local solutions. We know that there are countless community and grass roots organisations and groups that are working towards public outcomes in different and effective ways, but to date it has been unclear how local government is best placed to work with these groups and spread best practice and good ideas.270 The Plunkett Foundation noted the “critical enabling role” that should be played by local authorities to support communities in taking action at a very local level, helping them progress quickly through complex and time-consuming tasks such as negotiating the planning system.271 Action for Market Towns wrote of the importance of “a genuinely enabling culture and approach to partnership working”, and listed some of the features of such a culture: “empowerment” is mainstream council activity, championed by elected members and undertaken with diverse communities. 132. New skill sets may be needed.272 The London Civic Forum (LCF) suggested that council staff should seek secondments and short-term exchanges with the community sector, and receive community development and empowerment training as part of their professional development. LCF suggested that such training should become as standard as equality and diversity training.273 133. The role of councillors, particularly backbenchers, may also need some adjustment. Simon Parker predicted that the diversification of service providers would make the job of “elected service managers” redundant.274 Instead, councillors could develop their roles as “civic entrepreneurs”, setting up projects that build the capacity of their communities.275 Cllr Richard Kemp told us how he saw the role of ward councillors changing in five years’ time: traditionally councillors would go to the Town Hall, they’d go to the committee. They would raise questions, send emails, write letters. We’re asking them to be local 268 Q 15 269 Q 209 270 Ev 183 271 Ev w76 272 Qq 182, 208 273 Ev 178 274 Q 369 275 Q 370

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community leaders in a much more refined way. If there’s a problem with antisocial behaviour in my ward […] the first thing I’d do is get together in my front room the local police sergeant, the youth officer, the parks officer, the person from the school – whoever is relevant to solving that problem. […] we become proactive in our community in a very different way. Some councillors have always done that. Many haven’t, so it’s a question of bringing people up to that level. Localism means that you can’t just do things at the town hall, so that means we have to get involved and show community leadership at a lower level.276 Ward councillors may also fulfill the tasks—surely indispensable in a Big Society model of localism—of mediating between different community interests and championing the views of under-represented groups.277 134. If variations in local services are to be embraced as the expressions of local choices, the legitimacy of the process by which those choices are made is paramount. Local authorities are accountable at the ballot box. They are visible to local people, and if they are not accessible, they can be punished for that at election time. Their democratic mandate puts them in a uniquely strong position to be leaders of the community, and it is their job to take a whole-area view, adjudicating between competing groups and safeguarding minority interests. As the scope of local decision-making is extended, therefore, the Government must seek to strengthen and support rather than marginalise the role of local authorities. 135. It is obvious however that some local authorities are better than others at engaging with, understanding, and representing their communities. The Government’s immediate solution to this is to put in place through the Localism Bill new mechanisms that can be triggered by any community, regardless of whether their council wants it or not. It is our recommendation that, alongside such mechanisms, the Government and the local government sector consider together how to enhance the effectiveness of the democratic tools already at the disposal of communities. While the Government should not be seeking to dictate how councils engage with their communities, it could play a role in promoting standards and skills for effective engagement. This includes working with the Local Government Association to disseminate best practice and explore ways in which elected members can operate effectively within a decentralised system.

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5 Integration or fragmentation? 136. It is difficult to discern from the Government’s explanation of its brand of localism how coherent the resulting system of governance will be, and indeed to what extent the Government values coherence as an outcome. Local government consultant Henry Peterson described the difference he saw between ‘silo localism’, in which decisions are taken within separate service areas to devolve responsibility to local level, and more coordinated, ‘integrated localism’. He argued that the latter “offers the only long-term route to more intelligent and cost-effective forms of intervention and prevention by public agencies, along with better outcomes for citizens”.278 137. There is a danger that the principle of subsidiarity is applied by each government department, and that each department devises its own tools for community empowerment, with no thought given to how the resulting models relate to each other.279 Ed Cox of IPPR North described the cumulative impact of different departments’ decisions to devise their own local engagement mechanisms: the way in which accountability currently works from a community perspective is that, because the Department of Health, for example, says that we have LINks around health provision, if I, as a member of the community, want to hold my local health services accountable, I have to go to the LINks meeting on Monday night. If I have an issue about policing, because the Home Office says you have to have this form of accountability for local policing structures, I have to go to the policing meeting on Tuesday night. Because the council operates in a slightly different way, I need to then go to the ward co-ordination meeting run by the council on a Wednesday night. As a local resident, I didn’t want to go to any of those meetings at all, because then it squeezes out me running my local Cubs group or Scouts group or whatever; I haven’t the time then in the rest of the week to do the things I actually wanted to do. That is the reality of community engagement in a highly centralised, highly siloed situation. [...] I know that every department wants to have its own mechanism of accountability. What I would argue very strongly is: allow local government to be the mechanism of accountability for these different services.280 138. Several organisations expressed concern to us about the the potential for various Government localism initiatives to fragment accountability at local level still further.281 Cornwall County Council argued that Health Watch bodies and elected Police Commissioners, for example, “on the face of it complicate rather than simplify local democratic accountability.”282 The potential of GP consortia and Local Enterprise Partnerships to “confuse local relationships and potentially create delays and new expensive bureaucracy” was also of concern to the Centre for Public Service

278 Ev 146 279 Ev 216 280 Q 99 281 Ev 212 282 Ev w133

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Partnerships.283 Neither of these new models is based on local authority boundaries. LGiU stated that “councils could hardly be blamed for feeling that, no sooner have geographical boundaries been rationalised so as to facilitate joint working through virtual co-terminosity with PCTs, than the whole issue of co-terminosity is up in the air again.”284 139. Voluntary sector umbrella bodies told us that they were wary of operating in “an increasingly fragmented environment”, as reorganisation in various parts of the local statutory sector disrupted relationships.285 The British Retail Consortium also expressed concern about the prospect of businesses being “compelled to deal with a proliferation of local agents with responsibility for a wide variety of local issues” as decentralisation is extended to local bodies other than councils.286 Merseytravel noted the “risk that localism could translate as a ‘free-for-all’ or else place one local authority against another.”287 Furthermore, there is the prospect of the Big Society, “a bottom-up and mass localist approach that will lead to a diverse pattern of service provision and community activity”, adding yet more complexity to the landscape.288 140. We put it to the Minister for Decentralisation, Greg Clark, that the Government’s policies could result in greater fragmentation in local public services. He said: In our lives we regularly operate in a situation in which different people are responsible for different things. As long as you know who they are and you have some relationship with them and can replace them, or can go elsewhere, then in my view that is fine. The position we are in at the moment is that things are done to people without them knowing either who is responsible for them or, even if they did, being able to do anything about them.289

Total Place and community budgeting 141. The idea of bringing more coherence to local public service delivery was developed by the last Government largely on the basis of partnership working, embodied in structures of varying formality.290 Local authorities were supposed to take the lead in and be accountable for Local Area Agreements concluded with Government, agreements which nevertheless heavily involved others such as health services and the police in both the outcomes sought and the inputs that would be needed. Councils were similarly to the fore in the development of Local Strategic Partnerships, which are not independent legal entities with powers of their own, but forums for agreeing common priorities and actions. While the previous Government asked local authorities to take on the roles of ‘community leaders’

283 Ev w213 284 Ev 153 285 Q 134 286 Ev 170 287 Ev w5 288 Ev 151 289 Q 518 290 Ev 142

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and ‘place-shapers’, however, these roles were not supported by structural changes or any greater formal control over the full range of public resources in their area.291 142. Professors George Jones and John Stewart argued that local authorities should be given powers to allocate resources to and commission services from other public bodies.292 Lancashire County Council suggested that “councils could become the executive agencies hitherto used by Whitehall departments to implement policy.293 Barnsley Council advocated the idea of local authority-led ‘public service boards’ taking responsibility for all services in an area.294 This is the logical next step for those who consider that local authorites’ democratic mandate makes them the natural leaders in each community. Other witnesses, however, stopped short of recommending that local government be given formal accountability for other services, but still emphasised how important it was for those other services to be granted a similar level of local discretion by Whitehall—including over their finances—so that they could fully participate in partnerships.295 143. Efforts to increase local authorities’ influence have crystallised around the idea of ‘place-based budgeting’. The 2009 Budget launched a project called ‘Total Place’, in which thirteen official and many unofficial pilots set out to test the idea of “local public services working together to deliver better value services to citizens by focusing on joint working and reducing waste and duplication”.296 The pilots started by trying to ‘map’ the total amount of public spending within their area. This showed that together, social security, education and health—areas not under local authority control—accounted for over 70% of public spending in every pilot area.297 They then went on to consider how this spending could be used more efficiently while ensuring that the experience of users and residents was privileged over organisational processes. 144. The Treasury and CLG report on the initiative concluded that Total Place has exposed the complexity of the ‘internal wiring’ of public service delivery. The large number of individual grants, and poorly-aligned objectives of similar services across different policy areas, can limit the ability of delivery organisations to join up services around users. Understanding where the funding lies and a focus on customers have proved powerful drivers for change. In concentrating on citizens and outcomes, rather than on organisation-specific assessments and targets, local partners in the pilots have increasingly looked beyond organisational boundaries to develop innovative public services.298 The pilots also identified a wide range of potential savings that could be made by reorganising service delivery on these terms. The Local Government Association cited

291 Ev 149 292 Ev 142; see also Q 80. 293 Ev 251 294 Ev 229 295 Qq 31, Q 187 296 HM Treasury and CLG, Total Place: a whole area approach to public services, March 2010, p.14 297 Ibid., p.17 298 Ibid., p.19

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several examples, such as projected savings of nearly £1 billion in the cost of benefits for young people not in education, employment or training, and savings of around £5 billion through rationalising public sector assets.299 Following the conclusion of the Total Place pilots, the Local Government Association went on to publish its own proposals for a model of “local democratic accountability for local public services”, under the title of ‘place-based budgeting’.300 145. In evidence to us in September 2010, Secretary of State Eric Pickles spoke enthusiastically about the ethos of Total Place and how the Government planned to build on it.301 The Government’s ‘essential guide’ to decentralisation states that We believe that communities should be able to combine different sources of public money to create pooled budgets to tackle difficult cross-cutting issues within an area. These are known as ‘place-based’ or community budgets. Next year [2011], this radical advance in local control over local spending will be pioneered by 16 areas across the country. We aim to make community budgets available everywhere by 2013. We will work to allow community budgeting to encompass as many funding streams as possible—so that instead of expecting multiple distant bureaucracies to understand and manage the impact of public spending on so local a scale, decisions can be made freely and flexibly at the frontline instead.302 146. The Comprehensive Spending Review announced 16 ‘community budgets’ pilot schemes, which were due to launch in April 2011. In contrast to the wide range of policy areas addressed by the Total Place pilots—from procurement to youth unemployment, learning disability services to offender management—community budgets are initially to focus on families with complex needs. Greg Clark told us that they would be based on the principle that services should be designed around the needs of individuals, “rather than try to make our most vulnerable people fall into line with the structure of central government departments”.303 147. There is some dissatisfaction with the Government’s approach to the issue of placebased budgets. Cllr Steve Reed, Leader of Lambeth Council, told us we should be pushing for this to happen harder and faster, not least because of the scale of the funding reductions that we’re seeing coming through now. [...] We’ve had a number of Total Place pilots. [...] I think we could be a bit bolder and go faster with this now, and expect it to start to generate savings that we could learn from elsewhere.304 Cllr Richard Kemp, leader of the LGA Liberal Democrat Group, commented that, while he was satisfied that the Government’s proposals were a good start, “if I thought they were the

299 Ev 256 300 Local Government Association, Place-based budgets: the future governance of local public services, June 2010, p.6 301 Oral evidence, 13 September 2010, HC 453-i, Q 87 302 HM Government, Decentralisation: an essential guide, p.8 303 Q 511 304 Q 47

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end, I would be extremely disappointed”.305 In December 2010 we put it to the Minister for Decentralisation that, compared to the broad scope of prior work on Total Place, the community budgets pilots seemed limited, even timid. He told us, “you ain’t seen nothing yet”.306 He explained that the pilot phase is intended to discover what changes will need to be made to central government machinery to enable national roll-out of the programme.307

Will community budgeting fulfil its potential? 148. The idea of place-based budgets represents a significant cultural challenge to Whitehall. The LGA said that implementation of the principles of Total Place would require engagement from parts of Government that have so far only been peripherally involved, as well as “a fundamental shift in the nature of the relationship between central and local government.”308 Departments will have to come to terms with not being able to dictate their own, separate accountability mechanisms.309 Total Place pilots highlighted how obstructive inflexible budgets and data-sharing rules can be to joint working.310 The NHS Confederation reported the results of a 2010 survey of PCT Chief Executives and directors of adult social care, which asked them what factors had helped and hindered the development of integrated services: with the exception of changing leadership, the top factors were all nationally-determined, such as performance regimes and funding complexity.311 149. Area-based budgets would have to be the product of close collaboration between central and local government. NLGN refers to this as “a single conversation with central government about money and policy, rather than working through bilateral negotiations with each individual department.”312 The Centre for Public Service Partnerships argued that it would be “a major significant missed opportunity” if place-based budgets implemented by the current Government were to allow local authorities only greater discretion over existing local government expenditure. The proportion of spending within each area which is still under the direct control of Whitehall is, they contended “contrary to the principle of localism.”313 At even a very practical level, however, it may be difficult for departments to identify how much they spend in a particular locality.314 150. So far, the signs about whether the Government is prepared to tackle the obstacles to meaningful place-based budgeting are mixed. LGiU noted the Secretary of State’s expressions of support, but identified some mixed messages in what the Government has actually done so far. The NHS budget is ring-fenced, as will be public health budgets, and

305 Q 46 306 Oral evidence, 21 December 2010, HC 699-i, Q 40 307 Q 506 308 Ev 255 309 Q 98 310 Ev 158, 234 311 Ev w124 312 Ev 262 313 Ev w213 314 Q 47

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GP consortia will control commissioning budgets. Substantial amounts of education spend may end up under the control of autonomous free schools and academies. Police budgets will be controlled by Commissioners. The Work Programme is being contracted centrally, but Local Enterprise Partnerships will have an interest. LGiU concluded that “the logic of these initiatives goes against the concept of place-based budgets and shared decisionmaking”.315 151. LGiU also speculated that the concept may ultimately pose too much of a challenge to the primacy of traditionally independent-minded government departments.316 Baroness Eaton, Chair of the Local Government Association, commented, “I am not sure that all parts of Whitehall get it. Health is beginning to get it more than we ever thought it would, and certainly education is, but there is a long way to go in other departments.”317 Cllr Colin Barrow, Leader of Westminster City Council, said of community budgets: I think it will succeed or fail depending on the qualities of the individuals in central government departments who are assigned to manage it. As long as these people are revolutionaries who are interested in seeing whether there is something new that can come out of this cooperative budget, and seeing whether you can get better outcomes with less expense—people who want to actually find out whether this works—it will work. I know it will work. We’ve demonstrated it will work. We’ve published papers on the subject: it will work. But if the people assigned to it are minded to keep all this under wraps and make it Yes Minister, then it won’t.318 152. The Local Government Association pointed out that a significant part of the costs associated with the families who are to be targeted by the community budget pilots are benefit costs: “The Department for Work and Pensions should therefore be a major contributor to the community budget—but as yet there is no evidence of a financial contribution”.319 We asked the Minister for Policing, Nick Herbert and the Minister for Employment, Chris Grayling, what contribution their departments were intending to make to the community budgets programme. Neither volunteered any information on this point, although Mr Herbert commented that Home Office involvement “is quite possible”.320 On the general theme of devolution of budgets, Mr Herbert said that, in addition to the current policing precept, the budget for wider community safety responsibilities will be devolved to Police and Crime Commissioners. He said, “That will be a real enhancement for local democracy, and in due course we shall announce the details. [...] I think it is an example of where we will devolve budgetary decisions when there is a mechanism for taking those decisions via an elected individual”.321 153. Social Care Minister Paul Burstow was more forthcoming about the impact that community budgeting could have on the work of the Department of Health. He told us

315 Ev 152 316 Ev 152 317 Q 381 318 Q 46 319 Ev 261 320 Qq 442–5 321 Qq 424–5

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that officials in the Department are acting as ‘champions’ for the initiative, and that he anticipated the pilots bringing to light some of the issues that will need to be addressed by the Government to make a success of community budgeting. He saw the model being applied usefully to mental health services, for example. Mr Burstow told us, “The Department of Health is fully engaged with this because we see [community budgets] as very much part of how we drive an agenda of greater integration and collaboration across public services, which is key to delivering the public health agenda.”322 154. The Department told us that a ‘Community Budgets Group’, chaired by Lord Bichard and bringing together representatives from Whitehall departments, the local government sector and the voluntary and community sector will be responsible for driving progress. ‘Whitehall Champions’ have been appointed to help resolve issues within specific departments. Nearly fifty councils have, according to DCLG, been involved already in discussions with departments about adopting community budgets in other policy areas.323 155. We believe that the type of localism in which local government is most interested— with good reason—is that which will allow a comprehensive approach to public spending and service delivery in any one area. As Total Place showed, this approach holds out the possibility of services that are both more efficient and more effective. It would also allow for the streamlining of local democratic accountability, with the elected local authority more visibly reponsible for all outcomes in an area. However, integration of public services at local level does not appear to be a high priority for the Government. Across departments, policy developments that may individually be inspired by the ethos of localism risk entrenching silos rather than enabling creative responses to local problems. Alternative power and delivery structures such as GP commissioning, elected police commissioners and free schools may fragment accountability, and make it more difficult to corral public resources in any one area into a Total Place-type vision. We recommend that the Minister for Decentralisation include in his progress report on the departments an assessment of how far their individual policies facilitate or inhibit local service integration. 156. We support the Government’s community budgets programme. Although it seems to us an overly cautious, slow start to a programme which ought eventually to be revolutionary, we do not doubt the Government’s intention to expand and build on it rapidly. It is inescapable, however, that the model’s success will depend on the willingness of each government department to relinquish some control over its own budgets. We are mindful of criticism of a previous initiative, Local Area Agreements, that the promise of ‘freedoms and flexibilities’ to local authorities to enable them to join up services was realised in only a limited way.324 There is palpable enthusiasm for community budgets on the part of the DCLG ministerial team, and the Department of Health has also been praised for its engagement. However, the ministers we spoke to from the Home Office and the DWP gave the impression not only of not being so enthusiastic, but of being barely aware that they might be expected to contribute to such an initiative. We hope that this does not presage a damp squib. We recommend that the Government publish

322 Q 470 323 Ev 273 324 Ev 145

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regular reports on the progress of the community budgets programme, specifically the progress that is being made by individual departments in identifying their contributions, and how those contributions match up to requests made by local authorities. This is a crucial programme that demands a great deal more concrete commitment from government departments than has thus far been demonstrated. We will take a keen ongoing interest in this, and expect to question Ministers and officials on it in our annual consideration of the work of the DCLG. One issue which may need to be resolved is that, if local authorities gain through community budgets more control over how central government funding is spent in their area, this could have the effect of reducing the proportion of council funding they raise themselves—contrary to a separate aim of many localists. 157. Greg Clark resisted all invitations to state what percentage of total Government expenditure at local level he thought should eventually be under local control, other than to say that “we can agree that it is more than 10%”.325 Mr Clark reassured us that it was part of his and his ministerial colleagues’ role “to bang the necessary heads together in Whitehall” to ensure that resources can be pooled in local areas.326 However, he also indicated that some of the responsibility for making community budgets work lies with local bodies, and that they should take the initiative: “the debate is whether you design it from the top and crash things together so everything flows down to a local level or whether you give people the right of initiative locally to do things in a different way. I think there is room for both”.327 The Minister told us in December 2010 that the Government was open to offers about what more local government could take on: Right across the piece, as I hope will become apparent during our discussions, we want to say to local authorities and other groups in the community, ‘Come and make suggestions’ […] I think there should be no limit to their ambition. I would like them to come forward with suggestions based on joining up the local agencies, making a proposal to central Government. If they can make a case that this can be done better than it is at the moment and that it has a reasonable prospect of better results, it would be a barmy Government who refused that.328 158. Simon Parker, Director of the New Local Government Network, proposed that the idea of local authorities taking the initiative with community budgeting could be developed in a way analogous to the community ‘right to challenge’ in the Localism Bill: We would like local government to be able to bid to run central services where local government can prove it can run those services better. […] The way we have started to think of Total Place is through this idea of a right to bid. The idea is that local government should be able to bid on behalf of communities, basically, to get aspects of central government money. Perhaps that is for Jobcentres and dealing with the problem of worklessness; perhaps it is for criminal justice, but they should be able to bid and the Government should have to respond to that. […] The presumption

325 Qq 507–10, 517 326 Oral evidence, 21 December 2010, HC 699-i, Q 42 327 Q 514 328 Oral evidence, 21 December 2010, HC 699-i, Q 4

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should be, in line with our idea of a duty to devolve, that that money will be devolved unless the Government can make a convincing case for keeping it.329 The Minister broadly agreed with this idea, saying he would like “to extend the principle that people have the right to do things differently and prevail against a reluctant bureaucracy. Just as we are establishing that against councils, I think it should be established against central government.”330 159. As long as localism remains in the gift of central government it remains insecure. There is a risk that only the Department for Communities and Local Government will participate fully and that other departments will be allowed, to varying degrees, to ignore the agenda. The Localism Bill contains measures intended to give communities a right to challenge local authorities that are reluctant to relinquish power; we were encouraged to hear the Minister agree in principle that local authorities should have an analogous right to challenge the centre for services it believes it can deliver better. We recommend that the Government develop a process to facilitate this and legislate to give it effect. There should be a role for Parliament in assessing whether the local government ‘right to challenge’ has been properly administered and we would welcome further discussion with DCLG about how this could be implemented. One possibility would be to do this through the establishment of a parliamentary joint committee, as mentioned above. Any limits which would be set to such a process would need to be clarified, and justified in terms of localism. At present it is not clear to what extent the Government will be able to respond positively if, for example, proposals include taking more local control of benefits spending.

329 Qq 368, 379 330 Q 505

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6 Who will deliver localism? The Government’s plans to diversify service provision 160. In October 2010 the Government published a strategy for voluntary and community groups, charities and social enterprises, which stated that: The Government is committed to ensuring that charities, social enterprises and cooperatives have a much greater role in the running of public services. By promoting contestability to open up more contracts to third sector providers and giving them more information about the costs of existing suppliers, our reforms are aimed at giving the sector a bigger role in delivering more innovative, diverse and responsive public services.331 Under this vision, NHS patients would be able to choose from “any willing provider”, the voluntary and community sector would be given opportunities to bid for criminal justice contracts for offender and community services, mutuals, co-operatives and social enterprises would be encouraged to deliver social care, and “local partners” would be able to influence the support delivered by welfare to work programme providers.332 Publication of a White Paper, Open Public Services, is expected in early summer 2011. The Prime Minister has said that it will set out a ‘presumption’ that private, voluntary and charity bodies can bid for health, education, justice and council services.333 161. DCLG’s ‘essential guide’ to decentralisation states that “to improve the quality, responsiveness and efficiency of public services we […] need to break open the public sector’s monopolies […] Our default position is that all public services should be open to diverse provision”. The premise is that “local control over local spending requires a choice of public service providers”.334 These aims are embodied by two specific measures in the Localism Bill: the community ‘right to challenge’ and the designation of ‘assets of community value’. 162. Under the community right to challenge, voluntary or community bodies, parish councils and local authority employees will have a right to make to a local authority an expression of interest in running a service that the authority currently provides.335 The authority must then either accept or refuse the expression of interest, and, if it is accepted, must carry out a procurement exercise for the service, in accordance with normal procurement rules.336 A DCLG press release on the publication of the Bill set out the Government’s belief that this new mechanism would lead “to a transformation in the way

331 HM Government, Building a stronger civil society: a strategy for voluntary and community groups, charities and social enterprises, October 2010 332 Ibid., p.7 333 “Open for business”, Municipal Journal, 17 March 2011 334 HM Government, Decentralisation: an essential guide, p.9 335 Localism Bill, clauses 66–69 [Bill 126 (2010–12)] 336 Localism Bill: local government and community empowerment, Research Paper 11/02, House of Commons Library, January 2011, pp.46–7

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that local public services are run”, citing children’s centres, social care services, and transport links as possible subjects of community challenges.337 163. The Localism Bill would require local authorities to maintain a list of community assets and ‘land of community value’ within their area.338 The owner of an asset thus listed would not be able to dispose of the asset unless certain conditions had been met, including written notification to the local authority of their intention to dispose of the land, and completion of a moratorium period during which community groups will have an opportunity to raise capital in order to bid for the asset. The assets will ultimately, however, be sold on the open market at market value.339 164. Although some critiques of these measures in the Localism Bill have focused on the potential for private companies to get more involved in public service delivery, the Government’s expressed intention is rather to encourage individuals, communities and interest groups to spontaneously extend their activities and to take over services which are at present largely delivered by the state. ‘Liberating’ such groups will, the Government believes, be sufficient to galvanise more widespread voluntary activity at a level below the geographical boundaries of existing councils. The Minister for Decentralisation, Greg Clark, explained the motivation for these plans: I believe very strongly that the best ideas are not the preserve of elites, whether they are in Whitehall, Westminster or, frankly, necessarily the people who occupy the upper echelons of the town hall from time to time. I think lots of people in communities and working with their communities have great ideas but often they do not have either the influence or access to the mechanisms available to those in power and authority in order to achieve what they want. Therefore, it seems to be incumbent upon us as a Government and also upon local government to make some of the resources and support that we have to make our ideas fly available to people in communities with good ideas. I am absolutely certain that if you do that over time and across the country people will, if they have their head, do things in ways that represent innovations and will be a motor for progress that can be tremendously exciting.340 165. We heard from witnesses some of the advantages that could be realised through greater involvement of the voluntary and community sector in service design and delivery: innovation, “imagination and initiative”, better understanding of what is going on in the local area, expertise in delivering services, and the values of social entrepreneurship.341 Voluntary sector organisations often enjoy high levels of trust in the community, and can engage with local networks largely inaccessible to the stautory sector.342 Cllr Steve Reed described a community-led initative in Lambeth which aimed to reduce the exposure of 337 “Eric Pickles: revolutionary new rights for communities will protect and transform local services”, Department of Communities and Local Government press notice, 11 December 2010 338 Localism Bill, clauses 71–88 339 Localism Bill: local government and community empowerment, Research Paper 11/02, House of Commons Library, January 2011, pp.48–50 340 Q 495 341 Qq 150–3 342 Ev 248

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young people to gang activity and violence, and the ways in which it had been more effective than council-led efforts in the same vein. One of the advantages was the potential for savings: that community group delivered, for a fraction of the sum of the council’s own service, better outcomes. If we can place more of our resources at the disposal of communities in that way and appropriately support the communities to be able to analyse their needs and then procure for them, you will get value-for-money savings. It will differ from service area to service area, and place to place, because the level of capacity will differ, but you will see that happen.343 Sarah McAdam of the Commission for Rural Communities cited an example of a town council which had taken on responsibility for some highways maintenance work from the principal authority, with local people doing the work: “they are very responsive and have that local knowledge about where the issues are likely to arise.”344 The Community Development Foundation concluded that a more diverse group of service providers would make for “a more vibrant suite of public services”, bringing greater capacity and energy.345 166. Ben Kernighan of the National Council for Voluntary Organisations sketched out how the mix of local service providers might change over the next five years: At its best I think we will see some exciting examples at neighbourhood level—so quite localised—of where services have been transformed and the voluntary and community sector has played a significant role in that. In particular, in terms of your question about the users of services, they are therefore engaged in shaping and designing those services [...] We will also see lots of examples at a neighbourhood level as well of different statutory services coming together and really exciting multipurpose community solutions. We will also see other areas that have not got to grips with what is a complex agenda, where we will see a lot of fragmentation, disorganisation and big fears in relation to the period of change could be really tricky.346 Ralph Michell of the Association of Chief Executives of Voluntary Organisations added that in some areas the provider market might in fact shrink if the local authority, bruised by funding cuts, reacts by “in-sourcing and looking after their own”.347

Who will deliver the Government’s vision? 167. Many examples already exist of the type of organisation the Government hopes will expand into public service provision. This is a sub-local authority layer of institutions which could be described as embodying the ‘Big Society’; indeed, there is some concern that in promoting such an idea, the Government is “seeking to reinvent the wheel”.348 343 Q 9 344 Q 184 345 Ev 192 346 Q 146 347 Q 145 348 Ev 166

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Parish councils are one of the most traditional and widespread of such institutions (though largely absent from the most urban parts of the country). Local authorities have in many cases established ward or neighbourhood forums or committees at their own initiative; these may include local councillors in their membership and many are allocated a small budget. Schools are self-governing institutions and are moreover a natural focus of much activity that the Government might characterise as ‘localist’, such as parent-teacher associations, volunteering and fundraising drives. Tenants’ co-operatives, residents’ associations, Business Improvement Districts and voluntary forums for town-centre management, chambers of commerce, single-issue campaigning groups, amenity or user groups, community trusts that run buildings or other facilities, neighbourhood housing associations, councils for voluntary service, safer neighbourhood panels, local branches of national charities, youth clubs, faith groups and sports clubs are further examples of ‘localist’ bodies that already occur in some combination in most communities across the country. 168. Indeed it is questionable whether the Government’s characterisation of public service delivery in England as a monopoly which needs to be broken open is accurate. On our visit to Croydon, it was put to us that it is in fact very difficult to draw a definite dividing line between the state and ‘the community’; a Children’s Centre leader, for example, might be employed by the local authority but be in many senses also a community figure—someone who might advocate for the community, or galvanise others to take part. Alison Seabrooke of the Community Development Foundation described a distinctive type of third-sector body which she called ‘self-help organisations’: primarily volunteer-led, they tend to be established “because people are angry [about] some service delivery shortfall.” Ms Seabrooke cited an organisation working on domestic violence issues that was set up, on a shoestring, by a woman whose daughter had been a victim of domestic abuse; the organisation now receives a substantial volume of referrals from social services and is highly regarded for its work, although it receives no core funding.349 169. However, whether this array of different groups and institutions has the capacity or appetite to rapidly ‘scale up’ or to take on new responsibilities is an unexplored assumption. Such groups vary in the extent to which they are formalised, the extent to which they levy charges, extract fees from members or seek external funding, and the extent to which they interact with the state. Some, such as community trusts or neighbourhood housing associations, may already deliver services that at one time would have been a local authority responsibility. Others might have the potential to do so, but a great many will be engaged in areas of activity that, while enhancing their area or improving quality of life, could not be considered any kind of substitute for state activity. Many have some degree of reliance on the local authority for support or facilities. Still others may consider that the strengths of their organisation lie in their distinctiveness from statutory delivery agencies. 170. The Association of Chief Executives of Voluntary Organisations reported that its members are concerned by

349 Q 185

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what appears to be the government’s misunderstanding of what a voluntary organisation is, how it operates, and the extent to which an army of volunteers can be raised. The process of helping people engage with their communities is not going to happen overnight but is a long cultural change.350 Community Matters, which represents mainly small-scale and informal community groups, reported that such groups already deliver services, but that “our membership do not generally provide [statutory] services and are mostly not set up to provide them in future, although a very small number provide housing and health care.”351 London Civic Forum (LCF) explained that Many local community groups exist outside the formal voluntary sector who require little or no money but who want to make a difference to their area. These groups, such as amenity groups and after-school groups, emerge through local networking and are often fundamentally different from those groups who want to provide a funded services such as job-seeking advice. But that difference has often been unrecognised by capacity-building initiatives which focus on the more formal community sector groups and offer support in areas such as devising a constitution.352 LCF’s interim Director, Lorraine Roberts, noted the emphasis the Government has put on relatively formal mechanisms such as mutuals, co-operatives and social enterprises, commenting that many people do not want to be involved to that level.353 The success of this version of localism is also likely to vary a great deal according to the characteristics of different communities.354 171. The role that volunteers might play in a new landscape of public service delivery is contested. North Dorset District Council has implemented its own version of localism with “a huge army of volunteers without whom this journey would not have been possible”.355 Volunteering has helped the council deliver a range of services, including tourist information centres, open space maintenance, town markets and leisure centres at lower cost and, the council stated, with greater responsiveness to customers and the community.356 Cllr Colin Barrow, Leader of Westminster City Council, argued that the full potential of volunteers had not yet been reached: “This has quite a long way to go before we run up against those buffers. I don’t think we’ll know until we try it. We must be allowed to move in that direction, as far as the capacity will allow, and then more capacity will arise”.357 NESTA recommended that local government “presume community capacity to

350 Ev 166 351 Ev w177 352 Ev 179 353 Q 190 354 Ev 190 355 Ev 245 356 Ev 245 357 Q 39

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innovate”, and stated that “giving communities ownership of developing and delivering their own responses to the big social challenges they face is a self-fulfilling prophecy”.358 172. Community Matters, however, warned that volunteers and voluntary services should not be considered “a free, limitless public good. In reality these groups operate in a lowconsumption economy, often in practice a gift economy, but the resource requirements in terms of time, stress or the modest amounts of income required are very real constraints”.359 Cllr Richard Kemp suggested that “lots of people want to be involved” and it was up to local authorities to “bring together that coalition of the willing”, but this must be tempered by pragmatism: “at the end of the day, libraries will not be run by volunteers; they’ll be run by librarians. We’ve got to make sure that volunteering and support is complementary to, and not replacing, basic services”.360 Cllr Steve Reed, Leader of Lambeth Council talked about individuals’ motivations to get involved: Participation is based on reciprocity, what you get out of it. It’s not just altruism; it’s because you perceive a need and, because that need directly affects you, your family or your household, you will get involved in finding the solution, because it matters to you that much. [Parents in Lambeth who set up the country’s first ‘parent-promoted’ school] didn’t become involved in a Parent Promoter Foundation because they fancied doing a bit of volunteering. They did it because they cared passionately about the education of their children, and they feared there wasn’t a good enough place for their children to go and they wanted to be part of that solution.361

A retreating statutory sector? 173. There was some concern about the prospect of different layers of government withdrawing from service provision on the assumption that the vacuum would be rapidly filled by newly-empowered citizens.362 Community and volunteer-led initiatives, said Age UK, should not be seen as a substitute for existing publicly-funded provision.363 Sense pointed out that in the case of services for people with low incidence disabilities, it is not a given that there will be a local group to which services might be entrusted.364 Age UK worried that there is “a risk that vital local services could be lost by assuming that because people don’t want to run the service themselves, they don’t want the service at all”.365 174. North Dorset District Council told us that in 2006–09 it implemented changes which achieved a 25% reduction on its net revenue budget. Town and parish councils and community partnerships were consulted about which services “were important to their communities and, if important, would they be prepared to work with the district council to safeguard their future provision”. The services under consideration included leisure

358 Ev 183 359 Ev w179 360 Q 39; see also Q 299. 361 Q 17 362 Ev w136 363 Ev 202 364 Ev w1 365 Ev 201

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centres, public conveniences, sports development, tourism promotion, open space maintenance, car parks and street cleansing.366 Cllr David Milsted told us that it is up to communities what services they need and want: If they tell us they do not want it and they can prove that they really know what they are talking about, it is not for us to say, ‘I’m sorry but you’re wrong; you have to have it’. […] if genuinely the community does not want to take something on because it feels it does not want it badly enough, fair enough.367 If supported by research and robust consultation, such a conclusion may well be valid. However, if a service or facility is used primarily by the less vocal in the community, or people who would not be in a position to take on responsibility for running it, it is possible to see how a local authority in the hunt for cuts might mistake lack of volunteers for indifference. 175. Community enterprises and voluntary sector groups—particularly small ones—will require time, support and resources from the statutory sector to take on new responsibilities.368 This was emphasised by NESTA, who reported findings from a survey in which eight out of ten respondents agreed that the Government should allow communities to come up with their own solutions to difficult social challenges such as youth crime, obesity and climate change. Most did not know, however, where to get the right support, with 80% of those who already had ideas saying they would progress them if they had such support.369 This support could include advice, start-up grants, training, or fulfilling basic practical needs such as access to photocopying facilities or web hosting.370 Cllr Steve Reed argued that “it doesn’t work if the community is simply left to do it on its own. It’s too exhausting”. He returned to the example of a community-inspired youth project in Lambeth that aimed to prevent young people getting involved in gangs: When they were left to their own devices to do it the impact was not as big as it became when the council partnered them and put more resources at their disposal, so they had more things to call on. If you went to visit them and speak to them, they would say, ‘Why do you have all of these detached youth workers over there, doing those things, when we know that this kind of activity works?’ We’re trying to find ways to give them more control over those detached youth workers, so that what they’re doing lines up with the community’s own understanding of its own needs. You could leave the community to do it itself, and just take the council’s youth services away, but that’s like pulling the rug from underneath them, because there aren’t always going to be enough people with the appropriate skills to do all the things that need doing, but they will profoundly understand what needs to happen in the place where they live, because they live there and they see their children getting

366 Ev 244 367 Qq 293–4 368 For example, Ev 179, w75. 369 Ev 182 370 Ev 179, w222

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involved in these kind of gangs. What we’re talking about here is a partnership, not de-professionalising.371 176. The Community Development Foundation cautioned that “complex issues in delivering services and managing community assets and land can go beyond the average citizen’s skill set”; support from professionals, including council officers, would therefore be crucial.372 Project management, business planning and governance skills would all be needed by new or developing organisations.373 On our visit to Devon, we heard about initiatives including a community-led planning project, a community-run shop and post office, and a trust which had assumed countryside management responsibilities. While the inspiration and much of the hard work came from members of the community, all the projects had depended on local authority assistance at some point—for help in accessing funding, for planning advice, or for underwriting the new management model.

Barriers to greater diversity of provision 177. Voice4Change England and Urban Forum warned that whilst localism and devolution of power to communities can support public service reform, it is not a given that public service reform supports localism. If proposals on opening up public services are not managed properly then it is not local business or charities that will take over services, but large corporations.374 During our visit to Devon we heard from the Chief Executive of Exeter Council for Voluntary Service, who used the analogy of ‘clonetowns’—local high streets dominated by branches of national chain stores—to describe the impact that attempts to encourage a wider range of providers to deliver public services might have. Small local organisations, often with a very specialised expertise that does not lend itself to winning large contracts, could be squeezed out by large-scale, national charities. The effect, he said, could be contrary to localism. Other witnesses, however, argued that the better national organisations fully recognise the need to work with local partners or through local structures, and to tailor their service to the needs of each community.375 178. Many small-scale voluntary sector organisations feel that they are put at a disadvantage compared to established players in the market by current commissioning practices. They might therefore suspect that they have little to gain from increased opportunities to tender for contracts such as might be unlocked by the community right to challenge.376 The Association of Chief Executives of Voluntary Organisations (ACEVO) noted that bidding organisations will have to to have large amounts of time and other resources at their disposal.377 Regulations about payment in arrears or annualised spend, or

371 Q 14 372 Ev 194 373 Ev 242 374 Ev w221 375 Q 196 376 Ev w222 377 Ev 165

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procurement rules, can pose significant barriers to community organisations seeking to compete for services on an equal footing with large-scale providers.378 This includes, for example, St Petrock’s, a small charity providing ‘first contact’ services for homeless people, which we visited in Exeter. The trustees told us that the lack of a full-time bid writer, the difficulty of providing some of the outcome evidence asked for in tenders because of the very early interventions they provide, and unhelpful feedback from unsuccessful applications all jeopardise their chances of taking on new services. St Petrock’s also reported that some commissioning processes are founded on an assumption that a regional-scale provider would be the most appropriate delivery agency. 179. The challenges are illustrated by the explanation of the Work Programme given to us by Employment Minister Chris Grayling, who explained that the ‘payment by results’ basis of Work Programme contracts means that bidding organisations need to be able to “bankroll” their tenders.379 Wider application of the payment by results model for service delivery contracts might, therefore, restrict the organisations that are able to get involved. In its strategy for the voluntary and community sector and social enterprises, Building a stronger civil society, the Government has committed to producing proposals to “modernise” commissioning practice to ensure that more opportunities are open to civil society organisations.380 180. Several organisations argued that a culture change will be needed to ensure that commissioning decisions assess benefits other than cost savings, specifically “social value”, the sort of criteria on which local community organisations might be better able to compete.381 The Government has said that it will look at “how to enable commissioners to use assessments taking full account of the social, environmental and economic value in their commissioning decisions”.382 A Private Member’s Bill introduced by Chris White MP, the Public Services (social enterprise and social value) Bill, would require public bodies to introduce social clauses into their procurement and tendering processes, thus requiring all businesses that bid to declare the social value their tender would produce. The Bill was given its second reading on 19 November 2010. Greg Clark has said that it is the Government’s intention that “social value in the local area” can be taken into account during procurement exercises triggered by the right to challenge in the Localism Bill.383 181. A further concern is the prospect of grant funding, as opposed to contract funding, being cut or disappearing.384 One North West argued that grants promote innovation and quick responses to need, and enable new groups to get off the ground and develop capacity. It pointed out that many organisations “are best when they remain small”, and it is these

378 Q 28, Ev 193 379 Q 396 380 HM Government, Building a stronger civil society, p.8 381 Ev 191, w171, w222 382 HM Government, Building a stronger civil society, p.11 383 Public Bill Co Deb, Localism Bill, 10 February 2011, col 469 384 Q 137, Ev w199

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sort of groups that are better served by grants than having to negotiate commissioning and contracting processes.385 182. The capacity of voluntary sector organisations to respond to the localism agenda may also be undermined if they find their funding substantially reduced. Figures compiled by NCVO show that in 2007/08, 52% of statutory funding to the voluntary and community sector came from local government, so the risk of cuts as councils adapt to straitened circumstances is significant.386 Ralph Michell of ACEVO told us: the key concern is cuts. Our estimate is that if local government passed on the cuts it is facing proportionately to the third sector, it would mean a loss of income to the third sector of £1.8 billion a year by the end of the Parliament. We are already starting to see cuts being passed on disproportionately. [...] There is the danger that Whitehall has a particular view of the third sector and clearly values its role, but in some areas local government will not share that view and will see the third sector simply as an easy option to cut. It is a soft target and nice to have in good times but not necessarily in bad times. That is our main fear.387 Community Matters, a national federation of community organisations, reported a local government officer saying that “It feels as if there are two conversations being had; the one about cutting costs, and the Big Society one about building community. We haven’t got the resources to do both in the time that’s been given to us and in the end, the savings will have to come first”.388 183. Ministers, including the Prime Minister, have been vocal in urging local authorities not to pass on cuts in their own budgets “disproportionately” to the voluntary sector organisations they fund. Greg Clark said it “would not just be the wrong thing to do but would be a bizarre and counter-intuitive thing to do”.389 Compact Voice, however, reported that “despite these reminders, local decision-making has only followed the spirit described by national policy in some instances.”390 184. A ‘transition fund’ set up by the Government to support organisations through this potentially tricky time amounts only to £100 million.391 The transition fund is part of a larger package of £470 million over four years which is intended to help community groups realise the ‘Big Society’; this includes funding for 5000 new community organisers, recruited and trained centrally. The Government plans to establish a ‘Big Society Bank’ using funds from dormant bank accounts to provide new finance for social enterprises, charities and neighbourhood groups. The bank will be a wholesale organisation, investing

385 Ev w171 386 National Council for Voluntary Organisations, The UK Civil Society Almanac 2010 387 Q 134 388 Ev w178 389 Q 545 390 Ev w137 391 Q 141

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in financial intermediaries which will in turn increase access to finance for social action groups.392

Asset transfer 185. Transfer of assets to community groups and social enterprises, as envisaged by the ‘assets of community value’ provisions of the Localism Bill, is not a new idea. A review of community asset ownership and management was conducted for DCLG in 2007, following which an Asset Transfer Unit was funded to provide technical advice to community groups, local authorities and others. During our visit to Devon, we heard about ongoing asset transfer projects in the county, each initiated by the community. Devon County Council emphasised that such projects could be very difficult to bring to a conclusion, that they could be easily de-railed by unforeseen circumstances, and that committing a building to one community group could in certain circumstances have the effect of excluding another. The assets to be transferred were sometimes in poor condition, and so a great deal of investment was needed before they could be handed over. Groups needed to have a very robust business plan, and some of the possible avenues for income generation—such as car parking fees—might bring other problems. Finally, changes in the membership of a community group’s committee could seriously affect the viability of a project, especially if committees did not retain the high-level skills required to manage it successfully. 186. The Audit Commission commented that, while community asset transfer is manageable, “there are real risks in putting valuable assets in the hands of groups that may not be able to own or manage them.”393 Alison Seabrooke of the Community Development Foundation drew on her personal experience to highlight the possible pitfalls: I’ve raised money for, developed and built a large community building, and I know how damn difficult it is to run it and to keep it going. Particularly if you are looking at generating your own earned income, that becomes harder if you’re in a community that doesn’t have much money to spend, or with local public bodies that do not have much money to distribute to support it. So I think in terms of the principle, actually owning, developing and managing a building for the community is a real privilege, and you run it in a way that is effective because you know when people want to come and use it. [...] But in terms of getting them off the ground, and ones that are perhaps up and running at the moment and what their futures are going to be like, it’s going to be very tough.394 London Civic Forum, while enthusiastic about the contribution that asset transfer could make to the growth of the social enterprise sector, noted that councils would have to ensure that there is a large enough revenue stream to enable social enterprises that take over assets to manage them effectively.395 Action for Market Towns described the mix of capital grants, loan finance and revenue that was typically necessary for successful asset transfer, and the possibility of promoting community share and bond issues to support

392 “Prime Minister launches the Big Society Bank”, Cabinet Office press notice, 19 July 2010 393 Ev 219 394 Q 205 395 Ev 179; see also Q 300.

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this.396 There is some concern that disposal of assets will be undertaken by local authorities primarily as a means of making savings, rather than seeking to support local groups to take them on.397 187. To roll back the state on an assumption that civic activism will fill the vacuum would be a leap of considerable optimism. We do not wish to imply that there is no scope for the community to get more involved in directing and running services—the potential gains in terms of innovation and responsiveness are huge, and we have seen examples of what can be achieved by motivated and dedicated people. But there are limits to the responsibilities that communities can be expected to take on in a localist system; private individuals and community groups do not have infinite capacity to expand their activities, nor do many wish to. The Government must acknowledge that the ‘Big Society’ already exists to some extent, and therefore must be realistic about how much further it can grow. It has not explained how it expects to achieve a substantial increase in the number of volunteers and community bodies willing to take on the provision of services. 188. The voluntary and community sector will require practical help to scale up its activities. We welcome the Government’s commitment to reviewing commissioning processes to ensure that small-scale groups are not habitually at a disadvantage. Funding cuts, and a potential reduction in grant funding as opposed to contracts, will inevitably undermine the potential of some groups to participate. We note the Government’s intention to publish statutory guidance to local authorities not to pass on ‘disproportionate’ funding reductions to the third sector. However, this is another instance of two types of localism coming into conflict: local government must be given the flexibility to manage its resources according to local decisions, even in instances where those decisions might threaten the development of a ‘Big Society’ along the lines envisaged by the Government.

The accountability of delivery bodies 189. Bristol City Council stated that: If public services are going to move towards delivery by citizens, communities and voluntary groups a system for holding them to account needs to be outlined. It needs to be clear how citizens, communities and voluntary groups will be accountable for services they deliver, who will hold them to account, and what the role of the ‘Big Society’ will be in holding itself to account. What will be the role of elected members if responsibility and accountability for services may be moved away from the local authority? Will councillors become the scrutinisers for an increasingly more devolved decision making system? There remains a need to think through how Big Society initiatives interact with the formal governance and service delivery functions of local government, especially as these become more autonomous themselves.398

396 Ev w51 397 Ev w178 398 Ev w167

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Other organisations raised similar questions.399 The Runnymede Trust argued that “democratic accountability is not a key strength of voluntarist approaches”, and that the role of local government in providing transparency and legitimacy to devolved arrangements had not been properly clarified.400 190. Eugene Sullivan of the Audit Commission agreed that commissioning relationships between purchaser and delivery body clarified accountability and made it easier for other parties to monitor the relationship.401 The Minister for Decentralisation confirmed that new arrangements for voluntary and community groups to deliver services would be arrived at through contracts with local authorities. Bids to run services under the community right to challenge, for example, would if accepted be “subject to the contractual regime of the council”.402 191. However, Mencap argued that contracts with delivery bodies are in practice often “inadequate” tools for councils or individuals to use in holding them to account, and in addition: there is a tension between the patterns of larger contracting arrangements versus real choice of services for people, which again makes it difficult for individuals receiving services to exercise ‘accountability’, albeit via the market route. In times of financial constraints, smaller specialist providers of services are likely to be undercut by larger, national or even multinational organisations. Again this [...] has implications for accountability, as local individuals will find it difficult to hold national providers to account.403 Jessica Crowe of the Centre for Public Scrutiny described how contractual arrangements can be of varying utility in ensuring accountability and transparency: We did some research a couple of years ago, looking at different forms of commissioning and contractual relationships, and how councillors could hold those contractors to account. It was very clear that, unless it was built into the contract right at the start that the contractor was expected to come and supply information to scrutiny from the start, it tended to be quite easy for the client-contractor relationship to be quite cosy. The contractor could just say, ‘Well, we’re accountable to our client’, and the client would say, ‘Well, we’re making decisions and we’re holding the contractor to account’, but that is not very transparent to everybody else. So it has to be built in right from the start. Where that does happen, however, you can develop quite a constructive relationship, particularly if it’s a long-term partnership, which you can see. You then get a good understanding from the contractor and the supplier of what the council as a body wants to see, and you get a process of dialogue. I think that that’s much more healthy.404

399 For example, Ev w223. 400 Ev 196 401 Q 252 402 Q 553 403 Ev 204 404 Q 254

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192. The question was also raised of how the public sector equality duty introduced by the Equality Act 2010 will transfer to community and voluntary groups that take over the running of services.405 Age UK expressed concerns about the risks of financial and managerial sustainability of local services that become community-owned.406 Cllr Steve Reed considered that “there will need to be covenants around some of the contracting that enables communities to take control of assets or run services so that, if things go wrong, if groups are excluded, if services are failing, we can still intervene.”407 193. It will largely fall to local authorities, whether through contract management or other oversight arrangements, to determine whether the services provided by community organisations are of adquate and consistent quality. Local decisions will need to be made about the level of risk councils are prepared to take on, both in terms of financial underwriting and in performance management. Ways of transferring services to different providers may be needed in the event of ineffective service delivery. 194. Accountability for services delivered by non-statutory bodies is also causing some pause for thought at the national level. The Public Accounts Committee took evidence on the subject of accountability on 19 January 2011 from Sir Gus O’Donnell, Sir Nicholas Macpherson, Rt Hon Francis Maude MP and Lorde Browne of Madingley. When asked about accountability and value for money in bodies such as foundation trusts and free schools, Sir Gus O’Donnell responded that he had asked Sir Bob Kerslake, Permanent Secretary of DCLG, and a group a colleagues to investigate the issue of localism and accountability and report back to him: “We are doing some very new things here; payment by results for a lot of contracts will create some issues about precisely where the accountabilities lie. I think that is something we need to sort out.”408 195. Even if the capacity of communities to take over services was infinite, we consider that there would still be vital roles for democratically-elected local authorities to play. Prime among these is holding service deliverers to account. Local authorities are also needed as enablers, market-shapers and failsafes, evening out inconsistencies or gaps in service provision, and helping community groups and the voluntary sector to grow their own capacity. We urge the Government not to assume that a diversification of provision can occur spontaneously, nor can it occur without a coherent strategy to manage the risk of failure in service delivery. 196. Councils might have roles in ensuring community service providers are transparent and also to step in where there is failure. But there must be limits to this— there can be no serious localism if councils are expected both to transfer powers to localist institutions but still take the blame for failures in services thus provided. In some cases services will simply fail and the Government must accept this. 197. We recommend that the forthcoming White Paper on public service reform address the issues of the role of local government, the practical help that can be given to

405 Q 218 406 Ev 200 407 Q 12 408

Oral evidence taken before the Public Accounts Committee on 19 January 2011, HC 740-i, Q 72

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community groups to expand their activities, reform of commissioning processes, accountability arrangements for delivery bodies and those that take on the management of assets of community value, and how the risk of failure will be handled. It should include an assessment of how current models of contracting can be made more effective as tools of accountability, not just for the spending of public money but for the quality of service users’ experience. 198. In the spirit of localism, we would not expect the White Paper to dictate detailed solutions to these challenges at national government level, but to set out the principles on which solutions can be developed locally. Nonetheless, the Government must acknowledge that some of those potential solutions will be difficult to implement without sufficient funding to support them.

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7 Conclusion 199. The concept of ‘localism’ is far from new, nor is it particularly controversial. The Government’s commitment to localism and decentralisation of power is therefore welcome. What must distinguish this Government’s agenda for localism from those that have preceded it are the actions it proposes to take as a result. In our opinion the actions the Government has set out so far, both in the Localism Bill and in the programmes of individual departments, give an overall impression of inconsistency and incoherence. 200. On key issues, the Government is sending mixed messages or leaving questions unanswered: how far and under what circumstances will Government interfere in matters of strictly local significance? What limits will it set to local variation? Is integration of services at local level a priority for the Government? How will those bodies that the Government wishes to see get involved in service delivery be supported and held accountable, and how far will the state retreat in response? To what extent will all departments contribute, and how will any reluctance on their part be overcome? 201. Lack of clarity about the nature of localism as defined by the Government may have two undesirable consequences. One is that the Government’s intentions cannot be reliably interpreted by other stakeholders, who might have equally legitimate interpretations of localism, but find themselves running up against brick walls if their view does not accord with that of the Government. The risk is of substantial wasted effort as communities and councils pursue ‘the wrong kind’ of localism. The second is that an extraordinarily broad range of Governmental actions might be branded, perhaps carelessly, as ‘localist’, without any overall guiding philosophy to iron out contradictions, assess priorities, or challenge those government departments least inclined to relinquish meaningful power. At best this may result in creative confusion. At worst it could amount to obfuscation, preventing proper scrutiny of the Government’s performance against its own localist ideals. The Government should be explicit about the choices it has made about what type of localism it wants to pursue. 202. Prominent among the unanswered questions is what functions the Government intends to be fulfilled by local authorities. There is a risk that local government becomes simply the rump that remains by default when central government has retained or reassigned the functions it wants to, and communities have taken over the functions they are able to. We consider that councils have roles to play that are not only important, but indispensable in the context of greater devolution of power. Elected local authorities take a broad view across all public services in their area. They can adjudicate between competing interests in the community and protect minority groups where direct democracy would not. It is difficult to see how the ‘Big Society’ aspects of the Government’s vision could come to fruition without local authorities shaping the market for provision, helping new bodies enter that market, and acting as a safety net should any of them fail. Underpinning all these roles is local government’s democratic mandate. 203. Dismantling the apparatus of centralised, bureaucratic accountability must have as its corollary a strengthening of local democratic accountability. Transparent and effective processes for arriving at local choices are also needed if there is to be any chance of persuading the public to embrace variations in services. We share the view that periodic

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local elections are not by themselves sufficient mechanisms for achieving this. However, the new tools the Government is making directly available to communities are too specific to enable communities to express nuanced views on a range of complex issues, beyond the extremes of wishing to take over a service, and answering yes or no to a single referendum question. These mechanisms alone will not allay the fears of those who feel their needs are easily ignored when decisions about services and priorities are made. They need to be supplemented by greater support and development of the role of councils and councillors themselves in promoting democratic participation and holding decision-makers to account. Furthermore, at present there is scant evidence of widespread demand for localism on the part of the public to match the greater supply of opportunities to participate planned by the Government. 204. We have throughout this report made several recommendations referring to the progress report which the Minister for Decentralisation is due to make to the Prime Minister in July 2011. We have already been told that the progress report will refer to the six themes in the Government’s Essential guide to decentralisation and the Localism Bill. From the evidence we have received, however, additional themes have emerged—some of them more fundamental than the Government’s six—which we wish to see addressed in the progress report. These are: specific responsibilities and powers which have been relinquished and whether ministerial words and deeds have reinforced or undermined the redistribution of responsibility; how the Government’s vision for the role of local authorities is reflected by each department’s policies; how far individual policies affect the prospects for integration of services at local level; and how new community sector providers will be created, supported and held to account for public service delivery within each department’s remit. 205. The Government must set out the ground rules about what matters are to be under the aegis of local agencies, and what levers of power are to be retained by central government departments. If the Government’s brand of localism is to be credible, these ground rules will have to reflect a substantial change in the balance of power, and it is preferable that they take a form more durable—and more enforceable—than a policy statement. Subsequently, we expect Ministers to keep to their own rules and refrain from interference in matters that lie within the purview of local agencies. The Government’s tolerance for the risk of variations in services—variations not just of type but of quality— and for the failure of community-provided services will be put to the test. Genuine localism brings with it the prospect of councils taking actions which central government deems wrong-headed, unwise, or unreasonable. Genuine democratic accountability comes from allowing local residents rather than central government to be the judges of this. Does the Government have the stomach for this type of localism? We will know by how it acts over the coming years.

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Conclusions and recommendations Defining localism and its aims 1.

We welcome the Government’s commitment to localism and decentralisation. We agree with the Government that power in England is currently too centralised, that each community should be able to influence what happens in its locality to a much greater extent, that there has been in the past too much central government interference in the affairs of local authorities, and that public services have been insufficiently accountable to their local populations. (Paragraph 15)

The Government’s definition of localism 2.

The explanations of localism and decentralisation that the Government has thus far provided invoke very diffuse aims from which it is difficult to construct a coherent picture of the end goal. There is little clarity about who will ultimately be responsible for what. Increasing the influence of local decision-making is bound to result in some unpredictable outcomes, but we recommend that the Government undertake to provide a more detailed explanation of the framework within which it envisages such changes taking place and the limits that will be set to central intervention. A constitutional settlement, overseen by a joint committee, could provide such a framework, at least insofar as it relates to the role of local government. (Paragraph 24)

Localism in other government departments 3.

Allowing frontline workers to exercise their professional judgement is good management practice. Facilitating service choice and reducing bureaucracy may be laudable aims in their own right as well. None of these things, however, sits comfortably within a definition of localism. The Government is stretching its uses of the term in too many, sometimes contradictory, directions. Democratic accountability is privileged by some of these developments but not others; local government is integral to some but appears peripheral elsewhere; some policies contribute to integration while others seem likely to entrench silos between services. (Paragraph 31)

4.

Some policy areas appear to have been granted an exemption from decentralisation. The priorities of the Department for Work and Pensions appear particularly resistant to the arguments for devolving power to local institutions, despite the eagerness of local authorities to be more involved in shaping the response to worklessness in their area. However valid the grounds, such exemptions will necessarily limit the radicalism of the Government’s overall vision. They also give the impression that the definition of localism is a matter only of tone and of convenience for the Government as a whole, with each department permitted to ignore localism or to adopt whichever strain of the policy will facilitate its other goals. The views of those outside Government about how the policy should be defined have not obviously been taken into account. We recommend that the Government undertake a formal

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consultation to gather the views of local government and other stakeholders about what sort of localism they would like to see. (Paragraph 32) 5.

We welcome the appointment of a Minister for Decentralisation. We expect that it will be part of the Minister’s role to bring coherence and a sense of priorities to the Government’s localism agenda, and we look forward to the outcome of his first report to the Prime Minister about progress in each department. In the light of the evidence we have received, a clean bill of health for every department would be a surprising outcome. We anticipate taking the opportunity to scrutinise this and subsequent reports, and questioning Ministers on it at future evidence sessions. The response of other departments to the Minister’s analysis will be seen as a barometer of both the seriousness with which the Government is pursuing localism, and the capacity of the Department for Communities and Local Government to exert influence within Whitehall. (Paragraph 34)

6.

The Minister for Decentralisation will need to make more clearly demonstrable progress in influencing other government departments than he has done so far if questions about his role and his position in DCLG are to be answered positively. If such progress cannot be demonstrated, the Government will need to reflect seriously on whether the role needs to be moved to another, more influential, department such as the Cabinet Office (Paragraph 36)

Localism and efficiency 7.

The Government must be wary of assuming that decentralisation will reduce public sector costs in the short or medium term. It should not be quick to declare localism a failed experiment if efficiency savings do not instantly materialise. Indeed, the chances of localism transforming the way the country is governed may be hampered at the outset by a lack of resources to prime the pump by building community capacity. Localism is a goal worth pursuing no matter what the fiscal circumstances, but realism is needed about how fundamental change will be achieved without resources to support it. (Paragraph 48)

Central government in a localist system 8.

Ministers must rein in their interventionist instincts if the Government’s localism agenda is to be credible. Central government cannot have it both ways—on the one hand giving local authorities the freedom to make their own choices, and on the other maintaining that only one of those choices is the ‘sensible’ one. The Government must make its own choice: does it wish local authorities to exercise local discretion, or does it want to continue to prescribe and recommend courses of action centrally? The litmus test of localism will be the Government’s reaction to local decisions with which it disagrees. The concept of ‘guided localism’ is an unhappy compromise which is neither helpful to local authorities nor as radical as the Government seems content to believe. (Paragraph 57)

9.

Ministers are not alone in needing to curb their appetite for intervention. Changing the cultures of the civil service and of Parliament to support a more localist system will be crucial. The former will be decisive in ensuring that Ministers’ intentions are

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put into practice, and the latter in altering the parameters of debate to reflect the distribution of powers to local agencies. Opposition spokesmen, too, bear some responsibility for ensuring that central government is not tempted to interfere beyond its proper remit. (Paragraph 58) Setting limits to localism 10.

Localism has its critics, and they have legitimate concerns: about fairness, about the need to safeguard vulnerable people, and about services underperforming. Some stakeholders and sections of the community evidently do not trust the present forms of local democratic accountability to look after their interests when the apparatus of centralised, bureaucratic accountability is dismantled. We recommend that the Government consider how best to help these groups use the available means for holding their local service providers to account, beyond the ballot box. In particular, the Government must address the contribution to accountability that can be made by robust—and if necessary enhanced—local authority scrutiny functions. (Paragraph 74)

11.

We accept the case for some form of minimum national standards in services such as adult social care and child protection, where the needs of the most vulnerable must be protected. We recommend that where such standards are adopted they are formulated in consultation with local government, in order to ensure that they reflect the level of central government oversight appropriate to a localist system and do not simply recreate an overly-interventionist performance regime. (Paragraph 75)

12.

We recommend that the Government make clear the principles on which it will determine at what level different decisions will be made, and the grounds on which intervention in local services will be deemed necessary. These questions should not be decided purely on a case-by-case basis. Communities need clarity about which decision-makers they should be seeking to influence, and an explicit statement of the Government’s intent would help to forestall campaigning groups’ reliance on national government to enforce acceptable standards of service. A constitutional commitment to decentralisation would be one way of achieving this clarity; in the shorter term, we will expect the forthcoming progress report on localism in each department to be an opportunity to flesh out the principles on which the departments are expected to act. (Paragraph 76)

Localism without local government? 13.

The Government’s attitude to local government is inconsistent, and local authorities’ role in localism unclear. A parallel democratic structure is being established for policing, schools are to be further removed from council control, and there are to be binding referendums on council tax increases above a certain level. Assets of the former regional development agencies are to be transferred to central rather than local government or Local Enterprise Partnerships. All these developments imply that the Government may be more interested in circumventing local government than further empowering it. On the other hand, local authorities will have a new general power of competence and new responsibilities for public health. The Government must decide what it wants the role of local authorities to be and how it

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should develop, what powers they will have and how they will exercise them in relation to other bodies. We recommend that each department set out how it will devolve further powers to local government, and we look forward to seeing clear evidence of this in the Minister for Decentralisation’s progress report. (Paragraph 101) 14.

We recommend that the Government work with the Local Government Association to set out examples of specific ways in which the general power of competence will enable local authorities to extend their role beyond that conferred by the well-being powers. In particular, it is unclear what activities currently carried out by central government might be taken over by local authorities using the new power. We recommend also that the Government undertake an assessment of the extent to which exercise of the general power of competence will be restricted by existing regulation and statute. If there is in practice little room for local government to expand into, the power is likely to have very minimal impact. (Paragraph 102)

15.

Greater financial self-sufficiency for councils is a crucial foundation for localism. If the Government truly wishes to promote far-reaching decentralisation, we expect that the more radical options for reforming local government finance will be considered as part of the resource review. In particular, the case for increasing and broadening the tax and revenue-raising powers of local authorities, and their ability to borrow, must be central to the review. Decisions reached on these matters must be justified in terms of localism. (Paragraph 103)

How will local authorities have to adapt? 16.

If variations in local services are to be embraced as the expressions of local choices, the legitimacy of the process by which those choices are made is paramount. Local authorities are accountable at the ballot box. They are visible to local people, and if they are not accessible, they can be punished for that at election time. Their democratic mandate puts them in a uniquely strong position to be leaders of the community, and it is their job to take a whole-area view, adjudicating between competing groups and safeguarding minority interests. As the scope of local decision-making is extended, therefore, the Government must seek to strengthen and support rather than marginalise the role of local authorities. (Paragraph 134)

17.

It is obvious however that some local authorities are better than others at engaging with, understanding, and representing their communities. The Government’s immediate solution to this is to put in place through the Localism Bill new mechanisms that can be triggered by any community, regardless of whether their council wants it or not. It is our recommendation that, alongside such mechanisms, the Government and the local government sector consider together how to enhance the effectiveness of the democratic tools already at the disposal of communities. While the Government should not be seeking to dictate how councils engage with their communities, it could play a role in promoting standards and skills for effective engagement. This includes working with the Local Government Association to disseminate best practice and explore ways in which elected members can operate effectively within a decentralised system. (Paragraph 135)

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Integration or fragmentation? 18.

Across departments, policy developments that may individually be inspired by the ethos of localism risk entrenching silos rather than enabling creative responses to local problems. Alternative power and delivery structures such as GP commissioning, elected police commissioners and free schools may fragment accountability, and make it more difficult to corral public resources in any one area into a Total Place-type vision. We recommend that the Minister for Decentralisation include in his progress report on the departments an assessment of how far their individual policies facilitate or inhibit local service integration. (Paragraph 155)

19.

There is palpable enthusiasm for community budgets on the part of the DCLG ministerial team, and the Department of Health has also been praised for its engagement. However, the ministers we spoke to from the Home Office and the DWP gave the impression not only of not being so enthusiastic, but of being barely aware that they might be expected to contribute to such an initiative. We hope that this does not presage a damp squib. We recommend that the Government publish regular reports on the progress of the community budgets programme, specifically the progress that is being made by individual departments in identifying their contributions, and how those contributions match up to requests made by local authorities. This is a crucial programme that demands a great deal more concrete commitment from government departments than has thus far been demonstrated. (Paragraph 156)

20.

As long as localism remains in the gift of central government it remains insecure. There is a risk that only the Department for Communities and Local Government will participate fully and that other departments will be allowed, to varying degrees, to ignore the agenda. The Localism Bill contains measures intended to give communities a right to challenge local authorities that are reluctant to relinquish power; we were encouraged to hear the Minister agree in principle that local authorities should have an analogous right to challenge the centre for services it believes it can deliver better. We recommend that the Government develop a process to facilitate this and legislate to give it effect. There should be a role for Parliament in assessing whether the local government ‘right to challenge’ has been properly administered and we would welcome further discussion with DCLG about how this could be implemented. (Paragraph 159)

Who will deliver localism? 21.

The Government must acknowledge that the ‘Big Society’ already exists to some extent, and therefore must be realistic about how much further it can grow. It has not explained how it expects to achieve a substantial increase in the number of volunteers and community bodies willing to take on the provision of services. (Paragraph 187)

22.

The voluntary and community sector will require practical help to scale up its activities. We welcome the Government’s commitment to reviewing commissioning processes to ensure that small-scale groups are not habitually at a disadvantage. Funding cuts, and a potential reduction in grant funding as opposed to contracts,

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will inevitably undermine the potential of some groups to participate. We note the Government’s intention to publish statutory guidance to local authorities not to pass on ‘disproportionate’ funding reductions to the third sector. However, this is another instance of two types of localism coming into conflict: local government must be given the flexibility to manage its resources according to local decisions, even in instances where those decisions might threaten the development of a ‘Big Society’ along the lines envisaged by the Government. (Paragraph 188) The accountability of delivery bodies 23.

Even if the capacity of communities to take over services was infinite, we consider that there would still be vital roles for democratically-elected local authorities to play. Prime among these is holding service deliverers to account. Local authorities are also needed as enablers, market-shapers and failsafes, evening out inconsistencies or gaps in service provision, and helping community groups and the voluntary sector to grow their own capacity. We urge the Government not to assume that a diversification of provision can occur spontaneously, nor can it occur without a coherent strategy to manage the risk of failure in service delivery. (Paragraph 195)

24.

Councils might have roles in ensuring community service providers are transparent and also to step in where there is failure. But there must be limits to this—there can be no serious localism if councils are expected both to transfer powers to localist institutions but still take the blame for failures in services thus provided. In some cases services will simply fail and the Government must accept this. (Paragraph 196)

25.

We recommend that the forthcoming White Paper on public service reform address the issues of the role of local government, the practical help that can be given to community groups to expand their activities, reform of commissioning processes, accountability arrangements for delivery bodies and those that take on the management of assets of community value, and how the risk of failure will be handled. It should include an assessment of how current models of contracting can be made more effective as tools of accountability, not just for the spending of public money but for the quality of service users’ experience. (Paragraph 197)

26.

In the spirit of localism, we would not expect the White Paper to dictate detailed solutions to these challenges at national government level, but to set out the principles on which solutions can be developed locally. Nonetheless, the Government must acknowledge that some of those potential solutions will be difficult to implement without sufficient funding to support them (Paragraph 198)

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Annex—visits to Devon and Croydon Torbay Coast & Countryside Trust (Occombe Farm) The Committee met: Tim Key, Chairman, Dominic Acland, Director, Nick Powe, Trustee, Nigel Wollen, Trustee, Julian Carnell, Head of Education and Community, Nick Bye, Mayor of Torbay, Charles Uzzell, Environment Commissioner, Torbay Council, Mary Thoroughgood, Parliamentary Affairs Manager, Royal Institute of Chartered Surveyors. Torbay Coast & Countryside Trust was formed in 1999 to take over the role of Torbay Council’s countryside management service and responsibility for 1700 acres of land. The Trust is a charity, a company limited by guarantee and is entirely independent of the council, from which it has a 60year non-assignable lease for the land on a peppercorn rent. The council pays the Trust an annual management fee, which represents approximately 20% of the Trust’s income and is a significant saving to the council compared to the cost of the in-house countryside management service. A service level agreement sets the terms of the relationship between the council and the Trust. The Trust’s core services are in conservation, recreation, environmental education and sustainable development. Grant-making trusts and the lottery have been vital to the Trust’s development (the Single Farm Payment, Natural England, Heritage Lottery Fund). It also undertakes fundraising activities, including income generation from a farm shop, café, rentals, car parking and green burials. The Committee was given a tour of the facilities at Occombe Farm, which include a teaching kitchen and food growing area. Areas of discussion included: Community engagement: More than 130 volunteers give 8000 hours every year. There is a steady turnover of volunteers, and volunteer hours are an important source of match-funding for bids. The demographic profile of volunteers and donors is very mixed: retirees, young people, unemployed people. Specific projects target particular communities, such as deprived wards. There has been a measure of conflict with local communities in the past, which has been approached by setting up stakeholder forums. There will always be someone who doesn’t like what you want to do—reintroduction of sheep grazing in an area used by dog walkers, for example—but “the consensus view wins in the end.” However, the Trust is respected by the community, and is an entity to which it was suggested the public can relate more readily than to a council. The trustees commented, “I’ve never known anyone make a bequest to a council—but people do leave money to the Trust.” The model also exploits a preference among donors for small local charities. Relationship with the council: The two bodies describe themselves as “natural partners”, having shared ambitions. The management grant and the backing of the Council have been very important to the development of the Trust. Tim Key recalled that the Trust was initially very keen to assert its independence from the council, but they now realise the advantages to the council’s continued legal and financial stake: the public do not necessarily want the assets to be permanently transferred, and the current arrangement maintains democratic accountability, through the lease agreement, the annual business plan which is submitted to the council for comment, and the service level agreement. Advantages of the Trust model: This arrangement has allowed for specialisation, that is, the assets are now managed by an organisation for which the countryside and the local environment is and will always be top of the agenda, and which can call on specialist expertise in that area. It has facilitated access to additional funding streams. The council considers its grant to the Trust to be good value for money. The Trust has been able to achieve more than the council could have with the same time and resource, and has added value in terms of, for example, the huge increase in the

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use of the land for educational purposes and the development of the English Riviera Geopark project. Does this model have a wider application?: Nick Bye pointed out that only some sorts of activities lend themselves to this model; small-scale neighbourhood organisations might not be able to attract the necessary organisational talent, for example. Charles Uzzell noted the need to manage risk, by ensuring that groups to which assets are transferred need to have a robust business plan, and the council has to be able to take a strategic view. The ability of communities to spontaneously generate an idea and a model for a service and want to run it, without a lot of support from a larger organisation, is limited. The council is the guarantor for the Trust. It would struggle to replicate this model many times over, because the council’s level of reserves is not sufficient to act as guarantor for lots of organisations of the same size. Mr Uzzell argued that the localism agenda needs to take into consideration ways of funding start-up and sustainable financial plans for community-run assets. Torbay Council The Committee met: Nick Bye, Mayor of Torbay, Cllr Neil Bent, Deputy Mayor, Cllr John Thomas, Overview & Scrutiny Co-ordinator, Cllr Steve Darling, Deputy Overview & Scrutiny Co-ordinator and leader, Liberal Democrat group, Elizabeth Raikes, Chief Executive, Charles Uzzell, Environment Commissioner, Katie Lusty, Cultural and Community Services Group Manager, Sergeant Gaynor Bell, Paignton Neighbourhood Policing Team, Mandy Riley, Safer Communities Project Officer, Ed Williams, Torbay Voice Link Worker The Committee was given a tour of the Paignton Library and Information Centre, which was opened in September 2010, funded by Community Libraries. It houses the library, council services such as housing and benefits, adult learning, Age UK, Neighbourhood Policing, exhibitions area, a private-sector run café, meeting rooms for hire, and a police enquiry desk. Organisations such as the Citizens’ Advice Bureau run drop-in sessions in rooms available for community organisations. Presentations were given covering the council’s approach to commissioning, involving service users in decision-making (Torbay Voice), the implications of the mayoral model for localism, and the contribution of overview and scrutiny to localism. Areas of discussion included: Commissioning: The council is already a 65–70% (by value) ‘commissioned council’, rather than delivering services directly. Already the primary care trust has been commissioned to deliver adult social care (an arrangement threatened by the proposed abolition of primary care trusts). Barriers have included resistance from trade unions, and the fact that some councillors have found it difficult to give up control for influence over services. There has also been a skills gap to be addressed; what the council is doing now is not just procurement, but market-shaping. Innovation can be “stifled” by tax rules and the Green Book, and TUPE staff transfers are expensive, especially where pensions are concerned. The council remains accountable for the delivery of services, so they argue that there is no ‘democratic deficit’. Long-term contracts or service level agreements can, however, leave the council with set costs which reduces its influence over its own ability to achieve efficiencies from its remaining budget. Some areas, such as safeguarding, do not lend themselves to commissioning, and contracting for outcomes in services that are traditionally output-based—such as grass-cutting—can be difficult, but have been achieved through an innovative joint venture. Evaluating the council’s service provision: The council considers that it now needs to move towards “co-production with citizens”. It intends to take as its starting point consideration of the questions “what does the council do best?” and “what is it that only the council can do?”. This then provides the basis for political decisions about what the council will provide within its available resources. For example ‘lollipop ladies’ are not core business or a statutory service; schools might be

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able to set up their own charitable trust to which donations can be made, enabling them to commission the council to provide that service. Integration of services: the council considers that not all partner organisations took the ‘Total Place’ methodology on board. Lack of co-terminosity is a problem, and the DWP is “not set up to participate in initiatives like this”. Mr Uzzell commented that the council was “in danger of being excluded” from discussions about the Work Programme; of the nine potential bidding companies, only one had come to speak to the council about how they might work together. The ‘payment by results’ model might lead to the contractors focusing their energies on areas with “lower hanging fruit” rather than communities with long-term, persistent problems of worklessness. The mayoral model: Having one figurehead as the result of a direct election fundamentally changes relationships; it can increase the organisation’s sense of direction and appetite for risk. The mayor is the leader of a place not just a council. Nick Bye acknowledged that the mayoral model is not universally loved; some people think the mayor has too much power, others, that he does not have enough. The Liberal Democrat group believes that an elected mayor cuts the council’s connection to the community. Mr Bye stated that he does not necessarily feel he needs more powers to be devolved by central government; a greater ability to get things done locally is a higher priority. Of the existing mayoral authorities, Torbay is the only one to have publicly expressed an interest in exploring the ‘mayoral management role’, where the mayor takes on some of the functions of the chief executive. Elizabeth Raikes argued that it is “easier” to be a localist in a district council than a unitary council, because the public is likely to cast their vote on the sort of services provided by district councils, whereas functions such as social services are largely invisible to the general public. St Petrock’s Centre The Committee met: Andrew Dixon, Chair of Trustees, Jeremy White, Trustee, Mel Hartley, Project Manager, Gill Luckings, Communications Manager St Petrock’s is a charity that offers an ‘early contact point’ for homeless people in its base, on the premises of St Petrock’s Church in central Exeter. It provides clothing, food and washing facilities for rough sleepers, and gives advice on accommodation, benefits, finance, skills and training. The charity has recently established a social enterprise providing DIY skills and maintenance; it also carries out education work in local schools, and works with prisons to try to prevent people being released without accommodation. St Petrock’s has ten paid staff, between 30 and 40 volunteers, ten trustees—and a waiting list for people wanting to become trustees. Areas of discussion included: The difficulty small organisations experience in accessing funding: The core services that St Petrock’s provides—such as providing food—are very expensive but can be difficult to evidence outcomes for, because they involve a great deal of preparatory work with clients. Only 4% of the charity’s funding comes from the local authority and 30% from the local community. St Petrock’s has struggled to win grants and tenders; there is no full-time bid-writer on the staff, they find tendering processes to be changeable and time-consuming, and feedback given on failed bids has not always been helpful. For some services and tenders, only regional providers will be considered. The trustees feel that when a large proportion of available funding is channelled through local authorities, it leads to too narrow a range of providers receiving that funding. There is also a great deal of duplication in the services that are funded, with tenders being issued for services that St Petrock’s feels it is either already providing, or would be a natural extension of what it is already providing. The Localism Bill: “How would any charity trustee find time to plough through the length of the Localism Bill? We are doing localism anyway”. The trustees commented that the community right

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to challenge sounds time-consuming, and they are wary of damaging relationships with the local authority by launching ‘challenges’ to their services. Town council and residents of Dulverton, Somerset The Committee met: Chris Nelder, Chair, Dulverton Town Council, Amanda Rose, Clerk, Dulverton Town Council, Bern How, Dulverton Town Council, Leslie Silverlock, Dulverton Town Council, Christine Dubery, Dulverton resident, Teresa Williams, Dulverton community champion, Ruth Jackson, Participatory Budgeting Unit, Oli Henman, The Big Society Network, Ed Wallace, NESTA. In November 2010 The Big Society Network and NESTA launched nine pilots in the ‘Your Local Budget’ project, which is designed to give people a say in how mainstream local authority budgets are spent in their area through ‘participatory budgeting’ methods. Dulverton Town Council in Somerset is running one of the pilot projects. Dulverton is a small market town where participatory budgeting has been trialled since 2009; the current project involves £16,000 worth of public spending. However, by employing ‘Total Place’ tools, the town council discovered three years ago that nine different public authorities spent a total of £10 million each year in Dulverton, and the council is keen to secure greater local control over how these resources are used: “Every place should be given the opportunity to do what it wants and show what it is able to do.” Grass-cutting contracts and the management of car parks are areas of particular interest to the town council, and it would also like an opportunity to run the town’s library, recycling centre and youth club. However, the entire parish budget is £120,000, so there is no prospect of simply being able to bid to take these assets over. 300 people had attended a public meeting in the week prior to the Committee’s visit, where they voted both to increase the precept by 25 pence per week, and for some actions that they wanted the community to take. Nearly 50 residents volunteered to take these plans forward, and four new ‘action groups’ were established. Areas of discussion included: The advantages of participatory budgeting: it improves services by tailoring them more closely to local need, it casts public agencies in a more favourable light with residents, it enhances democracy, and it contributes to community cohesion. It is a very tangible way of getting people involved: “there’s nothing like money to get people through the door”. Different ways of organising participatory budgeting processes were discussed, including how it relates to the functions of elected politicians. Dulverton representatives rejected the idea that the methodology could allow narrow sectional interests to dictate public resources, saying that their recent event shows that all members of the community, given the chance, will support claims on resources by others in their community. The context of tight fiscal straits: When there are cuts to be made, people want to be involved in deciding what those should be. The town council argues that it can deliver services that local people want, at a price the community can afford, whereas “distant” district or county council officers don’t always understand what local communities need or want. It also contends that the burden of paying for services such as street sweeping and upkeep of public spaces could be more rationally distributed, with a more transparent connection between what communities pay for and the services they receive. The remoteness of decision-making: Dulverton residents do not always feel that their community is represented fully by the organisations where decisions are made about major items of spending, like social care budgets—the local authorities feel remote. As for central government, DWP is probably the biggest-spending department but “appears totally absent” at community level, despite understanding of community circumstances being a major advantage in tackling poverty and worklessness.

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The capacity of local people to take on new projects: “Dulverton is volunteered out—you’re not getting any more volunteers out of this town.” There is a limited supply of people who are willing to take on broader community responsibilities beyond their own personal interests, and there is only so much that town councillors can take on. A part-time town clerk cannot run lots of additional services, and underlying all this, funding has to be available. The burden falls substantially on a small number of individuals: “Our chairman’s been to twelve meetings in the last two weeks; I know that because I’ve been to ten of them with him.” Devon County Council The Committee met: Cllr John Hart, Leader, Phil Norrey, Chief Executive, Pip Tucker, Head of Strategic Intelligence, Peter Doyle, Head of External Affairs, Roland Pyle, Policy Officer, Andrew Leadbetter, Councillor, Jerry Brook, Councillor. The Committee was briefed on the geography and context of Devon, its particular challenges, and the county council’s approach to localism. Areas of discussion included: Community engagement and its variability: Devon has almost 400 town and parish councils for a population of 0.75 million over a very wide geographical area. Some of the parish councils are extremely active, others are practically moribund. This reflects the fact that some communities are galvanised and eager to grasp the localist agenda, and others are not. Efforts will have to be concentrated on those communities less likely to organise themselves, those that lack capacity. When faced with, for example, a library closure, it is often the prosperous communities who mobilise to save the facility and provide volunteers to keep it running. The local Member has a vital role, especially as a mediator when there are different opinions within the community. Asset transfer: Three asset transfers of county council buildings to the community had been instigated recently: one was a very rapid process, one was in progress, and the third was embroiled in a dispute about a car park. The council emphasised that such projects could be very difficult to bring to a conclusion, that they could be easily de-railed by unforeseen circumstances, and that committing a building to one community group could act to exclude another. The assets to be transferred were sometimes in poor condition, and a great deal of investment might be needed before they could be handed over. Groups needed to have a very robust business plan, and some of the possible avenues for income generation—such as car parking fees—might bring other problems. Finally, changes in the membership of a community group’s committee could seriously affect the viability of a project, especially if committees did not retain the high-level skills required to manage it successfully. Extreme weather: The council has been encouraging communities to be ready to help themselves in the event of extreme weather, giving individuals the confidence to go out and clear roads themselves that the council might otherwise not get round to in time. A lot of Members have chosen to use their local budget allocations for extra grit supplies. Town and parish councils are being encouraged to appoint snow wardens, and the county council is providing training, public indemnity insurance and salt. Parish councils are also being encouraged to set their own priorities in their area and to exploit local resources, such as farmers who may be willing to help. The county council describes its approach as “working with the willing”; some parish councils have taken the view that they do not wish to be involved because they feel that this is the county council abdicating its responsibility (and there is a general suspicion on the part of the public that localism is a mask for budget cuts). Some parish councils are very keen, others need persuading—funding is often instrumental to this—but it is the view of the county council that there are some which will never engage.

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The community of Chudleigh The Committee met: Graham Wall, Parish Plan Implementation Group, Richard Keeling, Chair of Chudleigh Town Council, and many other representatives of the community and local groups including Chudleigh Business Guild, the Film Society, the parish church, Chudleigh Amenity Society, the youth centre, the scout troop and the Chudleigh History Group & Heritage and Information Centre. Chudleigh is a large parish of around 4,600 residents. The town is located close to the A38, the main commuter route to Exeter and Newton Abbot. The Committee visited Chudleigh Town Hall, which as well as housing many community groups and activities has been established as an Emergency Rest Centre for stranded motorists in case of extreme weather. The Town Council initiated the development of a Parish Plan for the community, starting with a survey of 1800 households. Guidance was provided by the Community Council of Devon, and practical support (such as printing and maps) by the county council. The overall cost of the process was between £3,500 and £4,000, and establishing the plan took 18 months. The priorities for Chudleigh which emerged are strongly supported by Teignbridge District Council. The plan steering group then became an implementation group, and the town received a grant of £10,000 from DCLG and DEFRA to fund an ‘enabler’, appointed by CABE, to produce a masterplan (thought to be a similar document to the neighbourhood plans mooted in the Localism Bill). This masterplan will feed in to the Local Development Framework. The Committee heard that “localism is nothing new to Chudleigh”, and that many community groups had been operating in the town for years. The Parish Plan process, however, stimulated a great deal of volunteering activity in the town. A number of new organisations were set up, a new weekly market was established, Chudleigh Heritage and Information Centre was opened with a volunteer staff, and an Arts, Crafts and Exercise Group was set up. Volunteering in Health has rolled out to the town. There is an ongoing town centre project, a sensory garden project, and a new community orchard. Areas of discussion included: Community capacity: The work of implementing the Parish Plan is being led by about twelve local people, with hundreds of others volunteering for particular activities. Community representatives argued that “the Big Society already exists”, and that heaping more responsibilities onto existing volunteers will not work, nor will trying to do things without funding. The time of volunteers and the practical support from the district council in the development of the Parish Plan has not been costed. Local powers: The Town Council has requested the devolution of more powers and more resources. The parish precept has been used to raise some more funding, but further contributions from local businesses are probably not realistic as many say they struggle to afford business rates. Managing different views in the community: Where there were conflicting opinions about the future of the town, the steering group took a view. Some respondents said that new housing was not wanted, for example, but the steering group’s view was that this was not feasible. Ide Community Shop The Committee met Trevor Gardner, Chairman of the Management Committee, and other volunteers in the shop and post office. Ide is a village of 500 people. When, two years ago, it was announced that the village shop was going to close, the parish council took the initiative to establish a replacement. The present community

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shop opened a day after its predecessor closed. The shop has 150 shareholders from the local community. Many residents gave interest-free loans or donations to help the start-up. There was also local expertise to draw on: craftsmen who built the shelves, or people who gave legal advice. However, there is no previous retail experience on the committee or among the volunteers. The shop is located in a portacabin in a car park. It opens for 40 hours each week, and is run by more than 50 volunteers. Key to the success of the project was persuading the Post Office to retain a counter in the shop; it has helped make the facility a hub for the community, which also provides services such as free internet access and a selling point for tickets for local events. One third of the produce sold in the shop is produced within 20 miles of the village. A proportion of the shop’s profits are designated for grants to community groups. Areas of discussion included: Keys to a successful project: These were considered to be strong leadership, a clear vision, very supportive parish and district councils, a vigorous committee and volunteer force, and “a volunteer co-ordinator who is the Archangel Gabriel”. The speed with which the project was brought to fruition—it has been the quickest community shop project in the country—was attributed to the influence of one individual, described as “a maverick”, and the hard work of planners in the district council. Practical difficulties: Planning permission for the portacabin expires soon, and the shop does not have sufficient funds to acquire premises. Plans for a new building are at the moment stymied because of the ownership of the most suitable plot of land. Exeter Council for Voluntary Service The Committee met: John Bunting, Chief Executive, Simon Bowkett, Development Manager, Sue Hooper-Lawrie, Development Manager. Exeter Council for Voluntary Service (ECVS) is an infrastructure organisation, providing services for and representing the views of the voluntary sector in Exeter. Areas of discussion included: Voluntary sector involvement in service delivery: John Bunting cautioned that when the statutory sector “talks to the voluntary sector”, this often means building relationships with large-scale, national charities. He used the analogy of ‘clonetowns’—local high streets dominated by branches of national chain stores—to describe the situation that might arise from attempts to encourage a wider range of providers to deliver public services. Small local organisations, often with a very specialised expertise that does not lend itself to winning large contracts, could be squeezed out of large-scale commissioning processes by bigger charities from outside the area. Mr Bunting questioned the extent to which small groups would be willing to exercise a ‘right to challenge’; they might not see it as in their interests to challenge an organisation from which it is also seeking commissions. There may be local organisations able to deliver a particular service in Exeter, but no similar organisation in rural areas, which could result in a highly variable level of services. Involvement in the priorities of DWP: John Bunting argued that, in the new structure for the Work Programme, voluntary sector consortia might get involved at perhaps the third tier down, delivering niche services. A small voluntary sector organisation delivering on behalf of a large commercial sector organisation might find clashes of language and values in the management of the subcontracts. He characterised it as a very top-down process, and for the local voluntary sector it feels as though they will get only “crumbs from the high table”. The launch of work clubs, Mr Bunting reported, was badged as a Big Society initiative, which the Department then tried to nudge more forcefully when few people came forward to run such clubs. He raised questions of who

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carries the risk for work clubs set up by community organisations, and how are they quality assured? What do local authorities need to do in response to localism?: Councils need to give a clear steer on the importance of social values in commissioning, and be ready to protect the interests of vulnerable people. The challenge in terms of representative democracy versus direct democracy has not yet been fully addressed by elected Members. Their role and purpose must be much more clearly defined; are they there simply to monitor funding and rubber stamp decisions made by, for example, participatory budgeting? The prospects for community action: There is a danger of the voluntary and community sector in Exeter shrinking over the next few years because the sources of funding are drying up. But at the same time grassroots community activism is, if anything, increasing. There has been a shift in the motivation of volunteers who come forward for placements now; layoffs and redundancies have stimulated a rise in volunteering. Volunteering is generally more prevalent in already wealthy areas, however. A free market approach to localism will not work without some community development in the areas where there is less social capital. Through the Take Part initiative, ECVS has delivered training on becoming a magistrate, a school governor, a trustee or a councillor. It is still difficult to get people to take an interest in the formal business of councils, which has been conducted in the same way for decades. Transition Exeter The Committee met: Gill Westcott, Andi Tobe, Audaye Elesedy, Justin Pollard. Transition Exeter, part of the wider Transition Towns movement, is a group of local people who want to reduce the negative impacts of climate change and peak oil by promoting “community resilience”, and to reduce people’s negative impacts on the environment. It encourages working towards energy efficiency, sustainable transport and a sustainable economy, local production of food and other goods and services, and reduction of consumption and waste. Areas of discussion included: What localism should mean: Transition Exeter argued that local control and ownership of assets and resources is one of the key features of ‘an empowered community’. Community control of assets can only be achieved, however, with support and time; a mandatory moratorium of between six months and a year should, they argued, be integrated into plans for transfer of assets of community value, to give communities a fair opportunity to bid. They saw social justice as a missing element in the localism agenda; an important omission as resources are decreasing overall, and some communities have greater ability than others to respond. The challenges of promoting local responses to a global problem: There are limits to what can be achieved on a purely local scale, and Transition Exeter believes that national Government leadership is essential for the achievement of sustainability and resilience. Between 30 and 50 people are involved in local working groups, and some 500 are on the mailing list. There are no paid workers: “It’s exhausting, and burn-out is a huge issue in the Transition movement. As long we depend on goodwill and spare time we can’t operate on the scale we’d like to.” St Sidwell’s Community Centre The Committee met: Dawn Rivers, Director and Jason McNamara, Centre Manager. St Sidwell’s Centre in Exeter was founded in 2001 as a Health Living Centre. When that funding stream came to an end in 2004 and it now operates on a wider basis, offering services such as

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inexpensive internet access, a cafe, and rooms that are hired by a wide range of community groups who run classes and activities or hold meetings. Areas of discussion included: The difficulty of defining ‘community’: The centre serves Exeter as a whole, and even farther afield, not least because it has a good reputation for working with black and minority ethnic groups. The community right on the centre’s doorstep is relatively deprived, and likely has unmet needs that the centre is assessing its ability to meet. The importance of community development work: Facilitation is necessary to help the community bridge the gap to the statutory sector. Cutting funding for community development workers would distance the community further from local government. The Localism Bill: Jason McNamara said, “We know there are opportunities in the Localism Bill— we just don’t know what they are yet. [...] A lot of what is being expected out of the Big Society, we’re already doing it.” He questioned some of the concepts in the Government’s policy, asking why an asset in the ownership of the council is not already deemed to be in community ownership. He argued that transfer to a community group could be one step down the road towards private ownership. Prospects for the immediate future: Financially, the centre is at a crossroads: without continuation funding this year, it might face closure. Funding streams are very hard to come by, and the centre is not eligible for the Transition Fund because it does not receive any core funding. They are concerned that the organisation does not have the knowledge or the skills to “talk commissioning language” and compete against organisations with a track record in winning contracts. Evidencing outcomes for commissioners is difficult; centres like this excel at low-level, early intervention work that contributes to community cohesion but tends not to attract funding. New Addington, Croydon The Committee met: staff and users of Fairchildes Children’s Centre and Extended Schools officers, staff and users of Croydon Adult Learning and Training (CALAT), Cllr George Ayres, Croydon Council, Cllr Tony Pearson, Croydon Council, Penny Ford, Director of Quality and Performance Improvement, NHS Croydon, Jo Gough, Head of Community Involvement, Croydon Voluntary Action, Peter Brown, Director of Housing Needs and Renewal, Croydon Council, Ken Sherwood, New Addington District Centre Manager, Marilyn Smithies, Neighbourhood Partnership Steering Group, representatives of New Addington Pathfinders and others. The Committee heard presentations from: Cllr Mike Fisher, Leader, Croydon Council, Jon Rouse, Chief Executive, Croydon Council, Dwynwen Stepien, Head of Early Years and Extended Services, Croydon Council, Ken Burgess, Central Parade Business Partnership, Tony Brooks, Director of Public Safety. New Addington is a well-defined community of around 10,000 people in the far south-east of the London borough of Croydon. Over half of the area falls into the 20% most deprived areas in England, and there has been a range of economic and community regeneration schemes in the area in recent years. The Committee was given tours of Fairchildes Children’s Centre by Centre Manager Cheryle Sutherland, and of CALAT (Croydon Adult Learning and Training) by Centre Manager Irene Tsav. CALAT houses the youth service, Connexions, a small library, primary care trust offices, a local childcare business, an IT room, and spaces for community hire. Croydon Council was an official Total Place pilot, and is also participating in the Community Budgets pilot programme. The Total Place project concerned children from conception to seven

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years of age; the Community Budgets project will focus on 772 families known to services as having multiple problems, and who would make a substantial demand on services if those problems were to escalate. Areas of discussion included: The Government’s reforms: Chief Executive Jon Rouse stated that “Many elements of the Localism Bill are helpful, but we were travelling in that direction anyway. The reality is that for those local authorities who don’t favour further devolution, they are unlikely to be forced into doing so by legislation.” How to square the circle between more responsive local service delivery and the need for more cost-effective shared services will be a significant challenge. The relationship with central government: Council Leader Cllr Mike Fisher said that Croydon will very enthusiastically embrace the drive for localism, but it would be helpful if there was a coherent and consistent message across Government; he interpreted the policies of DWP, for example, as distancing its services even further from local communities. The council welcomes the abolition of the Comprehensive Area Assessment, but considers that there is still too long a list of performance indicators for local government; even more of the guidance and regulations need to be removed. Cllr Fisher also argued that the frontloading of budget cuts would make it very difficult for Croydon to implement localism precisely as they would like. Local government finances: Mr Rouse commented that the review of local government resources must deliver a system that takes full account of local circumstances, for example the very high number of unaccompanied asylum seeking children in Croydon’s care. New fiscal incentives are welcomed by the council, such as the potential extra resources from the New Homes Bonus, and it is keen to take up Tax Increment Financing. Business rates retention would also be welcomed. The introduction of flexibility in social housing tenancy and housing allocation was described as “one of the most localist things the Government has done”; it will help the council address issues such as overcrowding and the ageing population. The council has used this new flexibility to remove the bottom two categories of their housing waiting list—cases that were unlikely ever to come to fruition but which carried a high administration cost. Neighbourhood planning: Mr Rouse argued that this is likely to be a more effective tool in places where there are organised and coherent communities—in other words, those who might need it less. Areas with very transient communities might have less capacity to use it as a tool. Although overcrowding is a persistent problem in Croydon, planning applications for new housing in some areas of the borough tend to meet stiff opposition. The council could seek to use neighbourhood planning in this scenario to give the community more influence over how development takes place. Choosing the right level for localised decision-making: Croydon is participating in two Local Enterprise Partnerships, one of which—Coast to Capital—crosses the former regional boundary. Mr Rouse said it had been “liberating” to form partnerships according to the geography they felt was most pertinent. However, achieving a critical mass of activity in the LEPs would be difficult if they only have current local authority resources at their disposal. At the same time, there was concern that some powers will be given to the Mayor of London rather than London boroughs, for example the ability to establish urban development corporations. The relationship between the state and the community: Mr Rouse commented that the boundaries between the state, businesses, the community and the voluntary sector are very blurred; for example, the manager of a Children’s Centre might be employed by the council, but is very much a community figure. Taking away the role of any one of these sectors would damage outcomes. The need for communities to be supported: The Central Parade Business Partnership has enabled local businesses to have a say in the decisions being made about the area. It was made possible by

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business development support from the council and funding for the district centre manager, which, except in New Addington, is now being cut as the funding stream is coming to an end: “The large companies can look after themselves, but we need support to keep going.” The council welcomed the idea of the community running services and assets, but scepticism was expressed about how many community groups will be able to do this and to compete against commercial providers in tendering processes. Cllr Fisher said that we could be setting people up to fail if adequate support is not put in place. Commenting on the proposals for a ‘Croydon Congress’ to replace the Local Strategic Partnership and provide a forum for community engagement, the chair of a New Addington community partnership said, “Are you asking me to do this for free? If you want to empower me, give me financial support.” Total Place and Community Budgets: Croydon Council’s definition of Total Place methodology is the integration of agencies and budgets around the user. The Committee heard about examples of innovative integrated working in the borough, including the Heavers Farm dementia centre, the Turnaround Centre for young people at risk of getting involved with the criminal justice system, and the Family Justice Centre, which houses the first specialist integrated domestic violence service in the UK. The council’s view is that “Community Budgets will drive localism”. Officers from the Extended Services and Early Years services described Total Place as being the research phase about integrated working, and Community Budgets the implementation. They described services as “ready to go” with integrated working—subject to funding being available. The reduction of ringfencing in local government funding makes it much easier for the council to commission according to local need. However, it is still difficult at the moment to pool resources; among the barriers are the restrictions on use of the Housing Revenue Account, and performance requirements for individual services. So far, HM Treasury has provided a menu of options for pooling funding for Community Budgets “to be determined locally”, but local managers have not been given authority within their own services to pool budgets. The council intends to request that Jobcentre Plus resources be made available for pooling. If the Community Budgets project saves money, the savings could be realised in NHS and police budgets rather than the budgets of the early years and families services which are leading the work. Working with Jobcentre Plus: The initial Neighbourhood Learning in Deprived Communities grant for CALAT was for joint use of the building by Jobcentre Plus and adult learning. However, while Jobcentre Plus does outreach work in the centre, it has never been based there as originally planned. The outreach work, moreover, is exclusively focused on lone parents; the centre manager commented that this national priority is not very relevant in this community, where most of the lone parents are not ‘work-ready’. Mr Rouse argued that regionalised worklessness programmes may turn out not to be a good model for being responsive to local circumstances.

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Formal Minutes Monday 16 May 2011 Members present: Mr Clive Betts, in the Chair Heidi Alexander Bob Blackman Simon Danczuk

George Hollingbery Mark Pawsey Steve Rotheram

Draft Report (Localism), proposed by the Chair, brought up and read. Ordered, That the Report be read a second time, paragraph by paragraph. Paragraphs 1 to 205 read and agreed to. Annex agreed to. Summary agreed to. Resolved, That the Report be the Third Report of the Committee to the House. Ordered, That the Chair make the Report to the House. Ordered, That embargoed copies of the Report be made available, in accordance with the provisions of Standing Order No. 134.

[Adjourned till Monday 23 May at 4.00 p.m.

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Witnesses Monday 1 November 2010

Page

Cllr Colin Barrow, Leader, Westminster City Council, Cllr Steve Reed, Leader, Lambeth Council and Cllr Richard Kemp, Leader, LGA Liberal Democrats

Ev 1

Monday 15 November 2010 Professor George Jones, Emeritus Professor of Government, London School of Economics, Professor John Stewart, Emeritus Professor of Local Government, University of Birmingham and Henry Peterson, Consultant

Ev 16

Andy Sawford, Chief Executive, Local Government Information Unit and Ed Cox, Director, ippr North

Ev 25

Monday 29 November 2010 Ben Kernighan, Deputy Chief Executive, National Council for Voluntary Organisations and Ralph Michell, Head of Policy, Association of Chief Executives of Voluntary Organisations

Ev 35

Matthew Pinner, Policy Adviser, Federation of Small Businesses, Tom Ironside, Director of Business and Regulation, British Retail Consortium and Edward Cooke, Executive Director, British Council of Shopping Centres

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Tuesday 7 December 2010 Lorraine Roberts, Interim Director, London Civic Forum, Stian Westlake, Executive Director of Policy and Research, NESTA, Sarah McAdam, Chief Executive, Commission for Rural Communities and Alison Seabrook, Chief Executive, Community Development Foundation

Ev 48

Monday 20 December 2010 Dr Rob Berkley, Director, The Runnymede Trust, Gemma Bradshaw, Policy Adviser, Communities and Transport, Age UK, David Congdon, Head of Policy and Campaigns, Mencap and Vic Rayner, Chief Executive, Sitra

Ev 63

Jessica Crowe, Executive Director, Centre for Public Scrutiny, Steve Freer, Chief Executive, CIPFA, John Kirkpatrick, Director of Studies (London), and Eugene Sullivan, Chief Executive, Audit Commission

Ev 69

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Monday 10 January 2011 Cllr Stephen Houghton CBE, Leader and Paul Thorpe, Members and Scrutiny Support Manager, Barnsley Council, Cllr Ben Adams, Lead Cabinet Member for Communities and Culture and Helen Riley, Director of Strategy and Transformation and Assistant Chief Executive, Staffordshire County Council

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Steve Evans, Director of Community Services and Robert Walsh, Head of Safer and Stronger Communities, South Gloucestershire Council, Cllr David Milsted, Leader of the Opposition (Liberal Democrat), North Dorset District Council and Mark Hebditch, Chair, Community Partnerships Executive North Dorset

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Dr Andrew Povey, Leader, Surrey County Council and Cllr Michael Green, Leader Lancashire County Council

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Monday 24 January 2011 Baroness Eaton DBE, DL, Chair, Local Government Association and Simon Parker, Director, New Local Government Network Rt Hon Nick Herbert MP, Minister of State for Policing and Criminal Justice, Home Office and Rt Hon Chris Grayling MP, Minister of State, Department for Work and Pensions

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Ev 105

Monday 14 February 2011 Paul Burstow MP, Minister of State, Department for Health

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Rt Hon Greg Clark MP, Minister of State for Decentralisation, Department for Communities and Local Government

Ev 123

List of printed written evidence Page

Age UK

Ev 198

Association of Chief Executives of Voluntary Organisations (ACEVO)

Ev 164

Audit Commission

Evs 218, 225

Barnsley Council

Ev 226

BCSC

Ev 172

British Retail Consortium (BRC)

EV 168

Centre for Public Scrutiny

Ev 210

Chartered Institute of Public Finance & Accountancy (CIPFA)

Ev 215

Commission for Rural Communities

Ev 184

Community Development Foundation

Ev 189

Department for Communities and Local Government

Ev 268

Federation of Small Businesses (FSB)

Ev 167

Institute for Public Policy Research North (ippr North)

Ev 155

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Emeritus Professor George Jones & Emeritus Professor John Stewart

Ev 138

Lancashire County Council

Ev 250

Local Government Association

Evs 252, 258, 260

Local Government Information Unit (LGiU)

Ev 150

London Civic Forum

Ev 175

Mencap

Ev 203

National Council for Voluntary Organisations (NCVO)

Ev 160

NESTA

Ev 182

New Local Government Network (NLGN)

Ev 261

North Dorset District Council

Ev 242

Henry Petersen

Ev 144

Runnymede Trust

Ev 195

Sitra

Ev 204

South Gloucestershire Council

Ev 236

Staffordshire County council

Ev 230

Surrey County Council

Ev 247

List of additional written evidence (published in Volume II on the Committee’s website www.parliament.uk/clgcom) 4Children

Ev w206

Action for Market Towns

Ev w48

Business Services Association

Ev w13

Cllr Rob Barnham, chairman of the Overview and Scrutiny Management Committee, Gloucestershire County Council Ev w3 Barratt Developments Plc Barton Willmore

Ev w234 Ev w25

Blackburn with Darwen Borough Council

Ev w179

Brethren’s Gospel Trusts Planning Group

Ev w263

Bristol City Council

Ev w165

British Humanist Association

Ev w138

British Property Federation

Ev w126

CBI Minerals Group

Ev w172

Centre for Public Service Partnerships

Ev w210

Michael Chang, Sri Hall, Sarah Jones, Sarah Marshall, Tammy Riordan and Burnetta Van stipriaan

Ev w43

Chartered Institute of Housing

Ev w142

Chief Fire Officers Association (Cfoa)

Ev w186

Professor Michael Chisholm, Professor Steve Leach and Dr Mark Roberts

Ev w21

Communiqué

Ev w70

Community Matters

Ev w177

Compact Voice

Ev w135

Cornwall Council

Ev w130

Cosgarne Hall

Ev w84

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County Councils Network

Ev w98

County Durham Partnership

Ev w112

Covanta Energy

Ev w175

Gender Identity Research Education Society (GIRES) James Derounian Devon County Council

Ev w56 Ev w254 Ev w6

Devon & Somerset Fire & Rescue

Ev w15

English Heritage

Ev w59

Essex County Council

Ev w156

Evangelical Alliance

Ev w210

Mark Fox, Director, Pegasus Planning Group

Ev w29

Freight on Rail

Ev w77

Gateshead Council

Ev w61

Cllr Andrew Gravells, Chairman of the Health, Community and Care

Ev w2

Institute of Revenues, Rating and Valuation

Ev w244

Institution of Civil Engineers

Ev w238

Irish Traveller Movement in Britain

Ev w45

Bryan S. Jezeph

Ev w36

Kent County Council

Ev w9

Khulisa and AOPM

Ev w40

Knowsley Borough Council

Ev w81

Law Society

Ev w129

Localis

Ev w259

Magistrates’ Association Mayor of London and London Assembly Merseytravel

Ev w20 Ev w223 Ev w4

Metropolitan Policy Authority

Ev w105

Mineral Products Association

Ev w150

National Association of Independent Schools and Non-Maintained Special Schools National Association of Local Councils National Housing Federation

Ev w16 Ev w260 Ev w18

NHS Confederation

Ev w123

North Dorset District Council

Ev w160

One North West

Ev w168

Oxfordshire County Council

Ev w90

Place for People

Ev w216

Planning & Development Association

Ev w255

Planning Officers Society

Ev w94

Plunkett Foundation

Ev w75

Princess Royal Trust for Carers and Crossroads Care

Ev w199

Public and Commercial Services Union

Ev w109

RenewableUK

Ev w201

Royal Institute of British Architects

Ev w71

Royal Institution of Chartered Surveyors (RICS)

Ev w251

Royal Town Planning institute

Ev w227

Localism

Dr Alister James Scott Sense, The National Deafblind and Rubella Association

105

Ev w224 Ev w1

Chief Fire Officers Association (Cfoa)

Ev w186

SHP

Ev w154

Streatley Parish Council

Ev w122

Sustainable Development Commission

Ev w114

Jackie Terry

Ev w18

Theatres Trust

Ev w73

Torbay Council Overview and Scrutiny Board

Ev w82

Town and Country Planning Association

Ev w52

UNISON

Ev w196

Voice4Change England and Urban Forum

Ev w219

Westminster City Council

Ev w67

Women’s Resource Centre

Ev w78

Woodland Trust

Ev w101

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List of Reports from the Committee during the current Parliament The reference number of the Government’s response to each Report is printed in brackets after the HC printing number.

Session 2010–11 First Special Report

Beyond Decent Homes: government response to the Committee’s Fourth Report of Session 2009–10

First Report

Local Authority Publications

Second Report

Abolition of Regional Spatial Strategies: a planning vacuum?

HC 746 HC 666 (HC 834) HC 517

Communities and Local Government Committee: Evidence Ev 1

Oral evidence Taken before the Communities and Local Government Committee on Monday 1 November 2010 Members present: Mr Clive Betts (Chair) Heidi Alexander Bob Blackman Clive Efford Mike Freer

George Freeman George Hollingbery James Morris ________________ Examination of Witnesses

Witnesses: Cllr Colin Barrow, Leader, Westminster City Council; Cllr Steve Reed, Leader, Lambeth Council; and Cllr Richard Kemp, Leader, LGA Liberal Democrats, gave evidence. Q1 Chair: Good afternoon. If we could make a start to the first evidence session the Committee’s taking into localism. I thank the three of you for your submissions, for coming along and for starting slightly earlier than we’d initially planned. That’s appreciated. For the sake of our records, could you just indicate your name and the organisation you’re here on behalf of? Richard Kemp: I’m Councillor Richard Kemp. I’m from Liverpool City Council and I lead the Liberal Democrat group at the Local Government Association. Colin Barrow: I’m Colin Barrow, the leader of Westminster Council. Steve Reed: I’m Steve Reed. I’m the leader of Lambeth Council and I’m the deputy leader of the Labour group at the LGA. Q2 Chair: Thank you very much. To begin with, could you crystallise for us the essence of what you believe localism to be and whether you think that your definition has some differences or contradictions with those of your colleagues who are here today? Richard Kemp: Localism is involving people, wherever possible, in the decisions that affect their life, and devolving to officers, members and civil society—that’s probably the easiest way to describe it—power to make those decisions at the lowest possible level, so we meet the real needs of local communities and individuals, not the perceived needs of people in Whitehall and town halls. Colin Barrow: That’s eloquent. I think we all believe that decisions should be taken as close to the people who are affected by them as possible. A localist is somebody who believes that that principle trumps the fear of a postcode lottery. Steve Reed: I don’t disagree with much of that. I’d add to it that I think we’re looking at equalising the power relationship between the citizen and the state, or between pubic services and the people who use public services, so that citizens are able to become active shapers, rather than just passive recipients, of services. Localism is about putting in place the mechanisms that allow that transfer of power to happen and have meaning in terms of the services that people receive.

Q3 Chair: Are there any differences between you? Richard Kemp: The differences are probably less between us, who believe in localism, and people in our parties, in either local government or central government, who don’t. Colin Barrow: I agree with that. I think there are many people who believe in localism some days of the week and not on others. Those who call for oversight of local government performance, for accountability and so on and so forth, having local government account to the centre, presumably following a uniform set of standards that has been appropriately worked out—those people are the enemies of localism. I’m not saying that they’re not doing the right thing; I’m just saying it doesn’t tend to localism if you have a uniform set of standards, set at the centre, to which we must pay heed. Steve Reed: I guess the reason we’ve been asked here to speak on localism is that, within each of our parties, we are seen as people who are promoting that agenda. If you’d invited different people, you would have got a different view. I think it’s fair to say that, within the parties, there are people who advocate and are pursuing this agenda, and others who pursue different agendas. I guess over time within local government, because we have a lot of places doing slightly different things, we’ll see what works and what doesn’t work. I think there are some differences between what the Government says and what the Government does on localism. Q4 George Hollingbery: There seems to me to be a potential tension between what you would describe as “extreme localism”, where there are no duties proposed for councils at all—they can do what they like, as they like for their areas and judge what is necessary—and I guess the most centralising form of localism, where the Government has broad outcomes it wishes and makes those very plainly known. It is then your job to deliver them as you see fit for your areas. Where do you sit on the spectrum? Colin Barrow: There are different solutions for different areas. For example, I can see that child protection is probably one where instructions from central Government would be paramount. Policing, equally a matter of applying the law, is probably one

Ev 2 Communities and Local Government Committee: Evidence

1 November 2010 Cllr Colin Barrow, Cllr Steve Reed, Cllr Richard Kemp

where local considerations would be given more weight. I can see that with things like family recovery, which is our programme, which we have spoken about, about unifying public services around a particular family, local discretion is really important. I think what we need is not something that’s absolutely localist or absolutely centralist, and I don’t think any of us would be “ists” of either of those things. You have to think in terms of making public policy about which tools to leave at the disposal of local government and which tools to keep at the centre, in order to get the right answer for public policy. Steve Reed: I think that’s right. Localism shouldn’t mean the absence of local government. Local government will have a continuing and very important role within this, because local government is the tier of government closest to our communities and therefore understands the different makeup of our different communities, and therefore is best able to work with those communities to allow them to achieve the outcomes they wish to achieve. We’ve been running a commission in Lambeth—it’s just drawing to a close now—on turning our council into what we call a cooperative council, so working more closely with communities to achieve that rebalancing of power that I was talking about. One of the issues that’s coming through is what kind of capacity and support communities need to allow citizens to participate, regardless of their starting point. You don’t want services to be captured by one sectional interest that may then try to exclude other interests, for instance, middle class capture or one faith or ethnic group that meant they may try to exclude other groups. You need to understand what capacity or support communities need. You need to have reserve powers in place to intervene if things go wrong or if that kind of service capture happens. I think you need to have an element of clear democratic accountability within the equation, and elected councillors, rooted in their communities, offer that. Richard Kemp: It also depends on which part of a service you’re talking about. In the document that we wrote, we give five levels in which a conurbation is effectively governed. If we just take the police, for some things, such as dealing with serious crime and dealing with drug trafficking, you need a regional presence; you need big forces working together. That needs one type of governance. When you talk about the problems of parking, antisocial behaviour, liquor licences in my ward, I want to talk either to my PCSO or the inspector if they’re going to the committee. I don’t think it’s as easy in most cases to say, “Health goes one way; police goes the other”. It’s which particular service you’re dealing with at the time. We would assume that the key word is “appropriate”. What is the appropriate level at which you can maximise engagement and maximise local knowledge? That will depend on which particular branch of the service you’re trying to deal with. Q5 James Morris: Councillor Reed, I think you said that sometimes there’s a mismatch between localist rhetoric and what the Government means by it, or what they end up delivering. Were you reflecting on

recent experience or the experience of the last 10–15 years, in terms of the mismatch between rhetoric and reality, and what we can perhaps learn from that experience? Steve Reed: I think it’s fair to say that, under both the present Government and the previous Government, it hasn’t entirely happened. There’s a lot more talk of it now that I see. The Big Society implies that there’s going to be a lot more devolving of power down to local communities, but quite often they seem to be wanting to bypass local government and seeing it as just an obstacle. Some of local government is an obstacle, but local government at its best and most engaged can be one of those tools that enable communities to do the things they want to do. Simply bypassing it could have the impact of pulling the rug from under our communities and leaving them to sink or swim, rather than giving them the appropriate level of support that they will need to participate. For instance, the Spending Review we have at the moment, which is hugely frontloading the reduction in funding to local government, I think restricts and reduces our ability to transform services in a way that could empower communities in that way and will, instead, push us towards simply closing services down and creating a space into which something else will come. I suspect that something else would be more likely to be the market than the community, because the market is in a better position straight away to come in with different offers. Q6 James Morris: You see local government as being the prime mover of this whole agenda. You see that local government should be sitting right at the centre of this. Steve Reed: I see local government as being a key partner for the community in achieving what they want to achieve. At its centre must be the community, not local government. Much of government is things that are done to people, rather than things that people can control. We’ve seen falling levels of confidence in public services like the police and the Health Service, despite improvements, as assessed externally, and significant investment. There’s clearly a mismatch between what people perceive and what the Government believes is going on. Part of that is that we do things to people and communities rather than empowering our communities and citizens to make their own choices about the kind of services that they receive. In all of the rest of our citizens’ lives, they experience choice now and, in public services, too frequently they do not. If we get that right, we can change the perception, but that is about giving the communities and service users the tools they need to participate in shaping them, and local government has a role to play there. Q7 George Freeman: To move from the philosophic to the practical, it’s invaluable having three experienced councillors who’ve led within authorities, I’d invite you to share with us, because this isn’t a new idea, specific examples, possibly of the best one from your own experience, of localism in action, of councils making things happen and, alongside that, how you would see in your own authority this agenda

Communities and Local Government Committee: Evidence Ev 3

1 November 2010 Cllr Colin Barrow, Cllr Steve Reed, Cllr Richard Kemp

playing out in the next two or three years. What would you assume—and you’re free to do it in your own way—and what you would like to see going forward in terms of applying those lessons of best practice? Richard Kemp: The thing I was most proud of in Liverpool was a programme called Include, where the council looked at the problems of Liverpool 8 or Toxteth, as you might know it, and said, “We can’t deal with them all but there’s someone who can.” We invited a local housing association, which owns something like half the housing stock there, to be our agents in developing new responses, new engagement techniques, a whole range of new activities, to pull together the public sector. It’s often a myth when you say, “There’s not much money available.” Actually, there’s often lots of money, but it’s in 57 different pockets with 57 different mission statements, that are often competing. Now, in Liverpool’s context, although there’s been a change of control, that has been built on by the new Labour-controlled council, and they’ve set up a coalition of the willing in north Liverpool in three of the most deprived wards in the community. They’re doing a thorough mapping exercise of everything that gets spent, everyone who works there. What outputs, what outcomes, are required? The older hands among you will say, “Wasn’t that what the National Strategy for Neighbourhood Renewal was all about?” And I say, “Yes”. In Liverpool, we thought that was a really good programme. We’re still doing it. It’s a pity the Government stopped after five years. Q8 George Freeman: If I’ve understood you correctly, the gist of that best practice is inter-agency working around the sense of Total Place. It’s about getting the agencies together and saying, “What does this place need?” That can go on without the residents in that area. Richard Kemp: No, because it’s only by doing it at that level that you can effectively involve residents. Most residents are more intelligent than the rest of us; they don’t want to spend their evenings in church halls or going to meetings. They’d rather lead their lives. If you say to them, “What about your street, your schools, your shopping centre?”, they want to be involved in that. If you create a decision-making process for councillors and staff from all the agencies, then they can effectively interact with the local communities and the local communities, more importantly, can interact with them, but they don’t want to be involved in the local development framework for the city. They do want to say what their shopping centre should look like, and it’s our job to knit them together. Colin Barrow: I’ve never answered a question as put. I’m going to answer the question twice, in two different ways. One is that we gave £2 million to all our councillors, not individually but collectively. We split it up by ward and we gave them £100,000 to spend in each ward, to be agreed between the three councillors and with certain oversight from the centre about doing it legally. They could pretty much get whatever they wanted. They could get a park bench. What that did was force councillors to do what only some councillors do, which is actually talk to their

residents with the cheque in hand, saying, “I could do this directly now, this afternoon. Shall I do it or not?” What councillors often do is represent the position of residents to other people and hope that they get the right outcome. In this case, they had direct power and that power immediately transmits itself to the people they’re talking to, and a very helpful dynamic sets itself up and rolls out. It connects the councillors; it connects some residents. It doesn’t connect all residents. It’s a bit imperfect but it’s better than the alternative, which is to retire to city hall and throw a service at a resident. On the subject of Working Neighbourhoods funding, we have some very poor parts of Westminster, and we put in whole processes to create neighbourhood-driven renewal. They turned out to be pretty expensive and, when the money ran out or stopped, we were still stuck with these structures and, in thinking about the Big Society, we came to the conclusion that, actually, we could make a big step here. I took one of the participants in this programme and said, “Couldn’t we redesign the services around what you might want?” She was a volunteer; she still is a volunteer, very experienced in all the ways of the public service. She said, “It’s jolly nice to go to the office that you’ve set up to administer this Working Neighbourhoods funding and actually talk to the girls in the office, do the photocopying and do all the things that we do. You can’t stop that office.” I said, “No, what I’d really like to do is to give you £1,000 to do the photocopying. I’d like to send you down to Kall Kwick, and I’d like to pay for the coffee that you provide for your neighbours to come and do this with you. I’d like to spend some of the change on buying policemen, and filling in potholes and doing those things that you ask of me.” She goes, “Okay, that’s fine then.” The office was costing £500,000 a year, which should have been spent on services that should have been commissioned by volunteers. They only need a little bit of support to get them to do that job, and then the rest will follow. Steve Reed: I’ll give you a slightly different model around youth services. The reason I think it’s important we find a different way to deliver youth services is that those services are discretionary, not mandatory. The last time we had cuts on the scale we’re about to see, in the 1980s, youth services were decimated. Some period after that, we reaped the whirlwind, with higher levels of disaffected young people, higher levels of youth offending and higher levels of violent crime, particularly in poor urban areas, so we need to find a different way to deliver youth services to protect them. We had a programme running on an estate in Brixton called the X-it Programme. That’s a very poor community. Something like 70% of people who live there would be workless. There are very high levels of youth offending. I would say the majority of young people living on that estate would be involved in gangs one way or another, and the most violent of those gangs would be involved in very serious levels of offending, including knives and guns. A lot of people on that estate would know somebody who had been shot or seriously hurt, for instance. Therefore

Ev 4 Communities and Local Government Committee: Evidence

1 November 2010 Cllr Colin Barrow, Cllr Steve Reed, Cllr Richard Kemp

there was a desperate need to tackle the high levels of gang activity. The programme we ran there, the X-it Programme, worked as a partnership between the council, the police and the community, where older young people, who had previously been offenders, were trained to act as mentors to their younger brothers and sisters and people living on the estate who were starting to offend. By helping to set up and divert them to a range of other activities and programmes, where they could experience success or develop healthy interests, sometimes for the first time in their lives, we were able to reduce re-offending by young people by 72%, which was the highest level of any programme of its kind anywhere in the country. The key to it was the fact that it was designed and delivered by people in the community, who had greater credibility and reach into the parts of that community which needed to be got, in order to be diverted away from the ruinous course that they were taking. I say “ruinous”, both personally and in terms of what it was doing to their estate. At a second and related group, who I met very recently on another estate in north Brixton, I met a woman called Mimi Asher, who was the mother of a teenage boy who had started to get involved in a gang. They knew somebody from the estate who had been killed as a teenage boy. She was terrified, naturally, about the prospects for her child getting involved. She, working with other members of the community, particularly parents but not only parents, also a faith group and to an extent a local youth club, set up a range of activities on the estate, including a football team, cookery lessons, dance lessons, food sharing, talking to local shops to get them a bit of work experience, talking to a local college to get information locally about the courses available. Over the course of three years, those people got 60 young people out of gangs and got their lives back on track. I don’t know if you remember but, three years ago, on the front of the Sun, there was a teenage boy holding a machinegun. That boy is now positively engaged in this group and goes around the estate finding other young people and getting them out of trouble, rather than putting them into trouble. What I’m interested in is that we learn some important lessons from that. Councils generally in urban areas will spend several hundred thousand pounds targeting young people who become involved in violent youth crime of that kind. Mimi Asher and her group, with only one grant of £15,000, got the same number of kids out of offending as the council does. Could we use community-led commissioning to put the resources, both the money and the professionals available to the council, to put them at the disposal of the community, so that they can take decisions for themselves about what activities they need to provide to prevent youth offending. Chair: We have to go and vote, so we will back in 15 minutes at the latest. Sitting suspended for a Division in the House. On resuming— Chair: I understand we have some time constraints on when we finish so, without wanting to curtail discussion, reasonable conciseness in both questioning and answers will probably get us through the wide

range of subjects we want to try to talk about. I think you wanted to pick up on something that was said earlier, Mike. Q9 Mike Freer: It’s just a very quick one. The example of localism was fantastic, but it was based on a presumption of a well funded council having £2 million to pump prime Big Society. With a 28% cut in grant, how are you going to be able to pump prime citizenship without simply creating the vacuum that Steve mentioned that the market would simply fill, rather than citizens? Colin Barrow: It’s an unpleasant truth, but I think what we have to do is to move, in some cases, from provision by local government officers to provision by citizens commissioning services. Local government officers commission services upwards on behalf of communities. If we were to save some of those front-line people, who are working in communities doing this community development work, and replace them with volunteers and councillors and do it that way, we would spend a good deal less money. You might argue it would be less good, and that’s an open question, but some might argue it’s better. It is an open question, but it would certainly be cheaper. Steve Reed: I think “volunteering” is slightly the wrong word for me. This is more about participation. The word “volunteering” implies somebody’s doing it in their spare time, whereas “participation” makes it much more integral to how the service is developed. In the example I was giving before the Division bells went off, I was trying to explain how that community group delivered, for a fraction of the sum of the council’s own service, better outcomes. If we can place more of our resources at the disposal of communities in that way and appropriately support the communities to be able to analyse their needs and then procure for them, you will get value-for-money savings. It will differ from service area to service area, and place to place, because the level of capacity will differ, but you will see that happen. Q10 Bob Blackman: Moving along to look at the role that local authority plays in this whole localist agenda, traditionally local government is a delivery arm of central Government for a lot of the services delivered. How do you think the localism agenda is going to change that relationship, if at all? Richard Kemp: I think it will make it fundamentally different. First of all, it hasn’t always been that way. I first became a councillor in 1975, and then we ran all the housing; we ran all higher education. I’m not saying that’s a good idea and I want to go back to it, but the fact is that Liverpool City Council was a mini-parliament. I think the most important thing is that central Government has to let go. Perhaps you could play a part in that. Every time a Minister answers a question from an MP about street cleaning and so and so, you weaken localism, because that MP should be raising the question with the leader of the council or through the local councillor. Central Government has to become much better at setting a range of outcomes that it wants, and making sure that its own delivery arms, and there will always be some delivery arms of central Government, are empowered

Communities and Local Government Committee: Evidence Ev 5

1 November 2010 Cllr Colin Barrow, Cllr Steve Reed, Cllr Richard Kemp

to work at the lowest possible level with us to make sure that those outcomes are delivered with projects and programmes and partnerships that are relevant, not what some Whitehall warrior thinks are relevant. Colin Barrow: I would agree with 90% of that. If we are to be a delivery arm of central Government, then install civil servants to do the job. You don’t need us. We’re messy; we’re complicated; we’re political. You don’t need us. If you want delivery agents, hire them, because they are more effective. If you want local democracy, you have to do something different. You have to find the discretion, and then we’ll go and play in that space and respond to local need. That’s why you want the messy nonsense of local democracy. Steve Reed: I think you should look at what is termed ‘postcode lottery’ as ‘postcode opportunity’. This urge to try to make uniform everything everywhere prevents localism from happening. You need to carry a high level of risk within localism because, if you want to find out new ways of doing things that will work, you have to allow for new ways of doing things that will fail. As long as the failure isn’t repeated but is learned from, you’re creating by managing risk differently a broader space for innovation, and innovation is what we need if we are going to make resources work better for the communities that use them. Q11 Bob Blackman: What are the risks associated with local authorities being bypassed down to community organisations directly by central Government? Richard Kemp: A massive waste of money. A place like Liverpool has to function as a city for some things, as districts for some, and as neighbourhoods for others. If you simply had a whole series of people in the neighbourhoods they want to talk about, competing for resources without strategy, without direction, you would be chucking money away, in my opinion, and you wouldn’t be giving people the service they want. Because a whole series of services that you or I might think are vital wouldn’t feature at all. One of the most important things I do as a councillor is to be a corporate parent to children in care. I don’t think in 30 years as a councillor anyone’s asked me how well I perform that service. Some services just aren’t in public understanding, and would drop out and have their resources cut. Q12 Bob Blackman: Could I move that on a bit further? Steve, you’ve mentioned moving things down to community-based organisations. Clearly there’s a risk over probity, accountability and making sure there’s efficiency and all the rest of the great things we’ve talked about for local government for years. Do you see risks in that? Steve Reed: I think there are risks in doing it and risks in not doing it. The example I gave you was about violent gang activity on estates, and we have had primarily the state or public services locally trying to find ways to prevent that, and it clearly hasn’t worked, because the incidence of that kind of activity is increasing and not decreasing. What you really need is a partnership between the public services and the community that equalises power more. It’s not taking

the public services away and it’s not disempowering the community. It’s trying to get the two to work together. There are risks of the kind that you described, and I think we all need to be clear about, if we are handing more power and control to local communities and local services, what reserve powers we need for appropriate intervention and at what point. How will the contracting happen? There will need to be covenants around some of the contracting that enables communities to take control of assets or run services so that, if things go wrong, if groups are excluded, if services are failing, we can still intervene. I think if you allow for that to happen, you create the space for innovation. Innovation doesn’t happen without allowing for some risk and, I would say, higher levels of risk than we currently carry. Colin Barrow: Open control is not risk-free either. Giving £7,000 to a dance troupe and requiring them to have a hard rules policy, a health and safety policy, a community engagement policy, this, that and the other, and report on the same matters, will cost that group the very precious voluntary hours— it’s not going to cost any money—in complying with all of that. It doesn’t advance their dance one bit. It makes us feel better. Secondly, when we were spending some ward budget money, we wanted to buy a playground. We would go to the sports department, which says, “Ah yes, step into my office. That will be 30 grand. The people locally said, “Are you kidding? We must be able to get it cheaper than that.” They go off, fiddle about and try to work something out. Sure enough, it comes back and is delivered to spec and to time for £10,000. Now, where’s the waste of public money— the control or the freedom? Steve Reed: We sometimes spend more monitoring groups than the grant funding that they receive. Q13 George Hollingbery: It’s actually a development of where we’ve been. I’ve been a councillor for far too long frankly, for 11 years, and I think I know what backbench councillors can do, I know what some of them can’t do and I think I know what they’re doing in five years’ time if this agenda goes through, but I’m interested to know what you think they’re doing. In a world where we’re pushing services downwards, I’d quite like to know what you think you’re doing in five years’ time, what the whole shape of this looks like. Richard Kemp: We’ve written a book about it called Cabinet Member for your Ward, which is actually designed for Lib Dems, but actually should be good for any councillor. We’ve left some copies with your clerk. We’re thinking of doing one called Cabinet Member for your Constituency, because there are lessons here for Members of Parliament. Basically what we’re saying is that traditionally councillors would go to the town hall, they’d go to the committee. They would raise questions, send emails, write letters. We’re asking them to be local community leaders in a much more refined way. If there’s a problem with antisocial behaviour in my ward, yes, of course there are some things in which I’d raise the issue higher. But the first thing I’d do is get together in my front room the local police sergeant, the youth officer, the parks officer, the person from the school—whoever

Ev 6 Communities and Local Government Committee: Evidence

1 November 2010 Cllr Colin Barrow, Cllr Steve Reed, Cllr Richard Kemp

is relevant to solving that problem. We’ve all been empowered to get on with delivering it, and so we become proactive in our community in a very different way. Some councillors have always done that. Many haven’t, so it’s a question of bringing people up to that level. Localism means that you can’t just do things at the town hall, so that means we have to get involved and show community leadership at a lower level.

enablers to link communities in to the support systems they need and also, to some extent, to link the different groups in communities up together. Over time, you develop a different set of competencies that councils will need in order to facilitate the community doing the things it needs, and to facilitate them accessing the resources they need to access to make it happen.

Q14 George Hollingbery: Steve came up with a lot of great examples about the fantastic things happening in Lambeth, but they were nearly all fantastic because local people had sorted them out, not the councillor. Steve Reed: No, partnership. Clive Efford: Can you just explain more of that to me? Steve Reed: Yes. It doesn’t work if the community is simply left to do it on its own. It’s too exhausting for the community. The model I was giving you, I’ll stick with that one since we already started on it. The work that was happening in both of those cases was because there were people who were very worried, scared, about the impact for their young people, their children, getting involved in gangs. They wanted to participate and do things to prevent that happening. Now, when they were left to their own devices to do it the impact was not as big as it became when the council partnered them and put more resources at their disposal, so they had more things to call on. If you went to visit them and speak to them, they would say, “Why do you have all of these detached youth workers over there, doing those things, when we know that this kind of activity works?” We’re trying to find ways to give them more control over those detached youth workers, so that what they’re doing lines up with the community’s own understanding of its own needs. You could leave the community to do it itself, and just take the council’s youth services away, but that’s like pulling the rug from underneath them, because there aren’t always going to be enough people with the appropriate skills to do all the things that need doing, but they will profoundly understand what needs to happen in the place where they live, because they live there and they see their children getting involved in these kind of gangs. What we’re talking about here is a partnership, not de-professionalising.

Q16 George Hollingbery: Colin, what does the leadership do? Colin Barrow: I must say, I find it very difficult to generalise about councillors in my own authority, let alone councillors up and down the country. I think that the ward chooses the councillors it wants. Those people are successful or not over time, depending on their ability to respond to local needs. Equally, those people choose the leaders they want, and those people are successful or not over time, depending on their ability to do the whole-area bit, which I don’t want to repeat, which we were talking about earlier on. Hopefully, those of us who get into the centre of what the council does bring something strategic, in terms of marshalling that sort of localism for the city or area as a whole. Hopefully, the local councillor brings something local. They are very different from one another, and I don’t think either is an endangered species, because they’re both volunteers and, after all, that is what we’re trying to help.

Q15 George Hollingbery: I’m slightly confused about where the councillors are sitting in this though. It seems to me like there’s going to be a lot of extra work for councillors. Are you going to get better councillors? Are you going to get worse councillors? Steve Reed: That’s not necessarily councillors. The question you asked is what we would become, what would councils become. If you pursue this model all the way through, the council becomes a big set of tools that supports the community doing the things it needs to do. There will be platforms; there will be compliance that groups need to meet to meet legal requirements, procurement rules that need to be gone through. Recruitment support potentially needs to be given, and IT platforms that they could link into. If you turn the council into platforms of that type, which you want communities to link into, then we need people who are more community facilitators and

Q17 George Freeman: I’m very interested in your answers to the last two or three questions, because there seems to be a tension between, on the one hand, a localism which is a sort of benign local government interventionalism—“This neighbourhood has a problem. We need to put together a partnership”—and the other approach, which is: “We send a message out that what we are a tool box, and we’re here for communities to reach out and use us to make things happen.” It seems to me they are quite different models. They can coexist possibly, but I’m intrigued by the latter and the extent to which you send the message out that the old way of doing things, where you waited for your good local councillor, possibly all too rare, to hold a community meeting and make it happen. Those days are passing, and now it is “We want you, the community, to go out and hold those meetings. When you contact us, you’ll find those resources there. You’ll find those devolved budgets.” Is that what you want to see more of, you intend to do more of, under this model? Richard Kemp: I love to think that lots and lots of people want to get involved in lots and lots of things, and many of them do. My guesstimate is that about 5% of the population regularly volunteer. They do all sorts of things within the community, but they don’t want to serve on a committee. They don’t necessarily want to take responsibility; they want to do. Empowerment isn’t just serving on a committee. Empowerment is saying, “I have a problem. I know who to go to and those people will respond to that, or they’ll explain why.” I’d love to think that there will be lots of people on committees but, actually, we know just from school governors, for example, there are very few schools that have elections for school

Communities and Local Government Committee: Evidence Ev 7

1 November 2010 Cllr Colin Barrow, Cllr Steve Reed, Cllr Richard Kemp

governors. More people have elections for the chair of the parent/teacher association than the school governing body. A lot more people want to be involved in that practical, get-on-with-things activity than be a committee and take responsibility. Steve Reed: I will try to be quick. Can I give you a couple of examples? I think the key to this is participation: why people would participate and what they expect when they participate. Two examples: we run a scheme called Community Freshview, which is about clearing up derelict spaces and land in a particular street or on an estate. It’s too expensive for the council to come in and do it itself. Also, it’s not a sustainable solution because what was derelict and then is flattened soon becomes derelict again, because people come back and dump on it. What we do now is ask communities to clear it up for themselves but with support that we will give them. I went on Saturday to a pretty rundown playground on a street in Tulse Hill in Lambeth, and the community was there, painting it, building new things for the kids to play on, changing some of the slabs, but they had with them community payback offenders and people from the council’s Street Care service to make sure they had the tools. There was a load of skips; they had brought spades, forks, fertiliser and plants. The community did it for themselves. In that case, it was a one-off. They all came out one sunny Saturday afternoon and they cleared it up, sorted it out, but they all now look after it because they feel a sense of ownership over that space, which previously they didn’t have. The community gets a better facility as a result. That is a one-off instance. We also have in Lambeth the country’s only parent-promoted secondary school. That was a model that was enabled by the Education Act of 2000, which set up academies. No other borough took it up, because you had a significant funding disadvantage if you followed it. The way that it worked is a group of parents got together, wanting a new school for their children, because there wasn’t one in the local area that they wanted to send them to. They set up the Parent Promoter Foundation in partnership and with support from the council. They then led a consultation in the local community. They helped appoint the governing body. They helped appoint the headteacher. They agreed the ethos. They agreed the physical design for the school, and built such credibility for the school that, despite not existing at the point where parents wanted to apply for which school they wanted their primary school children to go on to, it was already one of the most popular schools in the borough, because of the level of support that level of parental involvement had brought. You all know that high levels of parental involvement in schools are a significant determinant of the success of that school and its standards. That was a much more extended type of involvement; it wasn’t just one sunny Saturday afternoon. This took several years, and many of them are still intimately involved in that way. Participation is based on reciprocity, what you get out of it. It’s not just altruism; it’s because you perceive a need and, because that need directly affects you, your family or your household, you will get involved in finding the

solution, because it matters to you that much. Those parents didn’t become involved in a Parent Promoter Foundation because they fancied doing a bit of volunteering. They did it because they cared passionately about the education of their children, and they feared there wasn’t a good enough place for their children to go and they wanted to be part of that solution. The council offered them the resources they needed to meet that problem. Q18 Heidi Alexander: Richard touched on this, when you spoke about the political culture that exists and the fact that every time that an MP asks a question of a Minister about street cleaning, we take something away from localism. I just wondered, as a new Member of Parliament who sits in their surgery and probably has half the people coming to see them about housing cases, the need for rehousing, to what extent do you think the political culture in this country needs to change in order for the public to embrace localism and what you as local authorities can do to start changing that political culture? Richard Kemp: As a councillor, I’m always delighted when people go to the Member of Parliament’s surgeries, because it makes my life a lot easier. I come back to when I first became a councillor. People would come to us and we could make decisions. They might not like those decisions, but they know we made those decisions. People stopped coming, because we can’t. I’ll give you two very simple areas: licensing and planning, which I hope will be dealt with in the decentralisation and localism Bill. Half of my case work in my ward is planning and licensing around one particular street. We will have a petition; we’ll go to the planning committee, which will say, “You’re absolutely right. We don’t want to pass this,” but they then pass it because they know that the Planning Inspectorate will make a decision. People say, “It’s your bloody committee. Why don’t you make these decisions?” and then they stop coming, and they stop coming for everything. The only way you can get involvement back at the local level is to make us visibly responsible, and then we have to account. At the moment, I can say, “Don’t blame me; it’s those people in Bristol. It’s the Government.” If you take away and really become localists, I have nowhere to hide, so people can vote me out on my merits. Colin Barrow: We could do a lot by diminishing the notion of partnership, which is the confusion of responsibility for outcomes. The concept of partnership has muddied the waters of public administration, and I think it would be much clearer if we said, “The Government does this. The local council does that.” They have complete discretion as to what they do in doing that but, if we want to take responsibility for it by guidance and so on and so forth, we take it back to the centre and we make up our mind what sort of arrangements we want. Then we can create a partnership locally between individuals who sit in a room, as Steve has eloquently described—or somebody’s front room, if you will. They say, “You’re going to do that, and you’ll come back to me next week. You’re going to do that, and you’ll come back to me.” That’s partnership, but the

Ev 8 Communities and Local Government Committee: Evidence

1 November 2010 Cllr Colin Barrow, Cllr Steve Reed, Cllr Richard Kemp

sort of partnership that involves a lot of people sitting in committee rooms, passing the blame around and suggesting they coordinate something from somewhere, blah, blah, blah, fishcakes, doesn’t work. Q19 Chair: Isn’t it that some of these things are black and white? Things are either at the centre, and central government does it and says, “Right, we going to give the guidance, that’s it,” or it gives complete responsibility. Are there no services where a halfway position might be more appropriate? Colin Barrow: The more we can put into very clear boxes the better people will understand what’s going on in their name. There will be some things that have to be done jointly. For example, if I’m going to try to get the Department for Work and Pensions to do the right thing with benefits in my area for some reason, I have to do that with their consent, and so we have to do that together. That’s something that’s helpful. Although it muddies the water a little bit, they can at least see what we’re arguing for, because we’ll make it clear, because we’ll lobby them for it. That’s not the sort of thing that I think responds to your question. How can you make clear who’s responsible for what? If you make a decision, you’re accountable for it. You gave approval for that 99-storey building in the centre of town and that’s down to you. Back me or sack me. Steve Reed: Colin makes a very important point there. Housing benefit is a good example. You have all of these different services like Jobcentre Plus, housing benefit and housing policy all doing slightly different things and going slightly different places. We’re working up a model that we’ll call “contract for place” that we can come back to Ministers with, which would allow us, within the outcomes that the Government wishes to achieve, to have more influence over those other public services in our locality, so that we can guide them, direct them, towards meeting the local priorities that we may have. That is a very important point you make. Your point, Heidi, was about the political culture. I think it makes no sense to say you want localism, and then for the Secretary of State for Communities to say you must stick with the weekly waste collection, for instance. What if we want to go to community budgeting, and a particular community would rather have fortnightly waste collection in order to spend some of that money on some other service that is more important to them? That might be youth services; it might be filling in potholes because the roads are substandard. Why is the Secretary of State telling that community they can’t do it, if they want to do it? That kind of knee-jerk making of pronouncements on TV, off-the-cuff, is very unhelpful towards achieving a localism agenda. The other point I wanted to make is that we need to allow more innovation and that means a different approach when things go wrong. We shouldn’t see things going wrong as a problem, unless it is repeated, because that shows a failure to learn. If something goes wrong, for most organisations, that is a very good way to learn how to do it better in the future. All of us as politicians, locally and nationally, have a tendency to jump on error, particularly when it is committed by our political opponents, in a way that

prevents the people who work for us—council officers, civil servants—from wanting to experiment or innovate for fear that it might go wrong. By stifling innovation in that way, we fail to find new ways to deliver better services more efficiently. Q20 Heidi Alexander: What do you think your role is in tackling the fear of the public about postcode lotteries? Steve’s example earlier was a great example—clearly a very driven community-minded person has made something happen. To what extent is that replicable and what happens when there isn’t that driven community activist in that area? What happens then? I just worry about the dependence on those initiatives coming from the bottom up and not having the more universal vision. Steve Reed: That is a very good point. A point I made earlier is that, in order to make this work, we need to understand what capacity and support different communities need to participate in shaping those services that matter most to them. Some communities will have more capacity than others. I don’t mean by that just articulate middle classes versus poorer communities. There is an awful lot of capacity in poorer communities too, although less experience of shaping large organisations to do the things they want. That capacity issue is there, and that’s a role local government can continue to play to help build that capacity. Your point about replicability is important as well, because local government has a tendency to try to scale up everything that it sees working in one community. It thinks, “If it works there, excellent; we’ll turn it into a universal council service, we’ll build this huge edifice and we’ll deliver it everywhere because, look, it works.” That very often kills it, because we don’t understand properly the difference between scalability and replicability. What we can do is take learning in one place and use that to show other communities how it might work, and allow them to adapt it to suit their own local needs. There’s a very important difference there: we mustn’t always seek to scale; we must sometimes seek to spread and share learning. Colin Barrow: We must celebrate when it works and not worry about that. The idea of, “How did they get away with it, they have a brand spanking new parent-led school, so we must stop that, because otherwise everybody will want one,” is a pity, because that’s a thing to celebrate and broadcast from the rooftops. Then other people will say, “We’ll have one of those as well. How do we get one of those?” You put in place the same informal incentives. You say, “Yes, we’re up for that sort of thing. If you’re prepared to get yourselves organised, we’ll be backing you. We’re behind you. We’re behind people who are trying to do the right thing,” and that’s what’s so terribly important. Historically, we haven’t been. We’ve tended to knock down the tall poppies and we should be saying “No, no, that’s fine. If the school’s important to you, that’s cool. If licensing policy is important for you, that’s cool. I don’t care. Just get engaged.”

Communities and Local Government Committee: Evidence Ev 9

1 November 2010 Cllr Colin Barrow, Cllr Steve Reed, Cllr Richard Kemp

Q21 George Freeman: I want to ask about the costs of localism and community empowerment. We’ve heard a lot of evidence, some of it suggesting that good localism costs money, in terms of making resources available, monitoring and providing the structures. Others take a different view—you, Steve, have pointed out that good localism saves money, for all the reasons you’ve said. I want to ask you whether you think it costs or saves money and, to the extent that it can do both, how you as councils should be free to manage that tension in a period of reduced public expenditure. Richard Kemp: The Local Government Association, in its place-based budgeting report, which it gave to the Government, which has been accepted—although it’s now called community budgeting—estimates that we can save between 10% and 20% on the delivery of public services, by joining them up in a substantially different way, scrapping some of the organisations, scrapping some of the levels, working back from outcomes—from outcomes to projects, from projects to partnerships, from partnerships to delivery—instead of starting with a load of organisations saying, “How can we spend £1 million?” We believe that money can be saved. It should be saved in good times, because the other problem is we don’t believe that spending that money necessarily gives you the outputs and outcomes that you want anyway. The Total Place reports are littered, almost literally, with places where we spend a shedload of money and the outputs and outcomes are still poor. My view is we shouldn’t waste a good financial crisis. Let’s use the lack of availability of money to really power change in a way that we haven’t been able to for the last 10, 15, 20 years. Colin Barrow: There’s nothing like a big organisation for wasting money. A vast organisation may have some economies of scale, but will also have some massive inefficiencies in the way it procures things. I’m not an expert on aircraft carriers, but I bet you that there are better ways of buying aircraft carriers than having the Ministry of Defence doing it. I don’t know. What I’m saying is that big organisations do try to systematise things in ways that mean that they don’t respond to local difference, so therefore you’ll get one solution that will be very efficient to procure. As long as you know that the solution’s the right one, it’s the best thing to do it centrally. If the solution may be different in different parts of the country, city or area, it’s much better to make that decision locally with a group of people who are sitting around in somebody’s front room, as you put it, trying to work out how best to do it. They will know how best to do it. They will not want to do it by way of some vast centralised procurement department. They will want to do it local, and local will mean cheap. Q22 George Freeman: You’d agree that local can be good and cheaper? Colin Barrow: I do mean it can be, but it will be different in different parts. I would make the point that, if you’re going to issue everybody with a biro once a month, the cheapest way to do that is central procurement, but you’re not doing that in local government, because it’s local and it’s government.

Steve Reed: I’ll add to that. I think we need to take a slightly broader view of value in this and take account also of social value. If we want a stronger civil society able to deliver some of these things, then we mustn’t cut away some of the infrastructure, particularly in the third sector, which may help our communities to deliver the things that we want them to deliver. We also need to look at the longer-term value of what we’re doing. I’ll stick with the example I used, since I’ve already been developing it with you. If we invest more now in building our communities’ capacity to deal with things like violent youth crime, it’s an invest-to-save model, because we’ll be putting the capacity in now that will enable them to reduce the levels of offending. We do not then hit, at some point in the future, the cost of dealing with the consequence of much higher levels of crime, and often very serious levels of crime, and we are more likely to get young people growing up into adults, who are productive members of the community contributing through the tax system, rather than taking through the benefit system. Q23 George Freeman: I totally understand your argument that investing in communities can save long-term costs of community breakdown. Do you think those investments can be generated by localist savings and efficiencies in general service provision through the localist drive or do you think there’s a net requirement for resources in order to unlock them? Steve Reed: We’re really talking about—extending it beyond that one example—councils being able to transform the way that they do their business, so transform the services that we deliver. I’m very worried about the frontloading of cuts in the way that it’s happening through the Spending Review. We’re getting nearly 50% of our cuts in year one, rather than having it equally spread over four years, as the Chancellor implied in his statement. That doesn’t give us the space we need to invest to transform. It means that we’re much more likely simply to withdraw from some areas of service provision. We’ll still be taking choices locally, and I very much hope that we’ll be able to find ways to build and support that kind of new capacity, where we need it, but our life has been made a lot harder by the way the Spending Review has been phased. Q24 George Freeman: I think I’m hearing two on the left say localism can be done well on lower budgets, but I think I’m hearing you, Steve, say it requires more money to be spent to produce the savings. Steve Reed: No, you could definitely save money and get better value for that money by localising those services. I don’t think you’ll necessarily have all of those savings by next April. It will take time. Q25 James Morris: Am I detecting something that seems to be saying decentralisation equals the transformation of local government, in the way that local government is organised at the level of delivery? There seems to be some commonality that says, if we’re going to decentralise power, what that means is we’ll have a completely reshaped idea of what local

Ev 10 Communities and Local Government Committee: Evidence

1 November 2010 Cllr Colin Barrow, Cllr Steve Reed, Cllr Richard Kemp

government does. That might mean slimmer bureaucracy and a kind of satellite delivery. Is there commonality on that? Colin Barrow: I suspect there is. I think it’s shooting the notion of the delivery agent in the head. If we can get that idea killed and have the idea that we’re in a local environment, trying to create local services for local people, different ward by ward, never mind across the country, but with some overarching community strategy, that’s the model. If there is no vestige of the reporting up to central Government left, all those people who follow Audit Commission guidelines—the umpteen pages of guidance and so on, which we all complain about all the time—if nobody’s looking at that stuff but they’re doing the right thing in their local community, in accordance with professional guidance from institutions, if it’s health, perhaps a medical institution, you are in a different world. It will be a world where things are very different area by area, where Ministers won’t be able to be held to account; there won’t be a delivery agent but there will be local democracy and local engagement. That’s when you get the cheapness that we’re alluding to. The way I see it is you take out 100 and have to put back 20 into building the sort of structures that Steve is talking about. Steve Reed: It’s different from service to service as well. In some services, you’ll be able to make efficiencies very quickly. For others, where you need to transform, you may need some upfront investment in order to allow that transformation to happen. I don’t think we should see this as rolling back the state. It’s more changing the role of the state, at the local level. Q26 Clive Efford: You’ve all given good examples of what you’re doing now to engage with local communities, so what’s getting in the way of localism? Richard Kemp: Central Government for one thing, so that’s why we were very keen to come here and enlist your support today. Until recently, Liverpool City Council had 1,100 key performance indicators, and it had some additional ones, because we had European funding working to a different financial year. That very much constrained what we did. We were doing things to meet the report. We were doing things to meet the Audit Commission’s visit. We weren’t doing things that we knew our communities wanted, because we were too often constrained. Our plea over the years has been: if you believe that local government should exist, let us have the powers to do things in our own area in our own way, and be accountable to our electorate. If you don’t think we should exist, just put in some more bureaucrats and put a commissioner into Liverpool, Westminster or Lambeth, and let them do it. Q27 Clive Efford: Councillor Barrow and Councillor Reed have both given very good examples of where the council has had the flexibility and the wherewithal to respond to specific local needs, which has resulted in efficiencies and also the targeting of important service areas, like youth crime. If you can do that under the current system, where’s the problem?

Colin Barrow: There are several things. They are trivial. They are small. The big stuff—we spend £250 million of net budget every year. I would have thought the amount of money committed to the sorts of thing that we’ve been talking about, what is actually spent on this area, might be £2 million-£5 million. The amount of money that’s spent in Westminster is £2 billion by public servants. It’s small, is the real answer to your question. We think it’s scalable or replicable, to use your word, Steve. We think it can be made bigger. We think, for example, that by taking Family Recovery and capturing the costs that we’re saving for the Department for Work and Pensions, for kids, the police, for the Home Secretary and for Justice, we think that there is a case for them to come and invest with us, and we will save them money. Then we will have more money in that pot of things that is doing good for the whole of the public sector. That is public service entrepreneurialism and it will save more money, and it will be different in Liverpool from what it will be in Westminster. Q28 Clive Efford: You seem to be saying that the structures that are in place for local government working with local communities are fine, but that the problems lie in the people who sit on your back from central Government. Colin Barrow: Telling 2,500 people how do to their job, yes, absolutely. Steve Reed: I think it goes a bit beyond that. We’ve been for the last few months holding a cooperative council commission to try to work out how this might work for Lambeth. The biggest single hurdle that has come up is procurement rules. The third sector and the community sector are both saying, very loudly, that our procurement rules mean they can’t compete on an equal footing with the big providers, because they simply don’t have the capacity to do the things that are being required of them. Some of that will be EU procurement rules. Some of it will be the national rules and compliance that we’re requiring. Some of it is competition rules. You can see the reason those are in there, but community groups can’t participate if those hurdles are in the way, because they don’t have the capacity to be able to get around them. We might need to look at procurement and models that will allow communities to participate. Q29 Clive Efford: You’ve set out a proposal for providing local services through cooperatives. Steve Reed: No, we use the term “cooperative council” in the sense of working together, not just setting up cooperatives, so it works differently in different service areas. I think there is a bigger role for cooperatives and mutuals in things like housing, cooperative housing for instance, but that Parent Promoter school was a different type of partnership; it wasn’t a cooperative. Q30 Clive Efford: Can I just go back to the example you used about responding to the local community on knife crime? Under your localism structure, as you envisage it, how do you guarantee that you respond to that particular person’s ideas and initiatives in that

Communities and Local Government Committee: Evidence Ev 11

1 November 2010 Cllr Colin Barrow, Cllr Steve Reed, Cllr Richard Kemp

structure—i.e. that somebody else’s bright idea didn’t get funded? Steve Reed: What we’re going to do, Clive, is set up a series of pilots in the new year across a broad range of different services to try to tease out exactly how the model can work. For that particular example I used for youth services, for none of this are we having to reinvent the wheel. There are generally examples elsewhere that we can draw on. The innovation is in trying to apply it across a much wider set of services in one place. For youth services, do you know Turning Point, the organisation led by Lord Victor Adebowale? They have a model for community-led commissioning, which I think we will be able to draw from. Srabani Sen heads Contact a Family, which is another organisation that operates a model of community-led commissioning; we can draw from that. It involves putting support into the community to help the community widely express what it sees as problems, and then how those problems can best be addressed. Q31 Clive Efford: Last question: other service providers that work within your communities, how do you envisage them being part of this localist structure on health, etc? Richard Kemp: I gave an example before to show that organisations have to empower to the lowest possible level. The trouble we have, whether it’s a local strategic partnership across the whole of our council area or down in our districts, is that at the moment the quangos, the Government Departments, are still reporting to Whitehall. We will talk to the local manager of Jobcentre Plus, and they’ll say, “I’d love to do that but…” We can talk to local health, “I’d love to do that but…” You have to release some of that power so that local people working together—this isn’t a land grab by local government. We’re not saying, “Give all the money to us and all the power to us.” We’re saying, “Let us create the partnership,” in our case in Liverpool, “in which those people with local responsibility can get on with the job of meeting local priorities with local solutions.” That doesn’t mean to say you won’t monitor it; it doesn’t mean to say you won’t set targets, but it will be local monitoring and local targets, which mean something to all of us. Steve Reed: I can give you a health example, since you raised it, Clive: personalised budgets for adult care. Care is slightly under 50% of our total budget in Lambeth—children’s care and adult care. We’ve got an expanding demographic and reducing resources. We’re desperate nationally to try to find a solution to that problem. We have increasing numbers of people taking control of their care through having a personalised budget, so they receive the value of the care package they receive, then they choose for themselves the outcomes they want to achieve and how they are going to achieve them, and very often they chose completely different services from those that were being provided by the local authority. We’re starting to see groups of budget holders forming together in what you might term “micro-mutuals of purchasers”, because they have something in common—a similar disability or vulnerability, or live

in the same geographic place, or are from a similar faith or ethnic background. Whatever it is, they form micro-mutuals, and they use that enhanced purchasing power to obtain the services that they need, either from external providers or sometimes from within the community. If you’re looking for some kind of day-care and you’re a Muslim woman, you may prefer somebody from your community to come and deliver that service, rather than somebody who is sent by the care agency. That then forces a shift in the market, by pushing the creation of micro-mutuals of providers as well, within the community. You completely change the care market, but we’re seeing already that people are getting better outcomes in terms of what they want to achieve from their care package, at lower cost. Within care, it works in that way. What we need to do is find the mechanisms to support budget holders to be able to find the kind of care that they want, because very often the level of vulnerability makes that different for them. There is a cost to us in supporting them to be able to make those choices, but after that we may realise cost savings, and they may realise improvements in the quality of the service they receive. Colin Barrow: Once the GPs commission care for their people locally, this whole deal, the cost, will come right down. It will go up if they commission possibly without regard to the total amount they have to spend in a particular year—that can happen. If they’re smart, they’ll hook up with local government, because we can reduce the cost of long-term conditions faster than they can. Therefore, that micro-local decision, the wisdom of crowds of clinical prescribers, will make the ring-fenced health service cheaper. Q32 George Hollingbery: Chairman, just give me 60 seconds, very quickly. Going back to the constriction of central Government, you’re going to get less ring-fencing, much less ring-fencing, which is coming down. Would you abolish duties for councils? 20 seconds each. In other words, you have completely free reign. You get a budget; you do what you like. Richard Kemp: Yes. Our duty is to serve our people. Our people would decide whether we do that. Q33 George Hollingbery: Would it work over the whole country, in all councils? Richard Kemp: It takes time. We don’t pretend that all local government is ready for all this now. There has to be a process of taking local government there. When I close, I’ll be making an offer to help local government get there, which I’ve shared with the Chair. Colin Barrow: I think the purest answer to that question is “yes”. What you have to do is be very clear about what you’re delegating local authorities to do: in other words, no duties, because you just say, “There’s only that much money,” but then you have absolute control over that much money. The bit of which you have shared control, you’re clear about that too. Steve Reed: The de-ring-fencing would be a lot better if the grants weren’t being reduced so much before they were rolled in, but the point there is right. The

Ev 12 Communities and Local Government Committee: Evidence

1 November 2010 Cllr Colin Barrow, Cllr Steve Reed, Cllr Richard Kemp

broad duty we will need to meet is that the Government is entitled, of course, to set the outcomes they wish to see achieved but, through the general power of competence, will the Government really allow us to get on and deliver those outcomes in the way that we see will best meet those needs for our communities? Councils will do it differently if you don’t dictate to them how it should be done. George Hollingbery: That’s three basic yeses. Thank you. Q34 Mike Freer: I confess to being a Big Society sceptic. My worry is, what will stop those who shout loudest simply dominating the vacuum or the gap that’s created, leaving behind the hard-to-reach groups or the less vocal groups? Colin Barrow: Of course, we get that every day. You know perfectly well; you did it until last week. You do have to pay attention to that stuff; there is no substitute for actually doing the work. If you just sit and listen to the people who shout loudest, eventually you will get the wrong outcome. That’s what we’re for. There is a tendency to listen to the people who make a noise, but actually you can balance that out by paying attention to what’s going on in your community, and that’s our job. Steve Reed: That’s one of the real reasons why this agenda should not bypass local government, because local government is in the best place, of all tiers of government, to ensure that we can get to those people who otherwise would be excluded, because they can’t shout loud enough, for whatever reason that might be. The example I gave you of those tough inner-city estates where communities were starting to take action for themselves over youth services, those weren’t your usual attendees of committee meetings. They’re certainly not the famous “sharp-elbowed middle classes”. These are people who themselves are generally workless and generally deprived in all sorts of ways, but they still perceive the problem and, being part of the community that’s suffering it, they can see more clearly, I would suggest, than we do, who are more remote, what needs to be done. The trick is how we give them the capacity and the support they need to achieve the outcome they want. Q35 Mike Freer: As long as they come to the right conclusion. Richard Kemp: Localism must include a democratic governance element. Just to give money and resources away isn’t governance; it’s anarchy. Steve Reed: Those people living on those estates will probably see themselves as better placed to come up with solutions than any of us. Q36 Clive Efford: What about if national Government wants to deliver social housing in an area where there are expensive local land values, and that is not in keeping with the views of local people? Colin Barrow: The central Government that chooses to do that should simply purchase the land and provide the social housing. Richard Kemp: And be accountable.

Q37 Clive Efford: Should it use local authorities as the vehicle for it? Colin Barrow: If they want to do that, and the local authority doesn’t, then they’re free to go and buy land and make it happen. Steve Reed: Do you know, I’m really relieved that we’ve finally found a point of difference. I think it’s very important that Government should be able to set big objectives like the amount of social housing you want in an area. If you allow different borrowers in London, for instance, to set different levels for that, then you’ll end up simply ghettoising poorer people in a smaller number of boroughs. We need to live, as a city, in a city that is cohesive, and where poor and rich people can live together. It’s important that we do that. There are other models of delivering housing as well. We don’t in this country have enough cooperative housing. Shared equity models make up 0.6% of our housing in this country. In Sweden, it’s something like 18%. They are a fantastic way to create mixed-income communities, to allow people from fixed or low incomes to meet their aspiration to own without being sucked into sub-prime lending and can elide that sometimes corrosive divide between tenants and leaseholders living on a single estate. Q38 Clive Efford: It’s a curious form of localism that national Government just comes straight in and does it direct. Steve Reed: I think national Government should be entitled to set outcomes that it wants to be achieved, and then leave local government to deliver them. Richard Kemp: It comes back to accountability, doesn’t it? If you want to do something like that, central Government should come in and explain why. There are many arguments that you can make where people will accept more housing and more social housing, when it’s clear for their children, when it will enhance their community. The trouble is, if it’s imposed, it’s different from it being negotiated by central Government. Q39 Bob Blackman: In your evidence, I think all three of you have actually indicated that there may be a limit to the number of people who are willing and able to offer their service in the form of localism. What do you think the implications are, if government—central Government or local government—gets it wrong and overestimates the amount of effort people will put in, in terms of a localist agenda? Richard Kemp: I think we will correct the mistakes at a local level, because we’re more practical and pragmatic. As I said before, I think lots of people want to be involved. Even more people want to be consulted and even more people want to know what’s going on. It’s our job to bring together that coalition of the willing in an area of those who want to take it further, but that must be tackled by pragmatism. At the end of the day, libraries will not be run by volunteers; they’ll be run by librarians. We’ve got to make sure that volunteering and support is complementary to, and not replacing, basic services.

Communities and Local Government Committee: Evidence Ev 13

1 November 2010 Cllr Colin Barrow, Cllr Steve Reed, Cllr Richard Kemp

Colin Barrow: I think it’s worth pushing this envelope. This has quite a long way to go before we run up against those buffers. I don’t think we’ll know until we try it. We must be allowed to move in that direction, as far as the capacity will allow, and then more capacity will arise. You’re reforming. You’re changing the world. The prize is that you get real civic society, where most people actually do feel they’re responsible for their local area. When people don’t even vote in local elections, when people don’t feel that the society they live in is something they control, the country loses a lot, and it loses it indirectly. They say, “Antisocial behaviour is something I don’t control.” “The lights going out is something I don’t control.” “I don’t control anything. They don’t give us nothing. It’s nothing to do with me.” They’re alienated from society and, if they’re alienated from society, they’re up to no good, eventually. That’s not helpful. We have to start to go back and start to say we want to see people being members of a community, members of a society, and not mind too much if it’s a bit messy, if it’s a bit awkward, because the prize is enormous. Steve Reed: We shouldn’t just see this as volunteering—a point I tried to make earlier—but as participation. People will participate if they feel a big enough need that they want to be met, and that they see themselves as having a role in helping to meet. The example I’ve given, we’re pushing at that. We don’t have a lack of people who want personalised care budgets, so that they can have more choice over the services that they’re being given. We’re not offering it enough in my view. The block isn’t coming from the lack of will in the community; it’s coming from a lack of service providers ensuring that those personalised budgets are happening. A smaller example: the community set up a programme in one neighbourhood. They got the neighbours together to bulk-buy insulation to cut household bills and reduce CO2 emissions. They expanded it into a community food-growing scheme. It had huge benefits, not only in the areas that they set out to achieve but also in creating a greater sense of community cohesion and lowering crime as well. We took one of the women who set that up and invited her to come and work for the council a day a week for a year to try to set up similar schemes elsewhere in the borough, and asked her to see if she could set up six in different communities. Within nine months, she had 50. There wasn’t a lack of desire on the part of the community to participate. It’s just that they weren’t feeling empowered or enabled to do the things they wanted to do. We pushed that door slightly ajar, and it was thrown wide open by the community. Q40 Bob Blackman: Can I just go to this very quickly? If you look at, for example, school governing bodies, which have been given more and more power, it’s more and more difficult then to get people to take on the roles of school governors, across the country. As you empower people, often it can have a negative effect, because they say, “Wait a minute, I didn’t sign up for all this.” Is there not a problem in that respect? Colin Barrow: I wonder how much power they have. I think they have a good deal of responsibility. I’m

not sure they’re necessarily free to depart from the admissions policies that have been given to them by other people, or free to depart from employment procedures. All that stuff that comes down in that tonne of paper that descends upon you, as soon as you become a school governor, does not encourage the view that you’re free as a bird to design the sort of school that you want. Q41 Chair: Would we want them to design their own admission policies? How could you run an education service in the city if every school had its own admission policy? Colin Barrow: I’m not making that argument. I’m not making the argument necessarily. I’m not qualified to make that argument, but the argument I’m making is the empowerment argument. Since governors are so free, why aren’t there more volunteers? They’re not very free. That was really the point I was making. Q42 James Morris: When we had the Secretary of State here, we were discussing the rationale for the abolition of the Audit Commission, and he said that he wanted to create a series of armchair auditors. What’s driving the Government’s thinking about accountability is transparency and the provision of information to the public. Do you buy into that? Colin Barrow: Yes. We are about to go—it’s taking a little while to get organised—but we will embrace that. It is going to be uncomfortable, I think, to have all our expenditure scrutinised. Local councillors are going to find themselves in a position of agreeing with the public and saying, “I wonder why we did do that.” However, that’s something that we have the power to straighten out, but it’s a good thing. We’re very much supportive of that. Richard Kemp: We have found another area of disagreement, fortunately, as we come to the end. I don’t believe that most members of the public, no matter how we bring them together, are interested in most of the services that we provide. You have a lot of services that are very well scrutinised, but no one will say, “Oh, good, I haven’t been ill. That must mean that Environmental Health is working correctly.” We have lots of hidden services that people don’t even know they take advantage of, because we just do it. While I very much accept that people can be used a lot more, that we ought to capture their experiences more and do something with them, that’s all very well for the services that people want to be engaged in, but perhaps not the other 80% of the services we provide. Steve Reed: Information is key to accountability, but I think that scrapping the Audit Commission loses a pretty important set of information that residents were using before, which is how their council compares to others, in terms of the services it’s providing. That information drove improvement over the last 10 or so years to a level it never achieved in local councils before, to the extent that we’re now the most efficient part of government, and yet the Government is cutting local government more than any national Government Department. There needs to be information for residents. Another key point here is that localism is really about control of resources, and particularly

Ev 14 Communities and Local Government Committee: Evidence

1 November 2010 Cllr Colin Barrow, Cllr Steve Reed, Cllr Richard Kemp

money, and if we don’t find means of handing that control to people through information, but also through being able to determine and choose how it’s spent, localism won’t work.

a tendency to say, “In an ideal world, it would be better if…” That translates into guidance, which translates into a different fault dynamic, which isn’t getting the best outcome.

Q43 James Morris: Where we have exceptions—I think Councillor Barrow talked about children’s services for example—how in this decentralised model do we deal with very, very serious service-level failure? Is that something where we’re just talking about democratic accountability or do we still need to have some mechanism for ensuring that, where service failure occurs, there’s ways of dealing with it, which are not just to do with providing information locally? Richard Kemp: The Local Government Association has put together an offer, again to government but particularly to local government, about how we deal with that. Some councils do fail and will fail. Some departments do fail and will fail. Our approach is what we can do within the family, because the best way to deal with the problem is to get experts from within the sector to help. Our offer is to do that but, if a council clearly won’t be helped, where services are still very poor by any stretch of the imagination, then the Government needs to have at minimum a step-in power of enforcement, and that’s the proposal. That should be very much the exception, rather than the rule. Steve Reed: The way that we dealt with the Baby P scandal actually made the problem across London, and I suspect elsewhere, worse, because it became impossible to recruit social workers, because they were so denigrated and pilloried because of failings in one council that we put a lot of other people at risk by having to increase the case workloads of existing social workers and being unable to recruit people to deal with that rise in caseload. We need to find ways as politicians to deal much more assertively, and confidently but sanely, with crises of that type, when they happen.

Q45 Chair: I suppose it goes back to the previous issue, doesn’t it, about culture? The culture of the media and the culture of public opinion influences the culture in the House of Commons, which makes it impossible for any Secretary of State to actually allow that process to happen. They’ve got to stand up and make out they’re actually accountable and responsible for all these individual happenings. Colin Barrow: It comes back to the point, Chairman, about the clarity of responsibility. Is Haringey, in that case, empowered to act independently, and how did it exercise that judgment? Richard Kemp: If you look at the councils that over the years, the last decade, have been the worst councils in the country—and I think of places like Hull, Walsall and my own council in Liverpool—they have all been improved from within the sector. Some help has been given by benchmarking—again, the Local Government Association will set up benchmarking. Being able to say, “Why do they do that better, what’s the cost there?” is very useful, but you can’t impose improvement. You can create improvement from within the sector, by working together.

Q44 James Morris: What do you mean by politicians being more assertive? What kind of thing are you thinking about? Steve Reed: The way that we all, as politicians, reacted to the Baby P scandal prevented us from being able to recruit social workers, and that can’t be in anyone’s interest. I think a more measured response to it, while recognising absolutely the scale of what had happened, would not have caused that problem and would have meant that other vulnerable people weren’t put at risk by the lack of social workers. Colin Barrow: The secret of intervening in that sort of incident is to have it done by peers rather than by superiors. If it’s done by peers, both professional and political peers, they understand the pressures that the individuals are under, and they’re able to make intelligent recommendations for the avoidance of such problems in the future, knowing the messiness of the circumstances in which these people work. That is something I’m sure that social workers and politicians alike would respect, as opposed to the slight tendency to encourage—I make no comment about the individuals; I’m talking about the principle. There is

Q46 Chair: We talked quite a bit about place-based budgeting, Total Place and how that can probably provide more savings, efficiencies and effectiveness than almost anything else, as part of this agenda. We’ve also discussed whether the Comprehensive Spending Review acts as a catalyst to force change or an impediment to change, but are you pleased or slightly disappointed that the Government’s moved to community budgets. Do you think they’re rather lacking in scope and lacking in numbers, given that only 16 councils actually have them? Richard Kemp: There are 30 councils because, for example, the 10 Greater Manchester authorities are classed as one. We don’t underestimate the difficulties in introducing localism. We can do all the right things within our councils, but you have to change whole systems within departments; you’ve got to change the culture of the way people operate. I am satisfied that those proposals are a good start. If I thought they were the end, I would be extremely disappointed. These are going to be actioned proposals. We will learn from the projects as they go on, and we will spread that learning quickly. Our challenge to central Government will be: this one is working, so why don’t we do that service everywhere? Why don’t we take the lessons we’ve learned to do another service, so we build it up? If it’s just an end in itself, it’s a poor one. Colin Barrow: I think it will succeed or fail depending on the qualities of the individuals in central government Departments who are assigned to manage it. As long as these people are revolutionaries who are interested in seeing whether there is something new that can come out of this cooperative budget, and seeing whether you can get better outcomes with less

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1 November 2010 Cllr Colin Barrow, Cllr Steve Reed, Cllr Richard Kemp

expense—people who want to actually find out whether this works—it will work. I know it will work. We’ve demonstrated it will work. We’ve published papers on the subject: it will work. But if the people assigned to it are minded to keep all this under wraps and make it Yes Minister, then it won’t.

budget model. We’ve had a number of Total Place pilots. Heidi will be familiar with the one in Lewisham. I think we could be a bit bolder and go faster with this now, and expect it to start to generate savings that we could learn from elsewhere. That would be a good one to push.

Q47 Chair: That’s as individuals, but how can you make it work when the Department of Health is ring-fenced and doesn’t want to really engage with it, when the police commissioners are going to be doing their independent thing, when free schools can come in and take a chunk of education money and not be joined up into the process? We haven’t moved much further than Total Place, have we? Colin Barrow: I thought that the Government had specifically assigned money, £1 billion, if I remember rightly, to encourage local authorities and health commissioners to work together to get a good outcome from joint working. That is for them to decide, but that’s what the Government intended to do, so the Government is actually requiring us to work together and putting some money behind it. That’s a good thing. In terms of justice and policing, they are already on this page, knowing that local government can offer something to integrated offender management and police governance so, in a way, the door is already open a bit. What we now have to do is kick it open and say, let’s try, with some good authorities and some good different examples, to see whether it can be done in a way that can be rolled out nationwide in a couple of years. That’s quick for this sort of reform. A couple of years is ambitious, and I salute the Government for its imagination. Steve Reed: I think you’re right there and we should be pushing for this to happen harder and faster, not least because of the scale of the funding reductions that we’re seeing coming through now. The part of government that is least playing ball on this is national Government Departments, I think. Very often, it’s because they can’t always do it because they don’t always hold information about their spend for a particular locality, in a way that makes any sense to try to pool their budget in a Total Place or community

Q48 Chair: Richard, you just wanted to make a point. Richard Kemp: I just want to make an offer to you from all three of us, which probably means the end of our political careers. We have circulated a statement that says we’re happy to work together. There are some differences; we’re not going to disguise that, but a lot of what we want is the same. We don’t underestimate the difficulties that some councils will have in introducing localism. We certainly don’t underestimate the difficulties that Ministers will have. I’ve worked with people like John Prescott and Nick Raynsford who wanted to really embed the National Strategy for Neighbourhood Renewal. It didn’t get embedded. What we’re prepared to do is to work together in councils, in central Government and in our own political parties to spread localism, and we suggest some things. Finally, we’ve suggested 10 key questions. I think you’ve only answered five of them, so I think we’d better get out fairly quickly. We don’t want to tell people what localism should be, but we do suggest that there are 10 things and, if they answer that, they should be able to do what they want to do. Our offer is: to be helpful to you; to give more evidence if you want it; to take you out, if you want, to see some of the things we’ve been talking about, because seeing is believing. I’ll add on at the end we’ll do a Cabinet Member for your Constituency book as well. Chair: Thank you very much. Certainly in terms of visits, it’s something we would want to do to get out there and have a look at examples. That does help inform us in our work. I thank the three of you very much indeed for coming and giving us your virtually unanimous views on most questions. We found one or two points of difference in the end. Thanks very much.

Ev 16 Communities and Local Government Committee: Evidence

Monday 15 November 2010 Members present: Mr Clive Betts (Chair) Heidi Alexander Bob Blackman Simon Danczuk Clive Efford

Mike Freer George Hollingbery James Morris ________________ Examination of Witnesses

Witnesses: Professor George Jones, Emeritus Professor of Government, London School of Economics, Professor John Stewart, Emeritus Professor of Local Government, University of Birmingham, and Mr Henry Peterson, Consultant, gave evidence. Q49 Chair: Good, we can make a start on our second evidence session of our inquiry into localism. Welcome, George and John; it almost seems like yesterday when you were before us on our previous inquiry into the balance of power, so welcome once again. Henry Peterson, welcome as well; it’s the first time you’ve come before the Committee. Somebody asked me the other day at a talk I was doing, after I’d finished, whether you could really prove that localism was going to make services more efficient, whether in the current climate it was actually going to be more cost-effective and, if it wasn’t, whether there was any point in doing it. What would your response be if you were asked that question? Professor George Jones: Yes, certainly localism will make services more effective, more efficient and more economical, because decisions will be taken close to the communities that are being dealt with. If we, for example, build on the work of the participatory budgeting experiments and exercises, we saw there, in an era of growth, that local citizens could take decisions sensibly and effectively about how to spend local money. Now we move into the era of cuts, and I’d have thought localism is even more significant, because, after all, it’s local people who will know where the cuts really bite, and they will know where to make sensible cuts far better than any central Government Department or regional office, and they will be able to be sensitive to any of the big problems that will arise—the social consequences, for instance, of cuts. Yes, it’ll be more economical, more efficient and more effective, because one hopes that they will be able to take an overview of all public service spending in the locality, building on the total budget experiments, so that it won’t just be local government expenditure that’s within their remit; it will be all public service expenditure. I’m a great champion of localism. You have yet to get me to define what I mean by that, but we’ll leave that to one side. My answer is wholeheartedly yes. Professor John Stewart: I would also say wholeheartedly yes. You can fit expenditure more closely to two things: you can fit it more closely to local circumstances, which will vary from area to area; and you can also fit it more closely to what local people want. National Government tends inevitably to seek uniformity, because it hasn’t the machinery and the means to discriminate between the circumstances in one area and the circumstances in another, or to

take full account of local wishes. That is why we actually have local councils; they can take account of local circumstances. The argument for localism is that maybe we are not giving the local councillors enough power. Henry Peterson: I would agree with all that’s been said, with the caveat that it’s always going to be difficult to prove to the satisfaction of Her Majesty’s Treasury that you are actually making specific costed, monetised savings. The Total Place pilots were put under a lot of pressure and requirements to do that. In individual cases, on particular projects and streams of work, they could produce figures, but equally one can question whether the Treasury demonstrates that the status quo is particularly cost-effective and the best solution in terms of public service delivery. It doesn’t have to produce an equivalent justification of what was asked of those authorities working on Total Place. Q50 Chair: That’s a very good expression of your belief in localism and that it will deliver. Is there any real hard evidence? Total Place was mentioned as a specific example. Is that the only example you have? Henry Peterson: The meta-evaluation of local area agreements from 2004 onwards was the first attempt to get local authorities and all their partner agencies working together in a more consistent and systematic way. Again, I don’t think they’ve been able to point to hard results over a four-year period in terms of national cost savings. I did a brief individual piece of work for ODPM, as was, on looking for efficiencies in the early days of local area agreements, because Ministers were obviously getting very keen to find them. You could pick them up, but they were in the region of £20,000, £30,000 or £50,000. I think you have some evidence from the Met Police that’s come in to you about the Diamond Initiative on youth offending in London, where they would demonstrate real hard savings. It’s been done so far on a project-by-project, theme-by-theme basis. Professor John Stewart: You could add that the Total Place pilots do that as well, because they demonstrated that there is scope for savings, if you can make allocations of expenditure at local level. Professor George Jones: You can’t give a hard and fast yes to your question, because we haven’t had localism. What we’ve had, as the DCLG evidence to you shows, is centralism for the last few years, under both Governments. We’ve had centralism, and the

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15 November 2010 Professor George Jones, Professor John Stewart and Mr Henry Peterson

criticisms that have been made of that, not only in our paper but also under CLG, show clearly that there are serious defects in centralism. I would go along with what my colleagues say: build on the principles of the Total Place pilots. Q51 Clive Efford: What would be the optimum level of money raised at local level that would achieve localism? Is there a sort of threshold? At the moment 25% is raised locally. How far would you have to go to raise the taxes directly at local level before you could really achieve localism? Professor John Stewart: I think it must be at least 50%. Clive Efford: Sorry? Professor John Stewart: Over 50%. There are some countries, for example Sweden, where it reaches about 75%, and it is interesting that they are one of the most localist countries. Q52 Simon Danczuk: I have a supplementary question about elected members, which you touched upon there: does localism suggest we need more or fewer elected members? The reason I mention that is that one or two local authorities, in an attempt to make cuts because of the national situation, are actually proposing to reduce the number of councillors, although I suspect it’ll save very little money. Does localism suggest more or fewer councillors or about what we have now? Professor George Jones: More. We don’t need a thousand community activists trained by the Cabinet Office and sent out as agents of central Departments to stimulate local activity. We don’t need that; we’ve already got 20,000 community activists called councillors. I’d have thought, with localism, there’d be more for them to do, and therefore we need more. We already have a democratic deficit in this country, when you compare our councillors in relation to the population. Compared with other countries, we’re very low on councillor representation. We need more councillors, not fewer. Professor John Stewart: In France, there is one councillor for every 100 of the population. There are about 400,000 councillors in France. It frightens the officers, that thought. Q53 George Hollingbery: Clearly, there are issues about raising large amounts of money locally, in that there are differing abilities in different parts of the country to raise different amounts of money. The buoyancy of local taxation is an extremely difficult issue. How would you propose overcoming that difficulty? Professor John Stewart: I would want a needs distribution of grant, but purely not as a general subsidy to local government: the amount that is required to equalise needs in relation to resources. That would be a maximum amount. I think you could probably do it from the 25% figure I quoted: 75%/ 25%. That would be my guiding principle: that you need some means of equalising in relation to the resources that are available in each area, and in relation to the needs.

Q54 George Hollingbery: Can we rely on central Government not to tax the amount that they are now putting on to local councils? Can we rely on central Government to give us a holiday from the tax that they were collecting and then distributing to local councils but are now collecting from councils? Professor John Stewart: That must be up to you. Professor George Jones: It depends on the legislation you pass. You have to ensure that the central Government doesn’t fiddle the system for its own benefit. It may be that you have to deal with the problem in the way the Political and the Constitutional Reform Committee may decide, and have a codification, perhaps in a statute, of the relationship between central and local government, which would cover this very issue that you raise. Henry Peterson: Another way of thinking, if I could suggest it, is if Parliament was willing to revisit and reconsider its principles of parliamentary accountability for public expenditure, accept the principle of place-based budgets that bring together all the public expenditure that currently exists in an area, and say, “We will set the quantum of that for each area across England, but we will leave you, the locally elected representatives, to then decide how to allocate it,” you get away from this issue of how much should be raised by local taxation and how much should be raised by central taxation. It may be simplistic for you, but I would have thought a lot of the public do not, when they pay their taxes, have any understanding of what they pay to the central Exchequer, what then comes back round in the form of block grant unrestricted to local authorities. The idea of place-based budgets is that you take existing expenditure—no more—but you give the discretion on how it is spent at the local level. Professor George Jones: I don’t think I agree with what Henry has just said. My concern—and John’s— has always been with democratic accountability, and we don’t think that councils can be genuinely democratically accountable if they’re only accountable for the way they spend money that has been handed to them in grant form by central Government. The only way to get genuine democratic accountability is to have local councillors being accountable for those spending and taxing decisions, so that, when they take the decision to spend more or less, they have to accept the consequences in taxation of those spending decisions. That’s the only way you’ll get financial discipline; that’s the only way you’ll get financial responsibility. I don’t go for making councillors merely accountable for their spending decisions. They have at the same time to be held accountable for the way they finance that expenditure, and that will bring it home to the citizen, too, and make them perhaps more responsible in their demands. Q55 Clive Efford: On this issue about how we finance it and redistribution, how much of the money spent by local government comes from business rates? Doesn’t that mean that there has to be some sort of large block grant? If you take the case of central London boroughs that can charge very high business rates, unless you have a substantial amount of

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15 November 2010 Professor George Jones, Professor John Stewart and Mr Henry Peterson

redistribution, therefore some formula that’s controlled from the centre, then the whole system falls apart. Professor George Jones: You have put your finger on my central objection to the championing by, for instance, the Local Government Association of the re-localisation of the business rate. I’ve never thought that the business rate, non-domestic rate, is suitable for democratic local accountability. It is a tax that doesn’t bear on voters. No wonder many people are saying, “Give local government that tax.” They’d love it, because it doesn’t bear on people who can vote them in or out. It doesn’t promote accountability. It may do something for what’s called a “gearing effect”, but it doesn’t encourage councillors or their voters to behave in a responsible manner. You have to have taxes that bear on voters.

is responsible for even more expenditure, bringing in maybe health and other services currently controlled by central Government, then the amount of money local government would have to raise under your principles would be even greater. If we can’t even achieve what we have now, how are we going to achieve it for an even bigger pot of money in the future? Isn’t that a problem? Professor John Stewart: It is a problem. I think we are moving on to a different area now, because what we need then to discuss is: what is the relationship between the local authority and the bodies that would still probably exist, and be responsible for these payments? That expenditure might be the means by which they were commissioning those bodies, but the relationship between the expenditure and the local authority would be different from its own services.

Q56 Clive Efford: What about the proportion of money that’s spent by local government that comes via business rate? Doesn’t that limit the amount of localism you can have in terms of tax raising? You’ll always have a substantial sum of money coming from the centre, through your distributed business rate. Professor George Jones: We’re not proposing the abolition of grant. We still need grant. John has mentioned you’d still need grant for resource equalisation in relation to needs. You can measure resources, I think, objectively. I have a question mark over whether you can ever measure needs objectively; that’s something for politicians to decide. A disadvantage of the business rate being re-localised is there are great disparities, as you pointed out, between parts of the country. You have to have a much bigger grant system if you give local authorities the business rate. If you want to get the grant down, don’t give them the business rate.

Q59 Chair: To put that question in a slightly different way, in Scotland we have a Scottish Parliament, which most people would think was perhaps more accountable, at a local level, but it doesn’t raise directly any of its money through taxation. Doesn’t that show you can increase accountability without actually having the money raising? Professor John Stewart: The current proposal is that they should.

Q57 Clive Efford: Sorry to labour this point, Chair. I’m not arguing that we give local authorities the business rate. What I’m asking is how do you get to a point where 75% of money is raised locally, directly from the voters to whom the councillors are accountable, if the bulk of the money that is being spent is coming from the business rate? Professor John Stewart: We just see the business rate in its present form as a grant. We would want to eliminate it as a main source of local government income. We were members of the Layfield committee on local government finance, and we stick by the recommendations for an additional tax. In Britain, we’re fairly unique in Europe in having only one local tax, which is one of the things that goes with its perceived unfairness. People will say it only falls on the householder, but that is a bit misleading. We’re advocates of a local income tax. Q58 Chair: Can I just follow up? There does appear to be an additional problem here. It relates to the disagreement you have with what Henry Peterson said. It has been a struggle to get agreement, in this place particularly, about local government having the rights and responsibilities to decide to fund a bigger percentage of its expenditure by taxes. If we move to a Total Place environment, where local government

Q60 Chair: What we have now, surely, is something that most people in Scotland will think is more accountable than what existed before the Scottish Parliament was set up, but it still doesn’t raise any of its own taxation locally. Isn’t it still more accountable? Professor John Stewart: It’s more accountable than it was before, I would agree with that, but it is by no means adequately accountable, because of its failure to have adequate taxation in place. As I understand it, I thought the proposal was that the national income tax would be reduced in Scotland, so that they would levy the tax in their own right. Q61 George Hollingbery: Essentially it is Mr Peterson’s model, isn’t it? Professor John Stewart: There is an allocated block grant from centre. Henry Peterson: I would be looking to a world where the budget for a county like Kent, however many millions it is—it would be a £7 billion to £8 billion budget—was provided on the same principles as the budget for the Welsh Assembly and the Scottish Parliament. It is then devolved and the decisions on how that is allocated across health, police and existing local government services becomes a matter of localist discretion. Q62 George Hollingbery: When you have regional distribution—when you have distribution for inequality—which effectively is what we have through the block grant allocation, which is greater per head in Scotland than it is elsewhere, you have all sorts of grants going on in Scotland that don’t happen here, which create terrible tensions throughout the country, about which we hear a great deal as people

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who represent English constituencies. Is that not a danger? Indeed, it also highlights the whole idea that there is a serious tension between equalisation and the local raising of taxation. No councillor can truly be accountable as and when there is equalisation, because you get different results from different things in different parts of the country, as we see in Scotland. We come back to a huge circle, going back on itself again and again. Henry Peterson: I think all that is true but, at a time when resources have been taken back to the extent that they are, I still feel you’re going to be better positioned with a block grant, effectively, at county level, and I would say at the level of the 150 areas in the country that have been dealing with local area agreements. Then they get to sort out how that should be best spent. Q63 Simon Danczuk: I’m just starting out on my parliamentary career. Working on the assumption that it lasts for a considerable amount of time—we don’t know that it will—I have a worry that this topic is something that we’ll continually revisit in years to come. That begs the question: to prevent that happening, do you think we need some sort of constitutional change to ensure decentralisation of power? Do we need to change things constitutionally? Professor George Jones: I feel I’m before the Political and Constitutional Reform Committee when I hear that question, because I think that’s what they will be asking us on Thursday. We have in our evidence explained, and we also did to the predecessor of your Committee, of which Mr Betts was a member, how we felt there needed to be a degree of permanency in central-local relations. That was the phrase the Committee itself used. We recommend— you’re not going to get a written constitution—a simple solution to that: a statute that codifies what the relationship should be, and the principles and checks, and that that should be monitored by a joint committee of the two Houses. We felt that it needed the power of a joint committee, rather than a single committee, to be continually monitoring and reviewing what the Executive was getting up to; ensuring that the Executive, for instance when it brought forward measures, had considered the effects on central-local relations. Within central Government there was capacity, perhaps in the Cabinet Office, to look at all the interventions from all the departments into local government, so that the cumulative effect of the interventions was truly considered. Of course, an Act of Parliament can’t entrench anything, but it can give a significant degree of permanency and make sure that, before actions are taken that interfere with local government, there has been considerable thought given, in Government and, above all, in Parliament. Professor John Stewart: The cumulative effect of the last 30 years, and I deliberately take 30 because it covers both Governments, has been that we see the relationships between central and local government as having fundamentally changed, not by anybody deciding it should be changed but by a series of policies and Acts, each of which has been considered on its individual merit without any report or, indeed,

without any information about what the effect has been. It required a research project from the late Government to find out how many plans it had required of local authorities. It required another research project to find out how many reports were required from local authorities. Nobody actually knew. You need something that will mean that, when civil servants and Ministers are considering a particular change, they have to consider whether it’s in accordance with the principles laid down. I happen to think at the moment the role of local authorities will be changed fundamentally in education, but by a series of separate measures, rather than thinking about the overall cumulative effect of the process. Henry Peterson: I would agree a degree of permanence would help a great deal. My experience is not quite as long as that of my distinguished colleagues, but I feel that I’ve lived through about three or four fluctuations of the central-local relationship, and it feels as if it’s being rewritten again, to an extent, by the present Government, in terms of the centre’s role on performance management and on intervention and so forth. The script is constantly rewritten. Local government, because it is pragmatic, is very good at adjusting endlessly. In my personal view, it doesn’t kick up enough of a fuss about the way it is expected to constantly adjust and work in a different way. It would do better to say more strongly, “We do need this level of permanence if we are to move forward.” Q64 Bob Blackman: As I understand it, the Government is proposing to bring in a power of general competence within the Decentralisation and Localism Bill. To what extent do you think granting local authorities the power of general competence will lock in some of the need to decentralise power and give them scope to do, broadly, what they want or need to do in an area? To what extent is there any distinction between that and the power of wellbeing, which was introduced by the previous Government? Professor John Stewart: Much will depend on the actual terms of that power of general competence. It’s interesting; we don’t understand why everybody in the past has always talked about the power of general competence. The Government is now speaking about a general power of competence. Our naturally suspicious minds wonder if there is a significant difference between the two. I think many people thought the power of wellbeing was giving local government, virtually, a power of general competence, but the case about the shared insurance arrangements in London— Q65 Bob Blackman: The reaction was that it has been very unused. Isn’t that the case? If you look at the evidence about the use of the power of wellbeing, it has been very infrequently used by local authorities. Professor John Stewart: It has been significantly used by some authorities, but you’re quite right to say that a lot of authorities have not thought of using it. There is deep suspicion in local government about the present position, because of the court decision in this particular case. We would like to see a power of

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general competence that is almost judge-free. One of the mistakes made was that the purposes of the power of wellbeing were stated. Once you actually state them, it comes to the courts, not the people using the power, to decide whether its use is in accordance with the stated purposes. I would like a power of general competence that didn’t state what its purpose was but, once you state the purpose, it must be looked at very carefully to see how it would actually be operated in accordance with that. Professor George Jones: I hope you will probe the Department for CLG on why they have called it the general power of competence, rather than what it has been for years—the power of general competence. Is it to allow wiggle room for the judges? We want to keep the judges out. You need to get them to explain why they made the change. Henry Peterson: The existing power is circumscribed. You can’t do anything that involves raising money. If you think about it, it’s quite hard to explore new areas of service delivery in any way without encroaching on that part. I think there is a power in the Italian constitution that allows the local state to do anything that isn’t specifically reserved for central Government. That tips the ultra vires principle on its head, effectively. It’s saying, “Rather than you, local government, can only do what Parliament defines, you can do everything. You can develop new forms of service for your citizens, unless it’s something specifically reserved in the constitution as a central state function, for whatever reason.” Q66 James Morris: Professor Jones, you started off by saying that you weren’t going to give a definition of localism, or you were hesitant about giving a definition of localism. I think it would be fair to say that there are some tensions around the role of local government vis-à-vis other organisations. From a governance point of view, my interpretation is that localism could also mean GP commissioning; it could mean free schools; it could mean directly elected police commissioners; it could mean communities taking more control of their communities. How do you respond to that, and do you think those things can be linked together, or is localism for you just purely synonymous with local government, and the other ones are, as it were, bastardisations—if that’s the right way of describing it—of your interpretation of localism? Professor George Jones: I hope you’ll put those questions to the Department, because there is confusion and inconsistency in the statements and the actions of the Department over this very issue. You’re never quite sure what decentralisation and localism applies to. To me, it’s all very simple. Localism is the polar opposite of centralism. Centralism is where governmental decisions are taken at one place in the centre. Localism is where governmental decisions are dispersed to the representative councils that have been elected by the people locally. We have always been localists as champions of local government. When you start to raise “double devolution” or the “Big Society” or decentralising grants, you’re doing it below local government. That’s sub-localism. They should not be

allowed to get away with the misuse of language appropriating “localism”. Q67 James Morris: For you, “sub-localism” is a form of centralism in a sense. Is that what I’m hearing? What do you mean by “sub-localism”? Professor George Jones: It’s the idea that you decentralise power down to entities below—sub— local government. We have a system of representative democracy in this country: MPs in Parliament; councillors elected for local authorities. That’s our democracy. The Government seems to want to pass governmental decision making beneath local authorities to the GPs and to other entities. It’s a very amorphous association. Q68 James Morris: Do you think that’s a bad thing? Professor George Jones: I think it’s very bad for central Government to be doing it, to be pressing it, to be sending community activists out to do it. This is a proper role of local government. Indeed, I would say we need a statute that lays a duty on local government to promote this sort of localism. They’re the people best able to encourage it and to support it, and to make up for any deficiencies that may happen when you promote it. I think there has been a lack of forethought by Government in promoting this extensive decentralisation to these various associations and entities. There are big problems about them. They can’t be settled in Whitehall, but they could be dealt with and managed by local authorities. Professor John Stewart: We see those forms of community involvement and community activity as a very healthy part of local affairs, which should be encouraged, enabled and helped by the local authority, but we’re very uncertain about what the Government is actually saying. Sometimes it’s clear that localism to them involves giving more powers to the local authority—it tends to be emphasised by CLG—giving powers to communities and giving powers to citizens. What is not at all clear is how these relate to each other. In a sense, we’re maybe planning for conflict in this situation, in so far as the different bodies to which power has been given could be in potential strong conflict with each other. We think there are all sorts of problems about what giving powers to communities actually means. Are we talking about communities of place, or are we talking of communities of interest? Some of the most active communities are not communities of place; they are people with a shared interest or a shared problem coming together. Who will define the boundaries of these communities? The communities themselves, probably, but then two different communities could be defining their interest for the same area, or there could be gaps in the situation. How will these communities make decisions? Will they have elected bodies in charge of them or would it be the un-representative people—a small elite; a small group—making decisions? How will we guard against financial problems? There could be many problems arising. Community groups could set up to run a particular service, but the people who were the driving force leave, and the service actually collapses. Unless you have proper bureaucratic controls, there could be

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financial problems if you hand over public funds to these bodies. There is a whole series of problems of that nature. They can only be resolved by the involvement of an elected body that is aware of all the problems and issues in the community and the groups that might be formed, and so on and so forth, and should be encouraging these developments, but in ways that actually secure that these problems do not arise or have been solved. We have phrases about giving power to the citizens, power to the communities and powers to local government, but no discussion of the problems and issues that actually arise. I can see possible scandal after scandal arising. Q69 James Morris: The thing is we have more than phrases, don’t we? We do have policy about free schools. We have policies about academies. They’re not phrases actually; there’s an implementation of a real agenda. Henry Peterson: I would agree that I think what John has been describing is a form of what many people would view as diffuse and fragmented localism, where it’s not clear where power is heading. Many people are in favour of devolving power, provided it doesn’t get captured by interest groups on the way, and there are reservations about aspects of the Big Society agenda. Going back to the original question of what is localism, I’ve tried to make a distinction in my evidence between silo-localism, which to me is decentralising and Government Departments shedding functions that they have hitherto been responsible for, but wish to pass down to a local agency or a local level, and you could include in that GP commissioning and free schools, as opposed to integrated localism, which is what I think the previous Government tried to move towards, where you had a body at the local level that was trying to integrate, to bring together, to commission more strategically to look across the piece. Total Place and LAAs before that were part of that move, which remained unfinished business. Q70 George Hollingbery: I had a question lined up, which I don’t think I’m going to ask the two professors, because I’m absolutely certain I know what the answer will be. Professor John Stewart: Will you give us the answers? Q71 George Hollingbery: If I can just let you have the question: what are the principal steps that need to be taken to introduce a coherent and accountable governance system for all local services? I’m fairly confident that would be locally elected councillors. Am I right? A comprehensive governance system for all local services in your view would be local authorities duly elected. Professor George Jones: Yes, but of course with a duty to promote community involvement. Q72 George Hollingbery: Indeed. You can commission this any way you wish, but the governance structures would clearly be through local

authorities. I think that’s the message I get loud and clear from the two professors. Professor George Jones: Here we have structures already; they have their own tax and their own mandate. It’s ready-made to do that. Q73 George Hollingbery: It’s all there, and I quite understand that. I was a councillor for a long time and I have some sympathy with your position. Mr Peterson, your view is slightly different, I imagine. Henry Peterson: What I’m trying to suggest in my evidence is that there may be a way forward where you build on existing structures of local government, because they are part of our democracy, historically and statutorily. To create that integrated governance body at the local level, you do have to do some rethinking of it. If you want to bring in health, work, Jobcentre Plus, policing and the full span of public services, you do need a different form of governance body at the local level. There have been ideas, as you’ll all be aware, around public service boards, local budget boards—call them what you like— which, I would suggest, would be a form of merger between the local authority executive or cabinet, as it exists at the moment, and the core part of a local strategic partnership. One thing that has happened in the past five years is that local strategic partnerships have managed to develop a degree of presence locally. It has been a struggle. They’re still entirely voluntary non-statutory groupings of partners coming together around the table. They have no powers or duties of their own, but you do get, in the 150 first-tier local authority areas, a body that is trying to make sense across the piece and has put into effect local area agreements and worked on Total Place. I’m suggesting that, rather than continue with that ambiguous division of roles at local level, you bring those together so that they become effectively one and the same, and you can do that either through an indirectly or a directly elected model. I’ve suggested the pros and cons of each, and I’m sure we could debate those. Q74 George Hollingbery: Does central Government have any role in this governance structure? Are they allowed to remove an authority? Can they really stick their fingers in the pie? They’ve outlined general outcomes that they wish to see achieved by the application of local budgets. Can they wade in and have a real effect at any stage? Henry Peterson: I wouldn’t particularly see why they should, providing Parliament has accepted a basic principle of devolving accountability, as it has done for Scotland and Wales in the past. Q75 George Hollingbery: Does this work everywhere? Does this work in all communities at all stages, at all times? Henry Peterson: To make it happen in reality, you would still have to go through a phased process. The place-based budget would give each area a notional budget initially, and say, “Do you realise that this is the totality of public resource that is currently spent in your area? We’re not saying that you can decide on all of it now, but maybe in two or three years you

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could.” You might say to the leading 20 or 30 authorities, “You can do this for real. We will take the strings off.” Q76 George Hollingbery: You talked about a gradualist agenda, I think, moving forwards slowly to increase expertise and so on and so forth. Who is making the judgment about whether somebody is ready or not? Henry Peterson: The precedents, with the pilots in local area agreements and with Total Place, is that it is Government’s choice as to who’s allowed to go first. I think that can be a mature dialogue between the sectors, and that in fact took place with local area agreements. Q77 George Hollingbery: Gentlemen, any comments on that? I’m sorry to so rudely cut you off in your prime on the initial part of the question. Professor John Stewart: I’d like to go back to one aspect of your first question, and that is the bodies underneath the local authority. There is a strong case, I believe, if you’re going to have bodies below that level, for elected bodies—elected neighbourhood councils or urban parish councils and so on. The representative principle is the right principle for avoiding a lot of the dangers in the situation. Of course some local authorities have moved in that direction of creating such bodies underneath them. I’d like to reply to a point that James Morris made. You were pointing out to me that the Government had made certain proposals. None of those proposals has faced up to what they mean for the relationship with local authorities. The Government hasn’t made clear how it stands on the relationship between giving power to the communities and powers to local authorities. The changes you have referred to in education are an example of that. They clearly have a big effect on the role of the local education authority, but the Secretary of State has not yet given any indication, other than that he may consult on the matter, about what the role of local education authorities will be in the future. If we’re talking about all these changes taking place, including the police changes, are they going to have the power to precept upon the local authority. A single individual given the power to precept on a local authority seems a very big transformation of our governmental system. If changes of that extent are going to take place, we need some understanding of what they will be. The key lies in the relationship, and that’s what I’d argue hasn’t been adequately looked at or publicly stated. Professor George Jones: I would like to make two observations on what has just been said, if I may. Q78 Chair: Could we just try to be a little bit briefer in our responses, because we have more witnesses to follow and one or two points we still want to raise with you? Professor George Jones: I’m not happy with what Henry was proposing, which seemed to be extremely complex and bureaucratic, and totally incomprehensible to the public. I can bet, if we went out to our localities and said, “The local strategic partnership has decided this,” they’d look in

amazement at you and say “What?”, but they know about the council. The point that was raised over here about incremental, gradual phasing-in, I think I’m against all that. John and I are old men in a hurry. After all, we’ve been doing this for 40 years. We want to see it now. Much more rather than phased incrementalism; go for the big bang. At the start of a Government, do it and get it done, and do not waste time. The civil service of course would love phased incrementalism, so they can still be there doing it, so big bang, please. Q79 Bob Blackman: I have three quick questions to which I’d like pertinent answers, please. Do you think the Government is being radical enough in making decisions about budgeting on a local level? Professor George Jones: No. When I look at the community budget proposal, which is building on Total Place, it seems to me to be narrow in scope. I don’t want to play down the importance of problem families, but that seems to be the focus. There’s much more we need to do, and also they are pilots. I know the Government says there are 16; you say there are 30, but that still seems to me too few. We know what the principles are. Let’s apply them. Q80 Bob Blackman: What would you rather see happen? You want this big bang. You want place-based budgeting. What would you want to see the Government do? Professor George Jones: I want to extend that system so that local authorities are genuinely the government of their local communities, embracing all those services. Q81 Bob Blackman: All service provided for that local community would be controlled by the local council. Is that your utopia? Professor George Jones: I’m not sure about the word “control”. I’d say they would be within the responsibility of the local council, and one hopes, given they have the duty of community involvement, that they would be decentralising and commissioning. They don’t have to be using the workers in those services as their direct employees. I’m not proposing an expansion of direct labour. Q82 Bob Blackman: Henry, do you agree with that position? Henry Peterson: I agree with most of those. I do think community budgets feel like a Sir Humphrey response to local authorities pushing forward for place-based budgets, and Sir Humphrey saying, “Let them have another round of pilots.” We’ve had two or three rounds of pilots from local area agreements and Total Place, and now this, and it’s limited in scope. I would go, as I say, for all 150 areas of England being told, “This is what your budget would be. At the moment you can’t all take all the decisions on it, but some of you can and the rest of you will be able to in a couple of years.” Q83 Bob Blackman: The other issue that I want to look at is: do you see individual councillors making spending decisions for their areas? A council is one

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big area, and you have individual councillors now; are they going to be able to take individual spending decisions for the area they represent? Professor John Stewart: Not over the whole range of council budgets, but quite a number of councils have given individual councillors, or small groups of councillors, a certain amount of money to be used to solve local problems. That seems to me to be a healthy development. Q84 Bob Blackman: Do you see that going further? Lots of local authorities have done pilots, but do you see that being the ultimate as to where this would go in terms of the localist agenda? Professor John Stewart: No, I don’t see that. I’m not sure what you mean. Do you mean that groups of local councillors or individual councillors could decide the whole of the budget for their area? Q85 Bob Blackman: Why not? That’s the localist position, ultimately. Professor John Stewart: Because many issues cross boundaries; they don’t fit into the responsibility of a particular area. You cannot design transport arrangements on a ward-by-ward basis. You cannot decide issues where the facility is used by a large number of wards. There are all sorts of constraints on what you can do in a limited geographical area within a local authority. Professor George Jones: I wouldn’t want individual councillors to be given large sums of money that they could spend as they wished. I don’t like one-person rule; this is why we’re against directly elected mayors and police commissioners. I don’t like the idea of concentrating power in the hands of one person. I rather like a collective group, in which you can coordinate, in which you can check and balance, and look at a policy issue from different perspectives. I think there’s more value in that than in relying on one person. I’m very much in favour of mini-budgets for different wards and districts, but not for giving the power over the use of that money to one councillor. Why not have it as three, together with a group of representatives? We’ve had the experiments of the participatory budgeting experience, and that seemed to me to show that you could send down various issues— Q86 Bob Blackman: What I’m getting to is, say you have a ward with three councillors, would you give them power to spend a lot of the money for their ward, as opposed to a strategic direction of a council, which may be going in a different direction? Professor George Jones: I would like the council to allocate to the ward and to those three councillors, who are democratically elected representatives, discretion to spend for their ward—to have sums of money. Q87 Bob Blackman: How far would you go? Professor George Jones: I can’t give you an answer to that. I would give it as much as possible. Q88 Clive Efford: Isn’t there a limit, though, under any system, whether it’s localist or centralist, to how

much you can achieve at local level? Take an example of a local authority in an area where people are predominantly wealthy, and you have a Government that’s elected that wants to deal with poverty. In order to keep itself elected, the local authority needs to keep council taxes down and, therefore, is not really interested in raising a lot of money for expensive poor people, who are a drain on local government resources. How does central Government ensure that its policy of dealing with poverty is addressed at local level, where the political interests are in conflict with the locally elected politicians? Professor John Stewart: We’re not against action at central Government level. The issue is really about the balance in the present system and desirable changes. There are issues in which there is a national interest. The Government is entitled to act in the national interest. Redistributive issues, which are partly what you’re dealing with, are a national interest. A political party may take one view or another. The important thing is that legislation—and above all the prescription that goes with the legislation—should not extend beyond where there is a clear national interest. That’s a matter of political definition—I know that—but I think all the evidence is that Government action has extended far beyond where there is a clear national interest. I’m not against duties being laid upon local authorities. What worries me is when, associated with those duties, if there is a clear national interest, it’s not merely the duty laid on them but often 20 regulations defining in great detail how things actually occur. To me the most ridiculous example is the legislation on local government’s own political structures, where you have 16 regulations, over 200 pages of guidance and five directives. Previously the old committee system lasted on the basis of one clause in an Act, allowing local authorities to innovate and experiment. The idea that all those regulations and directives, and endless pages of guidance, have been drawn up by people who have never worked in local authorities shows how ridiculous the system has got. That’s only an example of the extreme to which we’ve gone in prescribing not the broad duty upon a local authority but exactly how it should be carried out. Q89 Clive Efford: Can I just ask you, Mr Peterson, about your block grant proposal? In the professors’ evidence, they suggest that, if local councillors are more directly accountable to people for the taxes that they raise, they’ll do the Treasury’s job for them in being more efficient in how that money is used. If they want more money, they don’t go back to the Treasury; they go back to the people who elect them. How do you introduce that sort of efficiency in your block grant system? Henry Peterson: My experience is that the local politicians take their responsibilities for being efficient with Government money entirely seriously. They’ve always worked in a system where only a small part of what they spend is raised through local taxation, but they know their constituents are equally concerned about Government expenditure and waste in any form. I don’t see the problem in quite the way that John does.

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Q90 Clive Efford: Just one last question: on the issue of variation in services from one local area to another, how much do you think the public are aware of one local area delivering a great deal of services for people with disabilities, for instance? Henry Peterson: I do think that the postcode lottery question is a big one for you to address and, in a sense, it’s very timely to address it. I can’t help feeling that, as we move into an area of harder and harder cuts, public opinion and views and attitudes are going to change. At the moment, I fully accept that postcode lottery is an alarm-bell signal for the British public. They get very exercised about perceived unfairness, inequity and things being different in different places. As the going gets tougher, I think they will begin to acknowledge that it doesn’t always make sense to provide services, as John said, at the same level in every part of the country, because they’re not the same. Needs are not the same; they’re quite different. I do think postcode lottery feels to me a bit of a historic UK preoccupation, which is deep-rooted in our psyche, but I think we may be moving on from that, and we’re seeing some of that debate open up around universal benefits at the moment. Professor George Jones: I hope you’ll puncture the myth of the postcode lottery and make recommendations to celebrate postcode diversity. If it was left to the hands of local authorities, the differences would have been freely and voluntarily chosen. It would be postcode choice, not postcode chance. I notice that most examples of postcode lottery that the media tells us about are in the health service. Now, we’ve had 60 years of nationalisation, of almost a Stalinist centralised system, and yet it has been unable to stop unacceptable variations in service standards. Now, if centralism hasn’t delivered standards that are acceptable, then why not try localism? I bet that standards would not be at the minimum but they’d be higher, as local authorities looked across, rather than looking at what’s imposed on them. Now, minimum standards, you may say, are absolutely essential in order to stop the postcode lottery. I wonder how many of you in your election brochures said, “Vote for me for the minimum standard.” I do not believe that politicians want the minimum standard. They want higher standards. That’s what you should be aiming at, not a system that will ensure the minimum. That seems to me in no way inspirational. I can’t believe you went and campaigned on behalf of minimum standards. What do the public want? If you do public opinion polls, they would like the same price for beer and petrol everywhere. That’s what they would like: a uniform price for beer and petrol. Are you going to give it? Is that reality? What do the public want? They want better, improved, higher standards. Despite all this comprehensive data collection, analytics and statistics, the public don’t really know what’s happening somewhere else. What they are concerned about is their own service defects, and they want improvement. I think you should stand up to the media and stop this nonsense of the postcode lottery, and say, “We want a system in which there is diversity that has been chosen freely by local government.”

Q91 Simon Danczuk: On that basis, central Government—somebody centrally or an organisation centrally—has to collect data on performance to see whether local people are getting the minimum standard or an enhanced standard to be able to prove the point that you’re making. Do you agree that somebody has to collect that? Professor George Jones: I don’t want central Government or civil servants doing any of that. Q92 Simon Danczuk: But how will people know what standard they are getting? Professor George Jones: I want the accountability to run to the best judges of whether the services are alright, which are the local people. They know, especially if they’re having to cough up much more taxation directly that they see going into those services and that expenditure. Q93 Simon Danczuk: So you wouldn’t have any comparisons between local authority performance in terms of certain services? Professor George Jones: You’re going to do an investigation into the departure, the demise, of the Audit Commission. We need to address what we put in place of the Audit Commission. There has to be auditing of services independently, not done by an arm of central Government or a quango that’s being manipulated by Government. There has to be an independent audit system in some way. That’s a topic for your other inquiry. It is useful to have an independent body producing data and statistics about performance, because then a local authority would get the data and think, “Hey, why are we different? What are they doing?” It’ll reveal information to them, and make them think about whether they are being effective or not. I’m very much in favour of comparative data. It could be done perhaps through the LGA or one of its family. Professor John Stewart: A lot of that has been developed by local authorities without the Audit Commission. There’s a great growth of inter-authority comparison; central statistics were very important. As George says, you would expect any group of councillors or group of managers in a local authority to want information of that nature. I don’t think primarily it’s how the public make their judgment; they have their own conception of what a good standard of service is, and that is what they will go with. They will feed in their experience of previous authorities, because some of them will have moved there, but I don’t think they search the statistics. It’s more a political tool and a management tool. Q94 James Morris: Just very quickly: isn’t one of the problems with your vision—and it’s interesting you talk about the public—that public confidence in local authorities is pretty low? I’m a fully paid-up localist, but when I was campaigning in the election I didn’t hear many people clamouring for further local authority control over spending. I’m not saying that’s not necessarily right, but there’s a big gap at the moment between public perception and reality. How do you think that possibly would be bridged?

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Professor George Jones: No wonder the public is not wholly trustful of local government. They’re not very trustful of MPs either. No wonder that has happened with the centralisation that has taken place. What the public can see is that decisions have been sucked out of the local arena into Whitehall. That’s one reason I think why turnout is low. Q95 James Morris: Their scepticism isn’t a kind of philosophical one about where decisions are made, although that might be part of it. Isn’t it suspicion about the ability to deliver? Often when you hear the public, they have a suspicion or a question mark about the ability of local authorities to actually deliver the services that they think they require. Professor John Stewart: The research shows very interesting results on this. It actually shows that local government officers are, for example, much more highly thought of than civil servants. If you

ask people to what extent they’re satisfied with the services of local authorities, you will—it’s quite true—get something around 50% to 60%. If you then go through the particular services the local authority provides, you actually get 90%, because when you ask the question about the local authority, people think it’s all those people in the town hall drinking their coffee and so on. That’s what local government expenditure is about. If you ask people in the surveys whether expenditure should be cut, they don’t want education cut; they don’t want social services cut; they don’t want roads cut. What they want cut is local government expenditure. The problem is that the local authority doesn’t have a good identification; it’s not identified sufficiently with the services it provides. Chair: Thank you very much all of you for coming and giving some very interesting evidence to us. Thank you very much.

Examination of Witnesses Witnesses: Mr Andy Sawford, Chief Executive, Local Government Information Unit, and Mr Ed Cox, Director, ippr north, gave evidence. Q96 Chair: Good afternoon and welcome to you both. For the sake of our records, could you just identify who you are and the organisation you represent? Ed Cox: My name’s Ed Cox. I am the Director of the Institute for Public Policy Research in the north of England. Andy Sawford: Hi, I’m Andy Sawford and I’m the Chief Executive of the LGiU. Q97 Chair: You’ve probably been listening to some of the evidence. One of the questions we’re trying to explore is the relationship between local government getting more powers and citizens or local communities getting more control over their services. Do both those things have to happen for a truly localist agenda to be developed, or is there conflict between those two things happening? Ed Cox: I think that both of them can happen together. I don’t see that there’s a contradiction between the two. I would argue for a much stronger local government than we have currently, with greater powers over things like schools, health, police and economic development, for example. At the same time, along with that power and responsibility that could be gained at the local level, local government will want to, as I think it does already, engage much more effectively with local communities, both in terms of service design but also in terms of service delivery; in how communities can be involved in—to use the jargon—“co-producing” local services and local benefits at that very local neighbourhood level. Andy Sawford: I think it’s absolutely essential that both things happen: that more power is passed to local government so that we have a new relationship between central and local government in Britain; and that more power is passed by local government to local people. I argue for localism and stronger local democracy, not around the institution of local

government, the structure of local government and what it does as a service provider, but rather around local government as being a place where local elected politicians come together, having engaged with their community and made decisions about local priorities, and made tough choices sometimes about local services, to think about what the real local needs are. Clearly, you then need to have a really active, vibrant local community. What’s really important in thinking about the recommendations that this committee might make that inform what the new Government is doing—and the legislation is coming out, I think, within the next few weeks—is being quite clear about the importance of local politicians and local councillors in local decision making, how they can connect up local services, how they are the right people to make choices about local public spending and hold people to account for public spending. In that sense, in this framework, thinking about things like the community right to bid to run services, the community right to own assets and so on, somebody at a local level has to hold people to account where they’re using public assets, when they’re spending public money and when they’re providing essential services. Someone may have to arbitrate between different bids. Somebody has to have a handle on what community is in terms of these community bids coming forward, and that’s why it’s absolutely essential that local government is empowered, too, and this is in a sense a sequential process, rather than something that is a mish-mash. Q98 Clive Efford: Can you say something about how far you think we should go in integrating local services? If you’re going to have real decentralisation, don’t we need to see all services that are provided in a local area, as much as is practically possible, all integrated and democratically accountable at the local level?

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Ed Cox: Yes, my experience is that the greatest levels of service integration take place at the neighbourhood level. They are not badly coordinated at the local level, but the problem here lies actually in central Government. One of the reasons that we don’t have as integrated services as perhaps we should in this country is due to the way in which central Government, through its Departments, has essentially carved out its own scheme for financing, for holding accountable and so on, for each service area. I think that is not at all joined up when it translates down to the local level. If I may make a wider point now, it’s to say that, too often when we talk about localism, we identify the problem being local government. Localism and an inquiry on localism tries to sort out the problems of local government. Actually I believe an inquiry into localism is as much about looking at the way central Government works as it is about the way in which local government works. My analysis would be that it is the problems around the way in which central Government works—both in terms of the way it seeks to direct and deliver services, and hold them accountable, and finance services critically—that’s the root of the problem, rather than necessarily the attempts that local government is trying to make itself to integrate services. Andy Sawford: Integration sounds to me like something that we would all say notionally we support—the idea that services are integrated—but I’m not sure that we would always want to see that be the driver for how local public services are provided, communities engaged and services devolved in the coming years. It sounds a bit like an exercise that some very expensive private-sector consultants might come and help you do, which your managers can most effectively engage with and that your community can’t so effectively engage with. I rather think about terms like “connected services” and “network services”. I think terms like that are actually much more helpful when you think about the potential of mass localism for local innovation, for communities doing things very differently, for micro-innovation and so on, but also clearly the opportunity there is in bringing services together, in bringing public service providers together to do things more efficiently and more effectively for people. Lots of the big public policy challenges we face involve local authorities. For example, in criminal justice, dealing with high levels of offending, which is something we worked on with the Chair and parliamentarians a few years ago at the LGiU, you see that when someone comes out of prison on a Friday night with no money in their pocket, no treatment but perhaps they’re a recovering drug addict, no housing and no prospect of a job, uniquely a local authority can help to connect services around those people. They’re not necessarily provided by a single provider in the sense that integration might imply. It may be a semantic difference to some, but to me I think it’s quite an important point. Q99 Clive Efford: Isn’t the issue about accountability to the local community for the way services are constructed, provided and funded? That

should have some form of local accountability, which traditionally would be democracy. The way that services are constructed currently, too many of them are, or some of them are, centrally funded and controlled. Whether it’s integrated, whether it’s connected or whether it’s networked, isn’t the fundamental thing about accountability to that local community? Ed Cox: Yes, but the way in which accountability currently works from a community perspective is that, because the Department of Health, for example, says that we have LINks around health provision, if I, as a member of the community, want to hold my local health services accountable, I have to go to the LINks meeting on Monday night. If I have an issue about policing, because the Home Office says you have to have this form of accountability for local policing structures, I have to go to the policing meeting on Tuesday night. Because the council operates in a slightly different way, I need to then go to the ward coordination meeting run by the council on a Wednesday night. As a local resident, I didn’t want to go to any of those meetings at all, because then it squeezes out me running my local Cubs group or Scouts group or whatever; I haven’t the time then in the rest of the week to do the things I actually wanted to do. That is the reality of community engagement in a highly centralised, highly siloed situation. Having actually been, in the previous Government, at the heart of trying to negotiate these things between different Departments, I know that every Department wants to have its own mechanism of accountability. What I would argue very strongly is: allow local government to be the mechanism of accountability for these different services. That way—which is what I think many local authorities are trying to do, but they struggle because of what’s handed down to them— people can go to their ward coordination meeting on a Wednesday evening, and leave Monday and Tuesday evenings free to do other things they want to do. Q100 Clive Efford: How do network services fit in with that? Andy Sawford: If you said to the public, “What’s most important?” I think they’d say, “The services are what I want—that they work for me.” If you said, “We’ll offer you accountability but the services will be rubbish,” I think they’d choose something that’s a balance around how to get the most effective services locally. I agree with Ed on the silo point, and I think it’s a really important one. In a sense, we have a fig leaf of accountability over lots of local public services, which protects big-spending Whitehall Departments with their silo-ed preference for delivery, holding on to their responsibility and what they would see as their remit around public services at a local level. I do think we need to connect up local public services. In terms of accountability, again we need a much more vibrant local democracy in which there are all sorts of ways in which people can become engaged. I think the way to do that is to be absolutely clear that the role of democratically elected local councillors is the primary place where big decisions are made about

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spending, raising money, local priorities and so on. Behind that, there are all sorts of other ways in which communities can and will be engaged. That’s why my organisation is supporting the broad direction that this Government is going in, but what we want to see much more clarity around is what that relationship is between the local authority and local community democracy. Q101 Clive Efford: I’m sorry to press the point, Chair, but I’m still not clear about what you’re saying the role of local democratically accountable councillors is in a networked or connected system. Is it that some services are centrally financed by Government directly, and they cooperate wherever it’s in their interest with the local democratically elected body, or should we have the democratically elected local councillors actually being accountable for how that money is spent on all those services in the local area? Andy Sawford: Absolutely, we should. Clive Efford: What’s networking and what’s connected? Andy Sawford: You talked about integrated services; as I say, if you went down The Dog and Duck and said to people, “Do you think these services should be integrated and that’s desirable?” they’d probably say yes in the sense that the opposite is disintegrated services. Integrated services is about scale, isn’t it, in a sense? You could see it as personalised around an individual. In that sense, my argument for connected services is quite important. If you see it as central Government driving integration, or indeed large local authorities with big budgets driving integration, it would be around bringing things together in large units of delivery. Actually, as we go forward, that’s probably very large commissioned contracts with private-sector providers and so on, by the local authority. It’s big plans and strategies. It’s not about saying, “Actually, what we probably need here is a core of what the local government does as an organisation that enables things to happen in our community, supports local enterprise, local voluntary action and so on, that provides some core services. Then we need a vibrant map of lots of other local provision.” But, in the end, somebody needs to make a judgment about what’s working in that and what isn’t working in that, connecting with the community, neighbourhood organisations, residents bodies, if there are trusts or foundations or mutuals that are running these organisations, or social enterprise boards, talking to them about service provision, making sure you’re getting feedback from service users and so on. It’s evolutionary. Ed Cox: Can I pick up on that, because I think these issues of scale are absolutely critical in relation to service provision? I do think that, very often when we talk about localism, we use this in a very general sense that could be applied to any particular service area, with a broad presumption that what we’re trying to do is drive decision making around local services to the absolute lowest level—to that of the individual. Now, I think we need to be a bit more sophisticated in our understanding of localism, in so far as different

services or different public investments of different kinds are best achieved at different levels of scale. Better than the principle of localism, whatever that is, is the principle of subsidiarity, which is, as I understand it, driving decision making down to the lowest feasible level. This word “feasible” seems to me to be absolutely critical in this context, because there needs to be an assessment made in different service areas about what is most efficient and what is most effective in driving the service down to that level. In some cases, it will be down to the individual, but in other cases, it won’t; it will be down to the neighbourhood and, in others, down to the local areas, and in some cases, down to a sub-national level, which is above the local authority level. I think that’s fair enough. What I think we need, and what any sophisticated and serious attempt at understanding localism needs to do, is to create what I would call a framework for efficiency and effectiveness, where we can be clear about different services and what level they need to be driven down to, and for what reason. Then we can make an assumption about those. It seems to me that, very often, we get caught in the discussion and the debate about localism, which isn’t sophisticated enough, which talks about all services all at the same time and presumes everything’s driven down to the individual level. I think that ultimately is just a straightforward ideological mistake. What we really need is this framework of efficiency and effectiveness. Andy Sawford: I don’t think I agree with that at all, Chair. I think that actually what we need is much more pull by citizens. In localities, as a localist, I would expect that some councils will make some judgments about what’s best for them to deliver at a bigger scale, and what’s best to push out to the community. Other councils won’t. Through local accountability and local democracy, looking at how effective those services are from a user point of view, people will then vote with their hands, vote in the ballot box, turn up to meetings and say, “Look, we don’t think you’re delivering this in a way that’s effective.” The idea that you have a national framework that links to the minimum standards— Ed Cox: No, not a national framework. I think this framework needs to be developed from the bottom up. I’m not arguing that— Andy Sawford: In a sense it’s then imposed on people, rather than people choosing to get involved. Q102 Mike Freer: Sorry to spoil your fight. I think, Mr Cox, you just started to touch on one of the issues I wanted you to expand on. There are two questions, but they come at what I see are the inherent tensions in localism from both ends of the spectrum. Can we trust the localism agenda, when the Secretary of State dictates to councils that they shall not have street clutter and they shall not have newspapers? With a localism agenda, isn’t that their choice? That’s one conflict I’d like to talk about. Isn’t then the other conflict, if you are devolving down—I appreciate Mr Cox said to the feasible level where Mr Sawford saw no limits to decentralisation—local neighbourhoods? I have local neighbourhoods that do not want bail hostels or houses for supporting people with mental

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health problems. Is that their right, and if so, where do they go? How do you deal with those two conflicts? Ed Cox: On the first, I’d be very straightforward and say that the Secretary of State should not dictate, and actually cannot dictate, what councils are doing around bin collections or newspapers or whatever. I’d say that is anti-localist. I’d also add that the current plans around the council tax freeze, or the opportunity for a council tax freeze, are anti-localist as well. The fact that, after two years, you can have a local referendum looks localist, on the face of it, because you’re asking local people to decide, but ultimately it’s symptomatic of the fundamental problem, which is that central Government still wants to control and dictate the amount of finance that a local authority can raise for itself. We heard in the previous session some of the fundamental problems about the lack of financial autonomy that local authorities have. Very simply, I don’t think the Secretary of State should do that, especially not when he claims that “localism, localism, localism” are the three priorities of his Department. On the issue of feasibility, would you remind me of the question? Q103 Mike Freer: You actually said that localism should only go to the most feasible level of subsidiarity, which kind of answers the question, because at some point the council will step in and say, “There are some decisions that the local people would simply choose not to make,” because no one wants a bail hostel next to them. Ed Cox: That is why, on the grounds of feasibility, there are some decisions that have to be taken at a— for want of a better term—more strategic level. Q104 Mike Freer: For the greater good. Mr Sawford, you saw no limits to decentralisation. Andy Sawford: No, I didn’t say that. I didn’t use that language at all. There are massive limits on decentralisation. Of course, one of them is the geography and the politics of our country, and the way that the media is very London-centric. There are urban conurbations in China as big as this country, and there are states in America as big as this country—or nearly. We are a relatively small country, and certainly geographically we’re a small country. We have a sort of culture here where Parliament plays a huge role in the life of our nation and our politics. I don’t think we’re going to get to a time where people stand for Parliament without making promises that are about the local public services that people will receive. I’m not sure that it’s desirable to do that, and I just don’t see practically how you do it, certainly in the short term, despite the rallying cry of the professors we heard from a moment ago, whom I admire hugely. In the short term, I don’t see a shifting of 75% of resources locally and moving to a situation where taxes are raised locally. In so far as taxes are raised by central Government, and central Government will determine some of the priorities for that, clearly it’s honest and right that, when people stand for Parliament locally, they say, “These are my service priorities,” and so on. What I want to see is a different relationship between central

and local government. I want to see not a kind of parent-child relationship, but a more equal relationship between central and local government. In terms of your point about the statements by the Secretary of State, frankly I don’t think it matters too much if Secretaries of State feel like they can use the pulpit of being in central Government to share their views and the manifesto they stood on. What I want to make sure is that, in many cases, local government can say, “Okay, that’s what you want us to do, but we’re going to choose to do it differently.” I think that’s the test. In a sense, I have put that to Ministers and they say, “Well, Eric Pickles might be telling you what to do, but he won’t make you do things.” I think that is a difference. Part of the culture change is for local government to be a bit tougher and stronger, to stand up a bit more and say, “Actually, we don’t want to do it that way. We’re going to have fortnightly bin collections, because that’s how we choose to do it in our community.” Part of this new relationship is also about local government’s attitude, the culture and so on. On your point about people not necessarily wanting services to be provided nearby in certain ways or get into controversy about planning and housing provision and so on, well that’s what local politics is all about. Q105 Mike Freer: If I could press you, where do you draw the line on those services that residents historically have always tried to resist? Andy Sawford: Councillors have a responsibility to provide those services, and so they have to come together. That’s in the end why I talk about the primacy of the council. It would be a healthy thing if there were lots of organisations in communities and lots of people expressing their views one way or another. In the end, councillors must decide. Q106 George Hollingbery: We’ve certainly started on this topic already, but what is the proper responsibility of Government in a localised system? I’m particularly interested in your reactions if, say, you have young children and the local school were to fail in a decentralised system. Quite whether preschools are in a decentralised system is a matter of some dispute, I suppose, given that it is centrally funded. If the GP fund-holding practice collapses and/ or the local waste collection collapses, does Government get involved now or does it wait for something to make itself up locally? Andy Sawford: I wonder how you know we both have young children. Is it the eyes that give it away? I think there’s a spectrum and, actually, in the end I think these are judgments that central Government will have to make in a way that is consistent with the commitment in the manifesto, in the coalition agreement, in the legislation to move towards a different balance, a different relationship between central and local government. I don’t expect us to get to a situation where central Government stands by when there’s very, very serious service failure and does not intervene. I think the question is how do they intervene and when, and there being a consistency about that, and also there being a proper appreciation

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of the role of local elected councillors in that framework. Central Government, partly in the debate about this localism and decentralisation point, needs to be spelling that out, because we have the replacement of the Audit Commission, the CPA and those kinds of systems notionally with the collection of data. What we don’t know is at what point the Government might choose to act on that data. For example, mortality rates in hospitals, at what point will Government say— Q107 George Hollingbery: We had evidence earlier, did we not, that some sort of constitutional settlement about this might be the way forwards? Do you agree with that? Ed Cox: I do, yes. Andy Sawford: I think there needs to be a constitutional settlement, but it’s not one in which you could simply say, “These matters are all the preserve of local councils and communities,” unless you completely changed the British system of government and culture, and that’s not what we’re proposing at the LGiU. The problem with that argument is it’s pretty clear what some of the parameters are in which we can interact with the Government, this new Government, over the next five years around some of these key issues. There will be a review of local government finance. There will be discussions about where and how central Government intervenes, and I’d rather interact more pragmatically with that. Q108 George Hollingbery: Basically in each and every case, Government just has to take a view. Is it that important? Andy Sawford: It needs to be very, very different from the present situation, and the accountability should be much more at a local level. There was a question raised in Prime Minister’s Questions, I think, a couple of weeks ago around local service failure, to which the Prime Minister gave a response. I think the public would expect that. The issue is what intervention is made and in what way you intervene in local services, and how you exit that also, and actually restore responsibility at a local level. Ed Cox: I think I’d share many of Andy’s views on that. I think I’d just be a little bit more urgent about that. I would like to see, yes, local government and, in the current situation, other local service providers being held to far greater account for service failure than is currently the case. I’d like to see Ministers resisting the temptation a little bit more than they do at the moment to make statements when services do fail. Where I think I differ with Andy is the speed of cultural change that we need, because I agree with Andy that it’s very much a cultural issue. There is a need at the moment, within British society, for the Minister to respond to serious situations. I’m most encouraged by what the current Government is doing in the sense that we need to hear Ministers say, more often than not, “That’s a local problem. That needs to be dealt with by that agency and I’m not going to respond to that.” Q109 Chair: Doesn’t that apply to the Opposition Front Bench as well?

Ed Cox: Absolutely, yes, I would agree with that. I think we need to get this cultural shift happening much more quickly, and the current Government has put in place in the things that it has said already an opportunity to move faster. The other question that I’d ask, though, in response to your question, is why has the school failed? Why has the GP clinic failed? We’re hypothesising at the moment, but I’d once again point back to the fact that very often services fail because of the over-standardisation of a very centralised system, and the fact that they’ve been pursuing a service and providing a service in one particular way, because they’ve been told they have to pursue it in that particular way, and taking their eye off the ball of a very local issue that they haven’t then been able to respond to because of a centralised system. Again, it’s easy to construct the question as a local problem that needs to be dealt with locally and that somehow local agencies are failing, when at the heart of the problem is a very centralised system. This goes to the heart of the postcode lottery issue that was being discussed before. I would argue, and I think there’s growing evidence for it—Chris Huhne’s done work around OECD data and NESTA has done some work on mass localism, which is worth looking at—that the reason we have such big postcode lotteries, or whatever you want to call them, in this country at the moment, is actually because of the centralised system, not despite it. Andy Sawford: I feel a test, Mr Hollingbery, would be when Members of Parliament just simply refer all correspondence that is about local public services to the local public service provider. Q110 George Hollingbery: I do. Andy Sawford: I think that’s exactly right. I think that’s what all MPs should do. George Hollingbery: It clearly must be the right thing to do, but perhaps it has to fail first before you weigh in. That’s my attitude anyway. Q111 Simon Danczuk: You answered my point actually. It’s the point you made earlier, Andy, about parliamentary candidates standing on a platform around local services. Does that suggest that, in this new localism perhaps, Members of Parliament should have greater responsibilities, rather than just an influencing role in terms of local services and local government? Do you both think that they should be given more rights and responsibilities, perhaps playing a role in appointing the chief executive of a local authority, directly having a responsibility for other things, so really changing the dimension of what a Member of Parliament should do? Andy Sawford: No, I think Members of Parliament should talk about foreign affairs, defence policy and those kinds of issues about our national legal system and so on. I expect that, for many years to come, because the pollsters will tell them to and the public will tell them to on their doorstep, they will still make pledges about community safety, local hospital services and so on. I think it would simply be unrealistic and fairly pointless for any of us to say—

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Q112 Simon Danczuk: Why is that though? Why shouldn’t they play a more direct role in terms of encouraging or enabling, not just influencing, but to have some rights and responsibilities around local delivery? Andy Sawford: Clearly they do; the issue is how they exercise them. I don’t think that the exercise of those powers and responsibilities should be at a local level. It should be here in Parliament. Ed Cox: I think that is the problem, and it is this huge temptation that I understand Members of Parliament would necessarily have, given that they are voted in locally, to be seen to be addressing local service issues. It is a real tension. Again, I’d argue a constitutional settlement might promote a debate about this, but it also might actually give MPs the opportunity to say, “Look, we have a constitutional settlement here. This is for local decision makers to decide.” There’s a huge temptation. I do accept that. I think MPs do have a role in relation to local services in two areas within the very localised scheme that I would want to put forward. Firstly, around equalisation, if we’re talking about local government finance—and I would argue very strongly for much, much greater local financial autonomy—that’s where MPs and national Parliament can play a big role. Adding to what you heard earlier, I would argue that there are cleverer people than me who could set out an equalisation formula that would work across a broader tax base, a range of taxes and other financial vehicles, and enable the 50:50 that we heard about. I think that is possible; it’s perfectly feasible to do that. Equalisation is the one area where I think national Government needs to step in. The second, and I think Professor Jones was absolutely spot on about this, but I still want to stick with the term “national minimum”, is that I would argue that national Government needs to take a strong view around what I would call “national minimum outcomes”. I don’t believe in national minimum standards, in that services need to be standardised. I think it’s much more about what the outcomes are for local communities. There again, Parliament should have a view as to what outcomes are necessarily desirable for people across the country. Andy Sawford: I disagree with Ed on that point. The role of Members of Parliament is expressed in legislation and in statute in the responsibilities that it then imposes on other parts of Government, including local government. I think that’s the proper role, rather than a set of minimum standards, outcome targets or whatever they are. Very quickly, frankly, they look to me and probably feel to local councillors much like the performance system that we’re all celebrating the removal of, because of all the constraints it imposes. On your first point, in a sense you’re talking about integration—thinking of the earlier conversation—of MPs into the local political system. I’m not saying they should completely keep out of it. I think in many cases they can play a very positive role, and they should be connected to the local political system. Actually, there are lots of very good relationships between councillors, leaders of councils and their Members of Parliament, which affords them an understanding of what each brings to local politics and to the local community, and the role that each of them

has. It’s not for me about the MP being on the council or having a formal role. Q113 Bob Blackman: To build on what we’ve been discussing there, can you see that there’s a complete dichotomy between saying the Government will impose minimum national standards or outcomes— call them what you will—and people deciding at a local level what they’re going to achieve and how they’re going to achieve it? Ed, you seem to have championed this. Ed Cox: Yes, but I don’t see there’s a dichotomy between the two. I think it is right for a national Government to articulate a set of outcomes that citizens of this country could expect in terms of their life chances. I’m talking about them in quite broad terms. I’m not talking about performance standards. I want to be very clear: it’s different from that. How then those outcomes are achieved is very much a local decision. I wouldn’t argue that this is an imposition in the way you’re describing it. It’s a set of principles that a national Government has set out: “These are the outcomes that we would expect people to be able to achieve,” rather than, “This is how you’re going to do it.” How you’re going to do it is much more of a local decision. Andy Sawford: In effect, they do that through legislation and also, very importantly, through things like the Comprehensive Spending Review and budgets. Central Government will set priorities, and they will be priorities that local government and other local public service providers have no choice but to respond to, in so far as money and resources are a big factor in what you can do locally—not the only factor, and sometimes I think we put too much emphasis on it, but it is a factor. Q114 Bob Blackman: To cut across here, almost on any subject, be it health or education, there are inequalities built into the system. The fact is we were hearing the other week that every station you go down the Jubilee Line in London cuts a year off your life expectancy. It’s similar in education terms. They’ll be greater expectation from certain communities about achievement levels. If you say the minimum standards or the minimum outcome would be x, then naturally there would be a view of saying, “Give us some more money. We can make it happen.” That must fly in the face of saying, “We’re going to allow you to raise money locally—so it’s up to you how you raise the money—from poorer communities, but then lift those poor communities out of poverty.” How can that be achieved? Ed Cox: I think you’re assuming a more prescriptive set of outcomes than I think I am. What I’m suggesting is— Q115 Bob Blackman: I’m trying to elucidate what you mean. Ed Cox: What we’re suggesting is that there needs to be an understanding of what national Government’s priorities would be, education over health, or this type of education over that type of health, rather than an articulation of exactly what needs to be achieved to what level and what standard because that’s just back

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to the performance regime that we’re trying to get away from. It’s a much more general set of outcomes, but it might allow for variation between different political parties as to where they want local— Q116 Bob Blackman: Could you give me one example of an outcome that you think would be reasonable to be imposed nationally? Ed Cox: No, not immediately. I’d have to do some more work on that.

relationship that we’ve had, rather than the more equal relationship between local and central Government. You need to move away from that into a situation where local government is much more self-determining and it decides to extend its powers and so on. I repeat my point from earlier: I think that local government has to be really honest in this discussion. Part of the problem here is that central and local government aren’t really honest about the effect of what they’ve done and the culture that operates. Local government hasn’t pushed its own boundaries in a way that it could have done at times, and it really needs to be doing that in the years ahead. That’s part of the deal here: that local government now needs to show what it can do. Ed Cox: I would agree with everything that Andy has just said in response to that question. I would add though that, if we compare different central Government Departments, actually local government, as seen through the Department for Communities and Local Government, has been one of the most effective and efficient Departments over the past 10 years and, to that extent, has already demonstrated that, with notable exceptions—in the same way that there are notable exceptions among hospitals, schools and so on—it has already earned the opportunity to be given far greater powers and financial autonomy than it currently has.

Q117 Bob Blackman: I think we need to understand, when you’re saying “national outcomes”, what those are, in terms of our inquiry. Andy Sawford: I think that’s a really important point. It’s when you move from the conceptual to actually saying, “What would these be?” that you get a feel for how much they might constrain local choices and local decisions. I feel there’s too much of that already. If you think about the decisions around the Comprehensive Spending Review and the decisions to protect certain budgets, in a sense it was fairly inevitable. I go back to my point about the manifestos that people stand on. If you look at the kind of choices that different communities might make, many communities would prioritise things differently to central Government. I don’t want to see any greater constraint than there already is on the ability for communities to prioritise it. On your point about the inequalities, what we should be trying to get to, I would have thought, is a democracy that’s strong enough, that’s vibrant enough at a local level, that people just simply won’t accept that, and they do vote with their feet: they come to the council meetings; they air their views; they vote at elections; and they see that the responsibility lies with the local council. This is my point about culture change. When people think people are important and they’re going to do something that impacts them, they’ll vote. We have to get to a position where people actually do see that local government is incredibly important to their lives, they participate in elections and they express their dissatisfaction with services that are failing. If resources are the issue, the accountability is more at a local level, so we have shifted the balance of this so that there is the ability to raise local taxes, for example, or to finance things in different ways in communities. People then say, “Okay, well you’ve told us that this service isn’t acceptable. We feel that we need to spend more money on it. Will you accept this additional level of taxation or charging?” When you get to that position, you have a different balance of power and a better system of government, I think.

Q119 Heidi Alexander: Would you accept that there are examples of poor councils across the country. What’s your opinion? You don’t think there are any? Andy Sawford: No, I think there are lots and lots of examples of poor services around the country. It’s a bit simplistic to say there are poor councils. If it’s a poor council, it probably has poor leadership, and I think you need to go in and address that issue. It is branding all the things that council does, when actually some of the things the council does might well be very good, and might well be deliberately chosen in terms of whether they’re a priority or not in that local community. It goes back to the point that Mr Hollingbery was raising around when and how central Government intervenes across that spectrum. We do need to have that discussion fairly urgently, particularly around this legislation about what that might look like. The other critical point is, if the other part of this system in which you correct service failure is that local people do that—they vote with their feet and so on—you need to expose much more information about the kinds of services that people receive in their community, and be much clearer about how people can get redress, how they can share their views and influence local services.

Q118 Heidi Alexander: I just wondered to what extent you think that decentralisation should be dependent upon local authorities proving their competence or proving their potential to be competent. Andy Sawford: The “earned autonomy” approach that the Local Government Association and central Government have agreed around for about 10 years I think is the wrong starting point. It’s hugely patronising. It reflects the kind of parent-child

Q120 Heidi Alexander: Moving on to a slightly different area now, you talk about local people and their relationship to local government, and I wonder whether you have any evidence that local people want to see more power transferred to local authorities. Andy Sawford: There are polls about whether people want to get more involved. There are opinion polls that are commissioned from time to time about where people want power to lie but, as ever with these kinds of exercises, it depends often how you ask the

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question, doesn’t it? Do you want mandarins in Whitehall to determine how local services are provided, yes or no? It’s fairly obvious isn’t it? Do you want complete local determination, if that presents the risk that the services we receive here may be poorer than elsewhere? People would be a bit unsure about that. In a sense, the proof of the pudding is in the eating. We need to make sure that we get to a situation where local councils can determine priorities. They can go to the electorate and say, “This is what we’re going to do,” and people can then hold them to account for that, once you move into that kind of system of local democracy and that kind of relationship. Ed Cox: I feel that we’ve spent the last decade, if not longer, in something of a chicken-and-egg situation on this one. Central Government won’t let go until there’s demonstrable proof that local authorities are all going to be absolutely brilliant and the public is going to trust them completely with all decisions. For that reason, we don’t let go. My sense would be, as I said earlier, that there isn’t a huge amount of evidence to suggest that a highly centralised, silo-based system is being particularly effective either. As the professors were saying earlier today, now is the chance to say, “That system hasn’t worked. Let’s try something as an alternative.” When I say “Let’s try something”, I don’t mean a whimsical decision to try something. I think there’s a lot of evidence, particularly from overseas, that suggests that we can have far more effective, efficient and equal mechanisms for delivering local services if we decentralise more than we have at the moment. Andy Sawford: There is an important point here too about context, because we’re moving into a very different time. If we think of it as a fairly benign decade that we’ve just experienced in terms of funding, local services and so on, that would be the wrong frame of mind in the sense that there are going to be big controversial choices in communities, and people would want those to be made at a local level and would want to have some say and involvement in that. There is evidence to support that: that people do want some say and want to be involved. You see that particularly when you look at the surveys around the cuts at the minute. I think in the last poll that I saw— a MORI poll the other day—57% of the public supported deficit reduction, which is down only 1% from June. When that moves from a big conceptual, political national argument to something that is locally impacting them, people may take a different view and they certainly want to get engaged at a local level. I’m sure it’s both better in terms of local public service provision and the right thing for democracy that they can do that and that those decisions are taken locally. Q121 Mike Freer: Following up on one of your points about how bad councils or poor services will be voted out, I think that’s somewhat naïve. We have a history over the last 20 years of councils across the UK that have been single-party states, whatever the party is. It doesn’t matter how bad that council is, they never get voted out. How do you address that if you’re trusting the people to vote out poor service deliverers?

Andy Sawford: What councils are you thinking about? I can think of many where the electorate have shown, even in an area where you have Members of Parliament elected consistently of one party, with huge majorities, that in local elections people are still prepared to put a different party in if they feel dissatisfied or are prepared to explore a different mechanism. For example, the LGiU is neutral around the issue of elected mayors, but we do support the right of communities to look at that model of political governance. Hackney would be a good example of a place, and there are others, where people have used that as a way of changing the system locally, even though they didn’t change the party in power locally. In Doncaster, the public would only wear for so long the control by a political party that they felt was failing. In Liverpool, the public showed that they were dissatisfied with the performance of the party. Q122 Mike Freer: You’re talking several hundred years for Liverpool to come to that conclusion. Andy Sawford: These things will probably take longer, in the sense that the relationship between how people vote and what happens is not as strong as it should be. If we get to a situation where we have got a different balance of power, where many more decisions are made locally, it will become more acute and more apparent to people, and you might expect a quicker turnaround if people are dissatisfied with service provision. It’s not an argument. The rotten boroughs argument, for me, is not good enough as an argument against doing this. Q123 Mike Freer: I didn’t say it was. I was just saying it’s an interesting dichotomy that many of us around the table have had local government experience, where we’ve seen appalling service delivery and the people have been re-elected year after year. Ed Cox: I think you’re absolutely right to ask the question and to put your finger on a very important issue, but I think it demonstrates huge cynicism on the part of national Government to use that as a stopping point for greater devolution. I think it’s an appalling argument to employ. I think it’s absolutely the right question to ask. My main areas of work are across the northern cities of England. If you look at the political transition that has happened in many of those northern cities, I think it’s testimony to the fact that democracy can work and needs to be given much more opportunity to work than it currently has. Q124 Mike Freer: The point I’m coming from is that I’m a localism sceptic, not a localism cynic, in that I want to be reassured that these pressure points and tensions can be addressed to make sure that localism works. Ed Cox: This is at the root of the cultural problem that we have. Somehow there’s a zero-sum game going on in terms of the amount of political power that we have in this country. National Government’s got a whole load of it, and it’s prepared to let go of a little bit of it to local government if it’s earned or if it can prove that the public’s going to trust it. That, to my mind, is a fundamental reason why we do need a constitutional

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settlement that actually says, “No, this isn’t a zero-sum game in terms of political power. Local government has in many, if not most, countries of the world an entirely legitimate autonomous right to exercise power, almost irrespective of the role of national Government. This isn’t something where there’s a little bit of give and take here, and give and take there. Local government is a human right that people should be able to seize upon.” Andy Sawford: You’ve described yourself as a sceptic not a cynic. I would say I’m a pragmatist not a purist. Mike Freer: “Tomayto, tomahto”. Andy Sawford: There are all sorts of ingredients that go into correcting some of these difficulties around localism. You give that example, and without wanting to sound disrespectful to the Committee because I’m sure you’re not among them, I dare say that there are all sorts of levels of performance among Members of Parliament, and people get returned time and time again. It is the right of the electorate to make those kinds of judgments in its wisdom. There are other things. There’s a point here about the party system and what parties do in these instances, and sometimes they haven’t stepped in. There’s a point about local government’s peer improvement and challenge within local government, which I think has been lacking in the past. There are all sorts of reasons why these things happen, but the critical point has to be to expose that, both in terms of the power that is wielded locally and therefore how much people care, and the information that people have and the connection that people have to those decisions and to local services. Q125 James Morris: Some people think all this discussion is quite academic, because there is no prospect of a real, proper devolution of local finance. In your submission, Andy, you were saying that you didn’t see it being a short-term prospect. I know that you perceive yourself to be a pragmatist but, in purist terms, isn’t decentralisation meaningless without real financial autonomy for local government? Andy Sawford: I think it happened, the massive devolution of local finance, in some respects a few weeks ago. Technically in terms of the system for collecting and distributing taxes and so on, we haven’t seen reform, but two things happened in terms of the decisions that were made in our democracy a few weeks ago in the CSR. One was that the balance of funding was changed. The other is that councils have to be much more accountable for local spending, because they’re going to have to make some incredibly important, sometimes very difficult decisions. If they don’t engage the community in that, then they’ll be in for a really difficult time. In so far as they can, they need to get the public involved. They need to get some sort of sense of shared ownership of that. I always think about myself: if somebody told me they were taking away a proportion of my resources, I would want to decide which bits I gave up, which compromises I made and what my priorities were. Q126 James Morris: Do you think, in that respect, the fact that we’re talking about decentralisation at a time of cuts in local government expenditure actually

presents an opportunity to operationalise decentralisation into local government? Andy Sawford: Absolutely. Q127 James Morris: It’s not just decentralising the chop, in that sense? Andy Sawford: Some people have said that. Ed Cox: I would argue very strongly this is a case of handing down the axe to local service providers. To that extent, it is deeply problematic, but I also see it being an opportunity for local government to seize the freedoms—we wait to see what the Decentralisation and Localism Bill holds—and to seize those powers that I expect will be limited but good, in order to do that. My concern though, and I think the CSR demonstrates this clearly, is that essentially a very small group of people based in Whitehall can take such dramatic decisions that have such a huge influence on local government and the services that it provides. In any other country, we would not be in a situation where a Comprehensive Spending Review would have such dramatic results at the local level. It’s precisely our centralised system that enables that to happen. Q128 George Hollingbery: The vast majority of what local government does isn’t local anyway; they’re being told to do it by central Government. They have almost no discretion at all. Ed Cox: I would argue—perhaps I don’t know exactly where Andy’s coming from—but I don’t think I agree with the notion that we have to be extremely pragmatic about the state of local financial autonomy. I do believe that we can move relatively quickly. Sir Michael Lyons set out an agenda. There are others you could look at as well. We could move relatively quickly towards much greater levels of financial autonomy at the local level, and frankly I believe that now is a good time to do it. This is where the council tax freeze is, to my mind, a bit of a nonsense at the moment. What we really need to do is to say to local authorities, “I’d rather see a greater number of taxes, but you can raise local taxes as far as you like, as far as your local electorate is prepared to bear.” I think we can move more quickly to that situation. Q129 Bob Blackman: How do you then make the councillors who make that decision accountable? Do you have annual elections for the council or do you allow them to get elected, and then for four years they can live off this fat that they’ve creamed from the council tax increase? Andy Sawford: Forgive me, but isn’t that what happens with national Government and it’s even more consequential in terms of the proportion of people’s income that is taken by different bits of Government? If it’s good enough for central Government to have a programmed period of time—they’ve just set out a four-year plan—why isn’t that appropriate at a local level? The point is about honesty. People won’t be rewarded for being dishonest, for going to an election with a manifesto that doesn’t tell people they’re going to significantly increase taxation, if they indeed intend to, or that there is going to be a different view around

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the eligibility criteria and potential charging for services. I think this is another big dimension where local government, although it probably won’t choose to, has to—frankly, given the situation we’re in— think about how it can be more creative around that. On your point about being pragmatic, yes, the LGiU will continue to argue—we’ll argue until kingdom come—that it is really important that we have a different balance of funding. There will be a review of local government finance next year, but the simple fact is that you have four years to do something incredibly difficult. I don’t think I want to be saying to a leader of a council, “While you’re doing all of this, we’re significantly going to change the resources you receive, because there’s a new system of raising and distributing local taxation.” I don’t think that’s something that the public would want to see, in terms of the likely impact on local services. What councils want is some stability. There needs to be a great deal of creativity, and I think we also need to look beyond the next four years, probably to a next manifesto for you, if you conclude as a result of this that local government finance reform is essential. There will be real reform. The idea that this is a cover to do these very substantial things, like revaluation and so on, I just don’t think in the context of the scale of the financial challenge that councils are facing, that we should be doing it at this time. Q130 Chair: Just one final point. We talked a bit about this earned autonomy, which you were pretty dismissive of in terms of where we’ve been at. You also talked about the inherent rights of people to have local self-government, but the reality is we live in a parliamentary democracy, where power essentially comes from Parliament, ultimately. Is there some way forward where you could get not an earned autonomy but I suppose a bit like the Spanish relationship between their central state and their regions, where you have an offered autonomy where there’s an agreement about a range of services that can be undertaken by the regional government rather than the central Government, if the regional government decides that’s what they want to do. You could actually build in something where local councils could take on those responsibilities, providing they could show that their local people or local communities actually supported it. That would actually bring in the bit of the Scottish devolution model there. You had a referendum in Scotland, which said, “Yes, we actually want the Scottish Parliament to do these things.”

Ed Cox: Going right back to the beginning, that begins to articulate what we mean by “a framework for efficiency and effectiveness”. Essentially there’s a pattern that is equally negotiated as to which decisions need to be taken at different levels. I would say you then back that up through a constitutional settlement of some kind, which then enshrines that and moves to a greater sense of local autonomy. I think that is quite different from a notion of earned autonomy in the way in which we’ve talked about it for the past decade. Q131 Chair: It isn’t just about the difference in how services will be delivered at local level. We could actually have different services delivered in some areas and not in others, if that was the choice made. Andy Sawford: I think we would benefit from having that kind of debate, as part of our democracy, over time, in the sense that in America it’s always a very live issue—the relationship between federal Government and state government—as it is in Australia and many other countries. I would like to see us have that kind of relationship between local and central Government. In the immediate sense, what I’d also like to see is that, in the very substantial areas of reform that the current Government is proposing, there is much more commitment to a strong localist element, where that can be demonstrated to be effective. I would argue that there are lots of areas. People earlier talked about what the evidence for localism is. There’s incredibly strong evidence that local authorities playing a really strong role in welfare can be very effective. There’s evidence from Europe and from other parts of the world. I’d like to see that, in the next few years, being part of how public services are reformed and provided. How effectively local government does that will probably determine the future pattern of services and responsibility for those services in years to come, as much as constitutional arguments and so on. We do at least need something that puts local and central Government on a much more equal footing, and gives local government, I think perhaps in the way that you’re describing, Chair, the ability to exercise some challenge and some power to pull services and say, “We want to provide these here, in our community.” Ed Cox: Later in the week I will submit via the Clerk some examples of national minimum outcomes, together with a document we’re producing this week on what we’re calling “the five foundations for real localism”. Chair: Thank you both very much indeed.

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Monday 29 November 2010 Members present: Mr Clive Betts (Chair) David Heyes George Hollingbery James Morris

Heidi Alexander Bob Blackman Simon Danczuk Mike Freer

________________ Examination of Witnesses Witnesses: Ben Kernighan, Deputy Chief Executive, National Council for Voluntary Organisations (NCVO), and Ralph Michell, Head of Policy, Association of Chief Executives of Voluntary Organisations (ACEVO), gave evidence. Q132 Chair: Welcome to this session of evidence on localism. For the sake of our records, perhaps you would introduce yourselves and tell us the organisations you represent. Ben Kernighan: I am Ben Kernighan and I am from the National Council for Voluntary Organisations. Ralph Michell: I am Ralph Michell from ACEVO, which is the national representative body for thirdsector chief executives. Q133 Chair: You are very welcome. To begin with, is your view of your role in the localist agenda as the voluntary sector the same as the Government’s view of what you should be doing and what you should be involved in, assuming of course that you know what the Government’s view is and, indeed, the Government knows what its view is? Ben Kernighan: Shall I kick off? I think there are lots of similarities between our view and that of the Government in relation to this agenda. If you look at the voluntary and community sector as a whole, about a third of it works at a local level and more than a third works at a neighbourhood level. If you marry what the Government is saying in terms of localism with what it is saying in terms of that element of the Big Society agenda, which is about giving the voluntary and community sector a bigger role to play, there is a lot of similarity. Voluntary organisations have a really important role to play in delivering and designing services, helping to shape communities and promoting social action. There is a good deal of consistency there with what the Government is saying. Having said that, in the context of the cuts that are happening at the moment, a lot of money is being taken away from local voluntary organisations. What I would like to see in terms of what happens here is more local decision making and for community groups to have a bigger role in their local communities to help shape services as well as, where it is appropriate, to help them to deliver services. But national Government must also keep a role in terms of ensuring that that happens. It would be a disaster if power is passed down from national Government to local Government and gets stuck there. Unless national Government keeps some degree of influence, for example by promoting things like the Compact, we will find that the agenda works very well in some areas and some areas where it works really badly.

Ralph Michell: I would agree with all of that. Probably the biggest difference in point of view is not so much between central Government and the charity sector but potentially between the charity sector and local Government. Our fear is that local Government’s view of devolution and the Big Society agenda is that it is devolution to local Government and no further. As Ben said, we would be keen for devolution to go further in order that third-sector organisations at a local level are able to play the big role that we see them having in designing and delivering services and also scrutinising local Government and playing a part in local participative democracy. Q134 David Heyes: Those anxieties about local Government could be broadened out. For example, I guess that the removal of the PCTs is another issue that causes voluntary organisations concern. To sum that up, how will the way in which voluntary sector bodies go about their business locally be altered by decentralisation of power to councils and to these other local agencies? Ralph Michell: A big danger we see is that different parts of the statutory sector go in their different ways and become less joined up at a local level and that makes life harder for third-sector organisations. For instance, the abolition of PCTs and the potential arrival of several GB consortia will recast all over again the relationship between the local NHS and local councils, and third-sector organisations will therefore have to operate in an increasingly fragmented environment. On the other hand, probably the biggest advantage we would see in the devolution of power is that there is at least the potential for it to enable local agencies to join up more and be less hamstrung by diktats from Whitehall. It is the lack of that kind of joined-up thinking and commissioning that our members complain about at the moment. If it were there, it would make it much easier for them to go about their business in delivering services and looking after people, which tends not to be structured around public sector silos. That is one of their big complaints. To go back to what Ben said at the start, probably the key concern is cuts. Our estimate is that if local Government passed on the cuts it is facing proportionately to the third sector, it would mean a loss of income to the third sector of £1.8 billion a year by the end of the Parliament. We are already starting

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to see cuts being passed on disproportionately. For instance, Croydon has recently announced that it will cut its voluntary sector grants programme by 66%. There is the danger that Whitehall has a particular view of the third sector and clearly values its role, but in some areas local Government will not share that view and will see the third sector simply as an easy option to cut. It is a soft target and nice to have in good times but not necessary in bad times. That is our main fear. Ben Kernighan: I have to say that I am quite frightened by what is happening in relation to health for the reason that the lessons of history are that when there is big structural change within the statutory sector, the voluntary sector loses out. In my view the reason for that is not that the thinking or intention behind the structural change is to exclude the voluntary sector or not value it, but simply all of those individuals who had successfully built relationships with people in the statutory sector cannot even find the right person to talk to. I hope that the Department of Health is thinking now about how it will put in place a framework to ensure that voluntary organisations do not lose out. Nobody wants them to but I have a real fear that that will happen. Even the relatively small change when PCTs were merging had a negative effect. This is a much bigger change on a much bigger scale. I too would like to see the Government going further at the local and neighbourhood level in relation to the pooling of budgets. One of the big ways in which this country does not get the maximum potential from its voluntary and community sector is that very often it provides services to some of the most vulnerable people in society and it will help those individuals with their housing and family relationships, get them back into work and help them to be less likely to offend, but it is terribly complicated for that one individual to go to a variety of different funding pots at local level. Therefore, the experience of Total Place by the voluntary and community sector was not always a good one because sometimes it was just a statutory sector stitch up, but the principle behind that, particularly in a time of less funding, must be right. National Government must do more so that local authorities make sure that the voluntary and community sector is sitting round the table. Another of my fears is to do with Local Enterprise Partnerships which were set up between businesses and local authorities. We made the argument that social enterprises and voluntary organisations were also good at creating jobs, but that message came too late. In terms of the arguments around localism, the CLG is now saying, “We’re sorry, this is a new era; we can’t instruct local authorities what to do about that.” If there is too much of “we can’t instruct” or “we can’t set out advice”, then in many areas both the voluntary and community sectors will do much worse. It is not a party political point. We looked at where cuts have taken place, and discovered that there are good local authority areas and poor ones—it does not cover party boundaries. Following the useful comment by the Prime Minister urging local authorities not to cut, some have not done so but

others have made massive cuts, Comprehensive Spending Review.

before

the

Q135 David Heyes: So far we have looked at the impact very much at local level. What about the largescale voluntary sector level, which might include what are sometimes called umbrella organisations—maybe like your own. What impact do you think there will be on their ability to influence policy at national level? Ben Kernighan: The really important thing is that decisions are made at the most appropriate geographical level. If you look at something like services for deaf blind people or those with rare medical conditions, there is a strong argument that national or geographical areas larger than local are the most appropriate ones to provide support and to understand a strategy for supporting those people. There is, however, a big risk. While local Government is the biggest form of statutory funding into the voluntary sector, national Government funding is almost equally as big—the ratio is about 52%:48%. We may think that the pendulum had swung too far and that too much power was in Whitehall and that the best of what voluntary organisations are about is helping local people, not just having a say over the services but an involvement in delivering them. The great risk, however, is that if we swing too far that way, a lot of services for some of the most vulnerable people within society will be lost. On your point about umbrella bodies, I am more worried at a local level in relation to what is happening in terms of support. If the Government’s desired intention to see more voluntary action, more people volunteering and the encouragement of more philanthropy is to be fulfilled, you need a strong network of local support agencies. Ralph Michell: I agree with that. Clearly, there are services where the beneficiaries are spread out at fairly low density. The danger is that if you devolve commissioning too far it becomes unfeasible to commission for people who are that low density. But there are many charities that run, say, specialist helplines nationally on a particular issue or produce literature—for example, the Family Planning Association produces literature to go out to all GP surgeries—where there are clear efficiencies of scale. It is not particularly sensible to commission that kind of activity over and over again at local level with huge variations in quality, so missing out on those efficiencies of scale. Clearly, there are areas where it will be more appropriate to commission subregionally, regionally and nationally. There is also a role for central Government, even where commissioning is devolved to a very micro-level, as with personalisation and giving individuals personal budgets, to put in place the kind of structures that will at least allow for some consistency in the way services are bought. The nightmare scenario for a lot of regional or national third-sector organisations is having to deal with hundreds of different commissioners who commission in completely different ways. Q136 James Morris: You have expressed scepticism about the role of local authorities. The reality is that local authorities will continue to play an influential

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role in commissioning services. What specifically do you think needs to be done to improve understanding at local Government level about the voluntary sector? Thinking strategically, what kind of new commissioning structures would you like to see at local level? Ben Kernighan: There are a number of things to consider in relation to that. It is important to start an answer in terms of what happens nationally. One of the immediate challenges that faces local voluntary organisations at the moment is that many of them are making staff redundant, not because they will not necessarily get money next year but because they still do not know whether or not they will do so. So, if national Government only decides how much money local Government gets in December, and local Government then decides in January, the local voluntary sector cannot wait for that if it has to know whether to pay people in april. That is a really important point. You will see a big reduction in the effectiveness of those charities and lots of people being made redundant, but, in some cases, the money will be there and they will have to recruit them back. That is a huge inefficient waste of public money that happens in almost every financial year. Specifically in terms of local Government, educating councillors about the voluntary sector is a really important role that we will take more seriously. One of the positive things about the profile that this Government has given to the voluntary and community sector is that local Government is now thinking about how important that sector is, albeit that it sometimes makes funding decisions that do not necessarily make it feel like that to the people involved. In relation to some of the issues to do with commissioning, the voluntary sector is at its best when it is able to innovate and respond to changing need. There is a real tension here, because to have a wellrun organisation you need some pretty secure pots of funding. I think that a four-year spending review period is appropriate for many services, but, within that, you also have to be able to be responsive and shift what you do and how you provide it. In my view, that means you need local authorities to commission more on the basis of outcomes and less on tightly defined contracts. Q137 James Morris: In your comments so far you have talked a lot about the need for national frameworks. Mr Michell referred to a feeling of suspicion about having to deal with hundreds of different entities at local level, but is that not where innovation comes from? One of the dangers of national frameworks, as we have learnt over many years, is that they stifle innovation at both local Government and voluntary and community sector level, because you are constantly looking upward and having to conform to the guidelines rather than getting on with delivering the services innovatively. Ben Kernighan: Innovation happens within national voluntary organisations and community organisations, and localism provides a significant opportunity, particularly for those community and local organisations. Within that, it is important that local Government understands how to get the best out of

the sector. There are really good examples in places such as Camden, Thurrock and Merton where it is seen as a genuine partnership. Part of it is around the local authorities and voluntary and community sector coming together at the very earliest stages. In those areas where it was a good example, 18 months ago they all saw that there would not be as much money around and asked themselves how they should come together to determine their strategy and recognise that they could achieve more jointly. In the worst places, the local authority determines the strategy and then, very late in the day, it says that it is going to cut here and here because it does not have the cash. Ralph Michell: I do not want to give the false impression that we are overly sceptical about devolution. We see real opportunities in some commissioning being done at a more local level. We also need to be aware of the counter-balancing risks. Clearly, there are risks in terms of efficiencies and so on. On your point about innovation, I strongly agree with Ben that it is both small and large. Organisations like RNIB and RNID have innovated with things like talking books and digital hearing aids in a way only they can do because they are very big. Similar to the private sector, you can get innovation from one-off individuals in their basements as well as from very large companies investing millions in R&D. You want to be able to get both. With regard to local commissioning—I am sorry this is a fuzzy answer—probably the one term that covers what we are really looking for is “culture change”. Therefore, it is a culture change from procurement to commissioning; from the kind of top-down approach Ben talked about with the local authority deciding what it wants and very late on going to someone to buy it. It is much more a partnership approach between commissioner and the people on the ground delivering it who understand the needs of service users and how a provider organisation works. The communication between providers and commissioners is really important. Ben talked about the fact that many organisations will be laying off staff simply because local authorities are not talking to them. Our members complain to us that local authorities have said, “Don’t come and discuss with us the 30% cuts we need to make or how we could do it in an innovative way. Don’t talk to us; we’ll talk to you in January when we have decided what we’re cutting, where and by how much we want you to reduce your budget,” and so on. Obviously, that is not the best way to go about it. The culture change is to see local thirdsector organisations as partners and not as agents to deliver the decisions that you have already taken. Ben Kernighan: Perhaps I may add one thing in relation to innovation and commissioning because it is one of the things that the sector does best: the important ongoing role of grants. There is a misconception among many people and statutory authorities that commissioning is not very good and therefore we must all get better at it and we must understand absolutely everything about every community at every moment in time and be able to predict it three years hence. Just relax—you won’t be able to do that; it is not that simple; life is too complicated. To achieve that innovation you need

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especially small grants; sometimes micro-grants can make a huge difference to community organisations when they identify the needs and the innovation. This Government has said some good things about the importance of grants. Clearly, in a tough time there is a risk that those will be lost. If they are lost we will see a real dip in the ability of the sector to innovate. There is one other little point in terms of what local authorities need to be good at. If you look at what most frustrates the voluntary and community sector, it is not funding, it is that their expertise is not utilised in the strategies that local authorities take.

level. The whole way in which things will now be audited will be important. We are all dealing with the mindset change of things like not having an Audit Commission but, at the same time, looking at how we measure well-being in relation to that. To include in the work on well-being just how much of that is to do with people’s engagement in voluntary action will be significant. It is a very different way of assessing things. The transparency agenda will be good at spotting inefficiency and waste, but it will perhaps be less good at spotting high and low quality of services. We still need to think about how that is determined.

Q138 Heidi Alexander: Can you say something more about the role and importance of national and local Compacts in a more decentralised system? How do you see those Compacts having to evolve from where they are now? Ralph Michell: This comes back again to culture change. There are places now where statutory organisations have a Compact but it sits on a shelf, gathers dust and no one pays it any attention; a prime example is a PCT that recently asked 18 voluntary organisations to pay back grants that it had given this year, contravening its own Compacts. There was no consultation and it gave them a month to give it back. First, there must be that culture change. Part of how we should see the Compact is probably as a tool that could lead towards that culture change, but it needs much more teeth and accountability both nationally and locally and we hope that will be hammered out in the discussions that are currently taking place in Government. I think the new Compact with more teeth needs to be agreed fairly soon because the danger is that we will have this great framework or frameworks for partnership working but it will come after the really important decisions about the cuts are made. Ben Kernighan: I agree with that. What we will see in a world of more localism is that the world will be very different in different places. I am not tied to the idea of a postcode lottery as if we live in a world in which at the moment everybody gets equally good services. They do not. I do not fear that. I think that more individuals and communities being involved in local decision making and helping to shape services is a good thing. But the Compact has become more important in the context of that variability so that when things go wrong for voluntary and community organisations—when they are not treated fairly and public funds are wasted because of the way in which different parts of the state work with them—they need some redress. The evidence shows that, where the Compact works well, it helps those relationships. I agree with Ralph that it needs more teeth. For example, we would like to see the Local Government Ombudsman take a bigger role in terms of being a place where organisations can go when the Compact is not kept to.

Q140 Simon Danczuk: You have touched upon this throughout your contributions, but, to summarise, what is the impact so far on the voluntary sector of the attempts by local authorities to make savings? Ralph Michell: It is very mixed. Most of our members are at the stage where they know that a budget from which they currently get money is to be cut; in some cases they know that it will be cut by a certain percentage. I think that is where most of them are, but they do not yet know how that will impact on individual organisations. As Ben said, the danger is that they will have to make decisions before they know that. Either side of that there are examples of very bad practice, like the PCT I just mentioned. A trickle of our members have reported cuts for more than the past year. On the other side of the spectrum there are organisations working with their local authorities and other local statutory agencies in a really intelligent way because they acknowledge that next year there will be less money going in but there will be the same problems, and collectively they are working out how they should deal with that. There is a very mixed range of practice, but the cuts will really start to hit further down the line. Ben Kernighan: I entirely agree with that. Last week I was talking at a conference in Oxford where there was a real fear that the council would in-source services. The approach that they described to me was that the council was keen to lose as few jobs as possible—an understandable motive—but that meant bringing services currently within the voluntary sector back into the statutory sector. There are some excellent examples of good practice in terms of people looking across the private, voluntary and public sector at how they can share resources and who has empty rooms in which community groups can meet. They are looking at those kinds of exchanges of gifts in kind and taking a more fundamental look not just at the services they provide and the ones they are cutting but at how to achieve the same outcomes with fewer resources, and what their overall objectives are in relation to that. There is also recognition that the voluntary sector has its own role to play in adapting to these changes, for example where organisations choose to merge or share back-offices. There is recognition that there are humped costs if two organisations are going to merge, so a local authority can make a wise investment by supporting that process.

Q139 Heidi Alexander: Do you think there are other things that could give those Compacts more teeth? You have already mentioned the role of the Local Government Ombudsman. Ben Kernighan: I think the Parliamentary Ombudsman could play an equivalent role at national

Q141 Simon Danczuk: Clearly, the Government is promoting a localist agenda but at the same time funds

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are very restricted. What are the advantages and disadvantages or the risks associated with doing that at a very difficult financial time? Ralph Michell: Combining cuts with greater flexibility? Simon Danczuk: Yes—more localism. Ralph Michell: This is one of the big concerns of our members. In particular, there are areas where ringfencing will have protected funding going towards vulnerable groups, with whom a lot of our members work. Their fear is that, with those ring fences being removed and funding going down, they will see raids on budgets intended for vulnerable people, as we saw recently in the case of the Isle of Wight and its Supporting People budget, a large part of which was used essentially to plug a black hole elsewhere. That is a real concern. I think that links to the point about scrutiny of all of these decisions. Difficult decisions will need to be made and that they get made is fair enough, but a lot of our members worry that they will be made under the radar at local level. Particularly with the removal of some of the scrutiny mechanisms, the worry is that vulnerable people will be hit hard, charities will go under and that simply will not appear on the radar of a lot of people, given that at local level local democracy involves fewer people, there is less media scrutiny and so on. That links to a fear related not so much to cuts as to nimbyism, which concerns a lot of our members; for instance the provisions that I understand are in the Localism Bill to provide increased chances for local people to veto particular Government activities. We tend to assume that with all the additional involvement of local people that communities will be progressive and nice, but sometimes they will not be, and charities come up against that. For example, there is a case going on now in Harrow, I think, where an organisation is trying to build supported housing for 16 and 17-year-olds who have left home and are now homeless. That is being opposed by local residents who fear increased drug use, crime and so on. Again, there is a balance between on the one hand wanting to empower local people and, on the other, not doing so in a way that enables a local majority to disadvantage local minorities. In the absence of scrutiny of that kind of thing, a lot of our members would be very concerned. Ben Kernighan: By far the biggest impact on statutorily funded voluntary organisations in the short term will be cuts. The numbers make that clear. If you look at voluntary organisations that work at different geographical levels, the highest proportion that get some statutory funding is the local ones. If you look at the numbers, you have £6.6 billion going from local authorities to voluntary organisations. While we welcome the transition fund that the Government has come up with to help support organisations through a difficult times, that is £100 million. You can see how a great deal of money is almost certainly just about to come out of the sector. In relation to that, we are also concerned that voluntary organisations generally have very low levels of reserves. The median level of reserves is two months and for certain types of voluntary organisations it is less than that. There is a real risk

that we will have late decision making, big cuts and a low level of reserves. That is potentially a fatal combination. We have to hope that in the medium term at least, as there is a political consensus on the importance of civil society and voluntary organisations playing an important role in people’s lives—helping to deal with those big challenges that face society around an ageing population, climate change and so on—there are opportunities for voluntary organisations. The demand for services will go up, as we anticipate a rise in things like unemployment, which everybody predicts. It will be very difficult. To go back to pooling budgets, where I would like to see the Government do more, it seems like a very good time to introduce that because that is a way to achieve more, provide better holistic services and to do it in a way that also saves money. It seems like the real time for that to happen. Q142 James Morris: Earlier you expressed scepticism about Local Enterprise Partnerships. I was a little surprised by that given your desire to make sure that the voluntary sector view, as it were, is placed in strategies at sub-regional level. Quite a few of the LEPs I have seen, specifically the one in the Black Country, part of which I represent, have very specific provisions within the LEP proposals for getting the third sector and voluntary sector to input into the strategy. Can you explain a little further your concerns about LEPs, which seem to me to offer a valuable platform? Ben Kernighan: Some of them are and some are not, and it is very difficult to get information about how many of them have strategies and how many have not, but I know there are those where it has been excluded. I know that the Government came late to recognising that the sector had a potential role. My specific frustration is that, having realised this, CLG will not now write to the existing and forming LEPs to say that these sectors have an important role and they should involve them. I absolutely agree with you that they have an important role. I know from experience that if there is one group it is hard to get into if you are not there at the beginning, it is one that in part has the purpose of distributing money. Q143 George Hollingbery: Very briefly, we’ve touched on statutory duties coming in under the second tier council. It occurs to me that ring fence removal is all well and fine, but if there still exists a huge plethora of statutory duties you are in no better place at all, and the only place a lot of councils can go is to the voluntary sector and to cut grants to third parties. Is that a reasonable analysis? Ralph Michell: I do not think it is the only place. We are seeing a lot of unintelligent cuts. There are ways in which you can cut costs—we would like to see more of this—by transforming the way you deliver services. One of the ways you can do that is in partnership with the third sector. For instance, we have talked a lot about joining up. One of our members, Addaction, works with problem families, which, as we all know, are a huge cost burden on the state. Their service called Breaking the Cycle has a

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marked impact on families, in terms of drug abuse, engagement with the labour market and the way the whole family works. Independent evaluation of that work suggested that, for every pound invested, within two years you would be likely to save £87. There are similar stories in the NHS, in reducing reoffending and so on, which we could provide to you separately if you are interested. There are ways you can save money by working more with the third sector. What we are most worried about is the opposite: that you see the third sector as a frill and nice to have, and you get rid of some of the activity that probably saves you significant sums of money further down the line. Q144 Heidi Alexander: You mentioned the role of the community and voluntary sector in local Government in terms of scrutiny. Are there any tensions around more contractual relationships existing between local authorities and the community and voluntary sector in public service delivery, and their role as a critical friend and scrutineer? Do you see any concerns in your membership about those sorts of issues? Ben Kernighan: I think there is a tension. Lots of voluntary organisations take the king’s shilling while criticising the hand that feeds it, to mix a metaphor very badly. My response in terms of my advice to the statutory sector would be: remember the importance of grants and that they are really good; that you cannot know everything that is needed; that when you choose contracts, look for those that are not too tightly specified. People want to transform public services at the moment. You will not transform public services by moving them from one sector to another. If you keep a contract incredibly tightly drawn you will end up with the same service and a voluntary sector organisation that begins to take on the characteristics of a statutory organisation, which is not where we can add best value. Then my advice to voluntary organisations in relation to that is: they should always remember what their purpose and mission is; take on those contracts only if they believe that overall they will better fulfil the value of their mission; and try to diversify their funding, which is where philanthropy, and central and local Government’s role in supporting and encouraging philanthropy, is so important. Ralph Michell: There is a potential tension. If a local authority wants to bully one of the voices in the area, then this is an extra tool for it to do that. If a charity is afraid of consequences, then there is potential for it to be silent because it is receiving money when otherwise it would not. I am not sure that is what happens most of the time. I think that in a lot of cases it is the daily delivery of services to those who use it and dealing with the local authority that puts a lot of voluntary organisations in a good place to know what they are talking about. In a way, I think the roles can be complementary and certainly there should not be a tension between them, even if there can be. I agree with Ben that both grants and contracting are an important part of commissioning; both are good ways to secure different types of services. A third-sector organisation in receipt of a grant could feel equally under threat if it is critical of local Government. I do not see the shift we have seen to some extent from

grant-funding to contracting as having a particularly negative impact on that ability to speak truth to power. Q145 Bob Blackman: You have painted the picture of disparate activity across the country in terms of the funding position. You have mentioned the potential issue of a postcode lottery applying to services. Casting your eyes forward five years after this agenda has been rolled out, what do you expect to be the impact on the mix of local service providers across the country? Ralph Michell: I think it will be very mixed. In some places we see local authorities making a big shift towards out-sourcing their services, so they will want a very diverse and healthy provider market; in other places, as Ben has said, local authorities are insourcing and looking after their own, and there we will probably see organisations in trouble and the provider market shrinking. Even within those two groups, commissioning will be done in different ways; there will be different levels of involvement in the joint commissioning processes and different responses from within the provider market. Therefore, in some places we start to see consortia being built to enable providers to be commissioned from reduced procurement teams. In some cases that probably will not happen to the same extent. You then have the variation in the number of third-sector organisations in any single local area. I am afraid it is not a very helpful answer, but I think it will be extremely mixed. Q146 Bob Blackman: What do you envisage will be the impact on the people who use the services? Ben, do you have a view? Ben Kernighan: Yes. I have the view that to predict five years into the future is potentially a foolish thing to do. I am talking about my doing it, not you asking the question. At its best I think we will see some exciting examples at neighbourhood level—so quite localised—of where services have been transformed and the voluntary and community sector has played a significant role in that. In particular in terms of your question about the users of services, they are therefore engaged in shaping and designing those services. It is not a deficit model; it is not “What do you need?” but “What can you and the people you connect with at the moment do? What are your skills and abilities? How can we add to that and help you within your neighbourhood to make a bigger contribution as well as receive a better service?” We will also see lots of examples at a neighbourhood level as well of different statutory sources coming together and really exciting multi-purpose community solutions. We will also see other areas that have not got to grips with what is a complex agenda, where we will see a lot of fragmentation, disorganisation and big fears in relation to the whole period in relation to health, even if when we come out of the reorganisation it is good. The period of change could be really tricky, and probably it will be harder to keep tabs on what is going on in different places. There will be more of a culture within the public and voluntary sector of needing to spot good ideas all over the country and using technology to help think of the best ways to do that.

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Q147 Bob Blackman: A lot of local authorities are now looking at sharing services and bringing together a whole range of services to make themselves more efficient and effective. Do you see that as a conflict with the delivery of services at a very local level, even below local council level? Ralph Michell: Not necessarily. For instance, there are national charities that are essentially federations of smaller units. There are national charities, for instance RNIB with its talking book service, that are able to provide an extremely personalised service to individual households. Similarly, we see models emerging of consortia of providers. There are ways to marry the two. Q148 Bob Blackman: Do you think that because councils are coming together this could be an advantage to the voluntary sector? Ralph Michell: Going back to Ben’s point, it really depends on what service you are commissioning, what the need is and how that is geographically provided. Q149 Bob Blackman: Are there any particular examples where you think there could be an advantage? Ralph Michell: Where you have a number of quite small providers, not several providers in every local area—for instance, the British Liver Trust, which is a very small charity that works with a disease that is one of the biggest killers in the UK—there is no way that those small charities can be commissioned and seek to be commissioned by hundreds of local authorities. Frankly, if they have to try, their service will probably be hit negatively. There is an example where the shape of the third sector as it is must be taken into account; otherwise, you risk commissioning at a level that does not work for providers. Q150 George Hollingbery: You expressed some dissatisfaction with the Total Place model as it was piloted. The third sector had little or no input into it. Can you tell us a little more about what you think the third sector can add? How can it improve the results? At some stage I would also like you to address the idea of accountability. Ralph Michell: If you take as an example Blue Sky, which is a social enterprise that employs offenders to do grounds maintenance, its service reduces reoffending but also it is one that local authorities want to commission. I suspect that the impetus for that kind of joining-up of the public sector will come from outside the public sector; social enterprise having the imagination and initiative to join up, reduce reoffending and clean parks or recycle. I suspect you are unlikely to see that kind of thing emerge from within the silos of the public sector. It is that kind of initiative and outside imagination that you want to bring into the transformation of services. It strikes me that if that can be brought into the design and commissioning of services and thinking about transformation, you are much more likely to get better outcomes for people and better value for money than if you have what we saw some of with the Total Place pilots, which was essentially total public sector;

different statutory agencies talking to each other and working out where they could eliminate duplication. Q151 George Hollingbery: Do you see the third sector in this case as innovator champions advising big boards, elected boards or whatever they are—the accountable layer—for the Total Place? Do you see those people offering services that are innovative and joining things together? How does the third sector fit in? Is it a combination of those things? Ralph Michell: It is a combination of both. The more open both processes are, within the bounds of what is practical, the better from our point of view. Things like the right to bid, while not perfect in our view, are a step in the right direction. The culture change would see the local authority and probation trust in that instance seeing Blue Sky not just as a delivery agent but a partner in the local area that they might want to talk to when redesigning services or going through a radical rethink of how to achieve what they want to achieve with the budgets they have. The more of that we get the better. Ben Kernighan: I agree. The sector has a role in understanding what is going on in its locality and the clever local authorities realise that they cannot know everything that is going on in their local area, and working together they will come up with better plans and strategies. Therefore, they have a real role in understanding need. They have another role in helping to shape the design of services because they often have expertise in delivering services, and subsequently there is also a potential role, which some want to take on and some do not, around the delivery of those services. Q152 George Hollingbery: Can you tell me very quickly how this structure works? Do you see potentially an advisory board underneath whatever it is that looks after the Total Place budget and is required to consult with you every single time, or is there a champion on the board itself? Is it done by pitching? Ben Kernighan: For example, you could have the chief executive of the council for voluntary service; you might have somebody from the community foundation who brings in an element of philanthropic giving. You would expect the chief executive of a good council for voluntary service to consult within their own membership so that they have got a real sense of what the sector in their area needs and they know who has expertise in different areas that can be brought into that process. That would probably be a common model to work well. Guidance from national authorities in relation to commissioning has long realised that, if you try to separate entirely the process of who decides what needs are and who delivers services, you do not end up with the right services, because it is the people who understand communities and have some experience of providing services that can best inform what the overall strategy needs to be. Q153 George Hollingbery: It sounds very exciting. You are talking about social entrepreneurs driving in at the Total Place level to make sure that innovation

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happens and occasionally providing too, but that is not essential? Ben Kernighan: Yes. George Hollingbery: That is exactly where we are? Ben Kernighan: Yes. Q154 Mike Freer: You said that the sector had an understanding of its locality and needs but we hear two voices: there are those who say they have an understanding of their locality and their needs and that should be harnessed for service delivery and design; and yet others say it could be one voice, one community, one niche of a locality, which then influences service delivery and then excludes others. What is your view on how local authorities should harness that knowledge, and what shape should that harnessing take? Ben Kernighan: A local authority needs to triangulate its knowledge about the voluntary and community sector. Clearly, if it has something like a council for voluntary service it needs to work out how effective it is; how big a membership it has; what processes that organisation has for consulting its membership. It should also encourage wider direct dialogue, so it should ensure that its council workers and leaders also come into direct contact with a range of different voluntary organisations. It may be impractical to have all the voluntary organisations on the Total Place board and that is where an umbrella organisation can play a useful role. One of the other potentially valuable roles the sector can play in a world in which we want to see more voluntary action is in promoting the use of volunteers by the public sector, and obviously there is a lot of expertise in the voluntary sector to help do that. The more opportunities there are for the two sectors to work together, for councillors to shadow the trustees of voluntary organisations, for opportunities to do job shadowing and all those things to help understand better where each is coming from the better, because the responsibilities are different. Ultimately, politicians have to make difficult decisions about resources that will annoy some people because they will not choose those organisations. There is that ultimate difference in role that needs to be understood. But there is a whole raft of exciting ways in which the level of understanding between the two sectors can be promoted at local level. Q155 Mike Freer: How do you stop the excluded being excluded? Ralph Michell: To start with, it is important to bear in mind that a lot of the time, not always, third-sector organisations advocate the cause of a particular community that is more excluded rather than less. As a citizen I would want the local or regional state or whatever to retain and be very clear on its role in ensuring that its services are for everyone and that it

is not captured by a particular interest group, but I would also want it to seek to understand as best it can all of the communities it serves. If there is a Somali association in the local area that it could speak to in order to understand better the needs of that community, then it should. Q156 Chair: You talk about local authorities needing to change the way they interact with the voluntary sector. Does not the voluntary sector have to change as well, because clearly at present many local authorities do not see the voluntary sector as assisting with their difficulties; they see them as a way of making cuts and reducing expenditure? Ralph Michell: The third sector does have to change in terms of the way it communicates with local Government, because a lot of the time that is still immature. Recently, we did some work with Lambeth Council, bringing together some of its commissioners and local third-sector providers. The chair of the commission that that work was under described the relationship as “adolescent”. I think there is some truth in that. There are still some parts of the third sector that see themselves as having a right to public money and approach local authorities as whingers rather than as partners. I think that needs to change if this relationship is to work. There are clearly ways in which third-sector organisations as providers of services need to change the way they work in demonstrating their impact and in understanding some of the pressures commissioners are under. Yes, absolutely; the third sector needs to change as does the statutory sector. Ben Kernighan: So often it comes down to the nature of the relationships. Where those are good and there is willingness for each side to understand, you will often see very successful partnerships in terms of what can be achieved. Demonstrating impact is an important but difficult area when you are trying to achieve social outcomes, especially if you are helping people on the first step of the way. Perhaps you are increasing their confidence so they can get out of the house or socialise, but perhaps not to the extent that they become employable. That becomes very difficult territory in terms of demonstrating impact. It is not simple but it is something on which voluntary organisations need help and support. A big challenge that will face community groups in the years ahead is simply to understand the landscape. This is a radical Government that is proposing big changes across a whole range of different parts of Government, so having the information to understand what is going on and who to contact—those very basic things—will be crucial. That is where organisations that provide support to voluntary organisations will also be important. Chair: Thank you very much indeed for your evidence.

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Examination of Witnesses Witnesses: Matthew Pinner, Policy Adviser, Federation of Small Businesses, Tom Ironside, Director of Business and Regulation, British Retail Consortium, and Edward Cooke, Executive Director, British Council of Shopping Centres, gave evidence. Q157 Chair: Good afternoon and welcome to the third evidence session of our inquiry into localism. For the sake of our records, could you say who you are and the organisation you represent. Edward Cooke: My name is Edward Cooke and I am Executive Director at BCSC. We represent retail property developers and occupiers. Matthew Pinner: I am Matthew Pinner, Policy Adviser at the Federation of Small Businesses. Tom Ironside: I am Tom Ironside, Director of Business and Regulation at the British Retail Consortium, which represents small and large retailers. Q158 Chair: You are most welcome. If points are made on which clearly you are all agreed, there is no need to repeat them. Obviously, we can get through more of our agenda in that way in good time. The evidence you have submitted so far shows that among a number of organisations, including your own, there is anxiety about lack of clarity about precisely what the Government’s agenda is and what it might mean for your organisations and members. Do you want to highlight any particular cause of concern that you may have? Edward Cooke: Critically, there is lack of clarity over where decision-making powers are being devolved to, which means that what our members do, which is to regenerate local communities, will be much harder to achieve. Despite broadly supporting the principle of devolving decision making to a local level, whereby local people are best able to establish solutions for their local community, having multiple different rules and procedures in a number of jurisdictions around the country adds complexity to the way our members develop retail schemes. That is our major concern. Matthew Pinner: Given the nature and speed of change we have seen so far, inevitably there will be lack of clarity on some of the final details. From our point of view, we are keen to see what this will mean in terms of exactly what is to be done where and at what spatial level. I do not think we are entirely clear about everything at the moment in terms of planning how that will relate, for instance, to Local Enterprise Partnerships, of which we are very supportive and where we see lots of potential. We would perhaps like to see as soon as possible how, for instance, Local Enterprise Partnerships will interact with a new spatial view on planning given that the regional perspective will not be there any more. We would also like to see some further detail on exactly what Local Enterprise Partnerships will be able to do and how they will feed into some of the new elements that are being pushed up to central level, such as inward investment and exporting. How will LEPs deal with those? How will they deal with the things that we are to see being pushed slightly more locally? Tom Ironside: BRC members are broadly supportive of the move to greater localism. From our business experience we see significant benefits to tailoring local services to local needs. This is reinforced by our

experience of working through partnerships such as business improvement districts, town and city centre management companies and business crime reduction partnerships as well, where we can see that locally developed solutions can have significant benefits in local areas. That said, as my colleagues have said, these need to be balanced against requirements of cost and certainty. You need to have relative cost and certainty in order to plan and invest in growth. Our chief concerns in that context—I highlight a couple of areas—would be the way in which neighbourhood plans will operate and the potential for increased local revenue raising and variation between local areas in terms of revenue raising. Members have concerns in relation to potential growth variation in regulatory regimes and also the capacity of local authorities to take on the broad new remits which are being proposed for them. Q159 Chair: So, it is more the detail rather than the general direction about which you have concerns? Tom Ironside: That would be a fair reflection of where we are. Matthew Pinner: That would certainly be my view, yes. Q160 James Morris: As you say, localism implies that there may well be variations of approach and service delivery across the country and that necessarily will create some complexity. Do you think that might skew the advantage of the business relationship towards small business to the detriment of large national companies? Matthew Pinner: I am happy to speak about the small business element. You are quite right that having different areas pursuing different priorities and at different speeds could assist small businesses in those areas but, at the same time, as a national organisation we would rather see as much consistency as possible in certain things. Take the example of regulation: while it is good to have one area that does something particularly well, if that variation means other areas are not doing something particularly well, I would argue that is an argument for having a clear national strategy and national policy to back up some of those things, otherwise those variations could become differences in quality. Business likes certainty and consistency, and that is the same for small businesses. Even though we do not necessarily deal with multiple local authorities, we still want to see a level playing field. Tom Ironside: We represent both small and large businesses. We see challenges on both sides. For smaller retailers the challenge is very much where to find the time and resource to interact with the necessary parts of the machine to input into that increased local sensitivity and make sure your voice is heard. For larger businesses that over the past 20 or 30 years may have centralised much of their interaction with public and Government bodies there is a new challenge: how do they go about interacting

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across the whole of the UK in a way that fits with their business models and is relatively efficient and cost effective? There is a whole different set of experiences or challenges for larger companies. Edward Cooke: I agree with the last point. It is about adaptability. Over the past 20 years or so large business has increasingly centralised its operations, and its business model is much more like that to align itself to where Government has gone. Increasingly, they are looking at their business models and establishing ways to empower staff at local level to get involved in these partnerships, whether they be LEPs or other groups, that now have genuine power and responsibility and, if they are LEPs, are private sector-led. They see the advantages of working much more closely with local stakeholder groups because of the nature of this devolution. Q161 James Morris: Just on the point about LEPs, do you have concerns about the way you may interact with Local Enterprise Partnerships, again on the principle that they are bottom-up and are not being prescribed from the centre? Does that concern you, or do you see opportunities in that for business? Edward Cooke: I think the opportunity is that they are business-led. If you see public/private partnerships across the piece, whether they be through local assetbacked vehicles in the case of regeneration or something similar, that alignment with the publicsector and private-sector objectives is a huge advantage. We might have some concerns where LEPs have responsibility for strategic planning in one place but not in another. At what level are you engaging with LEPs? Who has responsibility for that? Will it still be the local planning authority? There are advantages in this public/private sector-led system but disadvantages in the lack of clarity. Tom Ironside: To add to that, many large retailers are involved in the development of LEPs in the areas where their headquarters are based, so they are building knowledge and understanding through that interaction. There is a process of positive interaction with these new structures that I hope will provide them with a model for broader interaction as we move forward. Matthew Pinner: From a small business point of view we definitely see great potential for LEPs if they take it forward in the way that has been envisaged. They are business-led and that is absolutely fundamental. One concern that we continue to have going forward is simply that, for small businesses, engaging with LEPs is not necessarily as easy as it is for large businesses simply because they do not have the same resources and capacity to make known their views. Nevertheless, they are a hugely important part of local economies. We are keen that across the country they make sure they are involved. In many areas we have seen some good engagement with the small business community through the FSB and other locally based structures, but that is not entirely consistent across the whole country; it is not there the whole way. There is perhaps another issue in terms of this engagement. Because they are not funded, if business puts in money alongside local authorities, there is the potential that small business will not have the same

capacity to do that without even just some small independent funding. If they have been asked to contribute, those small businesses will not be able to contribute perhaps towards the secretariat of the LEP in the same way that a large business would. That is where our concern would lie. On the other hand, we are very supportive of the move and think it has great opportunities. Q162 Simon Danczuk: The Government’s idea of localism is to devolve power down to local councils, local people, local councillors and local stakeholders so that the people at that level, who one assumes know best, can use that power to stimulate the local economy and growth for business. I get the impression that you do not share the Government’s appetite and enthusiasm for this devolvement of power. From what you have said so far, you seem to prefer a more centralist consistency across the country rather than letting things be decided more strongly and locally. Edward Cooke: From our perspective we are not at a point where we can say wholeheartedly that we absolutely support localism in the structure that is to be presented because on the whole we do not know what it will look like. Our main concern is probably in the area of transition. We have had a fairly centralised system of Government over the past number of years. Rapid devolution of decision making to local level creates a number of issues, not just about clarity of responsibility. We would like to see Government produce some constitutional settlement, or whatever it might be, that really identifies who is responsible for what. It also has a skills issue, which Tom alluded to at the beginning. You have a system, which in a planning context is something we are obviously very interested in, where planning has increasingly become a bit of a tick-box exercise. We have a number of examples where senior case officers in councils consult with our members—representing developers—on objections coming from elsewhere and asking for their advice, because they have not been empowered to evaluate that objection against the priorities of the local community, and then make a judgment on how to respond to that objection. We are not entirely sure what localism will look like for the development industry, and because of the way Government has functioned over the recent past, we are concerned that there is an issue of skills, especially in the area of planning. There are the benefits we talked about with the public sector being more closely aligned with the private sector and achieving a goal that is established in a partnership environment. Matthew Pinner: I think that from a small business perspective we are supportive of these moves towards local communities, including local business. We feel that small businesses are at the root of communities; they are at the heart. But it is also a question of balance; it is to do with what you can do and what solutions you can find locally, but at the same time in certain areas trying to maintain consistency. If, for example, we are looking at giving more freedom to local groups, including local businesses, to pursue a project or a programme on a small scale—perhaps a community facility or something—we think there is real potential there for getting local community groups

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and businesses involved. But at the other end of the scale, perhaps in terms of the business rate, we think that you need a slightly more consistent approach, rather than a different one. It is very much about putting things not necessarily at their lowest level but at the right level and there is scope within that. The issue on localism is that, because we have not necessarily seen all of the actual detail, while we can say we support some of the principles, we are not quite sure exactly where we stand on some of the individual policy areas and functions within that. Tom Ironside: We echo those comments. We are supportive of the broad thrust of where localism is headed as we currently understand it, but we are acting in the absence of key pieces of the jigsaw, namely the Bill and so forth. We believe from our interaction with local authorities that some are really well placed to move forward rapidly with the localist agenda. We are not clear whether that is a general realisable picture because our interaction with local authorities across the country leads us to believe that there is some variation in skills, knowledge and competency within those authorities in the key areas where we interface with them. I would echo Matthew’s comments about devolving power to the most appropriate level rather than the lowest possible level. If you look at the example of the West London local authorities that are currently looking at combining back-office activities as a route to securing efficiencies, clearly there are different levels to which you can move the power down in order to be effective. During a transitional phase, we would look to Government to provide, as touched on by colleagues, the right sort of support and co-ordination to assist local authorities and other local interests to engage with this new agenda. Q163 Simon Danczuk: Matthew, you started to touch on this. Are there any policy areas that should not be devolved down to local level? You mentioned the setting of the business rate. Are there any other policy areas that should not be devolved down to local level? Tom Ironside: I’ll go first. I am not sure we would identify any particular policy areas, but for parts of policies we can see some areas where logically you would want to put restrictions round them. We think Government is already in the process of recognising that. They are to retain a national planning framework. We do not yet know the extent of that, but clearly there is a case for doing so. Clearly, decisions around infrastructure, be that planning, waste management or energy generation infrastructure, will not be very easily dealt with at a micro-level. Inevitably, there will be areas that do not lend themselves to that sort of devolution. However, with a very broadly drawn general power of competence, there is a lot of potential to go further. Q164 George Hollingbery: Mr Ironside, you are coming at this from the perspective of representing retailers. Therefore, I infer that what you are interested in principally is planning. Do your joint interests go any further than that in localism?

Tom Ironside: Certainly ours do go very broadly because we are now hearing about localism through a whole range of different policy areas. We shared some of the concerns which the FSB has just referred to in relation to business rates, but we can also see that there are localist dimensions to proposals coming through in relation to policing, waste management and a whole range of other areas including licensing and right across the board. As the picture becomes clearer or we get more detail about what the intention is, we find relevance to ourselves across a whole range of different policy areas. Edward Cooke: Principally, the planning system is very important from the perspective of our developer members as are new models for development finance that have a local element, in particular discussion on tax increment financing; critically, business rates; and to an extent achieving the Government’s targets for sustainable energy and carbon reductions and how they are applied across the country using the planning system or our preference, which is building regulations. Q165 Heidi Alexander: Do you think local authorities should be held accountable for policies to support business and promote economic growth? You talked about the appropriate geographical scale. I just wonder whether you think that local authorities themselves should be held accountable for that and whether it is at a different level. If you do think local authorities should be held accountable, how should it be done? What do you think of the army of armchair auditors in this respect? Edward Cooke: For our members to have assurances that the standards within local authorities are set at such a level that they are able to do what they do, which is to regenerate local areas and provide employment opportunities and investment in the fabric of towns and cities, there must be some kind of monitoring of performance. At the moment it probably makes sense for that to be at central level rather than through LEPs or any regional structure. Matthew Pinner: As to accountability, I agree with Edward that in some areas you do need a way to monitor performance. If we move to the armchair auditor model and the ballot box, which is the ultimate accountability to the electorate, it is much more difficult for business to interact with numerous councils if there is no standard expected and performance monitoring, whereas if you still have some national oversight of how councils perform, it is easier at national level. We believe the Government does not understand the importance of small businesses. It is difficult for small businesses necessarily to adhere to a standard at local level all the time, but, for instance, on regulation there are certain standards we would like to see adhered to across all local authorities. If you have a local better regulation office, you have a slightly more robust mechanism. You can therefore monitor what is going on, but you can also push down best practice. There is a balance to be struck between allowing local solutions but also ensuring there is consistent best practice, which creates a level playing field for business.

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29 November 2010 Matthew Pinner, Tom Ironside and Edward Cooke

Q166 Chair: It does not happen now, does it? Matthew Pinner: Certainly in terms of regulation, no. We would like to see a strengthening of that. Chair: The law is the same but how it is applied can be different. Matthew Pinner: Exactly. For instance, we would like a stronger and better local regulation office. The move we would like to see is to greater consistency in the way councils deal with small businesses on a whole series of licensing and regulation matters. We argue that would perhaps get worse if you move to a slightly more hands-off approach; we would not see the progress we would like to see—an improved and more consistent approach. Tom Ironside: It is reasonable to expect local authorities to be held accountable for business development in their areas. In some areas central targets will not be just desirable but will be required because they will be defined in EU directives. You have waste recycling targets and so forth and they spring from European considerations. As colleagues on my right have said, there needs to be some mechanism to allow businesses to interpret different sorts of information from different local authorities on a relatively comparable basis. We are quite openminded about how you get to that outcome. We do not have a prescriptive view on that yet. Edward Cooke: Any mechanism that helps to establish where local authorities are exemplars in the area of our interest and shares that information among their peers would be extremely valuable. Tom Ironside: To build on that, there may well be an opportunity for businesses to play a role in the promotion of best practice. We can see a role for ourselves, too. Q167 Heidi Alexander: Do you see a role for LEPs in providing some form of accountability? Tom Ironside: Probably it would not be sensible for me to comment at the moment. On the issue of LEPs and their own potential democratic deficit, especially in the context of private sector members of LEPs, I would urge some caution about the role they might play in that respect. One thing we definitely want to see over the next year or so is that, whatever the model looks like, it is not revisited immediately afterwards. The RDAs suffered a certain democratic deficit. We are not quite sure how the private sector constituents of LEPs will be elected to those boards and whether that might create similar problems, so I would urge caution. Matthew Pinner: I think Local Enterprise Partnerships are an excellent way to engage with business and for business to air their concerns and combat some of the problem of having to deal with multiple local authorities. You can address business concerns on a slightly larger scale. I am not sure that LEPs and accountability would necessarily fit if they are not elected bodies, but certainly they are a potential mechanism for businesses to get their concerns heard, as opposed to accountability. I am not sure that at the moment, based on the model that it appears we are moving towards, it would be suitable for that.

Q168 Bob Blackman: One of the thrusts of Government policy is clearly to make local authorities consider how they can make their areas more business friendly. I think I detected in your evidence that you are not in favour of local authorities having the power to set their own business rates. Is that a fair conclusion? Tom Ironside: It is a fair conclusion. Edward Cooke: Based on what has come from the Local Growth White Paper, although there is no explicit reference to a relocalised business rate rather than there is to local rates retention, as an organisation and industry I am sure we would still resist local business rate retention, in the same way occupiers did through the Lyons Inquiry process, as a fully relocalised business rate where the UBR can be set by that council. Q169 Bob Blackman: Therefore, you favour a position whereby local authorities could retain the business rates that they raise but not levy a particular rate? Edward Cooke: Exactly. Probably the position we are in at the moment is that some fiscal incentive and alignment with the local authority and business interest, which could be created through the business rate, could be potentially advantageous but multiple different business rates across the country would be administratively very costly and something that I am sure our occupier members would not support. Tom Ironside: To add to that before perhaps Matthew comes in, retailers are very clear on this point. They would strongly oppose any move away from a national UBR because they need the clarity and certainty that derives from that nationally set business rates multiplier. That clarity and certainty allows them to drive investment and plan strategically. Q170 Bob Blackman: I accept your view. Would you support a position whereby the local authorities retained more of the money that came in from business rates, for example for infrastructure improvements? Tom Ironside: Indeed. We certainly do not have a closed mind to that particular part of the proposal, provided that could be done in a way that did not lead to the other outcome. We can see the argument for greater incentivisation through retention. Matthew Pinner: We are certainly very concerned about the potential for localisation of rate-setting powers. Small businesses do have issues in many cases with business rates; it is a large overhead for small businesses in many cases. Normally, rent and wages is the main aggregate outgoing. Whatever the issues with the current system, the UBR allows you to project forward for five years. Basically, the rate tends to increase with inflation. That gives us certainty. Also, the idea of having different levels in different areas means we move away from a level playing field for business, but in terms of incentives, we are certainly open to that although we would like to see more detail. Q171 Bob Blackman: In what other areas do you think the Government could make changes to create

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financial incentives or other incentives to make local authorities more business friendly? Edward Cooke: The one area for which we have been arguing strongly is Tax Increment Financing. The model we prefer is something called Local Tax Reinvestment Programme, which allows the developer in this case or the private sector to retain an incremental increase in the business rate to pay for the upfront public infrastructure cost. At the moment we find that in lots of regeneration schemes there is a viability gap and often that matches what it is our developer members spend on public infrastructure works. If there is a way to address it, that would be extremely positive for the delivery of schemes like Sevenstone up in Sheffield. We think the LTRP model of TIF is one way to achieve that. Q172 Chair: Is that like the United States model? Edward Cooke: Yes. There are a number of models applied in the States. There is also the ADZ model, which is the public sector-led scheme. They also have a private sector-led scheme. It is a developer pay-asyou-go scheme; it means the risk is transferred from the public to the private sector, but it is the public sector that ultimately gets the benefit of that investment. Matthew Pinner: In terms of Tax Increment Financing, we would like to see a bit more detail. Again, we do not have a closed mind to it but, as you probably appreciate, for small businesses those models are perhaps things in which they might be involved in the benefits of a development. You might want to include small business in the infrastructure project that you were pushing for under a TIF, but in terms of the detail we will hold fire on that. Most of the financial incentives probably do revolve around business rates. There is the obvious issue of potential discretion for discounts, which again we favour if it can be done cost-effectively. The issue for councils is that they would have to fund that, but there is a potential there, for instance, to try to regenerate a town centre. If you want to push a particular area to get a street back up and running and the council can find a way to discount business rates in a discretionary way, that is a potential way to stimulate growth. That is a good example of a local solution. Q173 Bob Blackman: Presumably, you would agree with the automation of relief for small businesses rather than those businesses having to apply for it? Matthew Pinner: Yes; we would like to see automation. Clearly, we are not there yet, but the relief in the first place was an excellent move and take-up is rising. Obviously, we would like to see more steps towards automation, and the latest announcement is a positive step in that direction. Tom Ironside: We would echo Edward’s comments about TIFs but, just looking more broadly at the planning system, we can see a case for the right sort of financial incentives to start to free up the planning process, and that is a recurring theme we hear from members right across the sector. They have longstanding schemes in the pipeline that they would like to see move forward more quickly. If there are ways

to incentivise those transparently, that is not unattractive to us. We are starting to note the first signs of that thinking coming through. We would be interested to see where that leads. Q174 Bob Blackman: Do you not have any concerns that there might be fragmentation in that approach under a localist agenda? Tom Ironside: We can certainly understand that fragmentation may be an issue in those cases. To go back to earlier discussions, this depends on what national parameters are put around schemes of incentivisation of that sort. Q175 Chair: The previous witnesses came from the voluntary or third sector. Government policy is to encourage local authorities to work with and offer more work to the voluntary sector. Are you equally enthusiastic about that aspect of localism, where work that might be going to your members as private sector companies might not always go to voluntary organisations? Tom Ironside: I am not sure we see direct competition in the sorts of work that might go to voluntary organisations compared with the sorts of services and products that retailers provide. We approached the opportunity to work with some of those voluntary organisations very positively and we are already talking to them about how we can find ways to maximise mutual benefits. I am not sure that we see that conflict yet. Q176 Chair: But the Federation of Small Businesses might well see conflict. Matthew Pinner: Again, until it is clear what we might see provided by social enterprises and nonvoluntary organisations it is difficult to see whether there would necessarily be a competition. You might get a situation where what you do is allow them to work together on something. A community organisation might want to build a playground, for instance. A small business could help them to do that. There is not necessarily a need for competition in that sense. We would welcome it, but with the reservation that at the moment we are not quite sure what we will see them do. I do not think that has really come through. Edward Cooke: There are opportunities for greater joint working even in the ownership of shopping centres to create value. I know that it has happened in a number of constituencies in the UK recently. I know that Lewisham and Catford shopping centres have been approached by Lewisham Council. They are working with one of our members to increase the asset performance of that centre, so there are opportunities to work there to improve the asset management of retail property. Historically, local councils have used consulting services to a large extent in the planning application process. That has been hugely beneficial for them. With more interpretive autonomy at a local level for planning, that dynamic might change slightly. Chair: Thank you very much for coming to give evidence.

Ev 48 Communities and Local Government Committee: Evidence

Tuesday 7 December 2010 Members present: Mr Clive Betts (Chair) James Morris Mark Pawsey

Bob Blackman Simon Danczuk George Hollingbery

________________ Examination of Witnesses Witnesses: Lorraine Roberts, Interim Director, London Civic Forum, Stian Westlake, Executive Director of Policy and Research, NESTA, Sarah McAdam, Chief Executive, Commission for Rural Communities, and Alison Seabrooke, Chief Executive, Community Development Foundation, gave evidence. Q177 Chair: Good morning and welcome. Thank you very much for coming this morning. This is our fourth evidence session in our inquiry into localism. Can I just apologise for the temperature in this room? I think it’s something we will be taking up with the House authorities. It’s not acceptable that you should be coming to give important evidence to us in these conditions, and we do apologise for that at the beginning. Could I ask you, just for the sake of our records, to identify who you are and the organisation that you represent? Lorraine Roberts: I’m Lorraine Roberts and I’m representing the London Civic Forum. Stian Westlake: I’m Stian Westlake and I represent NESTA, the National Endowment for Science, Technology and the Arts. Sarah McAdam: I’m Sarah McAdam and I represent the Commission for Rural Communities. Alison Seabrooke: I’m Alison Seabrooke. I represent the Community Development Foundation. Chair: You’re all welcome. Obviously, you’ll all want to have your say this morning, but if there’s something that is said that you simply agree with, it isn’t necessary to repeat it. There are four of you there, so it will be quite a long session anyway. The Government, in the Coalition Agreement, said that it wanted a fundamental shift of power from Westminster to the people. What do you understand by this and what do you think the key elements of that direction should be? Lorraine Roberts: We understand localism to be the devolving of power to neighbourhoods via local government, and the decentralisation and transferring of power to communities. We understand it to be a greater extension of participative democracy and devolving power to communities. We have a number of concerns, but we very much welcome the principle of localism and what we feel it can achieve, and the potential for greater local accountability and transparency in services at that level. Stian Westlake: We believe that this shift offers an opportunity to really unleash new ways of doing things. We have immediate fiscal challenges in our public services and much longer-term social challenges that they need to tackle. Government has historically been very good—or at least very fond— of top-down innovation, including the national programme for IT and big public service reform programmes.

What we have been unable to harness at scale is the energy of communities, communities’ own insight into the problems that they want to solve and their energy and social capital. We see that in the examples of the prison reform work done by St Giles Trust and the hundreds of entrants to our Big Green Challenge, who came up with their own ways to tackle environmental challenges, as examples of the kind of public service reform and innovation that we should really be focusing on. Sarah McAdam: The principle of localism is the devolution of decision making and the design and delivery of services to local government, but also beyond that to local people. The key element for us is that second stage of the devolution. So, a concern that if devolution stops at a local authority level there will be some real risks, particularly for rural communities because their voice may not be heard within the local authority structures. So it’s very important for there to be that second, double devolution of involving communities in the design and delivery of services, and accountability at that local level to replace the accountability that there has been to date back to central Government. Alison Seabrooke: Being the last speaker, I’m going to agree with the other three witnesses. We in general agree with the principle of localism. We have significant evidence of locally developed approaches to addressing the issues of local people’s needs that they’ve identified themselves. There’s also a real opportunity for what we call “community based asset development”; that communities have the skills, abilities, aims and aspirations to do things for themselves. The big challenge that we believe around localism is that we hope that it doesn’t stop at a local authority level. We have seen evidence of some very good local authorities who’ve worked with and engaged their local communities, but we also have a significant amount of evidence from local communities that the biggest barrier that they have encountered to date is actually working with their local authorities. Our experience also tells us that whilst this is a national piece of legislation, in the change, shift and balance of power, and whilst we at the national level can see what’s happening in the policy arena, the practicalities of the local delivery detail will take a good couple of years to manifest itself at a very local level. There needs to be a real focus with local public bodies about how they work very closely with their

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local infrastructure bodies, with the local community organisations, through their elected participative democratic members and representatives, to ensure that the ways that this Bill is interpreted can be met quickly. There could be a real time lag. Q178 Chair: So, there’s a slight tension around the role of local authorities. Some believe that they are part of the process by which this is a step towards passing powers down to the community level. There are other concerns that they may actually be a barrier to stop that from happening. So should central Government be saying to local authorities, “You must devolve power beyond yourselves out to communities,” and insist on the ways of doing that? Sarah McAdam: I’d say that insisting on the ways of doing that really goes against the localism agenda. There does need to be some very clear expectation that local authorities will set up accountability mechanisms to local communities and engage with local communities very actively. From our point of view, we wouldn’t want to prescribe exactly how they do that, but there is that clear expectation that that will happen—for example, the sharing of some of the incentives to local authorities with the communities that are accepting development or accepting some of the activity that will generate those incentives. Stian Westlake: I absolutely agree with the initial point, that you can’t prescribe these things. At NESTA, we’re putting in place a couple of practical experiments to try and help local authorities implement the kind of change that local communities want to see. The first is the Neighbourhood Challenge, which was announced in October. This looks at working with local authorities to help them mobilise community organisers, who themselves understand what’s going on in communities. So it’s about building that capability to engage with the community organisers. I know many of you have long local authority experience; you will have your own views on whether that is present in all councils or not. The other thing that we’re looking at is a partnership we put in place with a number of local authorities— both high-performing ones and less high-performing ones—to help them work with intermediary organisations like Participle or the Young Foundation, who have a long experience of working in communities, to build those skills across the country. What that means is that it’s a question of capabilities, rather than command from the centre. Lorraine Roberts: I think that we wouldn’t necessarily agree that localism means that all decisions are devolved. While we would agree that prescribing the exact detail of how you engage communities, or how you transfer that power and involve people, needs to be developed and built at a local level, we would say that there does need to be some degree of requirement, through either carrots or sticks, to provide safeguards to ensure that communities are given the opportunity and the support that they need to engage with the local authorities— to get involved and take part not just in service delivery, which I’m sure we will come on to, but also the planning and design.

We know from our experience that there is an appetite there for communities to do this but many people need the support—not just the opportunities opened up, but more than that. So I think that there does need to be a degree of requirement both to make sure that those opportunities are opened up and that support is provided to enable all communities to take part. Q179 Chair: It’s a general rather than a specific requirement, is it, about what local authorities should do in general, rather than what they should do in a particular way? Lorraine Roberts: Yes, rather than they do it in a particular way. I think that there can be advice and guidance about what works and what doesn’t work. We would also say that there are lots of good examples out there at the moment. Local authorities should be encouraged to look at what works and what works for different sorts of communities rather than just reinventing the wheel. We do think that it does need to be developed locally and to fit local circumstances, because those can be quite different. Q180 James Morris: You talked about accountability mechanisms. Isn’t the ballot box, locally, the most powerful accountability mechanism? So isn’t it important that that’s taken into account? Local authorities are the democratically elected layer of local government, so what other accountability mechanisms are you talking about? Sarah McAdam: For me, some of it is about transparency of data, which again is another part of the Government’s agenda. To enable that democratic accountability to be powerful, people need information. One of the things is to be able to take data about performance and access to services to a real local level, so people understand what’s available and what’s being provided and to what standard in their community. That enables them to have a real dialogue with their councillors about what’s happening. I think there are other mechanisms such as councillors giving reports on their ward and mechanisms around participatory budgeting, where communities get to make decisions themselves about how some of the funding is spent. So there are mechanisms that can be used to support the ballot box and engage in a dialogue throughout the process, rather than just at elections. Alison Seabrooke: Our experience is similar to Sarah’s. One of our concerns would be that just looking at local authorities as the democratically elected body that should know how to deliver the localism agenda is quite contested at a very local community level. For example, a couple of years ago people were talking about democratically elected local members being community leaders. Actually, if you work at a very local, granular level within a community, many people don’t know who their local elected member is. Particularly if you’re talking about marginalised groups and who they would identify with, it probably isn’t their local elected member. Elected members get called into play when people have started to negotiate their way through the local systems and power structures. When you’re talking

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about some of the most disadvantaged communities, they haven’t even surfaced at that level yet. I think that’s one of the concerns we would have around the localism Bill. It actually offers huge opportunities for the quietest, the most silent and the most invisible parts of communities, but to even get them to the point of knowing who their locally elected member is will be a challenge in itself. I would also like to add that for the last couple of years we’ve increasingly been doing work with the local authorities through action research activity. This involves trying to find out—and quite often trying to help officers and members understand—why some of their local strategies and their aspirations aren’t working. Sometimes it’s a case of needing some sort of critical challenge and critical friend to understand what the blockages and barriers themselves are in being able to undertake some of the aspirations of localism. One of our concerns is that there is a huge opportunity with the Decentralisation and Localism Bill, which we completely and utterly applaud, but there are pressures that are going to be brought to bear in the next few months around cuts in public spending, achieving the Big Society and changes to planning legislation. All of these are going to place a huge amount of pressure on officers and members, so helping them to interpret what localism can mean for them is going to be quite a challenge. So we’d say it’s almost as much about communities needing that support and helping them to navigate the opportunities that are there, but also support for people within local authority bodies to be able to enact that. Stian Westlake: To answer Mr Morris’s question about electoral accountability, I would argue that electoral accountability and other forms of accountability can be mutually reinforcing. If we have the local election as the gold standard of accountability, obviously elected representatives then have an interest in making sure that the council is run well, that it’s run efficiently and that it maintains itself in financial balance. All of those things can be helped by other more low level forms of accountability. Look at the kind of work that was done by Kent County Council in their Social Innovation Lab—a form of co-production, where people who were heavy users of services were involved in the design of them. That led to services that were cheaper but were more effective and reduced long-term demand. So that strengthened the position of elected officials. The feedback loop works the other way. If you look at an organisation like Social Action for Health in Tower Hamlets, which worked a lot with the local authority there, as well as engaging people in their health care and so lowering the costs of some of the public services. This also engages people in the democratic process—for example, taking people of Somali and Bangladeshi origin in that local authority and making them much more likely to vote and participate in the elections in the first place. Q181 Simon Danczuk: So what’s been preventing some councils from doing a better job in terms of encouraging participation?

Alison Seabrooke: I think it boils down to issues of power and where power is held. It’s quite difficult in some local authorities to get out of the mindset of, “We are the democratically elected body to do this work and therefore we know how to deliver policy in the way that we believe we understand our communities.” There are some that are doing absolutely fantastic jobs, but I just think there are going to be huge challenges in terms delivering the aspirations. Notwithstanding all the issues that we know about over-prescription of indicators and targets and so on, from the Community Development Foundation perspective we always start with an outcome-focused approach. So we look at the outcomes you wish to achieve and look at the best mechanisms you can employ to do that. The action research we found was that actually the performance of local authorities was driven up in terms of local engagement, working with the voluntary sector and involving people by responding to those targets. In answer to your question about what has prevented some people from doing it, it is people perhaps not really understanding and being led by targets rather than by outcomes, so it is activity-focused rather than asking what needs to be achieved for communities. It is also caused by others just focusing on those targets and not being imaginative enough or creative enough to be able to let go of that power and see what communities can do for themselves. Q182 Simon Danczuk: Anybody else? Lorraine Roberts: We gave evidence in our submission and talked about the need for some new development in our skill sets within local authorities with officers. We found, for example, great benefit when we tried to dismantle some of the cultural differences between local authority culture, community groups and people on the ground, by bringing people together in our cross-sector forums. This was to try and allow them to talk and to find the solutions together. Very often there is really just a lack of understanding across the board. We often get local authorities contacted to find out who their community is. Sometimes it’s just lack of knowledge that is a barrier to them knowing who to go out to talk to—what their patch is. In particular, when you have authorities with large numbers of marginalised communities in there, they are not so easy to reach when you have large turnovers within the population and transitional groups. So there are other skills that we’ve spoken about— commissioning working together, understanding across the cultures and looking at how to involve people in decision making without feeling too threatened. We’d certainly agree that both forms of participation work well together, but there is quite a lot of fear and misunderstanding across both sides. Stian Westlake: I would say there are three barriers to this working effectively. The first has been covered very well—the question of capability in commissioning. The second is the question of capability in the community sector, in the social sector. We have some fantastic community

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organisations across the UK; we also have areas that have weak social capital and that have trouble building these things. I think the role of the Big Society Bank, which we’re working to help pilot at the moment, will I hope provide at least some of the financial resources to help build that capability in more areas. The third thing, and this is somewhat controversial, is the question of challenge and the challenge that is provided by the overall fiscal circumstance. If you look at Aberdeen City Council, Aberdeen faced its own mini financial crisis three or four years ago—for local circumstances, but in a sense it was a mini replica of what’s happening across the country now. Under Sue Bruce, their very dynamic new Chief Executive, they turned the local authority around, put in place a plan which not only massively restored their financial position but also connected much more deeply with local communities. It really gave them a say in how they would address the financial challenge that they faced. Now Aberdeen is reasonably well regarded as a model of a well run council. I think the real challenge that councils face in the next few years is the financial crisis that will affect the entire public sector. If we have the right capability in place, both for local authorities and in the social sector, this could be an opportunity to do things in new ways. Q183 George Hollingbery: I think we’re all fairly clear that in the Decentralisation and Localism Bill that’s coming there are going to be certain areas where decision-making power is going to be directly devolved to communities, in particular in planning. Sarah will know very well that neighbourhoods will be able to make decisions about where they want things to go and how they want them to look, within a framework. Are there any other decisions that you can see being directly devolved to communities by local authorities? If so, I’m interested in the framework. We’ve covered a little bit of the accountability already. I’m interested in whether it will be within limited parameters that they make those decisions or whether they will make full decisions for themselves. Alison Seabrooke: I think your question is absolutely correct. From a local community perspective it’s very difficult to ask local residents to turn up to very different meetings—around planning, health, local education, play facilities and so on. What we found worked with Great Yarmouth Borough Council was a pilot scheme of mini Local Strategic Partnerships. So each neighbourhood had one of these mini LSPs where they could draw together strategically. Obviously, one of the key roles that a local authority plays is being able to be strategic in its approach and to see where the greatest needs might lie. So in terms of being able to devolve some of that decision-making process, but also joining up at a local level, that is a model that could be adopted. Q184 George Hollingbery: It’s interesting; we had evidence provided to us before that if you have a meeting on every night of the week for a different community group to do a different thing, you don’t

have time to cook dinner, let alone do something interesting. So there is this tension, isn’t there? Sarah McAdam: There are two things that I’d say assist us there, because there certainly is a tension and there’s a concern that people in many communities are already feeling overloaded and this has pushed them over the edge. Two things: one is that there’s an important level of local democracy that we haven’t mentioned yet, which is the town and parish council sector. This is a structure that’s already there, particularly in rural England, but not exclusively. There are obviously good and bad examples of that, as with any body, but it is a really useful structure that is very close to the ground. It is not synonymous with community but very close to community. It is a structure that I would suggest could be used. There are some great examples of service delegation to town and parish councils, where they have identified within the community that there are services currently delivered by the local authority that they believe that they could deliver better, more locally. There’s an example from Burgess Hill Town Council where they’ve taken on highways maintenance and they have local people doing that work. They are very responsive and have that local knowledge about where the issues are likely to arise. The other thing I would mention is, using that framework, the experience there is around community-led planning—again, particularly strong in rural England, but not exclusively. This framework puts a structure around helping communities to identify their priorities and what the needs are that they want to address first. Rather than trying to do everything at once, which will entirely overload them, it is about getting the community together and getting them to identify over the next two years what they are going to focus on, and when they’ve achieved that they can think about their next step. Lorraine Roberts: I’d also just like to say that in London we have a different direction of tier of authority that will be picked up in this Bill; we have the London Mayor and the powers that will be devolved to him and not down. We have no parish councils; we’ve had the power for the last three years. There are some movements and discussions within London, but we see quite a different challenge to setting up that sort of structure in an urban setting and particularly in London. For us it’s also a question not so much of what decisions get devolved but how communities can be involved in a whole range of decisions alongside local authorities and other statutory partners. It’s a question of what support they’re given to take those decisions because there are lots of dangers to devolving directly some decisions down to communities if it’s not put within a framework and communities are not enabled to understand the wider picture. I know a lot of local authorities have had this problem around planning and decisions, which is why we would support there being a London-wide plan on areas and issues around planning. Q185 George Hollingbery: I was very struck by something that you wrote about how people tend to coalesce around issues not political structures—about

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park user groups and so on. Is there not an inevitable difficulty here, which we’re beginning to touch on now, that at a very local level you can replicate the local council and deal with everything or you can harness enthusiasm for certain issues, and the two don’t work terribly well together? Alison Seabrooke: A key message that has come out, and this is partly in response to Mr Morris’s question earlier on, is about who people identify with locally. I think that’s one of the contested areas from a local community activism point of view around a democratically elected local authority. So this is picking up on Sarah’s point that when you get down to a parish or a neighbourhood level, quite often people identify much more closely with their parish councillors because they’re more visible and they may be going to the same community groups as they go to and so on. Part of the ability to unleash some of the opportunities that are there locally is due to people getting involved because there’s an issue that makes them very angry. Whilst power might be devolved down to a local level, that anger is only exacerbated if people don’t know how to do something. Picking up on Stian’s point from earlier on, we have done some work around self-help organisations, what actually identifies a self-help organisation and what’s different to other voluntary-sector organisations. Quite often, they are primarily volunteer-led, and they have been set up because people are angry or exacerbated by some service delivery shortfall. We worked with an organisation around domestic violence who have been going for around 10 years on a shoestring, run by a mother whose daughter was a victim of domestic abuse. They now get substantial referrals from social services and are highly regarded locally but receive no core resources. The other thing that identified all of these self-help groups was that they needed an intermediary; they needed that connection to the local public systems to help them both unravel and be able to work their way through their power structures. So the point I’m making is that, as more power is devolved, how are people going to learn about how to navigate? On the other hand, how are local officers and members going to be able to understand the opportunities, capacity and energy that’s out there in order to meet some of the service delivery needs that we’ve all been discussing? Lorraine Roberts: I thought this might sound a bit cheeky but I was going to say that part of your question demonstrates the importance of organisations such as ours. We do a lot of work trying to link the local with the regional in London and with the national. We run programmes such as How London Works, where we take activists in small community groups. We’ve done one on Select Committees and how Select Committees work, but we’ve also done them with the GLA and bodies like that. Certainly, when we’ve worked with supporting a whole number of groups to input into the London plan and the examination in public that we did there, we brought together a whole network of local groups and encouraged them to look at their issues within the much wider context of planning and services in London. We helped people put together written

responses, gave people the bigger picture to make that clear and got them enthused around that as a regional issue. We had a hot desk at the examination in public where we enabled quite a number of small community groups to go and talk about what mattered to them and their localities within the context of something much larger, and it was evidence that made sense on both levels. So the work that we and other organisations like us do is very important in making that connection between the local authority level, the regional and national level. It also helps to prevent the nimby-ism that can result from micro-level issues. Q186 James Morris: We’ve talked about accountability at a local government and parish council level, but isn’t the situation on the ground even more complicated than that in terms of accountability? In the community sector, the community also interacts with the police, with PCTs and so on. There has been quite a lot of thinking by the previous Government and by this Government about bringing together Government arrangements locally so we don’t have such a fragmented picture. To what extent do you think that an integrated approach at the local governance level will help your causes? Stian Westlake: I think it potentially presents a huge opportunity for community groups to really do innovative new things, especially to the extent where it removes some of the silos in service delivery. So the Peterborough Social Impact Bond is a great example of that, where the payment mechanism does bring together aspects of criminal justice, aspects of community service and aspects of services for younger people. That took many years to develop and it took a lot of arm-twisting on the part of central Government as well. But if we can put in place genuine partnerships locally that integrate across health, social care, education and— Q187 James Morris: Can I just ask, what would a genuine partnership look like from your perspective? What does that actually look like in practice? Stian Westlake: I think the most important thing, and the thing that appears to be working in Peterborough, is genuine financial fungibility across different areas. I say that knowing how difficult it is to achieve, but that seems to be what’s making the difference for them. Sarah McAdam: I would absolutely agree with that, but I would add genuine community engagement to it. I think that there’s a real opportunity there because communities don’t necessarily think in terms of institutions; they think of an issue that they need resolution to. There’s nothing more frustrating than hearing, “Well that bit’s the local authority, that bit’s the police, and you have to talk to five different people to get this resolved.” So it’s a great opportunity to have a partnership to engage with, but the danger is that the partnership will become so internally focused and involved in its own internal wrangling. If there’s more flexibility around funding, then that possibly takes away some of that. It has to be a partnership that involves the community for there to be that real

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discussion about what the priorities and needs of this neighbourhood are. Alison Seabrooke: That goes back to my earlier point about the mini Local Strategic Partnerships, so you actually involve local residents. For example, it might be your neighbourhood police officer who becomes a representative, and that goes back to my earlier point about who communities identify with. As you’ll know, if you operate in your own community, then it is about who you see on the street, it’s about face recognition, who you feel comfortable speaking about your problems to. I agree entirely with Sarah; the issue there is that it doesn’t stop there—it becomes a force for greater community engagement. Q188 James Morris: So am I hearing from you that it doesn’t need to be some kind of rigid situation? It can be flexible according to the particular requirements of a very local community? Alison Seabrooke: Yes. Q189 James Morris: So within a certain ward it might be a good neighbourhood police officer who takes the lead on resolving problems. Is that a scalable idea? Alison Seabrooke: My personal experience, having worked at a community level and through the work that the Community Development Foundation does, is that communities identify the most appropriate person or the most networked individual. They don’t say, “It has to be a police officer.” One of the examples I saw earlier this year was in Warrington, where the local senior police chief had become very much involved with referrals by improving his local officers’ understanding of mental health issues. So when they get a call out to a certain resident’s address five times a week they know what to look for and whom to refer to. That was at a neighbourhood level, so it really is determined there what those local issues might be. So you might be in an area where there’s very poor health or that has huge housing issues, but the individual that’s working at a local level will also be networked at a much more area level. Sarah McAdam: What I would add to that is that it does require the leadership to empower people, the frontline practitioners, to say that people can go a bit beyond the bounds of their jobs. So if there was an understanding that they worked as a partnership and the public sector bodies supported the local community, then it would require that the leadership strongly sent the message that they would not be criticised for going slightly off-piste for making sure that something the community has asked for happens or for making those links on behalf of the body and the public sector in that area. Q190 Simon Danczuk: You mentioned coproduction earlier and we hear about citizens’ juries, participatory budgeting and things like that. Why aren’t these applied across all local authorities? Could they be? Should we start to insist on local councils all doing participatory budgeting or some other method? Alison Seabrooke: I would certainly agree with devolved budgets. We’ve found that can be a powerful mechanism for getting people involved and also,

going back to the transparency agenda, they actually see where their money is going locally. There are two elements to this. One element is that participatory budgeting, where it’s local authority funding that’s being devolved at a very local level. There are also more flexible sources of budgets, such as community chests, where it would stimulate local organisations to be established or groups of people to come together with a much more flexible response. Stian Westlake: I think you have put your finger on a very interesting question around the scalability of any of these reforms. I think this really depends on the reason why you think localism improves public services or the services we provide to people. I think there are two ways you can look at this. One way is to see the local as an R and D lab for the country. So you think, “If we let a thousand flowers bloom, we’ll find the prettiest flower and then we’ll make everyone plant that flower in their local area.” The other way of looking at it is a more mass local approach, which says that the right flower for Lewisham is unlikely to be the right flower for Newcastle, for example. This says what we actually need are different systems tailored to their local areas. I think if we look at the different kinds of challenges that public services try to address, some of the more traditional ones, like providing a hip replacement in a district general hospital, are very amenable to the first standard of care and it’s an outrage that we see such a variation in in-patient stays after hip replacements. There you might want to take an approach that says that we will mandate certain types of practice across the country, or put in systems that force people to converge towards that. But I think if we’re talking about many of the challenges that our local authorities have to deal with, they are around subtle things to do with people’s lifestyle, anti-social behaviour, healthy behaviour and things that rely on people to adapt their own lifestyle and to set their own goals. For those cases, the idea of identifying one best practice and then scaling up is not always appropriate, and maybe the approach we want to take is the one we’ve alluded to before that says that if you create platforms and examples of best practice in these kinds of areas then you leave it to local communities and elected officials to identify the ones that are most appropriate. Lorraine Roberts: I would just go back and say that, yes, I think all local authorities and other statutory partners ought to be opening up to greater engagement far more in terms of their services, decision making and planning. I would say again that that has to be supported and enabled for the whole range of communities to get involved. Certainly in terms of coproduction, there’s a lot of emphasis on things like mutuals, co-ops and social enterprises. A lot of people in the community want to get involved at different levels to that; they don’t necessarily want to go that far, and they don’t necessarily have the scope to go that far. There’s a lot that local authorities could do around participatory budgeting. They could certainly work with their communities far more and provide support, for example, through the Take Part programme, which would be extremely beneficial in supporting more

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people to take part in a whole range of issues. We see people’s involvement in Take Part as being part of a journey; you can get people involved at a certain level. You might not be able to bring mainstream participatory budgeting into one local authority immediately and expect it to be a success; you need to work with both the officers and the community and look at the skills on both sides in order to bring that sort of thing in. I would say that while I agree you can’t take any model and transplant it in any area, you can learn and share learning across different authorities and across different communities. There is an awful lot of it out there, and we very much hope that in taking localism forward with some of those lessons we’re not going to be reinventing the wheel. We are going to look at what has worked and what could work better, rather than starting with a blank piece of paper. Alison Seabrooke: I absolutely agree with what Lorraine is saying. If we’re talking about that very localised, localist approach then it is about the principles of how you use resources, either people or money, at a local level to stimulate local involvement. One of the ways of illustrating that is through the Grassroots Grants programme, which we administer on behalf of OCS. It is just about to come to an end and is £80 million of grants. It is being used to develop the next Community First programme, so there has been a shared appreciation of what the value of small investments of money can do at a local level. So whilst you might be talking about participatory budgeting for people who are getting involved in the middle part of service delivery, in respect of the Grassroots Grants programme, 40% of the applicants had never applied for funding before. These are only grants of up to £5,000 and the average is £2,500. Some 41% of the groups that were surveyed cited their role as in meeting local service provision. So these are very granular groups at a local level. So you can match that with something like the Local Strategic Partnership model and then you move up to more of a local authority area with a strategic overview and co-ordination of that activity. It’s about tiering and some very core principles about how you devolve resources and stimulate local action and interest. Q191 Chair: You talk about all the good things that happen in different parts of the country; you talk about them happening in different ways in different areas due to different needs and populations. Is there still a core dilemma here though? What happens when you have authorities that just say, “We think we’re localists because we’re a local authority and we’re going to go on and do our own thing. We’re accountable; we’re elected representatives. We can see all these examples, but we don’t actually believe in growing any flowers here, we’ll just get on and do it”? Do you have a problem there? You have a situation that you wouldn’t regard as localist, but the only alternative might be for central Government to come in and dictate what should happen, which isn’t localist either. Sarah McAdam: The other possibility is to look at ways of building the capacity of the communities so that they can be demanding of what they want.

Q192 Chair: Who would build? Sarah McAdam: I think there is a role there for central Government to be looking at how it funds, resources and supports the building of capacity in local areas. I echo Alison’s point that often it’s small bits of funding that actually enable things to develop. Then, providing evidence and examples of what is happening in other areas does enable people to be asking questions about why this isn’t going on in their area. Stian Westlake: I would echo Sarah’s point that the idea of nurturing community groups to challenge their local authority is an important one. When the Big Society Bank gets up and running later this year, we hope that that will be one of the things that it enables to happen. It’s one of the things that the Neighbourhood Challenge ought to do; that’s going directly to community groups rather than channelling it only through willing local authorities. I think the real question is how to make sure that the examples of that working are amplified so that community groups are more willing to challenge local authorities if they feel they’re not getting all the answers that they need. Q193 Mark Pawsey: We’ve heard quite a lot of enthusiasm for the principles of localism from our contributions this morning. It’s only going to work if the entire community gets involved, isn’t it? We’ve all held public meetings and the same handful of people turn up—usually articulate middle-class people with big elbows. BME communities generally often represented fewer numbers of women. Mr Westlake, you also mentioned that we need to harness the energy of communities. What if there isn’t any energy? How do we get everybody involved in this new model? Alison Seabrooke: That goes back to Mr Bett’s question. I think there is a role nationally. It’s very difficult for central Government to stimulate that local community action directly. Certainly, the work we’ve been doing over the last 40 years has been about trying to translate what’s happening in national policy at a very local level—for example, running a national programme such as Grassroots Grants and making it accessible. What we do is work through lots of other national membership organisations, sub-national organisations and organisations such as Lorraine’s. They have that local expertise and knowledge and work with communities of place and communities of interest. I think you’re absolutely right that one of the biggest dangers is that localism will become the playing field for people who know how to work the system. I’m very conscious when people talk about the “usual suspects”; I think that’s a bit of a derogatory term. Quite often, those usual suspects have taken quite a long time negotiating the power systems and quite often come from a community activist background; they’re not just middle-class people with big elbows. Actually reaching beyond those people is absolutely critical. We have quite a lot of evidence about national programmes and how you work with very particular locally based organisations. When you tender for these programmes, you look at the outcomes you want to achieve and you work only with organisations that can

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help you achieve those outcomes. It might be faith, it might be BME organisations, it might be about Travellers and so on, but they can actually identify with those very marginalised sections of the community. I think that is where there is still a role for national action. Q194 Mark Pawsey: What mechanisms would you use to get to them? How do you actually engage them? How do you get them involved? Lorraine Roberts: If I can go back to the example of some of the programmes that we run—certainly Take Part and Active Learning for Active Citizenship. We have to be very careful when we talk about communities and this is a very big concern for us in London: it’s not just about local communities, but about what happens to those that don’t have the critical mass and whose interests can be overridden. Those communities need particular attention and need particular support provided. The Take Part programme, which grew out of Active Learning for Active Citizenship, looks to enable skill development at a very basic level initially with local people. It is offered through the sort of places that people will go to—libraries, volunteer centres and so forth. For a lot of people, the barriers are that they just don’t have the confidence or the sense that, if they do speak, anybody will listen to them, or that they’ll know the right things to say. Frankly, it is going to take resources to ensure that everybody does get an opportunity to take part in this. We had some lovely case stories of people who didn’t get involved in their neighbourhood, who didn’t vote and didn’t feel they were part of anything. They were drawn in to the Take Part approach, perhaps just courses in speaking up at a meeting, understanding how to read difficult documents, presenting your case and understanding where decisions are made—all part of the Take Part programme. From there, we move up to people taking on more formal civic roles. The vast majority of people do want to get involved, but don’t feel particularly confident or able to do that. I’m sorry, but I don’t think that power comes without money and transferring power into the hands of the community is going to require some resources to make sure that it goes into everyone’s hands, so everyone has an opportunity. Otherwise, it could be more negative than positive. Stian Westlake: When we ran our Big Green Challenge, the nationwide environmental prize, over the last two years, over half of the 100 finalists that we had had never participated in any Government or charity-sponsored programme before. When we asked them what really helped them, it was this practical capability of building advice. In our case we worked with Unlimited, who have a lot of experience working with social entrepreneurs, but there are lots of other parts at work. There’s the whole school of community development, there are community organisers and there’s the approach of people like Social Action for Health in East London. There are a number of ways of doing it. I do agree with Lorraine’s point that this requires resources, and one of the ways in which central Government can help in this respect is through the

kind of capability-building that is looking to be financed through the Big Society Bank, to make sure that includes practical capability-building as well as cash. Alison Seabrooke: Can I just add a missing point? When I was talking about a nationally co-ordinated series of activities, the Take Part programme that Lorraine just described is actually something that the Community Development Foundation manages nationally. So we wouldn’t take the credit for the delivery of that programme, but what we do is we work through the many local networks that we already have and have established over a long period of time. We know that those people locally, when we tendered for those bits of work, are the people who are connected and who are identified with locally. Central Government would find it very difficult to go directly to administer those sorts of programmes on a mass scale to stimulate that kind of activity. So I think it’s still called for in those sorts of programmes. Q195 George Hollingbery: That’s very interesting because that is leading directly on to the question that I wanted to ask. The difficulty of reaching small-scale organisations is incredibly important. Because large NGOs are much more visible and easy to deal with than central Government, is there a danger that a lot of this devolution and these Big Society ideas are going to result in large-scale voluntary organisations rather than small ones? Is there a case for those large NGOs to be localising as much as anybody else? Alison Seabrooke: I don’t know if you’re aware, but we are still a non-departmental public body until March. One of the things that we as an organisation need to do is shift our viewpoint. Whilst we still have a relationship nationally, there is much more scope for CDF as an organisation to work with other partners at a local level. The connection is that there always needs to be somebody who’s interpreting the policy development, and informing and influencing that policy development by being that intermediary on a national level. So, yes, national NGOs will always come in for that sort of criticism. Everybody feels that power stops at the level of the operator. I do think that there does need to be that co-ordination. One of the things that does slightly concern me with the disappearance of Government Offices and Regional Development Agencies, whatever good or bad they do, is that there needs to be somewhere for local organisations to connect to. That picks up Mr Betts’s point from earlier on about how you know when one bit of your locality is doing really badly or how you can help to drive up their improvement by showing them one bit that is outstripping everybody else. Quite often, that comes down to the culture of a particular public body. I won’t just say it’s a local authority; it is the culture. That is one of the things we have found time and time again with our action research activity. You can either have fantastic ideas at the top that suddenly grind to a halt at the delivery end, or it’s vice versa and it stultifies everything. I don’t know how you overcome culture change. That’s down to personal behaviour.

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Sarah McAdam: Could I just mention another network that already exists locally that I think we should be looking to? That’s the Rural Community Councils. They have a lot of experience of community-led planning and a lot of experience, to address the previous point, of engaging with hard-toreach groups. They take time to work through and support communities and support parish councils and others, to make sure that they’ve reached everybody in the community rather than just the loudest voices. There are structures like that that already exist and I think there’s more that we can do to make sure they’re visible and are used by the national bodies that need to have that understanding of what’s going on at a local level. I would just make the point that, as well as the need for resources that has been mentioned by my colleagues, there is a need for understanding that this sort of community development takes time, particularly to engage with people who are more reticent about coming forward. Often, it will be a small step of people getting involved in a very specific project or very specific issue that would then draw them into wider activity. Q196 Mark Pawsey: Aren’t these kind of people only drawn in when there is a particular problem, threat or challenge? In the absence of that, they’re going to be very hard to reach. Sarah McAdam: That’s often the start, but what is interesting is that certainly in our experience people might come together around a very specific issue but then they then get together, they then start to know their neighbours and talk about other issues. In rural areas, there might be a focus on a community shop or a village hall or that sort of building, which becomes the centre for other activity and the consideration that there’s more that they can do there once they’ve begun to talk to each other. Alison Seabrooke: One of the interesting bits of work the RSA are doing at the moment, which we’re involved in, is their Connected Communities programme. This is very much looking at who communities and individuals identify with at a local level. For some groups of people, the local school is their community hub or centre, and for another group of people, who may be of a particular faith or race, it absolutely isn’t; it’s somewhere else in that community. You mentioned community development approaches. Community development can be perceived as something that’s slightly difficult to evidence, but that’s because it’s a very long-view approach to working and trying to help stimulate action in parts of the community that haven’t been active before. One of the things you may not be aware of is that the Big Lottery Fund have tendered for an organisation set-up, the Big Local Trust. This is investing £200 million in up to 150 of the most disadvantaged communities, over a 10-year period. We are the preferred bidders and we’re absolutely thrilled to have the opportunity to work on that. It is particularly working in the sort of communities you’re talking about; the ones who haven’t been as active as they

should be and where there are entrenched social and economic problems. We are looking at various approaches, but you have to start at where the community’s at. We know that it will probably be a couple of years’ lead-in to help stimulate that local community action, but it’s about the financial resources and support and development work. Lorraine Roberts: Can I come back to your question? Large NGOs can improve the contacts they have at a local level. They can ensure that the support that they provide and the contribution to the overall infrastructure is appropriate. No, they must not parachute into local areas; they don’t have the local knowledge, and where it works best is where they can work in partnership with very local organisations. It is a concern for many community groups that, under things such as co-production and the other elements, they’ll be nudged out of the way by some of the larger national NGOs. The better large national NGOs know that and work in partnership with local organisations and enable it. As Alison was saying in terms of the Grassroots Grants, the small pots of money and what can be achieved on a local level with these, it’s fantastic and certainly a lot can be achieved. Sometimes I think that means people look at that and say, “Look at what you can do with just £5,000,” or “Look what you can do with just £2,500 in this local community.” Often that actually wouldn’t have been achieved had there not been the local infrastructure and local networks in place. That’s not taken into account in the overall figures, but those local networks and the local support that can be provided to those community groups often adds a lot more than that £2,500 or £3,000, and is an essential part of achieving that activity or outcome. Stian Westlake: I’d just like to pick up Lorraine’s point about the opportunities here. I think there potentially is a big opportunity. If we talk about finance for a minute and look at the capitalisation of community and social sector organisations, we see this very odd picture, if you draw it on a graph, where the majority of the sector is extremely poorly capitalised and as a result often leads a hand-to-mouth existence. Many projects that we would like to see happen don’t happen. Yet the average level of the sector is not so bad because you have a few organisations that are extremely well capitalised—often the national organisations that you mentioned. One of the challenges that they have is how to use that to its greatest effect. Lorraine made the observation that the most successful organisations like that do partner locally: obviously, they have the advantage of local knowledge and local delivery channels if they do that, but the advantage works the other way as well, because it puts that very scarce capital in the social sector to much better use. Q197 Bob Blackman: One of the problems that is experienced right across the country is, for example, that you can’t get people to come forward to be councillors, schools can’t get people to come on their governing bodies, and even residents’ associations struggle to get newer people moving into areas to

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participate. They are very local aspects. So what’s your evidence that there is a serious appetite for people to really get involved and get stuck into these things? Alison Seabrooke: That is the whole purpose of the Take Part programme, and there is significant evidence through that programme about using locally based organisations to encourage people and give them the confidence to become involved. So what Lorraine described is that the purpose of that is for people to become involved in civic life. It’s not just about civil society organisations. That is the progression step through the Take Part programme, which was a nationally identified programme that has been going for quite a few years now from the Active Learning for Active Citizenship activity. It has been about how you get people through that progression route. That doesn’t happen overnight, as you’ll know. These are people with low self-esteem, low confidence, who’ve never been involved in their community. It takes people that they can identify with, that they have local trust of and relationships with to help navigate them through that path. So the evidence we have is that people become school governors, magistrates, elected members, they take formal roles on community organisations and they become trustees. We have got stacks of that information, but it is a long process and it does require that injection of funding and support. Q198 Bob Blackman: Don’t we have the further problem that most people of working age, be they men or women, now are working? They therefore have more pressure on their time, they have their families and lots of other things that they do, and they say, “I can’t really be bothered to get stuck into all this.” How do we break that mould? Lorraine Roberts: There have to be different levels at which people can engage. I think you have to recognise that. I saw a presentation recently with somebody from the University of Birmingham looking at how we have some of the highest civil participation rates in Europe, but a lot of that is at quite a low level. That can be built on. As you say, people have jobs and they care about that, they have their families and they care about that. That means they can be encouraged to see that those things link into schools, education, the streets they walk their children to schools on, rubbish tipping, all of that sort of thing. Bob Blackman: We often wish they would walk their children to school. Lorraine Roberts: That’s true. At the end of my road, I see the road they have to walk their children along— those who do—stepping over the constant fly-tipping that takes place. So you can build on that interest, but you need to give people different entry points and different ways to get involved and take part. Then you have to build those confidences. As Alison said, we have numerous councillors who have come up from very low levels of involvement. In Southwark, we supported a group of young mothers, and one of the problems they had was that they were walking to the nursery, but they were going

up an alley that was used largely as a male urinal in the evenings and was particularly unpleasant. From just discussing this they got together, they lobbied the council and got a toilet put at the end of it; from that, they went on. We have lots of examples of people who, through that, have realised that they can actually effect change and can make their neighbourhoods and their local communities better from those small steps. Sarah McAdam: There’s clear evidence of higher levels of volunteer activity in rural areas, in fact in the most remote areas, when compared with the most urban areas. I’d suggest, although I can’t prove this, that that’s because of two things. One is because, it has to be acknowledged, in a lot of remote rural areas people have had to step up and deliver services themselves or get involved locally to fill the gaps in the statutory sector, but it demonstrates that they have done that. The other side of it that is interesting is that there’s also data that show that people feel a stronger sense of community identity in many rural areas; there’s a clearer geographical area that they relate to. There is some suggestion that as you build this sense of neighbourhood and you build this sense of, “These are my neighbours and we will work together to deliver things,” that does generate more volunteer activity. Stian Westlake: I think that’s absolutely right. It goes back to Mr Hollingbery’s point earlier, which was what the link is between the small questions that you might want to ask citizens and the big questions. In some senses, the small questions that people are passionate about are your gateway to engaging with people, rather than going and saying, “Here are the five questions that we, the local authority, care most about.” The route to engagement is about starting with what people care about and then trying to bring them on the journey that has been described. Lorraine Roberts: Could I add another point? One of our frustrations is that it sometimes feels like some of the approaches are not fully joined up around this and building a local sense of community. We are concerned that some other policies that are coming up will limit people’s sense of ownership to their neighbourhood and to their locality. For our members, that’s certainly some of the frustration: if you limit the sense of how long someone might be living in an area, either because of housing benefit cuts or because of limits to the lengths of social housing tenancy and so forth, they will not have that ownership of that area. They will not feel the need or the drive to invest in making their community better. So things need to be joined up across that. Q199 Bob Blackman: Could I just ask, Lorraine, from your perspective, you’ve mentioned the case across London and I think this is true for a lot of other urban areas. Do you think there’s a case for creating new parish councils, or the equivalent, in the network of villages that most urban areas are? Lorraine Roberts: It’s something we’re very interested in at the moment. One of our members at Paddington Development Trust is pushing forward with this idea based on the community that they have.

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I think there could be scope for that, but I’m not sure I’ve fully explored it enough to be able to answer. Q200 George Hollingbery: In the Decentralisation and Localism Bill, we have the idea of neighbourhoods and communities around which you can build a local plan. So there’s a platform there for everyone to grasp. There’s a structure there that you can start to build on, I would hope. Alison Seabrooke: In my own experience, having just moved out of a rural community having lived there for nearly 20 years, I’ve always been a big supporter of parish councils. My earlier point was that it was about people I identified with, I met and saw regularly. So I’m actually a great fan of parish councils—the really good ones—and what they can do if they have those local budgets. It was also about what they needed as individuals so they connected with the community. In terms of the community-led planning, we were involved in one of the very early parish plans. This goes back to the point about intermediaries or some way of facilitating what that community plan comes out with and how you turn that into action. That has to be a very clear role, because what can be very frustrating for local people is if they get involved and go through this fantastic process, but actually don’t understand what they do next. They don’t know how to change that road or to develop that piece of land into a play area; they don’t know where to get the resources from. There has to be some sort of support and resource for it. Chair: We talked before about the issue of how you deal with a situation when councils are not being very co-operative in trying to go for the community involvement. We talked about trying to skill people to start getting on with the job and maybe challenging councils. The Government has a national programme to recruit and train community organisers. Are you all comfortable with that or do you think it’s going to be a bit of a straitjacket by saying, “This the sort of person you ought to have”? Or should we be looking for how you train people to meet the needs of a particular area and meet the needs of a particular community? Alison Seabrooke: Could I answer that? We’ve been heavily involved in this even before the election. I think the term “community organisers” has been problematic. There is obviously a whole body of theory around community organising and it is now generally accepted that what you have to do is start with where the community is at and what the community’s needs are. Then you look at the type of person that needs to be involved in that activity and the skills and training that they might have. For example, community organising is quite often campaign-led around a single issue and it’s around the person who galvanises those people around them and leads that issue in a campaign and therefore it’s prominent and you can see an end goal. Community development, on the other hand, is about working with those people within communities who may be marginalised to actually help them to identify what their needs and issues are. Rather than saying, “This

is what we think you need to do,” or “This is what the issue is locally,” you help them develop the skills and capacity to lead on that activity. One of the things that has happened in the last few months, through quite significant pressure from lots of different organisations who work either from a community organising perspective or from a community development perspective, is that we’ve said, “Don’t throw the baby out with the bathwater.” There are many, many skilled community workers, in the most general sense, out there and therefore you should be working with those individuals at the start because they are the ones who have the local contacts, they have built local relationships and are going to be able to make action happen much more quickly. So you don’t start with a brand new set of 5,000 community organisers who are working in a certain way. The skills needed to set up and nurture a community organisation are very different from the skills needed to negotiate a contract with a local authority or to campaign on a single issue like the living wage. They are very, very different sets of skills. So, start with what the community identifies as its needs, what outcomes it wants to achieve, and then look at the right set of skills and the people who need to be involved in that. Q201 Chair: Who would do that? You’re talking about a central Government initiative here. It’s easy for central Government to say that this is a model and then implement it. When you come down to looking at those particular needs, how can a central initiative respond in that way? Alison Seabrooke: The way we would develop and deliver it is we would work through many of the national organisations, by and large community sector organisations, who we know have people locally who are involved in very local community work. So we would actually tender out and say, “These are the sort of activities that we believe need to take place and these are the skills we need.” If these are the outcomes that need to be achieved in a particular locality, what sort of skills are needed to do that work? Then you would see, through an open process, where there are existing people who could then be supported to help achieve that. Stian Westlake: We’re working with the Government to help pilot some of the earlier stages of this. I would absolutely agree with Alison’s view that one doesn’t want to be dogmatic and say that this person must be a follower of Saul Alinsky or a practitioner of a certain other school; that’s not a decision for central Government to make. The approach that we’re using is a challenge approach, saying, “Let’s see what communities propose to do.” Therefore the communities themselves will decide and the quality of those bids will determine what sort of model gets funded. So again, central Government shouldn’t be making the decision. Lorraine Roberts: It should be putting some safeguards down, though. I do think it has that role. I have asked various questions to various Ministers at events around some of the issues that you’ve raised here—around equalities and different communities taking part—and community organisers is what’s

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given back to me as what’s going to sort this out and is going to make sure that all the communities engage. I would emphasise that it is already happening. We have a network of over 300 community development practitioners in London; it is already happening and those relationships have already been built. I would echo the things that Alison said. I was speaking to a resident from the Paddington Development Trust last week at this event, and they were saying that they were used to being let down. Somebody lets them down and they just walk away; they don’t hang around anymore as they have relationships with certain people. So those things need to be built on and we will turn the clock back a long way if we try and re-establish it. I do think there is a role centrally. For us, it is a balance between localism and people being able to define things for their local circumstances, and the role of central and regional government to put down some safeguards to ensure that minority communities—or less vocal communities—are not sidelined or pushed out. We believe that needs to be a central part of the training and support of any of these community organisers. One of our concerns around the community organisers is that there are very few resources attached to them being able to do their work. Some will be paid, some won’t be, but they will need some access to resources to enable them to do what it is they need to do, and we don’t know the detail of that yet. Sarah McAdam: I’d just like to endorse what Alison was saying. We need to be careful as we develop this way of exploring with each community what they need, what they have already, who’s already there and how that can be built on. So we very much welcome the idea of additional resource and additional people resource, but absolutely we do not want somebody parachuted in with a model that they’re going to then impose on a community. Q202 George Hollingbery: I talked quite a lot already about the funding streams into very small groups and about service provision and its atomisation if you’re not careful. This question is for you mostly, Mr Westlake. The Big Society Bank has the potential, if not done correctly, to encourage the atomisation, and to produce 16 or 17 different organisations doing the same thing in an area. How do we avoid that? Stian Westlake: I think the first and most important safeguard against that is the principle that the Big Society Bank should not be a retail provider of funds. This is the long established principle that the Coalition Government has endorsed. The Big Society Bank will be a wholesale provider of funds. The challenge then comes in terms of how we choose to run the Big Society Bank. A model that we’ve often talked about is the model of a development bank, so something like the International Finance Corporation, that has an explicit role to try and build the market. What that would imply is that it would take a view in the investments that it makes into intermediaries—the kinds of organisations that will not do community projects but will invest in a wide range of community projects—on whether it’s achieving balance, whether it is covering a sufficient number of the bases, so that

you’re not getting duplication of focus on particular areas. I think that has to be at the core of what they do. It shouldn’t just be about saying, “Let’s pick some exciting social finance deals,” but, “Let’s see how we can create a thriving market.” Q203 George Hollingbery: Will that be done via the intermediary? Will the intermediary be instructed to make those judgements or will the bank make the judgements first? Will it take account of what local authorities are doing, as well as the voluntary sector? It’s a very wide remit. Stian Westlake: Absolutely. The position we want to avoid is a very heavy-handed bank that tells the intermediaries what to do, because then you may as well return to a model of a retail bank and you’d effectively be having civil servants or quasi-civil servants making direct investments, which we’ve all agreed is not the way forward. I think the challenge comes in saying, “How can you make sure you invest in a wide enough portfolio of social venture intermediaries to make sure that you will be getting some spread?” Just to give some practical examples, we’re running a pilot fund—the Big Society Bank Finance Fund—to try and invest in a few projects. We haven’t announced the decision yet but we’ve seen applicants, and very credible applicants, from a really wide range of fields. They range from angel funds that are looking to do a sidecar fund for social investments—so that’s very much social venturing in specific areas—through to the kind of community asset funds that look to finance people buying local shops, local pubs, local facilities, through to much more retail investments. I think if we were imagining ourselves in the role of the bank—I mean we are just doing it at an experimental stage—our job would be not just to make sure that any of the individual projects we chose to help finance were sensible, but that put together, they would enable the right kind of capital funds. Alison Seabrooke: Can I add to that bit? I mentioned earlier the Big Local Trust programme, which over 10 years is actually £200 million, so it’s definitely more than Big Society Bank in terms of the initial amounts it has endowed. The aim of that is not about a grantgiving scheme. This is about working with up to 150 of the communities who have shown very little activity or involvement or access to funds in any way, shape or form, and the intention is to start again where the community’s at, but to have local decision making at all points. So for example, some communities may well be able to make the decisions locally and have locally respected and identified organisations that can help distribute some of that money. On the other hand, some communities may need a little bit more support and may take a bit longer, and therefore you can do that centrally, but with the decision making still local. Now part of the programme is to work with Big Society Bank, to work with the Community First programme, to work with the community organisers. So it’s about drawing some of these activities together; because we have the benefit of a long-term view, we hope to be able to do that. But also, this £200 million is an endowment; it’s about making that money work, and our proposal is very clearly looking

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at year 10-plus. It’s not looking in the run-up to year 10, because we know what works and doesn’t work in communities from our experience, and it is about doing that capacity building, doing the community development. All the things that people have described today are community development, and that’s where Big Society Bank will come in, as one of those strands of investment, and so the Big Local Trust programme is about micro-finance, about loans, small investments, about working with the corporate sector, attracting other investments. So we hope to be able to consolidate some of these other bits of activity around this long-term programme. Q204 Bob Blackman: One of the key proposals in all this is transfer of community assets into the hands of the community, and that can be a community hall, it could be a pub, it could be all sorts of facilities. How realistic do you think that it’s going to be that these assets will actually reach the community groups in the way that’s intended? Alison Seabrooke: I think it’s realistic they will be passed on. I think the reasons for passing them on or letting them go have to be very closely observed, and again, I think that’s where the intermediaries, community organisers, community development workers, can help with that process. I mean, this has been going on for some years now, but on a much smaller scale, and one of the issues has been— particularly at a time when public sector is looking at cuts and offloading their buildings—you have to ask why they are offloading a particular asset, and I think that’s absolutely essential. Q205 Bob Blackman: Well, that comes on to the other issue of how we make them sustainable so that they remain as part of the community. Alison Seabrooke: Absolutely. I’ve raised money for, developed and built a large community building, and I know how damn difficult it is to run it— Bob Blackman: Yes. Alison Seabrooke:—and to keep it going. Particularly if you are looking at generating your own earned income, that becomes harder if you’re in a community that doesn’t have much money to spend, or with local public bodies that do not have much money to distribute to support it. So I think in terms of the principle, actually owning, developing and managing a building for the community is a real privilege, and you run it in a way that is effective because you know when people want to come and use it. You get a lot of people buy-in terms of volunteering, and you get a huge amount of added value in terms of the groups interacting with each other and sharing services, because it’s just a natural thing to do. But in terms of getting them off the ground, and ones that are perhaps up and running at the moment and what their futures are going to be like, it’s going to be very tough. Sarah McAdam: One of the things that the CRC is quite interested in is the scope to use the Right to Build that is going to be in the Bill for communities to generate ongoing income and capital—the scope perhaps for mixed housing schemes, market and

affordable housing, for business units that could generate income as well as stimulate the rural economies. So the scope to use those sorts of scheme—small-scale, appropriate schemes supported by the community—to then provide an income that will then perhaps support a community building or a community facility. That sort of cross-subsidy is something that we’d want to see encouraged. Stian Westlake: I think you’re absolutely right to identify the risk, and I think if we’re asking what the role of capability building should be, whether we’re talking about financial or from a skills point of view, one of the important roles if we’re talking about communities buying their local assets is providing the support and due diligence to make sure those business plans work. Q206 Bob Blackman: What safeguards do you think need to be put in place to prevent, for example, a community-built asset being transferred to a community, being run by a local organisation, and then they decide, “Actually, we’re going to sell this now and build housing on it, make an absolute fortune, and walk away with the money?” What safeguards need to be put in place to prevent that happening? Alison Seabrooke: You’d obviously go back to the governance structure of that organisation. If they’d been set up to run and manage a community building, then the powers within their governance structure—I don’t know. If I was working in partnership with a community organisation, I’d be quite careful in terms of looking at what their governance structure was. Bob Blackman: Yes. I could take you to a place where precisely that sort of thing is going on right now. Alison Seabrooke: Yes. Bob Blackman: Where an asset was transferred to the community, and they’ve said, “Actually, we don’t need all this land now. We now want to build housing on it, and we’ll keep this little bit for the community hall.” All the people that are participants in the governance structure are rubbing their hands and saying, “We’ll walk away with quite a lot of money.” George Hollingbery: There’s nothing wrong with that. Q207 Bob Blackman: Well no, but the issue is: does there need to be a safeguard or does it have to be protected as a community asset? Alison Seabrooke: I would have said in that particular example I’d be looking at whether selling the land was going to give them a sustainable income and if it was part of their business model, and it would be around what issues that caused in the wider community, I’m assuming. I don’t know what safeguards you could put in place if it was part of their business model. Sarah McAdam: I think as Alison says, you’d want the governance structures to be there to ensure there was continuing community support for the action that was being taken, and I think there is something around communities who are dealing with this sort of thing. I mean, it is difficult, it’s labour intensive, so some guidance and support about what sort of covenants

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they can put on land if they choose to is helpful. But in the end, I would suggest that if the community’s decided this is the best way for them to create a sustainable community, great. Bob Blackman: I think it depends on your definition of “community”. This is one of the key issues. George Hollingbery: Rural seats I’m afraid. Q208 Mark Pawsey: The handing down of powers from local authorities to communities means that in a few years’ time, local authorities are going to look rather different from the way they look now. Alison, you spoke about the pressure on officers and members of this localism agenda. I mean, how should the role of local authorities change in order to enable this shift to take place, and what role should local authorities be performing in the future? Alison Seabrooke: From our experience, if you took away all the current changes—which I think is a seismic change in the way local authorities are going to behave and perform and so on—the biggest thing we’ve found is providing the right level of skills and abilities for frontline practitioners to know how to work with communities, and to take into account all of those things that Lorraine described around equalities issues. I actually feel quite sorry for many local officers, because they’re expected to do this as well as their day job. You’re expecting a planning officer to become a community development worker or a housing officer, and that’s quite a tall task. I think you can sort of see the different schools of management theory over the decades over the last century, and it’s almost like we’re moving into another school of management theory where people are expected not to be prescriptive in their approach, to be flexible in their thinking, to encourage creativity and innovation. I suppose my concern is, when money is the point at the end of the day, the big driver is how you free front-line practitioners to be able to be creative and innovative; to show them that by being creative and innovative, they can actually help save resources. Q209 Mark Pawsey: But is the workforce sufficiently flexible to enable this agenda to take place, or will local authorities simply revert to doing what they’ve always done and the thing will get stifled? Alison Seabrooke: Yes, I’ve seen some very good examples of where some of the more progressive local authorities are actually saying, “No, we’re not going to remove the resources from communities because we absolutely understand that that’s what the Big Society agenda is about. That’s what we know is about co-production of services.” Then there are quite a lot of them who have basically hunkered down because they know that they have to save money, and the easiest way to save money is by cutting off anything that goes out, rather than rapidly transforming the way you operate. I think—and I would say this—that community development workers who have that understanding and those networks with communities can obviously help facilitate some of those processes. They act as that bridge. They understand how the communities

operate, but they also understand how the local power structures, legislation and processes work, and they can help navigate some of those culture changes. There’s not a definitive answer. It’s a huge opportunity for local authorities to work differently. Our experience has been that the culture change needs quite intensive support. For example, in the action research that we’ve undertaken, when we’ve gone into a local authority around a perceived problem from within that local authority and worked with them and unpicked it, it isn’t actually that; it’s something quite different. So it might be about their structures, where are the blockages and barriers, what stops things from happening, what can help. So it has ended up reorganising structures. It has changed the way people have worked, and that’s actually quite intensive. Mark Pawsey: But achievable? Alison Seabrooke: Achievable? Absolutely, yes. Stian Westlake: There is a big change coming. We undertook a survey of chief execs and deputy chief execs in local authorities a few months ago. We asked them: “In the next three years, what are going to be the biggest challenges you have to face?”, and about two-thirds of the answers were some form of “more working in partnership” or “more managing”; basically, Big Society-type answers. Then we asked them: “Tell us about the most important things you’ve done in the last three years.” And again, two-thirds of the answers were things like shared-service implementation, cost cutting, fairly centrally mandated changes. So I think that gives a magnitude of what we used to do and what people now think we need to do. Lorraine Roberts: As Alison said at the beginning, some of the greatest barriers to community engagement and empowerment have been at the local authority level, and have been around those sorts of attitudes. Some of our experience is that some local authorities do see community engagement as just what they do anyway. It’s what they do. They don’t need to think about it particularly; they don’t need to design a particular programme, because it runs throughout. We would say, “You wouldn’t run an aspect of the business without a clear business plan and without a sense of what you want to achieve and how you’re going to do it.” That’s why I think it is important that there should be the drivers for this. We are concerned with the loss of some of the targets around community influence and community engagement; they did drive some engagement focus in some local authorities, and that’s going to go. There does need to be more of a kind of a carrot and a stick approach to ensure that local authorities do do it in a structured and considered way. Q210 Mark Pawsey: I have one last question for Mr Westlake. Your organisation has spoken about a mass localism approach. Can you just tell us a little bit about that? Is that a methodology or an aim? Stian Westlake: I guess it’s a philosophy with a methodology that underpins it. It stemmed from a project we ran called The Big Green Challenge—an environmental prize—where we were asking the question: “How can you get different community groups to come up with their own innovative solution

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to a widespread problem?” In this case, the problem was carbon emissions and what they could do for the environment. We put together a methodology, which we’ve now documented and published and is now being used by other organisations, which was based around a challenge prize and a few principles. Firstly, we set very broad objectives. There were some high-level objectives in terms of what the initiative would be about, and in this case it was about saving the environment by reducing carbon emissions, and this ties into Mr Hollingbery’s point about the small issues that motivate people. This got a lot of people involved because there are a lot of people who are exercised about this. We were very un-prescriptive about how people could enter, who could get involved, and as a result, over half the people who entered and had serious bids that were taken forward to the next round were people who had never been involved with anything like this before. We then provided a lot of capability-building support for people who’d got beyond sort of that initial first stage. I think I mentioned we worked with UnLtd, but there’s a number of approaches that could have worked. So we helped with often quite basic things, like organising meetings, putting together plans, but it was as much the principle of the support as the specifics of the support that helped. We quite quickly winnowed so we had about 10 finalists, of whom we selected three prizewinners, and one of the things we found was that the steer that the prize provided was a real motivational force—not just for the people who did well and were in the final ten or the final 20, but for the people, the community groups, who had been motivated to come together just to enter the thing. We went and surveyed the 250 of the 350 entrants who hadn’t even got to the first round two years later, and we found the majority of them—I believe it was 75%; I’d have to check—were still carrying forward their ventures, were still putting something together as a result of this kind of rallying cry from the prize. This methodology is now being emulated in a range of areas: the Department of Health are doing things and the Ministry of Justice are doing things. One of the things we felt was important about this was it provided very little prescription beyond this kind of initial target to rope people in. It provided, in the grand scheme of things, very little money. If you compare it with the kind of money that’s lavished on large Government behaviour-change schemes around carbon emissions or has been in the past, we spent £1 million overall on prizes and motivated 350 community groups, so it was cost-effective.

The really interesting thing is that it brought groups together, and we’re now seeing that they’re doing all sorts of interesting things, as I think Alison and Lorraine have alluded to on many other occasions. It has built social capital and these groups are now doing interesting things. Q211 Mark Pawsey: So will you be proposing this as a model for the implementation of the localism agenda? Stian Westlake: We have talked to a lot of people about using this model. I think we would be falling into a trap if we said this must be mandated nationwide, but we are very keen for people to take it on board, and we put together a practical guide and work with a lot of people who are interested in it. Mark Pawsey: Thank you. Q212 Chair: Just one very brief final question; just a yes or no will do. Are you all basically optimists? Do you think in five years’ time there will have been a massive increase in community activity, and localism, decentralisation and devolution will really be out there affecting people’s lives? Lorraine Roberts: I try to be an optimist, if that’s the right answer. I try to remain optimistic and hopeful. I mean, it has the potential. It has the potential to be something quite exciting, but what we’ve seen and heard so far doesn’t—for us—have enough about the support and safeguards that need to be in place to make this work. At something I was at the other day, they talked about how either we’re going to have cuts and localism, or we’re just going to have cuts—so you might as well have the localism with it. It does worry me that propelling localism in an arena of such austerity could be tripping the toddler up before it gets to run. Chair: Very briefly? Stian Westlake: I’m an optimist. I think we have to take this at face value and make the best of it we can. It is a big opportunity. Sarah McAdam: Cautious optimist. Alison Seabrooke: Yes, I think the same. I think we can’t underestimate the shift, the changes that local authorities, and particularly the voluntary and community sector, are having to go through at the moment. So being in a position to be well equipped to take advantage of what the localism Bill intends to offer could be significantly challenging. Chair: Thank you all very much for your evidence, and I do apologise once again that you had to share with us in our efforts to reduce carbon emissions. Thank you very much for your evidence.

Communities and Local Government Committee: Evidence Ev 63

Monday 20 December 2010 Members present: Mr Clive Betts (Chair) Simon Danczuk Mike Freer Stephen Gilbert

David Heyes George Hollingbery ________________ Examination of Witnesses

Witnesses: Dr Rob Berkeley, Director, The Runnymede Trust, Gemma Bradshaw, Policy Advisor, Communities and Transport, Age UK, David Congdon, Head of Policy and Campaigns, Mencap, and Vic Rayner, Chief Executive, Sitra, gave evidence. [George Hollingbery in the Chair] Q213 Chair: Good afternoon. Thank you very much indeed for coming. My name is George Hollingbery. I am not traditionally the Chair of this group. I’m afraid the Chair has not yet managed to make it down to London. I apologise in advance to you and to the assembled audience because I am not as well briefed on these papers as I would have been had I known I was going to chair the meeting. Please excuse me up front for perhaps not being quite as fluent on these issues as I might otherwise have been. We are scheduled to finish this session at 5 o’clock, and I will be ruthless in ensuring that we do. At this time of year, everyone has other things to do. There are four of you, and if questions have been answered, please don’t repeat those answers, but if you feel you have something to add, feel free to make a comment—don’t feel inhibited in any way, shape or form. The first thing that occurred to me when I looked at your submissions was that you are all very nervous about the idea of localism, particularly as you are mostly national organisations. There seemed to be a unanimous belief among you that there were real problems for minority groups when power was devolved down. It is also fair to observe that lots of you talked about the spottiness in the provision of services. Even under the current system, it is fairly clear, is it not, that centralisation hasn’t delivered an absence of postcode lotteries; there are different outcomes in different places. Just explain a little further for us and for the audience generally why localism could be dangerous for minority groups and why postcode lotteries are necessarily a bad thing. David Congdon: I am David Congdon from Mencap. As you say, localism is not new, in the sense that lots of services are delivered locally; indeed, on the one hand, most of the work that Mencap does is delivered locally through contracts with social services for housing and support under community care legislation. We then have a large number of local groups doing all sorts of things at a local level who are funded by individual local authorities and who often provide low-level support to people who fall outside the eligibility criteria set by social services under community care legislation. The concern generally is not so much about localism in principle, because localism is here, it’s been here

a long time and the trend is obviously to accelerate responsibility downward. The concern is that when decisions are taken at a local level, they are inevitably based on pressures at a local level. People at a local level—councillors, in particular—know best what needs to be done in their area, but there is a danger that minority-group interests can be missed out, although that does not necessarily have to occur. The generalised example that I would give is that things that are very visible tend to be—this is not always the case—the things that will be protected. I probably shouldn’t mention street cleaning in the current climate, with snow all over the pavements, but things like that are very visible, as are things like town centre environmental issues. If the eligibility criteria for social care services to individuals with, say, a learning disability are cut, and those individuals see their day activity decline from, say, five days a week to three days a week, the only people who know about that are the individuals concerned and their families. That is the danger. A general point would be that, with increasing localism, there is a need to have mechanisms in place—a framework for accountability is the sort of thing we need. It is very hard to define exactly what that should contain, but we need something to ensure that, as far as possible, what the Government will through funding—most funding for local authorities comes from Government—actually gets delivered at a local level. Vic Rayner: I’m Vic Rayner. I’m the chief exec of Sitra, which is a national membership body that focuses particularly on housing care and support. A lot of the housing-related support services provided have been funded primarily through the Supporting People programme. Part of our concern, which we raised in our submission, comes from looking at Supporting People as a kind of microcosm of the impact of localism. Two years ago, Supporting People went from an essentially ring-fenced fund, to one that was not ring-fenced through the area-based grant. Our concern is that some of the things that have happened since the lifting of that ring fence, and the way that those things have impacted on the provision of services to the most vulnerable people and the engagement of those people in the development of future services and provision, could be played out on a wider scale through wider devolvement.

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Q214 Chair: I am interested in the actual evidence. Could you develop that a little further? There is no need to name names, but just tell us roughly what happened and how it affected vulnerable groups. Vic Rayner: In 2009, the ring fence was lifted and Supporting People became a named grant within the area-based grant. Over the past 18 months, a number of high-profile authorities took very significant cuts to the Supporting People programme, which came into effect at the end of last year and the beginning of this financial year. Some research has looked at the impact of those cuts within the localities, and we’re already beginning to see some of the changes and reap some of the impact of that. I can give more information to the Committee if it would like to look at research carried out by one of the Link services in a locality that made severe cuts to SP funding in 2010–11. The level of cuts is talked about across local authorities, and Supporting People funding is seen as one of the budgets that may take a very significant hit. Some research carried out by ADAS came out last week. It stated that 82% of adult social care directors felt that SP funding would have little or limited protection in the round of cuts. Part of what we see is that although the nationally prescribed Supporting People funding was given “relative protection” within the spending review, as it goes out to local authorities for decision making, it is seen as a high risk and a budget that could be taken away from meeting the needs of the most vulnerable. Q215 Chair: But that is not necessarily a reflection of problems with localism as much as with cuts. I understand that the localism element is making those people vulnerable, rather than the allocation of the budget, but the fact that there is a context of cuts at the same time is perhaps a rather poisoned chalice. Vic Rayner: Potentially, having the decision about the ring fence made at a time of significant economic pressure might be part of that picture. At the same time, the level of cuts being talked about does not necessarily bear a direct relationship to the level of cuts that the authority is receiving as a whole. The impact on the most vulnerable in that setting will be more significant than the potential cut to the authority as a whole. Again, there are examples of authorities now out in consultation that are looking at cuts of between 40% and 67% to SP funding, whereas the cuts to the authority over the four-year period would not be anything like that. It feels as though there is a disproportionate impact on the most vulnerable within that sitting. The other part of the issue concerns the engagement of those most vulnerable within the decision-making structures. A year or so ago we carried out research looking at the engagement of the most vulnerable people within the local strategic partnership framework. Already, some significant challenges were emerging in getting the voices of the most vulnerable heard within that decision-making process. As David mentioned, it feels as though, without careful support and investment in working out the right framework for that engagement and the future, the needs of the most vulnerable would be pushed out of that decisionmaking process.

Chair: I am already breaking my own rules about time keeping. Sorry. Gemma Bradshaw: I am Gemma Bradshaw from Age UK. As we say in our submission, we raised some concerns about the idea of localism, but that was more about the limits that we want to put on localism rather than localism itself. We think that if you have more community engagement and involvement in a localism framework, you would actually improve outcomes for older people. The question is how do you ensure that that happens within a new localism framework. Unfortunately, we have seen in the past that when local authorities have been given more flexibility about their priorities, they haven’t always prioritised older people. For instance, when they were given the flexibility within the local area agreement to pick indicators for what the priorities were in their area, although there were three indicators that focused on tackling poverty and greater independence for people in later life, only a handful of local authorities picked those indicators. Obviously, that was part of a different system, and there may be many reasons why those indicators weren’t picked, but it showed that at a point when they had to prioritise, particularly when they had a growing and ageing population, they didn’t take the opportunity to focus minds on that particular issue. We want to make sure that when local authorities are given greater freedom and more flexibility, there are certain checks and balances in that process. Meaningful participation is a particularly important part of this, and we need to make sure that minority groups are able to do that. Many older people also face different forms of discrimination—gender, sexuality, race—and we need to think about how we bring all these people into the process. I’m also particularly concerned about accountability and whether there is some possibility still to have national outcomes that all local authorities will be looking at. We’re going to have outcomes for health and social care which local authorities will be looking at, and they could be coming in balance, whereas there aren’t national outcomes for other services that they’ll be looking into. Q216 Chair: We will come on to accountability a little later, so we’ll move on if we can. Dr Berkeley: Robert Berkeley from the Runnymede Trust, a race equality think tank. You described us as nervous about localism, but we’re really excited about the potential that localism could provide. What we would be excited about is a real form of democratic local accountability that works for everybody in those areas, but we know that there are some major challenges to get there. The leap to localism suggests that there is an end point but not much of a story about how you get there: how you get competent citizens, well informed, with the information that they might need in order to take part in that. That’s going to be particularly true for those in marginalised groups, who may have a different set of experiences around public services in the past, but also educational experiences etc. The spectre that comes most to mind in terms of issues around race equality is Travellers and the failure to

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deliver Traveller sites over a long period of time. There are increasing worries in Traveller communities about localism and what it will mean in terms of the difficulties in getting those sites established. You mentioned postcode lotteries. We recognise that there’s a massive diversity of experience of services across different spaces and places, but a lottery doesn’t seem to describe it, because too often, there are certain areas that do badly and some areas that very rarely win. We find that those areas that experience high levels of deprivation are often those areas where people from minority ethnic communities are clustered. We understand that there will be a diversity of services and a diversity of outcomes, but we are very keen to understand what the minimum safeguards need to be in all areas across the country. Q217 Stephen Gilbert: I am struck, reading your submissions, that there seems to be a sense that all the organisations are after a remaining degree of centralised control and some centralised targets. I put it to you that you’re trying to have your cake and eat it. On the one hand, you’re welcoming localism, but you’re saying, “Only this kind of localism is acceptable.” Looking at the removal of ring-fencing for Supporting People, for example, what specific concerns are there about the removal of ring-fencing and of the national targets that go with it? Gemma Bradshaw: We’ve seen a number of examples where the removal of ring-fencing in particular around funding has meant that we have not seen the outcomes that we were looking for. I would move it away from targets and saying that there are specific numbers of things you need to a more generic understanding of what expectations people have of our local authorities. This is particularly important if we are removing any kind of performance management system, because if people, as individuals, are supposed to be challenging the local authority and saying, “This is what I expect,” they don’t necessarily have any understanding of what they have the right to expect. I’m talking about people having some understanding of what outcomes they may have for certain services. Maybe that’s where I’m trying to have my cake and eat it. Vic Rayner: I’m not sure about having my cake and eating it. Certainly in our submission to this inquiry and in the previous submission about the lifting of the SP ring fence, we have been asking for serious consideration of reinstatement of the ring fence, particularly around more disadvantaged groups. Part of the rationale for that is that there are significant concerns that those particular groups—perhaps those that aren’t necessarily the most electorally popular or those that don’t have a voice within the electorate because they’re in prison currently or are outside the electoral system—may need additional protection. For me, there doesn’t seem to be a particular dichotomy between central Government giving some direction about the money that is allocated for Supporting People spending and then saying to the local authority, “You have some responsibility to spend that in the way that you see fit through a need strategy.” In relation to Supporting People, although there was some central direction about the money and

some of the processes in place, how that money was spent was very much based on a local agenda, a local strategy and local involvement, particularly of service users and those within the community, regarding the kind of services that were required. It doesn’t seem to me that it’s necessary to say, “Here’s localism. We’re stepping away completely from any responsibility.” The other point on Supporting People funding is that the money that was put together to make up Supporting People involved a partnership of funding. It wasn’t just the local authorities’ money. The local authorities then became administering authorities. What needs to be in place is an understanding of how all those partners can be involved in further decision making, whereas at the moment, the way in which cuts, certainly, are being portrayed is that this is a local authority making a decision about its own money, and actually that money came from a very significant partnership including other members. David Congdon: May I add to that? This adds to what I was saying earlier. We’ve certainly always argued that we prefer ring-fencing, unashamedly. We recognise the debate has moved on, so there’s no point, in a sense, in going over that, but it still leaves the fundamental question that if Parliament or a Government Department says, “We want to spend £1.4 billion on Supporting People,” or says “We want to spend this money over the next four years, building up to £1 billion, on new social care reform grant,” what framework is in place to ensure that money is spent broadly in the way that Parliament intends? We recognise we’re moving into a scenario of outcome frameworks, particularly in the field of social care. Again, there is no disagreement in principle, but there is quite a challenge in ensuring that that does actually mean what it says on the tin—that you do end up with the £1 billion in that example, along with the other £16 billion spent on social care, delivering improved lives for the group that it is intended to deliver for. I don’t in any way underestimate the challenge of doing that. We have regulators and inspectors who don’t always identify when things are going wrong. We have the Public Accounts Committee and bodies like that, but the more money is devolved—an enormous amount of money is devolved; there is no problem with that—making sure that it does deliver in the way intended is, we would argue, very important, particularly for marginal groups, but not just for marginal groups. Q218 Simon Danczuk: My question relates to what you’ve been talking about. It is about what national safeguards need to be put in place for vulnerable and minority groups. If that is to be the case, how do Government decide which vulnerable and minority groups should be protected? David Congdon: I wish I could give you a definitive answer. It is easy to analyse the problem. I have read some of the previous evidence, which does highlight some of those difficulties. At one level, there has been an inspectorate that has changed its form from CSCI to the Care Quality Commission. I am slightly nervous to say that that is a panacea, because I think of some of the things that have gone wrong on its watch, if I may put it that way.

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Nevertheless, despite the difficulties, having a framework that says that we are trying to achieve certain things for this group of people and then monitoring it in not too heavy a detailed and bureaucratic way but in a broad way, has to be the way to go. Ultimately, in the field of social care, often to check what is going on, you have to have inspections on the ground, what quality of care is being delivered, both in residential care homes and in supported living situations, and then try to do that at a macro level as well. Simply to say that we have inspected some homes and they are doing well does not necessarily answer the question, “Is that group of people getting a good quality outcome from that particular social services department?” It is a challenge: I wish I could give you a more definitive answer. What we want to do is flag up that that there is a need to have mechanisms in place that ensure that degree of accountability. Dr Berkeley: Some groups are protected by the Equality Act 2010. It is worth thinking about how the Equality Act is put into action, particularly with the proposed cuts to the Equality and Human Rights Commission and, at a local level, what kind of local transparency and forms of accountability could be developed. We had an extensive structure of race equality councils across the country. In 2007 there were 100, now they are down to 42 and they seem to be declining. I was in Gloucester recently and there was one member of staff in the race equality council. I am keen to go with the spirit and suggest that localism can deliver, given local accountability to local citizens, but the structures need to be in place. I suspect that they are not currently. I do not hear any plans to support and establish those local organisations that might begin to hold local authorities to account a bit more on equality. Gemma Bradshaw: May I add a point on the public sector equality duty? That is an important piece of legislation coming through. It is a particularly big step forward for age discrimination. We want to raise the concern that, when we start to look at new models, it is not just the local authority any more, it will be community and voluntary groups. How will the public sector duty transfer to them when they start looking at running services? We are concerned that we don’t lose what has been a big step forward when we start looking at the new models delivering. Vic Rayner: I have a couple of quick points about safeguarding. That I suppose goes to the supported people services, but the quality assessment framework has been developed and intended as a localism tool for quality management. It looks at services very much from a local perspective, involving service users within the inspection framework. From that point of view, it works as a good mechanism and tool for accountability. Another area of concern in the shift from Supporting People funding into formula grant is about that transparency and accountability, and about how once that money is put within formula grant, how difficult it is going to be to hold the local authority to account about the level of funding it is spending on Supporting People and housing related support services, and therefore how effective and appropriate those services

are for the local community. There are big issues there about how safeguarding at a national level can be thought through in terms of how that national funding is being allocated, then taking that further to a local level to say, “Within our locality we have this much money that should be spent on housing related support, because it has been identified as a need.” Yet it is going to be very difficult to hold that local authority to account. There are concerns there. Q219 David Heyes: The area that I was going to ask questions about has been covered to a great extent, so I think that my question only needs a brief response from each of you. Whatever your concerns or worries about the role of local authorities in this, including whether they need some direction or framework from the centre, they are still key players and will continue to be key players. What should they do themselves? What can local authorities themselves do to improve their understanding of local needs and to ensure that we avoid some of these traps that you are fearful of? David Congdon: One of the things is consulting very deliberately with minority groups. We would say, as a learning disability charity, that they should do more consultation with people with a learning disability. In fact, there is a mechanism at the local level, called learning disability partnership boards, which was set up in 2001 when “Valuing People” started out with the original White Paper. There was a subsequent document, “Valuing People Now”, a couple of years ago. One of the problems with those mechanisms is that they are not on a statutory basis, and the research evidence is that they are often marginalised. So one message that we want to put across very much is that local authorities should engage very powerfully and deliberately with minority groups and listen to them, to enable them to play a part in that local democratic process. Dr Berkeley: I would add that just being transparent is not enough; being accountable is important too. So it is not just a case of publishing reams and reams of Excel sheets, but of trying to find ways of giving that accountability back to citizens. There are some really good examples, as in Ipswich in Suffolk, where the Race Equality Council has produced a scorecard that is very accessible for the local citizens, which is worth having a think about. However, the fact that those local organisations are disappearing at such an incredibly fast rate suggests that local authorities are already standing back from supporting local organisations that challenge them. I think that local authorities should welcome some of that challenge, rather than always responding negatively to it. Gemma Bradshaw: I would agree with both those points and I would add that it depends on how you carry out this consultation and engagement. We did some research looking at the latest NHS proposals, and 60% of the older people we surveyed agreed that local decision making is the right way to go. They also agreed that they would like to be involved in some way; but when you ask them if they want to be on a committee or involved in a consultation, the figures fall to less than 10% in many cases.

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So you’ve got to think about what people are getting out of this process. Do they feel like they are really influencing the change, or are they just part of another tick-box exercise? I think it’s how you do this that matters. Chair: Simon, I think that that leads us on to the next question that you wanted to ask, so perhaps we can move on to that. Q220 Simon Danczuk: Yes. You were mentioning some ideas that have been used to involve marginalised groups or vulnerable groups in the local democratic process. Overall, do you think that local authorities are particularly good or particularly bad at that, and do they need to get better if localism is going to be successful? David Congdon: That is a really difficult question to answer. When we looked at some consultation exercises that have gone on, my criticism would be that they are often misleading in terms of what they are consulting on. So, to give you a practical example, one of the issues in the learning disability field is about day centre modernisation, which most of us would agree is a good thing. Sometimes when you read the consultation documents, the words are fantastic, the vision is fantastic, but where is the meat? What will it actually mean for, say, the 800 users of existing facilities? Is there a guarantee that they will get some alternative, because that is often the issue— which alternative is better? When you read the consultation documents, it is often quite difficult to know what the consultation is really saying. So, the consultation has to be really meaningful and it must be very straightforward in clear, accessible language that anybody can understand. Otherwise, you get not a lot of people responding and, if they do respond it is not terribly meaningful in terms of an answer. So there should be an honest, straightforward, transparent consultation about what the issues really are and a willingness to follow the response—not always to follow it rigidly but certainly to take on board those concerns. I’ve seen consultations where the response has been pretty negative, but you wouldn’t know it when you read the report that’s gone back to the council committee. That’s not fair. It has to be open, fair and transparent. Vic Rayner: I think the other point I would add to that is that it’s not a cost-free option. A meaningful consultation is expensive and involves time, and really to get to the bottom of how people feel and can get involved in the community isn’t something that’s going to be easy and straightforward; but there are huge numbers of good practice examples out there, and I think, just to pick up on Mr Heyes’s point as well, it is about what can local authorities learn around engagement. I think it is partly about listening to partners, because there will be partners that they can work with who’ve got very effective and key routes into working with the more vulnerable people. There needs to be perhaps a levelling of that partnership approach that enables those voices to be heard at the right level—and getting people engaged early enough in order to have some kind of meaningful dialogue within there. But there are some

very good examples out there—very creative, inspirational examples where people have made that change—and it fits into that model of encouraging active citizenship and encouraging people to move and become part of their community. Q221 David Heyes: Where? Can you name them, exactly? Vic Rayner: We’ve done quite a lot of work up in Bradford with the service user forum there—a very active, very engaged group of people who have contributed not just to agendas around supporting people but around a whole wide range of areas. There are other examples in Bolton and Torbay. These were all leading examples of authorities that really took on board service user engagement. Q222 Simon Danczuk: It does puzzle me though— this is the question—that this doesn’t seem to apply across the board of local authorities, or to the majority. It’s always good practice examples in a small minority of local authorities, which causes me some concern. Dr Berkeley: You are right to point to this, because there is a real problem with us not knowing. We know that there’s a lot of activity going on. We don’t know what the impact of that activity is, or what the outputs are, so there are numerous BME forums up and down and around the country. The people who take part say that they had a very nice afternoon. Whether that actually has left them feeling more involved or more engaged in decision changing, they are not sure. The citizenship survey seems to highlight that there are certain groups that constantly feel left behind, left out, of decision making, but we may not have that citizenship survey much longer. Gemma Bradshaw: Similarly, we have examples of where our local partners, Age Concern, or Age UK, have been involved with the local authority, helping them to point to the priority needs, but they have been also been able to help facilitate some of the discussions, which might otherwise might have been more difficult. For instance, in Rotherham, Age Concern has been working in the residential care sector, working with families and residents so that they can influence their service and change the service in Rotherham. That’s an area where normally people in residential care wouldn’t necessarily feel that they could communicate or change their services. But, as you say, it is trying to make sure that these good ideas are across the board. Q223 Chair: Dr Berkeley, you might want to stay for the next session if you have the time, because we’re going to be talking to the Audit Commission about monitoring outputs and so on, so it might be of some interest to you to come along to that. I was going to ask about the danger of services becoming atomised in your particular fields. I think I already have the answer to that. I suspect—there’s not much point in pushing this—you believe, although this may be putting words in your mouth, that there is a real risk of these services becoming atomised across the country, and so individually delivered that you lose the strategic approach. It did prompt, though,

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another thought in me, which is: I just wonder if you, as organisations, have been able to tease out and separate the danger that your organisations face in terms of national policies and the ease of dealing with one organisation rather than a whole myriad across the country, and whether some of your thinking might be coloured by that. It’s an unfair question, to be honest, but I think we’re all human beings and it’s worth asking it. David Congdon: I think it certainly makes campaigning harder—there’s no doubt about that. I reflect on the fact that you can fight very hard to get laws changed, which is a typical campaigning activity, but then actually you’ve got to fight 152 local battles to get change on the ground. But I think a broader point is that balance between what should be decided nationally and what should be decided locally is critical. In the social care field, all the reading of the work done on the previous Government’s consultations on the Green Paper and the White Paper showed there was a strong consensus on some significant strategic changes in terms of having a much stronger national framework, albeit with a local delivery mechanism. From the provision point of view, most of our organisation’s work is done through bilateral negotiation with individual local authorities, so what you’re talking about doesn’t really make any difference to that. Q224 Chair: Listening to what’s been said, it occurs to me that in another area—the NHS—the Government are looking at separating a national commissioning service and a local commissioning service, so these things aren’t without precedent across Government. Vic Rayner: This is back to the cake, isn’t it? When you talk about services being atomised, meaning that it’s very difficult to compare like with like, it’s important to mention that we’re not seeking to have a completely standardised housing-related support service that looks exactly the same and feels exactly the same in every locality. That’s not what we’re focusing on. I completely agree with David that, in terms of influencing policy, life will be more challenging as we think how to work with different authorities, but we do that all through our membership structure anyway, because our members work with different authorities. You’re not talking just about changes to membership or national bodies like ourselves. Many of our providers—particularly those working in London— might work across 30 or 40 different authorities. One of the other challenges that comes from taking away ring-fencing or the national parameters that determine

how funding will be applied is that bodies need to think about how to meet the commissioning structures, the different priorities and the different monitoring and regulatory arrangements for different authorities. The challenge for voluntary and community sector organisations, which are already trying to meet authorities’ efficiency targets through their commissioning procurement structures, is enormous. So, yes, supporting our members in that will add to the challenges of organisations like ourselves, and our members are already incredibly challenged by the changes that are in effect and those that are coming in the future. You mentioned the changes around the commissioning of health services in the future and the fact that we will potentially have two local funding sections. Provider organisations and, therefore, the service users they work with will need to understand and engage with them to be effective local participants in strategy formation. Gemma Bradshaw: We are a national organisation. Obviously, local Age UKs and local Age Concerns have been influencing things in this way for many, many years. It will give us some challenges, but from working in partnership already—providing services, but also influencing things—we’ve seen that localism can work. That’s why we’re cautiously positive about localism. Dr Berkeley: We’re 15 people in the corner of east London. We have always tried, and we will continue to try, to give people the evidence and information they need actually to make a difference at their local level. Q225 Chair: Thank you very much for coming in today. I feel we haven’t really done you justice, so I apologise for that. My sincere and extended thanks for coming in on a particularly difficult day. I hope you feel you’ve had a chance to say everything you wished to. You’ve got two minutes left. If there are any burning points that you wanted to get on the record, but which you haven’t been asked about, please fire away. Vic Rayner: You mentioned the challenge of moving to a local agenda, but we as an organisation feel that that will not stop us talking to central Government, and trying to encourage central Government to continue taking a leadership role on the protection of the most vulnerable people and honouring the direction that they set out in terms of making sure that the most vulnerable are protected. That’s our continuing commitment. Chair: Splendid. Thank you very much indeed for your time.

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Examination of Witnesses Witnesses: Jessica Crowe, Executive Director, Centre for Public Scrutiny, Steve Freer, Chief Executive, CIPFA, John Kirkpatrick, Director of Studies (London), Audit Commission, and Eugene Sullivan, Chief Executive, Audit Commission, gave evidence. [Mr Clive Betts in the Chair] Q226 Chair: Good afternoon and welcome to our further evidence session on localism. Just for the sake of our records, could you say who you are in the organisation you represent? Eugene Sullivan: Eugene Sullivan, chief executive of the Audit Commission. John Kirkpatrick: John Kirkpatrick, director of studies and policy at the Audit Commission. Jessica Crowe: Jessica Crowe, executive director at the Centre for Public Scrutiny. Steve Freer: Steve Freer, chief executive of the Chartered Institute of Public Finance and Accountancy. Q227 Chair: You are all welcome. Certainly you’ll have a chance to have your say, but if you happen to agree with what’s been said, you needn’t say it again. You can just say “I agree” and we are more than happy to put that in our records. We’ve got a very centralised democracy in this country. A lot of our resources come from the centre, and therefore accountability is back to Government for the spending of that money. Can localism ever really work in such a situation? Steve Freer: I think we can have a form of localism in that situation, but I do think that for localism to work really effectively we need to align local decisions with locally raised resources. I think that’s when localism works most effectively, because I think that’s the arrangement that local people can get their heads around, as it were. They can see who’s responsible. They can see where they need to put pressure in order to secure accountability. I think where we have a mixture of local decision taking but resources raised at the national level and allocated to local authorities, sometimes accountability can get quite confused. Jessica Crowe: I would agree with that, and say that even in a centrally driven performance framework you could have more localism than we have at the moment if there was a clear focus from the centre on outcomes, but leaving it to locally elected bodies to determine the how; because people at a local level know the problems at local level—know what to achieve. There may be some congruity with what the national Government wish to see achieved, but they should state that more in outcome terms and not try and set out how it should be done at local level. They should leave that more to those who understand their areas better. One of the problems that we have in our system is that we don’t really have a definition of, or a clear agreed consensus on, what local government, as opposed to local administration, is for. I think it’s quite difficult to talk about some sort of localism in the absence of that clarity. Eugene Sullivan: I broadly agree with colleagues, and particularly with Steve’s point about the purest form being linking spending powers with tax-raising

powers. Notwithstanding that, one could go further in moving away from state and central control to engage more with local citizens about the services and priorities in their areas. I think the question is: how? How far do you go, and what arrangements do you put in place to deal with the accountability arrangements? Q228 Mr Clive Betts (in the Chair): What arrangements do you think there should be, then? Eugene Sullivan: First, at the local level, the people responsible for spending the money should be accountable not just for the money that they spend but for outcomes for the people they serve. Their first duty is to give an account of their accountability, and they can give that through financial returns and reports, by publishing performance data or through their newsletters. Those who gave the money are entitled to hold them to account, and they should hold them to account for the same sorts of thing. As the Centre for Public Scrutiny said, that holding to account should be proportionate. It should be less onerous the less important the sums involved are, and a bit more rigorous if it’s material sums. Q229 Mr Clive Betts (in the Chair): Even if we move to a more localist agenda, and even if we take the point up and if perhaps there is more responsibility for raising finance at a local level, we’re still going to have quite a proportion of money always coming from central Government, even if it’s only that element that deals with balancing up the different needs, deprivations and resources of different authorities. In terms of accountability for that spending, should that come to Parliament, as opposed to Government? Should there be a different form of accountability to Parliament for finance that comes from the centre, if we are going to get away from the idea that the Government control everything at local level? Eugene Sullivan: There is a well-established pattern for accountability to Parliament for the moneys voted by Parliament for the purposes for which it was to be used, and I don’t think that should change. At the moment, that comes in large part through the regime of the Audit Commission, and through the oversight of that through the National Audit Office. I still think that would be there, but it’s a question, again, of what would be proportionate. At the moment, about £73 billion of local government spend comes from Parliament, and it gets that assurance through the existing accountability mechanisms, so there isn’t heavy scrutiny from Parliament of that money. Q230 Mr Clive Betts (in the Chair): I would probably challenge that. There’s scrutiny of particular aspects of spending from time to time, isn’t there? The National Audit Office does it, and the Audit Commission gets involved through comparative value-for-money studies. Eugene Sullivan: Yes.

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Q231 Mr Clive Betts (in the Chair): But Parliament itself does not devote a great deal of time to holding spending to account at local level, does it? All that money, and very little time in Parliament, proportionately. Is that something that’s going to have to change? Steve Freer: I think I would draw a distinction with demonstrating proper stewardship, which I think is the appropriate description. If moneys come from the national level down to local level, I think it’s reasonable to demonstrate proper stewardship in relation to that money. As I think Eugene was hinting, one of the primary mechanisms for that is through audited grant claims. I think that’s really what he was referring to. I think the primary accountability for that expenditure should still be to the local taxpayer. The fact that it’s now my income tax or my VAT that’s being spent, not my council tax, seems to me to be a mere detail. It’s still taxpayer resources that have been spent locally, and for which there should be proper and primary local accountability. Jessica Crowe: To add to that, I think one of the things this Government have said they’re interested in is shifting from a bureaucratic form of accountability to a more democratic accountability. If you were going to move along those lines, not only should there be more scrutiny by democratically elected representatives at local level, as I think Steve is suggesting, but there could usefully be more cooperation between scrutineers at national level— yourselves—and scrutineers at local level to get that balance and understanding right, so that lessons can be learned with regard to how a policy is rolled out on the ground, and how money that was voted by Parliament is transferred down through the Departments. How is that developing on the ground? Is that money being spent well? Is it delivering what it was intended to? That sharing of evidence between the national and local could perhaps add something to what we have at the moment. Q232 Mr Clive Betts (in the Chair): Do you have any practical examples of how that might work? Jessica Crowe: If a Select Committee was investigating a particular policy, or looking at how a piece of legislation had worked and whether it had delivered what was intended, it might call for evidence from local authority scrutiny committees, to say, “Have you investigated such issues?”. We have a library at the Centre for Public Scrutiny of scrutiny reports from local authorities, and it contains more than 3,000 reports, so there is quite a rich source of data about issues that have been investigated and evidence that has been gathered locally, which could perhaps usefully inform work at national level, and vice versa; local scrutineers understanding more about the national policy-setting agenda and influencing it could be valuable. Q233 Simon Danczuk: Do we need national minimum standards for services, to reduce the possibility of a postcode lottery in terms of localism? Eugene Sullivan: For some services, you may well do; people talk about the postcode lottery. We may have some variation of services at the moment. The

important question under localism would be: is the variation intentional, and is it agreed locally and held accountable locally, or is it just something that happened? I think that it’s quite important for the Government, in their definition of localism, to decide exactly where to draw the boundaries around those standards. Q234 Simon Danczuk: Are there any particular services that should or should not have standards? Eugene Sullivan: One tends to think mostly about the services for vulnerable people. Again, the Centre for Public Scrutiny made the point that most complaints about a postcode lottery are about health, and you can understand that. There is a general tendency for this nation to want fairness, and fairness seems to mean equality of treatment wherever you happen to live, understandably. Jessica Crowe: A lottery implies that there is no rational basis for the choice that has been made, and I think that if there was a process by which the choice could be made—and, importantly, influenced before it was made—then it would feel less like a lottery for people. When I was a councillor, I always found that even when people didn’t agree with the decision that you made, if they’d had the opportunity to have their say and understood the basis for the decision it made quite a difference to them and it felt fairer, even if they didn’t agree with the final decision, so I think that it is having that opportunity for influence and being clear about the reasons for a decision that matter. I think that that could be most appropriately done by elected representatives who can be held to account for making that decision, informed by professional advice where that’s appropriate. Q235 Simon Danczuk: Do you think that there should be some national standards, or not? Jessica Crowe: Yes, I think there should be. As Eugene said, it is where the sort of “life and limb” services, and vulnerable people, are involved. Equally, it is entirely proper for a national Government, with a mandate, to wish to set up some things around equalisation of resources and that sort of thing. That’s entirely proper. However, as I said at the start, it should be around those outcomes, rather than setting standards around processes and inputs. Steve Freer: It is proper that there is consideration of national standards across a range of services, really. I think that the critical issue is to what extent you then put in place arrangements to try to performance manage those standards and ensure that they are applied on the ground from Land’s End to John O’Groats, as it were. In a sense, that is the mistake that we make too frequently: we over-engineer those performance arrangements. I think that the challenge for us is to step back from over-elaborate arrangements for monitoring and to try to get back to the sort of fundamentals of trusting local accountability to tell us whether appropriate standards are being delivered on the ground. Q236 Simon Danczuk: In terms of refuse collection, fortnightly or weekly? That is a national standard. I know that’s slightly tongue-in-cheek, but should

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central Government be setting that sort of standard, or is it for local authorities to decide? It is not a “life and limb” service, or one involving a vulnerable group, is it? Briefly, what is the panel’s view? Eugene Sullivan: We certainly do not think that the Audit Commission should be setting those standards, and haven’t done. But I think, again, that that is a matter for local discretion, and I think that you see that with the exchange of views around that particular subject up and down the country. Jessica Crowe: Yes. I agree with that. It’s not an outcome; it’s an input. Steve Freer: Yes. I agree with that. Again, I would emphasise that I think it’s for local accountability to exercise judgment as to whether the local authority has made the right choice in that area, or the wrong choice. Q237 David Heyes: Steve, you have referred several times to the importance of local accountability. Should that be through the ballot box? What are the limits of ballot-box accountability? Steve Freer: The ballot box is obviously very important, but it would be a huge mistake to put all our emphasis on one mechanism around which local accountability operates. We want to see local authorities straining to improve accountability every day, in every transaction and in every service. For the core of accountability, you have to seek to establish a dialogue with local people and try to engage and involve them. You have to listen very hard to what they say, and either respond to their requests in a positive way or explain why it’s not possible to do that. Q238 David Heyes: But what do you see as the framework for doing that? Do you see it as a supplement to the ballot box, or even in some cases as a replacement for the ballot box? How does it work? Steve Freer: A whole range of different options are available to local authorities, and they are being added to all the time. There are councillor surgeries, public meetings, and websites that invite people to tell the local authority where it can save money and how it can improve services. There is a whole range of different options. Jessica Crowe: I endorse that. The centre produced a piece of research earlier this year called “Accountability Works”, which identified many different forms of accountability. The ballot box is a very important one, but in between elections there need to be other forms of accountability. Those could be regulation and inspection, or internal performance management. We would obviously say that scrutiny by elected representatives and non-executives is a really important form of accountability. It could be about publishing your information and being held to account by the public, or indeed the media. There are lots of different ways of being held to account and we think it is important that there should be a sort of web—we described it in the research as a web of accountability—where those forms interact and work together. As Steve was saying, accountability needs to be supported by transparency and involvement, and we identified those things as the three really important

figures that support and bolster representative democracy. They all have the potential to work in more participative ways; you need all three of those things working together. Eugene Sullivan: I agree with most of what has been said, but I would add that periodic elections are not going to be a perfect mechanism for dealing with the views of citizens about the services they currently enjoy. Performance information is very important, as is engagement through some of the mechanisms that Steve talked about. There are also referendums on key subjects, and some people have even piloted work around budget and citizen stakeholder groups, to get people involved in the decisions, priorities and choices that are available. Q239 David Heyes: Forgive me, but I have not heard any drastically new ideas emerge from that. Those are all worthy things and worthy ways of supplementing the democratic process, but most of the local authorities that I am familiar with already practise many of the things that you advocate. What else can we do? Jessica Crowe: One very practical thing would be to reinforce the position of councillors in what you might describe as the democratic wing of the big society, about which we hear a lot. We should see democratically elected councillors as being at the heart of a lot of those mechanisms and accountabilities, with stronger powers than they have at present, to look at a range of different service providers, whoever they might be—the council, the voluntary sector, or the private sector. We are going to see greater diversity in service providers and decision makers. If all those people recognised that they could potentially be held to account by people who have been democratically elected and who would provide information to them and respond to their recommendations, that would give a strong and consistent set of powers that we don’t have at the moment. That would be a new thing, and there is a real opportunity to bring that in at the moment with the Localism Bill that is about to start going through Parliament. Steve Freer: You ended with the phrase, “What else can we do?”, but it is actually about what we should stop doing. Through a variety of different mechanisms over the past few years, we have put all this emphasis on upward accountability. We could stop doing that and encourage local authorities to major on some of the things that they already do, but—as was said by the previous witnesses—tend to exist as illustrations of good practice rather than standard practice across the sector. If we remove some of the upward accountability, put the focus on local accountability and really encourage local authorities to major in that area, a lot of these techniques would be used more widely and we would end up with a healthier system and a stronger relationship with local people. Q240 George Hollingbery: I was going to ask in a moment or two about accountability. As we have strayed on to it, I shall develop it with a couple more bells and whistles that I wanted to talk about. We have got armchair auditing of £500 and so on and so forth.

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That has its attractions for certain people. In my local authority we have one or two people who constantly challenge us in great detail and with great vigour, which costs a great deal of money to deal with every year. It did when I was a local councillor. I would appreciate some comment on how much challenge can reward and how much it can damage local authorities, particularly in times of restricted budgets. I wonder about the emphasis on £500: that is fantastic and transparent, but is it really what people think about when challenging their local authority? Or is the fact that the carer did not arrive this morning, or that there is not as much money this year to clean street X? A constituent said to me this morning: “Why don’t we just open up all the intranets of the all the local authorities across the country and let everybody see everything about how the decisions were made about a particular issue?” Obviously, some bits have to be confidential. What do you think of that idea? John Kirkpatrick: We’ve done a fair amount of work on different forms of transparency. Some people are interested in everything that has been published, and is increasingly being published, on the £500 basis. That is a good way to identify some things that may have gone unidentified before, such as the duplicate payments and other such stories that we have seen. There is potential in that. If people are interested in how good the value is from the services, we would argue that only publishing sums over £500 is not going to help much with answering that. People need a bit more context, they need to understand context and performance, and about all the money that is being spent in a particular area, rather than just that bit. There is a way to go before transparency can achieve the aims set out for it. As to whether there could be more transparency and how much it would cost, there is some evidence in research from the US that, as more is published voluntarily online, that reduces a bit the burden of responding to freedom of information and other requests. We may be in a period of turbulence while we introduce the measure. Some of that might settle down over a longer period of time. We don’t know that yet, but there is hope that that might be the case, as transparency becomes more embedded and useful, and people become used to using it for the purposes that you described your electors and constituents as wanting. Jessica Crowe: You’ve hit on the crucial point, which is not just how much money is spent but what was achieved as a result of that spending. Otherwise, you know the cost of everything and the value of nothing. You need a bit more. There could be potential in this move to develop, as John just suggested. The important thing is what people do with the information that they discover. There could be a strengthening of the relationship between the public and elected representatives, if people can go to their councillor and say, “I spotted this,” because there will always be people who have particular interests and hobby horses, who will want to invest the time and will spot things. The matter needs then to be delved into, to uncover whether it is a legitimate form of expenditure and has achieved what it was supposed to. By investigating, listening to service users about

their experience, listening to how the service is provided and how other people do it, you can analyse and decide whether that money is being spent to good effect. Councillors are in a good position to do that, in partnership with the public. Steve Freer: You’ve made the distinction between the small number of local enthusiasts— George Hollingbery: Yes, enthusiasts. Steve Freer: You’ve made the distinction between the small number of local enthusiasts and most people. These are early days in this transparency process, and I’m sure that it will develop, but at the moment, the emphasis is on publishing lots of raw data. That probably will work quite well for enthusiasts, but much less well for most people. The challenge, therefore, is to start to move from raw data to something more informative, to good information about local public services that enables you to form judgments about whether your local services are quite as good as they should be—comparative data and so on. I hope that’s the direction in which we will move over the period ahead. Q241 George Hollingbery: But intermediation is always dangerous because you get one particular person’s view of what a standard is. I accept that. The difficulty with financial data is that they are very raw and, for a lot of people, very intimidating, but if you could look more deeply into the mechanisms of a council and see pieces of paper where decisions were made and you didn’t intermediate that and say, “This is how we’re going to judge these across councils,” you could see why someone denied you that service or denied your area that service and then maybe you might come to accept it a little more. My constituent made a very powerful case to me this morning, and I was somewhat taken with it, I have to say. Can you see us getting there? Steve Freer: That sounds like an enormous leap. I think it would be an interesting approach to try to pilot in some areas, but it does seem to be a very big leap from where we are at the moment. Jessica Crowe: I think as well there are perhaps distinctions between the developing of policy and working up of policy and considering options, and it would need such a change in the culture of how policy debates are discussed and, indeed, reported. Decision makers have to consider, sometimes, unpalatable options and have to consider all of those to carry out due process and due diligence. I can see that people would be nervous, in having those debates in the full glare of the public, that the debates would be misinterpreted and that hares would be started running that didn’t need to be. As John was saying, a whole change of culture is perhaps required in how we make policy and take decisions, to have that more mature understanding that your constituent wants and that I think is right, but my worry is that we’re not in a place where that could happen at the moment. Q242 Chair: In terms of accountability, we seem to be talking about community groups and other types of organisation that aren’t elected and therefore aren’t accountable in the same way, operating beneath unitary or district councils. We probably don’t often

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mention parish councils, which tend to exist in rural areas, although there are one or two ideas about parishes appearing in London now. Is that another way forward, whereby localism could really be enacted, or is it a bit of an artificial creation to say, “We don’t want all these disparate community groups; we’ll make them organise themselves into parishes”? Jessica Crowe: Superficially, that is a clear and attractive approach, but I’m quite nervous about parishes in urban areas where there aren’t distinct geographical communities; there are communities of interest. It’s very difficult to decide where those boundaries might lie. When I was on the Councillors Commission, we looked quite closely at the role that parishes could play, and I think they do have an important role where you can identify the community that they represent, but we also heard from witnesses that there were weaknesses, that a number of parish places were not filled through elections and they were co-opted, so there wasn’t that strong accountability through elections that you might hope for. I don’t think they’re necessarily a panacea for all areas. What is really important is that whoever the organisation is, the way it operates is open, accountable and transparent. That’s the crucial thing. Q243 Chair: Do you generally agree with that, Steve? Steve Freer: Yes, generally. For me, it’s probably principally an efficiency test as to whether we focus localism at parish level, at district level, at borough level or at county level, but I’m not hugely optimistic about the capacity of parishes to take on significantly greater responsibilities. Q244 Simon Danczuk: I am particularly interested in accountability as it relates to vulnerable marginalised groups, homeless people, whoever they might be. It was suggested earlier that we needed national standards for certain services, particularly those that related to vulnerable and marginalised groups. Is that because they don’t have a voice and they struggle in terms of accountability with local authorities? Is that why national standards are being suggested in terms of services like that and/or how do vulnerable, marginalised groups hold local authorities to account? What can be done in that regard? Jessica Crowe: I think there is a need to make sure that it is clear how all sorts groups can influence decisions. And there will be groups that are not always organised or able to shout the largest. So there is that worry if you’ve got a very local system that those groups that are more organised will be able to exercise more influence. As I said just now, the important thing is that all organisations are clear and transparent about how they will make decisions and can show that they have taken account of how those groups that might not readily be able to access decisions will be heard. At CfPS we are developing something we are calling at the moment an accountability charter to help organisations work through their multiple accountabilities and set out in a very clear, simple form: this is how we will take decisions; this is how we will work; this is how you can influence us. That could work for a local authority,

for a partnership and for all sorts of things. We think it is really important that organisations set out how they are going to do that, and can then be held to account for that, as well as for how they make wider decisions. Eugene Sullivan: For vulnerable people, the degree of accountability, the degree of voice, the degree of engagement and how far you go on that is a choice. Sometimes it’s a risk. Sometimes you can afford to risk failure. It is less acceptable to accept failure when you are dealing with vulnerable people. That is an important aspect of it all, which is why inspection regimes are kept in place for some part of that regime. Steve Freer: I have nothing to add. Q245 Stephen Gilbert: From my way of thinking, accountability has to be slightly more than just being transparent and clear. I would have thought that any working definition has to include the ability to change the decision taker, which is why, I guess, the democratic process is our touchstone. You can’t fire a spreadsheet. You can’t sack a committee of councillors. It is very difficult to break up a partnership. So when we are looking at a much more complicated, evolving architecture on a local level, perhaps simplicity, with that ability to sack the decision maker, comes with the model of the elected mayors. At the end of the day—it is a point that you were making earlier, Mr Freer—the buck stops there. That is where people will recognise that that is the case. Do you have any thoughts about elected mayors being the way forward to solve this conundrum? Steve Freer: I thought you were going to make a slightly different point there. This is quite interesting. The point I thought you were going to make was that— Chair: That’s a politician’s way to answer the question. Steve Freer: Go with me; it is interesting. I thought you were going to make a point about complex, innovative partnerships and their role in delivering local services. Obviously they have a great currency at the moment. I am bound to say that there is potentially a governance problem with those sorts of complex arrangements to deliver local services. You use the word “simple”. I think that fundamentally, good governance requires clarity and a degree of simplicity. I don’t particularly agree that that has to revolve around a single individual. I think it has to focus very strongly on a single institution. That critically for me makes the case for the local authority’s leadership role in a locality. Jessica Crowe: I was a councillor in a mayoral authority, and I think mayors bring great strengths, like clarity, accountability and the ability to speak for a whole area, not just the council, when they’ve been elected by their peers on the council. There are great strengths to mayoral models of governance, but you have to have something that works in between elections and ways of bringing to the fore and exploring the decisions that are made in those four years so that the public have a kind of evidence base on which to decide whether they should re-elect someone at the end of their term of office. The mechanisms of accountability, transparency and

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involvement that operate in between elections are also important and can support electoral accountability. Eugene Sullivan: I agree with Steve’s point about leadership, but it’s not just about local council leadership; the leadership position—whether we’re talking about the leader of the council or an elected mayor—is very important. It should be chosen with that in mind, it should have a job description, it should have its own accountability framework for evaluation within the council to the council, and it should pay a rate for the job. Therefore, the expectations of the leader will be higher, and the leader paying the price if something is their fault would be more acceptable. So I don’t think these things are unthinkable. Q246 Stephen Gilbert: Just to follow on from that, I have served with a councillor from Haringey, where just over half the borough is of one political persuasion, and it always provides the ruling party, while the other half of the borough takes a different view. One half of the borough has no ability to influence decision making, which, almost by tradition, reflects the institutional vested interests of the other half. I’m not quite sure how any accountability arrangement would address that problem in the structures going forward. Jessica Crowe: I think you’ve illustrated the weakness of relying just on an electoral mandate. You need those mechanisms to involve people who may not be represented. That comes back to your question about vulnerable groups, which may not even vote. You need other ways of hearing a wider range of voices and being clear about how decisions can be influenced by those whom the decisions then affect. Q247 Stephen Gilbert: But without that electoral gun at a politician’s head, you can’t change the decision taker. You can explain the decision that’s been made, and you can have a clear and transparent look at the process, but without that mechanism, you won’t actually be able to effect change, will you? Steve Freer: I think, in a way, this links back to setting minimum standards and so on. In a way, setting minimum standards and some of the other architecture of legislation is about ensuring that a council, once elected, is there to represent all the constituents, as it were. Also, this is about the obligation to serve and make decisions in the public interest and, where councillors fail to do that, about their being challenged accordingly. Those are the other sorts of controls that apply, but I am bound to say that most of the politicians I’ve worked for have been very keen to persuade non-believers to vote for them in the future. Therefore, they’ve often been very keen to get into dialogue with people who are not natural supporters of their particular party. Q248 Chair: In this more complicated world, central Government grant—we talked about this earlier— goes to local authorities, so there has to be accountability in some form about how that grant is spent, as well as accountability to local people. But if we look at the Total Place projects, where we start to look at total Government spending in an area or at community budgets, which the Government are going

to pilot in a more limited field, money is allocated— by Parliament, ultimately—down different income streams. Councils aren’t ultimately responsible for it, but they may be responsible for helping to spend it. How do we deal with financial accountability in that sort of situation? Is this a lot more complicated? Eugene Sullivan: It is. There has been some discussion of that. Part of the problem with Total Place is that people need to pool budgets in some way and look at their total resources. There has been some success around that, but there have also been some exceptions, which Whitehall doesn’t always play in the Total Place budgeting. A lot of the money that’s going in, that could influence an initiative or a programme there, isn’t necessarily within the control of the group that’s there. I know Gus O’Donnell was talking at one stage about budgeted programmes that cut across the Whitehall boundaries of accounting officers, down into place-based budgeting or programme-based budgeting. I think that there’s more scrutiny there if you’ve got a programme where there’s one accountability line. People are not happy giving up their budgets, and even more so at a time of cuts. It’s going to be very difficult to get partnership to come to the table on total budgeting. But the accountability can be worked through if the willingness is there to work together. Q249 Chair: Do you think you can? Eugene Sullivan: Yes. Q250 Chair: In all aspects? It’s fairly easy, if your organisations share a building. You can divvy up the costs and it’s quite straightforward. But if you start to get into, “Well, we’re going to spend more from the health budget on helping to keep people out of hospital, because that’s going to help us with the cost in the long term”—but that’s local authority expenses, because they are delivering social care—doesn’t that start to confuse lines of responsibility? Eugene Sullivan: It does. The single conversation that the Treasury was starting around the Total Place pilots, I think, tries to address that. Also, I think, the net cost to the Exchequer should be the prime goal but you need to make sure that there aren’t winners and losers. So, on estate management, it could be having some sort of equalisation account or whatever, so that winners and losers can be evened out, and what you’re left with is the net gain to the Exchequer. But we have to be more creative about how we do that. Jessica Crowe: Yes. The powerful message that came out from Total Place was that we would all save money if some of these budgets were pulled. It showed that money spent by one agency would save another agency, and therefore the total amount of public spending. The sums of money were just so significant. It’s clearly something that has to be done, but I think it’s right that it’s going to be more challenging at the moment. I also think that there are lessons about things to avoid from the past analyses of how partnerships have worked—that they haven’t been open or transparent in how they’ve worked. Nobody has known quite how the local strategic partnership reached its decisions on spending the money that came for expenditure by

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LSPs. I think we need to learn those lessons and not repeat them, and so if shared budgets do emerge—and I think it will be tricky, for the reasons that Eugene gave us around people not being willing to give up their control and local empires—I think it will be very important that there are clear governance mechanisms. It was clear from some research that we did, looking at the Total Place pilots, that nobody had really thought about that yet. They’d done the mapping and they discovered this information, and they reached positions in principle about what needed to be done, but nobody had yet thought about how the decisions would be made going forward. And I do think that some thought would need to be given to that, so that there are very clear decision-making structures. I’ve referred to our accountability charter, which could help organisations think those things through. I think that’s really important. Steve Freer: I think the mindset of the pilots in this area needs to be different from the mindset we normally have in relation to pilots. Rather than seeing this as something we want to see working in a few areas and then rolled out across the piece, we should expect these pilots to show us some of the positive benefits that might come from a more joined-up approach, but also to expose more fully some of the real problems that you have alluded to. I think then it will be very interesting to see what the right kind of solutions are for the problems that are exposed: whether this can be done simply by sticking broadly with our existing architecture within the public services, and just wiring it up better with different protocols, or whatever, about sharing resources; or whether—and personally I suspect we will have to do this—it will take us to a position where we conclude that we have to simplify the architecture, improve the structure of our public services, and have fewer agencies responsible for delivery of public services. John Kirkpatrick: May I just add one point to that, from our research? If those pilots were to do as Steve suggests and illustrate a variety of different ways in which things might work, one of the things we could do is to compare them with what we see now. Let’s not pretend that what we have now at a local level in many of these areas is an ideal situation. We’ve done work that shows that a youth worker in many places is, for example, spending somewhere between a quarter and a third of their time on working out how to feed the different arrangements for different funding streams coming into a single youth work project. At the moment, there are people spending a lot of time, which they could be spending on actually solving the problems that they’d like to solve, working out how to make all these arrangements that we currently have work. It may be that that’s the way it has to be, but as Steve says, if we can find different ways and compare them with that, we may find that there is indeed a better way coming out of that. Q251 Chair: So, fewer income streams and fewer agencies responsible. We move on, then, to another aspect of localism, which is about getting more organisations involved in service delivery as opposed to just involved in the consultation process, whether they be voluntary

groups, community activists or social enterprises. How do we ensure that accountability is properly organised and effective with regard to those organisations, which could end up spending considerable amounts of money at local level? Jessica Crowe: If they were commissioned to provide services, there’s a clear accountability mechanism through commissioning arrangements. I spoke earlier about the importance of embedding the local councillor as a key part of accountability at a local level. In a way, it doesn’t matter how complex the service delivery arrangements are if it’s accepted that local councillors can ask more questions about what they’re doing. Making sure that councillors have comprehensive powers to ask questions about services that are being provided by anybody spending public money would go a long way. It would also have the virtue, as Steve identified, of being quite simple. People would then know that if they had a question or a problem with any service provider, they could ask their local councillor, who could look into it. I do think that that’s got to be an important principle for any new way of delivering services. Q252 Chair: Are there concerns about evidence already of voluntary groups probably not doing things in a criminally wrong way but simply not being as tight in their control of money, and not necessarily always understanding the protocols to go through? That might give concerns unless bigger attention is paid to this before we embark on a bigger roll-out of spending through these mechanisms. Eugene Sullivan: There is that problem, and there is the fact that because they’re voluntary groups, the normal disciplines don’t apply sometimes, or they think that way. But voluntary groups themselves are starting to think more about not getting the money from grant or fundraising but through contracts and the commissioning role. The commissioning role, I think, is an accountability itself between the buyer and the deliverer. Not only is it easier for others to monitor the accountability; it actually gives a clearer accountability between the two parties. Q253 Chair: Is there a concern, maybe, that in this brave new world lots of organisations will spring up and demand to have the right to deliver services whether they are commissioned to do so or not? On the other hand, it might be that local authorities say, “All right, this is localism. We’re being encouraged to pass things down, so we’re going to get rid of a lot of our responsibilities. We can say to community groups, ‘Here’s the local library. Go off and run it. We’ll encourage you, and maybe give you a bit of help, but it’s all yours now,’” even when those groups may not have the wherewithal actually to do it. Eugene Sullivan: I think the opening view of all this was that localism has got opportunities but carries risks with it. The accountability framework for localism has to be in place. It has to be proportionate, but there still has to be an accountability framework. At the moment, I don’t think a lot of the money would be channelled through local authorities, so I don’t think they could ever say, “It’s nothing to do with us.”

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It’s a question of what mechanisms they put in place to get accountability for the funds they pass on. As a commissioner, they couldn’t divest themselves of that accountability. Steve Freer: Yes, I think it’s about national standards and a minimum of standards, isn’t it? In each service area, we should be clear about whether we can afford to adopt a laissez-faire approach and risk failure, or whether there are certain standards that have got to be maintained. If we had greater clarity in that respect, local authorities would be clearer about the amount of risk they could take in the sort of transaction you’ve spoken about. Q254 George Hollingbery: Do you think that any transaction of this sort—the community right to buy or the community right to run whatever it is—should have a clause built into it, so the group can demonstrate how they are going to be held accountable? Is that an absolute requirement? Jessica Crowe: Yes, absolutely. We did some research a couple of years ago, looking at different forms of commissioning and contractual relationships, and how councillors could hold those contractors to account. It was very clear that, unless it was built into the contract right at the start that the contractor was expected to come and supply information to scrutiny from the start, it tended to be quite easy for the clientcontractor relationship to be quite cosy. The contractor could just say, “Well, we’re accountable to our client”, and the client would say, “Well, we’re making decisions and we’re holding the contractor to

account”, but that is not very transparent to everybody else. So it has to be built in right from the start. Where that does happen, however, you can develop quite a constructive relationship, particularly if it’s a longterm partnership, which you can see. You then get a good understanding from the contractor and the supplier of what the council as a body wants to see, and you get a process of dialogue. I think that that’s much more healthy. Q255 Chair: Thank you very much. Is there anything you would like to add that you think that you haven’t managed to say yet? Steve Freer: May I just make a point about that very last issue? It is something that we didn’t mention. I think that there is an important principle about public audit in relation to all these satellites, as it were. I think you have to be able to follow the public pound and audit it through all those layers, no matter how remote they are. The other point is that your suggestion that there should be a requirement in terms of how you would demonstrate accountability is important, but there are clearly a series of other requirements—aren’t there?— about demonstration of competence. It is also critically important not only that you can demonstrate that you can acquire the service, but that you can maintain it over a significant period of time. So you have to demonstrate long-term thinking as well as short-term ability to act, as it were. Chair: Thank you very much indeed for coming and thank you for your evidence.

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Monday 10 January 2011 Members present: Mr Clive Betts (Chair) Heidi Alexander Bob Blackman Simon Danczuk Mike Freer

Stephen Gilbert George Hollingbery James Morris Mark Pawsey ________________ Examination of Witnesses

Witnesses: Cllr Stephen Houghton CBE, Leader, and Paul Thorpe, Members and Scrutiny Support Manager, Barnsley Council; Cllr Ben Adams, Lead Cabinet Member for Communities and Culture, and Helen Riley, Director of Strategy and Transformation and Assistant Chief Executive, Staffordshire County Council, gave evidence. Q256 Chair: We welcome the first set of witnesses this afternoon. For the sake of our records in this sixth evidence session of our inquiry into localism could you give your names and the organisations you represent? Paul Thorpe: My name is Paul Thorpe. I am Elected Members and Scrutiny Support Manager for Barnsley Metropolitan Borough Council. Cllr Houghton: I am Steve Houghton, Leader of Barnsley Council. Cllr Ben Adams: I am Ben Adams, Lead Cabinet Member for Communities at Staffordshire County Council. Helen Riley: Good afternoon. I am Helen Riley, Director of Strategy and Transformation and Assistant Chief Executive at Staffordshire County Council. Q257 Chair: Thank you very much for coming and spending your time with us this afternoon. Perhaps I may begin with an issue that we will be exploring as part of this inquiry. We looked at it in our previous inquiry into the balance of power between central and local Government. Is it necessary to have greater formality in the relationship between central and local Government; to put it on some sort of formal constitutional basis? Is that necessary to get localism to work in this country? I declare an interest in asking the question, because a week on Thursday I shall be a witness before another Select Committee, the Political and Constitutional Reform Committee, which is conducting an inquiry into the specific issue of the constitutional relationship between central and local Government. So it would be interesting to have your views on that. Paul Thorpe: For the benefit of the Committee, the reason Barnsley proposed quite a radical model of formal constitutional settlement was that we thought we had reached a point where we constantly revisited localism and the balance of power among central and local Government, what comes in between and neighbourhoods, and that a degree of certainty ought to be introduced. We revisit this issue every few years when there is a change of Government, and some powers are added and some are taken away. That does not help the overall picture. What tends to happen is that central Government feels that it must constantly intervene in local matters because the media and public pressure do not understand where the various

powers and responsibility necessarily lie. That is one argument. It sounds quite formal. Possibly Staffordshire has gone for a less formalised model than us. Having said that, I do not think we are that far apart. Our model is fairly pragmatic in the sense we are saying that this needs to be underpinned by subsidiarity, which is a posh way of saying that at the right spatial level—the neighbourhood, national, local and sub-regional level—you do only those things that are most appropriate. That is a test of effectiveness and efficiency, and is not one underpinned by other radical notions. Therefore, it is doing what works best at what particular tier of Government and enshrining that in a formalised way so that everyone understands where rights, responsibilities and powers lie. Q258 Chair: You were talking about doing things at the right level; may not that level change over time? It might be that at different times there’s a different point. Therefore, if you put it into a constitutional settlement, does it not tend to rigidify it to the point where perhaps that flexibility of appropriate levels is missing? Cllr Houghton: Possibly, but that does not mean to say that could not be revisited from time to time either. If you have a constitutional settlement you may need a 10-year review period as part of that. It does not have to stay the same forever. The problem we have, largely with Ministers—the previous Government was guilty of this, and I suspect the new one will not be dissimilar—is that Ministers change and so approaches change; Governments change so approaches change. We are constantly catching up with where Government wants to be and it does not help that process. As Paul said, having some certainty against that background so that we can plan our futures, to be frank, as to where services are and what we want from them would be very helpful. As Paul said, there is a lot of misunderstanding in the public and that therefore diminishes our role locally because the public do not understand this. I suspect that a lot of local elected members do not understand it either, and, to be frank, more often than not we end up in a mess. Getting something stripped out there does not mean that on a lot of these issues it is simply national or local. A lot of the issues are joint issues for us both and we require co-production and an understanding of that. Local area agreements were the

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beginning of getting to grips with that. I am not saying that they were right in the form that they took, but they were a start to saying that local and central Government need to understand each other better. Let’s be clear about what you want from us. What do we want and how can you assist that process? Where do we both need to get together and say that on these particular issues there is not a national or local solution; it is about both partners working together. We do not get that; we tend to get, “Well, go away and get on with it,” which is fine until a Minister or someone decides it ain’t appropriate. Trying to sort that out helps get better outcomes but it also helps the democratic and political process for the general public, who can see us doing what, why and in whose name. At the moment the public simply cannot respond to that at all. Q259 Chair: Does Staffordshire want to comment on that? Cllr Adams: We take a slightly different view. In our experience good partnership working comes from having flexibility and not spending too much time setting out rules of engagement early on. They tend not to stand the test of time. We have been taking a pragmatic approach to this. We want to take ownership of issues in Staffordshire, which means that wherever possible we get on with the job. So for me a lot of the clarity around the Bill is that essentially within the locality it is down to us; it is just what we are looking for, and to go beyond that might not be necessary. Where we possibly have some issues, particularly as we are quite a strong two-tier authority, is the potential for confusion between different tiers at locality level. I think the Localism Bill is taking the right approach in trying to give parish and town councils some autonomy and power. Where that might challenge the responsibility of a district or borough, or indeed one of our own councils, that is liable to introduce some tensions and possibly some expense to the public purse that we would be better off avoiding. I think that at that level some clarity on what the responsibilities are at the place are more important to me than the responsibilities between local and central Government. Q260 George Hollingbery: I am interested in both those responses, but is not the truth that, ultimately, in a constitutional settlement or co-operation between levels the only thing that really matters here is money? That is what you are; you spend money and nothing more than that ultimately, like all Government, and until there is a constitutional settlement of some sort that allows you guys to tax a lot more for specific local services delivered locally to local people we will really never resolve this tension at all. Cllr Houghton: There is some truth in what you say. Having freedom and flexibilities around how we raise money and, more particularly, how we spend it would be of significant help. I caution about the local raising of funds because the re-localisation of business rates in its raw form will be catastrophic for many parts of the country. I do not think there can be an unfettered approach to the raising of taxation locally simply because some areas are better placed to do that than

others. We have to be clear about the impact of that. I have here a full list of what that would mean. As one leading civil servant said to some chief executives, we will have Westminster Council giving out food hampers every Christmas, and some councils in the North unable to bury the dead. We cannot have a position like that, so whilst re-localisation—in this case we are talking about business rates, effectively— would have some merits it needs to be within a framework of equalisation because the impact of that is so varied across the country, but it would help to give some abilities in those terms. But we also need to know what the expectations are. Are we prepared to go down the route of what some people describe as a postcode lottery in services, whereby we get different models and qualities of services up and down the country, or is Government looking for more standardisation in some cases, or at least minimum standards to be applied? The way you work that through will determine how we spend our money. Yes, that helps but the point I make is that it is not the only thing. Cllr Adams: It is about money; but for me, it is more about where the decisions are made about how it is spent. That is the key thing. It is really about policy choices rather than money, and the key thing is that local people drive your policy choices. The opportunity to raise income locally is important, but we are more comfortable with that being done through business endeavour and investment as opposed to taxraising powers. We are taxing our residents enough. It is more a case of using our initiative to generate income. Where there are issues around business rates in particular, authorities must make sure they deal in partnership with their neighbours. This is a fundamental thing here. If you get an authority that decides to be very aggressive with its business rate policy it will have an enormous impact within the region, so the key is to be joined up there with neighbours. Q261 James Morris: To come back to the legal status of local Government, one of the central planks of the Localism Bill is the granting of a general power of competence. To what extent do you think that is an academic legal point, or will it actually be meaningful for local Government? Cllr Adams: We have to see what happens with this. We have a couple of examples at the moment: one where an authority would like to operate a meals-onwheels service. Within a large county like ours where we have contracts for meals-on-wheels across several districts, for one district to endeavour to do that could upset the balance of the contractual arrangements and the cost of our providing the service to others. Where there are compromises and possibly additional cost to the public purse that is where clarity over responsibility is needed, because we would like to decline the offer if it does not add up to a net benefit for everybody. On the other hand, I have issues with some major highways through Staffordshire. We have offered and would like to take on some of the Highways Agency’s responsibilities for safety but that has been denied us. I think that under a general power of competence there may well be an opportunity for

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us to tackle that, but those are two quite different ways of using the same power, aren’t they? I think we will hit a lot of somewhat defensive interests as we try to challenge those. Therefore, for us that is a bit of a “look and see”. Cllr Houghton: From our perspective, we need to see what the detail of that means. At the moment we have got the power of economic, social and environmental wellbeing. If it does not take it much further than that, there is probably little added value, so the devil is in the detail. Q262 James Morris: The power of wellbeing has not been used extensively by local Government. Why do you think that was? Cllr Houghton: I think it takes us back to the point made earlier by the member adjacent to you. I have never particularly had a huge problem with powers. Very often it has been a lack of resources with which we have struggled to get things done. But with environmental wellbeing or the new powers that may be coming, in the end we still need a good lawyer to interpret that for us and see how far we are able to do it. Q263 James Morris: Is it not something to do potentially with the timidity of local Government in taking local responsibility and being afraid of what central Government may or may not do rather than it just being a question of resources? Cllr Houghton: I think it is a question of resources, but we come back to the point that there is uncertainty about what the roles are. We do not have clarity on that, so people become conservative in their approach because they are still not sure about their roles and responsibilities and how far they can go. To give just a general power of wellbeing does not necessarily change that. Paul Thorpe: It is also worth saying to the Committee that there is another strand to this. It is about powers and finance. It is welcome that local authorities could perhaps explore new revenue streams and funding opportunities and perhaps have tax-levying powers, but another very important strand in any form of government is accountability and transparency. There needs to be proper accountability and transparency, and that comes with a settlement that ensures that the people out there understand who does what and who is held accountable for what. The public do not really understand that now, as Cllr Houghton suggested. In future we will have a much more atomised, diffuse arrangement following the Localism Bill and various other enactments. They will probably understand it even less. That is one of the big problems that we will face. Q264 James Morris: Cllr Adams made a point about pragmatism. Is it not better that local authorities are given this general power rather than trying to codify the relationship in detail? Does not localism imply that we need flexibility and to be pragmatic, so a general power of competence allows local government essentially to step up to the mark and try to effect change in its locality and that can vary across different areas and can be pragmatic?

Cllr Houghton: It depends on the detail, because there is still an issue about the relationship between local and central Government and what central Government wants out of this. Does the general power of competence that may come out mean we can do what we want with education, adult social care or other services? Clearly, the answer to that is no because Government has its own agenda for that. So it will not solve those particular issues. I come back to the point about clarification of the roles and expectations. So that competence will not change it and that is where we get into difficulty; and very often that is where the change comes certainly between Governments, but we have even had examples in the past where Ministers change and the whole approach changes because of that. Helen Riley: On the general power of competence compared with the power of wellbeing, it is also important to remember that the latter was introduced at a time that ran almost contra to the way local Government was advised to act, which was very much in a top-down, target-setting regime with a wellbeing power to do things that were a bit fuzzy. I think you are right that there was some timidity and some concern about the ultra vires rule. I would be interesting to see if the competence power picks that up. Importantly for us locally, when we look at working with communities, increasingly local authorities, be it any of the three tiers, do very little alone. To be able to deliver the outcomes and priorities we want locally, we have to work with health, police, fire, the voluntary sector and many other partners. To me, it is interesting to see how that power of competence may or may not apply to partners who are as key locally to delivering the outcomes that we want around health, public health and community safety, because if that applies to only one element of public service we may hit some barriers as we try to move forward. Cllr Houghton: The classic problem we have faced in partnership working over the years with other public agencies is that they are directly accountable to their Departments, so, as much as we might have some great ideas about what we might do, and the council might have powers to change things, we get primary care trusts or the police or whoever it might be saying, “Well, that’s great, guys, but I have got to do this.” Q265 Simon Danczuk: Is the Government as a whole living up to its rhetoric on localism thus far? Paul Thorpe: One thing we have suggested to the Committee in our submission is that localism can mean any number of things to any number of people. Very few people are against the notion of localism— who can be?—but what does that mean? I think that the difference between our approach and the Government’s is that we again look at the position of subsidiarity: doing what works best at a given level. I think there is some degree of certainty in that. You know that refuse collection is really a council issue; you know that neighbourhood policing, grass cutting and so on can be neighbourhood or local community issues. You also know that defence and foreign affairs are a national issue, so there is some certainty there. Those things will not really change. That is the

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difference in approach. It seems to us that in the Localism Bill the Government’s approach is founded on the Big Society model, which is essentially that communities and individuals do it for themselves. That is their default position. Ours is more one of saying, “What’s the right thing to do at the right tier of governance?” rather than devolution through councils and other tiers direct to communities and individuals at that particular level. Q266 Simon Danczuk: You mentioned refuse collection. Central Government does have a view on that? Paul Thorpe: Well, it does, doesn’t it? That goes back to Cllr Houghton’s point. Cllr Houghton: We rest our case. Paul Thorpe: There is a lack of understanding and certainty amongst the media and public about what are local, neighbourhood and national issues. Cllr Adams: I think there has been a significant statement. Taking the ring-fencing off the majority of the settlement is an enormous step. That is a real commitment to local decision-making. For too long we have been obliged to spend our money in a certain way, whether it suits the locality or not. There has been a massive step change towards localism. On the other hand, the language and relationship must change. I talked earlier about ownership. I think it is the same with the media. There is a bins issue, so they ask Andrew Neil or somebody else what he thinks of the local bins issue. He will have an opinion, as we all do, about local bin collection outside our house, but what he ought to say is that that is a matter for the local authority and offer them absolute support in their decision. If they get it wrong, somebody will make sure that that changes because at the ballot box there will be a local decision. What we are looking for is the fundamental switch from, “Here you are, guys,” to actually, “Really, here you are, guys.” I think the statements in the policy documents are absolutely in the right direction. A lot of that is not law yet, is it? We have yet to see that followed with absolute certainty. Q267 Mark Pawsey: Mr Thorpe, you said that few people would be against the concept of localism. Good councils will be trying to devolve powers, so why do we need a Localism Bill? What will the Localism Bill enable your council to do that you cannot do currently? Paul Thorpe: We have problems in some areas with the Localism Bill, but I do not think that it is that big an advantage for us as a council; to be honest, it probably causes more problems than it solves. For a long time Barnsley Council has been a keen exponent of partnership working. As far back as 20 to 25 years ago we saw that you could achieve certain things only by working in partnership. So whether that is partnership at local council or neighbourhood level, that is the way Barnsley Council has progressed things. I do not think it is about Barnsley Council or any council grabbing power, freedoms and flexibilities just for itself. I go back to the earlier point: it is about the notion of the right thing at the right level and making sure those things are carried out at that

particular tier. It is not about the council grabbing powers and responsibilities necessarily for everything. This is not just us. Some things are better performed by other tiers. Q268 Mark Pawsey: But if you are already handing out those powers, why do we need this Bill? Paul Thorpe: That is a good question. Cllr Houghton: I think Government needs to be careful. Letting 1,000 flowers bloom is great because that becomes an innovative and potentially very localised and responsive way to deal with matters. We need a framework around that so that that activity can be properly audited and tested on behalf of the public. If we do not have that there is a real danger that it will run off and, first, will not be representative of the people that it claims to be; and, secondly, where that money being spent? Just because it is local and diffuse does not mean that it is necessarily better. How are we to audit that and check that we get value for money from it? If the Localism Bill does anything it needs to be able to create that kind of framework. I speak now as an audit commissioner as well as leader of a local council. We need some regulatory framework even around localism. To put all that out there without a framework will end in tears somewhere at some point. Therefore, a balance must be struck here. We have just won the Big Society Award for what we have done in working with local people on our estates, allowing them to make decisions about the quality of their services and so on, but it was within the framework of accountability; both financial auditing and accountability but also to that wider local community. You really need that. If the Localism Bill does anything, give us what that framework might look like. Is that a job for a local authority to do? So, while it is pushing things down and out into the community it needs to have in mind that regulatory role, or is that for someone else to do? Q269 Mark Pawsey: Are there some services that you would like to tailor to local needs but the existing legislation does not permit you to do so? Can you give us any examples of that? Cllr Houghton: One would be how we tackle unemployment and worklessness. The Government’s current position is that it will do that through nationally led training provider contracts. All the evidence suggests to us that the best way to tackle worklessness and long-term unemployment is by localising it, working in local communities and personalising services to the unemployed and using that local intelligence, context and need to shape what is being done. That is not what we have got at the moment. Under the national provider contracts, it is left to the contractors to decide what they want to do. We cannot even obtain from those providers any performance information. We have made freedom of information requests, and they have been refused on the basis of commercial confidentiality. How on earth will we work with those providers and know whether or not it is working if we cannot get the information? The first thing I would say is that sharing information across public agencies is essential. At the moment there are numerous barriers to that. That needs to be

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done in some cases in a sensitive way, in other cases in a private way, but it needs to be shared. At the moment we are certainly not able to share that information. Equally, when external organisations come to work in the borough, we need, either as part of those contracts on unemployment or other forms of service, requirements for them to work with local authorities and communities. That is not for them to be subservient to us but it means they have to do that. At the moment we do not have that. Q270 Mark Pawsey: Cllr Adams, you said that the best thing about the Localism Bill was to take off the ring-fencing? Cllr Adams: Yes. Mark Pawsey: Can you give us some examples of how that will benefit the residents of Staffordshire? Cllr Adams: The settlement as a whole is extremely challenging for us, so we have to make absolutely sure we satisfy local need. For example, originally we had a very large spend on careers services and information or guidance through the Connexions service. That was very much top-down directed. It had a very large cost base with monitoring performance and bureaucracy around performance reporting. We know we can do a better job with that for about half the money. We would like to do that and then put what is left into some of the local services. The same goes for the obligation to deliver children’s services in a certain way through certain types of very expensive, iconic and nice-looking buildings that do not necessarily deliver better children’s services in the right places. We think we can make some decisions and use that money differently. For me, it is not so much about devolving the services down. Where our partnership working works well it does that. It is more about breaking some of those connections between Whitehall and the decisions that we should be making on behalf of Staffordshire. It is a bit like the example of the Highways Agency I mentioned earlier. Previously, it was off limits. The new Bill may now provide some options for us to make a difference locally. Q271 Heidi Alexander: If the Government lives up to its rhetoric on localism and local authorities receive increased powers, to what extent do you think those powers will be devolved down to local communities in your areas? Cllr Adams: It will depend very much on the appetite of those communities or community representatives. We have something in the order of 300 parish and town councils in Staffordshire. Some are full-on ambitious and waiting to make choices and investments themselves, while others take very much the traditional local representation view. I do not think it is for us to poke or prod organisations to do things that do not suit them or their communities, so it will evolve very differently. But I would expect nationally to see a real tapestry of delivery. I am not worried about the postcode lottery. I want to see more quality in more places, less average across the whole country, and I think this is a way of stimulating that. The big philosophical thing around this with communities and devolving power down is that decisions will be made

generally by smaller groups at a lower level. If they fail they will do so in a smaller way. At the minute if we have a failure of national delivery it affects everybody, so to me there is some comfort in the mixture and diversity of delivery. Q272 Heidi Alexander: You said it depended on the appetite of local communities. Cllr Adams: Yes. Heidi Alexander: In your experience what determines that appetite? Cllr Adams: At the moment far too much of it is negatively determined, so people will get very excited about a planning application that they do not want to see proceed or a new road they do not like, and they will be active for two or three years about something that affects them personally. I think we have to stimulate communities to take a wider view and consider their neighbours and the future of the whole area. The key to that is to get them involved in local democracy. If the Localism Bill does nothing else, it will take power and deliver it back to local democratically elected people. When that happens, communities will want to get involved again. The idea at the moment that they go to a planning committee and something is thrown out by that committee and then turned around by a national inspector makes nonsense of local democracy. For me, it is a massive step: we pass the power back, and let things go right or wrong, because people will engage at every level. Cllr Houghton: Do not get carried away with all that. All the evidence suggests that local communities do not want all these powers thrown down to them. The vast majority want decent public services and access to decision-making when it directly affects where they are and, if it goes wrong, someone to complain to and it being sorted out. My experience is that they do not want a committee to work out how long the grass should be when it is being cut and so on. I have to say that over a number of years there was a lot of nonsense—the previous Government got hung up on this—about how much needed to be pushed down into these areas, because the demand is not there. That is the truth. However, we get demand where people want to try to shape their place, want to know how they can engage with public agencies to make it a better place and so on, but there is a lot of nonsense talked about some of this stuff, for example that a million people out there just cannot wait to get in and take over. That is not true. We will get into all sorts of difficulties if we start to throw this out and find out that it will not be done. It is the responsibility of the council to listen to its community. I am interested in looking at ways of how we do that and then the decisions that we have to take are appropriately shaped in light of that. Do not get carried away with the idea of millions of people. Of those who are keen to do things, some are very good and do it for the right reasons, but, to be frank, there are other people out there doing it for other reasons, and we also get into issues of accountability in some of this. My advice would be to tread carefully.

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Q273 George Hollingbery: I have to say that the issue of accountability and where that responsibility lies is the one that vexes me most. However, I disagree with you, Cllr Houghton, about appetite. I think it depends on where you come from and what your area is like. Certainly, in my area there is an enormous appetite for control of some services and some issues like planning where there is absolutely no doubt there will be very widespread community involvement. It is interesting that the Bill itself prescribes real democratic accountability in these issues only in areas like planning where there seems to be an appetite. I think we have heard from you about your worries about accountability. Perhaps I may ask Staffordshire about accountability and governance, particularly where services are devolved to third parties and where perhaps you have commissioned something out; or maybe under the right to challenge, people have drawn services out from a council. How do we create accountability, particularly with big public funds? Cllr Adams: To me the key is the legitimacy of the decision. I share Cllr Houghton’s concerns about accountability. If groups without a mandate seek to direct local policy, they need to be legitimate decisions through democratically elected representatives. I am keen to see more different, new ambitious people who seek to become democratically elected. I do not believe that we can give neighbourhood forums and communities of an ad hoc nature power to make decisions that affect a lot of other people because there are no controls over that through the ballot box or formal political means. Q274 George Hollingbery: But there will be control under the Bill. It Bill requires a referendum on any plan that comes forward. Cllr Adams: It does. For me, the referendum is the problem. You elect somebody for four years to make decisions and then can potentially second-guess them every month with a 5% referendum. We have just had a referendum under the 1970s Local Government Acts, with the support of six town councillors. They got less than 16% of the vote on the referendum and it cost them £14,000. That is not a good way to spend public money and it will not get public support when that is made clear. There are dangers in that. We need detail. It is very clear around planning, as you say. Ultimately, the planning committees make the decisions but they are being led and informed by community development focus groups etc. Outside planning it is not so clear, and there are dangers there. Paul Thorpe: The other question to ask is whether the Localism Bill is consistently localist in what it is doing and in its message, and, indeed whether that applies to some of central Government’s other legislation, for example the requirement to hold referenda. Are referenda in themselves particularly localist if, as Cllr Adams says, the council has been elected on a particular manifesto and mandate? There are inconsistencies in that and in other legislation, for example the imposition of new models of governance

such as mayors, police commissioners and so on. To what extent is this programme consistently localist? There are questions to be asked about that. Q275 Bob Blackman: We heard earlier about the potential for postcode lottery in the provision of services. Equally, one of the key challenges in the whole approach in the localism agenda is the power to allow authorities that do not succeed to fail. I want to explore with both Staffordshire and Barnsley when they think it is right for central Government to intervene. At what point does central Government intervene after the Localism Bill becomes law? Cllr Adams: I think central Government should set the parameters. Bob Blackman: To be clear, I think Cllr Houghton referred to minimum standards, for example. Cllr Adams: Yes; minimum standards and expectations. We need to understand when somebody has failed for a start, and whether central Government or somebody else then comes in to fix the problem. I think there is a role for the LGA there. If councils are failing it is the body of councils that should come in to try to fix them, and maybe it needs to be prepared to do that. It might be more difficult if we talk about some of the partnerships to which Helen alluded earlier in conjunction with other public services that are driven directly from Whitehall. If there is a failure in a local health service that is not necessarily in the control of the local authority other parties will have to get involved as well. Clearly, it is not in the public interest that, if something fails there is not a national response, but I think we have to be prepared for it and have a plan for the failure. It is not satisfactory that the Secretary of State or a Minister takes responsibility and makes short-term decisions on it. There must be some formal group. Cllr Houghton: The problem is that we do not know because we have not had the discussion. From my perspective, in understanding what works at different levels, in a sense the “failure” bit then comes in on a similar basis. The argument on dustbins is interesting, isn’t it? Councils had experienced difficulties because of the weather and bin collections got behind and in a few places, not all, some problems had developed. The councils did not see that as failure; they saw it as the result of all the problems we had had and we are working to put that right. The public in those areas saw that as failure and presumably contacted their MPs who got on to the Minister who then wrote a letter to every leader of a council in the country to say, “Get your finger out; you’re not performing well enough.” It is that lack of understanding that bedevils us. We get to a point where we know what failure is in the extreme; it is the child dying in Haringey. We all recognise that and understand it, but when we get to lesser areas, we do not know just how far that can go and it needs a discussion and debate. Q276 Bob Blackman: To be clear, in terms of service failure, clearly a catastrophic failure in a children’s services department is different. I think we would all recognise that. But in terms of a failure,

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services are not being provided by a local authority, say Barnsley; suddenly, you have fallen down on something and compared with Staffordshire, your services are far worse judged against these standards. Do you think the Government should intervene? Cllr Houghton: I come back to where I began. We need to have an understanding of the expectations on both sides. Once we have that we will know whether the Government should intervene. Unless we have the discussion and debate, we will get different interpretations from different Governments and Ministers. Therein lies the problem. That then prevents us from being innovative and creative in the way we would like to be. There is always the fear that we go too far and we are not sure what “too far” is. Paul Thorpe: It is also worth adding that the way performance management is moving now with the Government’s agenda means it is more about selfperformance management, so the local government sector as a whole must take responsibility and effectively manage performance across the piece. Therefore, each local authority has a responsibility to others as well to help that happen and drive up performance and understanding in the sector. That also requires local councils to be absolutely frank and candid about what they recognise as failure. Cllr Houghton: In the end, if we are not to have something between central and local Government and it is left to us, the Local Government Association has to get to grips with this and give councils a framework and clue as to how far they can push this and what service failure may or may not look like from the sector’s perspective, but at least we need something around that. That is not to drive every last detail of it, but to give us a clue as to where people are or are not likely to intervene. Helen Riley: In the past it was very easy to say whether x service at Staffordshire was better or worse than Barnsley’s service because we were working to a national framework. Clearly, the Government and the localism agenda are pushing local priorities and the services that deliver them will have different importance in each area. Therefore, it may not matter that a particular service is worse in Barnsley than it is in Staffordshire because it may not be delivering a real priority and outcome for Barnsley, whereas that may be so for Staffordshire. It is really difficult if you start to escalate that to national level and take a view across all local authority areas about whether there should be a benchmark for the performance of a particular service because they will be delivered differently according to different levels of importance,

depending on circumstances.

the

local

priority

and

local

Q277 Mike Freer: You touched on decentralisation almost as a charter for the sharp-elbowed or those with loud voices. You did not put it quite like that but that is what you were getting at. How do you protect those who do not have a voice? In my experience of local government, few people come banging on the door saying they want a halfway house, a centre for learning difficulties or a people referral unit. Usually, it is the reverse. How do you protect those silent communities that do not have a voice if localism is to be writ large? Cllr Houghton: I think you have to protect the role of the elected member at local level. Under the previous Government—there is a danger we’ll go as well—it felt that there was not a role for a local member: “We’ve put it all out there, let’s see what we get back.” I value representative democracy; it is incredibly important. For all its faults—I am sure we can debate them ad nauseam—in the end it is the one thing where people can exercise choice and some accountability for what has been done. If you are to have localism, build it around the role of the elected member. That does not mean the elected member is the be all and end all of it and has complete control, but it puts the elected member at the heart of that. The route of the silent majority that you talk about is just that, and we have to protect it. Q278 Mike Freer: To take that one step further, I am not sure that the local member is best placed, because a local member can be voted out if the local community says, “You supported that halfway house and we didn’t want it,” unless you are saying that the collective council can say, “We hear what you say but for the greater good of the community we will have to put it here”? Cllr Houghton: Yes. I meant the collective council. I am sorry if I did not make that clear. I emphasise that. Planning is one area that always worries you because when people demand things through the planning system they usually say, “We’re not having that.” Members are put under enormous pressure, which is why the collective council or the planning committee does matter so that difficult decisions can be taken. Chair: Cllr Adams, do you want to respond? Cllr Adams: I can only agree with every word of that. Chair: That is a very good point on which to end your evidence. I thank all of you for coming and giving us such interesting information this afternoon.

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Examination of Witnesses Witnesses: Steve Evans, Director of Community Services, and Robert Walsh, Head of Safer and Stronger Communities, South Gloucestershire Council; Cllr David Milsted, Leader of the Opposition (Liberal Democrat), North Dorset District Council, and Mark Hebditch, Chair, Community Partnerships Executive North Dorset (CPEND), gave evidence. Q279 Chair: Good afternoon and welcome to our session this afternoon. For the sake of our records, could you introduce yourselves? Say who you are and the organisations you represent. Robert Walsh: I am Robert Walsh, Head of Safer and Stronger Communities at South Gloucestershire Council. Steve Evans: I am Steve Evans, Director of Community Services, South Gloucestershire Council. Cllr Milsted: I am David Milsted, Leader of the second largest group on North Dorset District Council. Mark Hebditch: I am Mark Hebditch, Chairman of the Community Partnerships Executive North Dorset. Q280 Chair: That is quite a long title. I thank all of you very much for coming. If you happen to agree with something that has been said you do not have to repeat your agreement. Just a nod in the right direction will be sufficient to say “I agree.” To begin with, we have in front of us a Localism Bill. Do we really need a central Government initiative to get localism working at local level, or are you quite capable of getting on with the job anyway? Cllr Milsted: I think we rather have been getting on with the job, and our written submission, which I am sure you have seen, shows that over the last four years we have been doing a lot of what is now called localism. I listened to the previous questions. One of the questions you asked was, “Will the Localism Bill make it any easier for your council to do this kind of thing in the future?” I think some aspects of it might have made it a bit easier for us four years ago when we started doing what we have done, particularly the general power of competence. That would have been helpful. But in our particular case, without denigrating the Bill in any way, I do not think it will make an awful lot of difference. Steve Evans: It works on several levels for me. It indicates the view of Government in a particular direction. I think the fact that localism is central to the platform is a very helpful signal to communities and local government. The execution of that is the question. How well will the legislation match the needs of local government, central Government and communities themselves? Therefore, the test is how the elements within any Bill, White Paper or whatever blend with, for example, the Sustainable Communities Act, Healthy Lives, Healthy People and all the other aspects of government that work at a community level. Q281 Chair: So, if the Secretary of State had called you in before he published the Bill and said, “I understand you want to get on with localism down at council level. You are doing good things already but we can help you do even better, can’t we, so what more powers would you like to be devolved to you?” what would you have said to him? What would you have proposed could have been done in addition that is not in the Bill and would help?

Cllr Milsted: Probably any councillor in the country would say the bottom line is, “Please, sir, what we should like is the power to set local tax at the level we think fit and let the electorate decide whether or not they think that is a good idea by kicking us out if they do not like it.” Mark Hebditch: I endorse that. The direction of travel in the Bill seems absolutely fine, but we talked about this on the way down and, quite honestly, there is not very much in it that would be of direct help in the way we have evolved over the past few years. But there are issues in terms of devolving responsibilities to communities and community groups that are not councils and having a level playing field with councils. Having just been involved in taking over the leisure services of our town, we found that, for example, VAT was levied on a charity, which we are, in a completely different way from on a local authority, and similarly with business rates. There are ways in which local authorities have an advantage over community groups but the direction of travel is to devolve more to community groups and that makes it very difficult for those community groups to take on that responsibility. One of the reasons, obviously, is that ultimately the appetite may not be there to take on more and more. Cllr Milsted: I certainly endorse that. When it comes to business rates, that is a huge advantage of a local facility being run by, let’s say, a charitable trust or community interest company in that they can be granted 100% exemption from non-domestic rates, which I have to say is an enormous burden on local authorities, as many of you will know. I think many of us regard it as quite outrageous that councils have to pay business rates on schools, for example, but that is probably another issue. The VAT question was almost a killer on one large local project because the goal posts had been moved in the three years since the previous large local project had been done which benefited then from VAT exemption. It was assumed that those rules would still apply when we did the leisure centre in Gillingham and, behold, they did not and the district council had to find a substantial amount of extra money to help out the charitable trust with that. Steve Evans: Resources will always be one of the key issues. How you raise and pool resources will always be one of the questions. It is interesting that some of the work we have been carrying out around health has over a period of time drawn the health service and ourselves together. We have pooled resources on particular projects but we have never felt we have had enough resource going in because of the different pressures on the different organisations, from Government down. I think it was mentioned earlier that the accountability lines have been up not necessarily to the local community. Clearly, one of the issues for us has been being able to pool those resources with a legal entity that can deliver some of the priorities at a very local level and retain that

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accountability through the lead strategic organisations but help local communities take control of their own destiny and tackle some of their own issues. One of the fundamental issues for us is to get legal entities in place to accept resources but also the strategic agencies to accept that this is a priority for them so they can pool their resources in a common budget to achieve certain outcomes. Q282 Mark Pawsey: We heard from earlier witnesses—and you have alluded to the fact—that localism is a good thing and you have been doing it wherever you can so far. How do you measure that what you have done has been successful? If you are given the additional powers in the Bill that will provide even more localism how will we measure whether or not that has been successful? What are the criteria? Cllr Milsted: That is a good question. Sometimes you have to measure it negatively. If the number of people grumbling about a service diminishes to almost nothing, one likes to assume that means it has been a success. One measure is that over the past four years my district council has reduced its budget by more than 25% plus. That is about three million quid. It was a small budget to begin with; it is a tiny one now. The cost of running those devolved services is much less than the £3 million we have saved. What had been a number of clapped-out, scruffy and really rather nasty facilities—a collection of public loos that you really would not want to use and a leisure centre that was completely collapsed and exhausted—are now lovely and are very popular and well used. That is a measure of success. I think we would also measure success in terms of the perceptible community involvement and pride of place and belonging that it has created in many cases and continues to, although it was a hard road. It began with the council being capped in 2005, which concentrated minds politically quite wonderfully, because after that, given the realities of the situation, any sort of political fighting began to look a bit like two bald men fighting over a comb. Therefore, it was born of necessity, if you like. We had four leisure centres and three swimming pools that were going to close unless we could find some other way of doing it. I have to say that it began with a deal of hostility from town and parish councils. At our first meeting with them the biggest applause of the night came when a gentleman said he did not see why they should be using their parish money to bail out the “bloody” district council. We started from that point. Mark Hebditch: Success criteria can be very elusive. For me, the bottom line is to have good intelligence from communities about the needs and aspirations of those communities. That is well evidenced through engagement with the community through various strategies of consultation. Once you have that, you have a ready-made set of criteria by which you will judge it. If you do what we did—provide the leisure services that the community has clearly said it wants—then you can tick that box and you have been successful. I suspect that there has previously been a bit of tension expressed by the representative as against participative democracy elements; the

community action groups as against those councillors. Again, I think those tensions can be absolutely relieved if you start with a robust town, parish, district plan that is based on real exploration of what people in all the communities want and need. Once you sing from the same hymn sheet and have the same basic document to which we have all subscribed, those tensions disappear and you are going in the right direction. Q283 Mark Pawsey: And is the measure of success rewarded through the ballot box, or is it in a referendum or when local elections come round, or would you want some form of survey or some other form of measure to support what you are doing? Cllr Milsted: I do not know, speaking for the councils, that we really require any sort of recognition. I do not think we will get our reward through the ballot box particularly. If everything had closed and gone belly up then we would probably be kicked out. I do not think you get particularly rewarded for doing this sort of thing. It sounds terribly Pollyanna-ish, but your reward is that you know what you have done and you can see the benefits of it. Referendum is a concept with which we have a problem particularly in terms of the Localism Bill, and I would like to mention that. The Localism Bill talks about village and town design statements, parish plans and so on being implemented if they have been approved in a referendum. We now have several town and village design statements and town and parish plans that are being adopted as supplementary planning policy in our district-wide plan. We have not required referenda for those. Q284 George Hollingbery: Forgive me for interrupting. I hear a story of a failing district council that you very ably grabbed by the scruff and pulled back up again. I do not think that what you have done is localism at all; you have done what a good local district council does, which is listen to people in its parishes and towns and delivers what it ought to deliver. The whole point of this Bill is to deliver genuine devolution of Government power down to local authorities. With respect, I spent a long time on a district council so I genuinely know what I am talking about. There is so little, frankly, that a district council genuinely delivers that is mandated by Government, as it is in a unitary authority, that it will not impact on you greatly. Is what you are doing localism? Cllr Milsted: Yes, it is; it is the devolution of power of ownership of services down to the most local practicable level, which is hard-wired into the DNA of some of us politically anyway. It happens that we did it because our backs were against the wall because of capping and so on. Looking back, I think we would all say that even if we were to be awash with money, we would still have done it now that we know the good that it has done. Q285 George Hollingbery: But your town and parish plans hold no statutory weight, ultimately. Cllr Milsted: Yes, they do. I am sorry. They are being adopted as supplementary planning policy, so, yes, they do have statutory power. To hold a referendum

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would simply cost a lot of money that we would then not be able to spend on doing real, good things. Mark Hebditch: In the development of a new local development framework in the core strategy the results of all town and parish consultations have been incorporated. When I read the core strategy I can read words that I know I have written and spoken and this is part of the district council policy. There is no question about it. There is a real influence being brought to bear by people in communities on the way basic core policies, of which planning is one, are formulated to the point where the notion spelt out in the Localism Bill of having 50% support of voters through a referendum to initiate a neighbourhood plan seems totally redundant, indeed subversive of good practice at local level. Q286 Chair: Gloucestershire has been very quiet. Steve Evans: Perhaps I may change tack and use a slightly different example of which we have great experience. Like a lot of authorities, a few years ago we made a definite decision to move and focus some of the issues on our priority neighbourhoods: those areas that scored worst in the indices of multiple deprivation. We selected a number of areas based on them being in the bottom 20% nationally, which in South Gloucestershire is quite rare because we are fairly well off, but when you look at the difference in quality of life and life expectancy, illness and so forth, between our poorer communities and those best off it is significant. So with the support of the council we established a priority neighbourhoods programme and made a bit of a mistake early on, in that we went out and got to the stage where we asked each of the people in all groups in those areas—we also managed to access difficult to reach groups—what they wanted. The failure we made at that time was not to put that in context and explain to them where they stood in relation to health, crime and antisocial behaviour and to contextualise that in their communities. We learnt that lesson with our partners: the police, health service and voluntary sector. We have now revisited that and are contextualising those. We find that, in trying to develop a local platform for local people to take ownership of those issues and tackle those long-term underlying and most expensive aspects of public expenditure in our areas, they want to understand that and get the message and take some control of what they do. To me, the most important lesson for us is to contextualise some of the issues as strategic agencies and willingly to say collectively to those particular neighbourhoods, “We want to help you tackle those issues locally but we recognise that you need to be a major driver in those areas and a party to it,” and working through with those communities the mechanisms that will deliver that. We are on the next phase of introducing that and starting that programme in terms of them taking a lead and shaping their own action plans, but very clearly we are saying to them, if you like, “The only rule of this game is that you must focus on the multiple deprivation indices to be a priority neighbourhood delivery group.” They have accepted that. We are now in the phase where we are looking at an action plan,

not just the agencies in a strategic way but each individual community tackling the specific issues that those individual communities have. We have six priority neighbourhoods and all have a different focus, recognising their make-up and specific issues. We think that is the way forward for us. That is in addition to work we have been doing on the former PACT arrangements. We call them safer and stronger community groups because that resonates more easily with people. Over the past 18 months to two years we find that we have made a significant impact on those who believe they are engaged in influencing decision making. Q287 Mark Pawsey: How are you measuring that? You say you have found that. How do you know that it is succeeding? Steve Evans: Obviously, there was the Place Survey in previous years that asked those specific questions. The Place Survey was cancelled in the last year. We as a council with our partners decided that we would ask those questions again in a public survey. We had 1,200 responses, which is statistically significant in delivering that information. But we have seen a vast improvement in people saying they feel the area is safer and the agencies are working closer together; that the police and council are communicating better with communities; and the fear of crime is dropping. It is not all perfect but we have made significant inroads in those areas. Chair: We have to press on a little because there are several issues we need to get to. Q288 Mike Freer: I apologise for missing the start of your evidence, but what I picked up is that to you localism is consultation in that South Gloucestershire is involved in consulting their areas of multiple deprivation but they are not in direct control of the services. You have asked them but they appear to be consultees rather than managers of the actual delivery. North Dorset appears to be using existing structures of town and parish councils. What I do not have any evidence of is where your communities have either taken direct control, not through existing structures but through new ones, and they have created new organisations to take control of council services; or where they have said, “We want you to de-prioritise money from this budget and move it into that budget.” So, what I am getting is that you have consulted and allowed them to spend the money that is there rather than divert it or take direct control. Robert Walsh: If I could refer you to figure 5 in our submission that sits under paragraph 48, I am grateful to you for giving me the opportunity to explain better what this is about. You will see that within our model of community lead groups, which are the ones Steve has described, there are different ways that role can be played out. One of the important dimensions here is that that must be played out bearing in mind the maturity and strength of local community groups. So, a reference group, which is the furthest left on that continuum, is very much as you have described; it is a group that would be consulted and whose views would be taken into account. As you move further across that continuum the partner groups and then the

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leading groups have more power and influence, so within a priority neighbourhood where you have a leading group it will be the community lead group that starts to define what the priorities are and starts to push the public sector to move resources and effort around to deliver those local priorities. There will be only one community lead group within each priority neighbourhood, but, to come full circle, the ability of a community lead group to take on that role must reflect their current position. We will be supporting them and helping them to take a lead, but having discussed this model and drawn it up in conjunction with community groups, we have had to be very clear not to come along and say there is one model that fits all. Q289 Mike Freer: How many leading groups do you have? Robert Walsh: At the moment we have signed up five community lead groups. As we identified in our submission, we have one neighbourhood, Kingswood, that is not the area that shows up on the indices of multiple deprivation as having greatest need but locally there is not the social infrastructure to have a group that could lead in this way. So in Kingswood we will be looking to work with the community groups to develop that infrastructure; in other areas we have something already in place and that ranges from town and parish councils through to a regeneration partnership. Mark Hebditch: In North Dorset the way the existing structure was used was through a process of very rapid evolution from one model, where community partnerships were essentially talking shops and just listening to what people say, to taking on local services. Part of the North Dorset investment in the community planning strategy is to make sure that each of the towns and its cluster of villages has a community resource worker who has the capacity to help local groups establish themselves, give advice on governance, funding streams and so on, so that they can confidently take on new responsibilities, for example a local volunteer car group. My view as chairman of a local partnership is that that is fine but there are obvious synergies between different communities and opportunities for efficiencies and economies of scale by co-operating with other towns and villages in the area. That is why we have a community partnership executive in North Dorset, which again is in the process of evolution. In a fairly short time it will hopefully have established itself not just as a partnership networking organisation but a community enterprise organisation, probably as a charitably incorporated organisation, which will have a more entrepreneurial mindset to establish itself as capable of taking on more challenges in future. Therefore, it is not just a matter of everything happening that has been slotted into pre-existing structures because that is not true. The structure itself is evolving very rapidly and has the capacity to evolve further to take on new challenges under the localism agenda. Cllr Milsted: Our council’s support for the Dorset Community Action, which in turn supports the community support workers, ties in with our whole

community planning model, which is not based just on town and parish councils, with respect; it is created by the four town-based community partnerships who come together to form CPEND, of which Mark is Chairman. They are all different. We have not prescribed how they should grow. They have all grown as they needed to grow because the four towns are different. They are not quite the same animal one to the other but they are all performing very well and achieving good things. In part, that was why we were able a few years ago to win £3.7 million in liveability money. I think we were the only district council to get liveability funding. It was very much to do with that. Somebody asked what sort of recognition we wanted. I was trying to find a way of saying this, but we won an award last year; we won the Local Government Chronicle Health Service Journal Best Communities 2010 Award for that. There you are; I have got it in now. Q290 Chair: Mr Evans, do you want to add anything briefly, because we need to make a bit of progress? Steve Evans: In a number of areas we have transferred assets to clubs and organisations where they have shown a willingness to do that and run facilities. We very much support town centre partnerships. Our small town centres have suffered under the economy; they live cheek by jowl almost, so we have helped to enable those things and supported and strengthened them. There is not a single position that any of these organisations take. Some of them start very weak; they lack confidence. Particularly in our priority neighbourhoods there is lack of confidence and selfbelief. Part of our job is to build that confidence, trust, self-belief and skills so communities eventually come out of being priority neighbourhoods. Our job is to see that in the next 10 years those six priority neighbourhoods are no longer priority neighbourhoods by overcoming the multiple deprivation indices, but we certainly do transfer assets. We have somebody who helps organisations to set up a constitution, apply for charity status and enables groups to take on and become self-resourcing. That has been very successful with community centres. Chair: We must now try to focus. We will be constrained for time. There are still one or two issues we want to get to. Q291 Stephen Gilbert: I think you have given us some useful examples of localism in practice in your different patches. Maybe we can take a step back. What is the mindset or attitudinal change within local authorities that must be made for this kind of localist approach to flourish? Mark Hebditch: That change in mindset and culture is absolutely critical to the development of successful localism. There is no question about it. What has happened in North Dorset is that over a matter of five or six years the perception of officers and members of their role has been substantially changed. Obviously, the district council has its statutory responsibilities but as far as discretionary services are concerned they have now all been devolved to communities so that their role becomes that of enabler and supporter. I

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think that role can be developed even further. They are shrinking in a sense in terms of their own service delivery but growing in terms of the practical support they can give HR, legal, financial—whatsoever—to communities. It is to their great credit as an authority—I am outside the authority—that they have changed that mindset and embraced it positively with huge enthusiasm, and that in itself infects the attitudes of people in the community who feel they can do things because they believe we can do things. The bottom line to success at delivering services at grass roots level is that there is trust on the part of the people devolving those services to those at local community level who very often in the past have been totally marginalised. Who are these people, especially if they are non-elected and not part of statutory authorities? Q292 Chair: I think we really need one response from each. Cllr Milsted: Succinctly, it is the shift away from seeing ourselves as providers and dispensers to being enablers and supporters. In a nutshell that is it. Steve Evans: I offer somebody else’s quote that I would have liked to make: experts on tap, not on top. Q293 Chair: Very briefly, if a community says, “Sorry, we don’t want to run this,” does it mean it does not get a service? Cllr Milsted: That is right. It is their choice to decide what their communities need and want. Q294 Chair: What if it cannot run a service? Cllr Milsted: If they tell us they do not want it and they can prove that they really know what they are talking about, it is not for us to say, “I’m sorry but you’re wrong; you have to have it.” I have sat in on a parish council meeting where somebody said, “We’re not going to help fund this leisure centre because nobody in this village uses it,” and I happened to know that 64 people in the village were members of it. Well, that is different, but if genuinely the community does not want to take something on because it feels it does not want it badly enough, fair enough. Steve Evans: The matter will be put to the test over the next few years. Clearly, there will be a local democratic decision-making process at local authority level about what the priorities are and the available resources and then the community will have to consider what it wants to do in response to that prioritisation. Clearly, it will be a dialogue that will evolve. I do not think I can give you a simple, straightforward yes or no. Q295 Bob Blackman: If the ministerial team were sitting here they would tell us that this is an enabling Bill. It would then be for you as individuals at local level to make the decisions. How prescriptive do you think they should be about how you should devolve to local people? Perhaps I may start with South Gloucestershire. Steve Evans: It is a very difficult question. I think the earlier commentary we had about being clear about the arrangements between central and local

government would be very helpful. One of the problems I have faced over the last few years is the degree to which we were told how to run things on the ground, for example that for the PACT groups you must have three priorities at the end of the meeting. Communities do not necessarily work that way. We have also found that tackling antisocial behaviour, which was the focus early on, moved on to become, “Now, what can we do in our community, because we overcame the sharp-end crisis?” I do not think you can be prescriptive. Government needs absolutely to be enabling in this. There will be all sorts of legislation; it will not just be in the Localism Bill. There are some very good opportunities under the Sustainable Communities Act and also from devolving or transferring health protection and health improvement to local authorities, but I also think there will be challenges. Q296 Bob Blackman: If I may cut across you, suppose your council—I accept that you are officers and serving councillors—says, “Fine. We will not devolve any power at all; we will just keep it to ourselves and we’re not interested in any of this. We’ll just carry on as we are.” Do you think Government should intervene on that basis? Steve Evans: I do not because I think that local members would then very quickly get the message from local communities that that was not what was expected of them. Our communities are well able to challenge those situations, particularly if there is a national context which says, “This is what we believe is right across the country, but it’s up to you to challenge your local authority in terms of how it then delivers that.” I think it is that clarity of the national context and the subsidiarity that you would have in place that could be challenged. Knowing our communities, they are not backward in coming forward. Mark Hebditch: There are elements of good practice that need to be disseminated and shared, and it is certainly the role of Government to identify what is working and to give it support, praise and publicity. I referred earlier to planning, which is really important. I feel quite strongly, not as a town or parish councillor, that no town, parish or district council should be allowed to spend money without well-evidenced plans based on proper engagement with communities. That would get round the issue of councils that just drift on and do not do anything. What right do they have to exercise their statutory rights and powers without properly evidenced understanding of what their communities actually want? Although I believe in representative democracy quite passionately, I do not believe that all councillors bring that intelligence to the council chamber in an adequate way. Cllr Milsted: As I understand it, if the local authority sat there and said, “We’re not going to do any of this,” would the Bill not also give local people the right to challenge that and overturn that in any case? Q297 Bob Blackman: But is it not true to say that frequently most people protest about a decision that has been taken by a local council as opposed to demanding that a service is provided?

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Mark Hebditch: Yes, probably. Cllr Milsted: Or they protest against a threat to close something. Mark Hebditch: Which is why those protests need to be pre-empted by having robust plans in the first place to which people subscribe, which are public and transparent and the community endorse. Q298 Bob Blackman: Do you believe that central Government have the right to intervene in that process, or not? Mark Hebditch: I think they have a right to say what is good practice. I am not sure whether intervention would be appropriate. Cllr Milsted: I do not think they should prescribe or proscribe but they should, as Mark said, encourage. Having enabled, they should encourage. Q299 Simon Danczuk: You have talked about community activists and volunteers coming forward to develop, organise and deliver services. I can think of the advantages involved in those people doing that. What are some of the potential disadvantages and risks involved in volunteers taking up more services? Cllr Milsted: That nearly all of them in the case of some quite major projects that are now being run by volunteers are quite comfortably past retirement age and not getting any younger. As with any volunteering community, if you volunteer for one thing you probably end up volunteering for three or four and tend to bump into the same people again and again. There are not that many of the really active ones who are doing stuff. It takes only two or three people to fall off the twig and possibly a major local service is then in some peril. That is the biggest risk and what keeps me awake at night. Q300 Simon Danczuk: That is a good point. Do you think that they then shape that service to meet the needs and requirements of their demographic group as opposed to others? Cllr Milsted: No, I do not think so. Mark Hebditch: I do not believe that is true. There is a real danger in relying naively on the endless willingness of volunteers to come forward for all sorts of reasons. One of them is that volunteers need support, training, TLC and management and that can be a full-time job, which has to be done by other volunteers. I also have some problems about volunteering in terms of, for example, taking over library services. If a service is really under threat and the only way to preserve it is to take on volunteers instead of paid employees, fine. However, you probably lose some skills in doing that. Possibly you are also in danger of being at the thin end of a wedge where increasingly various types of service are deprofessionalised, of which the library service is certainly one. It has already happened even with paid employees, never mind volunteers taking over. The youth service is another. I believe you need proper, professionally trained people who are responsible for these services; otherwise, there is a real danger that the service itself will deteriorate to the point where it becomes unviable.

Cllr Milsted: I am also a county councillor. Not one of our 34 libraries is managed by a trained librarian, and that is an enormous change from 30 years ago when my late wife was a librarian. In her day all branches had to have qualified librarians. I agree with Mark on that, which is no disrespect to the people who are trying to manage our libraries. As to the point about more elderly volunteers, I do not think they run it in their own image. When it is something like a leisure centre with a swimming pool I do not see that as a danger, but we have made the point in our written submission that it needs, as we put it, continual nurturing to find new volunteers and sustain the ones we already have. The job is never done. There is never a point where the district council should say, “Well, I’ve ticked that box and can walk away from that one now.” It needs continuous watering and nurturing. Robert Walsh: I certainly endorse that statement. As Steve mentioned earlier, in South Gloucestershire we have a programme of community asset transfer. One of the things that has made that successful in some locations has been the fact that not all volunteers are equal and you need to ensure that if you have a community trust that is being set up you work with it so they understand the skills and abilities they will need, and in our case by running through that we are trying to prevent problems of groups failing down the line and the assets having to come back into council operation or ownership. I think it is a process of delicate nurturing and negotiation. Steve Evans: Perhaps I may add to that by saying that resilience and a stable environment for those sorts of organisations to flourish is also quite critical. In the past we have had all aspects of life. We had resources parachuted in for three years and then it went again. That works sometimes on certain projects, but often by the time you have the project up and running and the people together motivated and the energy in the system it has gone again. One of the messages we are getting back is, “This is not going to be a three-year wonder, is it?” One of the key messages we have all the time is that nurturing this as a long-term serious cornerstone of our work is critical. Q301 Heidi Alexander: As a final question, we have talked about the involvement of individuals and communities in different projects in different service delivery areas. What are your thoughts on the propensity and ability of those individuals and communities to get involved on a sustained basis over the whole range of services that local authorities provide? Do you think there are particular services that are more appropriate for that type of involvement? Mark Hebditch: The truth is that quite a lot of the services that have devolved to local communities have done so because the parent authority, usually the district, has been unable to continue to fund it and support it out of its own budget. So it has been force majeure; picking up the detritus of a collapse. However, I think that if you have strong community partnerships and good working with local authorities, and town and parish councils also have their capacity built, that appetite could increase, but it is

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incremental; it is not a big bang. It takes time to build that level of capacity and confidence in the community to take on bigger challenges. Our view is that probably the halfway house is to try to bring services closer to communities and residents by people coming out of their bunkers, silos, the PCT and children’s services and working together physically as much as possible in localities. When that happens and there is engagement in the community in something that is working, the appetite for the community to say, “We can do that,” could increase over time. There is no question but that you get the biggest bang for buck at the most local level, but you have to put in place some sort of infrastructure before you can maximise the value added that you get from that. Cllr Milsted: Some things have been passed across that we were not planning to because we did not have to, but we did it because the towns wanted them. Street cleaning is an example. The town said, “We have always known we can do a better job than you guys,” and we said, “Okay; have it,” and, funnily enough, they were right. Steve Evans: We largely agree with that. It is a continuum. There is a development stage to go through. You will not get there instantly. How far you can move from one side of the equation to the other,

or on the spectrum, remains to be seen. Clearly, some of the work we do—in the children’s and adult care services and so on—is highly professionalised and skilled and needs expertise to grow over a number of years; in other areas things are ripe for communities to take them over, but the spectrum will change. One of the things we recognise is the need to build skills, capacity, confidence and trust. If we focus on those key elements in our work we do not know how far it will take us in terms of what services could be taken over and what problems we may solve that mean services are not needed. Look at childcare for neighbours. At one stage there was a danger of doing a CRB check for neighbours looking after children. Children playing in a community setting means you do not need play groups, so the question is how far you can push the notion of improving services and having local people deliver, moving away from service purchase or provision to being communities again. There is quite a spectrum from one end to the other, but I think we can move some way and put some of that ownership and community pride back in the system. How far it can go I have yet to see. Chair: At that point we have to end our session. Thank you all for coming and giving us that very interesting information.

Examination of Witnesses Witnesses: Dr Andrew Povey, Leader, Surrey County Council, and Cllr Michael Green, Leader, Lancashire County Council, gave evidence. Q302 Chair: Welcome and thank you very much for coming to give evidence. For the sake of our records, will you say who you are and the organisations you represent? Dr Povey: My name is Andrew Povey and I am Leader of Surrey County Council. Cllr Green: Good afternoon. My name is Michael Green and I am the Cabinet Member for Environment and Planning at Lancashire County Council. Chair: Thank you both for coming, and particularly at such short notice, Cllr Green. Q303 Heidi Alexander: I would like to start with something that we have not spoken about with the previous witnesses, namely some of the financial aspects of greater powers being devolved to a lower local level. I notice that Lancashire’s written submission says that “localist arguments may require more robust evidence to counter claims that centralisation generates economies of scale and is therefore inherently more efficient.” I wonder whether I may start with Cllr Green. If localism proves not to be more efficient as a way to deliver services is it still worth doing? Cllr Green: Thank you for the question. Personally and as a county council as a whole, we believe in the devolution of services down to the lowest possible level. There are lots of advantages to that. We have practical examples of where we have devolved those services and the efficiency savings achieved as a result. But there needs to be a measure of caution. It is rather like a pendulum. For far too long the

pendulum has swung in the direction of centralisation. Now the pendulum is swinging back there is possibly also a danger of it going too far in the direction of localism. There needs to be a measure of the reality on the ground. That is where my cautious approach and that of the county council as a whole comes from. If services are delivered on a central basis there are indeed economies of scale. You have to overcome those by the localist agenda. I believe that you can deliver services more efficiently locally, but in some cases we still need more concrete evidence. There are proponents of centralisation who would take the opposite argument to mine and always put forward the argument of economies of scale. Those who firmly believe in the localist agenda need to provide firm evidence on the ground that it can be delivered more efficiently. To lead on to the other question about whether there are other reasons for following the localism agenda even if it was not more efficient, I would argue that there are. There are a number of examples. First, it creates a stronger link between the resident and the people who govern that area; second, potentially it increases accountability. One issue that I do not believe has been raised this afternoon from what I have heard is the crisis of faith in public institutions from Parliament right down to county councils, local district councils, parish councils and other public sector bodies across the board. Collectively, we have a duty to overcome that crisis of faith. That can come about by delivering services closer to people, by greater accountability and increasing the mechanisms to provide that

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accountability. I believe we can do that by partnerships between local authorities and Parliament. Q304 Heidi Alexander: From your experience in Lancashire does the devolution of power down to local communities have an inherent cost? Have you made any assessment of those costs? Cllr Green: We have not experienced those costs so far but it is a “watch this space” idea. We have devolved services down to district and parish councils. Lancashire is a very diverse place. It has 1.25 million residents; from east to west there are lots of different issues. Parts of the county are some of the most deprived areas of the country; other parts of the county are very affluent. Geographically, some of it extends into the Pennines and some to the coast, so that is different. There are political differences. It is a diverse county. Devolving these services can bring clear advantages. As to accountability, the county council was one of the first to webcast all of its meetings. People do watch those webcasts. We have cabinet question times. The cabinet goes out into the different communities and gives the public an opportunity to ask questions, and we publish performance data on a regular basis. Q305 Heidi Alexander: Dr Povey? Dr Povey: I would agree with the advantages that Michael referred to, in the sense of it being desirable for the localist agenda and we absolutely welcome it. I think that often what you are doing is getting an add-on. For instance, in the recent snow the county authority will clear the main roads and then perhaps it will ask local farmers to clear some of the rural roads. To me, this involves local people and parish councils, possibly providing them with some equipment and that sort of thing. Therefore, you get a gain in the service by devolving down some of that responsibility. As to a more obvious example of saving money, one of the things we are in the process of doing is to devolve our youth service down to local joint committees between borough and county council. Therefore, within each borough and district there is a joint committee. We reckon that over the next two or three years we can take out about £4.5 million from our budget of £20 million by devolving it down to the local committee. They will then have a menu of options about what services they purchase for their area. Therefore, we get a more locally defined service, probably purchasing more from the voluntary sector, and make considerable savings at the same time. Q306 Heidi Alexander: How much does it cost to run those committees? Dr Povey: They have one officer and part of another officer, so I guess the cost is £50,000 to £60,000. Q307 Heidi Alexander: Per committee? Dr Povey: Per committee, but they do a lot more than what I have just said. Q308 George Hollingbery: I want to ask both of you how you think your councils will look as organisations in five years’ time. Will loads of services have been

taken off you by community groups? Will you have devolved the whole lot down? Will you just be a commissioning organisation? How do you think you will look? Dr Povey: I think there will be an increase in the amount that we commission rather than provide in terms of some of the services being provided by voluntary organisations. I think in that sense we will be smaller organisations. Members will have a stronger role in terms of their local areas in making sure that these more locally defined services meet the needs of their particular divisions. There will be those differences. I hope that with the general power of competence and other things we will be doing things differently. If you talk more generally in terms of the changes, place-based budgets, yes, please; there is a whole raft of things that could be very different. Q309 George Hollingbery: Cllr Green? Cllr Green: My answer is remarkably similar to that of Dr Povey. I believe that we will look very different. Obviously, part of that is due to our diminishing finances as a county council over the next three to four years; part of it will be for the localism agenda and trying to devolve those services down to lower levels and out to the community. Therefore, I think the answer is remarkably similar. I think that leadership by councillors is key. If we are to deliver localism at all there needs to be extremely strong political leadership in the local area and the public must be assured of that prioritisation and accountability of service, backed I suggest by national minimum standards put forward by the Government of the day. I think they are critical. But the key thing is strong local political direction. Q310 George Hollingbery: I completely agree; that is very important. What proportion of that change do you think is driven by the reduction in funds over the next four years and what proportion by the localism agenda? Perhaps you would give a ballpark figure because, clearly, you cannot give a precise answer. Dr Povey: I am not sure I can really answer that. This was a direction in which we were going and the Localism Bill has given it tremendous impetus, but I do not think I am able to put a figure on it. Q311 George Hollingbery: What is driving your decisions now? Dr Povey: We have a set of priorities within the council and that defines what we do. Clearly, there is also a financial driver at the moment because of the reductions we have just had. There is a tremendous desire to drive things down, because we recognise that we can get that additional and more personalised service by involving people more locally, so I think it is a twin track. Q312 George Hollingbery: Do you think that the community right to challenge and the increase in the number of providers of services across the piece will necessarily have a localist impact in the end? National organisations could spring up. There are all sorts of different scenarios about how this could work. Will it

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necessarily produce a more patchwork, postcodelottery type and more localised service, or is there perhaps a perverse consequence to this? Cllr Green: It almost remains to be seen. As the months and years pass by we need to see what the actual result will be. It may well be that large charities and third-sector organisations that have a national footprint, for instance, take on services in particular areas. It could be argued—the implication is in the question—that that is not true localism, but it fundamentally remains to be seen. It will also differ from area to area depending on the ability and capacity for local organisations to take on some of the services, if they wish to do so. Q313 George Hollingbery: We have had representations in this inquiry about the difficulty of hard-to-reach or dispersed groups. Is the ultimate consequence of having some of those groups who need services that national representation will have to be part of the localist agenda to get some of their issues dealt with? Dr Povey: I do not see why it should be national. Within a county authority one can identify specific groups, either geographic ones or perhaps disabled people, spread throughout the community. One can do that at county level. I do not see why it would need to be a national body. Q314 Chair: Picking up the point George made, is there a big difference between localism that is driven by an ideological reason—that it is believed to be the best way to deliver—and that which is driven by the necessity of financial constraint? In one sense you are saying to the community, “In partnership with you we think that things can be done better. Do you want to join with us in that process?” In the other case you are saying, “You won’t have a service unless you run it.” Is that not a very different situation? Dr Povey: Clearly, both are going on. If we look back before the Localism Bill, there was a strong incentive for personalisation of services particularly in adult social care. That is probably the best example. That was recognised and I think people were already beginning to talk about the same approach perhaps for children with special educational needs. There was already a thrust in that direction for personalisation of service. I think that within counties there was always a bit of local involvement with parish councils and things like that. I think that was there and that the Localism Bill has given a tremendous impetus to it, and I also believe that the financial driver is there. Cllr Green: Broadly speaking, I would agree with those sentiments, but the will was already there and we were already doing it because we believed in it. Our county has a parish council charter that has been in place for some time. It has strong relations with parishes and town councils across the county. Q315 Chair: But is there not a difference between a community being told, “If you want to help run this service you can. That’s something we are up for as a council,” and saying to a community, “You have to run this service; otherwise, it will shut”? It may be a

community that does not necessarily have all the skills, abilities and requirements to do it. Dr Povey: I still think it is a bit of both; that would be my view. Cllr Green: Chair, you are quite right that there would indeed be a difference. Lancashire has not quite reached the point of saying that to the community. Q316 Mike Freer: Dr Povey, I think I am right in saying that Surrey decided that all its schools would become academies because the cost of mixed delivery meant that the residual costs were disproportionate on the rump. If I may give you some artistic licence, if you extend that to a patchwork of delivery across two counties where some communities take on services under localism and others do not have the capacity and so it has to be done in-house, do you have the flexibility of structures to be able to do that, or will you end up with those bits that do not go down the localism route closing because the cost base of what is left is no longer sustainable? Dr Povey: On the question of academies, that idea was floated but it has not been pursued as yet. I know there was some press about it. As to your more general point, as an authority we are always looking at ways to work with, for instance, our neighbouring authorities. We have an organisation called South East Seven where we work with six other upper tier authorities to see how we can work together. In some services you go bigger and get those efficiencies. That could take into account something like a school support service. We have done that differently anyway. We have a company that does that which then sells to other places, so there are lots of different ways of doing it. Within Surrey we can work with our districts and boroughs in sharing some services, so there are lots of different ways to provide services that take into account the changing nature of the situation and localism. Q317 Mike Freer: So, you think that if half the services go down the localist route and half do not, you can cover the cost base of what is left? Dr Povey: I do not think I said that. One would have to look at it very carefully. Perhaps sharing it with neighbouring authorities might be a way forward. Cllr Green: I would agree with that. Again, we would have to assess it at the time. There has not been any great rush in Lancashire for schools to apply for academy status, but if that began to materialise we would have to look at the situation and at different options. But locality working depends on the size of the footprint. For one service that footprint needs to be small; for a different service you need to look far wider and work in co-operation with neighbouring authorities. Q318 Mike Freer: To follow that through, obviously it is quite easy to say that you will encourage volunteers to run that library because it is a physical entity concentrated in one area. What if you have to produce, say, meals to the Hindu community, which is scattered across a very wide area? How do you cope with that where you have small clusters and do not have the critical mass for localism? How do you

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encourage localism where the service delivery is so scattered? Cllr Green: That is an excellent question that is difficult to answer. Dr Povey: We are feeling our way on a lot of this. Although there was some impetus there before the Localism Bill, it will play out over the next two or three years. I think some of the questions are quite hard. Q319 Mark Pawsey: We have spoken quite a bit about variation in service level. I think it took five or 10 minutes in today’s evidence session before somebody spoke about the postcode lottery. We have already heard it referred to in this particular part of the session. First, is it a problem that you get variation within an authority, because in some areas it has been devolved down to a local community to deliver the service but in other parts the council may have retained that responsibility? Second, does it matter if there is variation between one authority and a neighbouring authority? Following on from that, just how much variation will people be prepared to tolerate? Dr Povey: Unfortunately, the press loves the phrase “postcode lottery” and that tends to be picked up, but as the leader of an authority it is our job to decide on the level of service that should be provided within our authority. If at the end of the day it is different from Kent next door or from Lancashire, so be it; that is the political choice we should be making within our authorities. I do not have a problem as between authorities. In Surrey clearly there will be differences in service because the northern half is rather urban and the southern half is rural, so in some senses there will always be differences in service. For instance, the performance of the fire service in terms of response time will be different in the most rural parts of Surrey compared with the middle of Guildford. There is an acceptance of that kind of difference, but these are political choices. If you have strong leaders leading the communities then you will get differences between them, and quite rightly so. Cllr Green: Again, my response is quite similar, but I disagree with the argument that localism will create a postcode lottery. We have a postcode lottery now because a central state has tried to impose the same levels of service right across the country. We have different communities with very different needs, even in just one county never mind across the whole of England and Wales, so I disagree with that. We already have a postcode lottery. Localism means that we can channel and tune those services according to the need of the individual communities, so it will be much more focused upon what our residents actually need. It may well result in differences of services. My personal viewpoint is that I do not see a problem in that as long as there is a clear political view that that is what the communities want, but there is an issue of the media and we must also be aware that residents in some cases think that the same service should be provided everywhere. We have to bear in mind that, for instance, local authorities and councils are probably the most efficient part of the public sector and yet at times the public does not see that and still

thinks it is inefficient; it does not see the improvements that have been delivered. Q320 Mark Pawsey: If you are comfortable with variation are you comfortable with service provided in one part of your county and not provided at all within another because that is not what localism has determined as a consequence of consultation with residents and community leaders in those sectors? Dr Povey: We already have it, because I discovered only the other day that we have a meals-on-wheels service in part of the county and not the rest, and I do not quite know why. Q321 Mark Pawsey: What do those who do not have it think about it? Dr Povey: As I say, I discovered this only the other day; because it is done in conjunction with the districts and boroughs, probably in this case in that example it is more the district or borough that has made the decision, although the county subsidises it. Q322 Stephen Gilbert: We have shone the spotlight on local authorities a lot this afternoon, but do you think the Government is doing enough to challenge the centralising tendencies of Whitehall itself? Dr Povey: We would like to see more power devolved to local authorities. If I look across Surrey and at where most public expenditure is, I think the piece that is missing from the link is the DWP. I think that is the bit I would like to see. If in future you are to concentrate on those particular complex families that cost an enormous amount in all sorts of areas of public expenditure, you need the DWP on board. That would be the most obvious one. Cllr Green: I welcome what the Government is doing. The general direction in terms of localism is correct. There have been a number of new initiatives and policy announcements that go broadly in the right direction and I applaud those. The Government can go further. My starting point is that local authorities can deliver more, and more efficiently, than central government. If you give us the tools to do the job, to quote someone, local authorities can get on and do that. We need more funding but it is being cut back. Maybe that is something you can look at in Parliament over the years ahead. I would also sound a note of caution. Sometimes localism can go a bit too far. I give the example of free schools. The Government wants to remove the need for planning permission for free schools. You have to temper that with caution, because it means that any building in a public area can be converted into a school, but if you change it from a business, say a shop, into a school that brings different challenges to the neighbourhood: parking and road safety difficulties. If you remove a business or a shop and convert it to a school, that has an impact on the economy. All those factors would normally be factored into a planning application, and planning consent could be given or not, as the case may be, having regard to all those. If we go ahead with the Government’s wish to provide that freedom to communities to set up schools without needing those planning consents, while I understand where they are

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coming from, in practice difficulties may be caused for the community as a result of that. So temper that with a bit of caution. In general in planning there seems to be a move away from a need for planning permission based on a central structure and towards bringing it down to a more local level. Again, I would welcome that in theory, but there is a note of caution. Take the example of a quarry. In 99% of cases a local community will not want a quarry in their area but strategically there may well be a need for it on a regional or sub-regional level. If you take it down to local level you may not get it. That would be my note of caution. Q323 Stephen Gilbert: What do you think central Government is left doing in the new localised world that we are going into? What will the central Government Departments be doing? Dr Povey: It is clear that some functions would not come down to local authorities, but central Government has to set the framework and the overall direction. You are a set of politicians, so you have a set of priorities; that is what you should be setting out for us to deliver within our own local frameworks. Q324 Stephen Gilbert: So, we at the centre should be telling you what to deliver? Dr Povey: No. You have to set out themes, if you like, rather than detail. Cllr Green: Whitehall is not set up as a delivery vehicle. What we need is guidance from Parliament as to what kind of issues we need to look at, not so much how to look at them. Therefore, it is what, not how. It is key that we should have minimum standards, because nobody wants services to residents to fall below that standard. We need minimum standards, guidance on them and perhaps the structures to scrutinise and give support for commissioning and accountability, but then to give freedom to local authorities and communities to get on and deliver those services. Q325 Stephen Gilbert: Is there not a conflict there? What if the minimum standard is weekly bin collections and the local community says it does not mind all the hoopla and it can deal with fortnightly bin collections? Dr Povey: That is an example of where the centre is trying to over-specify, shall we say. Q326 Bob Blackman: Looking forward a couple of years, the Localism Bill becomes the Localism Act; community groups deliver some services; parish councils determine this and district councils ask for that, and you sit at county level. Where do you think the democratic oversight comes to make sure that all of this is transparent and is delivered? Dr Povey: You clearly have democratic oversight at all three tiers of local government, so that is in place. Certainly, Surrey has gone very much along the route of openness and transparency within all its dealings. As Michael said, we are webcasting and publishing everything we can so you have as much information as possible for the public to make those judgments on what you are doing.

Q327 Bob Blackman: As an aside, how many people actually watch the webcast? Dr Povey: I accept that at the moment it is hundreds rather than thousands. Q328 Bob Blackman: What delivering that? Dr Povey: It is negligible.

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Q329 Bob Blackman: Cllr Green? Cllr Green: I think we could expand the role of scrutiny committees within local authorities to make sure that accountability is there, and there is a possible argument for saying we could expand the Select Committee role into councils around the country because, no matter which way we look at it, a lot of funds will come from central Government. Presumably, Parliament will want to maintain some level of control over those funds and ensure that every pound is spent wisely for the good of the residents of the country. Perhaps there is that overarching scrutiny role and possibly joint committees set up with councillors and even the local MP. That kind of model exists in other countries and it could be role-modelled in parts of this country to see how it works in practice. Q330 Bob Blackman: Cllr Povey, your concept seems to be very much about the enabling council and delivery. How do you think central Government can bring in, say, health care and other things? As council leader would you be prepared to be responsible for the delivery of health care at a local level? Dr Povey: Yes, very clearly. The changes that are coming give us the responsibility for public health. The formal term is the Joint Strategic Needs Assessment for the area, which really will define what health commissioning should go on. I am very enthusiastic about it. Q331 Bob Blackman: I believe that Surrey PCT has gone through some financial challenges. Dr Povey: Yes. Having had a session with the chairman of the PCT very recently, I think he has those under control. We are starting our conversations with the GP commissioning groups. There must be a bringing together of health, adult social care and children’s services in particular. I think that for large county authorities like ourselves that is where they need to come together. Q332 Bob Blackman: Do you consider that to be an opportunity for the future? Dr Povey: Yes, very much. Q333 Bob Blackman: Cllr Green, from your perspective do you think that the Government localism agenda will drive away from the primacy of local authority control down to those who are not subject to local authority control? Cllr Green: To an extent, possibly. You have to be aware of the potential democratic deficit, because there needs to be that accountability. Ultimately, as councillors or MPs you have accountability to the public via the ballot box.

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Q334 Bob Blackman: How much of that is a problem given that local people may say, “The council are not providing this and councillors are not doing their job. We want to get on and do something and want people to stop interfering”? Cllr Green: If that is the starting point for a local community group to do something because the council is not providing the service, I would argue that that is

fine. If it is from the point of view that the council is providing the service but that community group wants to take on the running of it, that is a different argument, and then you must be aware of issues of accountability and make sure you have some level of accountability. Chair: Thank you both very much indeed; it was an excellent session.

Ev 96 Communities and Local Government Committee: Evidence

Monday 24 January 2011 Members present: Mr Clive Betts (Chair) Heidi Alexander Bob Blackman Simon Danczuk Mike Freer

David Heyes George Hollingbery James Morris Mark Pawsey ________________ Examination of Witnesses

Witnesses: Baroness Eaton DBE DL, Chair, Local Government Association, and Simon Parker, Director, New Local Government Network, gave evidence. Q335 Chair: Good afternoon, Margaret and Simon. Thank you very much indeed for coming this afternoon to the seventh evidence session of our inquiry into localism. Margaret, you have been before us several times. Simon, you are probably here for the first time, certainly in your new capacity. Simon Parker: Absolutely. Q336 Chair: For the sake of our records, please say who you are and who you represent. Baroness Eaton It is a pleasure to be here at the beginning, although I do not know whether we will say that when you have finished the grilling. I am Margaret Eaton and I chair the Local Government Association. Simon Parker: I am Simon Parker, Director of the New Local Government Network. Q337 Chair: You are both welcome. Perhaps we can begin with something in the Localism Bill that I know has been a particular issue for the Local Government Association: the general power of competence, or the power of general competence—I do not know whether there’s a difference between them. Will the power in the Bill make a profound and lasting difference to the relationship between central and local government? Baroness Eaton: Certainly, we have been pushing for this power for a very long time and we are absolutely delighted that it is in the Localism Bill, which was one of the first measures to come forward for the statute book. It is important because it encourages localism in a way that the wellbeing powers did not. You will remember that the wellbeing powers were challengeable. You will remember the occasion when local authorities wanted to set up mutual insurance. They were challenged and that could not happen. The last thing we want is to put something on the statute book that is challengeable in that way, because it prevents innovation and local authorities truly fulfilling the localist agenda. We have concerns about the number of occasions when the Secretary of State has the opportunity to intervene and make orders. Some of the language is “local authorities may have a standards board”. There should not be any “mays” if it is truly a power of general competence because they should be able to do everything without being told they may do it. Therefore, that is slightly at odds, but we believe it is something that really should be welcomed. I hope that at Committee stage, there will be challenges around

the number of occasions, of which there are I think 142, when the Secretary of State can possibly intervene and suggest ways of doing things. We do not want a Secretary of State to tell us what’s local and how. I am sure the intention of the Secretary of State was to give powers to local authorities, and I the Civil Service drafting and interpretation has perhaps not gone along with the intention, as far as I see it. Q338 Chair: We may explore the actual Bill in a little more detail in a minute. Simon, what do you have to say about the power? Simon Parker: We have also enthusiastically welcomed power. Over time it will provide much more space for local innovation. It is a very important philosophical shift. It does not just give local government more powers; it says that it can do anything an individual can do as long as it is not banned by law. There is a big question about whether or not this will be a game-changer. Are local authorities clear about reserved powers and what the Secretary of State might do to limit their use? I think that if it is to be a game-changer, we need real confidence and clarity from local government about how much they really can use this power. Q339 Chair: In your evidence, you said that the powers had to be seen in the context in which they were given, i.e. there is already a lot of legislation which directs what local government should do or prevents them from doing other things, and at the same time there ought to be a revision of all that legislation. Therefore, the power would be much greater if a lot of those restrictions were taken away or the directives were modified. Simon Parker: Clearly, many of the innovative things local government might want to do are already limited by statute. So if the existing statute remains in place that limits the scope of the power. Baroness Eaton: And, surely, it will mean that lawyers will fear challenge all the time because there are two conflicting sets of legislation. Q340 Bob Blackman: I declare a slight interest because I was the lead member for resources on the London Borough of Brent. That was the lead authority on local authorities’ mutual insurance and I still have the scars to prove it. My concern, on which I would like evidence from your respective organisations, is whether the general power of competence as currently

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framed in the Bill will be sufficient to allow mutual insurance to go ahead in future, for example, or many other aspects that would be financially beneficial to local authorities and local people. Baroness Eaton: It goes back to what we said about the ability of councils to be innovative. That is what all of us want, because everywhere is different, but unless it is absolutely clear that the Secretary of State and the existing legislation do not create a situation of challenge, it limits the opportunities that will flow from it. Q341 Bob Blackman: To press you a bit further, in the view of the LGA, has the clause as currently drafted gone far enough, or does there need to be some change to it to improve the position? Baroness Eaton: I would hope that at Committee stage those points would be made and there could be some amendment to override in some way, if you like, the prescriptive nature. I would have thought that all of the prescriptive legislation would be removed before the power of competence was introduced. I thought that would be the intention, but either I misunderstood or it has not happened because of legal drafting. Q342 George Hollingbery: To turn the question upside down slightly, over a number of weeks that we have been running this inquiry we have heard a lot of evidence about innovative councils doing all sorts of interesting things. I would like to ask you what it is councils cannot do at the moment and which this will free them up to do. What are the grand themes they will suddenly plunge into if this competence is allowed? Baroness Eaton: That will arise as things develop, because you do not get true innovation if people are constrained by legislation. They can be innovative to a point, but mutual insurance was something quite new that arose out of a particular time and need. There will be things that come along. Particularly in the present climate, where local authorities are anxiously managing less resource, they may find things they want to do. For instance, if a number of local authorities want to share a contract to do something to save money, I am not sure the present legislation allows that. Therefore, that would be one thing, but there will be things that none of us has even thought about. Birmingham or Saffron Walden might think of doing something they have never been able to do before because of constraints, so it would free up that thinking and ability. It is not that we are saying we need to do this and this; it is just that we need to be able to have freedom to develop what is necessary for our areas. Q343 George Hollingbery: Forgive me for pressing you on this. I am slightly surprised by that answer—I really am. I would have thought there would be projects straining at the leash, where they have had these fantastic ideas but just cannot make them happen. It does not seem to me that is the case. Is this perhaps a case of, “We’d like to have that power stuck there just in case there’s something we think of, but

there’s nothing banging at the door urgently saying, ‘If only we could it this way’”? Baroness Eaton: I just mentioned that one of the urgent things is the ability to join up and do contracts across the board, which you cannot do at the moment, to save three different councils having different contracts to deal with a particular issue, whether it be home care or whatever else. They cannot do that at the moment. So there are those kinds of things. But local authorities do not just go down the route of saying, “This is a major scheme we would like to do but we cannot do it, and it’s ready on the shelf,” because it is costly of time and officers’ commitments. So you would not embark on something unless you knew there was some benefit at the end and you would be able to deliver it. It would be a seed of thought in somebody’s mind. Simon Parker: I would echo much of what Baroness Eaton has said. I think it is in the nature of permissive powers like this that, with the right kind of amendments to the Bill, they will embolden local government to do more innovative work. We very much hope that, because local government will have this power, other parts of the local public sector will come to councils with innovative ideas; they will join up more things and this power will support that process. The hope is that, particularly in a time of cuts when a lot of councils will be looking for innovative ways to redesign their services, this power will strengthen and embolden their will to do so. Q344 Heidi Alexander: I am sorry to press you further on the issue of projects that might come forward as a result of the general power of competence. Baroness Eaton, you referred to the possibility of joint contracts. From my own experience, I am aware that the London Boroughs of Lewisham and Croydon have a joined PFI contract for the replacement of street lighting. My understanding is that there is some capability. In addition to the example of joint letting of contracts, or one contract across a number of boroughs, what other examples can you give us about these kinds of things? I appreciate what you said earlier—that it enables innovation and cultural change—but are there other examples? Baroness Eaton: There would be things coming forward that I would consider around partnerships, as you mentioned, with people who are not local government, or even the private sector, in a way that has not been done before. Q345 Chair: When you gave evidence to the Political and Constitutional Reform Committee you talked about perhaps trying to take things a bit further. The general power of competence could sit alongside a duty to devolve, and you could therefore have local authorities who felt able to say, yes, they would like those powers to be passed down to them and maybe you would do it by locking it in with a referendum of local people who say, “Yes, we want our councils to do it.” In that way, you could give a degree of permanency to a localist agenda that perhaps is not offered at present.

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Simon Parker: That speaks more broadly to what we think are some of the next steps for the localism agenda. The Bill has lots of good stuff in it, but there are some very big things left to do. We talked about having a referendum to lock in some kind of constitutional amendment, which I think is important, because if we are to do localism on a sustainable basis it needs to be done in dialogue with the public. The public must be part of the conversation and I am not sure they are as yet. I do not think they quite know what is coming down the track towards them. But there are two obvious further things we would like the Government to do to lock in localism. One is around local government finance. We would like to see a much more sustainable financial settlement. Q346 Chair: We shall come on to that later. Simon Parker: There is another one about the right to bid, but I can leave that till later. Q347 James Morris: One of the advantages of this inquiry is that we have a Localism Bill to respond to. Baroness Eaton, I was intrigued by the LGA’s response to the Bill. You said that “the drafting demonstrates how challenging it has been for the Whitehall machine to translate Ministers’ policies into legislation”. That is quite an intriguing comment. Can you expand a little on what you meant by that? Baroness Eaton: Yes, I can. From the sector’s point of view as represented by the LGA, we have talked a great deal with the coalition Government about the whole objective of a Localism Bill. I have a quote handy. In October of last year, the Secretary of State said: “The years of government interference and micro-management are over. Instead, we are starting an era of genuine local partnership. This is all part of my campaign to replace the command and control approach to local government with genuine localism.” It was very clear that there was no command from the top; it was about local decisions involving local people and localism. Q348 James Morris: Do you think the Secretary of State has been captured by his officials? Is that what you mean? Baroness Eaton: Well, I would say that most Ministers must respond to advice. Sometimes we wonder whether the advice is perhaps as flexible as ministerial thinking. Q349 James Morris: Mr Parker, what do you think about the Localism Bill? Simon Parker: I think the Bill is a good start and contains some very welcome provisions. We have already talked a lot about the general power of competence, which is to be welcomed. Obviously, we would like to see some tweaks, but broadly it is a step in the right direction. There is a lot of good stuff in it on decentralisation, and the right to bid to run services is very interesting. Some things in it we are not quite so keen on, for instance council tax referendums. Q350 James Morris: Do you think it is a coherent Bill? One of the criticisms is that it is a hotch-potch; it tidies up here; it offers a little bit there; and it does

a bit on the other side. Do you think there is coherence in the Bill? Simon Parker: It is a very good question. To my mind, this Bill is very much a CLG Bill and it affects CLG’s responsibilities. Q351 James Morris: Does that take us back to “being captured by the officials” point? Simon Parker: I do not think so. I think there is some ambitious stuff in there; I think there is some localist stuff in there. What I mean is that it is not an acrossgovernment approach. Some of the big things that you would want to do to embed localism, like the finance stuff, is not necessarily in the gift of the Department. If you want a consistent localist strategy, that is not something you can get solely from DCLG, and I think this Bill has come largely from DCLG. Q352 James Morris: I want to ask about the number of orders in the Bill that Baroness Eaton mentioned. Baroness Eaton: There are 142. Q353 James Morris: Is that not a bit exaggerated? Is it not obvious that in a Bill that needs a legislative framework in the context of what it is trying to do, there is a need to have orders that the Secretary of State, in the circumstances, has power to execute? That really does not cut across localism. In some ways is that not a bit of a non sequitur? Baroness Eaton: Some of the things that are coming up from those are, for example, around the referendums. The Secretary of State has the ability to decide what is localist—what is a local issue. That is the top telling local people what are the important local issues. To me, that seems a very inconsistent and unnecessary potential order within the Minister’s gift. There are examples of that. A lot of the things referred to are very, very local, like community assets. The Secretary of State decides what is an asset of community value. I would have thought that the people in my ward are more likely to know what is a valuable asset to the community than the Secretary of State. Q354 James Morris: How often do you think he or she will use that particular power? It seems to me there are times when the Secretary of State or an arbiter of some kind will be required to step in to make a judgment. You mentioned referendums. I think I am right in saying that the Bill provides for local authorities to make up their mind as to what is and is not an appropriate issue for a referendum. A local authority can reject the idea of having a referendum on a particular issue, and then it can be referred to the Secretary of State. There needs to be an arbiter at certain stages, does there not, and that is why a number of powers are prescribed in the Bill for the Secretary of State? Baroness Eaton: But then what is the point of the power of general competence? Either you believe that each area can be competent to deliver for its residents—that will create variations, because no two places are alike—or you have centralist diktat.

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Q355 James Morris: I totally understand what you are saying. I am very much in favour of localism, but all of us who have been local councillors know there are tensions, and sometimes what a local community considers to be an appropriate thing on which to hold a referendum is something about which a local authority has a different opinion for perfectly good reasons, and there needs to be an arbiter. There will be times when the Secretary of State will need to step in to make a judgment, will there not? Baroness Eaton: There might be a few, but I think 142 is rather a lot. Q356 James Morris: That is a fair point. Baroness Eaton: When you look at what they refer to, in my assessment not all of them are ones that necessarily fall into that category. Q357 Heidi Alexander: On the new powers to make regulations and issue guidance, if you had to name the top five in the Bill to get rid of, what would they be? Baroness Eaton: I would not like to say; I think it would be an unmeasured response. Q358 Chair: Drop us a note about it afterwards if you want; and you can give more than five if you like. Baroness Eaton: I can give you a very good example. There are issues around the housing revenue account, which has been a disaster for years. We are absolutely delighted that it is going to be addressed. But what is of major concern within that is that if local authorities choose to buy out of the housing revenue account— fine, finished—the Secretary of State can come back and demand extra payment. It is as if you have paid £300,000 for a house and the person who sold it to you can come back a year later and say, “By the way, it is now worth £400,000 and I want another £100,000 from you.” Those kinds of things are very prescriptive and controlling and are not particularly helpful around innovation. Q359 Mike Freer: I put a quick question. You can write to me if you do not have the answer at your fingertips. Is there evidence anywhere in the world of any local authority structure that has gone down this path and it has worked? Simon Parker: I am not aware of such evidence, but that does not mean it does not exist. Baroness Eaton: Nor am I, and other places are very differently structured from here. You mentioned finance. I know that the Committee was looking very much at community budgets and Total Place. You referred to CLG not being the only Department and other Departments also need to be involved, so we can get too localist a determination about how services are provided by the multiplicity of funding by Government. That does not seem to sit very clearly in the Bill either. Q360 Mark Pawsey: From what we have heard so far there seems to be less enthusiasm now you have seen the Bill than the account you gave prior to its publication. One of the key objectives of the Bill is to sustain greater democratic participation. We have seen levels of participation fall. Simon, you said earlier that

the public had to be part of the conversation, and in your written evidence you point out that only one in 10 people become involved in civic activism. We know that 30% of people actually vote in local elections. From what you have seen of the Bill, will it increase participation in local affairs? Simon Parker: I think it has the potential to do so, particularly with the decentralising parts of the Bill, so especially things like the right to bid, the referendums to some extent and the mayoral reforms. Those have the potential to engage people more in civic activism. I should not sound too pessimistic. In the written evidence, we highlighted the fact that at the moment people were not engaging. That is true and we need to change that, but we must also recognise that arguably we have had 40 or 50 years of creeping centralisation and disengagement. It will take time to re-engage people. I think this is a reasonable start. Q361 Mark Pawsey: Therefore, you subscribe to the view that there is a mass of people simply waiting to be involved who will come along and grasp all of these great opportunities rather than that they will become involved only if something affects them immediately? Simon Parker: I do not know there is a mass of people. I think there is evidence that quite a lot of people would like to get a bit more involved and that there are some barriers to that: lack of confidence and free time; and they do not have opportunities. So there are things we can do. One thing we are working on at the moment is to try to understand the kind of financial assets in localities. Obviously, the amount of money councils have is being cut, but we also have social assets. We have things like people’s free time, like social capital. One role that we think local government should grasp over the next few years is a role in managing and building that kind of social capital, civic trust free time, because then people will want to get more involved and be able to volunteer. We will build a stronger society and people will be more engaged with their local authority. Q362 Mark Pawsey: From where does your figure of one in 10 come? How will you measure a change? If we are looking five years down the road, will we be able to say that this has succeeded in what you would like to see happen? Simon Parker: I cannot recall now where it came from. If it is not footnoted in the evidence, I will send it through. How do you record an improvement? It will hopefully be considerably more than one in 10. Baroness Eaton: One thing it will do is make people more readily available and willing to stand for council, and to be a councillor where you can make a difference in your community, rather than feeling that you are responding to restrictions. You know what the community would like you to deliver but there are rules and regulations and boxes to tick and you cannot be the community representative, which is the reason most people become councillors. I am perhaps lucky in that my own ward, which obviously I know best, has five very distinct villages and communities. I suppose that because of community spirit, there is

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already a groundswell of people actively involved in doing things like village plans and taking part in and having a very active life in the community and working with their elected representatives. My experience has been very positive, although I recognise that in some places there will be far more willing and able people. If you live in a place where most people commute and come home very late at night, very often they will not want to go out during the week to take an active part. They will perhaps want to be active only when they see something going wrong.

authorities that have been very ambitious and innovative in small ways, but it is also about confidence. To go back to what we said earlier, you cannot necessarily see a need and be able to do something about it if the legislation gets in the way. As you say, it is about scale. It is usually the big things like the insurance scheme, which would have been amazingly useful but could not happen. On those things local authorities are stymied. There are lots of smaller things they can do, but for some of the larger challenging things, they need the Bill.

Q363 Mark Pawsey: But will the provision of this Bill assist that? Will it make it easier for those people to get involved? Will it incentivise them to get involved? Baroness Eaton: They will feel that they have more impact and input. I know that you are going to talk about finance in a minute, but one thing I have noticed is that people ask what difference it makes because the council tax is the council tax. The Government will give you nearly three quarters of it and it is all decided what it is spent on, whereas if it was very much more local, people would recognise that they had control over what they were paying out. Simon Parker: This is increasing the supply of opportunities to participate. I think the next step is to increase the demand for those opportunities. Baroness Eaton: Yes; I agree with that.

Q365 Mike Freer: Is there a risk that councils can use localism to disengage if the community will not step up? Simon Parker: When I speak to local authorities and look at the evidence we have gathered I do not think that is what councils will use this for. Is it theoretically possible? Yes, of course it is, but I do not see many local authorities that look to do this. Baroness Eaton: Why would they want to? They are not members because they want to sit in a council chamber at boring meetings; they are there because they want to do something about their community. They certainly would not want to go along and listen and then say, “Let’s not”, and back off and do nothing; they want the opportunity to say that if they do not want it they will not do it. Part of leadership is to help people to make difficult decisions that are sometimes necessary for their communities. We have all had it. You do not just avoid it; you have to deal with it.

Q364 Mike Freer: We have had some evidence that the Localism Bill is not required; that already good councils do this and it is really a state of mind. Can you think of any exemplars where councils have already done localism? Is there not a risk that a council can use localism to say, “Well, if the community doesn’t want to take on this service, we’ll simply close it down”? Those are two questions. Are there any exemplars and is there a risk of services closing if the community does not step up? Simon Parker: I suppose there are two exemplars of the kind of community participation we are looking for. One is Balsall Heath Forum in Birmingham, which has been quite a successful form of community governance. I am not an expert on it, but it appears to be an interesting example of the kind of reform we are talking about in terms of neighbourhood governance. I also think that some of what we have seen in the movement towards participatory budgeting is an example of what we are talking about here. In terms of whether or not the Bill is necessary, there is a question about scale. It is certainly right to say that probably there is not much in the Bill that a local authority somewhere is not doing in some way. The question is one of scale. Are we now moving towards turning some good exemplars in some places into a new way of doing governance? A difference of scale is a very important difference. Baroness Eaton: It would be a very brave chairman of a membership organisation who picked out individual councils as being better than others. If you look across, a lot of local authorities are being innovative. There are always those who could do with a bit more innovation. I know of a number of

Q366 Mike Freer: To follow that through, given the scale of cuts in local government funding, is there not a danger that some councils will say they have to close a library unless local people take on its running or staff it for at least half the time? Baroness Eaton: It depends on how you approach it, does it not? If you say to a group that you will close it unless they do that, you need to take people with you on the whole issue and the pressures the council is under, the statutory things that need to be done and the priorities for them. If you say, “These are the options with this pot of money and these are the costs. Which of these are really the critical ones, because we cannot do all of it? Do you want to take part and use volunteers?” they may say yes. You are not telling them they have to do it. If you are a localist you are listening and sharing the issues with them and working with them to resolve them. Q367 James Morris: I want to focus on one area of risk to which Mike referred: timing. Is there not a danger that, in the context in which the Localism Bill has been presented—a time of significant reductions in local government expenditure—if it does not deliver what people expect it to deliver and is generally perceived to have been localising the chop, for want of a better phrase, it will set back the cause of localism for a generation? Simon Parker: I think that if it is seen as localising the chop then that will be the case.

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Q368 James Morris: We are hearing a lot of that from the wider local government community, especially in the context of the reductions. Simon Parker: If it is seen as that it will be very disappointing, and undoubtedly it will harm the localist cause. I do not think that is what will happen because, if I look at what a lot of local authorities are doing, they are starting to look at how they transform their services and how to innovate and do things differently. There are some powers in the Bill that will help them to do that; there are other powers not in the Bill. We have talked a little about finance. There is also what we have described as a right to bid. We would like local government to be able to bid to run central services where local government can prove it can run those services better. That would help; it would give that kind of Total Place budget dynamic, which will help to transform services even more. The key to it—it is certainly what my organisation is trying to do—is to encourage and support local government to innovate and for central Government to provide the right kind of policy context for innovation so that these cuts are a spur for finding new ways of doing things and not just for producing cheap and nasty services under the guise of localism. Baroness Eaton: I completely agree with that. It would be tragic if people thought it was just managing the chop locally, but it does give freedom to do it differently. It is a challenge. but the challenge in Harrogate will different from that in Bradford, and at least they will have the opportunity to manage the difficulties appropriately for the place.

it will weaken it as well. How will those two things fit together? So the kind of support that we will be giving is to work with local authorities and to bring to bear our research expertise to try to puzzle out what it will mean to be a councillor and political leader. I think it will mean something quite different from the kind of elected service managers we have seen in the past, because most councils will move down the commissioning route and share their services. That model, which I caricature, where back-bench councillors walk around their patch looking for bins that have not been emptied so they can take the complaint back to the council, will not work in the future, so we need to work out what will. Baroness Eaton: As an organisation we have done a lot on topics like community budget and Total Place, and issues around more localised services and how you manage that. But I think many local authorities now look at recreating services in a different way and doing social enterprise, which is working with communities for solutions to some of the services that are required to be given in a different way. The organisation also spends a lot of time on member development and training. We have arms of the group which deal specifically with leadership training and training for councillors—“training” is the wrong word; it is “development”—so they can know the issues of the day, the implications of legislation and what it will mean for their roles. I think that when people see the nature of what they can do in communities, there will be very many more people willing to stand for councils than perhaps there have been in the past few years.

Q369 Bob Blackman: Part and parcel of the Bill is not just devolving responsibility to local authorities but devolving power to local people. Clearly, there is a challenge here. Certain local authorities may perceive this as a direct challenge to their authority and seek to deny people a say at local level. What support and assistance will your respective organisations give to enable local authorities to recognise the value of devolving further down, and what else needs to be provided by central Government to make that happen? Simon Parker: In terms of the support we provide, the big thing we are to develop next year is what we call the Commission on Next Localism, and it reflects the fact that we believe the agenda for localism and local government has been very much shaken up over the past year and that the Government do not have the clear long-term vision for the future of local government that we might have expected from past Administrations. As several MPs have pointed out, the approach is one of creative destruction: if we shake everything up, local government will be forced to change or risk slowly becoming irrelevant. One thing we are doing as part of that commission is to look at the future of local democracy, which has been rather neglected by researchers. Clearly, as you suggest, one thing that is happening at the moment is that we are very much challenging the role of councillors as representatives. That potential explosion of direct democracy will certainly challenge representative democracy but the question is whether

Q370 Bob Blackman: I am interested to hear you say that. Mr Parker, you cut off at the end. At the moment, most non-executive or non-cabinet member councillors feel completely isolated. Often I think they see their role as wandering round their wards to find out what the problems are and reporting them to the authority to get them fixed. What you did not go on to say was what you believed would be the role of those councillors in the future. Clearly, they will need support to get to that role. Where do you see them acting in future? Simon Parker: We shall be doing some research on this and I do not want to prejudge the results of that. It seems to me that probably there is a role there that is about civic entrepreneurship. I talked earlier about building social resources and social capital trust. A lot of back-bench councillors have started to do that already, particularly when they have things like ward budgets. They set up projects that build up the capacity of their communities. I think that increasingly that role will be about almost working like a community entrepreneur and then bringing that back into the council. Q371 Bob Blackman: To press you, do you see them being decision-makers about the services being provided in their wards? Is that where you see this going? Simon Parker: I think that could be part of it; it will vary in different areas. For instance, one of the interesting ideas to explore is whether, if we are to

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share services across several local authorities, it means that wards or neighbourhoods can commission variations in those services. If I am sharing services across a couple of counties, does that mean that each village can choose a tailored refuse collection or street-cleaning service? If you did something like that, where the extra costs of the tailoring are offset by the scale, then that is about ward councillors having quite a big say in how services are delivered in their areas. Certainly that could be part of the role. Q372 Bob Blackman: Do you agree with that, Margaret? Baroness Eaton: I do. I think that looking at things like community regeneration is a valuable role for local councillors, because they know their area and their community’s needs. At the moment, with the legislation and thinking around being less centralist, you find organisations like the church, the council, future builders and others coming together. Q373 Bob Blackman: Can you be a bit specific on the issue of individual councillors? Baroness Eaton: Sorry, their role? Bob Blackman: Yes. Do you see any limitations? Baroness Eaton: There are always limitations when human beings are involved because they are not all coming out of a mould. I think the opportunities are there and inevitably some people will rise to the challenge more than others, but I think it is a very good opportunity. I do not know any councillors who in my experience would not rise to that and be absolutely excited at the prospect of being actively able to do something in their ward. In many councils we now have delegation of budget. In my own, you get highway money to manage highways according to the needs of the rural part of a very large urban area. There are lots of areas that can bring councils into decision making. I think there are plenty of opportunities and they will be grasped. Q374 David Heyes: Whatever the role or functions of councillors now or following the Bill, I guess you subscribe to the view that a democratically elected authority should have a pre-eminent position in any locality. Baroness Eaton: Yes. Q375 David Heyes: Do you think the Government share that view? Baroness Eaton: Is that because you think the role of elected mayors might blur the two roles? Q376 David Heyes: I am not really focusing on elected mayors. I think we come back to the lack of definition of what localism is. Is it just decentralisation to the lowest level regardless of the democratic role or, at the other extreme, is it just enhancing the power and status of local authorities? Which of those is it? Is your view of the world, which sees an important and continuing role for local democratically elected authorities, really what the Government want to achieve through the Localism Bill?

Simon Parker: That is a very good question. I subscribe to the view that elected local government is critically important. I find it hard to imagine how you can do localism without local government. The idea that you will have just a direct relationship between the centre and the citizen is absurd, but the Government are introducing new forms of direct democracy, which are challenging to local government. I think local democracy will remain very important just because I do not think we have a convincing alternative. No matter how much direct democracy you introduce, you will still need locally elected councillors to take a strategic view across the area and make trade-offs. Do I think that what the Government want to see happen is stronger locally elected government? You would have to ask them. It would be good to hear them talk a little more about that role, because I do not think we have heard a great deal from them about strengthening the role of officials elected to local government. I would like to hear a bit more about that. Q377 David Heyes: Do you want to add to that, Margaret? Baroness Eaton: I also feel that without local democracy, there is no real accountability—for financial things particularly. The business community and many others would have serious concerns if there were no framework of democracy within localism, and how they related and worked with, as you say, groups that are not accountable in the way local democracy is. Q378 George Hollingbery: We have already mentioned the idea of local government financing and devolving power down. Can you truly have local democracy controlling itself without it having substantial tax-raising powers, certainly much more substantial than now? I want to get a bit more detail on that. I want to turn to another devolved local power: the Total Place project and whatever you want to call it running on from here. I would like a quick comment about how the pilots are going out in the communities. Have you heard anything about those? More particularly, do you think Whitehall truly gets it? Is Greg Clark running up against a massive brick wall here? He does not think so. Recently, we asked him whether he thought it would all work happily. He was smiling away and saying it would be great. Some of us are not particularly convinced. We are to take evidence from the Minister for Work and Pensions, and in a moment we will be taking evidence from the Minister for Policing. What sort of reaction do you think we will get from them? Simon Parker: On finance, we have been very clear: we would like to see local government raising more of its money locally. It seems to us that, at a time of cuts, local government needs to be able to have an honest and open conversation with local people about what services should be delivered and how they should be paid for. That is very hard to do when you do not raise much of your money locally. We would like to see at least 50% raised locally, and ideally a good deal more. The business rate is undoubtedly part of that, but we would also like to see greater freedom

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for councils, where their citizens support it, to engage in more charging, particularly where that is meanstested, and to engage in more trading and be more entrepreneurial. We would like to see not only more money being raised locally but for that money to come from a much more diverse and buoyant range of sources. Q379 George Hollingbery: To intervene quickly, does that not lead to the potential for two-tier councils, so we have some councils that are flexible, well-funded and can rely on their local electorate to fund everything and are responsible and accountable, and those that still rely on central Government and are tied to their apron strings? Simon Parker: I do not see that it need do. We do not need quite as much money as central Government currently dole out to equalise. You can do that with less. I am not sure what the exact figure is, but I am sure I could dig it out. There is no reason why you could not give local government more freedom while still equalising. There is no reason why you couldn’t do that. Moving on to the Total Place issue: if you are looking for a game-changer for local government, finance is one part of it and Total Place is the other part. Those are the two things on which I would like to see the Government move next. The way we have started to think of Total Place is through this idea of a right to bid. The idea is that local government should be able to bid on behalf of communities, basically, to get aspects of central Government money. Perhaps that is for Jobcentres and dealing with the problem of worklessness; perhaps it is for criminal justice, but they should be able to bid and the Government should have to respond to that. If a local authority can show that it can join up services and commission them in a more efficient way, it should be able to get hold of that budget. The presumption should be, in line with our idea of a duty to devolve, that that money will be devolved unless the Government can make a convincing case for keeping it. Q380 George Hollingbery: The Minister told us in plain words, “I am sitting here waiting for the ideas to come pouring through my door.” Therefore, local government can write to him at any stage, and he will facilitate things to help that happen across government and perhaps go out and write the cheques. I am not quite sure how it will work. Do you think that will happen? Is Whitehall really going to give up the control? Simon Parker: The idea of the right to bid means that Whitehall will have to give up the control. If a local authority asks for that budget, central Government will have to come up with a convincing case for not devolving it. The whole point is to move from the old idea of local government earning its autonomy to a new idea of central Government having to earn the right to keep power centralised and having to make that case. Baroness Eaton: I am sorry; I missed part of your question. Are you talking about the Secretary of State for DWP?

Q381 George Hollingbery: He is coming shortly. We previously heard from the Minister for decentralisation. Baroness Eaton: We in the Local Government Association believe that the Work Programme should be localised and would be more effective, but DWP have not given any details and confirmed that will happen; they have closed the drawbridge, so we are not getting very far on what we feel would be a good way of delivering a better service. I believe we have given a memo to the Committee on this, which you will have seen. But I think part of the problem with Total Place and what followed, which we prefer to call community budgets, is that it would require all Departments to get it. Although we have started to get some movement around families with complex difficulties, that needs to be much broader than just that experience, but it demonstrates that if resources are brought into one place they can be used in a way that is more effective and efficient and saves money. I am not sure that all parts of Whitehall get it. Health is beginning to get it more than we ever thought it would, and certainly education is, but there is a long way to go in other Departments. As for local government finance, for a long time we have advocated the return of the business rate in local government. If we want true localism, that really would be a time when all money was raised locally in one form or another, whether or not by local taxes. You would then have genuine localism because each local authority would be able to manage the resources according to the needs of the place and have less control from the centre. Q382 Heidi Alexander: Perhaps I may ask one or two questions about the appropriate role of central Government in delivering localism. A number of witnesses who have come before the Committee have talked about setting either a framework or minimum standards for services. What do you see that framework or minimum set of standards looking like and how do you think it might be negotiated? Baroness Eaton: There are some services where it is perfectly right that there should be a national standard, for example, child protection and some of the sensitive issues, but there are other areas where the local decision would be to do something differently because of the nature of the population. If Government provides the framework, I am quite happy for Government to say what they would like to have delivered in that context, but how it is delivered is where localism comes in. In the past, we have seen something like outcomes. For instance, Whitehall might think that an outcome for health might be the number of children who have had an injection for something, whereas probably the outcome is the number of children who do not get the disease. There are some issues about measuring what outcomes are. Therefore, when things come to a local level, the outcomes are demonstrated in the lives of people rather than that a particular box is ticked to say that so many pills have been given out and those are the outcomes. I think there is scope for a framework and minimum standards—but not in everything—in areas where one would expect a national quality.

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Simon Parker: To a large extent that is right. There are services where you would want minimum standards. Clearly, you will need failure regimes and that is a big one for central Government. Baroness Eaton: Yes, market failure. Simon Parker: Yes, but not just for individual local government services. If local government were to fail corporately—local authorities do—then how will that be dealt with? I do not think that is clear at this stage. Central Government have a role in creating the right kinds of conditions for local innovation. We have talked about what some of those things might be. Some of it is around the Total Place approach and right to bid; some of it is around finance; some of it is around what CLG seem to be focusing on now, which is the removal of barriers and burdens. It is better if that can be done in a joined-up way across government. The Government have chosen not to do it, but I think there is a legitimate role for central Government in setting a small number of strategic goals they want to achieve across society. I would probably limit those to five or 10 really big outcome-focused ones, but I think it is useful if central Government are able to be clear about the things they really care about and focus activity at local level. I do not think they need be very bureaucratic. There is another role around making sure there are good data out there, so we know what is going on on the ground and is being achieved. Therefore, it is information, strategic goals, the conditions for innovation and that kind of safety net and, on top of that, ensuring that the sector is regulating itself effectively, so providing some kind of quality assurance. Baroness Eaton: One thing we have not mentioned is the removal of ring-fencing. That is to be welcomed because it means local government has freedom to be more flexible with some of the money. We did not mention that earlier. To come with prescribed boundaries around money is not helpful.

data has been going on for quite some time. There must be value for money, but I do not think it is necessarily the role of central Government.

Q383 Heidi Alexander: Do either of you see a role for central Government in assessing the efficiency of local government and value for money? Simon Parker: It is a very interesting question and I am just trying to think. To put it this way, I think there is a very important role in assessing efficiency. I do not know that it is necessarily central Government’s job to do it. If sector self-regulation plus armchair auditors can do that, that is fine by me. We need to wait and see the quality of the data we get and how effective is the combination of self-regulation and armchair auditors. Baroness Eaton: There is a lot of work going on at the moment about creating a process of selfregulation. A push across local government for better

Q388 Chair: Referring to what Simon said about the broader range of options for local government to raise money, perhaps I may put a naughty little question at the end. Therefore, would the LGA support the suggestions by the Deputy Prime Minister, which I understand are being resisted by the Secretary of State, that the review of local government finance might go a bit broader than simply the localisation of the business rate? Baroness Eaton: I think it is for discussion, because it is one of those things some members would wholeheartedly support and others would not, but it needs to be looked at. Chair: We finish with a politician’s answer. Thank you both very much indeed.

Q384 George Hollingbery: I know the Chairman wants to close this and move on to the next session, but we are particularly advised to ask you about skill sets and whether or not there are skills at the officer, council and third-sector level to make all of this happen. Perhaps you would give a very brief reply. Simon Parker: They are there to some extent in some places and they will need to become much more widespread. Baroness Eaton: There is a danger in being too prescriptive about what sort of person and what skills make a good councillor. Sometimes some people surprise you. Q385 Mark Pawsey: Does that mean that we will not get the immediate benefits of localism because we have to wait for the existing cohort of councillors to be retrained or for new ones to come forward, or will we get the benefits fairly immediately? Baroness Eaton: I think that the existing collection of councillors across the country will come up to the mark. Q386 Chair: Margaret, in terms of the LGA’s position on the business rate, do you favour not merely authorities keeping the amount they collect but also being able to set the rate? Baroness Eaton: Ah. I put my hand up; I do not know. Q387 Chair: Can you drop us a note about that? Baroness Eaton: Yes, of course. We believe in collecting it locally and having the ability to spend it locally, but I do not know about raising it locally. We will drop you a note. I am terribly sorry not to know that. It is a fundamental point that I should know.

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Examination of Witnesses Witnesses: Rt Hon Nick Herbert MP, Minister of State for Policing and Criminal Justice, Home Office, and Rt Hon Chris Grayling MP, Minister of State, Department for Work and Pensions, gave evidence. Q389 Chair: Ministers, thank you very much indeed for joining us this afternoon for the seventh evidence session in our inquiry into localism. For the sake of our records, would you just identify yourselves and say which organisation you represent? Nick Herbert: I am Nick Herbert, Minister of State for Policing and Criminal Justice in two Departments, the Home Office and the Ministry of Justice, although I think I am here principally as Policing Minister. Chris Grayling: I am Chris Grayling, Employment Minister. Q390 Chair: Thank you both very much for coming. All Departments have business plans at present. What conversations took place within your Departments and, presumably, others—maybe CLG with the Minister for Decentralisation—about the extent to which those plans properly and completely reflected the Government’s aim of decentralisation? Nick Herbert: We have had ongoing discussions that began in opposition and continued in government with colleagues responsible for driving the localism and decentralisation agenda and promoting the big society right the way through. I believe that the policing proposals in the Home Office for the creation of directly elected police and crime commissioners strongly reflect the agenda of devolving power. It is very important that we continue what I think have been important relationships at local level between local authorities and policing widely in terms of ensuring that communities are made safer—the community safety agenda—at local level. That means the Home Office has ongoing discussions with CLG about those sorts of issues, and CLG are partly responsible for funding the police. So I think it’s fair to say that the conversations we have at both ministerial and official level on these issues are quite extensive. Chris Grayling: The same is true for us. Our position is slightly different in that a number of the welfare reform programmes we have brought forward are national by nature but will clearly be local by implementation. There is a difference in approach between what we are doing and what the Home Office and MoJ are doing but, most fundamentally, where we can we look for ways to devolve and decentralise, where we can add value and we think local communities can deliver better solutions, and where local authorities would benefit from local discretion. We have had extensive discussions not only with CLG but other Government Departments about the best way to deliver change in the right way. Q391 Chair: Is there any formal process whereby business plans almost have to be signed off by the Minister for Decentralisation, who says that that Department gets it, it is on track and it is doing the kinds of things he would expect them to do in line with the Government’s overall policy? Nick Herbert: I think the formal process is that the business plans are signed off at the centre, if you like. They ensure that the right principles, which apply to

the Government as a whole in terms of trying to drive this agenda, permeate the plan. But we are very conscious of them in shaping policy and then executing it, and the fact that the starting point for this coalition Government is about returning power to people and communities and decentralising wherever we can and making the notion of the big society a reality. It is not something that is done just by tick boxes and compliance with the requirements of the CLG; it is about the attitude of the Government as a whole, and we have been more than willing to engage with this agenda. Q392 Chair: Before the Minister replies from the DWP’s perspective, what you have said really echoes our look at the business plans. DWP had many fewer references to the localist agenda in its business plan. Is that because you did not get round to thinking about it or simply because you do not think there are as many possibilities in terms of your Department’s remit to adopt localist solutions? Chris Grayling: It depends on how you look at localism. To go back to the frame of your question, all of the business plans are signed off by Ministers in the Cabinet Office, whom I see as the guardians of ensuring that the business plans are consistent with Government policies in relation to areas like localism, and they will certainly hold us to account if they do not feel we have the right mix. Broadly, what we have not done is devolve responsibility to local government. A lot of the delivery of our programmes will be handled through the third sector, the private sector and local community groups. Local government certainly has a role in partnership with the DWP, but the essence of what we seek to achieve with our welfare reform programmes is more to capture the strengths of the third sector, the voluntary sector, in those communities than to devolve power to local government. I will explain why we have taken that particular approach when we talk about the Work Programme. That does not mean we are not looking to devolve responsibilities to local government. In some areas, for example the proposed changes to the social fund, clearly we look to move powers to local government, but it not quite as clearcut as simply saying we are trying to take responsibilities out of the DWP and migrate them en bloc to local authorities; there is a mix. Q393 Chair: We will come to the Work Programme in a minute. I think you have answered my next question about whether your Departments see localism as being about local government or local communities. Perhaps the Minister for Policing would respond from his point of view. Nick Herbert: The principle we have always tried to set out across government is that we should aim to return power and devolve it to the lowest possible level and, where possible, put power in the hands of the individual. Where that is not possible, practical or desirable, it may be a question of putting it in the hands of community organisations. It may then be

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appropriate to put it in the hands of local government, but in the case of policing, we are talking about transferring power from non-directly elected, invisible and relatively unaccountable police authorities to individuals who will be directly elected. That is not an agenda that in itself is about returning power to local government, although it is very important that these individuals work alongside local authorities. Representatives of local authorities will have a big part in these reforms, because they will play a part in our new police and crime panels. Therefore, there is a fit between the two organisations. I do not see the decentralisation agenda as being purely about returning power to local government. That is a very important element of it. Q394 James Morris: To press you a little on that, do you not think there is potential for identifying a contradiction in Government policy? On the one hand, the Government talk about decentralising power to local government, but in other parts of government— not necessarily your remit—there are initiatives going direct to communities and individuals. Is there not a danger that the tension that sets up will create some policy breakdown? Nick Herbert: I do not think so. The important thing is that we reverse the decade or more of deep centralisation where power has accrued to Westminster and Whitehall, and decisions that properly should be taken at local level have been taken at national level. Policing is a very good example of that. In what I am sure was a benign effort to drive up standards, there was an ever greater direction of policing by the centre, reflected in a proliferation of targets, some but not all reversed by the previous Government, and a policing pledge that was very prescriptive about how local policing should be delivered. The paradox is that where central Government became ever more prescriptive in these kinds of areas, which I think divorced local policing from local people, they were not strong enough where they needed to take a strong stance on things like serious and organised crime, which cross force boundaries. Q395 James Morris: Is the corollary of what you are saying that in certain circumstances, local government has been part of the problem rather than the solution; hence you want to get it lower down? Nick Herbert: I am sure there are opportunities also for local government to give away power too, but as far as concerns community safety, one of the advances in recent years has been the way in which local authorities now accept a role in the delivery of it. It is a statutory responsibility. We know that crime is fought effectively through local partnerships and the police cannot do it on their own. Improving those partnerships and making them action-oriented with less process and ensuring the local authorities continue to step up to the plate, even though funding will be tighter, is all really important. But in all of this the under-developed element is communities and the ability of people to have a say in policing and a greater role in the safety of their own streets and neighbourhoods. That is an under-developed piece. I

do not think it is the fault of local government—in partnership it has a big role in helping to facilitate a lot of it. Q396 Mark Pawsey: Minister, you spoke about communities and voluntary groups becoming more involved in service delivery. Clearly, in the case of the police, special constables are an easy example of where volunteers can get involved, but in the Work Programme, how will communities and voluntary groups get involved? What can they do at a practical level? Chris Grayling: We have sought to create a framework for the Work Programme within which there is a clear place for those smaller local groups. It has been a challenge to find the right balance, because in order to deliver a system of payment by results and the AME/DEL model that uses benefit savings to pay for the cost of the programmes that get people back into work, we have needed to approach overall contracting on a national basis. A number of representations have been made by local authorities to be part of the commissioning process. With respect to all of them, it is just not practical, because in theory we would be trying to work with a very large number of local authorities around the country to put together a complex commissioning process with ultimately one financial path that allows us to access and spend the money. It was simply impractical to try to do it on a fragmented basis. We have established a framework on a regional basis. For want of a better way to express it, it is an approved supplier list from the private sector. There are potentially some prime contractors from the voluntary sector in the framework among those who came forward and bid. Obviously, for those organisations, the key requirements include the ability to do the job but also the ability to bankroll it, because clearly on a payment-by-results system they need the capital base to deliver. Therefore, at that level it is very difficult to involve smaller local community groups, because they do not have either the legal status or the financial substance to bankroll a proper payment-by-results system. We all know, however, that some of the best support delivery, particularly to the harder-to-help groups, comes from within the voluntary sector, for example the local community group that works with young people in an area where there is a gang problem; it may be a specialist charity that has expertise in working with people with mental health problems, and so on and so forth. Basically, we have done two things. First, we have said to would-be prime contractors—those that have bid to join the framework and are now bidding to take up the individual contractual pieces of the Work Programme—that it is their job to assemble, to use a topical phrase, a coalition of organisations that can deliver the breadth of specialist support that is needed by the individuals we seek to help. That will involve them assembling a group of smaller voluntary sector, private sector and local community groups in their teams. If they do not do that, they will be severely disadvantaging themselves in the bidding process and effectively they will move to the back of the queue

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and will not get a contract. From the contacts I have had with the voluntary sector, I am encouraged to see that a lot of smaller groups are now involved in the process and are talking to the prime contractors. When we see the bids come forward in about a month’s time, I expect to see a broad range of smaller local organisations in the mix. The second piece is to ensure that those organisations are not disadvantaged in terms of commercial arrangements and are not duffed up by the big guys. Therefore, we have introduced a code of conduct called the Merlin Standard, which effectively provides contract protection for those individuals. Basically, if the big guys duff up the little guys, they can lose their contracts. Q397 Mark Pawsey: Do you sense that the smaller providers know where to go, understand the mechanism that you have put in place and you are confident that plenty of them will come forward? Chris Grayling: I think so. We have gone out of our way to try to make sure they are there. When we first advertised the Work Programme in the summer, we had about 800 expressions of interest from all kinds of organisations. Of those, about 100 came forward to bid to be prime contractors. First, we established a series of briefings for voluntary sector organisations. We established an online dating service for them with the big guys, so they could put in details of their organisation and capabilities on a site that was also used by the major contractors to assemble capabilities. We have completed the framework and started the second phase of bidding. We have contacted all of those 800 organisations and explained to them how to get involved with the would-be prime contractors. We have explained the Merlin Standard to them and the duties on the shoulders of the bigger guys to have the little guys working with them. I think we have done everything we can to put them into the mix. From the conversations I have had with smaller groups, they seem to be part of the equation and are in discussion with the big guys, and I expect them to be there when the bids come in. I cannot guarantee that every single community organisation around the country will be in that mix because clearly not all of them will be, but I am very confident that we will see a really diverse mix of organisations involved in this right across the country, which is what we are trying to achieve. Nick Herbert: It is the same in the field of criminal justice. We are also piloting the notion of payment by results to reduce reoffending, which is a really radical advance analogous to the welfare-to-work proposals. We also do not want to shut out the voluntary sector. Clearly, there is a role for new commercial providers, but voluntary organisations are doing fantastic work in this field as well; similarly, we want to find ways to ensure that they can be part of the process in the pilots that we are about to undertake. Q398 George Hollingbery: To be absolutely clear, Minister, you say that effectively the single Work Programme isn’t compatible with decentralisation, but the overall framework is. You are levelling the playing field at the bottom level to ensure that useful community assets are brought into the mix.

Chris Grayling: Yes. Q399 George Hollingbery: But effectively it is incompatible with decentralisation. Chris Grayling: The problem we face in trying to decentralise is to do it on a local basis through local authorities. If you think of the mechanisms that underpin the Work Programme, effectively the prime contractor carries the financial risk of getting people into work. They are paid when they are successful. As to the payment arrangements for the Work Programme, in the first three years of the contract there is a small upfront fee per placement, but after that it disappears. Typically, they will receive about 25% of the payment after six months and the rest in instalments over the following 12 months for a typical jobseeker. So they need the capital base to cope with that. Fundamentally, it is no different from setting up any other business because you need to carry cost for a while until you start to make a profit and eventually hit break even. It is a similar approach; they need to be able to carry that cost, but in terms of our payment mechanisms, we then need to be able to say to the Treasury, “They have got so many people into work for this period of time. The AME savings are this much and therefore hand over the money so we can pay them.” Although there is a mix of AME and DEL in the programme, what uncaps it—basically, there is unlimited potential for the providers—is the ability to use AME money for the first time to offset those costs. I think it would be impossible to try to create an AME/DEL mechanism of that kind to have big enough providers to deliver the capital base to support a payment-by-results system, and then to try to do it across dozens of local authority areas in anything like a sensible timeframe, monitor it and deliver it. Q400 George Hollingbery: You are saying that basically there is no role in the single Work Programme for local government. Chris Grayling: In terms of the structure of the programme and the contracting, no, but I entirely expect that local government will form partnerships at a local level with the providers. There are compatible services and both will want to work together. Another key point is that the framework, the approved supplier list, is designed to allow other public sector bodies that have additional demands to contract for additional services quickly and easily from the Work Programme providers. Where I see the real opportunity for local authorities is that if your local authority area has a particular problem with NEETs, for example, it can decide to allocate a chunk of money to contract with the Work Programme provider effectively to deliver an enhanced bolt-on service over and above the core service that the Work Programme provider is offering, and for the provider to do it quickly and cheaply, because some of the overhead is already covered in the core contract. I think the real opportunity is for local authorities to use the framework to add a local dimension to the national programme. I hope that is where the partnerships will be formed.

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Q401 Chair: When we asked the leaders of both Barnsley Council and Surrey County Council which area they thought ought to be opened up to greater local government involvement in trying to shape services currently delivered by central Government, both named DWP. The chair of the Local Government Association told us just a few minutes ago that DWP basically had pulled up the drawbridge on their communications with local government. I think they would see all the explanations you have given, Minister, as simply a government Department that just does not get the localist agenda. Chris Grayling: I do not accept that at all. If you take other areas, for example the social fund, we look to localise. I think it is right and proper that support of that kind should be handled by a local authority. Where there are areas like the social fund and we can devolve responsibilities to local communities we will do so, but, for the reasons I have just explained, to try to contract a pretty revolutionary programme like the Work Programme on a fragmented basis was, in our judgment, simply impractical. Also, time-wise—this is a real imperative for us—we have pressures in the labour market that we want to address, and we need to end some of the relatively unsuccessful and extremely expensive programmes we inherited from the previous Government, and replace them with a payment-byresults approach that we think has a much better chance to deliver tailored specialist support for individuals. It was a judgment call. It is the kind of thing that can be organised only in the way we are doing it on a national basis, but what we have to do is make sure there is clear space within that for local government to play a role. I think the framework offers a really valuable opportunity for local government to build on a core that we provide through the Work Programme and add enhancements tailored to their local area at relatively low cost. Q402 Chair: I heard the point about the timeframe. Are you saying that, given more time to develop over the medium term, the drawbridge might be lowered slightly and there would be opportunities for local government to become more involved in the future? Chris Grayling: The mechanism that the framework involves provides that route; it provides an opportunity for local government effectively to match fund some of the money we put in. We are paying for the core overheads through the Work Programme mechanisms, the teams that will help individuals and the centres where you see that support provided. It provides the ability for local government to buy an extra dimension to that service at a much lower cost than would be the case if it was simply starting from scratch. I think the framework offers local government a huge opportunity to tailor something extra for their area that really meets local needs and challenges. It is a great opportunity for them, even though I do not think you can approach the contracting of something like that on the fragmented basis that would involve tens if not hundreds of local authorities up and down the country.

Q403 Heidi Alexander: I would like to ask a few questions about the culture change that is required in your Departments in order to deliver the Government’s stated drive towards localism. Minister, you talked about the Work Programme. Clearly, the advice you have received from your officials is that this is too complicated and bureaucratic. Can you tell me what steps you are taking if you have a problem in changing the ethos among civil servants in your Departments? Chris Grayling: I have not really found that to be a particular problem. As the ministerial team, we have been very pleased by the calibre of support we have received and the openness of the Department to change. We are taking the Department through a revolution. If you look at the combined impact of the universal credit, the Work Programme alongside the move to start the migration from incapacity benefit, together with all the measures announced in the spending review last year, this is probably a bigger programme of change for the DWP than it has ever been through. We have not found any resistance to change or to thinking out of the box. There is a genuine willingness to help us deliver the agenda. From our point of view it is about identifying where things should be done centrally and where they can be done locally. In terms of the localism agenda, I give you one internal example of what I seek to do. I want to devolve much clearer power and responsibility to Jobcentre Plus frontline staff. I want local managers to take far more local initiatives in their own right. In our programmes to try to address some of the employment issues, we are consciously not prescribing from the centre what they should look like and how they should be done; we are leaving local Jobcentre Plus managers to take those decisions and to form local partnerships, whether with employers or local authorities. A good case in point is the development of work clubs, where all we have said to local Jobcentre Plus managers is, “This is a good idea. We are not going to tell you how to do it. Work it out in a way that is suitable to your area. You do not have to do it yourself but you can be a facilitator with other people to set up such clubs. We will not impose targets on you; we will not tell you how many have to be set up. Just go and do it, and here’s a bit of money to help you do it.” That is the approach we have taken and so far we are very encouraged by the development. They are all very enthusiastic. Every time you talk to a Jobcentre Plus district manager they will say these things are growing very fast. The localism agenda does not have to be about saying, “We will take powers and put them in a different organisation”; sometimes it is about saying, “We will interfere less from the centre.” That is something we are really trying to do. Q404 Heidi Alexander: Do you discourage discussion between your frontline staff and local authorities? Do you actively seek to include local authorities in that agenda? Chris Grayling: I do not discourage local discussions in any way, shape or form; indeed, I am very keen to see partnerships formed with local authorities, particularly at local level. We have some good

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professionals in Jobcentre Plus who I think will benefit from the formation of partnerships. One area I want to see more of is co-location of services between what we do and they do; for example, more opportunities for shared services that sit side by side in Jobcentre Plus offices, or for Jobcentre Plus offices to move into local authority buildings so that effectively people can get more for a single visit. Nick Herbert: That is certainly true of policing, where there is a big opportunity for shared services between policing and local authorities. Like Chris, I think that far from there being any kind of cultural resistance within the Home Office, I think there was an interest and enthusiasm in terms of the new agenda, which was not unexpected, from the incoming Government. Our commitment to decentralisation, localism and the big society had been well flagged up, and it married very well with the Liberal Democrats’ long-standing belief in localism in their coalition programme. The fact that the Home Office is Ministry for the interior or security means it is a challenge for them to identify areas where power can be returned or exercised somewhere other than in the Department. I think the challenge is not just for officials but for everyone in substituting a form of democratic accountability of policing at a local level—police forces sprang from local communities—for what exists at the moment, which is a very bureaucratic form of accountability. It requires new ways of thinking. Very often, we have found that people are still attached to the old way of doing things because that is what they have known for some time. That is true of some in the service themselves. We often find that the police service asks Ministers to intervene and do things and prescribe because that is the world they are used to. Similarly, Members of Parliament, if I may say so, often ask Ministers to intervene or comment on what are very often operational policing matters or where the governance has shifted. In relation to London, the Home Secretary is no longer the police authority; the Mayor and MPA have that function, yet we are very often asked questions and asked to do things that imply we are the ones who have some kind of answerability. The whole agenda, which is a very big one, requires new ways of thinking and getting used to that, but it is nevertheless an immensely empowering one, which, as Chris says, is also about restoring professional discretion and local decision making. The strong sense I have from local communities is that they want more of a say in the areas of community safety and policing; there is a great appetite for it. Q405 Bob Blackman: Those answers lead on to the questions that I want to pose. One of challenges under the Localism Bill and agenda is the temptation for Ministers to make comments or issue diktats from the centre on what should be done at the same time that decisions on services are being taken at local level. Could both of you give me an example of an area where either part of your team or your predecessors have made comments or commitments in the past that you expect to see devolved down to local level for decision making?

Nick Herbert: If I may go first, I give the example of the policing pledge, which was instituted by the previous Government. £6 million was spent on promoting it. If you look down the list of items in the policing pledge, it is impossible to disagree with any of the things that forces were undertaking to do, for example answering calls within a certain time and so on. The question is: was it right for the centre to be so prescriptive about the process of how policing should be done, or should we be much more interested in the outcome—crime falling and people being safe—and trust the service and professionals to deliver but hold them more strongly to account for those outcomes? I think that is a very good example of where we have very consciously stepped away from that kind of very directive form of government. There is some criticism because there are some who say that there are good things in the pledge and Government should remain signed up to them, and we should be forcing forces to implement them. I think that is the old politics of seeking to control from Whitehall and not understanding that the great price for that was the sapping of morale and erosion of professional discretion, leaving too little space for local innovation. It was done for benign reasons, as I said before, but it had the wrong effects. Chris Grayling: I would echo that. I do not look back at the previous regime and say these were people who deliberately set out to cause problems, but the consequence of trying to do too much from the Minister’s desk was hugely disruptive for the organisation. This morning, I spoke to a Jobcentre Plus manager from East London, who told me that now we had got rid of some of the mechanisms of interference, her staff had so much more time to get on with the job. She said they used to have to fill in all kinds of forms and paperwork for the Department, and they now did much less of it, and therefore they were able to do useful things like form partnerships with local authorities, get work clubs up and running and hunt for opportunities for young people to do work experience. That is really what we want the Jobcentre Plus teams on the ground to do; we want them to look outward and sort out problems in their communities, not look over their shoulder at the Minister, wondering whether they are doing the right thing. Therefore, we have tried to reduce the number of performance targets and the mechanisms for interference. Trust the professionals and devolve power to the front line. Q406 Bob Blackman: I move to the general power of competence that is being created for local authorities. That suggests there is potential that at local level they will do things that your Departments do at the moment, and that there will be challenges. One thing on which I want to question you, Mr Grayling, is local authorities’ responsibility for the administration of housing benefit, which is hugely expensive and bureaucratic, being repeated by every local authority all over the country with armies of bureaucrats. At the same time, most people in receipt of housing benefit will receive all sorts of other benefits. Why not combine them all under local authority control?

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Chris Grayling: The current situation on housing benefit and other out-of-work benefits will inevitably be superseded by the universal credit when it arrives after 2013 anyway. So the current arrangements are bound to change. As to the universal credit as the national system of single benefit to be paid across the whole country, although we have not taken final decisions on implementation and exactly how it might be paid out, my expectation is that would be held on a national basis. By contrast, for some of the other support we provide, for example through the social fund, the intention is to devolve, so that crisis loans become very much a matter for the local community to deliver, and to decide and identify priorities for the local authority to administer. Where it makes sense to bring things together we will do so. You could not create a national benefits system but devolve it. What you can do is devolve the things where there is clear logic in taking decisions locally. The social fund is a case in point. Q407 Bob Blackman: Are you saying that it will not be the responsibility of local authorities to administer universal credit? Chris Grayling: I think it is likely that it will not be, but we have not taken final decisions about the detail of that aspect of the implementation. At the moment, we are working through it to try to make it a reality. Q408 Bob Blackman: Are there any areas within your Department’s responsibility that you see falling under the general competence that local authorities will take over as a natural reaction, apart from the social fund? Chris Grayling: The social fund is a case in point; that is the main and immediate example. We are still considering the issue of council tax benefit where clearly there is a potential, but we have not at this moment reached a decision on that. Q409 Bob Blackman: Mr Herbert, are there any areas of general competence that local authorities are likely to take on? Nick Herbert: Yes. Far from being concerned about the general power of competence and local authorities doing more in the area of crime and criminal justice, I welcome that. First, we want them to maintain their existing level of activities in ensuring community safety. This is an important advance and I am very anxious that local authorities continue to forge these partnerships with policing and other services to ensure that their areas are safer. Even where they have less resource to work with, this is a high community priority. There may well be opportunities to extend their role in the wider field of criminal justice policy, as that potentially is devolved in future. There will be some areas where there is a role for local authorities, and others where the role is more naturally for police and crime commissioners, who naturally will look after forces within their areas but have responsibility, too, for community safety, with a devolved budget from the Home Office to help to deliver community safety programmes and work in partnership with local authorities. So I think the strong direction of travel will be for more to be done at local

level, and it will evolve as the right balance between what local authorities do and what police and crime commissioners do is achieved. Q410 Bob Blackman: What guidance or help and support are you providing in advance of the Bill becoming law? Nick Herbert: First, we are communicating with community safety partnerships to ensure that they become action-oriented and maintain their agenda as I described. That is very important. As the Police Reform and Social Responsibility Bill is going through at pretty much the same time as the Localism Bill, we will want to articulate how newly empowered local authorities will work alongside newly empowered police and crime commissioners with their police and crime panels. There is not a problem with that because it is exactly the same form of local partnership that local authorities currently undertake with police forces. It is a development of it, but I think both will have rather more power devolved to them by central Government. Q411 Mark Pawsey: Mr Grayling, You said it was not possible for local authorities to become involved because of the way the operation was working, but you did not mention LEPs. What input can the new LEPs have on welfare-to-work programmes? Chris Grayling: I hope they will have a very close input. The way we have established the Work Programme really puts it upon the shoulders of the local providers to deliver the best possible approach to getting people into work; otherwise, they will not be paid. My vision for the local Work Programme is that effectively it will be a close partnership between the provider, the LEP, the local chamber and the local authority, and we will see joined-up working across those local agencies. It is in the interests of the provider to make sure that happens, sit at the centre and bring in such support as is available, whether it is specialist advice or employer engagement. Crucial to ensuring the success of the Work Programme are the ties built up between the Work Programme providers and local employers. I see the role of LEPs effectively as a marshalling point for local business and economic interest, and as an essential partner for the Work Programme providers. Q412 Mark Pawsey: Because it is the LEPs as employers that will know what is needed coming forward? Chris Grayling: Exactly. Q413 Mark Pawsey: It is a bureaucratic body that is to be created. How do you see it happening? Chris Grayling: I think it will happen in an unprescribed way, as it should. At the end of the day, if you are running a provider under a payment-byresults system the key to your success is to match individuals and employer need, and ensure you have the kind of close working relationship with local employers that means that, when you say to the employer you have somebody for them, they automatically assume that it is likely to be somebody

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who is good because of the relationship they have established. In order to build those relationships, they will have to work through the bodies that bring those employers together, listen to and understand the needs of local employers, and form a close working partnership to try to meet local skills and employment needs, so to work with the LEP to deliver it is a natural and obvious thing to do. I do not need to dictate that that happens; it will happen naturally. To give an analogy, when we were in opposition. I was once asked by the leader of one of the local authorities in the South East how, when we scrapped the regional assemblies, they would all meet together to discuss common interests, to which my answer was, “Well, just fix it. Clearly, it’s the right thing to do, so go and organise what needs to happen.” I believe I do not need to dictate what happens in terms of local authorities, LEPs and Work Programme providers, because it needs to happen and it will, and it is down to them to work out the best mechanisms to deliver it locally. Q414 Mark Pawsey: What will you do if it is not happening? Chris Grayling: What will immediately happen is that the Work Programme providers will struggle financially and will have to make it happen. The benefit of the payment-by-results system is that you cannot not achieve excellence, because if you do not chase best practice all the time you will not make money. Q415 Heidi Alexander: Mr Herbert, I would like to turn the Committee’s attention back to you. I have a few questions about the directly elected police and crime commissioners. The Government are very keen to see these introduced. Does the Government’s determination to see commissioners in place signify wider doubt on their behalf about local authorities’ ability to take on more extensive responsibilities? Nick Herbert: Not at all. I have been at pains to say that I think local partnerships to make communities safer are incredibly important, and we want to see them enhanced. Police force boundaries in the main cover a number of local authority areas. Apart from London, there is no force boundary that matches a single local authority, so there was an issue for us. In responding to what I think were very interesting ideas about whether the accountability of forces should be at a more local level with local authorities, we faced the problem that we might have enhanced accountability—if you like, at the basic command unit level; at the local authority level—through the direct election of an individual as some have proposed, but that does not answer the question: who runs the force and who is responsible for holding that person to account? I think we would have ended up with a situation where we had lots of individuals holding bits of a force to account. Somebody has to set the budget, appoint the chief constable and set the strategic plan. The question is: is that to be an invisible and relatively weak police authority, or somebody with a local mandate? Equally, I do not think anybody wanted to see the break up of forces like the Thames Valley or West

Midlands to create smaller units that could be accountable to local authorities. What I think was the sensible way forward was to replace the existing police authorities on existing boundaries with a directly elected individual. But it is quite clear that the police and crime commissioner will have to work with local authorities, just as police authorities and forces do now. We are giving local authorities a stronger role in the governance of policing, because we are setting up police and crime panels on which district councils will be represented for the first time. In two-tier and rural areas, district councils have no voice in the governance of policing and they will be given that for the first time. Every local authority in a police force area, whether unitary, county council or a district council, will be represented on the police and crime panel, so I think that we are strengthening the links with local government in a sensible way. Q416 Heidi Alexander: If an elected police and crime commissioner said that safer neighbourhood panels or their equivalents were a waste of time and money, what would you say to him or her—anything? Nick Herbert: That is a hypothetical. I think the whole direction of travel has been for the enhancement of forces that want to talk directly to local people. We have made a commitment to hold beat meetings, which can be expressed, as you described, as safer neighbourhood panels, in the way you describe. We shall institute street level crime mapping, which will be a strong, sharp form of very local accountability for policing. I do not see that that is a realistic possibility. I believe that police and crime commissioners, some elected for quite large force areas, will want to ensure that their forces are connected with communities at a very local level. I do not see that they would to reverse that. Q417 Heidi Alexander: What kind of variations do you see emerging in police services as a result of issues raised through the election of commissioners? Nick Herbert: In the local area, I hope that the centre—Government—will interfere far less, and that decisions about how policing is delivered will be taken by the directly elected police and crime commissioner, held to account by the panel, with authorities involved in that way. It may well be that in the style of local policing and how a force is delivering local policing services there are some variations, as there are now. In our system of 43 forces in England and Wales there are rather different cultures. Some chief constables are keener on PCSOs than others. Not surprisingly, there is a different policing culture in some of the Met forces from some rural forces. I have absolutely no problem with the emergence of those differences in the style of policing, provided that they are a reflection of what the local community wants. It is the one-size-fits-all, top-down direction of policing that has helped to divorce local communities from the police, when we know that what they value is contact with police officers on the ground. There is quite strong piloting evidence to suggest that people also want their force to be held to account by an elected individual as well.

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Q418 James Morris: Building on that, is there not an argument that we are imposing directly elected commissioners, albeit elected ones, and it might be more appropriate to do it in a bottom-up way and give local communities the option as to which way they want to hold the police to account, given the local variations that you have described? Does that not go to the heart of the contradiction we teased out earlier about saying it is a form of top-down localism in that sense? Nick Herbert: I see your point. I think this is a reform where we can already see the success in London, so effectively it has been piloted there, given the way in which the Mayor has been introduced with responsibility for policing. We know that it is popular in London and that the Mayor has helped to deliver local policing priorities and hold the police to account while protecting their operational independence. If we allowed this reform to develop piecemeal across the country, it would raise a question about the interoperability of police forces and the way in which they need to co-operate in relation to things like serious and organised crime. First, I think that to have radically different governance arrangements would be problematic. Secondly, this is part of an agenda that enables the centre, the Home Office, to interfere far less. We cannot just cut police forces loose; they are monopoly public bodies. You cannot choose your police force if you live in an area; you have to put up with that police force. Therefore, it is very important that police forces answer to someone, and there would be a problem in the Home Office deciding where we were able to let go and where not if some forces had stronger local accountability and others did not. Q419 James Morris: To press you on that, London has a clearly defined, bounded police entity: the Metropolitan Police Authority. If you look outside London and take the example of West Midlands, which I know a little about, is it not the case that you have lots of different priorities there and a directly elected police commissioner might have too broad a remit geographically to be able to respond to particular local policing nuances in the Black Country, for example? Nick Herbert: If they have difficulty responding, how much more difficulty would the Home Secretary have? They will be far closer to the community than the Home Secretary and many of those decisions would otherwise be taken at the centre. They are replacing a police authority that already has responsibility in this area. I go back to the point I made before: where is the appetite for breaking up the West Midlands police and creating smaller police forces? It is true that those smaller forces might be very much more responsive to the local community. You can achieve the same thing by the way in which the police force is organising itself, devolves decision making, operates neighbourhood policing and so on, but for this big entity, West Midlands Police, with a budget of over £500 million a year, employing over 13,000 people in its workforce, somebody has to set the budget and plan and appoint the chief constable, and, if not a directly elected individual, then who?

Q420 Chair: Many people complain that they never have contact with their MPs on a yearly basis— probably a few more have contact with their local councillor; name somebody who has had contact. But, surely, in the course of the year virtually 99.9% of the population will have no contact at all with their police and crime commissioner. It will be a faceless person in headquarters somewhere who has no direct contact with the people they represent. Nick Herbert: All I can say is that that is certainly not the experience in London, where the reform has been popular. I may say that it was opposed by my party. It was a reform instituted by the previous Government, in my view rightly, but it is one to which we now fully subscribe. People like the fact that the Mayor is, if you like, in the line of public fire and is accountable. In the end, the Mayor has to answer for how policing is delivered in London. There are very diverse communities in London. It is a far bigger force in terms of population than any of the other areas will be. Would Londoners want that point of accountability taken away so that a committee that they had never heard of was responsible for the governance of policing? I do not think so. The Mayor stood on a platform of wanting to see more uniformed officers on public transport and action on knife crime. He has delivered on that and that is broadly popular. Frankly, I think he was also able to take a decision effectively, even though he had no formal power to do so, in relation to the Commissioner of Police in London that again was broadly popular. I think he was expressing what Londoners wanted to see in terms of a change. That was a decision that the then Government were not willing to take. I think this enhanced accountability works for a very big area in London. There is visibility. What happened, if you talk to the Deputy Mayor with responsibility for policing in London, was that there was a big increase in the number of complaints being channelled into the mayoral office, whereas previously they had gone to the Mayor. That reflected the fact that people saw the new point of accountability and that somebody was there to answer. Again, that is an important outlet that did not exist before. Q421 Bob Blackman: Before I move on to other matters, I want to clarify this particular issue. As you quite rightly say, the Mayor of London does not have power to appoint the commissioner. He has the power either to chair or appoint the chair of the Metropolitan Police Authority. Is that your model for the rest of the country? Nick Herbert: No. The police and crime commissioners will have the ability to appoint chief constables. Q422 Bob Blackman: Will you change the law to allow the Mayor of London to do that? Nick Herbert: No, because in London, the Commissioner of Police has national policing functions. Therefore, the Government take the view that the appointment must remain, if you like, in part a national one, so it will be in consultation with the Mayor but ultimately it will be the decision of the

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Home Secretary. It is an appointment made by the Queen on the advice of the Home Secretary. The reality, however, as we saw in relation to the current Mayor, is that if the commissioner loses the confidence of the Mayor, his position is untenable. I do not think the way it is set out formally is the issue. The fact is that it is a joint appointment between the Home Secretary and the Mayor, and will remain so because of the national policing functions.

Outside London, we will keep the ring-fencing because we want to ensure that PCSOs remain in place until the election of police and crime commissioners in 2012 so they then have the opportunity to decide going forward how that money should be spent properly. I think it is an example of where we will devolve budgetary decisions when there is a mechanism for taking those decisions via an elected individual.

Q423 Bob Blackman: But in London certainly, the position is that the commissioner is responsible for day-to-day operational decisions on policing and the Mayor will look at resources. Is that the model that you envisage for the whole of the country? Nick Herbert: Yes. There is a very clear and important divide here. The Mayor is responsible effectively for holding the Metropolitan Police to account for the resourcing, and ensuring it is an efficient and effective force. The Mayor is not empowered to interfere in operational decisions. The principle of operational independence of the police must remain, and it will remain in relation to forces outside London.

Q426 Bob Blackman: Do you see that responsibility and power over finance residing with the elected commissioners, or do you see local people getting involved in the decision making about what happens, other than in the elections? Nick Herbert: They will be strongly involved in the decision making because of the elections, but there will also be all of these other mechanisms, including the regular beat meetings and police and crime panels, through which there will be contact between the public, police and elected individuals,. There will be a great enhancement of the means by which the public can influence these decisions.

Q424 Bob Blackman: I now move on to the questions I was going to pose. Power and responsibility being devolved down is very much part of the Government’s agenda, but with power and responsibility must come finance. What plans do your respective Departments have to devolve real spending power down to both local government and local people? Nick Herbert: If I may kick off, police forces already raise about one quarter of their revenue from local people through the precept, so that will continue. It will be the elected police and crime commissioners who raise the precept in replacement of the police authorities, but there will be a further devolution of budget. The police and crime commissioners will hold budget for wider community safety responsibilities that will be devolved from the Home Office, so money that is currently spent centrally will be allocated to police and crime commissioners and spent according to local determinations. That will be a real enhancement for local democracy, and in due course we shall announce the details. Q425 Bob Blackman: When can we expect that to be operational? Nick Herbert: When police and crime commissioners are in place. Outside London, subject to the passage of the legislation, the first elections will be in May 2012. As an indication of how we wish these kinds of decisions to evolve, police community support officers are currently funded in part by the neighbourhood policing fund. There is a ring-fenced fund in the Home Office. In the spirit of giving more local decision-making, we have decided that in London, the ring-fencing should be lifted because we already have an elected individual, the Mayor, who can take decisions about allocation. It really should be Londoners who decide through the Mayor how they want the balance between constables and police community support officers to be set.

Q427 Bob Blackman: To take the question Heidi raised earlier, one of these commissioners is elected and decides that the safer neighbourhood teams are a total waste of money and does away with them. However, that commissioner may be elected for four or five years, by which time the whole infrastructure may be destroyed. I am not saying it will happen; it is hypothetical. How would local people then say that is not what they wanted, challenge it and force a change? Nick Herbert: First, I do not think there is a chief constable in the country who is not committed to safer neighbourhood teams and community policing. It has been an important development over the past few years and one that I think that chief constables are doing everything they can to maintain in spite of budgetary challenges. I am absolutely certain that elected police and crime commissioners will want to continue that, because they will reflect the wish of the people, which is to see this form of community policing. If anything, the criticism we have had is that they will be focused too much on the local and not enough on the national. We are taking steps to address that, to ensure that forces continue to pay attention to national policing issues like counter-terrorism and serious and organised crime, which are clearly terribly important. People will have a say through the election of an individual who can then indicate his priorities. There will then be a discussion between that individual and the chief constable as to how the plan that is drawn up will be expressed. You could argue in London that the Mayor’s commitment to put uniformed cops on public transport cut across the operational independence of the Commissioner of the Met, but the commissioner did not seek to argue that; he sat down with the Mayor and worked out how to express what it was people wanted, and that was a sensible approach. Q428 Bob Blackman: But clearly there is a power within the Localism Bill for local referenda. Do you

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see the position on local referenda applying to police operational activities? Nick Herbert: The problem is that that would be for just one part of a police force area, would it not? Q429 Bob Blackman: Potentially, but it could go beyond. Nick Herbert: It is not a question I have considered before. We shall be giving people a say once every four years, in the election of their police and crime commissioner. Q430 Bob Blackman: But part and parcel of the localism agenda is to empower people beyond, say, every four years; it is to make decisions at local level about things that affect them day to day. I seek to clarify whether it is your intention to enable them to have that power over the police service that they value. Nick Herbert: The power over a budget, the appointment of a chief constable and setting the plan will rest with the elected police and crime commissioner. The local authorities or directly elected mayors will have an influence in relation to their membership of the police and crime panels. It seems to me that a local referendum could indicate a view, but it could not cut across the power of the police and crime commissioners to do those things according to their mandate and the legal powers we are giving them. I repeat: somebody has to stand up the force, appoint the chief, set the plan and do all the things that relate to the proper governance of policing. Q431 Bob Blackman: Mr Grayling, are there any areas where you intend to devolve finance to local authorities or beyond? Chris Grayling: There are two things. First, where we do make a change, like the social fund, the funding will clearly go to the local authorities; it must. If we devolve power away anywhere in the welfare system, we cannot expect local authorities somehow to conjure up the budgets themselves, so funding will follow. In terms of our own frontline staff, we seek to provide greater discretion to local Jobcentre Plus managers over the deployment of funding. We already have a very substantial amount of discretionary money available to them to deploy as they see fit in their communities, whether for the needs of individual jobseekers or groups of jobseekers. That is a culture we will seek to continue. Where we can, we will give discretion to the front line. Clearly, where a local authority takes responsibility it must have the financial means to do so; where our staff have greater discretion operationally, we want them to have greater discretion over funding that supports that activity. Q432 Bob Blackman: Apart from the social fund, are there any specifics in terms of responsibilities and finance that you intend to devolve down to local authorities? Chris Grayling: At the moment, on the finance side, I would not be able to give you any firm announcements. There are things we are considering, which I cannot really detail yet.

Q433 Bob Blackman: When might we hear some results of those deliberations? Chris Grayling: Decisions will have to be taken over the next few months about how council tax benefit fits in with the universal credit, for example. Clearly, that is one area where localisation is a possibility, but we have to make it work in the most effective possible way alongside the universal credit. Q434 David Heyes: Accountability for local services is already extremely complicated. The changes we have been discussing today under the Localism Bill will make that even more fragmented and complicated for people to understand. What should we be doing to improve, clarify and simplify accountability for local services? Chris Grayling: The biggest frustration for our constituents is the sense that it always seems to be somebody they can never quite identify who is responsible for a decision. I think that has been one of the failings of the past. You ask about what will happen to a particular issue within a community and there is nobody anywhere near your community who is responsible for it. I think the broad localism agenda will deliver more visible decision-making within a community, whether it is for a county like Surrey, which I represent, where we will have an elected police and crime commissioner, or whether it is around greater discretion for the Jobcentre Plus manager who, if I come looking for a job and need to buy a new suit for an interview, has discretion to help me out. In both cases, what you do not want to hear is the local person saying that it is not his decision but the decision of someone in head office up the road. That is the big culture difference that we seek to deliver across government. Of course, you cannot deliver it in every possible area of government activity, but you can make a huge difference by saying these are things that government do not have to do. Nick Herbert: As MPs, we know that often people come to us about the performance of local services where they are deeply frustrated that they have not been able to get an answer. Often that is in areas where accountability is rather thin. If you take the example of police authorities, whatever their other strengths or weaknesses, they are not visible. I have never been to a public meeting in or outside my constituency and asked whether anybody knows who is the chair of the local police authority and seen a single hand go up, unless the individual happens to be a county councillor or are themselves the chair of the police authority, in which case the question goes down tremendously well. There is a serious point here. All the survey evidence backs this up. Very few people have any idea who the chair of their police authority is. I think that to create that greater visibility will be helpful in allowing people an outlet and somebody to go to, knowing who is responsible, and in turn that that person is responsive to the community because that individual is elected by the community. Q435 David Heyes: But councillors have multiple accountability already, for example for transport,

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social services and education. The social fund in future; perhaps public health. People understand that an elected council representative can have these multiple responsibilities. What is it about policing that requires a separate commissioner that is so different from all those other responsibilities of a local councillor? Nick Herbert: It does not in London. We have the advantage of a police force that is coterminous with the unit for which the Mayor is elected, so he can do it, but that is not true of any other police force in England and Wales. That is why you need a directly elected individual who is responsible for the whole force, unless you want to break up forces. I do not detect that there is any appetite for that; indeed, much of the advice we receive is to try to create ever bigger forces, with which I disagree. Q436 David Heyes: But you said earlier in your evidence that there was a lack of understanding of accountability for the Metropolitan Police and that even MPs still took cases to the Home Secretary. Nick Herbert: That is because it is a relatively new system, is it not, and one which we are all getting used to. It is evolving and will evolve further because we will remove one of the bureaucratic tiers of the Metropolitan Police Authority and have a system of just the Mayor and the GLA to hold the Mayor to account, which I think is broadly welcomed by those concerned. It is nevertheless true that Londoners are well aware of the Mayor’s responsibilities in this area and are very willing to hold him to account for policing. Part of the evidence for that is the increase in the volume of correspondence to the Mayor’s office. Q437 George Hollingbery: On this issue, are you brave enough to sit here in front of the Committee today and say that neither you nor the Home Secretary will respond to any MPs at all on policing issues when this is in place? Nick Herbert: I think it depends on the nature of the policing issue. Q438 George Hollingbery: I thought it might. Nick Herbert: I think this is important. The Home Secretary will retain lots of responsibilities, particularly for things like national policing issues. George Hollingbery: Indeed. Nick Herbert: So if you look at issues like counterterrorism, serious and organised crime and matters that cross force boundaries, where there is a need for a strategic view, clearly the Home Secretary has an ongoing role. The Home Secretary, effectively representing the Government, is the largest shareholder in policing, because a lot of the money comes from that direction. We will retain responsibility for wanting to ensure that money is not spent improperly. Therefore, there is a continuing role for the Inspectorate of Constabulary because these are monopoly services. There is a continuing role for the centre but it is very much a changed one, where there is far greater local determination on local matters. It is in those very local matters where there needs to be a change and we stop believing that the centre—the Government—can

answer for every single thing that happens when it should be a matter for local answerability and local determination. We do see that in London, but it is evolving. Q439 Chair: Finally, the Secretary of State for CLG and the Minister for Decentralisation have said that they want to look at devolving more powers to elected mayors in future, and they want to expand the scope of community budgets beyond the 16 pilots in dealing with families with particular problems. Does your Department have a list of powers and responsibilities that you would like to see devolved to elected mayors and a list of items you would like to incorporate in future community budgets? If so, what are they? Nick Herbert: As far as directly elected mayors are concerned, if those are agreed by local people they will have a role. The role we have identified is to sit on the police and crime panels, which work alongside the police and crime commissioners. Effectively, it is the successor role to local authorities. We have to be clear that it is the police and crime commissioner who is responsible for the police force as a whole. If, for instance, there was an elected mayor for Birmingham, I do not think that they could take sole control of policing in Birmingham because that is just a component of the West Midlands force. Q440 Chair: More generally, across your Department’s responsibilities, is there a list of items that you seek to devolve? The Secretary of State for CLG has already said it is not just his Department that he looks to devolve; it is government in general. Therefore, does your Department have a list of things that it will offer to the Minister for Decentralisation saying, “Go and talk to local authorities about those; we’d like to devolve them”? Nick Herbert: I have already identified the key areas of devolution, first in the creation of police and crime commissioners and setting up police and crime panels on which directly elected mayors will have a role and, secondly, in the devolution of budget to the police and crime commissioners. Q441 Chair: Devolved down to local authorities? Nick Herbert: Yes. Local authorities have a big role in the police and crime panels. Q442 Chair: That is not really an extension of their current powers, is it? Are there other areas? You talked about the criminal justice system. There may be areas there. Nick Herbert: There is potentially an enhanced role in relation to the criminal justice system. I think that that will depend on the evolution of reforms over the next few years as we develop the pilots for our payment-by-results models and so on, but we have already seen an enhanced local authority role in relation to youth offending. I think there will be a further opportunity for a local authority role, and that is something about which we will certainly want to talk to the Minister. Q443 Chair: And maybe also an involvement in the community budget?

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Nick Herbert: That is quite possible. Q444 Chair: Is the Department for Work and Pension going to be left behind again, or is that unfair? Chris Grayling: I do not think it is fair to say we are left behind. It is a question of creating an environment in which the Department seeks to do less—that is the whole approach that we are taking with the Work Programme. When we arrived in government, if you got a list of employment programmes that the Government had been running, there was a page of different lines. By the time we finish the Work Programme contracting, we will have a tiny fraction of what was there before. In some cases, there are clear opportunities to strengthen partnerships with local authorities. I want to see local authorities directly contracting with Work Programme providers

so that that becomes much more of a financial partnership with them in putting money into buying additional services and our paying for the core. I can see us extending and developing that principle in the months and years ahead. We will always remain open to new ways in which we can forge partnerships, as I described in the frontline with Jobcentre Plus, or bringing together services under one roof. We are not saying “never” to anything, but we have quite a lot to do at the moment. Q445 Chair: But you do not have any specific ideas? Chris Grayling: I have no specific additional proposals right now for powers to be handed over to local authorities. That does not mean we would not look at areas in future where we could do more. Chair: Thank you both very much indeed for the time you have spent with us this afternoon.

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Monday 14 February 2011 Members present: Mr Clive Betts (Chair) Heidi Alexander Bob Blackman Simon Danczuk Stephen Gilbert David Heyes

George Hollingbery James Morris Mark Pawsey Steve Rotheram ________________ Examination of Witness

Witness: Paul Burstow MP, Minister of State, Department of Health, gave evidence. Q446 Chair: Thank you very much, Minister, for coming to see us this afternoon for the final evidence session on the issue of localism. Perhaps for our records you can introduce yourself. Paul Burstow: I am Paul Burstow. I am Minister of State at the Department of Health with responsibility for social care and a variety of other policy as well. Q447 Chair: One of the issues that we have addressed in this inquiry, and indeed in the last Parliament in another inquiry, is the extent to which other Government departments are really signed up to a localist agenda, or whether it is just CLG saying it and other departments perhaps pretending to do so in the background, but not really engaged with it. When you joined up your major policies in the Health and Social Care Bill, to what extent did the Minister for Decentralisation, who is to come and see us later, have any real influence over your proposals, or was it a question of developing them, showing them to him and ticking them off as being okay? Paul Burstow: As we worked through the proposals and drafted the White Paper, there was certainly extensive consultation at both ministerial and official level on that between CLG and the Department of Health. Given that the proposals represent a significant change in the nature of the relationship between local government and the NHS, CLG had a particular interest in making sure we framed that in a way that was not prescriptive but allowed local government to develop that new opportunity and relationship as they saw fit. Q448 Chair: Can you tell me one way in which involvement from CLG in the localist agenda changed what you intended to do to what you are now going to do? Paul Burstow: I think one of the ways in which it changed between White Paper and Command Paper in particular is that in the framing of the White Paper we identified the role of scrutiny as sitting within the proposed statutory health and wellbeing boards. That generated feedback both externally but also, as the proposal at that point was understood, concern from colleagues in CLG. That led us to make the change we made in the Command Paper and the Bill, which means we maintain a separation between the scrutiny role over health for local government and the responsibilities in terms of health and wellbeing boards.

Q449 Chair: Can we possibly be let into any ministerial secrets about changes that were made before the Command Paper, before we had an external influence? Paul Burstow: I do not think there are any secrets in so far as it was a collaborative process. Eric Pickles and Greg Clark were engaged in that with us at ministerial level during the preparation of the White Paper and obviously during the cross-Government clearance as well. Q450 Chair: Is that different from that which might normally be expected with simply cross-Government committees looking at issues? Is there a particular role that the Minister for Decentralisation now plays to oversee this? Paul Burstow: I think there is. One of the things about which we were made very clear when proceeding was the view that CLG rightly had on behalf of local government about not imposing new burdens on local government. That was certainly something of which we were mindful, and they made sure we were very mindful of, as we went through. I think in that sense it was a productive relationship, which led to a clear White Paper and has further informed the policy going forward. Q451 Bob Blackman: One of the concerns within local government for quite some time is the lack of democratic oversight of the health service. The health and wellbeing board that is to be set up under the Bill only allows for one elected councillor to be a member of it. Did you consider other options to make it much more democratic and accountable to the public? Paul Burstow: First, it is not a question of only allowing one. What we have set out in the Command Paper and now in the Bill is the de minimis requirement in terms of membership—those who must be members—and we have made clear that there must be at least one elected member appointed by either the leader or mayor of that authority, or indeed those persons themselves, along with a variety of other key actors in the commissioning of health, social care and public health. Some of the early implementer health and wellbeing boards are exploring a variety of options to increase the numbers of elected members involved, so that is perfectly possible. The aim is to make sure that they are led by elected members and are firmly embedded as part of the role of local authorities.

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Q452 Bob Blackman: Therefore, is guidance going out from the department in that respect to suggest that the provision that you must have one and no others is not the be-all and end-all, but that expanding that membership might be an option that authorities might pursue? Paul Burstow: Working with colleagues in local government, LGA, the Local Government Group and others, we already have a number of early implementer authorities that are trialling these ideas. There are 25 at the moment and more are considering taking part. That is forming a learning network. They are all developing proposals and we will make sure that is shared, but the Department of Health will not come up with a preconceived shape and notion of how health and wellbeing boards will and must operate in every locality. That must be something that local authorities shape for themselves. Q453 Bob Blackman: How do you envisage this working where there is a directly elected mayor? Paul Burstow: In those circumstances the mayor could, for example, choose to serve in his capacity on the health and wellbeing board for himself, but equally he could choose to appoint someone else to act as his representative in that particular forum. Obviously, the role of an executive elected mayor is somewhat different from the role in an authority where that is not the structure, but we provide for that in the Bill so that it is possible to work. Q454 Bob Blackman: One other concern that is also expressed is that health and wellbeing boards may go the way of police authorities and will be largely unaccountable and uninteresting to members of the general public. How will you make sure those boards exercise a proper democratic oversight of the health service? Paul Burstow: In my nine months already as a Health Minister I do not think there is any occasion on which health policy is a source of disinterest to the public, so there will always be that engagement and interest in it. What a health and wellbeing board does is move into a democratic and open forum those very discussions, not just about health policy and priorities but also how they interrelate with social care and public health. I think it creates some new opportunities for the way in which these services can be better planned together, integrated and thus have influence over the commissioning of those services. Q455 Bob Blackman: How do you see it influencing GP commissioning and also adult social care commissioning? Paul Burstow: GP commissioning consortia will be required to be members of these boards, as will commissioners of public health and social care. One thing we are trying to achieve—we believe this is the best way to do it—is a change of culture at local level. In the past we have had health flexibilities around partnership arrangements, pooled budgets and so on that have largely gone unused, so it is not just about structure but the behaviours behind it. These structures are intended to try to create a new climate in which the NHS and local authorities effectively

pool their sovereignty, working together to deliver better services for their population. Q456 Heidi Alexander: As a follow-up to Bob’s question about the way this would work with directly elected mayors, would your department consider giving a broader remit in health services to directly elected mayors, as opposed to leaders of local authorities? Paul Burstow: I am not entirely certain I understand the question. A broader remit in what regard? Q457 Heidi Alexander: Just in relation to health services generally. Paul Burstow: Oh, I see. I think that at this stage we are not looking to give a broader remit, if you like. Obviously, in London there is an interesting additional dimension that we are working through with both London boroughs and the Mayor for London so there is an opportunity for the Mayor to be able fully to discharge his responsibilities for health improvement alongside the new responsibilities that will come to local authorities in that regard. But at the moment we certainly do not look to exercising differential treatment between authorities that choose to have elected mayors as compared with those who do not. Q458 Mark Pawsey: One of the key issues in this inquiry is the variation in the level of local services as different communities decide what is right for them in the spirit of localism. What is your view with regard to health? Do you expect more or less variation to develop between different communities as local authorities play a bigger part in the delivery of health services? Paul Burstow: I think the real test here has to be: does the service actually fit the postcode; in other words, are you delivering services that meet the needs of the people who live in an area, or are you just providing a one-size-fits-all solution? What we are very clear about is that we see a much more enlarged role and significance in joint strategic needs assessments as the way in which health and local government together can assess the needs of their population both to meet their social care and health needs and to drive the wider health agenda in terms of public health. For the first time in the Bill that is going through Parliament at the moment we place statutory requirements on GP commissioning consortia and local authorities to have regard to joint strategic needs assessments. At the moment they are produced in a document of variable quality. Lipservice can be paid to them and there is no obligation to take them into account. Q459 Mark Pawsey: You drew attention to the postcode lottery. That is an issue that just about every witness has come to sooner or later. There is greater concern, is there not, about postcode lotteries in health than there is about other matters? I think most Members of Parliament are aware that people compare what is available in one community as opposed to another. Is that a matter of concern? At what stage do you as the Minister start to intervene if there is too great a variation?

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Paul Burstow: The curious thing is that in a system that is largely command and control we have significant variations between one part of the country and another in terms of the results being achieved and the inputs to the system. We are determined to make sure that the way in which the system is driven is very much anchored on the basis of clinical evidence. NICE will be providing clinical standards that will describe what “good” looks like in a whole range of service and disease areas. That will inform the commissioning activity of the consortia; they will have to take that into account in the work they are doing, and because they will be led by population need, there will be differences between one part of the country and another but those differences will be necessitated by the needs of that local population. Q460 Mark Pawsey: How about where you have differences in the level of provision between adjacent authorities? Where people are looking over the boundary and seeing what is going on immediately next door, does that bother the department? Paul Burstow: It requires us to make sure that there is much more transparency and information available so that people can make comparisons to establish whether the difference is a justifiable one based on population need or it is the product of decisions made by commissioners that are not evidenced in that way. Therefore, it is very important that as part of the reforms we are taking forward there is much more transparency and comparability available so people can benchmark and challenge in that way. Q461 Simon Danczuk: I have a supplementary question about the difference between good and excellent services in different local authority areas. My question is whether you think GPs will be able to cope with the unpopularity and wrath of the public in terms of local decision making. Many of us in the room who have been local government elected members know what that is like. Do you think GPs are ready to feel the wrath of the public in regard to some of the difficult decisions they will decide to make? Paul Burstow: GPs are certainly keen to take on these responsibilities. At the moment we have about half the population of England covered by pathfinder consortia that over the next two years will develop the skills capabilities and also share in learning, so that process is going on. There is no doubt that in terms of major service reconfigurations, especially when we are trying to deliver what I think many of us would agree would be a better model of healthcare where more is delivered closer to home, that will result in challenging decisions at local level. You are right that elected members of local authorities are only too used to doing that and are very good at it in terms of accounting to their public, explaining those difficulties and taking the consequences of difficult decisions sometimes. I think we will have local government through its health and wellbeing responsibilities bringing that expertise very usefully to the NHS and taking local decisions about how service is provided in the future.

Q462 George Hollingbery: I was intrigued by your use just now of the term “justifiable difference”. Mr Pawsey asked you about postcode lottery. I think “postcode difference” is slightly more descriptive. You talked about whether the difference between postcodes was justifiable and so on and so forth. Who is making that judgment about justification? Is it you, the Minister, the ministry or the health and wellbeing board? There are all kinds of tensions here about split accountability. We have the face locally, which is the health and wellbeing board, and you with national policies. Where does accountability sit? What judgments will you, as Minister, not be taking that have characterised previous Ministers in your seat? Paul Burstow: The Secretary of State’s accountability—I think it will be much clearer than it is at present—will be to Parliament just as it is now. The Secretary of State, subject to consultation, will provide a mandate for the NHS that sets the strategic priorities and direction for service improvement. That will be informed by an outcomes framework, the first of which we published just recently, which covers areas of health improvement: areas of mortality more amenable to health intervention; patient experience; long-term conditions; avoidable harm and so on. Each of those is very much oriented towards: how do we get the best possible result out of the system? Therefore, the Secretary of State will set that and it will provide the commissioning board with its set of priorities going forward, if you like, which it then interprets into the commissioning rules and guidance that it gives to consortia. Therefore, there is accountability there. But perhaps I may answer the question in this way: we are bringing forward a fundamental change with these proposals. That fundamental change is in two parts. First, at the moment we have a system that is top down, command and control, in the way it is organised. We are removing that command and control system and creating much greater autonomy and, in the legislation, considerable clarity about what each organisation in the NHS has to do in future, and its responsibilities thereto. Secondly, we are inverting the current arrangements where managers are primarily in control of the system to one where they are led by clinicians and their clinical decisions, and those are the commissioning consortia. Therefore, in each part of the system there will be clear accountabilities, and also there will be clear accountability by the Secretary of State for the spending of taxpayer’s money and accounting for the delivery of a service that continually improves outcomes for patients. Q463 George Hollingbery: I am still slightly confused. I am not sure I understand how you can have justifiable differences being assessed by somebody, presumably you or your department, and yet local accountability to a board and the GP commissioners. Paul Burstow: That was the bit I did not answer. At a local level, health and wellbeing boards will be responsible for leading on joint strategic needs assessments. These are looking at population need in terms of health outcomes, social care needs and so on.

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They will be looking at the demographics and health inequalities of their population, and that will be used as the key document informing the development of joint health and wellbeing strategies, and those strategies will then be used by GP commissioners to inform their commissioning activity. They will have to demonstrate how they have taken those into account to shape the services they are providing and in turn also social services commissioners as well. Therefore, it is justifiable in the sense it is down to each local authority through its health and wellbeing board to account for its JSNA and then each commissioner to account for the service. Q464 George Hollingbery: But the health and wellbeing board does not control 80% of the health budget; that is being controlled by the GP commissioners, so do they have teeth? Can they make the GP commissioners do it a certain way; and, if so, do they not need to have a majority of local councillors on there so people are properly accountable locally? Paul Burstow: No. Sometimes the parallel is drawn with the adversarial system that we are used to here, whereas what we are trying to construct is a collaborative, consensual arrangement where health has influence over the shaping of commissioning of social care and public health, and local government has influence over the shaping and commissioning of the NHS. If you like, for the first time local government will not be just a commentator on commissioning activities of health; it will also be an actor, actively shaping those decisions by commissioning consortia. Q465 George Hollingbery: If a board and GP commissioners argue about how to solve a certain issue, will you as Minister reach down, sort it out and shake them up? Paul Burstow: No, but the NHS commissioning board, if there was a commissioning consortia in this test-to-destruction scenario, would have certain powers to address that. The GP NHS commissioning board authorises GP commissioning consortia in the first instance and there are reporting mechanisms and accountabilities there as well. George Hollingbery: That is very useful. Q466 Chair: To pursue the point in another way, you talked about the influence between the health and wellbeing board and GP commissioners, the involvement of the Secretary of State, the splitting of responsibility on public health, and local professionals and one or two elected members talking to and influencing each other, but in terms of the public and local population—we are talking of localism—it is very difficult, is it not, to see how they would be able to influence any of this process and understand it? Paul Burstow: Thank you for that because it allows me to say something about HealthWatch and the duties that will apply both to the consortia and to the NHS commissioning board on public and patient involvement and participation in decision making on commissioning and their other functions. First, let me say something about HealthWatch. At a local level

HealthWatch is intended to build upon the experience of the work of LINks that have been running for some time, but we are supplementing that with a national body called HealthWatch England, which will provide them with additional support to develop their capacity. HealthWatch England and HealthWatch locally will have the ability to be members of the health and wellbeing boards and they will be engaged with their consortia in the commissioning functions that consortia take forward. They will be involved in joint strategic needs assessments. Therefore, in many ways they are the bodies that look out to the public and have responsibility to provide the opportunities for the public to help shape these services. They will have that voice at the table where these matters are discussed. Therefore, I think that is a very clear way, which does not happen with LINks, in which that body will have a chance to shape what is going on. Q467 Chair: From the point of view of some people, you might just be confusing the situation even further. Most people may or may not know their local councillor; the chance of their knowing their local member of HealthWatch is probably slightly more remote. Paul Burstow: That is certainly a criticism that can be levelled at the moment against LINks in some communities, but I do recall two or three iterations ago of public and patient involvement when we had community health councils. In many towns community health councils were popular and well regarded as the entity that was there to champion the voice of patients. That is why we are keen not to replicate but certainly learn lessons from that structure. Chair: As an ex-member of a community health council, I pass on to James. Q468 James Morris: One of the most valuable pieces of work done by the previous Government was on Total Place, which shone a light on the amount of public funding that went into local areas. This Government has translated that into community budgets and initial pilots. I think that when the Minister was here he talked about the potential for that to be rolled out into other areas. What contribution is your department intending to make in making community budgets successful? Paul Burstow: A number of officials in the department are acting as champions in some localities where we are currently piloting community budgets, so their role is very much to act as barrier busters in central Government to make sure that those budgets are— Q469 James Morris: On that point, do you think there is some institutional resistance within the Department of Health to the concept of developing community-based budgeting? Paul Burstow: No. Q470 James Morris: We have heard in evidence that one of the barriers is to do with the fact that there are variable performance regimes across different departments and concerns about protecting funding

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and fiefdoms within departments to prevent it from happening. Do you see those barriers? Paul Burstow: No. If community budgets do anything over time, the one thing they will do is cast into sharper relief those kinds of issues and allow us to address them in a more systematic way. The Department of Health is fully engaged with this because we see them as very much part of how we drive an agenda of greater integration and collaboration across public services, which is key to delivering the public health agenda. Q471 James Morris: Sorry to cut across your answer, but what particular integrated services do you see as the next wave of community-based solutions? Paul Burstow: Let me start with one area where perhaps there is scope for greater collaboration across health and social care and other aspects of public service. A couple of weeks ago we published our strategy for mental health and identified the need for much earlier interventions to provide support in adolescence that can have a significant impact later on in terms of the burden of mental health in our society. It is very clear that if one is to deliver the appropriate interventions one needs partnership working across not just local public services but also engagement with a number of national public services to be able to put in place the right packages of support for families and individuals in those circumstances. Therefore, that for me would be an area where we could make quite significant inroads. Q472 David Heyes: You have described your vision of public health—I noted your words—as being “led by elected members and embedded in the work of local authorities”. You talked about public health work being based on a local assessment of strategic needs. Why then, exceptionally from other local authority resources, will the public health budget be ringfenced? Paul Burstow: This will be the repatriation of public health to local government after an absence of 40 years or so, so this is a new set of responsibilities to the current generation and arrangements of local government. We have taken the view that in order to give local government the confidence that Government is in earnest in transferring this responsibility they should have access to a ring-fenced budget as they take up these new responsibilities. Q473 David Heyes: It is very nicely presented but to other more cynical people, perhaps me, that would perhaps suggest you just don’t trust local government on this. Paul Burstow: As someone who comes from a local government background and has spent many years regretting the fact that local government was not given a good deal of latitude and freedom to be innovative at local level, that certainly is not the motivation behind the policy. It is to make sure that there is a dedicated resource to deliver some quite important change and enable local authorities to take on their new responsibilities.

Q474 David Heyes: It is a poor start for local authorities in being able to get on and meet what they perceive to be their local strategic needs. It sits alongside other centralising tendencies. Decisions about hiring and firing of directors of public health are to be retained by the Secretary of State. There will need to be consultation with the Secretary of State about those kinds of decisions and about employing what will be local government employees. All of it really indicates a determination to retain central control and not trust local authorities with this important new role. Paul Burstow: No, no. The joint appointment of directors of public health is to deal with the fact that the Secretary of State will retain accountability for health protection and therefore in extremis needs that line of control to deal with public health emergencies. That is why there is that accountability and a dual appointment. But the responsibility for health improvement sits solely with local authorities and the responsibility for discharging that function through local authorities through directors of public health. Therefore, these two responsibilities as far as we are concerned are very clearly separated. Obviously, as we go through the Public Bill Committee process that will be tested further. On the point about funding, I think the message we have received and understood from colleagues in local government is that they appreciate the certainty of knowing that this resource will be protected to allow them to do the necessary work to start up these new services. Q475 David Heyes: When can they expect to know whether that resource will be adequate for their new responsibilities and, for example, how the resource will be split between the local authorities and the new quango, HealthWatch England, that is being established? Paul Burstow: It is not a quango; it will be part of the Department of Health. There will not be a separate legal entity called HealthWatch England; it will be part of the department of state function and will advise the Secretary of State. As to the timetable, we are working at the moment to disaggregate the information from what is currently spent within the NHS budget. We indicated an estimate of £4 billion when we published the White Paper on public health last year, but there is more work to be done and more dialogue and conversation to be had with colleagues in local government before we come to final decisions. Q476 Stephen Gilbert: Minister, in terms of localism did you give any consideration to allowing local areas to choose whether they wanted to retain the primary care trusts? Paul Burstow: No, we did not. We took the view that a degree of certainty was needed about the architecture of the new system and that it would be consistently applied with clear accountabilities from one locality to another. What we have not done is prescribe in minute detail the precise way in which these consortia will conduct themselves. Therefore, it will be perfectly possible for consortia to have a very wide membership in their governance arrangements if they see fit.

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Q477 Stephen Gilbert: You talked earlier about the cultural change that would be needed to enable councillors and local authorities better to drive the health agenda in their locality. We have had evidence from the Local Government Information Unit that to date at the best of times it has been very difficult to get that relationship between GPs and councillors. How do you see that evolving, and what will be the principal drivers of the change? How will the cultural change, which you mentioned was necessary, take place? Paul Burstow: It is on a number of levels. Let me just describe it in the context of the legislation and a number of other actions that the department has taken over the past few months: in terms of the legislation, through changes in the remit of NICE we have extended it to social care; through specific duties on the NHS commissioning board to promote the use of the flexibilities around lead commissioning, pooled budgets and so on; and through the requirement that joint strategic needs assessments and joint health and wellbeing strategies are actually documents that have weight in the system and have to be taken notice of and acted upon in commissioning. That signalled a significant number of changes in the system to drive health and local government much closer together. But also in announcements we have made through the NHS operating framework we have placed requirements on the NHS to agree with their local government partners in areas where previously the NHS was solely responsible for making decisions, for example in terms of carers’ breaks, respite and budgets. They now have to agree with their local government partners on how much and how it will be paid out. For example, from 1 April next £648 million will be allocated from NHS PCTs to local authorities to support social care. That itself is engendering a new set of dialogues between those colleagues. Going forward, GP commissioning consortia will also be distributing that resource to local authorities, so we are trying to do a number of things from the centre to engender what ultimately will have to be down to behaviours and collaborative working at local level. The early implementers and the pathfinder consortia are also ways in which we are experimenting with that to make sure best practice is widely disseminated. Q478 Bob Blackman: Given everything you have said, why did you not just take the decision to do

away with PCTs, merge them into local authorities and let local authorities sort out adult social care and health at local level for the benefit of everyone who lives in that area? Paul Burstow: The reason we did not do that is that one of the key criticisms levelled at the NHS by successive Select Committees on Health and clinicians has been that clinical engagement in commissioning activity has been patchy and poor in many places and that the way in which we could make a significant change in quality and outcomes was to invert the system so one had clinicians on top supported by managers, not managers on top supported by clinicians. That is fundamentally the change in structure that we are bringing forward. Q479 Bob Blackman: But, surely, the alternative approach would be local people voting for their local councillors who would then have control over how the money was spent and where the services were provided. Paul Burstow: It is an alternative and it is one that this Government is not pursuing. I am sure that it is one that would be the subject of an interesting debate for the future. Q480 James Morris: If I may ask a philosophical question about localism, do you think it will ever be possible for a Secretary of State not to intervene at local level when there is a serious service failure and say, “Actually, it’s not to do with me; that’s to do with the structures that we have in place”? A lot of the evidence we have had about localism is that culture resistance in the public is one of the barriers to making localism happen. Do you believe it will ever be possible to get to that point? Paul Burstow: First, I think it is inevitably the case that any honourable Member of this House representing his or her constituents will expect to have the opportunity to raise that matter in a variety of ways here and for Ministers to account at the Dispatch Box. There is nothing we are doing in the reforms that will remove the right of an elected Member here to be able to pursue his or her constituents’ interests in the House. Secondly, as long as you have a unitary state, inevitably there will be those kinds of tensions and dichotomies in the system, but as far as I am aware at the moment that is not on the table for debate. Chair: Minister, thank you very much indeed.

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Examination of Witness Witness: Rt Hon Greg Clark MP, Minister of State for Decentralisation, Department for Communities and Local Government, gave evidence. Q481 Chair: Minister, thank you very much indeed for coming; you are most welcome. Quite appropriately, you are the last witness in the final evidence session of our inquiry into localism. For the sake of our records, could you just introduce yourself? Greg Clark: I am Greg Clark, Minister for Decentralisation. Q482 Chair: Thank you very much indeed. The appropriate first question is about decentralisation. The Committee is looking at localism. We understand that there are people also interested in the big society. Are these different concepts or are they all part of some genuinely joined-up thinking? Greg Clark: They are related. I see localism as the ethos, if you like, to try to do everything at the most local level. I see decentralisation as the way you do that. If you start from a relatively centralised system, you decentralise to achieve that. You might have seen the guide I wrote for that. If you do that seriously and comprehensively then I think you move from a position of a very centralised state to something that we have called the big society. Therefore, localism is the ethos; decentralisation is the process, and the outcome is the big society. Q483 Chair: When we heard evidence from the New Local Government Network, Simon Parker talked about the difference in his view between localism and decentralisation. He drew a distinction between the extent to which one was passing down powers and responsibilities to local government, which then sought to devolve power further to local citizens and communities, and simply passing power from the centre down to local citizens and communities, bypassing local government. Do you draw a distinction? Are they two different processes? Greg Clark: I think there are different models of it. The process of decentralisation that we have adopted, set out in the guide, is both. It involves transferring powers from central Government to local government, a clear example of that is getting rid of a lot of the ring-fencing. But it also imposes some requirements on local government to transfer powers to communities, so the right to challenge neighbourhood planning in the Localism Bill takes what was, as it were, the monopoly preserve of local government and gives people in communities the power. Therefore, it is both; it is a double deal, if you like. Q484 Chair: The double process is one that many people could feel comfortable with. I suppose there has been some concern when the process bypasses local government altogether. The idea of a Secretary of State sitting there and somehow having a direct relationship with individuals in the community does not necessarily seem to be an even-handed position or one where communities can exercise as much power and responsibility as they might do if they worked with their local councils in a more devolved framework involving the councils.

Greg Clark: I am a fan of local government. I should declare an interest as a former local councillor. Chair: Join the club. Greg Clark: That goes for many members of the Committee. I am quite impressed that we do not see some pallid faces among all those members of the Committee who are simultaneously members of the Localism Bill Committee. I am impressed by what has obviously been a healthy weekend of fresh air. I think it is a question of both. Even when we are empowering local communities, for example as in neighbourhood planning, I very much see a leadership role for local councillors. This provision is not excluding local councillors by any means. Just as we all hope our political and community leaders in our own constituencies will play their part, we expect ward members to play that part in taking advantage of the rights that are available to communities. But I think it is a combination of both. It would be wrong to see this just as a shift between central and local government. It would be equally wrong completely to ignore local government and put the focus exclusively on individual citizens and communities, so there are various aspects that do one or the other and sometimes both. Q485 Simon Danczuk: Minister, let me start by wishing you a happy Valentine’s day. Greg Clark: Thank you, sir. It is the first time I have been wished that by an MP colleague, so I am grateful. Q486 Simon Danczuk: I cannot think of anything I would rather be doing now than talking to you about localism. Greg Clark: I was going to say it was mutual, but I have been rather looking forward to this session. Q487 Simon Danczuk: What international examples have the Government drawn upon for its approach to localism? Greg Clark: There is a whole range of examples. If we start by looking across the world, as I am sure you know for your hearings, we have one of the most centralised systems, whether it is the centralisation of finance or the planning system. For example, if you look at the Dutch planning system, in which we have been very interested, there is much greater involvement by communities at that level. If you look at some of the rewards that come from development and planning, you will see that, for example, in the Danish system there is greater community ownership. If you look at the US, for example, as I said on Second Reading debate on the Localism Bill, I think it would be considered extraordinary if you were sitting in Colorado and were told that the detailed rules governing the behaviour of the local council were set by a member of President Obama’s Cabinet. Wherever you look you come to the ineluctable conclusion that we are very centralised to a dysfunctional extent.

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Q488 Simon Danczuk: So, in terms of examples, Manchester will end up more like Århus in Denmark. What are the examples of countries that we will become more alike under the Localism Bill? Greg Clark: I think we will be more like the rest of the world. I do not think there is a particular, single model of which we are trying to turn the UK into a clone. We have different traditions. Q489 Simon Danczuk: But have we borrowed examples from any particular places? Greg Clark: Mayors, for example. You mentioned Manchester. One of the things that impels us towards the idea of mayors for our bigger cities is to look around the world. We observe that the strongest cities in the world, whether it is Paris, Lyon and Marseilles or New York, Washington and Chicago, have figures who are rallying points and represent in a very personal way their cities. That has been very influential. As to planning, I think the Dutch system has been very influential. If you look at some of the community rights, again across Europe there are different approaches to this, but there is always a consistency that there is a sense of entitlement and of checks on the monopoly use of power, whether it is at the centre or even at local government level. Q490 Heidi Alexander: I hope you will forgive me if I don’t also wish you a happy Valentine’s day. My fiancé might have something to say about that. Greg Clark: I’m devastated, Heidi. Heidi Alexander:I would like to turn to how localism is going to work over the next five years. In your vision for localism, do you see local councils having fewer or more powers and resources in five years’ time than they do currently? Greg Clark: I certainly see them having more power and greater control over their resources. What they have will be increasingly up to them in a way that it is not at the moment. In terms of more power, the general power of competence establishes the right default that, rather than local government existing almost literally to do the things that central Government tasks it to do, you should turn it the other way round and say that local government should be able to do things other than those things that are explicitly banned. If you think that way, that is literally a general power which would enable councils to operate in different ways. Some will choose no doubt to go further than others in terms of innovation; some will be innovators; some will be imitators and some will be rather more cautious. Therefore, I certainly see local councils having greater powers. As to resources, one of the decisions we took, which is reflected in the Bill, was to replace capping for council tax, for example, with a local referendum whereby if a council wants to make the case for a higher than usual increase in the council tax, presumably for a particular purpose, it can make that case. I think that policies like the new homes bonus and the change we are making to the community infrastructure levy are about getting more local control of finance. I am sure that in future sessions you will take an interest in the review of local government finance, when it is very much intended that that

process will continue. Therefore, I would say it is both. Q491 Heidi Alexander: As to how it will work, perhaps you could take the example of your constituency. Is it Tunbridge Wells? Greg Clark: Yes. Q492 Heidi Alexander: Tell us what you see councils and different layers of civil society, perhaps community groups locally and nationally, doing in five years’ time. What will the delivery of public services look like in five years’ time in your constituency? Do you have any ideas about what those different layers will be doing? Greg Clark: That is a good question. For a start, I think the county council and borough council—we have a two-tier authority—will be able to distinguish themselves from perhaps their neighbours and do things in different ways. For example, they might choose to target the town of Tunbridge Wells, which has a lot of potential as a tourist destination. It also has a degree of potential in some of the new media centres, so, for example, they could use the powers they will have, whether it is to vary business rates or promote particular aspects of the local economy. They can do that and make a pitch for distinguishing themselves from neighbouring councils. In other words, they are not just a vehicle for delivering services; there can be something more tangibly Tunbridge Wells about it. What I would also hope and expect to see is a much greater engagement and partnership with local communities and voluntary groups. It should be easier for them to access the provision of services. I think it should be less of a situation in which they are dependent on just the grants programme, but those boundaries around the town hall should be chipped away at so there is a greater flow. On planning, for example, I would like to see a good proportion of the neighbourhoods in Tunbridge Wells—the whole constituency, not just the town—express a vision of how they would like their community to be in the future. Therefore, I would like to see greater civic engagement from the grassroots and a greater sense of local difference, I suppose. Q493 Heidi Alexander: Some people might argue that rather than decentralise from the centre, the Government might be better off perhaps decentralising to local authorities and allowing them to make the decisions about how to decentralise to the community beyond that. What would you say to those people? Greg Clark: I understand their case and it is a very rationalistic view that you devolve just to one level and then leave it up to them and that, just as people can make decisions about who forms the Government, they can make decisions about who forms the council. We advisedly chose a different route to combine the devolution to communities as well as to councils. It comes down to this: whether it is central or local government, I think there is a degree of power that if unchecked means that those people who are not the best performers—they will do these things anyway

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without this—may, without safeguards, choose not to give powers away and empower communities. I think that imbalance of power between those who have it and those who are excluded from it needs to be addressed. That is why we need a programme of Government to make that happen, because unless you do, people, frankly, are pretty pleased to have the power they have. Sometimes you need almost physically to prise their fingers off the levers of power if you are to make that difference, so I think it is right to push it further than local authorities. Q494 George Hollingbery: I was intrigued by your description in response to Heidi’s question about what Tunbridge Wells would look like in five years’ time after passage of the Localism Bill, because it sounded to me that there was nothing in what you said that could not be done now. It seemed to me to be absolutely what could be done now. You did not mention community budgeting and much greater integration of local delivery of services between local councils and local budgets, the health service and so on. I just wonder whether or not localism has become a matter of tone for this Government rather than forcing Government departments particularly to start to do more locally with each other. Greg Clark: I think it is a big difference. If you consider the status quo and talk to elected members or officers of any authority, they will tell you in all candour—it is not particularly a party-political point—that not just over the last decade they have become increasingly constrained in what they can do by having to abide by CAA, by having funding coming in into tightly specified pots of money so that they could not exercise the degree of discretion that I said was a more desirable precondition to doing things differently. Therefore, I think it has required that change. It is certainly true that the good councils engage with their communities and often help to nurture and support a very diverse range of civic organisations. I regard my council as a good one; it does a lot of that already, but it needs to be something that is not exceptional or relies just on the good will of the council. I think people should have the right to do things differently. One of the key reforms that shoots through a lot of the different measures is to go beyond the idea that this should be discretionary on the part of councils and to give rights to people in communities. Members will forgive me if I have said this before, but I think it comes from the Sustainable Communities Act whose principles are one of the most revolutionary pieces of legislation introduced by Parliament. The power is very simple: first, that people in communities below levels of Government, whether local or national, should have the right to know what is being spent and done on their behalf; and, secondly, they should have the right to suggest alternative ways of doing it and be reasonably considered rather than just abruptly refused. We have tried to continue the ethos of that Act, as it is now, in the Bill, and I think it is revolutionary. Q495 George Hollingbery: Therefore, localism has become a stick for local communities to hold over

their councils’ heads, and if they do not delegate or consult enough or do not deliver what people want them to deliver, the people can challenge them on that. Is that what you mean? Greg Clark: I do not regard that as a stick so much as an opportunity. I believe very strongly that the best ideas are not the preserve of elites, whether they are in Whitehall, Westminster or, frankly, necessarily the people who occupy the upper echelons of the town hall from time to time. I think lots of people in communities and working with their communities have great ideas but often they do not have either the influence or access to the mechanisms available to those in power and authority in order to achieve what they want. Therefore, it seems to be incumbent upon us as a Government and also upon local government to make some of the resources and support that we have to make our ideas fly available to people in communities with good ideas. I am absolutely certain that if you do that over time and across the country people will, if they have their head, do things in ways that represent innovations and will be a motor for progress that can be tremendously exciting. Q496 James Morris: Minister, I think that in evidence you gave to the Committee previously you commented on your cross-departmental role and said that in a sense there was a paradox in that there was a Minister for Decentralisation at the centre trying to decentralise power. Given your experience since the Government has been in power for eight to nine months, what blockages have you found in terms of making sure there is a commitment by Government to decentralisation, because a lot of the evidence we have heard is that one of the barriers to localism is the sense of cultural inertia in Whitehall. Greg Clark: Yes. It is one of the reasons that I really welcome this inquiry. I hope that if the Government needs a nudge, you will go beyond that and give a firm shove to all of us in Government just to reinforce the need to make this change. To start with your first point, Mr Morris, it is a conscious paradox. For the reason I said, if people have power at the moment, often it takes quite an effort to make them give it up. That is why I think you need a dedicated programme to do that. When the Prime Minister appointed me, he asked me to work obviously primarily for the Department for Communities and Local Government but to try to help the process of decentralisation across Government and indeed to report back to him in July on how different departments were doing. I have shared with Members that one of the first fruits of that is the guidance we have put out for people who may think that decentralisation is a rather abstract term to which it is easy to pay lip-service, but how do you put it into practice. We have broken it down into the six actions that you see there. Whether it is getting rid of central impositions or having a determination to be much more transparent in data, they are actions that not only can be taken by different departments but can be judged against, so the reply that I will give the Prime Minister in July will judge them against that, and some will do better than others.

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Q497 James Morris: How would you resolve a particular tension that existed if you thought that a department was taking decisions that did not support the decentralisation agenda? Hypothetically, I think of DWP. We have had evidence to suggest that the Work programme being implemented by the Government is in essence not really a localist programme; it is determined very much from the centre. How would you go about resolving some of those tensions, or are there certain areas of Government policy that you would not be able to influence directly? Greg Clark: I cannot direct them but I would hope to influence them. Before Christmas, I wrote to different departments asking them to set out how they were doing against these actions in order to bring together what they have achieved so far. Therefore, having that remit and the opportunity for those conversations does, I think, give one influence across Government. Sometimes it requires a conversation because, just as we have not taken what I would regard as a very crude form of decentralisation going just from Whitehall to the town hall, it is fair to have a conversation about some of the necessary safeguards. Therefore, child protection is clearly an area in which, reasonably, it is not possible to say that however a council discharges its child protection services will be purely a matter for the ballot box four years hence. I think that if there is something wrong with it, people should know early and there should be decisive intervention. Therefore, I think it gives rise to an intelligent conversation but gives an opportunity for some of these issues to surface so you can make sure you are casting it in the right way rather than in a way that does not reflect the differential circumstances.

prompting thought that perhaps some elements of criminal justice might be appropriate. Does it disappoint you that there is not enthusiastic thinking going on about future issues that could be decentralised? Greg Clark: I do not see it quite like that. If you look at what other departments are doing—I do not deny that there are leaders and laggards—and take education and what is going on in terms of the schools agenda, I think it is very radical; ditto on health. In social care, for example, the move towards personal budgets is very ambitious. But the opportunity arising from this request by the Prime Minister is to do a bit of cross-fertilisation in advance of July. If there are approaches on, say, transparency that have been made in one department that another department may not have thought about, or not thought about enough, it gives the opportunity to say, “These three departments are taking these steps to make information more transparent and available. Why are you not doing it in yours?” It may be the case that it simply never occurred to them, and to have a framework against which they can be judged provides a greater degree of rigour. The report that I shall issue in July is something in which I would hope all departments would want to appear favourably, so they have an interest—I hope an incentive—to learn lessons from other departments in Whitehall before then so they can present a picture of good practice. After all, this is one of the principal approaches of the Government—the power shift, as the Deputy Prime Minister described it. I cannot think that there is a department that would consciously want to be without that.

Q498 James Morris: To what extent do you interact with the Cabinet Office? It seems that the Cabinet Office has responsibility for, as it were, cross-departmental monitoring, if I may put it that way, of implementation and performance. Do you have a formal relationship with the Cabinet Office? Greg Clark: You are absolutely right. I do not know how formal it is, but, for example, I spend a lot of time with Oliver Letwin, the Minister for Government Policy. I do not think you have taken evidence from him. He is closely involved in the structural reform plans, for example, and assessing new Government policies. In Opposition, he and I worked very closely on this agenda over many years. We have frequent and close interaction on this, so not much goes on in terms of other departments that has an aspect of decentralisation that I do not know about and in which I have not been involved in a very flexible way.

Q500 Chair: To paraphrase, a few minutes ago you said decentralisation was about transferring powers to local councils or communities. Greg Clark: Correct.

Q499 Chair: I want to pick up just a couple of points. As to the letter you sent out, I would be very interested to see what reply you get from your colleagues about the progress they are making. Perhaps you can tell us which departments do need a shove in agility in that regard. We have already asked the Minister for care services whether he could think of any other issues where decentralisation might be on his agenda. The Minister of State for the Department for Work and Pensions could not think of any either, and the Police Minister with a bit of

Q501 Chair: GP commissioning hardly seems to fall into either of those, does it? Greg Clark: I think it does. It takes away a level of bureaucracy that was unaccountable in strategic health authorities and PCTs and gives much more influence to local people as to which GP they can go to, for example. Q502 Chair: But the real commissioning decisions are not going to be influenced by local people, are they? GPs are not going to be accountable in any way. Greg Clark: They are in effect because if you give people the choice of GP, the performance of GPs in commissioning is something over which people will have a direct influence in a way that they simply do not at the moment. In years to come we will look back to the devolution to GPs as one of the most empowering things we have done for local people. Q503 Chair: I represent an urban constituency. If I represented a rural constituency and the next GP was 20 miles away it probably would not seem to me to be an enormous transfer of influence and power. Greg Clark: I am sure that even those GPs would want to serve their communities well and have the

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good opinion of them. Everywhere has geographical margins and I am sure that they would want to make sure that even in those areas of competition they were doing well. But, more than that, my view of professionals, public service professionals in particular, is that the reason they follow their vocation, whether it is in the health service or in education, is that they want to do well; they want to exercise their professional judgment for the benefit of their patients. That is why you take the Hippocratic oath if you are a doctor. I have never met a teacher who was attracted to teaching other than because he felt he had a gift and talent for transmitting knowledge and inspiring people to learn. I think the more you circumscribe and describe centrally how you do that, however good the intentions—I recognise the reason for it is to have a degree of standardisation that seeks to improve standards across the country—you reach a period of diminishing returns, in that most professionals would say that the degree of prescription and control has taken the edge off the calling that brought them into their profession in the first place. Q504 George Hollingbery: You talked a little about the process of your driving through this change. The last time you were with us we asked you a similar question. You talked about wanting to say to local authorities and other groups in the community, “Come to us and make suggestions.” To what extent should local communities and their representative authorities be reaching up to draw down, and to what extent should central departments be pushing out? Greg Clark: I think it is both. In terms of reaching up to draw down, I think that if you establish the right to do things differently that is the correct way to do it. To take neighbourhood planning as an example, it would be the wrong approach to impose a requirement that every neighbourhood across the whole country had to adopt a neighbourhood plan on a particular date. It would be over-prescriptive and would not reflect the reality that some communities might be perfectly happy with the way their local planning authority’s plan sets out their needs. But to give communities the right to do things differently is the correct approach; similarly in terms of the provision of services and the right to challenge. If the way things are being done is pretty much perfect and no one would want to change it then presumably people will not come forward with challenges, whereas if there is a case to be made that things could be done better, it will be made. Therefore, to give people the right to do things differently but not forcing them to do so is a reasonable way, but it is right to put some safeguards into the system to ensure that, whether it is central or local government, it does not stymie people’s ability to take up to those rights. To go back to the Sustainable Communities Act, one of its principles is about information, requiring more information to be disclosed so people can make that assessment about whether things are being done properly or could be done better. A second is to make sure that bureaucratic procedures cannot be used to frustrate the will of communities among those authorities or departments, hopefully quite small in number, that would rather not be challenged.

Q505 George Hollingbery: I take you back to the example of Tunbridge Wells. From the evidence we have received there is a fairly strong suspicion that the greatest result localism can produce is the pooling of local budgets from Government departments. You are not talking about that. Evidence we received on our most recent field trip is that somehow the Government system is not yet fit for purpose in terms of the localism agenda. There were a number of examples where local organisations and/or councils wanted to reach up and make budgets work together and the silo guardians at that stage said, “Well, I’m afraid that I haven’t had that authorisation; I can’t spend the money that way.” Therefore, from the evidence I have heard there is a lot of work to be done at the centre to ensure that people lower down the chain in Government are prepared to offer a mechanism to local people to take control. Greg Clark: That is exactly the right approach to take, and I would like to extend the principle that people have the right to do things differently and prevail against a reluctant bureaucracy. Just as we are establishing that against councils, I think it should be established against central Government. I completely agree with that. I think it should be done at the initiative of different communities. There is also a programme of bringing people together as a matter of deliberate policy, but I think there should be the space there. It runs throughout the document I published that people should have the right to do things differently and make a reasonable case for that. Q506 George Hollingbery: You have put up structures around things where communities can draw power down—for example, local planning, right to challenge and so on and so forth—but you have not done that around central Government budgets that are being spent locally. Greg Clark: We are, and I think we should do more. The 16 pilots for community budgeting that we have started with are designed to work out what changes you need to make to central Government machinery to make that happen with a view to rolling it out nationally, but the initial pilots concern families that place great demands on local authority services. But I agree with you that the approach you have described is the one I favour and I intend to see it as the way that communities can access money. George Hollingbery: I would like to press you further, but my colleague has a question that I suspect might touch on this. Q507 Bob Blackman: If I may press you further, roughly 10% of total Government expenditure in any one place is controlled at local level. Clearly, we have the pilot areas looking at community budgeting. What is the end game here? How much of total Government spending at local level do you envisage being controlled at local level? Greg Clark: It is hard to give a precise figure, Mr Blackman. Q508 Bob Blackman: Try between 10% and 100%. Greg Clark: I think Nick Clegg got into trouble when he tried to put numbers on something a bit different

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like that and to be invited to say “no more than”, so I am not going down that route. But it accords with Mr Hollingbery’s point. If you establish the right to do that then it is up to local communities to take it up. My sense is that it is a lot more than is done at the moment. In my discussion with Miss Alexander I talked about the fact that other countries had a much greater local control over finances than we do. My objective is to establish the right to do that. I am confident that if you do that, people will take it up and we will transform the system. Q509 Bob Blackman: Can you envisage the day when we will be looking at a much larger proportion, say 50%? Greg Clark: You are very beguiling in your temptation. Q510 Bob Blackman: Say, 50% of the money spent at local level could be given to the local authority to decide on local priorities and local expenditure, possibly within the requirement that, “You will spend money on health and various different things,” but they could decide on the degree to which they spend. Greg Clark: I honestly have not thought about what is the right ballpark figure, so it would be misleading of me to come up with one, but we can agree that it is more than 10% and more than it is at the moment. Q511 Bob Blackman: To quote an example, on one of our visits we considered the example of lookedafter children where a vast array of different departments and Government agencies intrude on one young person’s life, yet at local level there is hardly any control whatsoever. Can you envisage that being turned round to being one agency that looks after this? Greg Clark: I think you put it very powerfully. That is the vision that I have. Whether you can get it down to one person, you should certainly have far fewer than we have at the moment. It reminds me of the old adage of Tip O’Neill, who said that all politics was local. I have just been struck over the past year in talking to councillors and people in communities how it has gone even beyond that. Policy at least is increasingly personal. I mean it in this way: you are a former councillor, Mr Blackman. Are you still a councillor? Bob Blackman: Not now. Greg Clark: You will know in your community who are the individuals and families—you know their names and where they live—who have a disproportionate call on public services. I think that is the experience across local government. People know personally those who need help. The frustration is that, in order to put the required offer of help together, first of all they may not be able to do so, even though they know what is best required. Even in so far as they can, it is such a tortuous knitting together of different strands of funding that it is completely wrong. Therefore, I think we should act on the principle that problems and policy often require to be personal and work from the bottom up and design Government around that, rather than try to make our most vulnerable people fall into line with the structure of

central Government departments that were set at the beginning of the 20th century. Q512 Bob Blackman: I can assure you that you do not lose that knowledge when you cease to be a councillor and become an MP. Greg Clark: Absolutely; it is the same in my constituency. Q513 Bob Blackman: To press you on one other area, as we have talked about, there is quite a lot of fragmentation between the services delivered by Government departments at local level. Is it not a higher priority to rationalise those than to decentralise so we get some consistency in approach rather than the fragmented approach we seem to have with various different Government departments? Greg Clark: I think that is one of the advantages of the right-to-challenge approach, if I may call it that, where you give the right of initiative to people to do things in different ways, whether it is to provide a service or to control budgets in that way. I see the principles of community budgeting being similar to those of the right to challenge, just as Mr Hollingbery said. If you do that one of the most important outcomes is that I hear local people saying, “Well, there is this money being spent on this service and on this other service over here and something else over here. We have an idea that we can pull it together and provide a better service for the people at whom it is aimed.” I think that a lot of the exercise of these rights, whether it is to have a community budget or deliver services, will be to de-fragment, consolidate and bring together a more coherent service for those individuals. Q514 Bob Blackman: Some would say it would be better for the Government to bring those services together in single delivery units and then decentralise rather than decentralise all these fragmented services and hope that local people do bring them together. Greg Clark: I think that is a very perceptive point. You are absolutely right that the debate is whether you design it from the top and crash things together so everything flows down to a local level or whether you give people the right of initiative locally to do things in a different way. I think there is room for both. What the Prime Minister and our colleagues have said about vulnerable families, for example, is a particular approach to try to bring together the relevant budgets for that in a very deliberate way. I think that should be supplemented with the ethos we are establishing whereby communities themselves can suggest different ways of doing things. Q515 Bob Blackman: I accept that, but can I be clear what your position is as Minister for Decentralisation? Is it your priority to decentralise or to bring these services together? Greg Clark: Clearly, I want to decentralise and allow local people to bring them together locally, but I also see the need for particular services—some of the narrower services. The Bill Committee had a discussion with people in the voluntary sector who deal with people with particular disabilities. In that

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respect, the community may not be the same as a spatial community. There may be people with particular needs that can be serviced across quite a wide geographical area. In that case, one probably needs to bring budgets together at a higher level than the geographical community, so I think there are different approaches depending on the different communities. Therefore, where you have a geographical community, there is a strong case for that, but if you have communities of needs, shall we say, it might require a slightly different approach. Q516 Steve Rotheram: If I may follow up what both Mr Blackman and Mr Hollingbery said in regard to the Minister being reluctant to be tied down on the range between 10% and 100%, at a philosophical level would it be the aim to achieve as near as possible 100% freedom. Greg Clark: I do not come to it with that perspective. I think that if you establish a right, I genuinely do not have in mind a figure that people should get to. They should be able to get to whatever level they want; there should be no maximum level. But it is a bit like neighbourhood planning. If people are pretty happy with the way things are and do not want to change it, that is cool; they should be able to continue with that. It is the same with community budgets. If they are satisfied with the services that are provided, fine, but if they think they can do things better, they should be able to. Q517 Steve Rotheram: The reason for my hesitation is that I have never been on a Select Committee before, so I apologise if I get some of the protocols wrong. In regard to what you have just said on this question now and earlier, even though you are reticent to get tied down to a specific figure, is the aim to release as much as possible and, therefore, achieve as nearly as possible 100% freedom in regard to any budgeting responsibilities, or are there some issues that you think are outside the scope of that which need to continue to be ring-fenced? Greg Clark: I really do not have a figure in mind. I think it is about giving people the right to do things differently. I do not think in that way. If you have a particular figure in mind then, to be frank, that is rather corrupting of your purpose because then you tend to try to drive everything to get to that figure and end up being more directive than empowering. I would rather give people the right to pool budgets and challenge the way things are done but genuinely not drive them to get to a particular percentage. Q518 Chair: I think the “fragmentation” argument is a really important issue. As to the problem of central Government silos—we have heard descriptions of how they still operate right down at the lower level with the involvement of Government officials—is there also a danger that by not using local government as a focal point for decentralisation in all respects in creating the elected police commissioner, the free school, the community trust and the neighbourhood planning arrangement you create fragmentation at local level where there is nobody overseeing all these

issues and trying to pull them together in some kind of coherent approach to local service delivery? Greg Clark: You raise a very interesting point, Chairman. My view is that if you have people responsible for the things for which they are responsible—on other words, the police commissioner responsible for approaches to policing—people will get to know who is responsible for what. In our lives we regularly operate in a situation in which different people are responsible for different things. As long as you know they are and you have some relationship with them and can replace them, or can go elsewhere, then in my view that is fine. The position we are in at the moment is that things are done to people without them knowing either who is responsible for them or, even if they did, being able to do anything around them. I take PCTs. I daresay that all of us as Members of Parliament have experienced a situation in which there is something wrong with our local health economy. We talk to the Secretary of State who says it is the responsibility of the PCT. We talk to the PCT and they say it is the responsibility of the Department of Health. Naturally, you are lost and frustrated in the midst of it, so in this case I would rather have responsibility for commissioning with GPs so that people know who it is and that they can go elsewhere. I do not think it is beyond people to know that actually their GP is responsible for where they go to access the health service. Chair: They will probably still get their MP to go to the Secretary of State, so we may still end up in the same place. Q519 Mark Pawsey: My question is to explore this direction of travel that has been started on under localism and what the limits of localism might be. You have already spoken about the right for local people to take control wherever possible. We have the community right to buy which is part of that. If a local authority looks at the delivery of services that remain with central Government and believes that it might be able to deliver those better would there be a right to challenge Government and for the local authority then to take that over? Is that a logical extension of the process we have already started? Greg Clark: It goes back to what I said at the beginning. It is about power being at the most appropriate level. It is not an extremist approach that all power resides at the neighbourhood level. I think different levels should be responsible for different things. To take a case in point, I do not think the borough of Tunbridge Wells should be responsible for its own defence policy, for example. I think the standing army in Tunbridge Wells might be quite a scary thing. I don’t know, but it might be more Dad’s Army than a killer force. But I think for that reason, whether it was scary or not, I think it should reside nationally. As you go through services the question is: what is the most appropriate level for this? Q520 Mark Pawsey: This is part of the “0% to 100%” question that Mr Hollingbery and Mr Rotheram raised. Who determines what is the most appropriate—central Government?

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Greg Clark: This is why my answer to Mr Blackman was meaningful in the sense that, if you tot up defence spending and all the other things, what would be a realistic percentage even if people did exercise all these rights? I think there is an exercise to be done there. Perhaps the Committee’s advisers might identify what is the maximum level. I think there are judgments to be made. I am not in favour of abolishing this Parliament. The fact that this Committee is looking into localism means that one of the underlying questions, I daresay, is: what are the limits? What services should be decentralised and what should not? I give an example of defence; earlier I gave the example of child protection. My view is that the answer on child protection is that the delivery should be decentralised but there should be pretty tight reporting requirements and powers to intervene if that goes wrong. I think it does vary. I do not have a generic answer as to what the proportion is. Q521 Mark Pawsey: If we accept that defence is not on the agenda, in evidence to this Committee local authorities have said they would like greater powers in dealing with the question of worklessness. That is not included within the Localism Bill. If local authorities are able to make a convincing case for them to receive powers in that field what would be Government’s response? Greg Clark: I think that goes to community budgeting essentially. I think you took evidence on that. I think local councillors do have a sense of who in their communities need help and often what type of help. We all know that the type of help in one particular area can be very different from what is required in another, so I would like to see those services subject to this “right to challenge” approach. On the other hand, there is a desire—that is why it is I think a conversation—to have a system where contracts are let and there are national providers. To build in the degree of opportunity for challenge is what we need to establish case by case. Q522 Mark Pawsey: So, is that the Localism Bill No. 2? Greg Clark: I think it is a sensible suggestion, Mr Pawsey. I do not think this is the end of it by any means. This is an important step down the road to a more decentralised country, but if this Committee meets in a couple of years’ time I hope it will be able to look back and think that this has been another big step forward in the progress we make on community budgets. No doubt the review of local government finance will be another contributor to this. I think you are absolutely right to suggest that it will not all be done and dusted by this Bill. Q523 Heidi Alexander: It could be argued that many local authorities are already doing localism, just as it could be argued that we are already doing the big society. Can you explain to me how you see the localism that is being promoted by your Government as being different from those examples in parts of the country where it is already happening? You have talked about things like neighbourhood planning. If local authorities have gone about putting together their

core strategy in the right way there would have been a huge amount of local community involvement and engagement. You have spoken about the community right to bid to run services. Again, in many local authorities who are working with the community and voluntary sector some of that will already be happening as well. Therefore, do we really need the Localism Bill? Greg Clark: One of the classic questions in relation to any Bill and reform of this sort is: because the good practitioners follow these principles anyway, why do you need to introduce anything that makes it more widely available? I think the answer to that has two components. The first is that I think it should be available to everyone, perhaps especially in those areas where people might be living under a local authority, or indeed areas of national Government, that need to be challenged as to the way they are doing things because they do not represent best practice. I do not think it should be random and depend upon whether you happen to live under a progressive council or that you are dealing with a Government department that takes an enlightened view of these things. Q524 Heidi Alexander: But that would be a local decision by the local electorate. Greg Clark: It is really what we have talked about. There is a purist view that it is all about moving things up and down the scale between central Government and local government and it is just the ballot box. I take a different view. It is similar in my view to the approach we take in the private sector about having laws against the abuse of monopoly power. You can say that companies exist; they are free to trade; it is really nothing to do with us whether they act in an abusive way using their dominant market power. I think there is an acceptance not just in this country but across the world that you need a framework in which the people lacking power enjoy some protection against those who do have power and abuse it, or have the capacity to abuse it. In competition law, the concept is the abuse of a dominant position, so you can have a dominant position but you should not abuse it. I think it is a similar thing here. Therefore, I think we should have protection for people in communities and voluntary groups so they cannot be abused in that way. But I would also say it is not just about protecting those people against abuse who might be subject to it, but a lot of what we are doing extends new powers and flexibilities to everyone. In terms of neighbourhood planning, to have a neighbourhood plan that has force in the planning system as a neighbourhood plan is not available at the moment. Its principles can be reflected in a local plan but nowhere near as directly as the opportunity is here. If you take the ring-fencing of funds, every local authority had to comply with the Government’s intentions as to how money was spent and report in a way, so even our greatest critics among the members of the Local Government Association from perhaps rival parties would agree that all of local government was being held back by some of the existing provisions. Therefore, I think it is a question of

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removing as many of those restrictions as we can and in giving rights, to make sure that they cannot be overridden. Q525 Heidi Alexander: I am sure that we will spend a lot of time over the next couple of days talking about neighbourhood planning, but let me put it to you that under the local development framework an authority, in responding to community pressure, could have decided to do a piece of supplementary planning guidance for a neighbourhood area and could involve the community in that, making sure that that piece of supplementary planning guidance was in general conformity with the local development framework for the area as a whole. Do you ever worry about the fact that, with the neighbourhood plans and forums that you are setting up, you are stoking up expectation among local communities that may inevitably be disappointed? Greg Clark: I do not think they will be disappointed, but in terms of continuity we deliberately modelled neighbourhood development orders on the local development orders introduced by the previous Government. It was very much modelled on the right for a local authority to create, as it were, a special planning zone in an area, and we have learnt from that. What we have established is the right for a neighbourhood to do that even if the local authority is resistant to it, and there is a process of dialogue and agreement. I think it is a good example of making use of a procedure that is not entirely novel but entrenching rights for people to do it. This is not the occasion to talk about the failures of the planning system that we have collectively inherited, but I think everyone would concede that the opportunity for local engagement is not what it might be and, more than that, has been one of the principal reasons for so much antagonism in the planning system. I think most people would accept a greater degree of local participation. It is hard to imagine that there is anyone who could not think that was a good thing. Heidi Alexander: I am not sure that that antagonism will necessarily go away but we will leave that for another day. Q526 Chair: Is there a model of how neighbourhood planning works elsewhere in the world on which you have drawn and we could look at? Greg Clark: As I said in response to an earlier question, we have not modelled these reforms by just taking off the shelf another country’s approach and adopting it, but in planning, the Dutch approach, in terms of its opportunities for neighbourhoods to come together, provides some lessons from which to learn. Q527 Simon Danczuk: Do you intend to devolve more responsibility in decision-making powers to directly elected mayors than you do to other local authority structures? Greg Clark: We are considering what package of powers might be available to mayors. We have said that as the Bill progresses we will come forward with some suggestions as to the powers they might have. Q528 Simon Danczuk: Anything in particular?

Greg Clark: It is probably premature to talk about that, but I will happily come back to the Committee to set it out with the reasons when we have put it together. Q529 Chair: Is there any timescale for that? Greg Clark: It is during the passage of the Bill. Q530 Chair: It would be helpful to have a note on that. Greg Clark: Yes, absolutely. Q531 Chair: Where you have the elected mayor taking the executive decisions and the public deciding on the budgets through a referendum and the community deciding on various things to do with planning, what is left for the local councillor to do? Greg Clark: The role of a local councillor is significant in many ways. In a mayoral model there is a very important scrutiny function, for example, just the same as in Parliament. You do not need to be a member of the Government in order to play a useful role as a representative of local people both as a community champion and community leader. We all exercise that responsibility very actively, but in terms of debating the things that the mayor—the Government for the purposes of comparison here— might be doing, we are also important contributors to what is in the Government’s or the mayor’s mind, and scrutineers of that. If I may be so bold, your Select Committee is a good example of that. Its members are not members of the Government but, as I said at the beginning, I very much welcome this inquiry and will take very seriously the conclusions you come to; they will influence my thinking and, I hope, that of my colleagues in Government. You will also, quite rightly, pass judgment on whether you think the Government is doing the right thing and well enough. Q532 Chair: I accept the point that if you are not a member of the Executive you can still contribute, but generally we do not have direct referendums constraining our decisions in Parliament in the way referendums will potentially constrain how local councils operate. Greg Clark: The referendum for a council tax increase, for example, follows a proposal from the council leadership or mayor to have an increase that is beyond the level at which it would have been capped, so I would assume there would be pretty vigorous discussion as to why this was desirable and what it would be used for. Therefore, it is not a true reflection of the model to say that the decision as to what the council’s budget should be is, as it were, put out to the community to decide on and then the mayor and council just implement it. There is a proposal put out for ratification, if you like. Chair: It would be interesting if we could have put the VAT increase to a referendum, but perhaps we will not go down that road today. Q533 George Hollingbery: Minister, you mentioned a couple of times local government finance and the review that is going on. Let us set aside for a moment

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the argument about community budgets and national income and focus entirely on local government. As a former local councillor, it seems to me that there is really no localism without fundraising locally. One of the great problems we have had recently is that only 5% or so of what I could do as a local councillor was something I could control. The only way to remedy that is to have the money raised locally and for local councillors to be entirely responsible for that and to be held accountable for it. What options do you think the review of local government finance should look into? Are you an enthusiast, like the Deputy Prime Minister for example, our close colleague, for a hugely increased role for tax-raising locally for local government? Greg Clark: The first thing to say is that local government finance and the opportunity for councils to make meaningful decisions over the finances is not just about tax raising. Getting rid of ring-fencing so you can make local decisions and be accountable for the money you get from central Government is an important part of that. I think there is a very important component for participating in and being given the right to access some of the money that at the moment slips through the fingers of local government and goes straight to the Treasury in effect, so the new homes bonus and the community infrastructure levy and the reforms we are making there to require a proportion to be spent in neighbourhoods make for a much more meaningful discussion about spending than we have had so far. We have council tax referendums rather than the capping of council tax. There are big steps forward there, but it is well known and well established that that is a direction we want to go in, and you are absolutely right to say that the more localist you are, the greater the reflection of councils’ behaviour is in financial matters. Then you come to the question of local revenue raising. Again, this goes to one of the themes about localism. You could imagine a very crude way of thinking whereby we just make every local council completely independent of the state and not bother about what it can raise and spend and say, “You are on your own.” That would be crude. The fact is that we all know that the local government financial settlement and system involve two things. One is revenue raised locally but the other is an equalisation. For better or for worse, there are different parts of the country that have a different capacity to raise revenue from others and often have needs that are also different. It is often the case that they point in opposite directions, so places with very high needs might have a reduced ability to raise the funds necessary for that. Therefore, it would be nice to imagine a circumstance in which we did not have to think about that but we do because it is real, it exists, and it would be wrong just to cast everyone loose. Q534 George Hollingbery: One accepts there will always be councils that need help. I totally understand that. There are issues about buoyancy of taxation and all sorts of other technical issues. Is the direction of travel that you personally as the Minister for Decentralisation would like to see towards more local raising of taxes or not?

Greg Clark: Yes. Q535 George Hollingbery: And not just NDR but allowing councils to raise more of what they then spend? Greg Clark: That is the direction of travel. The point about a direction of travel is that you need to consider the actual steps to get you there and they are not without complication. What we have said initially is that we will look at an NDR regime, which in some ways is a microcosm of the system. There are authorities that raise a lot of money in business rates and pass them to the Treasury and have fewer demands than others. If we start with the clear intention, as we have done, of making it more worthwhile for communities to respond positively to business that is the right way to start. The direction is clear, but I think we need to proceed with it sensibly. Q536 Chair: Therefore, you are on the side of the Secretary of State or the Deputy Prime Minister? Greg Clark: Everyone is always very keen to find differences of view and opinion, but the territory we are in genuinely does represent an area in which there is very strong commonality of views between members of the coalition and, if we leave aside our party colours, a lot of people across Parliament. One of my predecessors, John Healey, suggested recently that things got a bit too centralised and the drift needed to be corrected. I do not regard this as being a dividing line. Chair: It is one of the few issues on which I might actually agree with the Deputy Prime Minister. Q537 Mark Pawsey: Minister, you have argued that the process of localism is about better decision making locally. You have not spoken about this being a financially driven matter, but what are the costs of localism? Will localism save money or cost local taxpayers more? Greg Clark: I do not think it will cost taxpayers more because, if you take the right to challenge for example, and give local people an opportunity to say how things could be done differently, that approach will be taken up only if it can do a thing better for the same amount, or do the same thing for less. One of the virtues of unleashing this type of reform is to bring in the possibility of innovation driven by the bottom up that is absent from the present system, where things have to come from the top down. I am not someone who abuses the motivations of those who introduced the system we have; it arose genuinely because people took the view that you needed to distil a set of operating instructions in an expert way at the centre and then require everyone to follow them and that would bring up performance—I think that is why people did it. However, one of the reasons we have to change the system we have inherited is that the centralised approach, even with the best intentions, is quite an expensive system to operate. If you are to promulgate instructions from the centre you need people to do that; you need people who receive those instructions in the subordinate institutions, as it were, and turn them into practice. They then need to report on how they are doing what

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they are told to do, which involves more people, and then you need people at the centre who receive those reports and presumably analyse them and look for deviations and exceptions. You then send people in to correct them. It is quite an expensive system. One of the reasons the Local Government Association pressed for the repeal of the CPA regime and various allied aspects was that it was very costly, quite apart from being dysfunctional. Therefore, I think that getting rid of this and allowing for innovation offers the opportunity to save money. Q538 Mark Pawsey: On the one hand you get rid of the cost of bureaucracy, but is not the danger that on the other side you have lots of smaller organisations going about doing their own thing; they are not joined up, and on issues such as procurement the economies of scale get totally lost? Is there not a danger that that additional cost, and perhaps people championing local causes and drifting off with grandiose schemes, might compensate for the savings made by this bureaucracy? Greg Clark: Take the right to challenge, which is perhaps one of the purest expressions of this, if it is going to cost more money you would not do it unless you thought that the transformation of service to the people in receipt of the services was so pronounced that it was worth it. Therefore, I do not think that is going to happen, because if it costs more money you would not take it up. It is a right to challenge rather than a right to insist. More than that, just because something is done differently and locally does not mean to say that it necessarily costs more money. Often there is a greater sense of economy that comes from people operating in a way that is closer to their community. The more insulated people are from people on the ground, the more inefficiencies can creep in and be undetected. It is also the case—I do not want to labour this—that there are opportunities to have joint procurement even when you have a decentralised number of providers. I think the free schools network is an example of this. I imagine there would be quite a lot of joint purchasing among the independent schools. Q539 Mark Pawsey: Following on from that, is it going to impede the success of localism or is it a good thing that we are doing it in a time of austerity? Greg Clark: It is certainly not a good thing. I think it is something that is actually unrelated to it. The reason I was given this job was that I wrote a pamphlet in 2003 on the drivers of centralisation as I then saw being established six years into the previous Government. That was at a time of relative plenty and prosperity. At that time, I was arguing that that would suppress people’s initiative, make for a less dynamic and diverse way of doing things and would turn out to be costly. Therefore, it is a set of reforms that was needed whatever the circumstances. We happen to be in difficult economic times. As it happens, I think that getting rid of some of the apparatus of the centralised system, such as the CAA regime, releases some funds that might make a useful contribution to the economies that people have to make anyway, but I would want that done at any time.

Q540 Simon Danczuk: Decentralising even further down local government and getting services delivered, as you have just been saying, by local people sounds on the face of it potentially a good thing. A number of us met with the Council for Voluntary Service in Exeter. The chief executive was concerned about large national charities coming in to deliver local services. My question is: what safeguards are you putting in place to stop that happening? He was comparing it with the cloned town centre where you have lots of national charities taking over local services as opposed to the local voluntary services taking them over. What are the safeguards against that happening? Greg Clark: I am not sure I agree with the description that these are cloned services nationally. My experience—I do not know about other Members—is that even with national charities, when they have local branches, they tend to have quite a local character to them. I think of Age Concern in my constituency, for example. It is part of a national network but is absolutely local and is run by people who are part of the community, know everyone in the community and are really in touch with the needs of that community. I think this goes for some of the other charities. I think of the Alzheimer’s Society. Again, it is part of a big national network but has a very intimate relationship with local people. In terms of spreading opportunities to do things differently, I think a good national charity can be a lot of help to communities that need assistance. The common denominator of a lot of these national charities is that they are in business to make a difference to people and help them. Therefore, if they spot an opportunity, that here is a part of the country where services are not being provided terribly well at the moment, and therefore by implication people, often quite vulnerable, are not being as well looked after as they might be, it is completely consistent with their mission to say, “We know how to provide services; we’ve done it successfully in this and that part of the country. Let’s see if we can turn things around there.” I think the consequence of doing that would be to do what we really take for granted in private business. If someone has a good idea, it spreads like wildfire across the country. I would like voluntary organisations to have the same thing rather than a fantastic success in one place. It is a nightmare; it becomes almost impossible to replicate that in other places. I would like the opportunity for successful voluntary organisations to be able very quickly to work their magic in other communities, confident in knowing that, almost without exception—I cannot think of any—the way they tend to do it in my experience is very much with the grain of local people anyway. Q541 Simon Danczuk: Therefore, there are no safeguards for this to be a stepping stone to the privatisation of services, so they go from the public sector monopoly you talk about to the voluntary sector of social enterprise, and if there is a failure at that level, it then goes to private provision. There are no safeguards for that either.

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Greg Clark: There is no difference compared with the present situation. The right to challenge is just available to voluntary organisations and social enterprises. We are debating the definition of this. We could have made it available to businesses. We chose not to do that; we wanted it to be a community right to challenge. We had the discussion we have just had as to whether you should ban national voluntary organisations from this but, for the reasons I have said, we concluded that it could help communities, especially those suffering particular problems. But we have not established any means for private companies to access this right. Q542 Simon Danczuk: So, in terms of that provision if it went to the voluntary sector it could not then go off to the private sector after that? Greg Clark: No; it stays with the voluntary sector. If they were to give up the contract or whatever, it would be just as same as anyone giving it up at the moment. It goes back to the authority. There is no requirement for it to go elsewhere. Q543 Bob Blackman: One of the exciting things about this for people at local level is the opportunity for community assets to be transferred to organisations, but often those will be dependent upon one, two or possibly a slightly larger group of individuals who are keen to make things happen at a particular time. Greg Clark: Yes. Q544 Bob Blackman: How will you make that sustainable in the long term and ensure this is continuous rather than that someone comes up with a bright idea and says, “Yes, we’ll do this,” and suddenly they either move away, get fed up or decide to go off and do something else? Greg Clark: I think all communities have community leaders. There are people who are more active than others. The idea that someone, or a group of people in their community, inspires other people to participate is the way things have always been. If you look throughout our history, people have been motivated to make a difference and have organised people to come along with them. I think we are creating more opportunities. One of the things you considered was the MORI survey. I am pleased you have alighted on it in this inquiry because when I talk about decentralisation it is one of the slides I take around. At the moment only 15% of people think they can have any influence on decisions made about their community; 85% think they have no influence over that. Even more alarming in some ways is that of the 15% who are involved in decision-making bodies in their communities, more people who are involved think that they have no influence over decisions made in their communities than do, even among the people who actually sit on the boards of these things. Therefore, we inherit a situation in which the vast majority of people feel they have no influence over the future shape or organisation of their communities. Even of the people who are active, 56% think they cannot have any meaningful influence.

What we are doing in providing these opportunities and rights—things that have a bit of edge to them—is doing something that I hope will transform that situation and that more people will think there is a reason to get involved because there is something you can do about it; and, hopefully, even more, that the people who are involved will think there is a purpose in being involved rather than just being a name on a list. Q545 Bob Blackman: One of the other issues is that local authorities in the budget round this year are often deciding to reduce funding to voluntary organisations and close down community facilities. The Localism Bill will not take effect for the best part of a year. Therefore, the opportunity to do some of these exciting things in the community will be reduced because the funding, the people and support will not be there. How do you answer that? Greg Clark: First, I think it is premature to say that this typical or the majority. As you know, councils are considering these matters. Every day there are examples of councils that reflect the kind of discussion we just had: that there are opportunities to engage with their local community that offer to do things better and sometimes more cost-effectively. I think it is a bit premature to say that most councils have not decided to do that. It comes back to the discussion Heidi and I had about whether you need these safeguards and protections and whether you cannot just rely on the good will of all councils to do the right thing no matter what. My view is that there should be these rights, and if they had been enacted five years ago, there would not be the same power in these councils at the moment to make these decisions. They would have to act in a way that reflected the power that the community has. But I share Heidi’s view that more councils than perhaps is perceived to be the case recognise that to cut disproportionately the voluntary sector would not just be the wrong thing to do but would be a bizarre and counter-intuitive thing to do. I hope this will be quite a prominent issue in the election campaigns coming up and people will feel the consequences of their electors if they behave in a way that is unnecessary. Q546 Bob Blackman: That is quite difficult in London when we do not have elections until 2014. Perhaps I may press you on what happens to community assets that are closed down by local authorities now in the current budget round and before the Localism Bill becomes an Act of Parliament and therefore the community right to challenge is ingrained. What happens to those community assets if local authorities just dispose of them? Greg Clark: I would expect and hope that every local authority seeing the provisions that are to be introduced in the Localism Bill act consistently with the principles that are being established as public policy. As you know, the Government simply do not have the means to direct particular authorities to do particular things. The Government never have had those means and have not had them for many years, so it is not as though we have powers that we are not

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using. But the expectation of the Government is very clear. We have set out in terms of the transparency regime that we expect councils to make a full account of what they are spending on the voluntary sector. When the average reduction in budgets is 4.4%, councils that cut disproportionately and first, rather than look for opportunities to involve the voluntary sector more widely, are bad councils and ought to be castigated for that. Q547 Bob Blackman: My final question, because I see that others are twitching to get in on this, is are you saying that the Government are powerless to stop the closure of these community facilities in the current year and there is no action that local people can take? Greg Clark: No. What I am saying, Bob, is that it is no different from how it has been for the last 40 years. There were never powers to require councils to invest in a particular community centre. Even if I were to be introducing these in a Bill, which I am sure you would castigate me for in this Committee, that could not be done overnight anyway. Therefore, I think it is important to send a message—I hope this Committee will want to send a message—to every council that to choose not to involve the voluntary sector more is the mark of a bad council. I was just reading a letter that I got today from the leader of Reading Council, which has chosen to increase the budget for the voluntary sector in anticipation of this. Last week I was talking to the leader of one of my local councils who said that his proposal to his budget committee would be to increase the budget for the voluntary sector for precisely these reasons. I hope and have some degree of expectation that that will be more typical than is perhaps thought at the moment before we get to the time when actual budgets are being set. Q548 Heidi Alexander: Have you instructed your officials to look at the definition of best value in relation to the disposal of community assets? Greg Clark: Not specifically. I think the question of best value is being looked at generally. Q549 Heidi Alexander: It seems to me that quite a significant amount of work probably needs to be done in order to start to help councils address the conundrum they face in the transitional period, between what might be happening as a result of budget decisions taken in the next few weeks and before the Localism Bill is enacted. It would be quite interesting for our Committee to understand what work is taking place in your department on that. Greg Clark: Perhaps I could drop the Chairman a line. Chair: That would be helpful. Q550 Steve Rotheram: I have to say it is slightly disingenuous for the Minister to use the national average of 4.4% and say that therefore if anybody makes cuts— Chair: I do not think we accuse the Minister of being disingenuous, even slightly. Can you rephrase the question, please?.

Q551 Steve Rotheram: Okay. I think the Minister is mistaken if he believes that councils are bad purely because they cut. If there is a national average of 4.4%, not all councils obviously get that. If it is an average, obviously some are under and some are over, some significantly over. Some councils are facing double that particular cut, so it is a full 8.8% reduction. Believe me, the last thing any council would want to do is make cuts to the voluntary and community sectors, but there are councils that are having to do that and make those awful decisions. Simply because of the front-loading and the formula that is used to determine it, the councils most in need of assistance and help seem to be the ones that are being clobbered the hardest. Therefore, the community and voluntary sector is the ones on which they will have to rely on the most and yet they will have to make cuts to that particular budget line. Therefore, it is not good enough to say it is a 4.4% cut and therefore nobody should suffer more than anybody else. There are people whose budget allocation is significantly less than that. Chair: We are perhaps straying a little from the main issue. Greg Clark: We could have another discussion of local government on the settlement. Did you have the Secretary of State before you? Chair: Yes. Greg Clark: I recognise that 4.4% is the average and some have more than that; some have twice that, but I think there is a more general point. Just to parcel this out proportionately is to miss the kind of opportunity that the Localism Bill embodies, which is to see whether the voluntary sector can help. The principle of the right to challenge is that the voluntary sector and community organisations should have the opportunity to say whether things could be done differently. Sometimes that will save money; sometimes it will not, but if things can be done better, there is no need to wait for the Localism Bill to be implemented. Therefore, any council that is considering reducing the budget to the voluntary sector should not think just in terms of having a kind of wall around the funding and saying this is the voluntary sector budget. First, they should be taking down that wall, looking across its services and saying, “Are there opportunities for you to do more in other areas, even if we are not going to do the same in this area?” so they can break out of that corral, if you like. Secondly, they should reflect before making a decision and voluntary organisations should be given the chance to make suggestions and representations as to how the whole of the budget can be better managed. I am saying it would be wrong to say, “The budget is being cut by a certain percentage and we’re going to allocate it evenly.” I think they should invite voluntary organisations to sit down and say, “This is our budgetary situation. What could you do? Are there any things we are doing in a certain way that you think could be done in another way?” I think that good councils—as Heidi says, across the country they are mostly good councils—will do that. Q552 David Heyes: If you succeed in prising local authority fingers off the levers of power—a phrase

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you used earlier—and service delivery is pushed down to community groups, voluntary organisations and the private sector, how will those bodies be audited? Greg Clark: Mr Heyes, it is no different from the present situation. They will be providing services under contract to the local authority. Q553 David Heyes: Much of what is being proposed here, genuine localism, will remove the local authority from the scene; they will be bypassed and services will be delivered directly by community groups, voluntary organisations and others outwith a contractual arrangement with the local authority. Greg Clark: No; they would all be within the contractual arrangement. The provisions in the Bill give people the opportunity to say they should be able to be considered for providing a service, but if they are accepted then it is subject to the contractual regime of the council, and quite rightly so for the questions of accountability that you implied. Q554 David Heyes: There is much talk about them being held to account by local people. How would that be achieved? Greg Clark: The councils? Q555 David Heyes: The groups, voluntary organisations and others that deliver services in future will, you say, be held to account by local people. Greg Clark: The decision to make use of them will rest with the council. They do not have the right to displace the existing way of doing things without the council agreeing to it. The council must accept that different approach, so it is the council’s decision that is relevant. Therefore, the council should be held to account for making that decision, and it is also subject to the contractual system that the council practises. Q556 David Heyes: If you are comfortable that this audit will be achieved through contractual arrangements that is not a view shared by the Public Accounts Committee. I do not think it is a view Sir Gus O’Donnell shares, is it? Has he not tasked your permanent secretary with looking at precisely where accountabilities will lie in future? Sir Gus is quoted as saying three weeks ago, “I think this is something we need to sort out.” Are you saying that it is sorted out and it is not a problem? What is it that needs to be sorted out? Greg Clark: I think you will find that when Sir Gus comes to look at it across the piece the reporting lines for the use of public money are established and are as robust as they are. I was on the Public Accounts Committee in the last Parliament when we considered these matters. We did an interesting piece of work to ask whether there was any greater record of fraud or mismanagement on the part of voluntary organisations than on the part of either the private sector or public sector. The advice of the Comptroller and Auditor General at the time, based on an inquiry that he conducted, was that there was not any greater track record. Mistakes were made by the public sector, private sector and voluntary sector but there was no increased incidence. I think it is really important that we do not inadvertently and unthinkingly suggest that

there is something more risky in terms of the use of public funds in contracting with a voluntary organisation than with any other type of organisation. Empirically, there is no greater loss of funds with them than anyone else, and I think we should be rigorous about the use of public funds across the board rather than in some way finger voluntary organisations with suspicion. Q557 David Heyes: Therefore, was Sir Gus mistaken in asking your permanent secretary to look at this? Sir Gus said three weeks ago, “We are doing some very new things here; payment by results for a lot of contracts will create some issues about precisely where the accountabilities lie. I think that is something we need to sort out.” You are saying that is just a mistake, misunderstanding or failure to realise that local authorities will do this through contractual arrangements. Greg Clark: That was for local authorities under the right to challenge. Payment by results is more about the welfare-to-work reforms. As he said, these are different arrangements from how they have been done in the past. It seems to me perfectly reasonable, in fact unexceptional, that the Government’s accounting officer would want to make sure that the oversight he had was as good as it always had been, but I do not think there was any implication in what he said that he had any reason to believe that they were not. He reasonably said as the Government’s chief accounting office that as payment mechanisms change you need to make sure that your guidance as to practice of oversight reflects that. David Heyes: I will not press you because of time constraints. Q558 Chair: Is the report going to be made public? Greg Clark: I did not even know there was going to be a report. You are better advised. Q559 Chair: You will understand that we get all our intelligence from the Guardian. Greg Clark: My understanding, as I just said to Mr Heyes, is that it is a reasonable thing. I think Sir Gus was appearing before the Public Accounts Committee and was asked about accountability where there were different and new payment mechanisms. My understanding is that he reflected back that, of course, as accounting officer he would in the normal course of things make sure the practice was up to date. I do not think there is any formal inquiry with a report. It was reflecting what he would do as Government accounting officer. Q560 Chair: I think that in his evidence to the Public Accounts Committee Sir Gus said that he would he happy to pass this on to the Committee, so can you make sure we have it? Greg Clark: I think you might invite Sir Gus to do that. Q561 Chair: Okay; we might ask for that. Finally, was the term “guided localism” a carefully thoughtout policy in which you were involved or a throwaway line by the Secretary of State?

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14 February 2011 Rt Hon Greg Clark MP

Greg Clark: I think what Eric meant by that was really what we have been talking about. There is a version of localism that says everything goes to the neighbourhood or the local authority. It is guided in the sense that we are establishing certain rights. Sometimes these are rights that people in power would rather did not exist, but we are nevertheless going to insist on them. I suspect that is what he was referring to. Q562 Chair: Is there not a dilemma here? All Ministers and Secretaries of State are politicians and have views on things, but if responsibility is handed down to local authorities to decide on their refuse collection policies, or the ring fence is taken off the Supporting People programme so local authorities can make choices and decisions, when they make those choices they are immediately castigated for making the wrong ones. Is not localism also about a cultural change as well as a legal change? Greg Clark: You think it is that. I have a very clear view on that. I think it is the right thing to decentralise and not respond to every situation by taking yet more powers to the centre. But does that mean you do not have an opinion on things and you regard anything that is ever done as being for the best in the best of all possible worlds? Clearly not. What the Secretary of State has said on occasions, whether it is to do with bins or whatever, is to express his view, but you will notice that he has not taken a power to require weekly bin collections. As I have said to you today about

voluntary organisations, I will not be slow to say that I think it is a mistake for any local authority to cut funds to the voluntary sector and they should as a matter of good practice—it is bad practice if they do not—make sure they have a proper, open discussion with the voluntary sector now to anticipate the rights in the Bill and invite it to say how it could do things better. I think I am entitled to express that view. All of us in public life are elected to give an opinion on things, especially if we see things that could be done better. Q563 Chair: But do you accept that if we are to change the culture and localism is a force that will continue then there is a responsibility on all politicians, particularly at national level, to give a clear impression to the public that they not actually responsible any more for some of these matters and real responsibility rests somewhere else? Greg Clark: I think that is right, but it is also a time—I think it was alluded to in some of the other questions— of robust debate. One of the great things about localism in my view is that things are not driven by some invisible bureaucratic process in which people are given the result. There will be discussions as to what is the best thing to do and those discussions on occasion— Mr Danczuk made the point—will be pretty robust and vigorous. The Secretary of State in all my years of experience with him specialises in that. Chair: On that point we have probably reached agreement. Thank you very much indeed, Minister.

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Written evidence Memorandum from Emeritus Professor George Jones and Emeritus Professor John Stewart Summary — Localism and decentralisation can strengthen government at both the national and local levels. — Community involvement and decentralisation to local communities should be seen by local authorities as a means of strengthening local representative democracy rather than as opposed to it. — There are many difficult issues to be faced in decentralisation to local communities, which are likely to limit its development. Their potential is most likely to be realised with support by local authorities committed to community involvement. Central government should leave local authorities to experiment in finding ways most appropriate for their localities without departmental interventions. — Central policies on localism and decentralisation are likely to be successful only if there is real authority for those policies in central government and procedures to enforce them over all departments. — To realise the potential of these policies local authorities will have to cast aside a habit of deference which has limited some, although not all, to being agents of central government rather than local governments for their areas. — “Place-based budgets” could transform the working of the fragmented system of community governance, provided local authorities are given powers to match their responsibility for these budgets. — Localism and decentralisation require a significant increase in the taxation powers of local government. Localism and Decentralisation 1. We welcome the Committee’s inquiry into the Government’s policies on localism and decentralisation of public services. We regard both as necessary for the effective delivery of public services and the good governance of society. Because areas vary in their social, economic and environmental conditions, services are likely to be more efficient and effective if those responsible for their delivery understand those conditions and the problems and aspirations of local communities and citizens. Centralisation tends to uniformity imposing targets, procedures and practices that take little account of local circumstances and citizens’ concerns. 2. There is an illusion that central government knows best because it has knowledge and capacities not available to individual local authorities. Its scale is seen as an advantage, although scale has disadvantages as well as advantages, with diseconomies of scale as well as economies, in particular problems of communication. Defects of centralism include: — central Government does not directly deliver local services and hence has no first-hand knowledge of service-delivery; — central government has no direct knowledge of local conditions and the concerns of local citizens; and — the lack of direct experience of the local level means that too often the centre does not appreciate its importance. 3. There has been little research into the impact of centralisation and decentralisation on the effectiveness of service-delivery. Comparison is difficult because of the extent to which local services are subject to central control. Examples are often quoted of service-failures at local level, but examples could be multiplied for central government and its agencies. The Committee should reflect upon why local authorities avoid deficits, while many health authorities have been in severe financial deficit. 4. The role of local authorities extends beyond the provision of services. Local authorities as local government are concerned with the good governance of their areas, as was recognised by the powers of wellbeing in the Local Government Act 2000 and the Government’s commitment to a power of general competence. 5. The concerns of communities and citizens and their aspirations for the future are given expression in local politics both by local parties and by the pressures and demands made by the multiplicity of communities and individual citizens. An active political process at local level is a condition of good governance, but that process requires a new stress on “localism” since it cannot develop when limited by excessive centralisation. Decentralisation through localism should be seen also as a condition of good governance at the national level. It reduces the burdens on central government, focusing all its resources on issues that can be dealt with only at that level. Decentralisation in the system of government creates a capacity for handling the diversity of society. 6. Elected local government is the only democratically legitimate and accountable form of localism. Everything else is either central government or the private sector. Local government is the government of difference, both responding to differences in local conditions and creating it as local authorities respond to the

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aspirations of local people. These differences should not be criticised as a postcode lottery but celebrated as local choice. Diversity creates a capacity for learning in the system of government. Little is learnt from uniformity except that mistakes have been made everywhere. Much can be learnt from the diversity of relative success and failure in different areas. 7. No definitive boundary can be drawn between centralisation and decentralisation or between centralism and localism. Localism and the “Big Society” are concepts and broad approaches to governing, rather than specific and concrete policies, which can express trends towards either centralisation or decentralisation. Such boundaries will be determined by the push and pull of political processes. One can never be certain the right balance has been achieved, but one can identify that the present imbalance is dangerous for the effectiveness of both central and local government, as was recognised by the report of the CLG Committee The Balance of Power: Central and Local Government [HC 33–1, 2008–09]. 8. The guiding principle should be that central government should intervene only when there is a clear national interest requiring action. This action by central government should require explicit justification and not be the automatic response that leads to detailed prescription in legislation, regulation and guidance, buttressed by bureaucratic procedures, overbearing inspection and detailed reporting. We welcome the Government’s commitment to reduce regulation, targets and inspection. Decentralisation to Communities 9. The Government stresses that decentralisation should involve decentralisation both to community groups and to local authorities, which immediately raises the question of the nature of the relationship between these two processes. Yet the Government has not clarified the relationship between decentralisation to community groups and decentralisation to local authorities, which is necessary if conflict is to be avoided. Nothing could be more fatal to the Government’s policy than conflict and hostility between community groups and local authorities. The Committee should focus on this critical issue. Problems in decentralisation to communities can be resolved only at the local level through the community-leadership role of local authorities, but local authorities will be able to resolve the issues only if they are fully committed to community involvement. 10. Key questions for the Committee to investigate are: what are the communities to be involved, and how they are determined? Are they communities of place or communities of interest, concern or background, or are they of all these types? How are their geographical or organisational boundaries to be designated? If such boundaries are to be decided by the communities concerned, then how can overlaps and gaps in responsibilities be avoided? What issues are suitable for decentralisation to communities, and what are of wider concern? How is expression to be given to the wider community interest? Is a community group required, and if so then how can one ensure it is representative of and accountable to the community? How is financial control and probity in the use of public resources and public powers to be secured? Can a private organisation assume “community” responsibilities? 11. It may be argued that concern for such issues could stifle development through top-down (although local) bureaucratic procedures. That is not inevitable provided there is a commitment to community involvement. These issues will not be resolved unless they are faced, and if they are not faced serious problems will arise that could bring the policy of decentralisation to communities into disrepute. Conflicts could arise between different groups claiming similar responsibilities; prosperous areas may gain attention while deprived areas are neglected; community groups may be dominated by a small elite with little accountability to local people; interested parties may dominate without rules about declaration of interest and for probity of behaviour; public funds may be abused with ensuing financial scandals; and corrupt people may assume control of community bodies. The need is for procedures that provide safeguards without unnecessary bureaucracy. 12. Local authorities should be given responsibility for promoting and supporting decentralisation to communities. They should work with local people in determining activities for decentralisation to communities, deal with overlaps and gaps and develop frameworks that protect accountability and probity. The principles of representative democracy should guide the approach to decentralisation, and those who make decisions in groups should be representative of the communities they serve. Representative institutions can provide accountability to local people. Urban parish councils—like existing rural parish councils—have a role to play with their established procedures for ensuring probity and financial control. 13. The development of community involvement cannot replace representative government but could strengthen it. Local authorities are well placed to bring about community involvement. They should take initiatives and not wait to be told what to do by central government. They should build up the role of the councillor as community representative, enabling community involvement in the work of the authority and other public bodies and in meeting community needs. The effectiveness of this role depends upon interaction between elected representatives and communities and citizens. Such interactions happen now, but often their focus is limited to the problems of single individuals. The council should support the councillors’ role in community involvement. As community representatives they can ensure contact between community groups and the local authority and assist in their work. There are 20,000 such community representatives (ie councillors) who could be a rich resource working with community groups and in interactions with them without the need for direct intervention by central government. It should learn to trust local government as the elected body for the area.

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14. Local government is at its most effective when close to the communities in its locality. Working together local councils and community groups can strengthen both local democracy and community activities. Local authorities could build community involvement, using the growth in their powers and their freedom for initiatives that the Government has promised in its policies for localism and decentralisation. However, since 1945 central government has removed much local autonomy and power, making it less likely councils will themselves pass power downwards. 15. There is a need for realism about the extent to which community groups can or should take over responsibility for the delivery of services. Many activities involve more than one community. In some communities there will be limited or no interest in such developments, or opinion may be divided. Certain council policies set a framework within which community groups should act. Community interest may decline over time as individuals who took the original initiative leave the area. Differing views on the policies to be followed may divide the community. The reality is that direct involvement of communities in the provision of services is likely to be limited compared with the scale of work and activities by local authorities and other public bodies. Developments are likely to be patchy, being taken up more by some communities rather than others and varying over time. Because of these reservations about what community groups can spontaneously achieve, the involvement of the local authority working positively with local communities is important to their success. 16. The local authority can and should involve communities and citizens in many ways. Local authorities will be realistic about how far that involvement can go, reflecting their understanding of their areas and the communities within. Local authorities should be committed to pursuing that involvement while recognising the limitations on how far it can be pursued. The changes in central government required to secure decentralisation 17. Past experience shows it is easier to announce a policy of decentralisation than to ensure it happens. The reasons lie in the working of central government departments. Even when the initial policy is accompanied by measures of decentralisation it is not long before the operations of departments reassert the dominant centralist approach. Michael Heseltine, when Secretary of State for the Environment (1979–83) held “a bonfire” of 300 controls. Over time new central controls more than replaced the number abolished. 18. The consequences of the dominant centralist approach are to be seen in detailed prescription through legislation, regulation and many pages of guidance; in the numerous procedures and reports required of local authorities; and in the many inspections imposed on them. These practices are well-illustrated in a recent dossier from the Local Government Association: Reducing the burden—allowing councils to get on with their day job [11 August 2010]. The press release accompanying the dossier noted “Thousands of pages of official guidance that has no legal force”, and the dossier itself stated that “CLG and quangos collect 2500 separate data items from council housing departments” [Annex A: 3]. There is no adequate information on the extent of staff time and costs arising in both local and central government from this centralisation. The reason why excessive central requirements occur, despite commitments to decentralisation, lies in the workings of central government. The Committee could helpfully examine what in the operations of departments has led to an excess of controls and prescription. Only if that process is understood can it be changed, and if it is not changed then policies of localism and decentralisation will wither away. Four key factors are involved. 19. The first is the dominance of departmentalism, with the policies of a department having priority over the Government’s policies on decentralisation. Ministers and civil servants manage budgets, develop policies and assume powers to secure their aims, including powers over local authorities. Even in DCLG the same factors are at work. The present Secretary of State is deeply committed to giving local authorities freedom from central controls, yet where he has strong views on how local authorities should act he proposes new powers to enforce those views: for example, he insists on the publication of details of expenditures of over £500; he supports new controls over council newspapers; despite giving authorities freedom to re-introduce the committee system he proposes to impose directly-elected mayors on big cities subject to a confirmatory referendum; and, while opposed to capping, he will require referendums from authorities proposing an increase in expenditure he regards as excessive. Freedom for local authorities is only real if it means freedom to act in ways central government does not like, rather than freedom merely to do what the Government likes. 20. The second factor is that policies are specified in detail through legislation, regulation and guidance, and supported by procedures, inspections and reports to ensure the policy is implemented. Departments work out how the policy should be carried out in practice rather than leaving it to local authorities which have more relevant experience of practice at local level than does central government. This process is the way the civil service has learned to work and is deeply embedded in its culture. It is elitist and lacks confidence in local government and believes the centre knows best what is required, with the result it creates too many authorities dependent and expecting guidance rather than using their own initiative. 21. The third factor is that, while no department explicitly sets out to limit local authorities’ freedom to act or to place burdens on local authorities, no department considers the cumulative effect of such decisions on the workings of local authorities. Each new policy and each new procedure is considered on its merits without consideration of how it adds to the burdens on local authorities or how it affects their operations. The requirement on local authorities to publish details of expenditure of over £500 is likely to generate much

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correspondence, each leading to detailed responses. Policy on academies and free schools was developed without any apparent examination of its impact on the role of local authorities. 22. The fourth factor is the failure of central government to recognise that the primary accountability of local authorities is to their local citizens who have elected them. The Government’s decision to abolish the community area assessment is welcome recognition that the proper assessment is by local citizens as voters. Rather than submitting to inspection by a national system, local authorities can benefit from peer review as organised by the LGA and its associated bodies. Such processes give expression to the principle of shared learning. External reviewers of a local authority should accept that those inspecting an authority have as much to learn as those being reviewed. They do not necessarily know best. The danger is they and central government believe they do know best. 23. These four problems can be overcome, but only by fundamental change in the workings and operation of central government. The Government should initiate a review of all requirements placed on local authorities to identify the extent to which they are consistent with its policies on localism and decentralisation. This review should cover the proposals of the Lifting the Burdens Task Force set up by the previous Government, many of whose recommendations were not carried into practice [Final Report November 2008], but it should range much wider. The review should encompass legislation, regulations and guidance. It should assess the staff resources and costs involved in reports, procedures and data required from local authorities, and lead to proposals for change that should significantly reduce administrative overheads at national level as well as in local authorities. 24. At present the power of DCLG to secure the implementation of Government policies on localism and decentralisation is limited. DCLG lacks the necessary authority in Whitehall. It should be charged with the responsibility of ensuring the application of those policies and in the future workings of central government. It will need to understand the present position and the implications for local-government expenditure and the staff required at both local and national levels. DCLG needs to be able to bring pressure to bear to ensure service departments in their relationships with local authorities conform to the Government’s programme for localism and decentralisation. 25. Procedures will be needed to restrain central departments, including DCLG itself. Proposals to institute policies and procedures bearing on local authorities should require the approval of DCLG. This requirement will involve the introduction of routines that may be regarded by civil servants as bureaucratic. But departments should be asked to state what national interests are at stake in their proposals. They should be asked why detailed legislation, regulations and guidance are required, given the Government’s policies for localism and decentralisation. They should be asked what staff resources and what costs will be required at both national and local levels, and how these estimates have been arrived at, possibly subject to checks by the National Audit Office. 26. DCLG should make decisions on whether the policies and actions of departments are consistent with the Government’s programme on localism and decentralisation. It should report to a powerful Cabinet Committee any retreat from the Government’s localism and decentralisation agenda. The results should be subject to parliamentary scrutiny through a review by the Joint Committee of the Commons and Lords as proposed by the CLG Select Committee’s report The Balance of Power: Central and Local Government. [HC 33–1 (2008–2009), paras. 138–142]. Through these channels both the executive and the legislature can play a part in sustaining localism and decentralisation. Requirements from Local Authorities 27. Localism and decentralisation require local authorities to develop community involvement and support community initiatives by working closely with citizens. Local authorities should be ready to use to the full their powers to meet community needs and aspirations. It requires local authorities to be local government. 28. This role will not be easy when local authorities and other bodies at local level are expected to reduce their expenditure. There is a danger that local bodies will be required to bear an unfair share of cuts. Central government has always found it easier to reduce the expenditure or grants to other public bodies than to reduce its own direct expenditure. 29. There are opportunities for the reduction of expenditure. “Place-based budgeting”, if radically implemented, should lead to more sensible use of resources at local level. A reduction in the demands made by central government for reports, in applications for specific grants or in having to meet the requirements of inspections should lead to significant economies. Discretion to innovate both in a local authority’s own activities and in its support of initiatives by communities is likely to be a better use of resources. Many local authorities have shown the scope for local action even within present constraints. 30. The endless flow of departmental prescription and guidance suggests that central government has not seen local authorities as governing local areas in interaction with their citizens but as agents for central government. The danger is that central government assumes it is more important for local authorities to satisfy central government and its inspectors rather than to satisfy their citizens. Inspectors have become instruments of central government in assessing local authorities and can easily condemn innovations because they do not conform to what has been declared good practice. If local authorities are to fulfil a role in community

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leadership, they must reject this subordinate role and not seek guidance from central government, which central government has often given as a justification for the proliferation of guidance. Years of centralisation and regulation have left councillors unsure of their capacity to act on their own initiative. The System of Governance at Community Level 31. The Government’s policy of localism and decentralisation highlights the state of governance at local level. Almost for the first time it enables consideration of how local areas are governed by a complex of agencies and authorities. Too often in the past institutions of government have been considered and reorganised, focussing on the requirements of a particular department without regard to the impact on other public bodies and on the system of governance at local level. 32. The result has been the present fragmented structure of governance which has clear weaknesses. It is wasteful of resources. It fails to focus relevant institutions on the needs of a locality through an integrated approach, with instead each institution governed by its own central-government-departmentally-defined areas of concerns. This maze of institutions and powers confuses the public, and apart from the local authorities lacks clear local accountability. Attempts have been made to deal with some of these issues by creating partnerships, which have, however, added to the confusion of bodies invisible to the public and lacking clear accountability. 33. Recent developments and the analysis of expenditure both in “Total Place” and in other initiatives by local authorities have led to discussion of “place-based budgeting”. The recent LGA paper on Place-Based budgets: the future governance of local public services [June 2010] rightly identifies the need to — Achieve significant economies by eliminating unnecessary duplication of resources. — Make an effective impact on social, economic and environmental problems through integrated working. — Enhance local accountability and local democracy. 34. We commend this paper to the Select Committee as showing how “place-based budgeting” can improve the governance of local public services. But three issues require further work: — The report identifies areas which could provide the basis for “place-based budgets”, recognising that this issue should be resolved locally. In many areas they suggest partnerships between local authorities. But such partnerships weaken the clear accountability of an individual local authority and should be avoided wherever possible. — The paper proposes that area-based budgets should be drawn up by a local board composed of elected councillors, in effect the cabinet where based on a particular authority. Further work is required on the board’s responsibilities and powers over that budget. The implication, if place-based budgeting is to be firmly based on local accountability, is that the board should allocate resources to and commission services from other public bodies—that implication should be made explicit. The lack of such powers was a weakness in Local Area Agreements and could be a weakness in the Government’s proposals for the role of local authorities in strategic planning in health, which do not provide adequate powers for local authorities to support that role. To achieve area-based budgets will require DCLG to overcome the kind of departmental defensiveness considered above. — The paper proposes that, alongside accountability for place-based budgeting to local voters through elected local authorities, there should be accountability to Parliament for the proper use of nationally-raised tax-payers’ money voted by Parliament. There are also references to what is, in effect, accountability to ministers through performance-management systems. The result of these different arrangements could confuse rather than strengthen accountability. Local accountability should be at the heart of the Government’s policies for localism and decentralisation. The Final Piece of the Jigsaw: Financing Localism and Decentralisation 35. It is not enough for CLG to promote localism and decentralisation. The Whitehall spending departments whose work impinges on local authorities and localities, like Education, Health, Work and Pensions, Transport, the Home Office, Environment, Food and Rural Affairs, Energy and Climate Change, and Culture, Olympics, Media and Sport, all have to be committed to localism and decentralisation. For place-based budgeting to be effective they need to ensure their budgets and policy decisions for localities follow the lead of the local authorities. Such decentralisation requires a cultural change among departmental civil servants, and officials in their quango offshoots, and such change is unlikely to emerge unless there is political commitment to localism and decentralisation from ministers, and above all from the Prime Minister and the Chancellor of the Exchequer, the first two Lords of HM Treasury. There is no place for “ring-fencing” of service budgets in the new localist world.

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36. The Treasury has to be as committed to localism and decentralisation as is CLG. It must champion decentralisation not only of expenditure decisions but also of taxation decisions. It too must reject centralisation. The Treasury controls 96% of taxation, with only council tax as the 4% beyond its direct control, but even it is capped by CLG. The council tax finances only around 25% of local-government expenditure. For decentralisation to be genuine, elected local government should be drawing the lion’s share of its revenues from local taxes it levies on its local voters. That shift in the balance of local spending and taxing will enable more responsible, responsive and accountable local government, no longer acting as a supplicant on central government demanding bigger grants, and more involved in interacting with its localities. Citizens, community groups and councillors will behave more responsibly in their use of resources if they know that any demands for higher standards, better services and fewer cuts will have to be paid for by local-taxation increases bearing on them. This local fiscal discipline should be welcomed by the Treasury, since it will no longer be bombarded by local authorities seeking larger grants. Instead local authorities will be their allies in the wise use of resources. These authorities, more reliant on local taxation than central grants, and playing the lead role in place-based budgeting, will help the Treasury avoid its incessant battles with Whitehall spending departments, since decisions on spending and taxing will have been decentralised to local authorities. Cabinet squabbling will be diminished, enabling the Treasury to concentrate on issues of macro-economic management and international finance. 37. The Government has promised a review of local-government finance. This review need not take years, since the evidence has been accumulated in numerous previous reviews, notably by the 1976 Layfield Committee on Local Government Finance [of which we were members] (Cmnd. 6453), and in the more recent Lyons Report of 2007, Place-shaping: a shared ambition for the future of local government.. All that is required is political will. That will should now be here because of the sheer problems facing public finances and the Government’s commitment to localism and decentralisation. The political moment for change is now. The Committee should enthusiastically encourage this change and support a radical shift from centralisation across the whole of government. Returning taxation powers to local government is a pre-requisite for genuine localism and decentralisation.

Conclusions 38. For localism and decentralisation to be effective central government needs to exercise self-discipline and relax its controls over local authorities. It should not make detailed and random interventions into delivery; it should abolish ring-fenced specific grants; it should not cap local-authority decisions on levels of council tax or make a judgment on whether a particular expenditure of an authority is excessive; and it should not confine local government to only one tax. 39. Our main conclusions are: — Localism and decentralisation can strengthen government at both the national and local levels. — Community involvement and decentralisation to local communities should be seen by local authorities as a means of strengthening local representative democracy rather than as opposed to it. — There are many difficult issues to be faced in decentralisation to local communities, which are likely to limit its development. Their potential is most likely to be realised with support by local authorities committed to community involvement. Central government should leave local authorities to experiment in finding ways most appropriate for their localities without departmental interventions. — Central policies on localism and decentralisation are likely to be successful only if there is real authority for those policies in central government and procedures to enforce them over all departments. — To realise the potential of these policies local authorities will have to cast aside a habit of deference which has limited some, although not all, to being agents of central government rather than local governments for their areas. — “Place-based budgets” could transform the working of the fragmented system of community governance, provided local authorities are given powers to match their responsibility for these budgets. — Localism and decentralisation require a significant increase in the taxation powers of local government. September 2010

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Memorandum from Henry Peterson 1.0 Executive Summary 1.1 This submission to the Select Committee looks at the key developments in central/local relationships in England over the past decade. It then goes on to argue that: — For localism to achieve the core aims of better outcomes at significantly less cost, a modified form of local governance body is needed—with integrated and accountable responsibilities across all key public services. — The form of accountability should be through democratically elected representatives, exercising roles which are broadly consistent across health, policing, and employment support alongside existing local government functions. — Place based budgets, with true pooling of public expenditure streams, are critical to achieving the scale of public expenditure reductions needed. — Accountability for the totality of place-based budgets should rest with Parliament. Accountability for spending decisions within these budgets should be fully devolved to local level. — There is a viable and phased route to such a form of local governance in England, building on the work of councils and local partnerships since 2004 (including LAAs and Total Place). 2.0 Brief Introduction to the Submitter 2.1 I worked as a director and deputy chief executive for a London Borough (Hammersmith and Fulham) until 2005 and have subsequently acted as a consultant and adviser to CLG (and former ODPM), the Local Government Association, Local Government Improvement and Development (formerly IDeA) and London Councils. 2.2 I have been closely involved in the localism agenda, and in particular on governance issues (future of LSPs, ideas on local public service boards), and on the development and implementation of local area agreements. 2.3 Awarded the OBE for services to local government in June 2006. 3.0 This Submission First Addresses Four of the Specific Questions Posed by the Committee The extent to which decentralisation leads to more effective public service delivery; and what the limits are, or should be, of localism 3.1 The issue here is who is to judge the “effectiveness” of public service delivery? One of the main arguments for localism is that it leads to public services which are more responsive to the differing needs and aspirations of communities across the country. Judgement is made from a local rather than a central perspective, with decision-makers better positioned to reflect varying needs and aspirations across the country. 3.2 The debate on universal minimum standards, versus local autonomy and responsiveness, remains unconcluded. As the 2020 Public Service Trust has commented “the tensions in the public mind between fairness of provision, on the one hand, and both local control and choice, on the other, remain unresolved”.1 3.3 Notions of universality, minimum national standards, and “fairness for all” are deeply embedded in the UK psyche. Other countries, with a history of more devolved or federal administrations, do not appear to experience to the same degree our apparent tensions over devolved decision-making versus universality and equity. 3.4 The picture in the UK seems unlikely to remain static, as the public confront stark choices and tradeoffs to a degree not faced for several decades. As the detailed impact of public expenditure cuts becomes evident, the current weight placed on principles of equity, universality, uniformity and choice, look likely to shift. Government is already opening up this debate in relation to certain hitherto universal benefits. 3.5 Hence the “limits to localism” should not be seen as fixed. Few if any public services or forms of welfare support should be deemed off-limits to democratically accountable adjustment and fine-tuning at the local level. 3.6 In times when every public pound has to be well-directed, the public will look for decisions to be made closer to them. They will also want to see visible outcomes, services tailored with more precision, and waste avoided. English local government has a relatively good track record in these respects, as compared with many other parts of the UK state. 3.7 Concerns over “postcode lotteries” may well give way to growing public regard for thoughtful, well planned, and democratically legitimated “postcode variance”. This assumes that a way can be found to achieve integrated and coherent decision-making across the totality of public services delivered at local level, with visible and consistent accountability.

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The lessons for decentralisation from Total Place, and the potential to build on the work done under that initiative, particularly through place-based budgeting 3.8 The lessons from the Total Place initiative are set out in the HMT report2 and work by the Office of Public Management.3 The Select Committee will no doubt be looking back further, to the experience of councils and local strategic partnerships in rethinking delivery of services through local area agreements and joint strategic commissioning. 3.9 The original thrust of LAA thinking, developed jointly between local and central government, was devolutionary and localist. The initial ODPM prospectus4 built on the Treasury’s 2004 proposals for more devolved decision-making.5 The LGA simultaneously published proposals for local public service boards, promoting the idea of multi-agency governance bodies with a remit to oversee and steer the totality of local public expenditure.6 3.10 Seen from a localist perspective, early commitments by the previous administrations to “let go” from the centre were never carried through. The “deal” struck between CLG and local government in 2003–04 proved insufficient to shift the underlying culture of Whitehall. Those parts of government most wedded to top-down performance management prevailed. LAAs became bureaucratised through target negotiations. Removal of ring-fencing from central funding streams was piecemeal and slow. Freedoms and flexibilities granted to local councils were limited. 3.11 Despite these setbacks, LAAS (and their sub-regional equivalent of MAAs) have had significant impact. Across all 152 first-tier local authority areas in England (and with alternative models in Wales and Scotland) multi-agency partnership working across the public sector became more deeply embedded. Local political leaders took on a wider and more active role, encompassing issues of crime prevention, community safety, health, wellbeing and sustainability. 3.12 To date, policy developments on localism and devolution in England have moved forward largely through a series of White Papers, pilots and pathfinders. The 2007 LGPIH Act consolidated some of the progress made, but not with any permanence. In particular, issues of governance and accountability were largely sidestepped, with reliance placed instead on informal and voluntary partnership working. 3.13 The institutional capacity-building and constitutional underpinning that might be expected as part of a coherent decentralisation programme (as pursued in Denmark, and previously in France)7 has yet to be put in place by any UK national government (beyond the 1998 legislation on devolution to Scotland and Wales, and the Greater London Authority Acts). 3.14 The current difficulties in devising suitable accountability arrangements for place-based budgets, and unresolved issues over the status of future LEPs, can be seen as symptoms of this ad hoc and incremental approach. 3.15 Despite being a signatory to the European Charter of Local Self Government, successive UK administrations have never accepted the principles of the Charter’s Article 9 on finance. The negotiations between the LGA and CLG on the December 2007 Concordat exposed this basic difference of view.8 3.16 With the benefit of hindsight, it could be argued that had Government put real weight behind localism from 2003–04 onwards, the necessary expertise, institutional capacity, and governance frameworks could have been built at a time when public sector resources were plentiful. 3.17 As it is, it may prove that a critical window of opportunity has been missed. The years in which a localist governance framework could most easily be built have now passed. 3.18 While it is not too late for localism, it feels too late for further gradualism. If decentralisation and localism are to happen, a more radical shift is needed, comparable to the devolutionary programmes carried through elsewhere in Europe. Further years of pilots and pathfinders, chipping away at an over-centralised state, do not look to be a sufficient solution. The role of local government in a decentralised model of local public service delivery, and the extent to which localism can and should extend to other local agents 3.19 The “community leadership” and “place-shaping” roles of local councils, and of their political leadership, were consistent themes of the previous government. Local authorities were expected to take on this wider remit without explicit constitutional changes and with very limited influence over the totality of public resources. Many felt this was an exercise in being handed responsibilities without powers. Now facing massive financial constraints, a retreat by local councils from this ambitious remit could well gather pace. 3.20 Yet there has been a significant shift in relationships between councils and other public sector agencies in the area, which could be consolidated if the Coalition government moves purposefully and quickly. 3.21 The enhanced role of local partnerships and the introduction of national frameworks to provide underpinning to these bodies (such as LAAs and MAAs) have made a difference. The previous government’s aims of strengthening horizontal accountability in a “place” while diluting vertical accountability to Whitehall were advanced over the period 2004–10, if not far and fast enough.

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3.22 On the extent to which localism should be extended to other local agents, the answer depends on the form of localism. “Silo localism”, in which individual Whitehall departments simply shed responsibilities from the centre, may reduce central budgets but create an even more fragmented and expensive local state. 3.23 “Integrated localism” will continue to have some upfront costs, in putting appropriate support architecture in place. But the local government community is not alone in arguing that such devolved autonomy offers the only long-term route to more intelligent (and cost-effective) forms of intervention and prevention by public agencies, along with better outcomes for citizens. 3.24 The potential role of local government in such a devolved (as opposed to decentralised) model would seem clear. It is to govern, in the classic sense, and not merely to undertake an agency role in attempting to co-ordinate local service delivery. It is to engage with, and to reflect through representative democratic decisionmaking, the needs and aspirations of local people. It is to make the judgements, choices and trade-offs necessary to reconfigure the boundaries of our public realm, within broad parameters and budgetary allocations set by Parliament. Place based budgets 3.25 The concept of a single local governance body with a remit to bring together and steer the totality of public expenditure in an area has long been a localist ambition. 3.26 LGA and Innovation Forum 2004 proposals for local public service boards envisaged (as their endgame) a streamlined partnership of all key players, overseeing a locality based block grant covering the totality of locally relevant public expenditure.9 3.27 In its 2005 proposals for “second generation LAAs”, the LGA again argued for such arrangements, at the Central Local Partnership Ministerial Sub Group on LAAs and Performance Management.10 3.28 Interest by the previous government in such ideas quickened only towards the end of its term of office, as a result of the work of Cumbria County Council, the Leadership Centre,11 and the Institute for Government. This led on to the Total Place Programme and the more recent lobbying proposals from the LGA.12 3.29 Proponents of place-based budgets now have to fight their corner in the context of public service cuts, and not at a time of growth or steady-state. This is raising questions on viability and costs of implementation. How effective and appropriate accountability can be achieved for expenditure on the delivery of local services, especially for that voted by Parliament rather than raised locally 3.30 The extent to which Parliament can be said to be genuinely accountable for spending decisions on current levels of centrally voted local funding is debatable. 3.31 The House of Commons determines annually, by affirmative resolution, the total amount and distribution of all elements of Formula Grant. But there are no restrictions on how local government spends the major part, Revenue Support Grant. Specific formula grants, and other ring-fenced funding streams have been shrinking as a proportion of the total of local authority spend. The Coalition Government has committed to further removal of ring-fencing. 3.32 In this context, and with layers of democratically elected decision-makers in place within first, second and third tier local government, what further level of accountability does Parliament need for place-based budgets? 3.33 Historically, public services in England have a mix of central and local financial accountability, with no particular rationale behind the mix. As others have noted, “At no stage of English history has any government held a consistent and logical policy on the range and limits of municipal services.” 13 3.34 The LGA’s June 2010 publication on place based budgets14 suggests a new form of “Place Estimate”, approved by Parliament, as the means of ensuring Parliamentary accountability for the “national” element of a set of PBBs. An alternative option, of devolving a tax base equal to any expenditure streams included in a PBB, is also floated. 3.35 Either way, any solution comes back to basic issues of the central/local constitutional settlement. How should place-based budgets combine “Parliament’s money” with “the local area’s money”? 3.36 As argued above, distinctions (and accountability arrangements) for “national” as opposed to “local” public funds are already blurred. 3.37 Place-based budgets could go down the route of cautious pilots, ring-fenced to specific “themes” (as explored in recent weeks by Government Departments and local councils). But if they are to have significant impact, and to move beyond “alignment” of funding streams (with accountabilities unchanged) national rollout and a new set of public expenditure principles is needed. 3.38 These could be similar to those developed for the Scottish Parliament, at the time of devolution,15 as assigned budgets over which local decision-makers have freedom to spend according to local priorities.

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3.39 Where existing public funds are spent at local level, is there evidence that the public value a system of Parliamentary accountability more highly than accountability to locally elected politicians? The latter is closer to them. The concept that Parliament exerts close and direct control over the details of expenditure in a “place”, once Estimates are voted, is surely largely notional? 3.40 This is not the same issue as that of devolving tax-raising powers, where successive governments have made clear their reluctance to devolve significant new powers to local level. 3.41 Hence current arrangements for Parliamentary accountability should not be seen as an insuperable obstacle to place-based budgets. The case for place-based budgets is that a locally-based governance body, bringing together key decision-makers in an area and ensuring local democratic oversight, offers the best hope for more carefully targeted allocation of public funds. 4.0 Is there a Viable and Phased Way Forward for Localism? 4.1 The second part of this submission looks at the prospects of achieving a transition to a form of localist governance that is radical, while minimising costs and upheaval resulting from institutional change. 4.2 The proposals are based on six guiding themes: — Start with the money with a re-ordering of accountabilities for public expenditure. — Keep governance simple, rationalising the currently ambiguous relationships between local authorities and local partnership bodies. — Strengthen directly elected accountability as the primary means of extending citizen influence across the full range of public services. — Use existing spatial boundaries—unlike the current “bottom up” approach for deciding the spatial geography of LEPs, this submission suggests using the 152 first-tier local authority areas in England as the spatial level for place based budgeting and governance (i.e. the areas currently covered by LAAs). — Use existing legislation where possible to avoid the extended delays inherent in Parliamentary timetables. — Place faith in local politicians, and in those public servants already working at local level to improve, integrate, and reinvent public services. Theme 1 Start with the money 4.3 Place-based budgets, under this model, would be a formula-based grant for the locality with no ringfencing. Parliament would determine the total figure (ideally with settlements spanning three years or more). Decisions on spending within the total would be devolved to local level, on principles similar to those applying to the UK devolved regions. As at present, local councils would raise a proportion of the total through local taxation and precepts. 4.4 Scope of PBBs would be similar to that being developed (in their widened version) for Local Spending Reports under the Sustainable Communities Act 2007. Scope would exclude national spend on eg defence, and potentially include some transfer and welfare payments to individuals in cases where limited local variation has demonstrated benefits. Theme 2 Keep governance simple and strengthen directly elected accountability 4.5 In order to extend local democratic accountability across the full range of locally delivered public services, the suggested model is that of a local board made up of directly elected mayors/leaders, working collectively with directly elected portfolio- holders for health and wellbeing, policing/community safety, employment and skills, alongside existing local government services. 4.6 These locally elected politicians would form the executive of the local authority, and the core executive of a local public services board (or “local budget board”). The latter could be constituted as a public service trust, or community enterprise company, with legal capacity to hold funds and employ staff. Other key local partners (business, third sector) would have membership, as with local strategic partnerships (LSPs) at present. But a directly elected executive would sit at its core. 4.7 Current proposals for directly elected Police Commissioners would be adapted to fit with this more collective model of governance (while still meeting the commitment to introduce “directly elected persons” in this role). These public service boards would oversee public health and wellbeing, as proposed in current NHS reforms. That part of the place-based budget assigned for GP commissioning would be passported onwards, other than when withholding or redirection became necessary in the public interest. 4.8 Over the longer term, such local public service boards (or “budget boards”) would come to be seen by the public as the key governance body for the area. They would subsume current council cabinets or executives. Non executive councillors on the local authority would continue to act as the “assembly” for the area, with functions of constituency representation, overview and scrutiny (as for the GLA in London).

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Theme 3 Use existing spatial boundaries 4.9 The June proposals from the LGA on place-based budgets suggested that spatial boundaries should be set through local negotiation and agreement between key partners and players. The initial stages in the establishment of Local Enterprise Partnerships (LEPs) have followed a similar bottom-up approach, leading to the submission of proposals for 56 sub-regional LEP areas. The case for variable geography for place-based budgets, between sub-regional for economic issues to district or neighbourhood for issues such as crime prevention, is a strong one. But the complexities of making such arrangements happen, and ensuring any level of citizen understanding or coherent accountability, are formidable. 4.10 This submission suggests an alternative approach, of using the existing 152 first-tier local authority areas as the spatial architecture for place based budgets and governance. This is for several reasons: — statutory accountability for budget-holding and resource decisions, on local government spend, already lies at this level; — existing forms of democratic electoral accountability are in place; — Local Strategic Partnerships provide the foundations for multi-agency integrated governance in these areas, building on relationships of trust and collaboration; — six years of LAAs has already built partner relationships at this level; — progress could be made swiftly, avoiding extended local debate alternative spatial options; and — Local Spending Reports already operate at this level. 4.11 There is no perfect solution to the question of the ideal spatial level for place-based budgets. With LAAs, district councils and neighbourhood bodies have often struggled to make their voices heard and their more local priorities included. But there has been the chance to build more mature communication and dialogue. 4.12 First-tier councils have learnt that their statutory responsibility for putting together a LAA does not give them the right to dictate priorities to lower spatial levels. And, looking upwards spatially, these same councils swiftly recognised the need to come together to tackle wider issues, at the level of natural economic areas, through MAA arrangements. Theme 4 Use existing legislation where possible 4.13 Many councils and their local partners already work together to make use of existing legislative opportunities for pooled funding and joint governance. The history of LAAs, MAAs, LSPs, and partnership working in the Core Cities and larger counties demonstrates this. 4.14 The full scope of secondary legislation (such as the provisions in Sections 11 and 12 of the Local Government Act 2000, for the Secretary of State to approve alternative forms of local authority executive) remains relatively unexplored territory. 4.15 With a Government willing to support innovation, a means of testing out more radical options for directly-elected multi-agency partnership executives, of the kind suggested above, may prove possible without the need for primary legislation. Significant changes to central government funding regimes (such as Area Based Grant) have been introduced in the past non-legislative routes, and hence relatively quickly. More fundamental changes in accountabilities of eg NHS bodies or police authorities are another matter. Theme 5 Place faith on local politicians and those who serve them 4.16 Experience of England’s devolutionary efforts over the past decade, and current Whitehall moves to “localise services”, suggest that some fundamental cultural blocks remain at the heart of the central/local relationship. While the rhetoric of localism has been ramped up, many Ministers and MPs appear still to see locally elected politicians as an insufficiently credible locus for devolved decision-making. There is a perceived reluctance to introduce a strengthened local state. 4.17 Advocates of local government often struggle to understand why local councils are not seen as the natural option for providing integrated and accountable localism. Following the series of reforms over the past decade, does the quality of decision-making and priority-setting at local level still have to justify itself? Is it notably worse than that at national level? 4.18 Many would also argue that the calibre of staff supporting and servicing local partnership work, from councils, NHS bodies, police and other arms of government is as good as that of civil servants in regional Government Offices and in many parts of Whitehall. 4.19 Given the track record of improvement in local government, particularly in use of resources, project management, and delivery (as compared with many NDPBs, quangos, and central departments) what’s not to be trusted? 4.20 Yet cultural attitudes towards local government remain slow to change. Ministers and Whitehall have gained more respect for local government in recent years, but historic perceptions of councillors as “a bit dim

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and often self-important” still run deep. As does the prejudice that civil servants possess “Rolls Royce minds and local government officers… motorcyclist’s minds”.16 4.21 Efforts were made by CLG and others, as part of the previous government’s “new performance framework”, to shift these cultural attitudes in Whitehall. The Institute for Government has continued to press on this theme.17 But there are signs of Whitehall reverting to its silo traditions, while simultaneously pursuing forms of localism that bypass local government. Potential risks of localism 4.22 For any government, there are risks inherent in devolving and decentralising. Yet at a time of major budget public expenditure cuts, there are also big risks in doing nothing, or in a fragmented approach to localism. 4.23 Some risks that the Select Committee may wish to consider, and to look for ways to ameliorate, include: — the lack of an integrated governance layer to which to “let go”. The previous government moved cautiously in strengthening the role of local strategic partnerships. Following the 2005–06 review undertaken by ODPM, 18 these partnerships were left as non-statutory bodies with no powers or capacity of their own. Total Place took integrated local governance machinery no further. The current search for suitably robust decision-making arrangements for LEPs, place-based budgets, or for health and social care, demonstrates this gap in our governance landscape. There is still no adequate statutory means through which local decision-makers can come together to create strong and effective vehicles for multi-agency, democratically accountable, leadership of place. Without such a layer of governance to let go to, the devolutionary ambitions of the current government will remain hindered. The suspicion remains that Whitehall will always find reasons why such a governance layer is not needed, or is undesirable. — fragile support arrangements for local partnership working. Much of what has been achieved at local level in recent years has relied on commitment and energy of small numbers of staff, working to make a success of LSPs, LAAs and MAAs, and “joined-up” working. Funding arrangements for such staff have often been ad hoc and short-term, relying on sources such as Neighbourhood Renewal Funding and LAA Performance Reward Grant, which are no longer there. Hence there is little solid institutional capacity in place to take joint working and place-based budgets to the next level. More worryingly, a number of councils are already dismantling or reducing their local partnership arrangements, in their efforts to cut costs. In doing so, their hope is that collaborative working is sufficiently ingrained as the “day job” for many service providers, for working relationships to survive intact. This may well prove a false hope. Several Coalition Government initiatives potentially run counter to an integrated approach to local public service delivery (separate directly elected police commissioners, GP consortia of unpredictable size and spatial level). — the temptations for any Government to “axe and devolve”, cutting budgets while passing down accountability for the consequences. In the minds of the public, this could forever associate greater local autonomy and place-based budgets with much increased austerity. As discussed above, this is not the best moment to be embarking a shift from central to local decision-making. 5.0 Conclusions 5.1 That a decade of public service expansion passed by under a government cautious and ambivalent in its moves towards localism is already one missed opportunity. 5.2 It will be doubly ironic if a new government committed to the “radical devolution of power and greater financial autonomy to local government” finds that it presides over the dismantling of the modest advances towards integrated local governance as have been put in place (despite the obstacles) in English counties and cities. 5.3 Empowerment of neighbourhood groups, and a more active civic society, may help us through these difficult years. Silo-based decentralisation, through which Whitehall departments offload responsibilities (and shrunken budgets) to more localised delivery agents, may prove better than nothing. But neither is a substitute for integrated and democratically accountable local governance, bringing together resources and decisions in a way that citizens can understand. 5.4 Localised and devolved governance in England should not prove an impossible nut to crack, if the political will is there. References 1 What do people want, need and expect from public services, 2020 Public Services Trust and Ipsos MORI March 2010.

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2

Total Place: a whole area approach to public services HMT and CLG March 2010.

3

Learning from the Total Place pilots, OPM Sue Goss February 2010.

4

Local Area Agreements: a prospectus, Office of the Deputy Prime Minister 2004.

5 Devolving Decision Making 1 delivering better public services: refining targets and performance management, HMT and Cabinet Office March 2004. 6 7

With a little help from our friends: international lessons for English local government Localis and LGA January 2009, Council of Europe report on central government supervision/control of local government, Nov 2006.

8

Localis commentary on 2007 statements by Hazel Blears (as for 8 above).

9

Local public service boards, LGA and Innovation Forum July 2004.

10

LGA paper to CLP sub-group, July 2005.

11

Counting Cumbria December 2008 Leadership Centre for Local Government.

12

Freedom to lead—trust to deliver LGA January 2010, Place based budgets—the future governance of public services LGA June 2010.

13

Whitehall must learn to let go, Peter Hetherington, Guardian 1 Nov 2006.

14

Place based budgets—the future governance of public services LGA 2010.

15

See http://www.scotland.gov.uk/government/devolution/scpa-10.asp

16 Both sets of comments quoted in Attitudes to Local Government in Westminster and Whitehall, George Jones and Tony Travers, Commission for Local Democracy, May 1995. 17

Shaping Up: a Whitehall for the future, Institute for Government 2010.

18

September 2010

Memorandum from Local Government Information Unit (Lgiu) Introduction 1. The LGiU is an Award Winning Think-Tank. Our mission is to strengthen local democracy to put citizens in control of their own lives, communities and local services. We work with local councils and other public services providers, along with a wider network of public, private and third sector organisations. Through information, innovation and influencing public debate, we help address policy challenges such as demographic, environmental and economic change, improving healthcare and reforming the criminal justice system. We convene the national Children’s Services Network and have launched two social enterprises Local Energy ltd and the Centre for Public Service Partnerships. 2. 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. Executive Summary 3. LGiU has welcomed the Coalition Government’s early commitment to Localism. Successive governments have steadily eroded local ability to make decisions on local services. LGiU believes that councils have a democratic mandate to control and scrutinise all services at the local level. They should have the power to take a whole area view approach, to convene the right organisations and people, and to take responsibility for services. 4. Our response to the Select Committee considers your questions in the political and policy context, including the new government’s approach to localism and the Big Society, public service and political reform in an era of public spending constraint. 5. The Big Society offers new opportunities for citizens to play a more active role and take greater control of their local community. Some of the proposals build on previous approaches, such as a drive towards the community ownership of assets.The Big Society is still more of a “big idea” than a set of practical proposals. As these proposals develop they will need to address how communities will be motivated to take up the challenges and opportunities that the Big Society approach presents. For example, we must ask, and the Select Committee might explore: — What will motivate people to want to take over services or assets rather than have the council deliver them?

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— When community groups do get involved how will we ensure that they are properly supported and that they are accountable in respect of service standards and use of public money? 6. The government will want to achieve this without reintroducing what many see as the “deadening hand” of the Big State through a regime of targets and bureaucratic procedures. Local government may fear that the cost of stimulating the market of community involvement and of supporting it will offset any savings that have been realised through divestment of services and assets. 7. The Big Society is a bottom-up and mass localist approach that will lead to a diverse pattern of service provision and community activity. At the same time, the new government is considering how to build on the Total Place projects and related initiatives, to connect up local public spending, achieve greater value for money and better services, at the same time as strengthening accountability. The new government is referring to this as Community Budgets. These two elements of localism: Big Society and Community Budgeting are very different and must be reconciled effectively. 8. “Total Place” and “place based” budgets approaches, allied to a drive towards shared services and other measures to achieve economies and improve services through scale, such as joint procurement, have been criticised as essentially a technocratic, practitioner-led exercise. There have been concerns that local politicians, let alone local communities, have not been involved. Even the discussion of a “people centric approach” to services is focused around individual users and how more effective interfaces and clearer customer pathways can be established between them and the multiple agencies with whom they come into contact. 9. Answering the challenges, fulfilling the vision, and addressing the contradictions, is not a role only for central government, or indeed debate at the central level. Local government itself must be proactive which is why the LGiU has established a Big Society network to develop thinking and leadership in the months ahead. The extent to which decentralisation leads to more effective public service delivery; and what the limits are, or should be, of localism 10. Local government is at a crossroads. The coincidence of a radically localist new coalition government and the most pronounced contraction in public finances in thirty years presents a unique set of dilemmas, choices and possibilities. 11. We know the future of local government over the next few years will be shaped by two forces: a drive towards localism and the need to achieve efficiencies and cut spending in a challenging financial context. If we are to prevent these drivers from pulling us in opposing directions we will need a fundamental shift in the way we think about local service delivery and the relationship between people, places and power. 12. Citizens will need to become more engaged in the process of governance and of public service delivery. No doubt there is an ideological element to this drive to localism, both a conservative commitment to a smaller state and a liberal emphasis on autonomy and self-determination tend in this direction. However there are also compelling practical reasons to believe that the relationship between citizens and the national and local state will have to change. 13. Public expenditure cuts will be real and deep. They will start this year and continue for the remainder of this Parliament. Local government should expect to bear more than its share of these cuts given the new Government’s commitments to “protect” a range of services and their budgets. Revenue and capital funding are at serious risk. The spending cuts will be severe. There are, however, some reasons for optimism. Local government is to be given the power of general competency and it will retain its duty of community leadership and place shaping. This should include some coordinating powers over local public spending, developing on the “Total Place” work. 14. In terms of the “limits” of localism, what is needed is for any action by government to be taken at the appropriate level and in a proportionate way. Too often governmental action has been driven from the centre and been out of proportion. The incoming government wishes to reverse this and we support them in that. It must be recognised however that the political culture presents potential difficulties. In particular, LGiU believe that local political choices that do not match national priorities, and the perception and sometimes reality of “failure” by councils from time to time, may prove a limitation on the new government’s localist approach. Local government organisations have called for the “freedom to deliver” and the “freedom to succeed”, but it is essential also that they have a freedom to make local choices and take risks that may lead to outcomes that central government will not support. One of the key tests of the new government’s commitment to localism will be the circumstances in which it chooses to intervene in local service delivery, and the extent to which it puts in place any framework to mitigate risk of “failure” at a local level. This is also a challenge for local government which has not in the past been successful at self-improvement in the most serious cases of poor performance. 15. A further limitation on localism is in local government itself. Not all local councils have demonstrated either the willingness or the obvious ability to explore and push the boundaries of their role. Examples of this are in the varied and quite often very limited use of opportunities such as the Power of Wellbeing and more recently the Sustainable Communities Act. In contrast, some councils are pushing for the maximum freedom and demonstrating how they would use it. An example is the recent publication by Westminster City Council, of their Foundation Councils proposals, which we would urge the Select Committee to consider.

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The lessons for decentralisation from Total Place, and the potential to build on the work done under that initiative, particularly through place-based budgeting 16. The Total Place pilots and parallel projects have shown that there are significant opportunities across a range of services to focus on outcomes for users and communities, ignoring current institutional and professional boundaries and in so doing to eliminate duplication and unnecessary expenditure whilst improving or at least sustaining performance and outcomes. 17. The government’s attitude to place-based budgeting displays a degree of contradiction. Eric Pickles has expressed firm support for the principles behind place-based budgets and ministers have said that the Chancellor wants to see options for place-based budgets properly explored in the spending review. However, the messages are rather mixed across government. The NHS budget is ring-fenced. There is to be a national commissioning board and the devolution to an unknown number of GP consortia of much of the commissioning budget; that is, to private businesses. Local GP Commissioning will create further pressures as councils lose their (in many cases successful) relationships with PCTs. In education, there will be free schools and many more academies. Responsibility for police budgets will lie with the police commissioner, who will have to listen to partners like local authorities, but will have no duty to co-operate on matters such as pooling budgets. The position is unclear in other areas of government—the role of local authorities, for example, in the DWP’s new centralised Work Programme, and how contracting for welfare to work will fit with what is clearly a decentralising move— the establishment of LEPs. 18. The public sector needs to deliver a challenging level of efficiency savings and savings from stopping service delivery. Savings from individual organisations will not be enough by themselves and if organisations look for savings only from within their own budgets this could lead to perverse outcomes and increase spending in other parts of the public purse (e.g. if funding on gritting/road repairs is reduced, the cost of accidents increases; if social service funding is cut, vulnerable people stay in hospital beds for longer). 19. The logic of these initiatives goes against the concept of place-based budgets and shared decisionmaking. The challenge to the primacy of central departments is perhaps too much for traditionally independent departments like the Home Office, Health and Education. 20. We shouldn’t take Total Place as a panacea, but it has shown how strategic planning of public services across an area can deliver savings. As LGiU sets out in its paper People, Places, Power (appended), Total Place or whatever it becomes known as should be regarded as a set of behaviours rather than a series of processes and project programming. It should lead local leaders and managers to always explore how benefits, outcome performance and savings can be achieved through partnership and collaboration. It should be about focusing on outcomes and the needs and aspirations of citizens rather than institutional interests. This approach will be very relevant over the next few years of budget reductions and constraints. The role of local government in a decentralised model of local public service delivery, and the extent to which localism can and should extend to other local agents; 21. LGiU has consistently argued that local government has a unique role in public service delivery. Councils have a democratic mandate to decide and scrutinise public service priorities and delivery, engaging with and acting on behalf of local people. They have capacity unlike any other actor in the local state with procurement capabilities, resources, convening power, and a whole area view. Police services 22. LGiU calls for the Government to reconsider directly elected police commissioners as proposed in the Police Reform and Social Responsibility Bill. LGiU has long campaigned against directly elected police representatives, arguing that local councils and councillors already have an electoral mandate and should be the natural representatives to hold policing to account within communities. Schools 23. The mix of schools with different governance and funding arrangements has been getting more complex for some time now. While the effect of the Academies Act have made this mix even more complex, local authorities have continually demonstrated their ability to work with all types of schools including the 200 plus Academies created during the past seven years. Given the oft demonstrated ability of local authorities to be flexible to meet new circumstances, there is no reason why this cannot continue with a new wave of Academies, albeit following conversion from maintained school status, and possibly against the advice of the local authority. The task of reconfiguring support services, and local authority finances, will be significant if many schools opt for Academy status. This is especially so in a period of reductions in Government grant to local government but, as with past changes in Government policy, local authorities have shown they are up to the task. 24. LGiU supports action to improve standards in schools and in many cases a change in governance via the Academy route may be right for schools. LGiU has concerns over Free Schools.

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Health 25. The proposals for GP Commissioning have significant implications for local authorities, not only in relation to areas of recent close working with the NHS, such as social care and safeguarding, but also in relation to the proposed new local government responsibilities for health improvement and public health. One issue of considerable concern to local authorities is that of co-terminosity with NHS boundaries. Councils could hardly be blamed for feeling that, no sooner have geographical boundaries been rationalised so as to facilitate joint working through virtual co-terminosity with PCTs, than the whole issue of co-terminosity is up in the air again. The consultation document on the changes emphasise the government’s desire for local flexibility of GP consortia, which means that there will be no real external incentive for commissioning consortia to be aligned geographically to local authority areas. 26. A close working relationship between GPs and local authorities would, in many areas, involve a huge cultural change, since most GPs are not used to the idea of mutual accountability or responsibility with local councils. Nor are most GPs used to thinking in a holistic way about the health and social care needs of whole populations or to thinking of themselves as community leaders. Their training and their practice to date has been much more about individual clinical relationships with patients, and this will doubtless remain the case for many GPs. However, the GPs who have been chairs and members of PCTs’ professional executive committees (PECs) will have had considerable experience of thinking in terms of commissioning issues, and local authorities will wish to build on or develop relationships with PEC members as a way in to deepening their collaboration with local GPs more generally. 27. The LGiU has raised some concerns about the proposed local authority-led local health and wellbeing boards, as strong vehicles for local authority/NHS partnership. The consultation on commissioning highlights these concerns, as it again places considerable reliance on the health and wellbeing boards as a conduit for partnership. At the same time as playing a leadership role in developing working partnerships with commissioning consortia, the health and wellbeing boards will also, under current proposals, take over the statutory health scrutiny functions from health overview and scrutiny committees. This dual role might prove difficult to play, particularly as, at the moment, GPs, being independent contractors with the NHS, are not covered by any of the requirements of the health scrutiny legislation. Local authorities will no doubt wish to put forward their views on how well health and wellbeing boards could carry out the functions envisaged for them and what support, in terms both of legislation and resources, they might need to do so. 28. In addition, councils may wish to give their views on the specific roles envisaged for them in this consultation in relation (a) to managing major health service procurement exercises in which local GP practices are bidding and (b) to selling their services to commissioning consortia to provide support with needs population needs assessments or other issues. The action which will be necessary on the part of Whitehall departments to achieve effective decentralised public service delivery 29. For councils to harness the potential of differing and complex forms of public service delivery presented by the Big Society and Place-Based Budgeting central government will need to abandon ring-fencing at a local level in its entirety and allow councils the powers to over-see and convene budget holders across the local state. 30. There are also questions about what functions central government demands that councils should perform. LGiU has posed the following questions in “People, Places Power”; — Services: How should particular services be delivered and combined, how should budgets be pooled toincentivise efficiencies, how can functions be shared and economies of scale achieved? — Spaces: What is the appropriate spatial unit within which services should sit? How can we disaggregate the way we think about place? When is it appropriate to operate at county, district, town, ward, neighbourhood or street level? — People: Who has responsibility for which services and who decides? What should the council do and what should the community lead? Who makes decisions about particular services and what is the remit and scope of that decision making? Thinking about a given issue along each of these axes is likely to yield very different answers, but these can be mapped on to each other so that tensions are identified and trade-offs can begin to be made. 31. The Prime Minister has stated that power will be devolved first to local communities, and afterwards to local government. This “double devolution” is welcome as LGiU does not believe in the primacy of local government structures, but in the wider question of local democracy. CLG will have to answer the question whether it believes that councils exist not to serve as the local arm of government but as the governmental arm of local communities, not just to deliver services or act as a strategic commissioning agent, but to provide the stage for an ongoing dialogue between people about the places they live in and the power they wield.

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The impact of decentralisation on the achievement of savings in the cost of local public services and the effective targeting of cuts to those services; 32. The principle benefit of decentralisation in the achievement of savings is that there will be greater freedom at local level to innovate to achieve a better use of resources. This will be across areas ranging from procurement to innovation in processes and service delivery. It may still be beneficial though for local authorities and other local public services to seek to achieve economies of scale by working closely together, whether that is in joint procurement or shared services. In terms of the “targeting of cuts”, whilst the new government has made clear its priority areas of spending and priority services, it has not directed local public services in where to make cuts. The LGiU believes that local authorities should be free to determine local priorities. What, if any, arrangements for the oversight of local authority performance will be necessary to ensure effective local public service delivery. 33. LGiU welcomes the move away from the over burdensome and controlling audit and inspection regime that developed in recent years. We support the stated objective of the new government to reduce central targets and inspection regimes. Proposals for independent private audit should be consulted with local councils to ensure that a privatised replacement of the Commission simply replaces its audit function. The Government’s rhetoric on this has so far been welcome. 34. LGiU would offer a note of caution; the initial aims of the Commission were to improve the performance of local councils, which in many ways has been a success. The Government must now set out how free councils will be to “fail” or more specifically how much risk they will be allowed to take. LGiU proposes that councils should create Innovation funds for officers to suggest ways which have an initial start-up cost but could potentially deliver service cost-savings over a period of time. Central Government will need to be specific about how entrepreneurial they will allow councils to be after a risk averse decade created by all-encompassing inspection regimes. 35. LGiU calls for Overview and Scrutiny Committees to be given the relevant powers to audit more widely across council services and also across the entire local place. 36. The government is currently exploring, through a CLG consultation, the future of the “top slice” funding which supports certain local government sector wide functions such as improvement support. Currently a very limited review is taking place, with CLG focussing funding on a single provider of improvement support, either through the LGA or the IDEA (LG Improvement). Consideration should be given to how in addition to supporting these important sector wide bodies, a more dynamic market place for improvement support, and specifically innovation, can be developed. How effective and appropriate accountability can be achieved for expenditure on the delivery of local services, especially for that voted by Parliament rather than raised locally. 37. 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. As local government takes a stronger community leadership role which allows a degree of local choice and diversity, 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: — the return of business rates to local control; — local authorities having access to a range of local taxes; and — reform of council tax and council tax benefit. 38. 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 effectively and so fully undertake a place-shaping role. LGiU wants to see at least 50% or a much larger proportion of funding being raised locally using the measures that we have identified. 39. Reform of the balance of funding is unlikely in the near future, despite the coalition’s promised review of local government finance. What additional or alternative approaches may be taken? One idea that LGiU would like to see explored further is for local authority Chief Executives, or another appropriate person at a local level, become the “accounting officer” for public spending. This would mean that instead of a vertical accountability to the Permanent Secretary of one of more government departments, accountability could also rest at the local level. This could enhance the processes of parliamentary scrutiny, such as in Select Committees and Public Accounts Committee. October 2010

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Memorandum from the Institute for Public Policy Research North (ippr north) Key Points — Centralism and the command and control approach to governance has failed to deliver uniformity and impacts negatively on the delivery of public services. It is time for a more localised approach. — The role of the centre should be the enforcer of minimum standards, focusing on setting key national outcomes without getting bogged down in the detail of delivery. This will open space for local innovation without undermining equity. — A wider range of fiscal powers for local government will boost autonomy and the ability of local government to capitalise on the powers and functions available to it. — Capping constrains autonomy. A wider range of fiscal options is likely to reduce the reliance on the council tax as a source of revenue, making capping unnecessary. — Greater fiscal decentralisation must come hand in hand with an equalisation mechanism based on need and seen to be fair. Without this poorer areas with a smaller tax bases will suffer. — The power of local government varies across policy areas. It is the “priority areas” of crime, education and health where there is the most opportunity to increase the role and influence of local government. — The approach of local government earning “freedoms and flexibilities” through an incremental case-by-case approach should be superseded by a more coherent, and radical approach to decentralisation. — The biggest challenge is achieving cultural change—locally and centrally—so that there is greater ambition for the role of local government. It should move more firmly into the role of setting broader local priorities and outcomes, marshalling other services. Too often national priorities trump local ones, and local government and other parts of the local public sector look “up” to Whitehall rather than “out” to the local area. This requires changes more broadly than within local government itself. — This debate needs to move beyond a zero sum balance of power between central control and local autonomy. We should look instead at the relationship and interdependence between the centre and localities. — Many of the best ideas, knowledge and innovation lie at the front line where policy is delivered. Given the proximity to users, it is here that the success or failure of policy becomes apparent. This must be fed back to decision-makers (whether locally or centrally) and drive ongoing improvement. — For this to work there are some additional important issues that the committee should consider: Lines of accountability: part of the problem is a political culture that holds ministers responsible for everything. Ministers and departments need to be clear about the limits of their responsibilities, and they need to resist pressures to respond to matters of detail. More direct accountability locally too, through more directly elected mayors for example, may also help, and give the centre confidence to devolve more powers. Reforming the centre reform of the centre of government has been conspicuously absent from these debates. Any shift in the balance of power from central to local government will require corresponding reform to the way the centre operates. Whitehall needs to end its obsession with delivery and micro-management and instead play a more strategic role. Twenty-first century Whitehall should focus on articulating clear high level outcomes for public services, and less on the process of saying how these outcomes should be achieved. Workforce development Such changes, both locally and nationally, raise serious questions about skills, capacity and capability of the workforce, both in local government and in Whitehall. Local government leading on setting local outcomes and marshalling the local response will raise issues of local policy capacity for most authorities. Local government needs a high quality workforce through investment in the current workforce and attracting the brightest and the best to a career in local government. There should also be much greater interaction between the central and local workforces, through more secondments and other such opportunities for more frequent interaction, or even through a unified public service model. This would also fill a capacity and skills gap in central government, by increasing Whitehall’s direct experience of local government and other parts of the public sector. The Balance of Power: Central and Local Government 1. Over the last 10 years there has been a great deal of rhetoric around “localism” and “decentralisation”. The Blair and Brown governments have at various times claimed to be in favour of shifting the balance of power from centre to the locality. At times, however, it hasn’t been clear quite what this means and to which institutions central government has favoured empowering. Moreover, it is clear that there is a significant gap between the rhetoric of decentralisation and the reality on the ground. 2. The government’s approach to local government to date might be described as “Jekyll and Hyde”. The Dr Jekyll of localism has delivered powers of “general well being”, prudential borrowing powers, three-year budgets the partnerships agenda, and the concordat between central and local government. But Mr Hyde’s presence is felt in the form of capping, which remains alive and well, ring-fenced budgets and through the

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“audit explosion” in central targets and the corresponding performance management regimes, which are still notable, despite being whittled down through the Local Area Agreement (LAA) reforms. Consequently, and in spite of recent changes, England still remains one of the most centralised countries in the Western world. 3. This submission will briefly outline the case for a more radical shift in the balance of power between central and local government, before looking more specifically and what additional powers local government should be handed, and how local government will need to change if it is to exercise these new powers effectively. We will conclude by outlining some additional issues that we think the committee should consider as part of its inquiry, which we believe are essential to this agenda. The Case for Greater Devolution 4. Many of the limitations of the centralised command-and-control model of central government are now well understood. To some extent there is a consensus across political parties, policy experts and interest groups in favour of various forms of de-centralisation, one of which is the re-empowerment of local government. 5. At the same time, there are real and understandable concerns at the centre about “letting go”. These include fears that the pace of public service improvement will slow, and that local inequalities will emerge as a result of divergent local practices. This has been the “social justice” concern in relation to decentralisation, and centralisers can certainly point to historical examples of dysfunctional local councils in the UK that trapped their citizens in poorly performing services without effective redress. 6. There is also concern at the centre that if power was given away the centre would nonetheless retain all its responsibilities, and be blamed when things go wrong. Understandably central government does not want to be subject to blame for events over which it has no control. 7. While these concerns are real and must be addressed, they do not amount to a robust defence of the status quo. Most notably this is because centralism can be seen to have palpably failed on a number of fronts: (a) The centralised state has not delivered uniformity: despite years of centralisation, the state has not delivered uniform standards of public service provision. “Postcode lotteries” are often the result of a centrally co-ordinated system that is unable to cope. Centralism has failed to put an end to varying standards. (b) The centralised state cannot respond adequately to diverse needs: England is a hugely diverse country, which means that a range of different responses tailored to the local context are often required. It is simply not possible for central government to master all the detail required to deliver this from the centre. This results in differences in local demand and local need not being properly accounted for. (c) The centralised state stifles innovation: A hierarchical and rigid delivery model stifles experimentation, militates against innovation and produces unresponsive services. It can also lead to the “crowding out” of local action and local choices if most decisions implemented by local government are made at the national level. This reduces the incentive and opportunity for local innovation and can lead to inefficient resource allocation as local priorities are overlooked. (d) The centralised state results in looking up rather than out: with local government and service delivery organisations continuously looking upwards to ministers for instruction and performance monitoring, and not looking outwards to the public they serve. (e) The centralised state undermines local accountability: Excessive centralism undermines clarity over whether the centre or locality is responsible, and can encourage further centralisation if ministers are held publicly responsible for local decisions. If local government is perceived as impotent it can result in a vicious circle of low turnouts in local elections and diminished legitimacy. 8. Not only has excessive centralisation failed, but we would argue that greater localism could help address many of the problems outlined above. (a) Finding local solutions to local problems: preferences and needs differ between areas, as does the cost of delivering services. Greater local power and flexibility is better suited to tailoring services around local needs and ensuring resources are efficiently allocated. (b) Unleashing innovation: greater local powers and flexibility can foster innovation and experimentation creating “laboratories of democracy” which can help to push up overall standards as other areas emulate successful policy approaches where appropriate. (c) Being locally responsive: Locally designed and delivered services that are also accountable locally are more likely to be responsive. This can also contribute to democratic renewal through empowerment, greater public involvement in decision making and co-production of public services. This can also serve to increase trust. (d) Better joining up: effectively addressing complex problems frequently requires working across functional boundaries. This can often be achieved more successfully at a more local level as responses can be tailored to a common local context and the sheer geographical size is more manageable.

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Localism and Social Justice 9. Localism is not anathema to equity and social justice. This is not to say the issue of striking a balance between equity and diversity is irrelevant, or that furthering social justice and localism automatically go hand in hand. Equity is undoubtedly a crucial aspect of social justice. But in the context of public service delivery this is too often taken to mean there must be uniform provision of public services, which would imply a centralised approach. A more sophisticated interpretation would be to argue that it is not centralism per se that guarantees equity in terms of common standards and the elimination of postcode lotteries. Instead, what may be more important is the effective enforcement of national minimum standards—however these are achieved. This casts the role of central government in a rather different light: as enforcer of a shared minimum rather than a designer and deliverer of services. It also opens space for local innovation in how these standards are met without undermining equity. 10. Achieving this would require a framework setting out which activities, in relation to each public service, should be performed at each level of government. Such a framework is conspicuously absent at present, with each central government department seemingly acting with little reference to the actions of others. A framework would need to set out criteria for determining the circumstances in which a service should be provided uniformly across the country, irrespective of place, or when a degree of service variation should be allowed, perhaps underpinned by a minimum national standard, but with variation in service design and delivery. 11. Setting such minimum standards will require a much more sophisticated understanding than we currently have of the spatial level at which decisions are best made in different areas of public service, and the areas where the public are willing to see variation. There will also need to be careful negotiation of what the national minimum standards should be. If they are set too high it would effectively remove any real local autonomy, as all efforts will be directed to achieving this “minimum”, to the detriment of pursuing other locally determined outcomes. If it is set too low then—in the absence of other effective mechanisms and incentives for improvement—some local authorities may consistently under-perform. Powers and finance—what needs to change? 12. Ultimately much of the debate about shifting the central-local balance is about powers and finance. And while there has been some extension to the powers, functions and flexibility available to local authorities, the development of financial instruments has not kept pace. This must be a priority area for change. 13. One way of evaluating the degree of centralism still exercised in England is to compare the balance of funding between central and local government across countries. In the UK there is a clear dependency on central government grants, much of which is earmarked for specific functions prescribed by the centre. Meanwhile, only approximately 25% of revenue is collected locally (Mrinska 2008). This is a very small proportion when compared to some other Western countries. For example in Sweden over 70% of local spending is from local taxation. Even in France, which is often thought of as a highly centralised country, approximately 50% of revenue is from local taxation (Lyons 2007). Only the Netherlands, Ireland and Italy are more reliant on central grants to local government than the UK, and the first two are substantially smaller countries in terms of population. 14. This raises serious concerns about local government’s ability to make the most of the powers and functions available to it, as without corresponding fiscal flexibility the autonomy of local government will always be constrained. 15. Not only does this reduce the autonomy of local government to respond flexibly to local needs and circumstances, but it is likely to have the effect of constraining the ambition of local government. In the current fiscal climate, even with the increased predictability of central level financing promised by the government, it will be difficult to take risks in implementing locally meaningful projects without first ensuring total support from central government as it remains the main source of funding for any significant investment project. 16. Capping demonstrates how centralised local government finance is, with central government willing and able to cap the one key tax that local authorities are meant to control. This is an affront to local autonomy, and putting a brake on council tax rises should be a job for voters through the ballot box. It is important to note that the reliance on council tax as a means of revenue would recede if local authorities had a wider range of fiscal instruments available to them. 17. However, as with the debate about the impact of greater decentralisation on social justice, there is a balance to be struck with regard to fiscal powers. According to the fiscal federalism literature greater decentralisation will lead to more efficient spending as authorities will be responsible to the public for raising revenue it spends. Greater fiscal decentralisation could also bring accountability gains, clarifying what local government is responsible for. 18. But this has to be balanced against considerations of equity. Going too far down the route of fiscal decentralisation will have negative consequences for poor areas, where there is a smaller tax base to draw upon, yet a greater reliance on public services. A potential comparison could be drawn here with the Local Area Business Grant Incentive scheme, which sought to reward increases in rateable values with a financial incentive from central government, which could be spent on improving services. However the dominant outcome was greater increases in rateable values (and therefore the corresponding financial reward) in affluent

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areas. Greater fiscal decentralisation must therefore be matched with a robust equalisation regime that is based on need and seen to be fair. 19. This focus on the need for more fiscal instruments in not to say there is nothing to be done on powers. In reality the level of autonomy available to local government varies across policy areas, with much greater discretion seen outside the “priority areas” of crime, education and health. It is, therefore, in these areas where there is the most opportunity to increase the role and influence of local government. It is also these areas that greater local government autonomy and influence would provide the largest challenge to central government. However it is also important to note that what is a sensible level of decentralisation for one public service will not necessarily be the same for another. 20. Overall, a key problem is with the current approach to extending the powers and functions of local government, by which local authorities must “earn” greater freedoms and flexibilities by “proving” themselves through high performance, in most cases to central government, although in some cases it is to other tiers of government. For example, following the Sub-National Review, local authorities must “prove” their economic development capacity to the regional development agencies. In practice this has too often amounted to earning greater discretion to do only what central government wants and approves of. 21. Ultimately, earning “freedoms and flexibilities” on a case-by-case basis only results in the incremental extension of local government power, rather than anything more radical. Such an approach also fails to address the question of reforming central government. 22. It also fails to initiate the cultural shift that is required both centrally and locally in order to achieve more ambitious and empowered local government that sets the agenda locally based on local needs and demands. This is an issue we turn to in the next section. Shifting the Culture Centrally and Locally 23. There is a need for all levels of government to be more ambitious about the role that local government can play, both as a local leader and as a contributor to the national debate. 24. To the credit of local government, its performance has improved significantly and rapidly as judged by the comprehensive performance assessment (CPA), indicating local government is doing a good job of performing within the remit set for it. We note in passing that a comparison of the CPA with the Departmental Capability Reviews shows that local government has performed significantly better than its counterparts in Whitehall. 25. A more ambitious approach in part means local authorities making full use of the powers available to them. In particular, the prudential borrowing powers, power of well being and charging and trading powers all remain underutilised by many local authorities. 26. But as well as making full use of its powers and performing well within the framework set out by central government, local government must demonstrate capacity for self-generated improvement and initiative. This will give central government departments increased confidence to devolve further powers, functions and flexibilities. 27. Too often local services remain the product of national priorities and decisions, which are taken without adequate consideration for local context. This is further compounded by the tendency of many local authorities to look “up” in order to try and interpret what is wanted by the centre, which tends to trump what is needed locally. 28. As the centre is the source of most funding and the performance management regime, this is quite rational. But these target setting and performance management regimes can lead to perverse outcomes including target hunting, gaming, segmenting policy streams and limiting innovation. Instead local government should primarily be accountable to the electorate whom they serve, with their needs at the forefront of their actions. 29. Local government should move more firmly into the role of setting broader local priorities and outcomes, marshalling other services and steering local activity. As the directly elected part of the sub-national web of governance, it is right that it should play this role, bringing local legitimacy to the activities of other parts of the public sector. Local government should be the fulcrum of democracy at the sub-national level. In this respect the establishment of Local Strategic Partnerships (LSPs) and LAAs have been moves in the right direction. 30. But for local government to be fully in the driving seat requires changes more broadly than within local government itself. For example, there remains a question about the adequacy of the duty to cooperate given most parts of the local public sector outside of local government look “up” to their masters in Whitehall rather than “across” to local government for direction. Shifting this tendency is clearly a big job that would require change across the public sector. In particularly there would need to be changes in central government as well as locally to be effective. 31. Too often the debate is about central control or local autonomy, cast as a zero sum balance of power. It is time to move the debate beyond this approach, and to look instead at the relationship and interdependence between the centre and localities.

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32. Many of the best ideas, knowledge and innovation lie at the front line, with the so-called “street level bureaucrats” delivering policy, who given their proximity to users are often the first to know whether a policy is working or not. A core function should therefore be to feed that back to decision-makers (whether locally or centrally) and for them to play the part of “talent spotter”, developing and disseminating ideas. 33. For such feedback loops to work public service managers need to be appropriately incentivised to provide such feedback, rather than focusing solely on the more immediate task of meeting output targets. A more open process where all share a desired outcome and are pursuing a common minimum, but the design and delivery of services is open to debate may better deliver this goal. 34. These are the sorts of changes that aren’t easily captured by mechanisms like the concordat. That is not to say the concordat hasn’t been useful—although it is difficult to judge its success given it has not been in place for long and remains largely untested. 35. A constitutional settlement for local government may be more important here. A constitutional settlement would set out the relationship more clearly, helping to overcome key problem for local government, which is the sheer level of public confusion over the respective roles and responsibilities of central and local government. A constitutional settlement would also be much more difficult to erode or ignore than a concordat. The relative weakness of the constitutional position of local government in England ultimately explains why central government has been able to adjust the powers, functions and boundaries of it with such frequency and relative ease. Barriers to Localism—Some Unasked Questions 36. This inquiry asks some very important questions about the balance of power between central and local government. However in our view there are some further important issues that the Committee should consider, which we have hinted at in the text but outline more fully below. They are: lines of accountability; workforce development; and reform of central government Lines of accountability 37. Perhaps the most important barrier to localism in Britain is a political culture which tends to hold ministers responsible for all actions of “the government” most broadly conceived. Local problems often result in the desire to “hang the minister”. The most obvious example of this is in the health service where the Secretary of State is expected to answer for every hospital infection or dirty ward. The reasons for this are complex. In part this is because the doctrine of ministerial responsibility is deeply ingrained in the national psyche; it is partly because central government fails to exercise restraint, and wades into arguments and it is partly because it is not obvious who is to blame if it is not the minister, and the lines of accountability are too opaque. 38. The Lyons report rightly makes clear the importance of cultural and behavioural change at the top of government: ministers and departments need to be clear about the limits of their responsibilities, and they need to resist the inevitable pressures to respond to matters of detail which are the responsibility of individual local authorities. 39. One way of addressing this is through more directly elected mayors, as the name recognition and direct accountability they bring may serve to increase the confidence of central government to give powers away. Certainly this has been the case for the Mayor of London. In some respects it is understandable that central government does not want to give powers away if it is still be blamed when things go wrong. This would be to give away responsibility but retain accountability. Reforming the centre 40. Reform of the centre of government has been conspicuously absent from these debates in Whitehall. The failure to look at this issue alongside reforms at the local level has both limited the speed and extent of improvements to public services and local democracy, and offers a very significant opportunity for the future. 41. The way we govern has changed, with government increasingly “steering not rowing” and having to operate through reformed state institutions, through networks created and managed by them and through markets shaped and monitored by them. Twenty-first century Whitehall cannot command and control and must be reformed accordingly. This means being able to work with a constellation of public, private and voluntary actors, negotiating across boundaries at the international, regional and local levels and managing diverse delivery chains. It requires the centre to take a more strategic role, rather than trying to micro-manage delivery. 42. Such a reformed role should mean more concern for articulating clear outcomes for public services, and less with the process of saying how these outcomes should be achieved. This should be led by local government in partnership with other actors. Workforce development 43. Such changes, both locally and nationally, raise serious questions about skills, capacity and capability of the workforce, both in local government and in Whitehall.

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44. If local government is to raise it sights, be more ambitious and lead in setting local outcomes and how to achieve them, local policy capacity will be an issue for most authorities. For services to be the product of local decision-making and for policy initiative to be grasped, local government needs a high quality workforce. This not only means investing in the current workforce, but taking steps to attract the brightest and the best to a career in local government. A perennial—and convincing—argument of the champions of devolution is that the perception of local government as disempowered and subservient to national government makes it more difficult for it to attract the best people into both political and officer roles. Steps must be taken to make a career in local government as attractive as one in Whitehall. 45. One way to do this would be to end the formal distinction between the civil service and the wider public service and move towards establishing a more unified public service workforce, which would ensure much greater mobility of staff between central and local government and other public bodies. For instance a public service graduate recruitment pool could be developed. If such a move is deemed a step too far, an improvement would be to increase the mobility between the two workforces through secondments, and other such opportunities for more frequent interaction. A missed opportunity in this respect has been making the National School of Government a civil service only resource, whereas opening it to different parts of the public sector would have increased cross-fertilisation. 46. Such developments would help to fill a capacity and skills gap in central government, as it would increase the likelihood of those working in Whitehall having direct experience of, or at least direct contact with, those in local government and other parts of the public sector. This would help to break down barriers and increase understanding, as currently the centre is too distant from and lacks contract with those delivering policy. A central challenge for civil service reform is to bridge this divide and establish a new working relationship with public service delivery bodies, including local government. 47. So far the debate on central-local relations has tended to focus exclusively on devolving powers and functions and resources and overlooked the issue of how we spread human capital across the two sectors. A stronger focus on the workforce is needed. October 2010

Memorandum from the National Council for Voluntary Organisations (NCVO) Executive Summary 1.1 NCVO is the largest general membership body for voluntary and community organisations (VCOs) in England. Established in 1919, NCVO represents over 8,300 organisations, from large “household name” charities to small groups involved in all areas of voluntary and community action at a local level. NCVO champions voluntary action. Our vision is of a society in which people are inspired to make a positive difference within their communities. A vibrant voluntary and community sector (VCS) deserves a strong voice and the best support. NCVO works to provide that voice and support. 1.2 NCVO supports efforts to devolve power to local people and communities as part of building a vibrant civil society. We have long argued that power and decision-making should be devolved to the local level where possible; and that public services should be commissioned and delivered in partnership with the people and communities they serve. 1.3 Localism is not solely about public service delivery, but about stimulating new forms of participatory democracy, allowing a full range of people and communities a voice to influence decision making and building the ability of communities to have a real influence over the policies that affect them. A vibrant civil society is central to the good society. The starting point for measuring the effectiveness of services should be the positive difference that these services add to the lives of individuals and communities. 1.4 Along with clarity of purpose in seeking to de-centralise decision making, there should also be an acknowledgement of the limits of this approach. Local diversity, with services tailored to meet local need, is positive but a role for central government should remain in: — leading on good funding practice; — setting standards and ensuring that they’re met; — making and managing functioning markets in public services; and — tackling barriers to promoting new, innovative approaches 1.5 Decision making should be devolved to the right level, not necessarily the lowest level, in accordance with local need. This may vary, according to the nature of the particular service, community or issue. A uniform model will not be possible, and one community may need to be served by decision makers at various different levels depending on the issue. 1.6 There are also limits to de-centralisation as a mechanism for driving improvement. Positive change will not come simply through transferring services from one sector to another or a change in the level at which decisions are taken.

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1.7 The Total Place initiative offered some positive early insights into the potential of place-based budgeting. This holistic, user-centred approach which focuses on need should be expanded to drive effective public services. The VCS has a unique and important role to play in the delivery of needs-focused services. 1.8 There should be an enhanced role for local government in a decentralised model of public service delivery. However, voluntary and community organisations have a vital role to play, working with their users and members to identify need and design, deliver and evaluate public services. Partnership working between local government and the VCS will therefore be essential in ensuring that de-centralised public services better meet the needs of local people and communities and maximising and recognising local resources. Whilst the ultimate aim may be to transfer power to communities and individuals, local authorities will retain an important role in funding, supporting civil society and in designing, delivering and monitoring the effectiveness of funding. 1.9 A strong Compact, at both local and national level, is important in managing an effective partnership relationship between the statutory sector and the VCS. The Compact is a vital tool in delivering better partnership working at the local level. The principles of localism are closely aligned with the principles of the Compact; to deliver local activities based on local need, identified through local engagement. The extent to which decentralisation leads to more effective public service delivery; and what the limits are, or should be of localism 2.1 More effective public service delivery can best be achieved by: — placing the agenda of citizens and communities at the heart of the reform process; — ensuring public services are designed and delivered in a way that enables the voice of citizens and communities to be heard and acted upon, as well as providing them with a market choice; — a holistic approach, which provides effective, joined up services to citizens; and — applying a more sophisticated understanding of the efficiency agenda, which gives as much weight to effectiveness as it does to cost savings. 2.2 Enabling people to co-produce services, involving them in their design and delivery, is likely to lead to more efficient and effective public services. This will require more systematic engagement and involvement of communities, enabling them to identify their needs and design solutions to meet those needs. This is often best done at a local level. However, there are also examples where service users are not well-represented at this level (eg people with a rare medical condition) and therefore it is essential that decisions are taken at the most appropriate level: decentralisation alone will not bring about improvements in public services. 2.3 VCOs have a vital contribution to make, bringing both an awareness of local needs and particular skills and experience of involving service users and communities, particularly those that are the “hardest to reach”, giving them a voice, as well as a choice. It is essential that local authorities understand and support these roles over and above any role they may play in service delivery. 2.4 Decision makers must take full account of the valuable role that the VCS plays in providing voice and advocating on behalf of a full range of people and communities, including the most vulnerable and marginalised. Identifying need, including unmet need, in communities is important and changes to public services, including decentralisation should take place through consultation and partnership with the VCS. Recommendations: — De-centralisation is an important element of making public services more effective, but should not be seen as the complete solutions. — Local Government should work in partnership with the VCS, which has a unique reach into a wide range of communities. 2.5 Local diversity, and the design and delivery of services that reflect local needs are to be welcomed. However, it is important that minimum standards are protected to allow equality of access and provision. With the abolition of some accountability measures, including the Audit Commission, and statutory indicators, there will need to be adequate safeguards in place to ensure consistency. There must be a culture of accountability and evaluation to create ongoing and positive and evidenced change. Recommendations: — Government to consider which scrutiny and oversight measures will be necessary to maintain standards in a more de-centralised context. — For the Government at all levels to ensure robust equality impact assessments are conducted before changes to service provision and budget allocations are made. Equality impact assessments should take place early in the service design process and be open and transparent. — Government and the VCS to draw up key tests to assess the effectiveness of locally delivered services. The level at which this work should take place will vary.

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The lessons for decentralisation from Total Place, and the potential to build on the work done under that initiative, particularly through place-based budgeting. 3.1 There were positive early results from the Total Place initiative. An approach which is focused on need and led by the needs of users and communities will be an important part of improving public services, as people’s needs cut across public sector silos. The adoption of place based budgeting will require cultural as well as structural change in the public sector. Holistic approaches to meeting need are led by users and communities, and not determined by administrative boundaries. The Total Place pilots looked at spending and didn’t advance much into solutions. 3.2 Place based budgeting can promote better commissioning processes: assessment of need and capacity; designing solutions; delivering services; evaluating for change and should be an important part of the solution for the Government in seeking to protect frontline services in a period of fiscal retrenchment as resources can be allocated more effectively. 3.3 However, to realise the full potential of this approach, government will need to employ a degree of flexibility. For example, place based budgeting may highlight the need for increased investment in preventative services, where upfront investment will yield considerable savings in the medium to long term, as well as improved community well-being. 3.4 There is a particular role for the VCS in place based budgeting to maximise community resources and bring in significant needs/resources evidence and to employ innovation, as the VCS has unique strengths and abilities in identifying need, designing services with users at their heart and employs a range of innovative approaches to public service delivery. 3.5 There are — — — — — — — —

a number of potential barriers to place based budgeting, including: The need to understand and commit to outcomes. Sharing the risk of outcomes not being met. Measuring and distributing shared savings and proportional rewards for all parties. Being able to staff and structure truly person-centred (and implicitly risk-taking) services. Barriers to financial transparency and co-operation between funding services. Upfront investment to cover both acute and preventative services. Cultural, workforce and administrative barriers to shared budget and service development. Learning how to share risk on investments into new services and new infrastructures.

3.6 The relationship between place based budgeting and the “right to bid” proposals will require close examination. The potential for communities to own and run services is one way of engaging service users and local communities. However, service providers will also need to work in partnership with local communities, including through co-production. Local government must look closely at the commissioning process, to ensure that the process of identifying need and designing services is effective in a model where communities can bid to run services. Communities will need to be equipped with the skills and confidence to take on these responsibilities, to be able to compete fairly against more established players in the market. Recommendations: — A place based approach should extend beyond budgets. The whole approach to identifying need, commissioning and procurement and the design and delivery of services should enable individuals and communities to co-produce services. Savings may also be achieved, but this must not be the primary driver for a move toward a more place-based approach. — For place based budgeting to be successful, agreed outcomes between the VCS and other partners are necessary. This will require good partnership working, with clear lines of accountability agreed in advance. Government at all levels should commit to partnership working with the VCS, and there should be joined up working across Whitehall to achieve this. — For “right to bid” proposals to be balanced with a holistic approach, ensuring that commissioning processes identify and meet local need. — A place based approach will require a degree of workforce change—central government should play a role in sharing development practice across agencies and Whitehall staff’s own skills through mentoring or other work. The role of local government in a decentralised model of local public service delivery, and the extent to which localism can and should extend to other local agents 4.1 Local government should have an enhanced role in public service commissioning under a decentralised model. Whilst the ultimate aim is to devolve power to communities, there is a valuable role for local government in providing support, resources and expertise to civil society. Local authorities are likely to remain a primary decision maker in commissioning and procuring public services.

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4.2 Local government will play a leadership role in commissioning, co-ordinating with different sectors where necessary. The role of users, citizens and communities in commissioning is important to ensure that services meet the needs of local users. 4.3 It is important that local government is equipped with the right powers and resources to be able to take on an enhanced decision making role. The suggested end to a ring-fencing of local authority budgets would be a welcome development in giving them the freedom to make decisions flexibly, responding to local needs. All communities should be involved in the process of identifying need and this evidence needs to inform service design and delivery in a meaningful way. Local government should share best practice to drive greater effectiveness and higher standards and there may be a role for central government in co-ordinating this activity. 4.4 The majority of funding to the VCS is channelled through local government and the role and status of local government in a decentralised model is therefore of importance to civil society.1 Local authorities should work with the local VCS to empower local communities to set the agenda and identify priorities for their area. 4.5 To achieve genuine de-centralisation, and to build communities with the capacity and confidence to play a full role in policy making, will require genuine partnership between all statutory and non statutory sectors, including community representatives, government, the VCS and the private sector. Relationships will need to be based on trust and accountability. There is a need for both formal structures, to bring together partners from different sectors and for local Compacts to be used in managing relationships. 4.6 A strong, well understood Compact is important in managing the relationship between the Government and the VCS. In the context of de-centralisation, it is important that local Compacts are drawn up between local government and the VCS and that both sectors are committed to it. 4.7 The VCS is grounded in local communities and localism is central to the ethos of the sector. Recommendations: — Central government should equip local government with the powers and resources it needs to play an enhanced role in decision making. — There must be a full role for the VCS in identifying need and designing and delivering services, including through partnerships with local government, with the private sector and with Local Enterprise Partnerships. — Early adoption of a robust, well understood and well publicised set of Compact commitments. — For local authorities to have to adopt meaningful Compacts. — A Compact ombudsman, responsible to Parliament, would be an important step to managing the relationship between civil society and the state. 4.8 NCVO members report wide variation in the ways in which local authorities are dealing with current financial and economic challenges. Local government should aim to make long term decisions based on evidence, in the context of reduced funding. De-centralisation and an enhanced role for local government increases the urgency of this. 4.9 Some local authorities are dealing effectively with reduced funding whilst fostering good relationships with the VCS and therefore protecting service delivery. For example, lessons learned from the London Borough of Merton are: — Early, open discussion based on mutual trust is vital to underpin the relationship. — Putting the needs of communities rather than organisations first allows a shared starting point and common objectives. — Separating out grant and contract funding allows clearer thinking about each. — The VCS has to be ready to adapt to tighter circumstances. — Local public bodies need to recognise and value the sector’s expertise.2 Recommendations: — For central government to provide guidance on how local authorities should be managing the need to reduce spending and for best practice examples to be disseminated to promote good funding practice. This could be done in partnership between the Government, NCVO and representatives of local government including the LGA. — For the Spending Review settlements to oblige all departments to take the impact of their decisions on the VCS into account. For DCLG, this obligation should feed down to local government. 1

2

NCVO (2010) The UK Civil Society Almanac 2010 showed that 52% of statutory funding to the VCS came from local government in 2007/8 (the most recent available figures). Compact Voice (2010) Why is Merton handling budget cuts so well? Available at: http://www.compactvoice.org.uk/content/why-merton-handling-budget-cuts-so-well

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The action which will be necessary on the part of Whitehall departments to achieve effective decentralised public service delivery 5.1 Action from Whitehall will be necessary in driving effective decentralised public service delivery. There will still be an important role for central government in setting and maintaining standards, providing clear frameworks for service delivery and sending a signal to local authorities about the way in which the relationship between all levels of government and the VCS should work (for example in ensuring that an end to ring fencing does not precipitate a sharp drop in funds to VCS projects—particularly those that serve marginalised, vulnerable and excluded members of the community). Central government must work to ensure a level playing field in public services, without which there cannot be a fully functioning, plural, competitive market. The role of Whitehall is not, therefore, simply to devolve power and reduce its role in public services. 5.2 The need to reduce spending must not result in sharp, quick cuts to budgets in the VCS. Whilst the majority of funding to the VCS comes from local authorities, central government has an essential role in setting overall spending and in providing frameworks within which local authorities operate. 5.3 Effective public service delivery requires effective funding, with decisions made on a long term, strategic basis. Good funding practice driven from the centre will help to mitigate the impact of reduced overall funding and help to build much needed resilience in the VCS. Central government should set out clear guidelines on improved funding mechanisms, including: — Longer term funding (set for the period of the forthcoming Spending Review where possible). — Proportionate requirements attached to funding. — A comprehensive understanding of the full range of types of funding available, and when these are appropriate. — Accessible funding for a full range of VCOs with the application process to be less complex. — Adoption of the intelligent funding model. — An approach to funding which takes full account of the social value added by the VCS in identifying need, designing and delivering services. 5.4 Effective delivery of decentralised public services will also require a fully functioning market and there is a clear role for central government in making changes to create a level playing field. NCVO has called on government to examine in detail the required changes in market making and management, including changes to: — Tax and fiscal policy, including Gift Aid and VAT (particularly shared services VAT). — Commissioning. — Allow local public sector organisations to pool budgets. — Procurement.3 Recommendations: — Whitehall should retain an important role in setting standards and the frameworks for public services and provide useful and meaningful guidance to local authorities and local decision makers. — For good funding practice to be put at the heart of government decision making and to mitigate against the worst potential impacts of reduced spending. — For Central Government to work with the VCS to develop detailed recommendations to create a level playing field, which will be a pre-requisite for genuinely localised, plural models of service delivery. — For Central Government to examine commissioning processes in the light of “right to bid” proposals, to take a lead in ensuring that local authorities have the ability to build skills and confidence for communities to derive maximum benefit from these proposals. October 2010

Memorandum from the Association of Chief Executives of Voluntary Organisations (ACEVO) ACEVO is the Association of Chief Executives of Voluntary Organisations. We represent over 2,000 third sector leaders across the UK—from small community groups to some of the biggest national charities. Our role is to support, develop, connect and represent our members in order to promote the efficiency and effectiveness of the sector. This response was informed by a joint round table event held in collaboration with Sitra, during which we invited voluntary sector providers to consider the questions raised by the inquiry. The event was attended by a number of local and national organisations that are responsible for providing a diverse range of services. 3

NCVO (2010) Response to Treasury Spending Review. Available at: http://www.ncvo-vol.org.uk/sites/default/files/SR_final.pdf

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This response focuses on five broad questions: 1. How far should power be devolved and is there a space for regional commissioning/delivery? 2. What can be learnt from Total Place and what should its successor look like? What role is there for the third sector in shaping and influencing the way place based budgeting is rolled out? 3. What should the framework be for cross-sector engagement in developing local strategies? How can the third sector gain a “seat at the table”? 4. What role should central government play in defining and setting local agendas? What role can the third sector play in influencing central government? 5. How can the third sector promote itself as an effective public service delivery partner at a time of cuts? How can we tap into the Big Society rhetoric to influence local services? 1. How far should power be devolved and is there a space for regional commissioning/ delivery? We believe that the devolution of power is a positive step towards improving public services. It can improve the flexibility of services, break down barriers and, perhaps most importantly, better utilise local knowledge. It is not a panacea, however, and should not be viewed as such. Devolution does not necessarily result in better services. Questions surrounding local capacity, understanding and knowledge as well as legitimate concerns over local accountability need to be addressed before it can be assumed that service design and quality will improve. Regarding accountability, a number of providers commented on the fact that commissioning decisions (an often poorly understood process currently) were being taken solely by officers within the local authority and that elected members were not playing their part in the governance and scrutiny of these decisions. This reduces levels of local elected accountability, running against the grain of local democracy and putting power in the hands of local communities and people. Therefore not only must commissioning be made more intelligent and based on need (ie real commissioning, not just procurement), it also needs to become a more democratic process of itself. There was some confusion from front line organisations surrounding the actual meaning of locality and localism. There seems to be little common agreement on what is defined as local, how this is shaped and by whom. It was argued, however, that following the example of personalisation, true devolution in many services would see power and money devolved to the individual across a range of forms (vouchers, smart cards, budget holding, direct payments etc). This has the potential to revolutionise service provision, increasing efficacy and reducing long term cost. ACEVO members have expressed concerns around how the increase in budgetary freedom at the local authority level (by removing ring-fencing) may negatively impact upon the most vulnerable members of our society. Specifically that services for people facing disadvantage (or unpopular groups), who have little influence over how monies raised and allocated nationally for them but spent by local authorities, could experience a decline in the services they depend upon as local authorities decide to meet other (possibly more politically popular) priorities. These concerns are exacerbated by proposed changes to commissioning structures (eg. GP commissioning) and their potential lack of engagement with the third sector. More help is required for third sector organisations to build relationships with commissioners: the difficulty of establishing organisations as known and trusted partners must be overcome, particularly as much of the current commissioning expertise (eg in PCTs or RDAs) is being redistributed. Regional commissioning levels have proved effective in giving those client groups that are thin on the ground or transient are adequate representation. It is vital that a level of infrastructure is maintained, providing an overarching and joined up knowledge of localities. This will reduce duplication, increase efficiency and spread best practice. It is critical that a strategic level is maintained and a level of standardisation continued, otherwise published data (a keystone of the Coalition’ localism and accountability plans) is meaningless for comparison. Furthermore, adequate lines of accountability over actions are essential which cannot be provided purely through the publishing of spend data. 2. What can be learnt from Total Place and what should its successor look like? What role is there for the third sector in shaping and influencing the way place based budgeting is rolled out? ACEVO fully supports the direction of Total Place and the evidenced savings of joining up local budgets. However, we have concerns that the Total Place pilots did not involve the third sector to any significant degree. We believe that greater inclusion of the sector would have brought much stronger results. Local authorities need to be strongly encouraged to involve the sector in a meaningful way. This is particularly true in need assessments (eg JSNAs) where sector experience is greatly needed and currently underutilised. Incorporated sector knowledge must be placed top of the place based budgeting agenda. Both the advocacy and delivery abilities of the sector must be utilised. Local, holistic service knowledge is an important strength of the sector, particularly when bringing together budgets where we have that delivery expertise. If, however, the third sector is to shape and influence place based budgeting it will also require clearer contacts within commissioning bodies to aid communication and break down barriers. Whilst we support proposals such as the “Right To Bid”, it is important to note that they will take large amounts of resources and time and would therefore urge for them to be as simple and transparent as possible. Finding the correct person

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to speak with can be a challenge in itself—if an organisation is approaching a new commissioning body it will not understand how the body operates, where the power resides or its idiosyncrasies. It is essential that sufficient space is carved out of the statutory sector to enable third sector delivery as well as develop productive cross sector working (eg referrals and proper procedural patterns) to break down municipalist barriers. We strongly support joint working between and across sector organisations, but are aware of the challenges this can pose. Trust, which can be so fragile, is a vital ingredient and yet with budgets being cut and competition fiercer, the tension between organisations could easily increase. An unintended consequence of these commissioning changes could be that organisations stop talking with one another. We need to ensure the sector plays a strategic and joined up role to help make smart cuts, not silo themselves and become passive recipients of salami slicing. 3. What should the framework be for cross-sector engagement in developing local strategies? How can the third sector gain a ‘seat at the table’? Cross-sector engagement at the local level requires a framework that includes an obligation for local authorities to include the third sector. As discussed, this should involve a degree of infrastructural oversight and scrutiny. The development of local strategies should look to include duties to ensure the third sector is viewed as an equal partner and not restricted in any cross-sector relationship. We recommend that public sector officials attend third sector meetings as well as vice versa to ensure true engagement and move beyond what is currently too often a nominal consultation process. Current examples of best practice will need to be mainstreamed and actively encouraged if, for example, local Health and Wellbeing Boards, are to have strong third sector representation. A cultural shift within the public sector will be required to shift power from local authorities to society and the organisations and networks that exist within it. 4. What role should central government play in defining and setting local agendas? What role can the third sector play in influencing central government? National agendas that influence the local level via policy levers are greatly needed. Central government will still play a significant role by setting national agendas and must hold local bodies accountable for their delivery. We would also argue that central government must retain its oversight over the actions of individual local authorities to ensure against unjustified local agendas or malpractice. Whilst CAAs have gone, there is a vital role for government to play in making sure that need is properly analysed, that national indicators are better reported and that it is able to take action where necessary. There is also a role for government to protect the most vulnerable groups, ensuring that those passed over by the localism agenda are not forgotten (eg transient groups). Furthermore, central government, on behalf of the taxpayer, needs to play a role in exercising value, control and responsibility—taking a cumulative view of localities’ actions. The third sector has an important role of influencing policy at the national level. Two key (symbiotic) roles that the sector performs are through advocacy and service delivery. From these and our networks into communities, we have unparalleled insight into what makes successful and effective services. Our role in lobbying and research has helped drive forward innovation at a national level which has then rolled down to local service provision. The sector has an increasingly large and well documented evidence base and the knowledge contained within it must be drawn on effectively by Government to influence national agendas. National infrastructure bodies help broker this relationship and will have an increasingly vital role in helping co-ordinate and describe the sector to government. 5. How can the third sector promote itself as an effective public service delivery partner at a time of cuts? How can it tap into the Big Society rhetoric to influence local services? Key to promoting the sector as an effective public service delivery partner is generating strong evidence based on outcomes. Whilst the trends are positive, the sector still needs to become better at generating a substantial and appropriate evidence base. However, there is some confusion in providers over who exactly the third sector should be promoting itself to given the fragmentation of commissioning, personalisation and localism agendas—is it GP consortia, local people, central government or local authorities and in what order? Furthermore, the third sector has raised concerns over who could represent the sector effectively and coherently with government if infrastructure bodies are to be seen as less of a priority. ACEVO members have expressed concern that the Big Society is seeking to reinvent the wheel. There is particular concern by what appears to be the government’s misunderstanding of what a voluntary organisation is, how is operates, and the extent to which an army of volunteers can be raised. The process of helping people engage with their communities is not going to happen over night but is a long cultural change. Although we embrace the greater involvement of the third sector and the devolution of power, we cannot allow the Big Society to be used as a political tool to cover up further cuts. October 2010

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Memorandum from FSB (Federation of Small Businesses) The FSB is supportive of decisions being made at a local level wherever possible. We agree with the intention to put more power and opportunity into people’s hands by decentralising power to local communities. We are strongly of the opinion that small businesses are an integral part of the local community; they generate wealth, employment and opportunity. It is therefore vital that any plans for greater decentralisation are undertaken in a way that recognises the importance of the whole community including the business community. We note that the terms of reference are particularly focused around public service delivery. The main issue for small businesses is in ensuring that increased public service delivery at local level does not result in decision making in which the interests of local business are marginalised by councils, or where their actions go unchecked. This could lead to the emergence of damaging differences between areas in terms of environments conducive to business growth. Oversight of Performance The abolition of the Comprehensive Area Assessments and local inspections, means that there will be a reduction in nationally led safeguards or monitoring to ensure minimum standards. In some respects this raises questions for business in terms of trying to ensure consistency of performance. While there are benefits to local authorities being given additional flexibility to tackle issues particular to their area (in conjunction with business where appropriate), there is a danger that differences may begin to emerge that work against the interests of business. If local government increasingly reports on its performance indirectly, such as through greater transparency, rather than directly to government, it may be more difficult to monitor and prevent local authority activity which hinders business. For example, increased autonomy on the way regulation and licensing is carried out could mean that national efforts to encourage better regulation and reduce red tape for small business are undermined. The FSB believes that there is still a need for certain issues related to local service provision to have a level of national leadership. As an example the FSB has recently supported moves for the Local Better Regulation Office to have more teeth to ensure regulation at a local level does not impinge on business activities. There is a role for a body whose purpose is to support and represent small firm’s views on red tape within local authorities and drive through change. A balance between greater autonomy in public service provision and national leadership therefore needs to be struck. There appears to be recognition of the need for such a balance in the Government’s LEP proposals which include an intention to place certain Regional Development Agency functions under national leadership rather than devolve them downwards to LEPs. This represents a obvious tension with the Government’s wider “decentralisation” agenda. Local Accountability The committee’s terms of reference includes the issue of accountability of decision making and spending at local level. This is of vital significance to local businesses. Although local residents will have a redress through the democratic process, this is not an avenue directly available to business. Greater local power requires increased accountability. It appears that this will be achieved through greater transparency, the ballot box and mechanisms such as referendums. If this is to happen it is vital that mechanisms are put in place to ensure that the business voice is heard. For example referendums should be required to include local businesses where the issue will have a potential impact. One example of where greater local autonomy may raise concerns is around forms of revenue generation such as local control over business rates. Business rates have a disproportionately large impact on small businesses, representing the third highest overhead on average. We would have strong objections regards local tax-raising powers of this nature as any such moves risk inhibiting small business growth. It is vital that decisions such as this cannot be taken without proper consultation with and accountability to the local business community. The present models of accountability at local level would be insufficient to create the necessary safeguards required for this level of decentralisation. We do believe that the Government is committed to involving business in aspects of local decision making. This is evidenced through the move to form Local Enterprise Partnerships which place local business leaders as key partners in promoting economic development. We are very supportive of this move but it is vital that these aspirations are delivered on and we would like to see this recognition of the importance of the local business community permeated right throughout the drive towards decentralisation and empowering local communities. October 2010

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Memorandum from the British Retail Consortium (BRC) 1. The British Retail Consortium (BRC) is pleased to contribute to the Community and Local Government Select Committee’s inquiry into the Government’s plan for localism and decentralisation of public services. About the BRC 2. The BRC is the lead trade association for the UK retail sector. We represent retailing in all its forms across the UK and work on the full range of issues affecting the sector. Our aim is to ensure the UK’s political and regulatory framework supports retailers in maintaining their outstanding record on job creation, consumer choice and product innovation. With the retail sector employing around 2.9 million people and contributing around 8% of GDP, we play a vital role in the success of the UK economy. Overview of BRC position on Localism 3. The BRC recognises the opportunities presented by the Government’s plans for localism and decentralisation. There are many aspects of localism that appeal to the retail sector. Indeed, retailers have a long history of engaging successfully with local authorities and other local bodies through partnerships, such as Business Improvement Districts and Town Centre Partnerships. 4. However, we are concerned that the impact of devolving greater powers locally could create accompanying challenges in specific areas of policy. In a policy field as broad as localism, it is inevitable that there will be some areas in which retailers would like to understand more about the potential impact for their businesses. It is important that the benefits of localism must be balanced against the possible negative impacts on productivity. We recognise this is a particular concern for businesses operating on a national basis which require certainty for effective business planning. Summary of Key Points on Localism — In some areas, localism could lead to more effective public service delivery. However, there are limits to the effectiveness of localism in relation to specific policy areas. — Localism must not add to the already significant regulatory burden facing businesses. — If local variations are introduced into those national policy frameworks that currently work well, it could damage their effectiveness unnecessarily. — Local government should play an important role in delivering the Government’s localism objectives. However, localism can only be delivered effectively by local authorities that are fully fit for purpose. — Central government must retain a crucial role in the oversight of policies that demand rapid changes to be delivered consistently across the UK. — There needs to be an overarching framework and guidance in place to assist local decisionmakers and to provide the level of coordination that is necessary for issues which require greater strategic consideration. BRC Response Question 1—The extent to which decentralisation leads to more effective public service delivery; and what the limits are, or should be, of localism 5. Decentralisation of local power can lead to more effective public service delivery in key policy areas. We recognise that, in some cases, local decision-makers will be better placed to deliver programmes and services that address issues of real local concern. Through their extensive national operations, retailers are frequently in a unique position to identify and highlight examples of good practice in local areas (for example in relation to transport initiatives). 6. The Government has indicated that the potential for increased localism will be a core consideration in all policy areas and general governance across the country. However, until greater detail as to what this will mean in individual policy areas is made available, it is challenging for many businesses to assess the scale of the potential impact. In our view it is essential that localism is set within a broad framework that will enable national businesses to work with local authorities and communities to deliver the services their area requires. Such a framework would enable a significant level of focus to emerge that all parties involved can deliver against. 7. There are likely to be limits to the effectiveness of localism in relation to specific policies. Local variations in some policy areas could significantly increase the regulatory and administrative burdens for business. We believe that central government must continue to play a crucial role in policy areas that demand rapid changes to be delivered consistently across the UK (relevant issues in specific policy areas are discussed below). There needs to be an overarching framework and guidance in place to assist local decision-makers and to provide the level of coordination that is necessary for issues which require greater strategic consideration. It will also provide businesses with the reassurance that a consistent and coherent approach will be applied.

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8. An overview of the potential impact of localism on specific policy areas for the retail sector is set out below. 9. Planning: The localism framework must deliver a number of key objectives in order to stimulate regeneration and enable sustainable planning to be achieved. The development life cycle is already a lengthy one and it would be regrettable if the planning process was further slowed. If local planning departments are to make planning decisions based on local priorities, then a coherent national planning policy must guide that process, to ensure that localism benefits not only local people, but also national interests. As many local authority planning departments are already struggling to manage their existing workloads, any increase in their responsibilities must be matched by an increase in their resources, including qualified staff. 10. Business rates: The proposed reforms to local government finance, including business rates, have the stated aim of promoting transparency and economic growth. While acknowledging that these reforms could have some positive implications for retailers, any new measures should not increase the tax and regulatory burden for retailers in relation to local government or undermine the certainty that retailers need for business planning. We support the retention of the Uniform Business Rate and would be concerned at changes which introduce local variation. The greater the freedom for individual authorities to adopt their own rules in relation business rates, the more difficult it would be for national businesses to manage their rate liabilities. While welcome in principle, we need to be careful that the benefits of the proposed introduction of a new discretionary power to levy business rate discounts is not offset by an accompanying increase in complexity and the administrative burden for business. 11. The Government has also committed to giving local businesses the right to vote on any Business Rate Supplement proposal. The BRC supports this commitment from the Government. 12. Crime: The BRC recognises the benefits of having crime and police priorities driven at the local level. However, this needs to be accompanied by a clear national strategy for business crime which is developed through engagement with key stakeholders. We support the establishment of a National Crime Agency that will focus attention on serious and organised crime groups and the proposal to ensure better collaboration from police forces where offences cross force borders. We are concerned that if the local election process is used to appoint elected police commissioners and set local policing priorities, this could act to exclude the business community who would not play an active part in this process. 13. Environment (green issues): Localism can play an effective role in addressing some environmental issues such as waste and land management where circumstances are specific to different regions. Flexibility in terms of local delivery is clearly important in achieving strong recycling rates. However, a national strategy that ensured consistency of materials collected (rather than collection mechanisms) would further improve collection rates. It would ease the burden of communicating with consumers regarding what can and cannot be collected and would improve significantly consumer understanding and awareness of what can be recycled. 14. With respect to waste management infrastructure, there needs to be strategic guidance and direction from a national perspective. In order for plants to be appropriate they need to be in the right place and the right size. If there are incentives or disincentives at a local level there is a potential risk that inappropriate infrastructure may emerge. 15. Localism alone will not allow us to address effectively the challenges presented by reducing carbon emissions and tackling the causes of climate change. Climate change needs to be tackled at a national and international level, and decisions made from a local perspective will often run contrary to central government ambitions. If the UK is to exploit fully the economic opportunities presented by climate change, such as the renewable energy market, then we must be at the forefront of investment in green technology. If more power is devolved to local authorities, then we could see more green-tech planning applications being turned down, with the risk that the UK is left behind. 16. Public Health: Devolving responsibility for public health to a local level could present problems of coordination for many national businesses. Without central government’s guidance on the commitments required to achieve the campaign’s objectives it will be increasingly difficult to achieve official endorsement of the activity. Demonstrating to external stakeholders that this approach is credible and will deliver the outcomes required will be a significant challenge. 17. Alcohol licensing and pricing: Members need consistency of licensing conditions to ensure they can operate alcohol sales efficiently, implement national measures such as Challenge 25 to prevent illegal sales and to ensure local competition is not affected. Whilst we understand the key role local communities need to play in licensing, giving greater regulatory powers to local licensing authorities risks adversely affecting the ability for national companies to administer licences efficiently and responsibly. It could also have a damaging impact on local competition in the grocery market by imposing restrictions on individual premises on licensing hours or even access to new licences. 18. We understand that local authorities are also considering the implementation of local by-laws for the minimum pricing of alcohol. Local pricing of goods, including alcohol, could present significant administrative challenges for national businesses and have an impact on local competition. As an alcohol licence is a key requisite for a supermarket, regulating different pricing policies would have an impact on wider grocery sales.

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Question 2—The lessons for decentralisation from Total Place, and the potential to build on the work done under that initiative, particularly through place-based budgeting 19. The Coalition Government should have regard to the experience of Total Place in framing its localism proposal. Total Place had significant similarities to aspects of the Coalition Government’s localism agenda. It provides some of the direction and structure that national business has been looking for from localism. The semblance of a framework that is provided by Total Place would go some way to providing the structure and security for national businesses to plan and operate successfully within the Government’s localism agenda. 20. Total Place recognised that there are specific service areas that are well suited to devolved governance, but also implied that this is not necessarily the case for all service areas. It also demonstrated that localism has been tested by local authorities over a period of time to gauge what can be achieved and where. This in turn enabled them to put in place sufficient and suitable structures to manage effectively the governance and finance of these devolved functions. 21. We recognise the principle behind place-based budgeting which will enable local authorities and partners to bring together their budgets and work collaboratively to reduce unnecessary costs and deliver better, more efficient services to their local area. However, we would like to know more about how this could work under the Government’s localism agenda. Question 3—The role of local government in a decentralised model of local public service delivery, and the extent to which localism can and should extend to other local agents 22. Local authorities should play a key role in a decentralised model through their responsibility for the delivery of local public services, their participation in new Local Enterprise Partnerships and the provision of guidance and support to these partnerships. However, a decentralised model can only be delivered effectively by local authorities that are fully fit for purpose. The recruitment of sufficient qualified staff remains a challenge in many areas of local government activity, such as planning. 23. We support localism being extended to other local agents but the BRC would not want to see a situation develop whereby businesses are compelled to deal with a proliferation of local agents with responsibility for a wide variety of local issues. From a business perspective, it would not be practical for businesses to be expected to engage individually with a large number of local agents. 24. Local Enterprise Partnerships, with equal public and private sector representation, will have an important role to play in the future success of their local area. They must be implemented effectively. We question whether, from the outset, all partnerships will have the right level of skill, knowledge, expertise and possibly the time to pursue the extensive remits which it is proposed that they will have. In our response to the Government’s consultation on Local Enterprise Partnerships, we recommended that there needs to be a framework and support structure in place at the national level to assist Local Enterprise Partnerships to carry out their role effectively. Question 4—The action which will be necessary on the part of Whitehall departments to achieve effective decentralised public service delivery 25. Whitehall departments will need to retain a crucial role if an effective, decentralised public service delivery is to be achieved. As noted above, the Government needs to establish an overarching support structure for local authorities, Local Enterprise Partnerships and other local agents to carry out their responsibilities. This is particularly important for issues which require greater strategic consideration, such as planning and infrastructure. It will also give businesses the reassurance they need that a coherent and consistent approach will be applied across the country. 26. Whitehall departments should be involved substantially in developing the necessary support structures and guidance for various policy areas. Staff should also be called upon to assist and provide expert advice to local government and partnerships in the performance of their functions. In relation to Local Enterprise Partnerships, we have recommended to the Government that a support structure is required to advise these partnerships on crucial matters of economic development. This support could be provided by a pool of central or local government officials dedicated to giving specialist advice and promoting best practice. 27. While recognising the value of individual policies being developed to meet local needs and circumstances, for national businesses to engage at a local level, there needs to be a base level of consistency in terms of the quality and effectiveness in the delivery of those policies. Example 1—Waste Management 28. Local authorities are currently free to design their own systems in terms of what items are collected for recycling and how they are collected. There are benefits under this approach (systems can be designed to suit local demographics) but there are also challenges. The most significant issue is that different items are being collected by different local authorities. There are no materials in the UK that are universally collected in all local authorities and consumers remain confused as to what they can and cannot recycle in their local area. The UK-wide On-Pack Recycling Label scheme was developed to overcome this issue. A framework that

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guides local authorities on the materials that need to be collected (in order to achieve national carbon reduction targets) would still provide the freedom for local authorities to develop collection systems that suit their local circumstances. Example 2—Crime 29. A centralised strategy for tackling crime against the business community would help to recognise and share effective practices across each of the police force areas. We acknowledge that it is beneficial for priorities to be largely driven at the local level, but having a complementary national strategy will provide support to the locally elected commissioners and will remove duplication of effort/resources. It should highlight the importance of businesses to safe and vibrant communities and encourage effective engagement between local businesses and elected commissioners. A good example of where this has worked well is with the National Counter Terrorism and Security Office where national leadership/training of the Counter Terrorism and Security Advisers ensures a consistent approach across the UK based on a greater understanding of how national businesses operate. Question 5—The impact of decentralisation on the achievement of savings in the cost of local public services and the effective targeting of cuts to those services 30. It is essential that the Government’s decentralisation agenda achieves real savings in the cost of public services. The Government should build upon the financial priorities identified in Total Place and the case studies that have demonstrated that significant savings can be made in local public services. However, we recognise that such an approach will not be appropriate for all public service areas. 31. The retail sector is supportive of the Government’s strategy to address the fiscal deficit. We recognise that public sector spending, across both central and local government, must be reduced significantly if the UK economy is to emerge from the recession stronger and more competitive internationally. At the same time, sufficient resources need to be made available to achieve the Government’s localism objectives. Question 6—What, if any, arrangements for the oversight of local authority performance will be necessary to ensure effective local public service delivery 32. The BRC recognises the Coalition Government’s strong desire to move away from a top-down, targetdriven approach to governance. However, there needs to be a certain level of central oversight over local authorities in a new localism environment. While we are not necessarily advocating that the Government should prescribe in detail what local authorities should be required to do, in relation to certain policy areas, we consider there is a case for having some performance targets for local authorities to be determined centrally. Should the Government proceed with plans to remove all existing centrally-set performance targets and statutory controls, then measures are needed to help asses the performance and effectiveness of local authorities and identify areas of improvement. We are also keen to understand what mechanisms will be put in place to address local authorities that continually fail to meet the needs of their local communities. 33. The Government plans to introduce a “general power of competence” in the forthcoming Decentralisation and Localism Bill, which will permit all local authorities to take action unless they are forbidden expressly by the law. With significant cuts to local government funding expected following the October 2010 Spending Review, we recognise that this general competence power would give local authorities the freedom to work in partnership with private sector organisations and local communities to drive improvements in the delivery of local services. However, for national businesses that have operational models that address issues from a corporate perspective, this power needs to be accompanied by sufficient safeguards to ensure business certainty is not undermined. Question 7—How effective and appropriate accountability can be achieved for expenditure on the delivery of local services, especially for that voted by Parliament rather than raised locally 34. Accountability for expenditure on local services delivery can be achieved by monitoring the performance of local authorities through their strategic business plans. Some local authorities have established a Standards Committee for the purpose of maintaining and promoting high standards of conduct within the authority. It is possible that the costings for expenditure on the delivery of local services could be assessed through these committees. 35. However, as noted above, ultimately we consider that central government should retain some oversight over local authorities if they are to be held properly accountable for the expenditure on local services delivery which has been voted by the Parliament. 36. To drive economic development in conjunction with delivering community objectives the Government has spoken about the potential to incentivise local authorities to take a business focused approach. 37. This proposal would need to be supported with a strong framework for delivery that enabled accountability to be demonstrated to the electorate, stakeholders and the Government. It is inevitable that some

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authorities will fail to achieve their objectives should this approach be taken and the Government needs to be aware and in a position to take appropriate action. October 2010

Memorandum from BCSC BCSC BCSC represents businesses operating in the retail property sector, our mission being to promote industry best practice and advance the professional aims of the retail property industry. Our membership is a broad church of around 2,600 property professionals including owners, developers, retailers, surveyors, architects and public sector managers. The retail and retail property industries together play a strategic role in sustaining communities, with 7.6 million people currently employed in the UK. In 2008 alone around £6 billion was invested in the UK by the retail property industry, creating tens of thousands of new jobs. Given our unique position at the heart of the retail property industry—an industry which has played a crucial part in revitalising many of our towns and cities, including in recent years Liverpool, Manchester and Bristol— we would welcome the opportunity to explore with you the issues raised in this submission at a future oral evidence session. Summary of BCSC Position on Localism Agenda During the last two years, we have seen a radical change in the fortunes of retail led development. The stark consequences of the UK banking crisis, combined with falling capital values and consumer demand has had a profound effect. Add to this the reluctance of banks to provide loan facilities to commercial property, and in particular, development, and we have the recipe for stagnation. Our research shows that virtually all development that is not under construction at present is unlikely to be delivered for several years. This will have a dramatic impact on the regeneration prospects for many towns and cities in the UK, and will undermine hopes of imminent job creation in our part of the private sector. Against this backdrop, we welcome your Committee’s Inquiry into localism and are pleased to offer our industry’s initial thoughts on the likely consequences of moving towards a decentralised model for the delivery of public services and a localised framework for sub-national growth. Our submission focuses primarily on the possible consequences of a localised framework for sub-national growth as it is within this policy area that our industry has the most experience and expertise to offer. To summarise: — We welcome the Government’s decision to look at ways to enable communities to better take a lead in the direction of the development of their local area. — We urge Government to make the transition to the new governance structures as straight forward as possible—whilst recognising that the full transition may take some time. — Our industry needs further clarity from Government to be able to adapt internal processes to engage with new points in the governance structures. — We welcome the Government’s commitment to seeing businesses lead Local Enterprise Partnerships (LEPs), however we urge Government to ensure that the new system does not suffer from a perceived democratic deficit as this could undermine the new setup and lead to public calls for a rethink at a future date. — We believe that the planning system works best when clarity exists for both applicant and developer. — Planning departments need to be adequately funded and resourced in order to prevent both delays and unnecessary application refusals. — Looking to delivering a sustainable built environment, we continue to believe that the national building regulations, rather than localised interpretations of the Merton rule, are the best mechanism for meeting our climate change obligations. — We fully support proposals to extend to the discretionary measures for providing business rate relief. — We welcome the recent announcements on Tax Increment Finance (TIF) proposals, and look forward to working with Government to identify the best model for the UK market. 3. The Extent to which Decentralisation Leads to More Effective Public Service Delivery; and what the Limits Are, or Should Be, of Localism As stated in our opening remarks, we are keen to comment only on the areas of public service delivery that impact directly on our industry’s ability to thrive and bring about regeneration benefits for the country’s many

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towns and cities. With this in mind, we have restricted our comments to the planning system, the sustainability agenda and the possible adjustment of business rates arrangements. Planning Irrespective of the tier of government that is designated the decision maker/arbitrator for planning decisions, we urge Government to ensure that all parties—developer and potential critic—are fully aware of the channels of engagement open to them. With this in mind, we would welcome clarity from Government as to how far the functions of the LEPs will in fact extend. In the 29 June letter to Local Authority Leaders and Chief Executives, the Government noted that some of the functions of Regional Development Agencies are “best led nationally, such as inward investment, sector leadership, business support and access to finance”. We believe that it would be of huge benefit to those establishing LEPs and those seeking to engage and work with them in the future if Government could be more explicit in this division of responsibility. To give some context to this, it is crucial to understand that our industry, like many, centralised its operations as Government centralised its own. This enabled our companies to engage with the relevant decision makers and build effective relationships which have helped to create some hugely beneficial regeneration projects. With the dismantling of the RDAs set to be completed by 2012 (24 months), our members are keen to ensure that our own internal operations are realigned to match the new central/local governance arrangements. To minimise disruption, and delays to regeneration projects and the positive consequences thereof, we are keen to begin the transition now. One factor that has contributed to the cumbersome character of the current planning system is the lack of officers available to process applications on the ground. Further Government cutbacks to local authorities’ budgets will further put pressure on the resourcing of planning departments. This could lead to an even slower process due to fewer officers being able to process applications, resulting in increased delays in bringing forward schemes at a time when delivery of investments needs to be accelerated to safeguard and create jobs. Notwithstanding some of the concerns about the current planning regime, our industry has welcomed the recent shift in attitude towards development at a national level. The planning system has become more open to a positive view of development, recognising the regenerative benefits that come about from significant private sector investment in local areas. We would be keen to ensure that this pro-development attitude is not lost in the transition as responsibilities are devolved. Sustainability We recognise that there are many ways in which shopping centres can reduce carbon emissions, via both behavioural and technological changes, and we are committed to the Government’s target that all non-domestic property should be zero carbon by 2019. We continue to support the use of Building Regulations as the mechanism to deliver sustainability advances, and urge Government to resist handing more powers in this area to the planning system. The introduction of policies designed similar to that of the Merton Rule do not deliver the required flexibility to work towards meeting the 2019 target. It is crucial that each development is assessed on its own merit, and local authority-wide (often arbitrary) sustainability targets have not been shown to deliver the best results. The Merton Rule is clearly popular with local authorities and is seen to be quick win to deliver energy reductions and improve a council’s reputation in this area. However, the rule is restrictive in its application, and in certain circumstances introduces an element of risk in enabling developments to move forward. A move towards such policies could serve to complicate matters and create further regional inconsistencies between different local authorities. This, we feel, could undermine the power of larger landlords and developers to make strategic decisions relating to the sustainability of more than one shopping centre at any one time, thus reducing economies of scale. Business Rates Retailers contributed around 25% of Government’s annual £25 billion in business rate receipts in 2009–10, and with a revaluation in 2010 along with powers given to local authorities to raise addition rates revenue through a Business Rate Supplement (BRS), the cost of business rates to retailers is likely to increase. Escalating business rates at a time of falling sales driven by weak consumer confidence continues to have a detrimental impact on retailers’ ability to remain profitable. This has resulted in large numbers of retailers going into administration and an increase in the amount of empty property on our high streets. Against this backdrop, we fully welcomed the Government’s proposal, as published earlier this year, to establish a broad new power allowing a local authority to grant relief to any ratepayer, subject to local eligibility criteria. We believe that this would help support town centres during the current difficult economic climate. We strongly believe that any relief should also be made available on empty property. This is an area where the

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localism agenda can enable communities to seize the initiative and act to protect local retailers and landlords and thus preserve their own high streets. Turning to the recent announcement by the Deputy Prime Minister on Tax Increment Financing (TIF), we firmly believe that a specific TIF variant—known as Local Tax Re-investment Programme (LTRIP)—should be introduced urgently. Unlike other tax increment proposals, including ADZs, we believe that the introduction of LTRIP transfers risk to the private sector for upfront infrastructure investment without relying on public sector money and in our view does not require primary legislation given, as you will be aware, that the Local Government Act 2003 s70(4a) gave powers to Ministers to allow additional business rates, over and above those assumed in annual financial settlements and which would normally be retained by Government, to be returned to local government and allocated to principal authorities. As indicated above the key point to note about LTRIP is that it does not require any initial borrowing by the local authority. Instead, the expenditure can be financed by the developer’s own resources, and the developer is then repaid out of a tax increment, from increased business rates, as and when it arises. Thus the local authority can entirely transfer to the developer the construction risk and the risk that the tax increment will fall short of expectations. 4. The lessons for decentralisation from Total Place, and the potential to build on the work done under that initiative, particularly through place-based budgeting We welcome the LGA’s June 2010 report Placed based budgets the future governance of local public services. Whilst we recognise aspects of the description of a “public service architecture created on a flawed and over-centralised model, with a public budget for every issue, and an inspection and control regime for each one”, we do not believe that the role for centralised streams of funding is completely defunct. There will continue to be a role for a central department to share best practice and guidance with local authorities around the country. This in itself should not be seen as an unnecessary additional cost. This should be seen as a means of saving money, albeit the local authorities’ money rather than central government’s. To expect each local authority to undertake the same learning curve for each and every new planning application (for example) that comes into its realm would be an inefficient use of public funds. It would be more sensible for the central department to be able to share the experience and expertise of the whole country with all the respective authorities. We fully accept that there is also a role for trade bodies in the dissemination of best practice and education, and this is a core function of our own organisation. We would be particularly keen to explore ways in which we, and other industry bodies, can help to provide local authorities and other local decision makers with the necessary education and experience that they require to make informed choices for their communities. 5. The role of local government in a decentralised model of local public service delivery, and the extent to which localism can and should extend to other local agents Local authorities will clearly have a crucial role to play in the decentralised model of local public service delivery. We also welcome the proposed LEP structure which is set to include local business representation. That said, we do acknowledge the perceived accountability deficit in the RDA model. With this in mind, we are keen to ensure that the replacement LEPs are not left vulnerable to similar perceptions. We would therefore urge Government to issue robust guidance in relation to the balance of the LEP Boards. We fully support the suggestion that “business and civic leaders work together”, however, we believe that it is essential that there is no space whatsoever for a public perception that the new LEPs are anything other than democratic organisations. We believe that there do need to be in place some guidelines to ensure that all LEPs are able to demonstrate democratic accountability to their local areas. To give each LEP the ability to construct its own Board without such guidance could undermine effective delivery in the future, with opponents of decisions exploiting the perception of a democratic deficit to challenge plans. 6. The action which will be necessary on the part of Whitehall departments to achieve effective decentralised public service delivery The transition to decentralised public service delivery cannot and will not take place over night. It is fundamental that the Whitehall structures remain in place, and properly resourced, until such time as the new arrangements are fully operational. We cannot allow a situation to arise where there is a shortfall of service provision, be it a shortfall that causes delay to the planning system, or indeed one that undermines social care provision. To allow such a hole in service provision to occur will undermine the public’s support for localism and thereby could cause the very same resentment that came to be levied at the soon to be extinct RDAs. Our industry is particularly keen to ensure that we do not have to undergo a further remodelling of the governance arrangements in the future as this would only serve to create further delays to development processes and thereby exacerbate delays to realising the full benefits of some retail-led regeneration projects that are currently in the pipeline.

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7. The impact of decentralisation on the achievement of savings in the cost of local public services and the effective targeting of cuts to those services We recognise the constraint on public finances at the present time, and we do understand that delivery of public services at a local level may reduce some costs. However, we cannot begin to estimate these cost savings for Government or indeed those for our own industry until such time as further clarity is available on the Government’s localism proposals. 8. What, if any, arrangements for the oversight of local authority performance will be necessary to ensure effective local public service delivery The LGA’s place based budgets report recommended that each place should be accountable to Parliament for its budget. Whilst in principle this sounds relatively straightforward and removes layers of bureaucracy, we are sceptical as to whether this could become a realistic proposition. Given the planned reduction in the number of MPs, and therefore the increase in each MP’s workload, we would welcome further explanation of how this proposal would be taken forward. We would question whether there would be sufficient Parliamentary time for MPs to scrutinise each local authority’s budget. Equally, we would welcome further clarity on where accountability would lie should a budget be misspent—would it be with the place, or with the scrutiny committee of MPs. 9. How effective and appropriate accountability can be achieved for expenditure on the delivery of local services, especially for that voted by Parliament rather than raised locally As noted above, we would welcome further exploration of this issue. We are concerned that Parliament will not alone have the capacity to regulate the funding streams. This is an area where there may well continue to be a role for some arms length bodies with limited regulatory functions. October 2010

Memorandum from the London Civic Forum 1. Executive Summary London Civic Forum supports greater decentralisation and localism of public services. This should go handin-hand with opening up the opportunity for local people to influence, in some cases, deliver, the services they need. Our submission looks at the case for engagement and gives clear recommendations on how local authorities and Whitehall can support this. Extent to which decentralisation leads to more effective public service delivery and what are, or should be, the limits to localism — Local authorities must understand that people do not often organise within neat political boundaries, and they should understand the importance of, and be prepared to work with, social networks, communities of interest, and small user groups organising around a school, park or library. — There will be limits to localism. Some decisions will have to be made in the national interest. In London, there will be appropriate decisions to make at the city-wide level, for example, safeguarding the interests of marginalised groups, or exploring cross-borough initiatives. And even at the borough level, there will be a need to plan strategies for the whole borough. Role of local government in a decentralised model of local public service delivery Local government has a role as a facilitator of local opinion and should: — underpin their engagement practice with a good engagement strategy; — establish a range of engagement mechanisms; — facilitate a culture change on the part of local government officers; — engage service users at the point of service delivery; and — invest in the role of councillors as community leaders. Local government also has a role as a catalyst for empowerment and should support and invest in: — active citizenship programmes; — informal community groups; and — the social economy;

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Extent to which localism can and should extend to other local agents Public agencies need to understand the appropriate spatial scale in which to: — plan, spend and deliver local services; and — encourage citizen engagement Action for Whitehall departments to achieve effective decentralised public service delivery Whitehall should: — encourage more joining up of Government Departments who are producing their own versions of what localism means; — continue to fund the Regional Empowerment Partnerships; — learn the lessons from Total Place; and — fund national support programmes to encourage citizen engagement, such as the Take Part programme, Grassroots Grants, a social enterprise support programme. Impact of decentralisation in the achievement of savings Savings may be achieved by: — early intervention programmes, some of which can be effectively delivered by the third sector; — contracting volunteer-using agencies to deliver services; and — the use of Social Impact Bonds and “payment by results”. Oversight of local government performance There is a role for citizens to become involved in assessing the performance of their local services. How effective and appropriate accountability can be achieved for expenditure on the delivery of local services There is a need to set up participative methods to involve citizens in calling elected members and government officers to account. 2. Introduction 2.1 London Civic Forum was established in September 2000 and has a cross sector membership of over 1,300 organisations and individuals. We aim to increase and improve civic participation in London. We develop opportunities for Londoners to learn about the governance of London and empower communities to have a say in the policies and decisions which affect their lives. Our work is founded on the understanding that the more people who are involved in civic society at all levels, the better the governance and services provided will be. 2.2 London Civic Forum is submitting evidence based on the extensive expertise we have developed through the delivery of our cross sector programmes around community involvement in public services. In particular we host the London Empowerment Partnership which over the past four years has brought together a range of statutory agencies, civil society organisations and networks with the aim of improving the quality, coordination and evidence of community empowerment in London. Through this we have conducted research, piloted programmes and developed case studies which show how effective engagement can be achieved. 2.3 We also run other programmes through which we have built up a comprehensive understanding of how community engagement supports public service delivery by a range of agencies.4 2.4 London Civic Forum supports greater decentralisation and localism of public services. However, we know that public services are more effective if informed, directed and in some cases delivered by local communities. Therefore increased decentralisation needs to be accompanied by increased engagement and power for people as has been identified in the Big Society agenda. 2.5 There also needs to be recognition that London is different. London has a city wide governance structure in the Greater London Authority, and therefore there has to be decentralisation across a range of levels: Londonwide, sub regional, Local Authority and neighbourhood. 4

We are the Regional Take Part Champion for London and encourage and enable local authorities and their partners to build the skills and confidence of local people to get involved and influence services. Our Big Opportunity programme facilitates community involvement in the 2012 Olympic Games aiming to ensure that they leave a lasting and sustainable legacy for Londoners. Through the Your Voice, Your City programme we work with community and voluntary sector organisations to help them develop their skills and understanding of policy and decision making structures in London and enable them to take responsibility and shape the work of the key governance structures in London.

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3. Extent to Which Decentralisation Leads to More Effective Public Service Delivery 3.1 The devolution of power from national and regional government to local government should go handin-hand with opening up the opportunities for people at a local level to influence the services they need. If the council and the people plan services together they are far more likely to be configured the way people actually need; this should result in more effective services with less waste. Public services should be informed, and in some circumstances, delivered by the people they benefit. Decentralising services to a more local level is more likely to be effective if public bodies understand that people network at different levels, for example: — Social networks are of paramount importance. People’s networks do not always fit into recognised political boundaries: in London, Finsbury Park has a strong identity of its own despite crossing the boundaries of Hackney, Islington and Haringey. — People also often identify more strongly with a community of interest, such as a disability group, or linguistic group, than a geographical community. — Local services often have a stronger catalysing effect than political boundaries: park user groups, Parent Teacher Associations, and “keep our library open” campaigns are often strong and effective, whereas many councils find that their local area-based structures struggle to attract large numbers of residents. 3.2 Decentralisation at a more local level can also be effective since it recognises that people in different areas have different needs: for example some neighbourhoods may not need the same level of street sweeping as others. Planning and delivering services at a more local level than the district could be more effective since services may not necessarily need to be delivered uniformly across the whole district. 3.3 However, there is a concern that middle-class people with the time, confidence and know-how will get more involved and influence services than those who lack experience or confidence, or who simply don’t have the time. This is an equalities issue that might possibly be resolved by community development and outreach work. 4. Limits to Localism 4.1 Although decentralising power to a neighbourhood level is valuable, there will be limits to localism where some decisions are in the national, city-wide or borough interest. — There will therefore be a need for the Government to declare some things in the national interest, whether that is a universal standard for a particular service, such as access to medical treatment, or a nationally significant development, such as the route of the high speed rail. — In London there may be a need to plan and commission some services at the city-wide level, setting out what needs Londoners have, including those of marginalised groups who may be small in terms of numbers at a borough level, but significant across the whole of London. Strategies such as the London Plan provide a strategic view which can safeguard the interests of all Londoners. Indeed, as the example below demonstrates, local groups can find London-wide strategies useful for safeguarding their interests at local level. Just Space Network The Just Space Network, hosted by London Civic Forum, promotes sustainable communities through engagement in planning processes. It played a significant part in helping develop the Further Alterations to the Mayor’s Spatial Plan, and facilitated representation by community groups at the Examination in Public. The process enhanced local community groups’ understanding of how London-wide policies, such as limits on the density of developments in certain locations, could protect their local interests. They could then use these arguments when talking to borough planners. — Similar issues may occur within a borough where neighbourhood planning is not always the most appropriate level. For example, how will locations for travellers’ sites or supported housing be chosen in the face of local opposition? A simple majority opinion or referendum may not always be appropriate if the interests of “unpopular” groups never get prioritised. It will be necessary for councils to develop local strategies to tackle the needs of communities of interest in conjunction with them, and to use these strategies to set out the case for service provision to meet their needs. 4.2 RECOMMENDATION 1: We would like the Committee to recognise the value of the Mayor of London in establishing citizen engagement structures to consult on pan-London strategies. 5. The Role of Local Government in a Decentralised Model of Local Public Service Delivery A facilitator of local opinion 5.1 A key role for local government in making localism work is as a facilitator of local opinion. If public services are to be informed by local people, then there needs to be structures for engagement. The London

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Civic Forum has an in-depth experience in working with boroughs and their partners to coordinate and promote empowerment practice across London. London boroughs need to: — Underpin their empowerment practice by a good engagement strategy which sets out the business case for engagement and how they will work with communities to identify priority outcomes and address them. — Establish a range of appropriate mechanisms to engage with citizens: — ongoing area assemblies which appear to work for planning, environmental issues and crime prevention; — issue-based forums (eg health and social care forums) and special interest forums (eg older people’s forums) which work better across a wider area where people can make wider connections and learn from each other; and — one-off or annual mechanisms such as consultations, participatory budgeting sessions on particular issues. Working with a community of interest: defining needs and setting priorities Southwark Council undertook action research on the needs and wants of Muslims in the borough. The research comprised recruiting and training a group of Muslim residents as volunteer researchers. They designed the research questions, undertook focus groups and a survey, and participated in a workshop that drew out the findings of the research. A report was written informing the borough of the needs of Muslims and the research findings will be acted upon. The Council wants to try this approach with other groups since it believes it is an excellent way of getting different communities to define their own needs and make recommendations to the council, and could save money that might otherwise be spent on external consultants. — Facilitate a culture change on the part of local government officers by cross-fertilising ideas between officers, community groups, social enterprises and community activists. We would like to see secondments and short-term exchanges between young council workers and the community sector as part of their continuing professional development which could have a profound effect on their career paths. We believe that community development training and empowerment training should become as standard a feature of the continuing professional development of local authority staff as equalities training has been. — Engage service users at the point of service delivery. Many users engage reactively when they have an issue or need, that is, they engage at the front line of service delivery. Customer engagement in services is often not fed back into policy making by front-line staff, but if service users were engaged at the point of service delivery they could feed in their views about service improvements. Tapping the resources of front-line staff is most important in this respect. — Invest in councillors so that they can act as a route to engagement with local people. Time is often limited for them and much time is spent in the council chamber. Good induction for councillors to help them understand their role in the community is paramount. Councillor in the community Involve, a charity promoting high quality processes in public participation, was funded by the London Civic Forum, through the London Empowerment Partnership to develop a new resource to support elected members in their community leadership role. A website, Councillors in the Community, was established with the aim of promoting councillors’ capacity to understand the needs of their ward residents and work in an empowering way with them, and make a positive impact for them. 5.2 For citizen engagement to be effective, local councils will need to support local people by: — hosting and supporting the development of local groups and enterprises, including providing space and resources to communities to organise and develop their own messages and responses; — investing in community development and promoting active citizenship programmes, including community leadership; — investing in local forums and networks, including online social networking; — supporting infrastructure groups such as councils for voluntary services and community anchor organisations to mobilise collective action around a strategic community agenda; — facilitating grass-roots community-led action planning of an area; — engaging customers at the point of service delivery and acting on the results to bring about improvements to the service; — bringing the public and private sector together with citizens to create a cross sector vision of an area or service; and — supporting equalities groups who may need specific encouragement to enable them to participate fully in society.

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5.3 RECOMMENDATION 2: We would like the Committee to recognise the importance of the role of citizen engagement in the planning of public services, and to introduce a scheme whereby public sector officers acquire community development and engagement skills as part of their continuing professional development. A catalyst for empowerment 5.4 A second role for local government is to act as a catalyst for empowerment so that local people can organise on their own behalf as active citizens, in community groups and as social enterprises. Boroughs can invest in the community by: — Investing in active citizenship. People may want to become involved in a variety of ways: volunteering as a member of a local board; becoming a school governor; belonging to a tenants association; becoming a friend of a park. They may want to set up informal or more formal groups to provide local services. Or they may want to get actively involved in influencing the council— either on one of its more formal forums, or to campaign around a particular issue. Although these are citizen-led initiatives the local authority has a role in facilitating them to happen, particularly in deprived areas where there is not a culture of active citizenship. This requires, firstly, good community development skills to find out what is happening on the ground in terms of social networks and groups, and secondly to nurture people’s aspirations by supporting them to take part in future activities. This can set them along the route to achieving their goals. Take Part Take Part is a national initiative funded by Communities and Local Government which supports individuals and small groups to build their skills, confidence and knowledge to become active in their community. Although a nationally funded initiative, in London it is working at the borough level. Take Part can act as a catalyst for the involvement of people who would otherwise not be involved and has had remarkable results. Sylvie Montgomery had been volunteering in various roles for a number of years when she found the Southwark Active Citizens Hub through a link in an email. Since then she has attended a wide range of courses to help develop her skills, and has long considered herself an active citizen. Since getting involved with the Hub Sylvie has taken on more volunteering roles, including a construction project for Advocates for the Homeless in Southwark. She also started a campaign against plans to demolish a police box in her local area. “The Hub’s courses and the support from the Active Citizens officers gave me the confidence and skills to stand up for what I want,” Sylvie explains. “I have also been regularly attending the Hub’s Public Speaking Club which has helped me to speak out in front of people.” In fact Sylvie had become so confident in her speaking skills that she agreed to give a presentation on behalf of the Hub at Coin Street Neighbourhood Association, in front of nearly 100 people. Sylvie is now focusing on her most recent role as a Trustee for “Together”, a mental health charity. — Investing in informal community groups. Many local community groups exist outside of the formal “voluntary sector” who require little or no money but who want to make a difference to their area. These groups, such as amenity groups and after school groups, emerge through local networking and they are often fundamentally different from those groups who want to provide a funded service such as job seeking advice. But that difference has often been unrecognised by capacity building initiatives which focus on the more formal community sector groups and offer support in areas such as devising a constitution. Boroughs need to support these small informal groups to make a local impact by: — fulfilling basic needs such as access to a photocopier, IT training, support in setting up a website; — facilitating access to information from the local authority on issues relevant to their campaigns; and — allocating small grants (using the Community Chest model) to enable groups to get things off the ground. — Investing in the social economy. Boroughs can support the establishment and growth of social enterprises which can work with the public sector to deliver services. The Young Foundation talks about “intelligent scaling”, helping social entrepreneurs to “refine their business models and improve their effectiveness”, and growing those whose model would work more widely.5 Transfer of assets could be a big gain for the social enterprise sector but boroughs will need to ensure that there is a large enough revenue stream to enable social enterprises to manage any assets they take over. Boroughs should also help social enterprises by ensuring an even playing field is established between potential third sector and private sector contractors. One model could be for local authorities to support smaller social enterprises to bid for contracts together, making economies of scale by sharing some back-office functions. But councils should also be developing a commissioning model which is not based on larger and larger contracts, which inevitably favours large commercial providers. 5

The Young Foundation Investing in Social Growth (2010)

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5.5 RECOMMENDATION 3: We would like to see the Committee encouraging local authorities to invest in and support: — active citizenship programmes; — informal community groups; and — social entrepreneurs and social enterprises. 6. Extent to Which Localism Can and Should Extend to Other Local Agents 6.1 Here we raise the particular issue of public agencies engaging at the neighbourhood level, rather than the borough or wider level. Two important questions that agencies need to ask are: — Is the neighbourhood the appropriate spatial scale in which to plan, spend and deliver local services? — Or is the spatial area the right place to encourage citizen engagement? 6.2 These questions raise some issues: — People tend to engage well on issues where they can have a direct say on how very local services are run in their areas, or where they can collaborate to get a problem sorted. Thus people will engage well on local planning issues, street cleaning and community safety. The police have generally had very good success with their Safer Neighbourhood Forums where local people can work collaboratively with the police and other agents such as the youth service. Residents may also engage in something like a local employment and training forum when wanting to plan local skills training or job search activities, but probably only for a limited timescale. — However, people engage less well on a regular basis at the neighbourhood level where the service has a wider catchment area eg a further education college. The college may well want opinions at a neighbourhood level on how a change in service might affect local people, for example establishing outreach services, but this engagement is rarely on an on-going basis. 6.3 The solution is for local people and agencies themselves to plan what is the appropriate level of engagement and whether this is one-off, for a limited period to plan a service, or on an ongoing basis. The existence of an area-based forum will be a useful means for agencies to engage with residents on a one-off or time-limited period. 6.4 RECOMMENDATION 4: The Committee should encourage more joining up of Government Departments who are producing their own versions of what localism means, and engender a discussion on where it is most appropriate for local agencies to engage at a local level, and what for. 7. Action for Whitehall Departments to Achieve Effective Decentralised Public Service Delivery 7.1 Whitehall has a role to help decentralisation happen. This is not about telling local government what to do. In the spirit of localism, local government must decide for itself which mix of empowerment models to use. However, we would argue that the Regional Empowerment Partnerships have been instrumental in supporting boroughs to share good practice and learn about what works. Good practice needs to be found, disseminated and evaluated and the London Empowerment Partnership has continuing role to play in doing this. 7.2 Whitehall also has a role in joining up the different departments with a responsibility for delivering localism: education, health, police as well as Communities and Local Government, so they deliver the same message. There is a danger that some of the new initiatives, such as academies and Free Schools, will not engage with local communities. 7.3 Whitehall should learn some of the lessons from Total Place and consider the evidence that public agencies getting together can improve services by sharing certain back office services, cutting duplication and making services more efficient for the user. 7.4 Importantly Whitehall can support local people themselves to take part in the localism agenda effectively. This will involve putting in place national support programmes such as: — Take Part programme which uses community-based informal learning to build the skills, confidence and experience of people to meet political, social and technical challenges; — business support for social entrepreneurs (feasibility studies, start-up funding); and — support and advice for social enterprises on commissioning. 7.5 RECOMMENDATION 5: We recommend that Whitehall: — continues to fund the Regional Empowerment Partnerships; — learns the lessons from Total Place so that is can best decide how to devolve powers and finance to a particular location; and — funds national support programmes such as the Take Part programme, Grassroots Grants, Social Enterprise support programme, including support on commissioning.

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8. Impact of Decentralisation in the Achievement of Savings 8.1 We believe that one of the most effective cost saving will be more support for “early intervention” programmes which prevent crises happening further down the line. Supplementary schools run by volunteers can improve educational attainment levels. Outreach by volunteers who raise awareness of how to detect possible symptoms of cancer may encourage visits to the doctor who can undertake early diagnosis. 8.2 Other savings can be made by using social enterprises and the voluntary sector to provide public services. They may be able to provide a lower unit cost by using volunteers, but it must be emphasised that volunteers still have to be recruited, trained and managed—which requires a skilled volunteer manager. 8.3 Another way of saving is the “payment by results” model. The most innovative example of this is the Social Impact Bond trialled by the Government as a way of reducing re-offending rates at Peterborough Prison. Social investors have put in money to a rehabilitation programme administered by Social Finance, who will contract with social enterprises. Investors will receive from the Government a share of the long-term savings if re-offending rates drop. The scheme has raised scepticism from those who think that it might distort the client group, working with those least likely to re-offend and leave the most vulnerable out. However, Social Finance says they have an incentive for working with those at risk of offending since they are the ones who will cause the figures to drop. While this might be true of working with ex offenders, this may not be the case with jobless people as organisations may well “cream” off those who are most likely to enter employment. 8.4 RECOMMENDATION 6: The Committee should consider advising the Government to invest in programmes that will ultimately result in cost savings, such as outreach and early intervention programmes; and evaluating the “payments by results” model to ensure that the most difficult clients to help are not abandoned by this model. 9. Oversight of Local Government Performance 9.1 We believe there is a role for the central scrutiny of local authorities’ performance, but we would like to see a move away from a focus on centrally prescribed quantitative targets and audits of performance management in local authorities to a focus on both qualitative and quantitative outcomes. So we would like to see a model where a local authority defines its own results as part of a process that looks first at what it is that the service is to achieve. And it is at this stage that we want local people involved as service design should be participative. 9.2 Thus Whitehall could require local authorities to complete a Logical Framework Analysis, similar to that used by the Department for International Development for the overseas projects that it funds. This involves defining what changes the services expects to make and what tangible results it expects which relate to that change. Too often performance is measured by activities and processes but does not answer the question “how has this actually benefited people?” 9.3 Performance measurement should involve citizens. Service user groups, neighbourhood forums and citizens’ panels all have a part to play in the assessment of services. Community evaluators can devise their own evaluation models as shown in the example below. Community Evaluators in Tower Hamlets A group of residents in Tower Hamlets was supported to develop their own community evaluation tool to pilot on a real council engagement process (in this case, the participatory budget process) through a project commissioned by the London Civic Forum, through the London Empowerment Partnership. The tool included questions that assessed the quality of the venue, how well the meeting was managed, the question and answer session, whether there was a summary of points made, and most importantly whether there was feedback on what the council would do next. The community evaluators fed back their results and criticisms to council officers responsible for engagement, suggesting improvements to the process. The council found the comments useful and was going to take them on board. Not only did this process lead to real improvements in the engagement process, but the evaluators felt empowered and that they influenced the course of action. 9.4 RECOMMENDATION 7: The Committee should consider encouraging more community participation in performance assessment 10. How Effective and Appropriate Accountability Can be Achieved for Expenditure on the Delivery of Local Services 10.1 It is right that people should call their councillors and MPs, and their local authority officers and civil servants to account. But care needs to be taken about the context in which money is spent. Lists of expenditure and Freedom of Information requests can put people on the defensive and are often misleading without any context. The correct questions to ask are: “What exactly did this money achieve and has that been achieved for less money elsewhere? And if so why?” These questions focus on results. 10.2 Yet accountability is important. If people feel their elected members are accountable to them it gives legitimacy and strengthens democracy. Question and answer sessions such as the City Hall debates involving the London Mayor are an example of people being involved in calling elected members to account.

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10.3 Participative methods of assessment, such as community evaluation, are very important methods of citizens holding their public agency to account. 10.4 RECOMMENDATION 8: The Committee should consider how the Government can set up participative methods to involve citizens in calling elected members and government officers to account. October 2010

Memorandum from NESTA Summary 1. NESTA is the UK’s foremost independent expert on how innovation can solve some of the country’s major economic and social challenges. Its work is enabled by an endowment, funded by the National Lottery, and operates at no cost to the government or taxpayer. NESTA is a world leader in its field and carries out its work through a blend of experimental programmes, analytical research and investment in early-stage companies. 2. In the constrained fiscal context and with significantly reduced budgets across public services and local government, localism is increasingly important. Locally-led approaches have the potential to engage service users more directly in the design and delivery of public services, and to make services more effective at meeting needs and more efficient in using resources. Further, longer-term social issues such as climate change, demographic change, poor mental and physical health and high rates of recidivism and anti-social behaviour require more engagement from citizens that local approaches can deliver. 3. We believe there is huge potential for a radical approach we call “Mass Localism” to respond to these challenges and deliver greater decentralisation. NESTA believes that mass localism can be deployed by local government to encourage many more widespread, high quality responses to some of the big challenges they face. It depends on a different kind of support from local government: by creating more opportunities for community groups to develop and deliver solutions and to learn from each other. 4. Based on NESTA’s research and practical programmes this submission focuses on our work on mass localism, which offers a means of engaging communities in finding their own solutions to tackling social challenges. We outline practical steps needed to achieve desirable outcomes and consider some of the challenges that need to be negotiated when delivering programmes on a local scale. The Innovation Imperative in Public Services. 5. The need for innovation in public services has been argued before.6 However, forthcoming reductions in public spending mean that councils and public services will struggle to deliver the same type of service in the same ways. Radical innovation—developing different approaches to public services that are more effective and lower cost—is now imperative. 6. Our practical programmes, in partnership with public service professionals and communities across the UK, have demonstrated that that when citizens and frontline workers lead the transformation that is required, better outcomes can be produced at a lower cost. Examples of this kind underpinned a NESTA report published last year, which highlighted the perceived failure of big campaigns aimed at mass changes of public behaviour and demonstrated that locally-led initiatives were more effective. Projections in the report, based on practical examples from NESTA’s Innovations in Mental Health and Health Launchpad programmes, suggest that the NHS could save £6.9 billion per year by adopting these patient and/or frontline worker-focused approaches more widely.7 7. The complexity and local specificity of today’s big social challenges means that centrally-led, technologydriven approaches are struggling to make an impact. Through stimulating communities to get involved in public service delivery, and engaging citizens to take action, activities can be generated that better reflect the needs of the community. In addition, the solutions they lead to are also cost effective as they can access more directly the resources of citizens themselves to deliver change. 8. NESTA has significant experience of the reality of how to engage local communities in tackling the kind of social challenges we are facing. Our experience in programmes like the Big Green Challenge has demonstrated that there is significant, hitherto largely untapped, capacity within our communities to generate localised and new ideas to help combat the problems that they face. 9. A recent NESTA survey showed that communities want to get more involved: eight out of ten people believe the government should allow communities to come up with their own solutions to difficult social challenges such as youth crime, obesity and climate change. However, the biggest barrier to taking action was identified as not knowing where to get the right support, with 80% of those with ideas saying they would progress their idea if there was appropriate support in place. 6 7

Harris, M and Albury, D (March 2009) “The Innovation Imperative”, London: NESTA Bunt, L and Harris, M (2009) “The Human Factor”, London: NESTA

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10. NESTA’s Big Green Challenge, a £1 million prize challenge for community groups to develop responses to climate change, revealed that within our communities there is both considerable appetite for tackling these problems, and the ability to generate truly innovative solutions. In this case, the four winning communities achieved, through different and locally-driven projects, carbon emission reductions of between 10% and 32%. 11. The practical experience of running the Big Green Challenge showed that community groups can generate innovative and effective ideas to resolve some of the biggest problems facing our society, and it provided a framework for NESTA’s “Mass Localism” report.8 This showed how policy-makers can stimulate local responses to a variety of challenges, through community-led initiatives, networks, and local voluntary groups. Principles of Mass Localism 1. NESTA believes that the radical approach offered by mass localism can be used to deliver more decentralised and effective responses to these challenges. Mass localism can be used by local government to encourage many more widespread, high quality responses to big challenges our communities face. However, it depends on a different kind of support: one where local government creates more opportunities for community groups to develop and deliver solutions and to learn from each other. 2. Local government has traditionally found it difficult to support genuinely local solutions. We know that there are countless community and grass roots organisations and groups that are working towards public outcomes in different and effective ways, but to date it has been unclear how local government is best placed to work with these groups and spread best practice and good ideas. 3. Government often struggles to marry localism with national impact and scale, as well as overcoming criticisms of equity of service in different parts of the country. Current support tends to fund activity rather than outcomes, creating a cycle of dependency and undermining the potential for local approaches to scale and become self-sustaining. In order to change this cycle, local government support must be more focused on funding outcomes and accessing the full range of local groups and going beyond “usual suspects”. 4. NESTA’s research and practical work has explored how mass localism could be applied to a number of social issues, particularly seemingly intractable issues that require citizen engagement and go beyond best practice, such as anti-social behaviour, wellbeing and public health and climate change. 5. There are five principles which underpin mass localism: — Establish and promote a clear, measurable outcome: The focus on clear outcomes (in the case of the Big Green Challenge, it was reducing carbon emissions) provides a clarity of purpose that increases the likelihood of engaging citizens. While it is understandable that local government seeks to provide accountability, too many additional objectives, targets, secondary aspirations and considerations can act as a disincentive for many groups, and cloud their sense of purpose. — Presume community capacity to innovate: The belief that communities, with the appropriate levels of support, develop and deliver their own responses was a defining characteristic of the Big Green Challenge. Giving communities ownership of developing and delivering their own responses to the big social challenges they face is a selffulfilling prophecy. — In the early stages, challenge and advice is more valuable than cash: The Big Green Challenge was a staged process, with help for the development of ideas at the beginning and graduated financial rewards at later stages. This approach allows ideas with promise to be stretched and developed early on, without limiting their potential by allowing a lack of prerequisite skills or capacity to become a barrier. — Identify existing barriers to participation, and then remove them: The individual and shared experience of projects can help to identify in what conditions community action can flourish, and what barriers prevent local solutions from being designed and delivered. For example, if a project depends on local volunteers donating their time, the project could be derailed by requirements for professional accredited contractors. Whenever possible, conditions that prevent local engagement or contractors should be removed. — Don’t reward activity, reward outcomes: Providing financial support upfront can easily be misinterpreted as grant funding made in payment for activity, regardless of outcomes. When financial support is a reward for outcomes, it helps to galvanise sustainable community-led action, rather than leading to a dependency on relatively short-term financial support. 6. Mass localism requires local government being able to identify and understand existing community resources. Finding out exactly where the local community networks are and what the key groups are is the beginning. Through working more closely with those groups, local government can more readily identify what local needs and interests are, and how they could be met more effectively. 8

Bunt, L and Harris, M (2010) “Mass Localism”, London: NESTA

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7. The next step is using a range of tools to engage the community. Social media and new communication technologies also offer a new range of (cheap) opportunities for local authorities in how they engage with the community and local groups. NESTA has recently developed a practical guide for local authorities in how to use social media to best effect.9 For example, Councils should publish and share their data so that local groups can help to interpret and present it in different ways online. October 2010

Memorandum from Commission for Rural Communities 1. About the Commission for Rural Communities 1.1 The Commission for Rural Communities (CRC) was established in April 2005 and became an independent body on 1 October 2006, following the enactment of the Natural Environment and Rural Communities Act, 2006. 1.2 The Commission has the following three roles: (1) Listening to and representing the views of rural communities. (2) Giving expert advice. (3) Acting as an independent watchdog. 1.3 We have a statutory responsibility to act as an advocate for rural communities and businesses and provide independent advice to government and others to help ensure that policies and programmes reflect the needs of people living, working and doing business in rural England. We have a particular focus on tackling disadvantage and economic under-performance. 1.4 Although in June the Secretary of State for Environment, Food and Rural Affairs announced the abolition of the CRC as an independent arms length organisation, she also announced that our work would continue through the formation of new Rural Communities Policy Unit within Defra. The details of this new Unit are being developed at the time of writing. 2. Summary of Key Points 2.1 The CRC is supportive of many of the principles surrounding localism and decentralisation of public services. 2.2 The Government needs to ensure that the devolution of power and responsibility away from central government takes proper account of, and builds on the strengths and good practice present in many rural communities, including the network of around 8,000 parish and town councils in England. 2.3 A real commitment to community led planning should be included within the Government’s plans for localism and decentralisation. 2.4 The Government should make greater use of Participatory Budgeting as it is proven to make a positive contribution to many communities, in particular in rural areas. 2.5 When taking forward plans for placed-based budgeting, the Government should be minded that as rural places are often governed by geographically large and remote units of local government, place based budgeting needs to occur at a small enough special scale to be of relevance and benefit to people in smaller, more rural communities. 2.6 It is important that public resource allocations between different places are fair and are seen to be fair. This is so that, for universal services, all citizens receive broadly similar services. It is also necessary so that targeted services, for example to disadvantaged people, reach those targeted people and groups wherever they live. 2.7 Concerning the Government’s plans for the Revenue Support Grant, the improvement agenda for parish and town councils should be included in the scope of the purpose for which top-sliced resources should be used. At present, they receive no revenue support grant and it is time that central government supported some of their improvement and development requirements. 2.8 Concerning changes to local performance management, it is important that any revised process is meaningful to local people and to local councillors (of all tiers) in the neighbourhoods, towns and villages where they live (and not just at the level of administrative delivery bodies). 3. General Comments 3.1 It is clear that the Government’s plans for localism and decentralisation of public services are not just about giving power back to local government, but pushing power downwards and outwards to community 9

Gibson, A (September 2009) “Local by Social”, London: NESTA

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level—the Government has indicated that it wants to make sure people can take control and responsibility in their local areas and communities. 3.2 Rural communities have traditionally used many innovative approaches to engaging communities, supported by high levels of volunteering effort, and there is much evidence that these efforts produce a wealth of good practice. 3.3 The CRC published its State of the Countryside report10 2010 on 6 July. One of the themes drawn out is the evidence that rural people are in a strong position to respond positively to the localism agenda. The data we have gathered and analysed demonstrates that people living in rural areas are more likely than urban dwellers to feel that they strongly belong to their neighbourhood. They are more likely to report that they have been involved in local decisions (although interestingly around the same proportion of rural and urban people feel that that they are able to influence local decisions—below 30%). And people living in rural areas are more likely to volunteer than those in urban areas—taking an average across all rural districts, nearly 30% of residents reported that they had given unpaid voluntary help at least monthly over the past year. 4. Town and Parish Councils 4.1 Community and neighbourhood level power and influence is central to the Government’s ambitions. Strong and active Parish and Town Councils provide a ready-made route through which people living in rural communities can work together and express their views. 4.2 The Government needs to ensure that the devolution of power and responsibility away from central government takes proper account of the role of parish and town councils. 4.3 In February 2007 the CRC began a national inquiry into the role of rural local councillors11, and how this role could be strengthened. Our inquiry explored the opportunities and challenges for rural councillors in bringing decision-making closer to their communities. 4.4 The aim of the inquiry was to help rural communities have greater influence over local decisions, by supporting local councillors to become better democratic champions in acting on behalf of their communities. We collected evidence from local authorities and local councillors at all levels; and held over 35 hearings with business groups, local authority officers, local councillors, voluntary and community groups, formal partnerships and campaigning organisations. 4.5 Throughout the inquiry, we found much that is right and healthy in our local democracy in rural England; with examples of strong local leadership, proactive town and parish councils, and effective community voices. 4.6 The inquiry made 10 recommendations for action, which were published at the beginning of 2008. The recommendations included the need to allocate neighbourhood budgets to local councillors; supporting parish councils to become fully elected representative bodies (and addressing the problems caused by the costs of elections); developing and maintaining strong links and trust between principal authorities and town and parish councils; and the need for a central and local government commitment to supporting very local community plans. 4.7 Alongside the National Association for Local Councils (NALC), the CRC have also conducted research and good practice12 into service delegations; into the relationships between the parish sector and principal authorities, particularly unitary authorities and into parish clustering. 4.8 The government has also announced its intention to bring in a number of measures to encourage volunteering and involvement in social action and train a new generation of community organisers. We need to ensure that these measures build on the strengths and good practice that are already present in so many rural communities. 5. Community Led Planning 5.1 The CRC would also like to see community led planning included within the Government’s plans for localism and decentralisation. 5.2 Community Led Planning is a step-by-step structured process, taken on by local community activists, to create a vision for a community and an action plan to achieve it. What makes Community Led Planning distinctive is that, done well, it involves building the relationship between service providers and local communities as part of the plan development itself. Because it is made up of actions to be taken on by local volunteers, community groups, local government and other service providers, it produces more impressive results than can be achieved through a top-down approach to consultation by local government to feed their own strategic plans. A community led plan challenges local people to say what part they can play in improving their own local neighbourhood and builds the capacity of local community groups to respond. Additional 10 11 12

State of the Countryside 2010 http://ruralcommunities.gov.uk/files/sotc/sotc2010.pdf Participation Inquiry http://ruralcommunities.gov.uk/strengthening-the-role-of-local-councillors/ Continuing Effective Engagement http://www.nalc.gov.uk/Document/Download.aspx?uid=a5e755f2-ab14–48cc-9024–1a3f45503f75

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benefits are that the proposed actions and solutions have already been tested out and are more likely to be realistic and achievable by all partners working together.13 5.3 There are wide spread examples of community-led planning processes being used to engage whole neighbourhoods in a discussion about their needs, priorities and ambitions, including Parish and Village Plans and Market Town Plans. These have been used to engage local communities on local needs, priorities and ambitions and much positive action has resulted from this process. 5.4 The CRC, alongside partners in Devon, has developed a Sustainable Rural Communities Toolkit14 to assist in planning policy development. The toolkit is relevant across a range of spatial levels and highlights the strengths rural communities can bring to overall planning policy development. 5.5 The Government has announced plans to give financial incentives to principal authorities to encourage the creation of local plans which allow development of land for housing and employment. It is crucial that the local authorities’ plans use community/parish plans as their starting point. There is a danger otherwise of the needs of rural communities in particular being overlooked. Alongside this sits the risk that a small group of residents will find it easier to block affordable housing or other schemes that the majority of the community have decided are crucial to maintain a thriving, vibrant community. 5.6 Proposals for the creation of new Local Housing Trusts also need to ensure mechanisms are developed to enable communities to take the lead and retain control, but with support and with some of the bureaucracy carried out by others. 5.7 The CRC would also commend to the committee the Rural Coalition’s recently published report “The rural challenge. Achieving sustainable rural communities for the 21st century”,15 which addresses in more detail many of the above issues. 6. Participatory Budgeting 6.1 The CRC would also commend to the committee the positive contribution that Participatory Budgeting (PB) can make to communities. It is a method by which local people decide how to allocate part of a public budget, and it directly involves local people in making decisions on the spending and priorities for a defined public budget. It can be applied very flexibly and typically it works with (mainstream) local annual revenue budgets or supplementary revenue streams or regeneration budgets. 6.2 PB can create a range of benefits for local people, including: — Bringing communities together. — Encouraging local people to stand for election as local councillors. — Helping to raise people’s understanding of the complexities of public budget setting and deciding between competing priorities. — Improvements in the way local people and elected councillors and council officials work together. — Services being better tailored to local circumstances (often resulting in improved resident satisfaction). 6.3 PB can also create benefits for Councils and other service providers, including: — Better decisions: local decisions based on local knowledge and needs. — Helping local people understand the complexities, compromises and trade-offs involved in local authority decision making. — Providing a strong community leadership role for councillors. 6.4 The CRC, alongside CLG’s Participatory Budgeting Unit, have produced a short report16 on PB in rural England, which we commend to the committee. 7. Local Government Structures 7.1 In many rural areas four tier systems of local government exist including county councils, district councils, parish and town councils; and National Park Authorities, as well as a multiplicity of Local Strategic Partnerships and other partnerships. 7.2 The issue of the complexity of these structures was a feature of our participation inquiry. As such one of our recommendations called for a structure of powerful new unitary authorities serving their communities, working closely with a renewed structure of empowered and influential parish and town councils. We believe that unitary authorities strengthen and clarify local democracy and local accountability. They should help shire local government “punch its weight” with more urban dominated structures such as city regions. 13 14 15 16

Community Led Planning http://www.acre.org.uk/communityengagement_parishplans.html Sustainable Rural Communities Toolkit http://www.ruraltoolkit.org.uk/ Rural Coalition report http://ruralcommunities.gov.uk/wp-content/uploads/2010/08/RuralCoalitionWEB_MH.pdf Participatory Budgeting in Rural England http://ruralcommunities.gov.uk/files/experienceofparticipatorybudgeting.pdf

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7.3 Whilst the CRC acknowledges the reasoning behind the halting of local government reorganisation, we also continue to have uncertainties over the sustainability of the remaining two-tier structure and there may be a case for the establishment of virtual unitaries. We view recent examples of shared Directors and shared Chief Executives between district councils and between district and county councils as an encouraging development. 8. Place-based Budgeting 8.1 The CRC is supportive of the principle of place-based approaches to allocating and spending budgets, as it gives local areas an opportunity to consider and address the key priorities for specific communities. 8.2 Ultimately, a place based approach may lead to local authorities having control over entire budgets for areas, and decisions on allocating such resources may come under a single management structure. 8.3 In order to tackle specific issues, this approach may result in budgets being taken away from some organisations/areas and handed to others. 8.4 As part of this process, it will be important that rural stakeholders are fully engaged with this process. Furthermore, those charged with making decisions on the allocation of resources should ensure that proper consideration is given to the knock on effects to rural communities that may result from the prioritisation of particular spending. This will be of particular importance where direct rural representation at the decision making level is not present. 8.5 Furthermore, as rural places are often governed by geographically large and remote units of local government, place-based budgeting needs to occur at a small enough special scale to be of relevance and benefit to people in smaller, more rural communities. 9. Resource Allocation 9.1 It is important that public resource allocations between different places are fair and are seen to be fair. This is so that, for universal services, all citizens receive broadly similar services. It is also necessary so that targeted services, for example to disadvantaged people, reach those targeted people and groups wherever they live. 9.2 This is notwithstanding the fact that local democracy, decision making and choice can also lead to variations in the levels of some services, as well as in levels of local taxation. The CRC recognises that there are often complex trade-offs, both implicit and explicit, involved in rural service delivery: between access to services, quality of service, cost of service, cost of accessing the service, local tax and charging levies, eligibility criteria and so on. Some services may cost more to deliver in urban areas and some may cost more to deliver in rural areas. There may also be different expectations about service delivery, with rural citizens not always expecting the same levels of service delivery as urban citizens. 9.3 Service providers also need to continue to be keenly involved in delivering continuous improvements and efficiencies in service delivery to rural communities. Alongside fair resource allocations must be placed efficiency, different ways of service delivering (when appropriate) and also a commitment to innovation and testing new approaches to service delivery. 9.4 The CRC has prepared a position paper17 on this subject, which we commend to the committee. 10. Revenue Support Grant 10.1 The CRC welcomed CLG’s recent consultation on revenue support grant top-slice for improvement services to local authorities. The CRC generally supports the principles outlined and agrees that a single specified body should be the recipient of all top-sliced funding, and that it should decide how best to use this funding to deliver objectives and outcomes agreed with the CLG Secretary of State. 10.2 The main additional point that we recommended to the Department was that the improvement agenda for parish and town councils be included in the scope of the purposes for which top-sliced resources should be used for. This reform would provide a more equitable deployment of “top sliced” Government funding for improvement and development in local government. At present none of this resource is spent in support of the parish and town council sector of local government. There are about 8,000 parish and town councils in England, most of them in shire and rural England, and they are served by over 80,000 councillors. They receive no revenue support grant and are therefore the most financially locally accountable tier of local government. It is time that central government supported some of their improvement and development requirements. If the Government is minded to accept this proposal then suitable objectives (including delivery of the objectives of the National Training Strategy for parish and town councils18), should be agreed between CLG and the LGA and the National Association of Local Councils (representing parish and town councils). 17 18

Resource allocation position paper http://ruralcommunities.gov.uk/files/positionstatement.pdf National Training Strategy for Town and Parish Councils http://www.nalc.gov.uk/Training/Training.aspx

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11. Local Performance Management 11.1 The CRC notes that the Local Government Group has recently consulted on proposals for self improvement for councils following the abolition of the Comprehensive Area Assessment (CAA) regime. 11.2 Our rural commentary on the first CAA reports19 contains much that we feel is relevant to their proposals. 11.3 This short commentary on the value of the CAA regime to rural people shows a positive picture. Many rural communities are well served by their local authorities and other local public service providers. There are a significant number of excellent practice case examples that can now be taken up by others. And rural circumstances and needs were often recognised in the CAA reports. 11.4 However, the report also highlighted that there was room for improvement, both in the CAA process and in the delivery of rural public services. It highlighted: — That the extent to which CAAs picked up on rurality was not systematic. — That the CAA reports were at too high a level to be meaningful to most people and reporting of performance against the National Indicator Set (NIS) did not expose local rural and other differences in service standards and delivery. — It was unclear how the views of local people had informed the assessments. — Whether equitable service delivery across different geographies was being achieved was difficult to judge from the CAA reports. 11.5 The CRC discussed this paper with Local Government Group in spring 2010 where we emphasized that in future there would be value in the following: — Recognition of rural circumstances and needs by local service providers at the local level. And a recognition that tackling geographical inequalities is an important role and challenge for public service delivery bodies. — Collecting and promoting good practice solutions on addressing the challenges of public service delivery to dispersed communities. — Introducing performance management and local spending information that is meaningful to local people and to local councillors (of all tiers) in the neighbourhoods, towns and villages where they live (and not just at the level of administrative delivery bodies). 12. Examples of Decentralised Public Service Delivery 12.1 The CRC would like into highlight a number of examples of decentralised public service delivery in rural areas: — Residents in Brandon, Suffolk, have limited access to health and social care services, with many located 10 miles from Brandon. Via it’s Connected Care programme,20 Turning Point, a health and social care organisation, is training local community researchers to engage with local people to establish various services in the town, and identify what meets local needs and where gaps in provision exist. — The Bay Broadband Co-operative provides broadband to the residents and visitors of Robin Hood’s Bay in North Yorkshire. Remote villages and farms enjoy a reliable and high quality broadband connection through a wifi mesh of up to eight megabits. Members pay £8 a month for the service and visitors to the area also can purchase a temporary connection to the system for between £3 a day to £10 a week. The co-operative survives on its income and is currently making a sustainable profit. — Burgess Hill Town Council, in West Sussex, delivers a range of county and district services through its Mobile Maintenance Teams, who are also contracted to service three smaller neighbouring parishes. 13. Conclusion 13.1 The CRC asks the Committee to consider: (i) How the devolution of power and responsibility away from central government will take account of the strengths and good practice present in many rural communities. (ii) Examine the Government’s commitment to community led planning and its inclusion within the Government’s plans for localism and decentralisation. (iii) Recommending to the Government the positive contribution that Participatory Budgeting can make to many communities. 19 20

CAA commentary http://ruralcommunities.gov.uk/2010/06/24/caa/ Connected Care http://www.turning-point.co.uk/commissionerszone/centreofexcellence/Pages/ConnectedCare.aspx

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(iv) The fact that rural places are often governed by geographically large and remote units of local government and that place-based budgeting needs to occur at a small enough special scale to be of relevance and benefit to people in smaller communities. (v) The importance that public resource allocations between different places are fair and are seen to be fair. (vi) The possibility of including parish and town councils within the scope of plans to revise the Revenue Support Grant. (vii) The importance that revised processes for performance management at the local level are meaningful to local people and to local councillors (of all tiers) in the neighbourhoods, towns and villages where they live (and not just at the level of administrative delivery bodies). 13.2 The CRC commends this submission to the CLG Committee inquiry into Localism and hopes that it provides helpful assistance to informing the Government’s thinking on Localism and Decentralisation. October 2010 Memorandum from the Community Development Foundation LEVELLING THE PLAYING FIELD: THE ROLE OF THE COMMUNITY SECTOR WITHIN LOCALISM 1. Executive Summary 1.1 The government has taken the first step towards overhauling public services and eliminating inefficiencies by making a clear commitment to localism and decentralisation. The realities of implementation will be much less straightforward. Effective localism requires more people to be involved in decision making and activity in neighbourhoods. Central and local government, elected and unelected community representatives, neighbourhood groups and local people all have vital roles to play. But these various key players may not be adequately developed to participate or contribute on equal ground with those who have historically monopolised the power set to be devolved. The first and most important role of will be to level the playing field for localism. 1.2 The following paper presents evidence on localism and decentralisation drawn from the work of the Community Development Foundation (CDF). CDF is a registered charity and non-departmental public body which has supported the practice and values of community development (CD) in the UK for more than 40 years. Its dual status means it sees the benefits and challenges of localism and citizen involvement from the perspective of both government and communities. 1.3 This paper focuses three of the Select Committee’s areas for consideration where a CD perspective is most crucial: — The extent to which decentralisation leads to more effective public service delivery; and what the limits are, or should be, of localism. — The role of local government in a decentralised model of local public service delivery, and the extent to which localism can and should extend to other local agents. — The action which will be necessary on the part of Whitehall departments to achieve effective decentralised public service delivery. 2. The Extent to which Decentralisation Leads to More Effective Public Service Delivery; and what the Limits Are, or Should Be, of Localism Decentralisation and effective public service delivery 2.1 The closer the design, delivery and evaluation of public services comes to the people they are intended to serve, the more effective those services will be in responding to real need. By harnessing the expertise of local people, community groups and other local agencies, local authorities take advantage of previously untapped knowledge and innovation. On the other side of the coin, failure to involve local people in service provision can result in low take-up of services and wasteful spending. 2.2 A move towards localism will require full participation from numerous capable, accountable, resourced players—many more than we have seen in centralised processes. This will include local and central government, community groups, community activists (elected and unelected) and local people. In order for local authorities to design and commission more effective services, they must proactively involve and empower local people, their representatives and community groups. This requires a shift in the culture of many local authorities and central government to be able to open up design and decision-making processes to civil society. Targeted services 2.3 Poorly targeted services are wasteful. Since local people best understand local need, involving them in service delivery (alongside proper profiling of risk and demand) means that the right services will be targeted at the right people. In our report, The Duty to Involve, we found that Great Yarmouth Borough Council piloted

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a neighbourhood level local strategic partnership (LSP), aimed at improving the neighbourhood and meeting local priorities. The locality approach was so successful at bringing services together and improving local areas that these “mini” LSPs have been rolled out across the borough and multi-agency actions plans have led to demonstrable change: youth work was able to reach younger residents and seven new community groups were established in the first year.21 Ownership 2.4 Involving local people in service development gives them a greater feeling of ownership over services, particularly over those delivered via “co-production” methods. This increased sense of ownership leads to a sense of shared responsibility. Services born from public involvement avoid the pitfalls of top-down service provision, which are not easily sustained and often unappreciated.22 Greater understanding and ownership of services that really meet local need leads to high take-up of services, and to services being used as they were intended. 2.5 There is a virtuous circle here: communities can be empowered by their involvement with public services, allowing them to play a more active role in their communities. In turn, “increasing people’s empowerment naturally means that public agencies become more aware of their citizens’ needs and aspirations [which] leads to more responsive, effective public services.”23 For example, Wolverhampton City Council’s approach to neighbourhood management led to the introduction of a system of neighbourhood tasking, in which services respond to community priorities.24 Cost effective 2.6 Decentralised public services are more cost effective. Better targeted services mean they reach the people in need, maximising uptake, they do not have to be constantly and expensively re-designed because they do not work on the ground, and there are significant additional benefits in terms of community engagement and empowerment, which lead to a range of cost-savings across service areas. For example, if communities are empowered to make their need known, that need can be tackled earlier and less expensively before a chronic situation arises. 2.7 The Truro Homeless Action Group, who have been providing hot breakfasts, friendship and support to homeless people in Truro for 13 years, are entirely volunteer-run and self-financing, bar £1,000 per annum from the local Methodist Church. Their costs are around £6,500 a year, and if volunteers were paid only minimum wage for their time it would amount to £12,702 a year. If the volunteers were paid at the average wage of £13 per hour this would rise to £28,470 per year. If you look at the lifetime of their work (13 years), even if it were staffed at minimum wage, the group have provided a service worth around £250,000.25 Accountability 2.8 There is potential to create greater accountability through decentralisation, where mechanisms for holding local decision-makers to account are accessible and well publicised. In particular, if accountability comes to depend on locally-determined performance frameworks, local people will need to be much more actively involved in scrutiny processes. Decentralisation can also lead to more transparent, accountable processes such as participatory budgeting. Studies show that when citizens are given more control over determining value for money in public services, this increases legitimacy and trust in public agencies.26 One participant in Newcastle’s participatory budgeting process pointed out that if money had been allocated without citizen involvement, “it would all go into the mysterious pot, where nobody knows where it goes.”27 The limits of localism 2.9 The limits of localism must be as adaptable and locally-oriented as the concept itself. CDF believes that the extent (and success) of localism will depend on the characteristics of the area and the capacity of local people to understand, participate, and access appropriate skills and resources. Bearing this in mind, we outline below some common limitations identified through our work. 2.10 Localised public service delivery must be carefully planned, since failure could lead to blame among the many partners and a return to regressive centralised delivery. For larger services with a network of different partners and delivery agents, it will be important that they all understand and share the same objectives. Otherwise there is potential for them to work contrary to the needs of service users in pursuing delivery targets that are too narrowly defined. 21

22 23 24 25

26 27

Pitchford, M, Archer, T with Ramsden, S (2009) The Duty to Involve: Making it Work. London: Community Development Foundation. p.26. Pitchford et al, 2009. Neumark, T (2010) Engaging with communities: Lessons from the frontline. London: Community Development Foundation. p.9. Ibid. The group work a minimum of two hours a day, 365 days a year, with three volunteers each day. If each volunteer were paid minimum wage (£5.80/hour) and their costs were consistently £6,500/year, over 13 years their work would cost £249,626. Neumark, 2010. Ibid, p.11.

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2.11 If local authorities are now to be responsible for entire services, there must be a mechanism in place that insures against service failure without reducing local responsibility for managing public money. This links back to our earlier point on accountability: one way of achieving active local responsibility when fail-safe mechanisms are also built in would be to make service delivery democratically accountable. 2.12 Although public services should be accountable first and foremost to the people they serve, there are some services and localities that demand at least an element of oversight at a local authority or supra-local level. Such services are those where there is a tension over how needs of different communities are prioritised, or whether there are area-wide issues with reducing the equality gap. It is essential that services are not simply commissioned for those communities whose representatives have the resources, skills and confidence to make the most vocal case about the services required or even bid to run services. 2.13 Government must also be careful that a move towards localism does not come at the expense of nonlocalised needs and communities.28 Localism requires government and public agencies to engage with citizens as residents of a single locality. While the boundaries of districts, wards and other official geographic divisions are clear, the divisions between identity groups within a local area are not. The needs and demands of local people are based not only on their surrounding environment, but also on their interests, faith, ethnicity and any number of networks and factors that are not necessarily tied to place.29 Government cannot afford to ignore or discourage participation from communities that operate at the supra-local or even national level. 3. The Role of Local Government in a Decentralised Model of Local Public Service Delivery, and the Extent to which Localism Can and Should Extend to Other Local Agents 3.1 In a decentralised model of public service delivery, local government has a critical role to play. It is a role that will depend on the nature of the local area, including characteristics such as the variation between communities, industries and natural geography. Local government is responsible for providing accountability and commissioning based on the needs of the whole area. 3.2 Local government’s role is primarily that of enabling. For many public service areas, local government should move towards a greater emphasis on delivery by local agents.30 Where local authorities are themselves delivering services, they should make every effort to involve communities in that process. Changing antiquated funding relationships 3.3 Local authorities who wish to level the playing field will need to tackle long-standing issues around full cost recovery, sidelining of smaller organisations and antiquated funding relationships. Commissioners will need to ensure that the competing interests of single issue groups are effectively managed, as the success of some groups over others to run services could lead to local tensions. Part of the culture change will also require a strong understanding of service cost benefits over delivery price, for example, cheaper bids to deliver services are not always efficient in the long term. Fair and common standards for commissioning 3.4 Where local authorities are commissioning services, in order to fulfil their enabling role they have to recognise any structural inequalities in the bidding, reporting and accountability requirements. For example, authorities should examine whether payment in arrears is a condition which would exclude smaller, but equally capable organisations from competing. 3.5 Local authorities should also ensure that they apply common standards to the process of commissioning in order to ensure fairness and quality. These include, but are not limited to:31 — Ensuring that the widest range of potential providers are aware of the opportunities, for example by giving applicants the chance to meet commissioners at open events.32 — Providing appropriate application forms.33 — Providing one-to-one support to first-time applicants.34 — Providing feedback on application forms from a reviewer before final submission.35 — Providing three-year funding (in one programme managed by CDF, the option to apply for funding over three years has helped to build the sustainability of community groups who are delivering vital services in their communities). 28

29

30

31

32 33 34 35

Charteris, S, Donnelly, K, Swann, P and Houghton, J (2010) Delivering a Localist Future: A route-map for change. London: 2020 Public Services Trust. Rainsberry, M (forthcoming) Identities and social action: What does it mean for the frontline? London: Community Development Foundation. We have taken “local agents” to mean any locally-based organisation capable of providing a public service, although given CDF’s expertise this paper will focus mainly on civil society agents. While the following recommendations stem from CDF’s work in grant funding, the organisation believes this learning is transferable to other forms of financing. Evison, I with Roe, N (2009) Funding Communities, Adding Value. London: Community Development Foundation. Ibid. Ibid. Ibid.

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— Clearly communicating simple and straightforward monitoring requirements, with support available where needed.36 Up-skilling new delivery partners in the voluntary and community sector 3.6 Local authorities should provide capacity building and support to smaller organisations in order to level the playing field. Such support depends on local organisations, but might include: — technical support (see section three for more details); — information and training on engaging with service delivery; — information on best practice in financial accountability and risk management; — grant funding; — help to build effective relationships with public bodies and other local agencies; and — a supportive atmosphere where smaller organisations have the confidence to become involved with service delivery. 3.7 The community development approach to grant giving incorporates capacity building as a key element of any programme. Groups funded through the Grassroots Grants programme saw the capacity building element as very important in building longer-term skills and sustainability. To date, 11.17% of the money spent on capacity building by local funders across the programme has been spent in the 10% most deprived top-tier local authority (TTLA) areas. 66% of local funders surveyed agreed that training and support would help them to target areas with higher needs.37 Enhancing service delivery through diverse providers and partnerships 3.8 A more diverse group of service providers—from private sector, to social enterprise to community groups—provides a more vibrant suite of public services. In the spirit of the Big Society, mobilising and resourcing community groups in particular will enhance the benefits of localism. 3.9 The Grassroots Grants programme has demonstrated how community groups can fill gaps in service provision: 41% of the groups surveyed cited filling a gap in service provision as one of the reasons why the group was set up.38 Community groups can also deliver services at a relatively low cost. TTLA areas that are more deprived (on the basis of the Indices of Multiple Deprivation) get greater grant allocations per capita. However, less deprived TTLAs can have “pockets of deprivation”. 3.10 One group funded by Grassroots Grants operates in a TTLA area which is in the 20% least deprived areas, but the specific postcode district is in the 10% most deprived districts in the country. The group works with ex-offenders soon after their release, aiming to reduce the local re-offending rate in comparison to the national average. The programme is termed “intensive be-friending” and takes place for a period of up to 12 weeks. Through the be-friender, ex-offenders can access services, start training or education, find a job, or start volunteering—all of which result in better integration into the community. This can help reduce rates of reoffending, breaking the vicious cycle of prison, crime, unemployment and often drug addiction. 3.11 CDF also recommends that local authorities recognise the strength of local self-help activity in filling the gaps in service delivery based on local need. Such activity is both a support and a challenge to state provision, in the manner of a critical friend. In order to maximise this support, self help could be better and more effectively supported by local government. In the first place, all parties need to “foster closer working relationships between such groups and public services, harmonising their different experiences to seize opportunities to enhance service provision.”39 3.12 One example from CDF’s self help research is the Phoenix Community Housing Co-operative. The group was set up in 1980 to “provide shared, short life accommodation to single young people on low incomes”.40 Phoenix has cultivated a mutually beneficial relationship with a local housing association. In one project, the group leased flats from the housing association and renovated them at an incredibly low cost, by training volunteers to refit the properties. Not only has the affordable housing supply increased, but volunteers have gained new skills to help with future employment. In this case, self-help activity is able to flourish because of the convergence of the agendas of the group and the housing association. 3.13 Intermediaries can foster better relationships between local government and self-help groups by helping to “identify self-help groups that are providing important benefits, looking at how they complement public services and their distinctive practices (that are in contrast to the state).”41 Such intermediaries would identify 36 37 38

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Ibid. CDF tracker survey of local funders, 2010. Curtis, A (2010). The next generation of service providers? The benefits and limitations of micro and small voluntary and community sector groups providing services. London: Community Development Foundation. Vanderhoven, D and Archer, T (2010) Self help: A discussion paper on how to grow self help. London: Community Development Foundation. p. 4. Ibid, p. 3. Ibid, p. 6.

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the support and resource needs of different groups, determine the social return on this investment, and ensure leasing/funding/resourcing arrangements are reached that are favourable to both sides.42 3.14 A sufficiently empowered voluntary and community sector (VCS) is also better able to work with public service providers in co-production models. Wolverhampton’s Stamp It Out project is an innovative initiative led by a partnership of local community volunteers, crimestoppers, the Local Neighbourhood Partnership and other agencies such as Wolverhampton Network Consortium, the police, and the neighbourhood safety partnership. Its aim is to tackle crime and anti-social behaviour in the local area. Many local schools, community groups and individuals are involved in the events, demonstrating the commitment of local people to working in partnership, and helping to make a real difference in their community. 4. The Action which will be Necessary on the Part of Whitehall Departments to Achieve Effective Decentralised Public Service Delivery 4.1 The previous section outlined the practical role and responsibilities of local government in levelling the playing field for localism. But central government also has a vital role to play in stimulating local activity and social action. With the forthcoming Localism and Decentralisation Bill, the coalition government has already committed to handing power back to local government and local people. While this is a crucial first step, public service reform cannot stop there. Centrally-held resources and expertise must also be shared out in such a way as to create opportunities for community groups and local people to take up the powers extended to them through the Bill. In this section we will look primarily at how this can be achieved through innovative funding programmes, capacity-building initiatives and reduced bureaucratic burdens. 4.2 Financing will be a vital aspect of growing a new generation of VCS service providers. However, financing methods must evolve to keep up with the innovation of local people and local groups. CDF has seen a increasing number of VCS groups apply for funding to central government in order to address service gaps in their local areas.43 The flexibility of programmes like Grassroots Grants and Faiths in Action has allowed groups that would historically be excluded from such funding to access small amounts of money to deliver services. Increasing flexibility in eligibility criteria for funding programmes 4.3 Central government must continue to make financing opportunities available to groups that fly under the radar of more traditional funding programmes. The Grassroots Grants programme sponsored by the Office for Civil Society (OCS) is a successful example of how flexibility in eligibility criteria has allowed small community groups to address local needs in ways that would not be funded by traditional funding programmes. One such example is the TBN Credit Union, funded by Grassroots Grants. TBN operates in an area of Middlesbrough, providing saving facilities and loans to members at very low interest rates. As of May 2010, it was providing banking services to 1,000 local people in an area with no other local banking facilities. As credit unions are not eligible for charitable status, TBN cannot apply for funding from most Trusts. However, the eligibility criteria for Grassroots Grants programme is intentionally flexible to allow groups such as TBN to access funding.44 TBN was awarded £5,000 from Grassroots Grants, which allowed the group to purchase equipment and stationery, open additional collection points and send staff and volunteers to the Trade Association’s Annual Conference. Since receiving the grant, membership has grown and volunteers have gained experience in customer-facing roles (which has already led to some volunteers re-entering paid employment). TBN is now also working with local schools to give children the opportunity to learn about saving money. 4.4 Despite their contributions to regeneration, civil and neighbourhood renewal,45 faith groups are another category that has historically struggled to access government funding. Prior to the Faith Communities Capacity Building Fund and the Faiths in Action Fund, “a lot of the funding on offer to the VCS had been closed to faith organisations”.46 This was due to different funders’ (largely unfounded) concerns about promoting proselytism.47 Faith groups are another example of a sector that makes a substantial contribution to a diverse range of local needs, but which has been overlooked by inflexible eligibility criteria in government funding programmes and difficult funding relationships. Eliminating annualised spend 4.5 Central government also has the opportunity to make a massive contribution to getting local groups up and running by eliminating annualised spend requirements from national funding programmes. In CDF’s experience of managing grant programmes, annualised spend has been a major barrier to success for funded 42 43

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Ibid. Much of the evidence in this section draws on CDF’s experience of managing grant programmes sponsored by CLG and OCS. However, CDF strongly believes that the learning from grant programmes is transferable to other forms of financing as all will require appropriate and effective monitoring, administration and payment methods. Eligible applicants to the Grassroots Grants programme must be not for profit VCS groups in England, be led by volunteers, have been active for 12 months or more, have an average annual income of £30,000 or less, and work to the benefit of their local communities. For more information, visit http://www.cdf.org.uk/web/guest/grassroots-grants. James, M (2007) Faith, cohesion and community development. London: Community Development Foundation. Ibid, p. 60. Evison, I (2010) Faith matters: Case studies from the Faiths in Action Fund. London: Community Development Foundation.

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groups. Annualised spend can cause any number of problems in delivering work, such as insufficient flexibility to recruit necessary staff, or premises leases which do not match funding timescales. When paired with delays in permissions and CRB checks, funded groups are often unable to spend the money before year end. Additional delays in receiving funds can mean local groups have little more than a few months to set up and begin activity before their funding is cut off. Providing support and capacity building at all stages 4.6 A community development approach to funding requires that groups receive support and capacity building at all stages, from pre-application to evaluation and sustainability planning. Additional support during the application process ensures that the fund is accessible and no eligible group is excluded. The fund must be adequately and appropriately promoted, application guidance and forms must be clearly written and presented, and applicants must have access to support in writing an application (which could include briefing events for potential applicants, and access by phone and e-mail to an independent reviewer for feedback on draft applications).48 Increasing local groups’ capacity to deliver 4.7 Funding programmes must also be realistic about local groups’ capacity to deliver. CDF’s self-help research shows that “many ideas would never come to fruition without some knowledge of the relevant sector.”49 In one case studied, a motivated group of residents set out to put a piece of waste ground outside their homes back into productive use. Part way through the process, they discovered low levels of contamination in the soil. It required expert removal, and the group of residents was recommended to acquire public liability insurance. Instances such as this emphasise that complex issues in delivering services and managing community assets and land can “go beyond the average citizen’s knowledge and skill set.”50 4.8 The government has proposed a “civic service”, where, for example, officers from local authorities could provide advice and support to community groups. CDF recommends that this new approach be used to connect those with technical skills and expertise in the public sector with community groups that need those skills, whether they operate in the local area or in neighbouring authorities. We believe this is a financially viable way of addressing the shortfall of expertise in community groups. Using light touch monitoring 4.9 Reducing the bureaucratic burden is already a central government commitment. Financing programmes— whether grant funding, commissioning, contracts or loans—with complex and excessive monitoring systems can discourage and distract community groups from the activities they have been funded to deliver. Grassroots Grants has distributed small grants to over 15,000 local groups. The programme has used “light touch monitoring” to reduce the burden on small groups, freeing them up to focus on delivering their important work. However, it should be kept in mind that monitoring to an appropriate degree can have positive effects for funded groups, as reported by Tackling Race Inequalities Fund (TRIF) grant recipients. TRIF funded groups stated that monitoring requirements helped them set work plans and track their progress.51 Sharing learning nationally 4.10 By increasing the emphasis on citizen engagement and empowerment, central and local government must be sure to implement involvement methods that go deeper than tokenistic consultations. The National Empowerment Partnership (NEP) has been successful in supporting local authorities to “improve the supply of community empowerment opportunities” and “engage in community empowerment as a way of working at strategic and operational levels”.52 4.11 While local authorities can benefit greatly from the learning of their colleagues in other parts of the country, effective distribution of knowledge requires specialised skills in communications, interpretation of policy, and ensuring effective dissemination and quality assurance. There is scope for the coordination of knowledge sharing to be handled at a regional or national level, building on the success of programmes like NEP and Take Part. The appetite for knowledge sharing at this level is clear: participants in the NEP evaluation commented that events sharing good practice were oversubscribed. An analysis of the feedback from one such event showed that 96% of respondents found the event either useful or very useful.53 Benefits of good practice dissemination include: — access to new and innovative ideas, and new materials; — getting an overview of legislation, policy and guidance; — learning new methods and tools and getting relevant materials; 48 49 50 51 52

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Evison, with Roe, 2009. Vanderhoven and Archer 2010, p. 8. Ibid, p. 7. Khor, Z (forthcoming) Tackling Race Inequalities Fund: Interim report. London: Community Development Foundation. Institute of Voluntary Action Research (IVAR) and the University of West England (UWE) (forthcoming). Evaluation of the National Empowerment Partnership: An interim report in year three. London: Community Development Foundation. pp. 4–5. Ibid, p. 32.

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— — — — —

improved knowledge and confidence to bring empowerment into their work; information and learning to pass onto colleagues; opportunity to network and share ideas with people facing similar challenges; opportunity to think strategically and practically about empowerment; and impetus to try out new ways of working.54

Changing the culture of government 4.12 Whitehall departments must take the lead in shifting government culture away from centralised processes and decision making. In the past government has favoured certain concepts of efficiency and fairness at the expense of more democratic processes. The shift towards localism is a definitive step away from the debilitating effects of casting the electorate as passive recipients of unaccountable, state-led services, rather than as architects of their own local state. 4.13 However as part of this culture shift, government must also recognise and accept the costs (in time and money) of decentralisation and genuine involvement of local actors. Citizen engagement is not without costs, and involving a diverse group of local people can be slower than centralised decision making. Decentralisation is also dependent on government and others letting go of an important set of assumptions regarding uniformity of service delivery and replication of successful models. Local services tend to differ in the context in which they develop, and coordinating different services and different service priorities across a single authority or region becomes more complex. October 2010

Memorandum from the Runnymede Trust About Runnymede Runnymede is a social policy research organisation focused on race equality and race relations. We work by: — Identifying barriers to race equality and good race relations. — Enabling effective action for social change. — Influencing policy at all levels through providing thought leadership and robust evidence. Executive Summary — Decentralisation of power could be a welcome development for Black and minority ethnic communities, especially where local communities have the power to decide what best meets their needs and interests. — However, simply moving decision away from central government does not resolve the problems of democratic accountability, fiscal transparency, equality and rights. — If local decision-making is democratic and inclusive then concern about “post-code lotteries” can be minimized. We accept local variation is permissible, within boundaries. However, there must be mechanisms to ensure a minimum standard of public services is ensured for all, regardless of address. — Increasing race equality will reduce public spending. If decentralisation is to achieve substantial public savings it is important that service delivery does not result in increased ethnic inequalities which would result in greater public expenditure further down the line. — There is a danger that in the drive to localise power and cut bureaucracy, local authorities will not be sufficiently held to account on decisions they make. New ways to hold local authorities to account need to be explored, particularly in relation to race equality. Some local authorities may also need further resources and training to deliver their new powers effectively. Response to Inquiry 1) The extent to which decentralisation leads to more effective public service delivery; and what the limits are, or should be, of localism 3) The role of local government in a decentralised model of local public service delivery, and the extent to which localism can and should extend to other local agents 4) The action which will be necessary on the part of Whitehall departments to achieve effective decentralised public service delivery 1. Decentralisation could be a beneficial development for those from Black and minority ethnic (BME) communities, particularly as localism could lead to public services more effectively tailored to the specific 54

IVAR and UWE, forthcoming.

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needs of local communities. We agree that local people and communities may be better able to determine how best to respond to their needs, and of course that needs vary significantly by location. Two concerns arise in thinking about how decentralisation may be more effective. First, is that inequalities locally are likely to mean that some people are better able to express their interests, and have their needs better met. There is much evidence that apparently universal public services often lead to unequal outcomes based on the advantages that different citizens bring to those services prior to delivery, and there is no reason this will be different for decentralised service provision. Second is that there may be a difference between effective and efficient, especially in areas where there are particularly pressing needs. In such localities, it may prove extremely costly to respond to those needs, but doing so will of course make public services more effective in the sense that they properly target those with the greatest needs, and affirm the value of equal rights and citizenship. In sum, decentralization and public services reform need to ensure choice, but also voice, while at the same time protecting and affirming everyone’s rights. These principles should guide the implementation of “localism”, but also outline its limits. We now explain these concerns in more detail and specifically in the context of race equality—responding to questions 1, 3 and 4 together. 2. A key problem in relation to race equality is that policy on equality since the Race Relations Amendment Act has used new public management (NPM) models in order to address the role that public authorities have in promoting race equality and good relations. NPM models do not fit easily with a desire to decentralise decision-making, given their emphasis on centrally agreed targets, monitoring and reporting. The development of tools to support the implementation of the Equality Act should seek to address this mismatch, bringing monitoring and accountability on equality more in line with new models of accountability which put the citizen at the centre rather than upwards reporting to inspectorates and central government. 3. At the same time, there may need to be further training or resources for local government or other local employees who get new powers. Currently centralisation means not only that many decisions are made in Whitehall, but that many people with expertise in making these decisions have to work in London. To localise power effectively, the relevant skills should be better distributed across the UK, and this will involve people moving out of London, but also further training and resources for those already working for local institutions, and perhaps greater prestige for employment in local authorities. 4. CLG has a crucial role to play in delivering this change, both in its role as lead department on race equality and in its relationship with local government. Finding ways of delivering appropriate levels of accountability to citizens is a key stumbling block for many in promoting localist and/or Big Society approaches. Some key problems arise: 4.1 Sharpest elbows—It is important to ensure that marginalised groups have an equal say in local decision-making, so that services are not merely designed around those who are most articulate or who have the most useful forms of social capital. This is just as important in areas with small BME communities as in those with larger BME communities. 4.2 Democratic deficit—The legitimacy of decisions is dependent on transparency; democratic accountability is our best mechanism for this to occur. Democratic accountability is not a key strength of voluntarist approaches. There has been little clarity so far in discussions about localism of what the proper role of local government is and how it needs to be strengthened to provide transparency and legitimacy to decision-making—particularly crucial when the decisions before us are likely to impact disproportionately on the already marginalised, including Black and minority ethnic communities. Making collective decisions suffers from two problems: how to adjudicate competing claims, and how to ensure the resulting decisions are legitimate and accountable. Democratic decision-making institutions are the best way of responding to these difficulties, so currently local authorities and local councilors appear the best institutional mechanism for ensuring accountability. To the extent that local people are not always engaged with these institutions, those decisions will neither accurately reflect everyone’s interest, and nor will they be fully accountable. But if we “localise” service provision or collective decision-making further—and to institutions or people that have no democratic standards— this will not only lead to resentment, but further undermine people’s faith in institutions and democracy generally. 4.3 Minimum guarantees—If local decision-making is democratic and inclusive then the worry about “post-code lotteries” can be minimised, but only within certain boundaries. What are the mechanisms for ensuring a minimum standard of public services for each citizen regardless of their address? Who is responsible for ensuring that marginalised groups are included, and what incentives/sanctions operate for their exclusion? What are the limits of difference we are prepared to accept between localities? In a society that has significant inequalities between areas, however, post-code lotteries are heavily loaded in favour of the more wealthy. The previous government’s attempts at neighbourhood renewal highlighted that areas with high levels of deprivation are more difficult to turn around than relatively wealthy areas. Differences in local outcomes would be more acceptable to the general public if these inequalities were taken into account in the levels of financial support for different areas based on levels of deprivation.

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5. Therefore decentralisation is often welcome, but it does not resolve the problems of democratic accountability, fiscal transparency, equality/rights, or inclusion, simply by moving decision-making away from central government. If decentralisation is to be fair and effective, these issues need to be addressed—ideally before we are too far down the road, and thereby miss the opportunity to create a localism that works for all. 5) The impact of decentralisation on the achievement of savings in the cost of local public services and the effective targeting of cuts to those services 6. It is worth highlighting that successfully promoting race equality will reduce public spending. If we were able to reduce the major persistent racial inequalities, we would make significant savings on spending. Part of the tragedy of racism is the waste of resources and human potential that it engenders. — In the UK we currently imprison a greater proportion of our Black population than even the US. — Achievement gaps persist in education despite significant investment in inner city schools. — Black boys and girls are three times more likely than their white counterparts to be excluded from school.55 — Pakistani women seeking work are four times more likely than white women to be unemployed. — BME graduates are three times more likely than white graduates to be underemployed. 7. The social and economic waste that patterns of racial discrimination and inequality perpetuate lead to increased levels of public spending on supporting families, rehabilitating offenders, unemployment benefit, mental and physical health, etc. Our ongoing collective failure to address these inequalities costs the Exchequer dearly. Few attempts have been made to measure the real costs of race inequality, however, the REACH report to CLG estimated that if the educational underachievement of Black boys, and their over-representation in the criminal justice system could be addressed it would save £808 million in spending each year. This figure could be higher if we were to take into account the wasteful use of resources that racism enables, for example, the over-use of stop and search powers by the police on people from Black and minority ethnic backgrounds— which too rarely lead to crime detection, debilitate community relations with their police service, as well as cost thousands of pounds in police time each year.56 8. If decentralisation is to achieve substantial public savings it is therefore important that service delivery does not result in increased ethnic inequalities and greater public expenditure further down the line. However, if decentralisation is carried out in a way that takes into account the specific needs of varied communities, race inequalities could potentially decrease, thus leading to more savings in the long term for society as a whole. 9. However, we must also face up to the fact that responding to some needs is more costly than responding to others. Whether this is in rurally isolated communities, for disabled people, or among Black and minority ethnic groups, it may be more costly to provide the same service provision to some people rather than others. We need to be honest about the costs of reaching the most vulnerable, but also about the obligations public bodies have to ensure that everyone has fair access to public goods and services. 6) What, if any, arrangements for the oversight of local authority performance will be necessary to ensure effective local public service delivery 10. There is a danger that in the drive to localise power and cut bureaucracy, local authorities will not be sufficiently held to account on decisions they make—particularly following the scrapping of the Audit Commission. In particular, if equality regulations are watered down as part of a drive to reduce bureaucracy this could have a negative impact on Black and minority ethnic groups. 11. As argued in Runnymede’s paper “Local Decision Making and Participation” (2007)57, one solution to this could be for the government to determine areas over which local communities (and local councils) should not have the authority to decide, such as minimum standards of human rights and race equality. 12. In addition, as ippr argue in their paper “Equality, Entitlement and Localism”58, it is important that the new Public Sector Duty introduced in the Equality Act is used to ensure accountability and to make sure that localism does not lead to a reduced focus of tackling inequalities experience by particular groups. 13. Accountability could be driven from below; indeed this would be a more ideal citizen-focused model. There are numerous examples from the US in terms of how community organisations have led the way in holding decision-makers to account on race equality,59 but in order for this to approach to be effective, it will require the development of more effective community organisations. 55

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Debbie Weekes-Bernard (2010) Did they get it right yet—a re-examination of school exclusions and race equality Runnymede: London http://www.runnymedetrust.org/publications/148/32.html Kjartan Sveinsson (ed.) (2010) Ethnic Profiling: The Use of Race in UK Law Enforcement Runnymede: London http:// www.runnymedetrust.org/publications/143/32.html Omar Khan (2007) Local Decision Making and Participation Runnymede: London http://www.runnymedetrust.org/publications/ 19/32.html Phil McCarvill (2010) Equality, Entitlement and Localism ippr: London See Minnesota’s Organizing Apprenticeship Project for a good example www.oaproject.org

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14. Finally, another way to enforce accountability at a local level in relation to race equality could come from an increased role for Race Equality Councils (RECs) in holding local authorities and service providers to account. RECs may well have a better understanding than central government of the local situation and of the specific needs of the different ethnic groups in the area. Currently the size and effectiveness of RECs across the country is varied—indeed some areas have no RECs at all—so much work would need to be done to increase their capacity and presence if they were to hold service providers to account on race equality. 7) How effective and appropriate accountability can be achieved for expenditure on the delivery of local services, especially for that voted by Parliament rather than raised locally 15. For organisations to exert power effectively they typically require some control over their revenue stream. The Lyons Review (2006) suggested some interesting ideas for giving local authorities tax-raising powers, and how to phase those powers in over time. We agree with the general principle that more taxation should be raised locally, not only to reflect the increased authority exercised by local bodies, but to allow better responsiveness to particular needs. This would ultimately result in the reform of council tax, with its replacement by a more proportional local property and/or income tax. 16. Where local expenditure is granted by the will of Parliament it becomes very difficult to achieve accountability. Parliament and indeed every citizen thereby gains an interest in knowing how every local service is provided, and a right to know how money is spent. This is why the Audit Commission existed, and a new or existing agency will have to fulfill this function. 17. At the same time, of course, local people are often well placed to judge the spending efficacy of their local institutions. In addition to a central institution to ensure accountability to Parliament, local authorities could be required to explain and publish their annual budgets, and even have quarterly or annual town meetings to respond to local questions. October 2010

Memorandum from Age UK Age UK welcomes the opportunity to respond to this inquiry into Localism by the Communities and Local Government Select Committee. Localism and decentralisation presents an opportunity to provide better public services attuned to local need by devolving power to local government and through it to local communities. At the same time a more localist approach should allow communities to take the initiative to set and deliver the priorities for their own neighbourhoods. The ageing agenda takes account of all services used by older people and the environment in which they live and work, making it cross-cutting and relevant to every local service commissioned and provided at a local level. Age UK recognises that decentralisation and localism presents an opportunity to improve priority areas for older people. However, in order for the process to be effective for older people more consideration needs to be given to the following: — Making sure older people are partners in planning and delivering better outcomes for public services through a framework for participation that allows communities to define the problem and work with local agencies to find the solution. — Recognising that building capacity in communities will require initial and sustained investment in existing and new voluntary and community organisations to give people the ability to take on new roles eg supporting, creating or managing volunteering, social enterprises, etc. — Defining the framework for local accountability so that people have a means for assessing the suitability and quality of services. — Outlining the role of local and national government to assess and ensure the needs of the whole community are met, in particular older people. 1. Delivering More Effective Public Service Delivery The extent to which decentralisation leads to more effective public service delivery; and what the limits are, or should be, of localism The case for further decentralisation The proposed Decentralisation and Localism Bill contains a range of measures which are particularly relevant to older people including: — Returning decision-making powers on housing and planning to local councils. — New powers to help save local facilities and services threatened with closure, and give communities the right to bid to take over local state-run services. — Giving residents the power to instigate local referendums on any local issue and the power to veto excessive council tax increases.

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— Greater financial autonomy to local government and community groups. — Creating new trusts that would make it simpler for communities to provide homes for local people. Age UK recognises that effective implementation of these changes could lead to better outcomes for older people if it leads to improvements in local services, planning and housing, adult social care and support, and access to volunteering. Decentralisation presents an opportunity to protect local services and tailor them to a particular community. The decline in local services over the past few decades, characterised by closures of banks, post offices, pubs, garages and local stores has caused real problems for many older people, particularly those who face additional barriers of declining mobility, poor health, low incomes and limited social contacts. The loss of local post offices has been particularly damaging; during the recent two year programme of closures, 2,432 outlets were shut, leaving a network of 11,500, compared to a peak of 25,000 in the 1960s. The Public Accounts Committeei report criticised the previous Government for the local consultation phase of the programme stating too little time had been allowed for consultation; the decisions had already been made; and the public were not listened to properly. We hope that the Decentralisation and Localism Bill will increase opportunities for people in later life, in all their diversity, to influence decisions and where appropriate have the opportunity to run local services. We will not achieve greater civic activism until the voices of those older people who are currently excluded from local decisions are heard. Measures to localise decisions about planning and housing should similarly ensue the needs of older people are properly met. The growth of the older population will account for half the growth in numbers of households over the next twenty years, yet most of our housing stock and the design of our towns, cities and public infrastructure is not suited to this challenge. Greater flexibility could allow the development of new models of retirement housing that fit local and individual needs, such as cohousing and cooperative development. There is also a need for flexibility in local planning for retirement schemes, which could for example mean reducing the planning gain obligations on smaller developments to help make homes affordable. Housing policy fundamentally impacts on how we receive and access a whole range of services, including both social care and health care. Many homes are inaccessible and inconvenient for large sections of the population. The Lifetime Homes standardii provides 16 design criteria that meet the growing demand for choice, flexibility and independence among disabled people of all ages, as well as promoting high quality and thoughtful housing design for the general population. It is hoped new models of local ownership will deliver affordable, lifetime homes for older people and their families, allowing more older people to remain independent in their own homes and communities. People who require access to adult social care and support and their carers are often isolated, yet there is enormous scope to develop new models of care and support based on neighbourhood and co-operative groups that bring people together and involve them in running their own care services, possibly using pooled personal budgets. This should be a central strand of the review of devolution and aim to give greater financial autonomy to local government and community groups. There may also be scope for developing community resources in order to reduce or delay the need for people with lower needs to use services. In this respect an increased emphasis on the development of social capital and community resources might contribute to the prevention agenda. In terms of adult social care services, care should not just be seen as being about individual consumers using services. Rather it should also include social and community activity, co-production of services and mutual and collective solutions to care and support need. Local government should therefore be developing increased mutuality and community and neighbourhood networks, particularly where older people are able to be active participants and to have control over community networks. Later life is a time when many people wish to volunteer and make an active contribution to civic and community life; indeed many community groups are almost totally dependent on older people’s contributions. Age UK and our partners work with more than ten thousand older volunteers. But only a minority participate, less than a quarter of people aged over 75 participate in formal volunteering at least once a month,iii with many more older people having something to offer, and something to gain from being more active in the community. Volunteering does not just play an important role in delivering services, but also in improving the lives of the volunteers themselves; improving physical and mental health; combating loneliness and personal isolation; bringing communities together; boosting independence; providing contentment and satisfaction; and empowering people. Enabling and supporting the growth of organisations that involve volunteers therefore has the double impact of benefiting both service users and volunteers. Understanding the limits of localism The effective transfer of more control to local communities will need to ensure meaningful participation for the whole community. Older people need to be partners in planning and delivering better outcomes for public service delivery. As individuals and collectively there needs to be a framework for participation that allows communities to define the problem and work with local agencies to find the solution.

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This framework needs to enable people to feel their voices are being heard, but there is an important distinction to be made between participation and influence. The Citizenship Survey 2009–10 showed that older people were less likely than younger groups to feel they could influence decisions locally and nationally. The process needs to allow people to see the outcomes of their involvement. The ability of people to take on new roles, volunteering in a range of formal and informal local scenarios, may be limited in three key areas: the skills and knowledge of individuals to take on these new roles; the management capacity of organisations to involve volunteers effectively and in greater numbers; and the opportunities and capacity that already exist within their neighbourhoods. It also needs to be recognised that not everyone will feel they can get involved. Research suggests that over 1 million people over 50 consider themselves to be socially excluded from society.iv There needs to be consideration about how to reach the most isolated and ensure the voice of the majority does not undermine individual needs. For some older people who face multiple discrimination, on the grounds of not only their age but also their race, sexuality and/or disability, there will be additional barriers to participation which need to be systematically identified and addressed. The policies of localism and decentralisation must be considered in the context of the public sector equality duty, which is due to come into force from April 2011. This will place a statutory obligation on public bodies to assess the impact of moves towards decentralisation and localism on equality of opportunity between groups with protected characteristics. There will need to be an initial investment of resources in existing and new organisations to enable older people to take on these new roles. For instance, for older people to effectively engage in the planning process, they are going to need accessible and inclusive information, advice or advocacy. There will need to be specific mechanisms for people to have an input and it needs to be clear how this will feed into the planning cycle. There should be consideration about the distribution of investment to reach those that may currently feel excluded as well as communities that are already active. There is an opportunity for existing successful local initiatives to play a role, sharing their knowledge and providing support. For instance local Age UK partners are in some areas providing a range of local services and forums to challenge communities to be more age-friendly. Age Concern Milton Keynes holds annual discussion forums for local older people to ask what help and activities they might want in the future. Last year they wanted help with housework, gardening, shopping, odd jobs and home adaptations. They also wanted a range of daytime, affordable social and physical activities which are local or accessible by bus. Sharing this information and supporting other organisations to connect with the whole community will be useful to provide truly locally prioritized services. However, further incentives for existing and new networks to evolve and fill the gaps in knowledge and skills may need to be developed. There needs to be a system that ensures choice and the quality of local services. In particular, local accountability needs to be more clearly defined for local agencies. While transparency is important, it needs to go beyond providing access to data. There needs to be a process for individuals to assess the suitability and quality of services. There may also be risks in new forms of service provision around financial and managerial sustainability of local services, particularly those that become community owned. National government needs to maintain some level of oversight to ensure local agencies are meeting their public duties in respect to national and international rights. (See also below: 5. Effective Oversight) Maintaining availability and choice in vital local services is an important part of localism. Local and national government will still need to hold responsibility for assessing and ensuring the needs of the whole community are met, in particular older people. As service provision becomes more diverse it will be necessary for government, locally or nationally, to be setting limits or minimum standards that should not be breached. The rights and services for vulnerable older people who may find it difficult to engage in the political and planning process need to be protected. In some service areas, such as housing and planning, local and national standards already exist. There needs to be consideration of how these requirements are factored in to a community-led process and whether other services need similar standards or audit processes to maintain quality. The experience of personal budgets is useful to consider in terms of maintaining choice and quality of services. For instance, while being given ownership through direct payments people may find there is no choice of local services and care providers may struggle to predict what demand will be. Older people often have to choose care services quickly and in pressurised circumstances, such as leaving hospital, so may not be able to exercise effective consumer choice. Personalisation builds on concepts of independent living that have been developed over many years by disabled people’s organisations. However independent living has never been seen as just being about turning people into consumers; it also involves bringing people together to provide mutual practical and emotional support. This aspect of personalisation should not be forgotten and mutualistic approaches to obtaining the assistance older people need should be central to the Government’s “Big Society” agenda. At the same time, there needs to be certainty that there is a willingness from society to take on these new roles. The government should seek further evidence about the level of enthusiasm to take part. By openly

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discussing this with communities, the government will also need to identify the barriers to participation and ways to overcome them. There is a risk that vital local services could be lost by assuming that because people don’t want to run the service themselves, they don’t want the service at all. In some cases there will be a case for public service delivery to continue. 2. Lessons from Total Place The lessons for decentralisation from Total Place, and the potential to build on the work done under that initiative, particularly through place-based budgeting. The Total Place pilotsv demonstrated that there are real service improvements and savings to be made from public authorities putting the citizen at the heart of service design, and working together to improve outcomes and eliminate waste and duplication. Coordination of ageing issues should be a primary consideration for place based budgeting. A lack of senior leadership and coordination on ageing issues often results in individually run programmes that chip away at the edges of problems without dealing with them in the round. For example, social care transformation is a major policy programme, which relies on a cross-cutting preventative approach, but is often led exclusively from social care departments in isolation from other services. This leads to budget decisions which undermine good value for public spending as a whole (eg insufficient joint commissioning of preventative services by the NHS and local government) and a skewed perspective on costs (eg when the costs of exercise classes, pavement repairs and good street lighting are not set against the larger costs to the public purse of increased numbers of frail older people falling). At the very least, local authority budgetary planning needs to establish a process for cross-departmental coordination on ageing issues. Age UK proposes that a cross-cutting approach to ageing policy should consider four key areas which could lead to significant savings in public spending over the medium term: — Integrated service provision: silo-thinking prevents roll-out of cost effective “upstream” support or integrated service models which are designed to encompass the needs and preferences of older service users. — Social exclusion and the most disadvantaged older people: exclusion and deprivation in old age are strongly associated with higher health and care needs, so a particular focus should reap savings. — Communication, advice and advocacy: increasing service user choice often saves money and improves outcomes. But it can also increase complexity and confusion unless coupled with good quality information, advice and support. — Attitude change: as a society we are proving slow in shedding our negative attitudes to ageing, which holds many back from leading a full and active life. Local public sector bodies can do much to lead a positive approach to ageing in their local communities, by promoting active ageing, supporting their older workers to continue working and challenging negative attitudes and behaviours within their own services. 3. Extending Localism to Other Local Agents The role of local government in a decentralised model of local public service delivery, and the extent to which localism can and should extend to other local agents. In the section above, “understanding the limits of localism”, it was assumed that local government would have to develop an oversight role in order to meet concerns about: participation; building capacity of communities; choice and quality of services; and, probably most critically, assessing and ensuring the needs of the whole community are met, in particular older people. However, other local agents are already commissioning and delivering local public services that affect older people’s lives. They all need to be built into a coherent framework of localising services. The services provided by local Age UKs and Age Concerns shows that the voluntary sector is already providing a wide range of high quality services with different local agents, which embrace the localist approach. For example, Age Concern Leicestershire and Rutland working with the University Hospitals of Leicester run a Dignity Project based at the Leicester Royal Infirmary to influence and coordinate policies to ensure that older people are treated with dignity and respect at all times throughout the University Hospitals of Leicester. A number of improvement areas have been identified including same sex accommodation, signage and the Privacy and Dignity Plan. Another example is Age Concern Rotherham, which has supported the implementation of Rotherham Borough Councils “Home from Home” Quality Scheme by running sessions in residential homes to support residents and their families to express their views about the care they are receiving. A number of government policies over the years have placed an emphasis on commissioning from third sector providers. Existing services should be recognised and protected where they are already shaped in the way the localism agenda envisages. Further decentralisation to a range of local agents, within the right supportive framework, should enable increased choice and efficiency.

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4. Impact of Spending Cuts The impact of decentralisation on the achievement of savings in the cost of local public services and the effective targeting of cuts to those services. Meeting the needs and expectations of growing numbers of people in later life, within a climate of reduced public spending, presents a significant challenge for local public sector leaders. High quality sustainable services for the long term will only be achieved through a radical new approach to ageing, with coordination and leadership from local leaders, and older people at the heart of decision making. Local authorities, working with other local public sector bodies, companies, charities and community organisations, will need to fundamentally rethink the way services are designed and delivered. In most cases, small scale improvements will not deliver the change needed. Over the next few years local authority budget decisions will need to secure a balance between short term protection and long term vision. In addition, there will be some direct costs to decentralisation and localism. The Big Society agenda offers the opportunity to widen the scope of services further, but it will be important to ensure that community and volunteer led initiatives are not just seen as a substitute for existing publicly funded provision. The voluntary sector has a key role to play as they have many years experience of the type of community development work and mutuality which is essential to make the Big Society a reality. However, as highlighted above, there will need to be investment in order to support building skills and knowledge as more people take on and develop these new roles. 5. Effective Oversight What, if any, arrangements for the oversight of local authority performance will be necessary to ensure effective local public service delivery There will need to be continued oversight in the performance of local authority commissioned and delivered services in order to ensure the needs of the whole community are met. Some level of national oversight will be needed for ensuring local agencies meet public duties set at national and international level. However, overall accountability should be more locally facing rather than the top down framework that was previously in place. Age UK commissioned researchvi into “The value and impact of the performance management framework on older people”. It highlighted the lessons learnt from the previous performance management system for local authorities in order to identify the key components that needed for any future system. The previous performance management framework inevitably had a number of flaws: — The most significant is the closed process for agreeing the targets in the Local Area Agreement. — The national indicators that support PSA 17 do not provide effective measures on outcomes for older people and need to be further developed and refined. — Local Strategic Partnerships should be given the freedom to develop local indicators that reflect local priorities and these should be given the same priority as national indicators. Overall a more outcome focused approach with local leadership and local autonomy is the approach that LSPs believe will lead to improved services for older people. The current system is overly bureaucratic and too prescriptive to allow creativity and innovation in finding local solutions to local problems. The key levers for improved outcomes for older people, identified by the research are: — A commitment from the council’s cabinet to involve older people in a meaningful way in making decisions about local services. — Investment in the infrastructure and support required to develop effective and independent older people’s forums. — The development of strong networks of older people willing to share their views and experience. — The use of outcome focused performance indicators such as those used in Outcome Based Accountability (OBA). — Older people being represented at all forums where decisions are made on issues of importance to them. — The views of older people collected through the JSNA are used to inform the planning of services across all parts of the council not just health and social care. References i

Oversight of the Post Office Network Change Programme HC 832 12 November 2009

ii

http://www.lifetimehomes.org.uk/

iii

http://www.communities.gov.uk/documents/statistics/pdf/1547056.pdf

iv

Out of sight, out of mind: social exclusion behind closed doors. Age Concern. 2007

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v vi

Total Place: A whole area approach to public services. HM Treasury. 2010 The value and impact of the performance management framework on older people. Age UK, 2010.

October 2010

Memorandum from Mencap Executive Summary — Mencap believes that the greater devolution of power to the local level will have an impact on the delivery of social and other services to people with a learning disability. — Mencap is not averse to the idea of local people having a greater say over what happens in their area, and we would agree that local councils are probably more receptive to local needs. — Mencap believes that safeguards need to be in place to ensure that the risks of a postcode lottery, a potential unintended side-effect of “localism”, are minimised, and that local decisionmaking takes place within the context of the equality agenda, so as to ensure that the voices of those unable to speak up for themselves are not drowned out by those who can shout the loudest. Mencap would therefore like to see a National Advocacy Service introduced, supporting individuals with a learning disability to hold their local authority to account. — Mencap believes that for localism to work it needs to be outcome focused and not guided by a cost-cutting agenda. Only then will it bring better result for individuals on the ground. Background Information — Mencap is the voice of learning disability. Everything we do is about valuing and supporting people with a learning disability, and their families and carers. — We work with people with a learning disability across England, Northern Ireland and Wales. All our services support people to live life as they choose. Our work includes: (a) providing high-quality, flexible services in things like housing, employment, education and personal support that allow people to live as independently as possible in a place they choose; (b) providing advice through our help-line and website; and (c) campaigning for the changes that people with a learning disability want. — We work with people with a learning disability of all ages. All our services are tailored to the individual so we can provide support throughout their life. Consultation Response The role of local authorities 1. Mencap believes that the local authority has the role of delivering services at a local level, including the important role of market shaping. Although the Government is best placed to lead, local authorities are best placed to strategically plan and implement the joined-up approach, as a ‘one-size-fits-all’ model does fail to factor in the make-up of local agencies and the demographics of the local community. 2. Mencap sees an active role for local authorities to lead on local negotiations, and in the decision-making of how a service should be delivered. Mencap also believes that there are some areas where a greater devolution of power to local decision-makers is likely to have a positive effect, i.e. for example in planning. Currently, the lack of affordable housing is restricting the opportunities for people with a learning disability to live independently, and local authorities and individuals being empowered to make the decision to build more homes could potentially help improve this situation. 3. However Mencap is concerned that devolving decision-making further to the local level than it currently is, in the manner that seems to be proposed, may lead to the vulnerable in our society, including those with a learning disability, loosing out. As people with a learning disability are generally a minority and often not as visible in public life, we fear that their needs could be sidelined for the calls put forward by the majority who are non-disabled and may be more vocal. The issue of accountability 4. The Government has a clear vision of how accountability within the localism context would work; democratic accountability is to replace bureaucratic accountability. Mencap would argue that a balance between the two is likely to be the answer, particularly where the needs of people with a learning disability are concerned, some bureaucratic accountability is required to safeguard vulnerable people. 5. Relying on democratic accountability alone will lead to a greater politicisation of issues that should be beyond politics. Furthermore, more would need to be done that all sections of society are engaged in the democratic process; experience has shown that many people with a learning disability are excluded from it.

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This is exemplified by that fact that in 2005 less than 1 in 5 people with a learning disability voted in the general election. 6. One element of reducing bureaucratic accountability suggested in the coalition programme is the reduction or removal of inspections, as manifested in the decision to do away with Comprehensive Area Assessments. Mencap believes that some quality control needs to be in place and enforced, as democratic accountability alone will struggle to fulfil this role. Those most at risk of failures by local authorities are people who receive services, including those with a learning disability. 7. Mencap would welcome a greater role of Learning Disability Partnership Boards (LDPBs) on a local level, as a form of democratic accountability. However, without LDPBs being given greater powers to influence decisions on the local level, their existence will not enable people with a learning disability to hold decisionmakers to account. In addition, we are aware of LDPBs being dismantled or reviewed in light of the current financial crisis, which calls into question their greater role in this context. Mencap opposes this in light of the localism agenda. 8. There are a number of potential issues emerging out of the interaction of “localism” and the big society idea, which are likely to lead to more services being outsourced to charities and private companies. Contracts between local authorities, who have and should continue to have duty of care, and outside providers are often inadequate in that they make it very difficult for local authorities to hold providers to account, and therefore in turn also for individuals. In addition there is a tension between the patterns of larger contracting arrangements versus real choice of services for people, which again makes it difficult for individuals receiving services to exercise “accountability”, albeit via the market route. In times of financial constraints, smaller specialist providers of services are likely to be undercut by larger, national or even multinational organisations. Again this compromises quality, and also has implications for accountability, as local individuals will find it difficult to hold national providers to account. 9. The localism agenda depends on democratic accountability. This raises questions over how well equipped individuals, including those with a learning disability, are to understand and scrutinise the workings of local authorities. Mencap would like assurances being made that engagement with the community would not only result in simply more consultations. Mencap would also like to see a National Advocacy Service introduced to support people with a learning disability to speak up. Making “localism” work for people with a learning disability 10. In order for localism to work and for it to deliver better outcomes for amongst others people with a learning disability, local authorities will need to have enough money available to them to ensure that the services they offer are of the quality that people would expect. Devolving power to the local level should not be done to deflect responsibility to local authorities in hard times, but because we think that local authorities are better placed to find good solutions. 11. For localism to deliver for people with a learning disability, more needs to be done to ensure that local authorities have an accurate understanding of the number of people with a learning disability in their area. Without this local authorities will fail many people in need of support. These should be closely joined up with Joint Strategic Needs Assessments, with the latter needing to be improved. 12. Mencap believes that there still needs to be some central control and enforcement mechanism to ensure that local authorities deliver the outcomes people, including minorities, such as people with a learning disability want to see. Democratic accountability, as touched upon above, can only ever be one side of the coin. To ensure that people with a learning disability amongst others will receive good services in the future, Mencap believes that safeguards need to be in place to ensure that local authorities must take into account the needs of the most vulnerable, even when finances are tight. 13. As touched upon above in paragraph 9, Mencap would urge local authorities to carefully assess and outline their contracting arrangements with providers to ensure that those receiving services receive the best possible available and are able to hold the local authority to account over potential failures. September 2010

Memorandum from Sitra Summary — Sitra is a voluntary sector charity that represents the views of providers and commissioners of housing, support and care services. We are best placed to comment on the provision of housing related support services to people who are experiencing disadvantage. — Our submission concentrates on localism, with reference to the experiences of providers and commissioners prior to, and post the removal of the ring fence for Supporting People and inclusion of the monies in the Area Based Grant.

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— During the period of mainstreaming housing related support within localities Sitra ran a Local Strategic Engagement Project (LSEP) which researched the impact of localism on the provision of services for people experiencing disadvantage. — Sitra and its members are concerned about the extent to which localism leads to effective public service delivery for people experiencing disadvantage. We believe there is a need for national and improved accountability for housing related support services. — Sitra is concerned that without national strategy and direction, the Government will not be able to keep David Cameron’s pledge to protect the poor, elderly and the disadvantaged. — The acceleration of the localism agenda coupled with the current climate of cuts in public services is resulting in local authorities being pressurised to make decisions that may result in short terms savings but lead to more costly interventions being required in the future. — The speed at which both agendas are being implemented means that valuable services are at risk of being lost and there is limited scope for localities to make strategic judgements. — In summary Sitra is recommending that the CLG Select Committee advise the CLG: — To develop national strategy and direction in meeting the needs of people experiencing disadvantage. — To put in place protective measures that ensure nationally raised monies for the expenditure on local services for people experiencing disadvantage is spent on those services. — To ensure that localities are accountable both nationally and locally in meeting the needs of people experiencing disadvantage. — To support the role of the voluntary sector both as an equal partner in the provision of public services and a community facilitator who can contribute to place based budgeting. Sitra Sitra is the umbrella organisation committed to raising standards in the housing, care and support sector. We are a membership organisation and a registered charity with over 25 years experience of offering practitioners a range of affordable policy, training, consultancy, information, conference and capacity building services. Our membership comprises almost 700 practitioner organisations in the field of housing with care and support. The membership elects the committee. Members are drawn from both providers and commissioners, and from the statutory, voluntary and private sectors. We operate throughout England, and have offices in London, Bristol, Newcastle and Birmingham. Our work covers all aspects of supported housing, together with associated activities such as human resources and staffing issues, financial management, and community care. We are recognised, funded and consulted by government departments and other bodies as representatives of providers of supported housing. We work with them on issues of national strategic significance for the sector. For example we have been working with CLG on developing the transition programme which supports organisations through the changes resulting from the removal of the ring fence, and with the Department of Health on taking forward the personalisation of housing related support services (Right to Control). The monthly Sitra Bulletin is widely recognised as a key source of technical information and policy development news throughout the supported housing sector. With a circulation of around 5000, it is the most widely distributed specialist publication within the supported housing sector. We supplement the Bulletin with regular briefings on matters relating to supported housing and its related fields. Sitra is also known as a leading training provider. Each year we train over 4,000 individuals across the country, either on our general programme or on tailor made in-house courses for members and clients. We also provide a range of seminars and conferences on supported housing related themes. Over 2,000 people attend such a Sitra event each year. We are therefore in a unique position of combining a detailed knowledge of the housing related support sector on the ground with an understanding of and engagement with developing national policy. Our submission is based in part on our general knowledge of the sector derived from our day to day work but also from a number of specific consultation and engagement exercises. These are: — A round table event was held on the 17 September 2010 with ACEVO which invited voluntary sector providers to consider the questions raised by the inquiry. The event was attended by a range of local and national providers who provide a diversity of services to people who experience disadvantage. — In 2009–10 Sitra’s Local Strategic Engagement Project (LSEP)specifically supported providers and commissioners in understanding, engaging with and influencing local strategic decision makers. The LSEP conducted research on the impact of localism on the provision of services for people experiencing disadvantage. This research comprised of : — Web survey undertaken by 23 providers and commissioners. — Detailed provider questionnaire responded to by 68 providers. — In-depth interviews with 11 local authorities officers. — Attending and consulting with commissioner forums in six regions.

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— Attending and consulting with 23 local provider forums. — Joint seminar held in 2010 with the Local Government Information Unit attended by statutory and voluntary sector representatives. — Meetings and telephone contact with voluntary sector providers. — The research culminated in an event on localism in July of this year during which 50 commissioners, voluntary sector providers and policy makers debated the impact of localism on the delivery of housing related support services. — A series of national “round table” events organised in partnership with the CLG during January and February of 2009 and repeated in 2010. These were attended by a total of 1000 people, including local commissioners, providers and other stakeholders. This significant national debate among stakeholders considered localism within the context of the removal of the supporting people ringfence. — In a questionnaire to members, which elucidated 91 detailed responses the potential impact of localism in relation to housing related support was explored. A specific set of questions to commissioners about commissioning structures, which elicited 39 responses. — Regional consultation events in the London, South West, West Midlands and North East regions, attended by 75 people. The views presented in this submission are therefore based on a solid body of evidence drawn from research in the housing with care and support sector on the impact of localism and the potential impact of further decentralisation. Sitra Response to the Questions in Italics As the submission should be no more than 5,000 word in length Sitra has concentrated on the questions we feel best qualified to contribute to. The extent to which decentralisation leads to more effective public service delivery; and what the limits are, or should be, of localism Sitra’s submission is that decentralisation has not led to more effective public service delivery of housing related support. It is our contention that those groups of people who are in receipt of non-statutory services are significantly worse off as these services are being reduced or cut in order for local authorities to make savings. We believe without a national strategy and process of accountability—groups such as those who misuse substances, from an offending background and those with multiple and complex needs will not receive the services they need. Those who experience multiple disadvantage are not in a position to hold the local authority to account as they form a relatively small part of the electorate, the rest of the electorate often do not perceive meeting their needs as necessary. These groups also do not have the advantage of seeking legal recourse against the Local Authority for reductions in the services they receive as those services have no statutory footing. In the round table events in 2009 and 2010 highlighted the views that the least popular groups would lose out as services are reduced. The LSEP 2010 provider questionnaire found that over 70% of those who responded they were concerned that new arrangements under localism presented more challenges to services for particular client groups—for example those with multiple/complex needs, substance misuse and offenders. The LSEP web survey found that the voice of people in localities who experienced disadvantage and were in receipt of preventative services was moving further away from decision making processes. Nearly half of respondents stated the needs of disadvantaged people within Local Strategic Partnership structures were given a low priority. The importance of this should not be underrated, as it is of note that the largest component of the Area Based Grant is made up of Supporting People monies which represents 34.5% of the grant nationally and in some areas eg Bournemouth over 50%. At the recent round table event providers were concerned that those people experiencing disadvantage had little or no influence over how the monies raised and allocated nationally to meet their needs was being used by Local Authorities. This appears to be counter to the Governments policy of local democracy and its directions of putting power in the hands of local communities and people. Sitra believes that it is right that officers with appropriate expertise are making recommendations, however, decisions about services should be made in a governance framework that ensures that elected members play their full part in scrutiny and oversight and there is accountability to the full electorate. A significant number of services are provided locally with funds that have been identified nationally by a Government who has indicated its responsibility at the helm of a civilised society is to take care of those who are frail in terms of age, disability and those simply unable to look after themselves. All providers at the September 2010 round table highlighted that David Cameron pledged the Government would look after the poor elderly and disadvantaged. We believe that national strategy best addresses the direction of travel for groups who experience disadvantage. The responsibility in meeting their needs spans Government departments and investments made by one department result in savings or benefits for another. Although services for those who are disadvantaged are best commissioned and provided locally, at that level it requires national direction to ensure that investment meets the Governments national objectives. National direction recognises that those who experience disadvantage need solutions that transcend local authority

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boundaries but in times of austerity local authorities will be under considerable pressure only to invest in services that benefit those with a local connection. In the 2009 questionnaire respondents expressed concern about this, particularly those providing services to women fleeing domestic violence, services where people need to move for their own welfare (eg young people seeking an exit from gang culture, sex workers trying to get away from their pimp/dealer) or more mobile social groups (gypsies and travellers, rough sleepers). It will be apparent that these are some of the most socially excluded and many fall into groups which some local councillors would be only too pleased to exclude from their area. The issue of the understanding of social inclusion is a serious one in the context of many local groupings of residents. The initial survey of members in 2009 found a limited appetite for the flexibility in the sector it was hoped that localism would bring. Some respondents suggested that the removal of the eligibility criteria would enable more holistic service provision, a more honest distinction between care and support (rather than one made to chase available funding criteria), and services that are designed to meet needs, rather than funding rules. Joint commissioning can lead to more streamlined and focused services. One respondent suggested that more flexible funding would enable the design of services based round communities rather than individuals. The round table and LSEP research however indicated that some providers experience is that this flexibility had only resulted in Local Authorities using the money to meet other priorities, continuing to keep contract conditions that prevented more holistic/innovative services being provided. Although it was recognised that the current climate of public sector cuts means that commissioner have perhaps not had the time and opportunity to be more innovative and creative. One of the overriding concerns regarding localism is the uncertainty of the shape of the landscape, and the place that those who experience disadvantage occupy in the landscape. Some providers have commented that the move towards localism is to be welcomed, as for many years’ local authorities having insufficient flexibility to respond to local need. The current acceleration however is too fast and too extreme; it would be more helpful to have a better balance between national direction and local provision. There was a belief at the recent round table that within this agenda voluntary sector providers have played the part of community facilitators. Under the Supporting People programme they have invested in structures both within local authorities, their own organisations and communities to ensure that services users had influence over decisions that were being made. Providers report the dismantling of these structures along with a lack of transparency in the decisions made by local authorities, prevent providers as community facilitators and their service users from the opportunity to shape their landscape. As one provider commented we should not just consider how far power should be devolved but the shape of that. The impact of decentralisation on the achievement of savings in the cost of local public services and the effective targeting of cuts to those services Housing related support services have seen disproportionate cuts in investment as local authorities struggle to implement the budget reductions required in the current climate. Housing related support services have identified that investment in preventative services relieves spending on more costly statutory services and prevents the need for more expensive intensive services. The Cap Gemini research (carried out in 2006 and updated in 2009) demonstrated that a national investment of £1.6 billion prevented £3.44 billion being spent from the public purse. Spending on preventative housing related support is in tune with the coalition Governments desire to keep people at home and in the community and empowered to have control over their lives rather than entering more expensive provision such as residential care. The cost benefit tool has been adapted for local data, but members report limited take up. Where the tool has been applied commissioners of housing related support have found little appetite amongst those responsible for making local strategic decisions to utilise the research. The overriding reasons for this are believed to be as follows: — That the investment in preventative service produce saving for the public purse or other statutory agencies and not the local authority — Current Investment in preventative services results in future savings however local authorities are experiencing pressure to make cuts now. In simple terms local authorities are being pressurised into realising short term gains through cutting investment in preventative and non-statutory services at the risk of increasing expenditure on more costly interventions in the future. The concern is that this short-sighted—albeit understandable—position in the current climate bears more than simply financial cost to central and local government. It is the human cost to those whose aspirations have not been fulfilled, and who have spiralled into a positions where they need more intrusive services and have less control over their lives. The families and carers who struggle with the consequences of caring for those whose needs are not being met and communities who experience lack of quality environment. At the recent round table event there was evidence that local authorities are not making strategic decisions about cost savings and simply indicating the monies for services for people experiencing disadvantage will be cut. In some cases this cut are already posited at 25–40%, with local authorities indicating if the national allocation experiences a reduction that will be simply added on. Sitra’s concern that pressure on public spending will lead to funds being diverted from support and prevention to other priorities including deficits, has been realised. Sitra has seen a loss of specialist commissioning for preventative services as Supporting People teams and commissioning and governance structures are dismantled. The LSEP research demonstrated that statutory

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partners and stakeholders in localities were not aware of the use and availability of housing related support to meet need and avoid more costly services. Sitra believe there was a missed opportunity for localities to include housing related support needs in the Joint Strategic Needs Assessment (JSNA) in the LSEP research the majority of local authorities indicated that their JSNA did not include needs for housing related support. The potential impact of this is when statutory and other partners come together to commission services to meet the needs in a locality based on the JSNA, the provision of housing related support is likely to be overlooked resulting in more expensive, intensive and possibly intrusive services being provided. The voluntary sector’s expertise in pulling together statutory and other forms of funding to provide services for groups experiencing disadvantage has resulted in innovative services that meet holistic needs. Services that are subject to cuts in statutory funding report that, loss of statutory funding could mean the loss of the whole service, including specialist housing provision. The impact of competitive tendering and the lack of investment in the voluntary sector has already seen a number of providers closing down, and a lack of choice for those who require services in particular smaller specialist organisations. The LSEP research demonstrated that the national compact and its principles are not being adhered to at a local level and that this results in an unequal partnership between the voluntary sector and local government. Some providers thought the Government should consider a radical view of decentralisation placing the power into the hands of the community. Some views put forward were to bypass Local Authorities and for Central Government place the resources for meeting the needs of people experiencing disadvantage in the control of voluntary organisations as community facilitators, however this would bring its own requirement for accountability and scrutiny. The lessons for decentralisation from Total Place, and the potential to build on the work done under that initiative, particularly through place-based budgeting Sitra believe that the voluntary sector has a role to play in contributing to place based budgeting. The voluntary sector has had a strong history in working with a plethora of statutory agencies, the private sector and communities to meet the needs of people experiencing disadvantage. Many voluntary sector organisations have their roots in philanthropy which epitomises a total society response to protecting the poor elderly and disadvantaged—indeed—what we understand to be the Big Society. The voluntary sector could be instrumental in taking the lead in Place Based commissioning, as one participant stated at the recent round table taking statutory agencies by the hand and explaining to them it is not dangerous to collaborate and we will look after them. Another provider commented that the “right to bid” could be used in line with place based commissioning by the voluntary sector who are well versed in putting pieces of funding together to meet local need. In order to do this there needs to be a robust voluntary sector that is treated as an equal partner within the Place Based commissioning process. There are some positive examples of voluntary sector organisations coming together to decide on a vision of what a city or community needs and achieving this using social enterprise: The role of local government in a decentralised model of local public service delivery, and the extent to which localism can and should extend to other local agents Voluntary sector providers play an important role as community facilitators. Large and small voluntary sector providers have been providing services which place choice and control in the hands of service user, promoting community engagement and developing their role as place shapers. There are many examples of Housing Associations involving communities in regenerating their environment and smaller local agencies bringing communities together to improve their landscape. The cuts in public services are posing challenges to this work not least in that local authorities also deliver public services for example services for older people, people with learning disabilities etc. Providers have reported that they believe that they are not competing on a level playing field and that the scrutiny and monitoring of the cost effectiveness of local authority provided support services should be the same as the voluntary sector. This would ensure that commissioning decisions were made fairly. What, if any, arrangements for the oversight of local authority performance will be necessary to ensure effective local public service delivery The removal of the Supporting People ring fence has been a valuable exercise in appreciating the impact of local authorities having the freedom and flexibility to meet local need with national investment. However as stated before this has left funding for disadvantaged people particularly vulnerable at a time when local authorities are under pressure to make cuts in expenditure and as highlighted above are looking to make immediate savings even where this may result in increased spending in the future. The flexibility of the mainstreaming of funding originally specifically for housing related support has been reported to Sitra as resulting in cuts in this provision as Local Authorities divert this to other priorities. When the ring fence was removed the Select Committee inquiry highlighted the need for the Comprehensive Area Assessment to ensure that the needs of vulnerable people were being met and were concerned about the relative maturity of the Local Strategic Partnerships. The committee also recommended that CLG should have a more ambassadorial role. It is our understanding that this has not been the direction of the department.

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Sitra remain concerned that Local Strategic Partnerships are not mature enough to hold Local Authorities to account for spend on services for disadvantaged people, despite the biggest component of the Area Based Grant comprises monies originally for this purpose. It is not sufficient that accountability for spend on services for the poor, elderly and disadvantaged should rest with the electorate, when their only recourse is to vote every four years. At the recent round table providers believed that if power is truly to sit with local people and the community accountability to them and their inclusion has to have a statutory basis. The local community should have statutory powers and duties. The LINk initiative was cited as a model of local accountability as there are statutory requirements for the oversight and scrutiny committee to respond to issues within defined timescales. Since the removal of the Comprehensive Area Assessment it is difficult to see how local authorities are held to account on meeting the needs of disadvantaged people especially are providers are reporting a lack of transparency in local authority decision making. Providers have highlighted the need for local authorities to be more accountable to communities including voluntary organisations in their role as community facilitators. In addition to this there is a role for national Government though the development of national strategy including a mechanism for monitoring and compelling local authority adherence. How effective and appropriate accountability can be achieved for expenditure on the delivery of local services, especially for that voted by Parliament rather than raised locally Sitra believe that the Supporting People programme could be used as a blue print for effective and appropriate accountability for monies raised nationally. The programme was expected to be accountable nationally by reporting against National Indicators. Indeed many localities chose the specific indicators relating to vulnerable people and information was gathered nationally by CLG on spend on people experiencing disadvantage, The governance, commissioning and procurement of services was also accountable at a local level with structures set up that ensured that service users had a voice in decision made. The usefulness of these structures was apparent as the LSEP research found that they were still in place despite the monies being mainstreamed and included in ABG. More recent contact with providers and commissioners has indicated that this picture is changing and structures are being dismantled and expertise lost as saving efficiencies take priority. In this event it is untenable that the accountability for national monies is simply devolved to the local electorate. National Government has a responsibility to the tax payer who is part of their electorate that monies paid for the delivery of public service locally are spent wisely and effectively. In the recent round table providers, as members of the national electorate and tax payers, believed that Government also has a responsibility to the electorate to make good their pledges in this case looking after the poor, elderly and disadvantaged. In order to do so they must have mechanisms in place to ensure that local spend of national money meets the intended purpose. Recommendations General Recommendations — That the Government develops a national strategy on meeting the needs of people experiencing disadvantage and need the provision of housing related support or preventative services and this should be the responsibility of Communities and Local Government Department. That the strategy places obligations on local authorities in meeting the needs of those disadvantaged in their locality. — There needs to be national investment in role of the voluntary sector particularly if the Government is referring to this sector as the first sector. The Compact Commissioner should have powers to enforce adherence to the compact at a local level. — Commissioning decisions made by a local authority between local authority or voluntary sector provision of services made by a local authority are subject to scrutiny by national Government. — The voluntary sector use their expertise to play a lead role in place based budgeting. — Central Government should ensure that local authorities are obliged to have representation from the voluntary sector organisations both as providers or services and community facilitators in place based budgeting. Specific recommendations linked to Localism and Housing Related Support Sitra would like to propose that the Select Committee recommend that the CLG: — Consider investing real time in exploring whether to reinstate the ring fence for the monies formerly known as Supporting People with grant conditions that require the spend to be on housing related support. If the Select Committee are not minded to recommend the above Sitra would like the propose that the Select Committee recommend that the CLG: — Explore the potential of ring fencing the proportion of the housing related support that is currently being spent on preventative services for those groups who are not in receipt of statutory services and who have been identified earlier in this submission as most vulnerable to experience loss or reduction in services.

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In addition, Sitra would like to propose that the CLG develop a number of protective measures: — Enabling service users to ask for a judicial review of a decision to withdraw funding for housing related support services. — CLG to have clear responsibility for leading and ensuring delivery nationally of a strategy for responsive client orientated housing related support services. — That local authorities are required to consult on and publish and regularly update a needs-based strategy detailing how they will meet the housing related support needs of vulnerable and socially excluded people in their borough. This to include how decisions will be made on the provisions of housing related support services and stakeholders including how people experiencing disadvantage will be engaged. — That in each local authority there is a mandatory named officer with responsibility for ensuring delivery of the strategy and maintaining the necessary levels of expertise. — Where local authorities are decommissioning services for people experiencing disadvantage they have to publicise this on their web site and what provisions are replacing these services to those in receipt of services. — That the CLG devise a mechanism to ensure that that LSPs are both nationally accountable and accountable to their communities on how well they are meeting the needs of those people experiencing disadvantage. — In any forthcoming review or replacement to the National Indicator set—an outcome focussed measure is designed which encourage local authorities and LSPs to make housing related support a priority demonstrates the quality of services delivered and outcomes. Consideration should be given to making this mandatory. — That the value of early intervention and preventative services is recognised and that the cost benefits realisation model for supported housing is regularly updated at a national and local level and that local results from the model are collated centrally to inform the national picture. — The CLG continues to publish the amount of ABG allocated to local authorities and what proportion of this comprises of nationally allocated monies for housing related support. — That the GLC consider a formal structure and statutory duty for local authorities to be held to account by and engage with their electorate and those who represent their electorate. September 2010

Memorandum from the Centre for Public Scrutiny The Centre for Public Scrutiny is a charity dedicated to promoting the value of scrutiny and accountability in the public sector. The bulk of the work that we do relates to local government. The main points of our submission are: — that the move towards increased decentralisation is a welcome one; — that steps need to be taken to ensure strong and effective local accountability as a crucial element in decentralisation plans; — that there may be significant risks arising from the pressure to make immediate financial savings, and the willingness of Whitehall departments to devolve power, which could conspire to make effective decentralisation more difficult; — that partnership working makes governance and decision-making opaque and complicated, with leadership and responsibility being shared between many different local organisations; — that flexibility rather than an adherence to existing structures will be a theme in the coming month and years, further complicating the picture across the country; — that any local accountability framework will need to take account of all these issues; and — but that, notwithstanding the above, decentralisation offers a vital opportunity to make services more effective, more responsive and more accountable to local people. We will address each of the Committee’s lines of enquiry in turn. For our submission, we have defined “localism” as the principle by which power is devolved to local communities—either giving individual citizens the right to directly influence decision-making, and/or ensuring that local bodies delivering public services have a significant amount of discretion over the service they provide. As we will explore later in our submission, these two elements can occasionally come into conflict. Localism could be about very local, neighbourhood-level decision making, but we will be focusing on what it means in terms of decision-making across a single local government area. There will be circumstances where it will be appropriate for local organisations to join up to align strategy across one or more local areas, and this should still be seen as localist in terms of devolving power from the central, national state.

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The extent to which decentralisation leads to more effective public service delivery; and what the limits are, or should be, of localism We believe that decentralisation has huge potential to make public services more effective. Where more discretion and power is given to local people and bodies, they are able to make decisions which are more in tune with the needs of local people and help to meet those needs more effectively. Decentralisation also allows local people to have much more influence over the decisions made in their name, which could bring some significant benefits for civil society as well as more engagement in local politics. A fundamental element of this decentralisation must be a mature approach to accountability. A lot of the debate hitherto has focused on the freedom for local communities to make decisions, but contingent upon this is the requirement that there needs to be an equal local mechanism to hold the people making those decisions to account. Such local accountability needs to be credible (in terms of having the powers and resources necessary to justify a position of local influence) and legitimate (in involving local people, and being led by people who are selected, or elected, by local people or groups). Furthermore, such a system needs to have utility—it has to demonstrate that it can succeed in improving services, rather than just providing accountability for its own sake. This conclusion derives from our recent research “Accountability Works”, which we attach. We think that a local authority’s scrutiny function—in partnership with other non-executive bodies in the locality—can fulfil these three crucial criteria, and that strengthening local accountability, through scrutiny as well as through other means, is a crucial component of decentralisation. To move onto the limits of localism, there will always be elements of public policy making that will need national control such as defence and foreign policy. There may also be circumstances where national considerations will override local ones. The key principle is to balance competing interests within an understandable, and equitable, framework. Decentralisation will—and should, so long as there are strong and effective means whereby local communities can influence decisions—lead to significant variances in the nature of service delivery in different parts of the country. It may be appropriate for Government to agree and monitor a set of national minimum standards for certain “life or limb” services or in order to achieve certain social goals, leaving others to the discretion of local people. However, even if this were to happen, decentralisation will still lead to suggestions of “postcode lotteries”, although it is worth bearing in mind that most complaints about the “postcode lottery” are made about access to NHS treatments where different commissioning decisions have been made at local level by Primary Care Trusts. We believe that the critical issue is about accountability: PCTs, regardless of their strengths, are largely invisible at local level and people do not know how to influence or hold them to account for their decisions about levels of service provision. Some thought will need to be given, very soon, to how localism will work in practice—where responsibilities will be given to local authorities, when they will pass directly to local people and how this all fits in with the Government’s plans for the Big Society. We expect to see these themes crystallised in the Localism Bill later in the autumn. This clarity will be vital in helping local people to understand the process, and in making the process of governance and accountability for decision-making open and accessible. The lessons for decentralisation from Total Place, and the potential to build on the work done under that initiative, particularly through place-based budgeting We have carried out detailed research into Total Place and the way it is influencing the trend towards increased localism. The Total Place pilots demonstrate the great potential of this work—not just to save money but to radically enhance services. In our view there are a number of lessons that can be learned from Total Place: — that implementing proposals for closer joint working has the potential for significant complexity in governance. Unless new decision-making and governance models are developed, leadership can be atomised where budgets and responsibilities are shared in this way, and a flexible and responsive area-based system for accountability is vital to the longterm success of Total Place and place-based or community budgeting; — that, given the necessary freedoms (including the removal of ring-fenced budgets and the significant reduction in central inspection) there are opportunities for local areas to save billions of pounds per year; — that savings will be difficult to achieve immediately. The true benefits of Total Place may only come to pass from 2015 onwards. This is because joint working and savings are predicated around the pursuit of “invest to save” policies—early intervention and prevention which mean that, by joining up with other local agencies to take action now on so-called “wicked problems” (deprivation, poor education, poor health outcomes) significant amounts of money can be saved down the line in acute services (such as prison, hospitals etc). However, the argument for “invest to save” may be difficult to make in an environment of financial austerity;

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— there are some possible “quick wins”, savings-wise, from Total Place. Collocation of staff and shared services offer some significant opportunities, but organisations will need to be careful not to tie themselves into structural arrangements that might not be appropriate in the long term. Furthermore, where structural changes are proposed, it will be vital for non-executives in the organisations concerned to have a role in challenging any proposals to ensure that they are as robust as possible, and that estimated savings in fact come to pass; and — that potentially some of the most useful lessons for decentralisation come from Total Place’s emphasis on learning from “customer insight” which would drive services to be more responsive to local needs and experiences and less driven by central prescription. A useful test on whether services should or should not be decentralized might be to ask whether central prescription presents a barrier to services being able to respond effectively to customers’ needs—including the needs of those who may not currently be customers but who perhaps ought to be. The role of local government in a decentralised model of local public service delivery, and the extent to which localism can and should extend to other local agents Total Place cannot merely mean Total Council, and it can be expected that decentralisation will lead to more local discretion in all local agencies, although as the only locally democratically elected agency, local government can expect to play a leading role. The benefits of Total Place can only be realised if all local agencies are given more independence. Some of the reforms being introduced by the Government will also involve local government playing a stronger role, for example in policing and healthcare, although other reforms, such as the introduction of “free schools”, reduce local government’s role. True decentralisation must mean increased mutual understanding, negotiation and liaison over needs and priorities. Leadership will need to be more complex because no one person or group of people will have prima facie leadership responsibility for all services in the area (with the possible exception of executive mayors in England’s 12 largest cities, subject to legislation and referenda). In this environment effective governance, openness, transparency and accountability will need to be carefully planned, designed and delivered because it, too, will need to involve joint working between a wide variety of local partners. We explore this issue in more detail in our recent publication, “Accountability Works”, which suggests the existence of a “web of accountability” in the public sector which informally links the roles of non-executives working in a variety of organisations. These non-executives need the freedom to be able to link up their work and investigate issues of mutual concern. The action which will be necessary on the part of Whitehall departments to achieve effective decentralised public service delivery The challenge for Whitehall is significant, and there is little evidence that central Government has so far considered seriously what decentralisation will mean for it. The twin themes of community budgeting (Total Place) and decentralisation will require much more effective joint working at Departmental level, both in Whitehall and in the planning and operation of more local delivery units. There is concern, which we share, that the inability and/or the unwillingness of Whitehall to recognise the vital part it must play in this transformation will act as a significant brake on decentralisation. For example: — The increased use of the formula grant rather than ring-fenced funding for local agencies. — There will probably need to be a more specific role in programme management for the Cabinet Office or an “Office of the Prime Minister”. — Priorities may have to be developed on a cross-Government basis. — Departmental boundaries will have to become much more fluid. — There may be a necessity to set up more joint delivery units for issues which cut across departmental responsibilities, which could lead to complexity in the machinery of government and an increase in the number of quangos. Counter-intuitively, the creation of a decentralised state at local level may require more centralisation at national level, and the diminishing of the autonomy of individual spending Departments, to grant local agencies maximum flexibility to make their own decisions. The impact of decentralisation on the achievement of savings in the cost of local public services and the effective targeting of cuts to those services We have already discussed the potential of Total Place to help deliver significant savings, but it will be vital to continue to take a value-based approach to service delivery rather than to focus on cutting costs. At the moment, a cost-cutting approach will lead individual bodies to retreat into organisational silos to find ways to make cuts to their own budgets. This could lead to significant tension between different agencies, as it did several years ago when “cost-shunting” between the NHS and social services departments of local authorities served to sour the relationships between many councils and PCTs.

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Effective decentralisation will help to deliver savings in the long term (as we have discussed). However, meaningful decentralisation will (like devolution) be a process, not an event—as such, it is unlikely to result in immediate benefits to the public purse. To be sustainable, savings need to be planned carefully. Short term savings plans may serve to reduce capacity in local areas, and to reduce the ability of agencies to take on the additional responsibilities that decentralisation will bring. We want to emphasise again the importance of accountability in securing effective decentralisation of power. If accountability is approached intelligently, it can provide a powerful method for identify savings and efficiencies in local services, based on independent research and the views of local people. The scrutiny process, for example, will provide an excellent opportunity for local agencies to engage in discussions with local people about savings plans. What, if any, arrangements for the oversight of local authority performance will be necessary to ensure effective local public service delivery We agree with the principles set out and agreed between the LG Group and CLG around local self-regulation. Sector-owned improvement activity must be the means for enhancing performance. However, we are keen to see a number of changes to the approach suggested thus far: — A more central role for non-executives. Hitherto the focus of the self-regulation discussions have been on peer review. Peer review provides a powerful tool to share best practice, and is locally-owned. However, it can run the risk of not engaging with local people, and is not a continuous process. By involving non-executives (scrutiny councillors, as well as others in the local community who have a formal, non-executive role) accountability and improvement can be joined up. Scrutiny provides an opportunity for the public to get more involved, through the design of reviews and investigations which specifically address areas of public concern, and which will inevitably be more outward facing than the peer review process. We are concerned at Government proposals which may result in many authorities dispensing with their scrutiny functions in favour of a return to the committee system of governance. While we recognise that the values of scrutiny and accountability should override concerns about structures and processes, we are concerned that a removal of a formal scrutiny function in some local authorities will lead to a significant mismatch between executive and backbench power (this having been a key reason for establishing scrutiny in the first place, following the Audit Commission’s 1990 report, “We can’t go on meeting like this”). Strong, independent local accountability, led by elected members, is indispensable to transparent decision-making and will only become more important as partnership working increases and central government inspection and oversight decreases. Scrutiny occupies a unique and pivotal niche that no other group, person or organisation can fill. — An expansion of the idea to take in other local public agencies. One of the significant benefits of the Comprehensive Area Assessment (CAA) approach was that it cut across all public agencies in an area. We have a serious concern that the proposals for structural change in the local public sector at the moment (in local government, education, police and health in particular) will serve to fragment accountability, governance and improvement in local areas when it should be further joined up. Any move towards a specific form of sector-led inspection in local government should, we think, involve other agencies as well. Peer reviews, for example, could and should be area-based rather than focusing on “the council” as a discrete organisation. — A realistic and proportionate approach to performance management. While the dismantling of the centrally-mandated performance regime that was an intrinsic part of CAA, and associated measures being reported to other Government departments, should be welcomed, care must be taken to prevent the maintenance of a culture of process-based targets. We are concerned that further refinements to the proposals around self-regulation may see the creation of a “core group” of indicators, or a “pared down” national framework, which will bear more than a passing resemblance to the National Indicator Set. Although we recognise the importance of ensuring that nationally-comparable data collection is carried out, for the purposes of national and local business and service planning, this should be proportionate. Importantly, it should also be outcome-based. Measures and indicators must focus on tangible improvements to people’s lives on the ground, which can be difficult to measure. — The retention of links between financial audit and assessments of effectiveness, to maintain a consistent approach to value for money (VfM). We will expand on this in the next section. Overall, it is vital that some of the lessons learned from the Comprehensive Area Assessment are brought to bear on a new approach to central inspection for performance. Although CAA was widely criticised it had some significant strengths—it was a continuous process (allowing a more proportionate and realistic approach to be taken to performance) it was area-based (discussed above) and it recognised the difficulty of comparing authority with authority, by its abandonment of the CPA star system in favour of the more nuanced—and understandable—red/green flags.

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How effective and appropriate accountability can be achieved for expenditure on the delivery of local services, especially for that voted by Parliament rather than raised locally. As we have pointed out above, the accountability implications of enhanced localism are significant. Transparency is an important issue. The Government has recognised this by requiring local authorities to publish items of expenditure over £500. However, transparency on its own will not deliver effective services or accountability and this requirement will need to be bolstered by an enhanced culture of openness in the public sector more generally. Furthermore, it will be necessary (with increased partnership working and the sharing of budgets) for this requirement to publish expenditure to be extended across all public agencies delivering services locally, as well as private bodies spending public money. The placing of this large amount of expenditure information in the public domain is based on an assumption that an “army of armchair auditors” (as various members of the Cabinet have described them) will use this data to hold decision-makers to account. While we accept that this is possible (and, in fact, likely, for information that is nationally important), at local level it is less certain that this will come to pass. The local press now lacks the capacity to analyse this kind of data in detail in most parts of the country; local people, too, may not necessarily have the skills, the time or the inclination to pore over detailed expenditure figures, especially if they are provided in a less than understandable format. Even if they can, there is no guarantee that they would be able to influence the views of the decision-maker. We think that there still needs to be a formal method (or methods) for assuring the effective and value-formoney spending of public funds. Non-executives (in particular, scrutiny councillors) should sit at the centre of this process. Scrutiny members have the resource in many parts of the country (through officer support) to use this data effectively, and to focus on areas of importance to local people. As democratically elected representatives, local councillors have a responsibility to scrutinise spending by public officials and this offers another way for the public to challenge spending. However, it is not just the amount that is spent but what is delivered as a result. Democratic scrutiny requires those responsible to explain in public the actions they have taken and to answer questions about how effective the spending has been and what the results were. It can also ensure that the experience of customers is heard in public and taken into account, facilitating choice and competition. If localism and decentralisation means doing things differently in different parts of the country, we may need to accept that there will be different structures of accountability in different parts of the country. This is why principles of openness, transparency and involvement are in some ways more important than the precise structures that are chosen to put these into practice. We might see different models developing, depending on how far local organisations choose to take a Total Place approach, or a “Virtual Council” approach, or any other approach appropriate to their local and political culture, for example: — A Public Service Board model of executive governance across all public services in a local place. — A Commissioning Council model with more distributed governance across a range of organisations and perhaps more focus on customer accountability. — A more traditional Public Stewardship model of governance based firmly around democratically elected councillors. — A shared services/shared governance model which might employ different kinds of accountability according to the configuration of different services, particularly if jointly provided across different organisations or several local areas acting together. These are of course not exclusive, but are intended to illustrate that form should follow function and that this applies to governance and accountability as much as to anything else. Comparative Information It is difficult profitably to compare English local government with that operating in other countries. Lessons from elsewhere are likely to have limited applicability because local service delivery is bound up in wider structural issues relating to the operation of Government more generally, and to social, cultural and political issues beyond the purview of this enquiry. Some limited lessons might, however, be learned from the experiences of Commonwealth countries whose systems of governance most closely resemble that of England, and to the United States, where strong and highly local civic leadership forms a central part of citizens’ relationship with the state. For example, in South Africa, Johannesburg has for some years been trialling an executive/scrutiny split in decision-making which is now being rolled out across the country and it would be interesting for the inquiry to examine why they have chosen to adopt this model of local governance from English local government. September 2010

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Memorandum from the Chartered Institute of Public Finance & Accountancy (CIPFA) Executive Summary — If local agencies and specialist agencies are given access to the necessary levers, they are well placed to make decisions which best serve the public interest and the needs of local communities. — Where Central Government feels that there is a compelling need to regulate the conduct of the public bodies, CIPFA would recommend the use of codes and guidelines rather than resorting to costly legislation. — CIPFA believes that the Government should use the Comprehensive Spending Review to fully explore the potential of place-based budgets to enable more efficient and effective public services. — It is important that localism is about more than subsidiarity. Local agencies working in silos is not a recipe for improved services. There must be incentives to encourage joined-up working wherever appropriate. Measures of performance should be focused on outcomes from the perspective of citizens and service users. Value for money should be considered from the perspective of the public purse as a whole. Local authorities have a central role in terms of ensuring effective democratic accountability. — Effective dialogue and trust across Whitehall and between the centre and local public bodies is key to developing high performing decentralised public service delivery. — The key focus should be on equipping local residents with the tools and information they need to challenge local decision making. As part of this drive it is essential to make data available in a way that enables citizens to help shape future choices rather than merely contest past decisions. — Government should introduce disciplines to ensure that its conduct does not inadvertently impair the accountability arrangements of local services to local communities. Introduction 1. CIPFA, the Chartered Institute of Public Finance and Accountancy, is the professional body for people in public finance. Our 14,000 members work throughout the public services, in national audit agencies, in major accountancy firms, and in other bodies where public money needs to be effectively and efficiently managed. As the world’s only professional accountancy body to specialise in public services, CIPFA’s portfolio of qualifications are the foundation for a career in public finance. 2. We also champion high performance in public services, translating our experience and insight into clear advice and practical services. They include information and guidance, courses and conferences, property and asset management solutions, consultancy and interim people for a range of public sector clients. 3. Globally, CIPFA shows the way in public finance by standing up for sound public financial management and good governance. We work with donors, partner governments, accountancy bodies and the public sector around the world to advance public finance and support better public services. The extent to which decentralisation leads to more effective public service delivery; and what the limits are, or should be, of localism 4. In 2009, CIPFA and the Society of Local Authority Chief Executives and Senior Managers (SOLACE) undertook a series of workshops with senior managers from across the public sector to consider how the public sector should react to cuts in spending and what the implications of such cuts might be. 5. One of the issues raised during this work was the need for significant delayering of the public sector with many more decisions taken locally with minimal oversight. If deep cuts in public services are necessary it is best to make many of those difficult decisions at local level where they can have regard to local needs and circumstances. That means a shift away from the uniformity of national prescription and targets, in favour of different service offers and standards in different communities. 6. Difficult spending choices will still be necessary of course. However, if local agencies and specialist agencies are given access to the necessary levers, they are well placed to make decisions which best serve the public interest and the needs of local communities 7. That said, though much maligned as skewing outcomes, targets and guaranteed service levels are important tools to encourage more consistent standards and practices across the public services. Despite their bad publicity, they help to set users’ expectations and to ensure that the user experience aligns with expectations. So in this shift away from prescriptions from central government, there may be circumstances when the Government will wish to set a central minimum standard, although it would be hoped that central prescription could be kept to a minimum 8. Where Central Government feels that there is a compelling need to regulate the conduct of the public bodies, CIPFA would recommend the use of codes and guidelines rather than resorting to costly legislation. The Government has made public its desire not to manage public services from the centre and the use of codes and guidelines is very much in line with this thinking.

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9. The introduction of the Prudential Code for Capital Finance in Local Authorities in 2004 provides a concrete example of how localism’s benefits can be maximised within a clear framework of best practice. The code allowed an additional £3 billion of capital spending in the first two years of its introduction whilst ensuring that capital investment remained affordable to individual local authorities. The removal of central controls has allowed local authorities to work in partnership with health and other local service providers to support joined up local public services. 10. The Prudential Code provides a robust and transparent framework for local authority borrowing and replaced the previous complex regulatory regimes. It succeeded in removing a mass of detailed regulation by replacing it with a principle driven regime requiring local decision and its application in local circumstance. The Code has consistently proved that local authorities can and do manage their borrowing prudently and in accordance with local needs and priorities whilst the application of the best practice framework provides reassurance that effective governance arrangements are in place. 11. The Prudential Code has laid the foundations for the current Housing Review which seeks to free up local authority social housing provision from central controls and constraints and allows for a future in which social housing can be properly planned and adequately funded. The lessons for decentralisation from Total Place, and the potential to build on the work done under that initiative, particularly through place-based budgeting 12. CIPFA believes that place-based budgets offer scope to rationalise and align public services to allow more effective joint working. The challenge is to maintain the alignment of responsibility and accountability for budgets that is both meaningful and practical. Local authorities must be given sufficient influence over budgets for functions for which they have strategic responsibility to allow them to exercise that responsibility, otherwise it becomes meaningless. 13. Total Place pilots have shown that where budgets for an area are looked at across organisations significant savings can be delivered and services improved as innovative approaches can be applied to intractable problems. 14. CIPFA believes that the Government should use the Comprehensive Spending Review to fully explore the potential of place-based budgets to enable more efficient and effective public services. 15. A key to the success of place based budgets will be to ensure that localities are empowered to work across traditional organisational budgets and maximise the impact of resources. CIPFA’s work on pooled budgets has shown that when local public bodies have a real will to come together to manage resources value for money can be significantly improved. 16. The Government may itself wish to consider the potential to use place based resource allocation models to send out a clear signal that silo based thinking cannot be allowed to dominate as public expenditure cuts begin to bite. This would be supported by removing a large element of the ring-fencing of resources that encourages silos between functions within organisations as well as between them. The role of local government in a decentralised model of local public service delivery, and the extent to which localism can and should extend to other local agents 17. Local authorities have a democratic mandate for the decisions they make on behalf of local areas. This gives them a unique accountability with which to deliver the aims of localism. If localism is to be extended to other agents then we would want to see them encouraged to work with local authorities in their local leadership role to ensure that local accountability remained. 18. Freedom for other agents to work closely with local authorities based on local priorities will be an important factor in extracting the maximum benefit from place based budgets and opportunities for coordinated public services. 19. It is important that localism is about more than subsidiarity. Local agencies working in silos is not a recipe for improved services. There must be incentives to encourage joined-up working wherever appropriate. Measures of performance should be focused on outcomes from the perspective of citizens and service users. Value for money should be considered from the perspective of the public purse as a whole. Local authorities have a central role in terms of ensuring effective democratic accountability. The action which will be necessary on the part of Whitehall departments to achieve effective decentralised public service delivery 20. As well as considering new responsibilities which might be delegated to local public bodies, Government should consider the case for new powers to enable local bodies to respond imaginatively to local need. CIPFA welcomes the Government’s announcement to grant councils a general power of competence aimed at encouraging innovation and remove uncertainties. We hope that the power will be drawn as widely as possible to remove any ambiguity. Similarly, the recent announcement to enable tax increment funding of development schemes, recognises the importance of initiatives to continue to stimulate local economies.

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21. Effective dialogue and trust across Whitehall and between the centre and local public bodies is key to developing high performing decentralised public service delivery; the introduction of the Prudential Code has given local government a proven track record that it will not use additional flexibilities irresponsibly but will use the opportunity to provide more responsive services to local needs. The impact of decentralisation on the achievement of savings in the cost of local public services and the effective targeting of cuts to those services 22. CIPFA believes that decentralisation of power to local authorities will help achieve savings in the cost of local public services, improve the effective targeting of cuts to minimise the impact on essential services and maximise cost savings where possible. 23. Despite similarities between many public bodies, there is no standard template of cost-saving solutions that is right for all circumstances. Much will depend on the requirements and wishes of the organisation’s users and customers, the current state of its services and its strengths and weaknesses in bringing about change. The size of the organisation and nature of any partnership it is in or could enter into will also be key determinants. 24. Leaders should ensure that systematic arrangements are in place to collect both quantitative and qualitative information about the needs, aspirations and priorities of users and customers. This should be a dynamic continuous process, recognising that requirements will vary as the prevailing economic climate changes. What, if any, arrangements for the oversight of local authority performance will be necessary to ensure effective local public service delivery 25. CIPFA believes that local accountability is the key to effective local decision making and governance. The key focus should be on equipping local residents with the tools and information they need to challenge local decision making. As part of this drive it is essential to make data available in a way that enables citizens to help shape future choices rather than merely contest past decisions. Local authorities extensive scrutiny functions should be used to hold local service providers to account. The current transparency agenda may help to support accountability but presents three challenges: — Turning data into information—Public bodies must give context and meaning to their spending data before they publish so that citizens can make genuinely informed judgements. — Engaging the many rather than the few—It is vital to reach out to the widest possible audience to attract a credible level of feedback. Making online information easy to navigate, with engaging information presented in a sensible format is therefore key. — Helping to shape future choices rather than contesting the past—Creating channels for feedback that help shape public bodies future choices rather than just contest the past is essential. 26. Local government is subject to a variety of reporting requirements already. For instance, there are statistical reports for national aggregation and comparison, such as the budget summary reports that give an overview of council tax nationally and there are reports designed to track national performance indicators or to brigade local government towards national strategies to name but a few. Moreover, councils must now publish all spending over £500 online. 27. CIPFA recommends rationalising the existing raft of reports so stakeholders are clear on where to go to find key information on the overall performance of a local authority whether through traditional or electronic means. To enable this, a code or guidelines for local government stakeholder reporting to ensure that local authorities are following best practice is crucial. Future development in local government reporting should therefore be about building on what is already there, to tie in non-financial information to the currently financially biased reporting. Any developments should also tie in with an authority’s broad communications strategy. 28. These are principles which CIPFA has long been advocating. In May 2008, CIPFA published a discussion paper entitled Telling the Whole Story: The Future of Stakeholder Reporting in Local Government. It set out CIPFA’s vision of re-invigorated stakeholder reporting in local government. This work is now coming to a conclusion and will provide a model for producing annual reports that are tailored to each authority’s individual circumstances and will help address the information needs of local residents. 29. The existing regulatory and professional requirements placed on the Chief Financial Officer are designed to ensure effective accountability for the financial performance of local authorities. The Chief Financial Officer has an explicit duty to act on behalf of local taxpayers and the need to provide them with effective and accurate financial information. How effective and appropriate accountability can be achieved for expenditure on the delivery of local services, especially for that voted by Parliament rather than raised locally 30. Strong and effective accountability arrangements are a pre-requisite for good public services. Whether the decision or action relates to policy-making or delivery of public services, it is important to make accountability arrangements as unambiguous as possible. Failure to do so will create a recipe for confusion and for public

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dissatisfaction. Government should introduce disciplines to ensure that its conduct does not inadvertently impair the accountability arrangements of local services to local communities 31. Capping of local authority budgets is a good example. Local authorities should be responsible and accountable for their decisions in setting of budgets and council tax. If Government gets involved to cap or freeze, or threatens to cap or freeze council budgets, confusion arises in the mind of the council tax payer. Both central and local government are liable to be held accountable for spending decisions over which they have less than full control. 32. Likewise, local accountability is weakened by the constant failure of central government to approve the revaluation of domestic properties for council tax purposes. Over time, out-of-date valuations eat away at the underpinning local rationale of the council tax and the principles allowing councils to run their own affairs which this Government has been at pains to support. 33. Again, where central Government wants to stipulate the conduct of the public bodies, CIPFA would recommend the use of codes and guidelines rather than legislation. Conclusion 34. CIPFA would be happy to provide further information on any of the points raised here and indeed give oral evidence to the Committee if requested. October 2010

Memorandum from the Audit Commission 1. The Audit Commission has until recently undertaken four major roles: audit, inspection and assessment, value for money studies and data matching. 2. This memorandum draws on evidence from the Commission’s work, which focuses on local public services, and addresses the final two points from the inquiry’s terms of reference: — What, if any, arrangements for the oversight of local authority performance will be necessary to ensure effective local public service delivery. — How effective and appropriate accountability can be achieved for expenditure on the delivery of local services, especially for that voted by Parliament rather than raised locally. Summary of Response — Devolving decision-making to the local level presents both opportunities and risks. Localism gives the public the opportunity to have a greater say over the delivery of council and other local services in their area. It gives local services more freedom and flexibility to respond appropriately to local needs. As well as benefits however, localism has risks, such as the risk of unacceptably poor provision for vulnerable people. (Section 1.) — Transparency is a necessary component of localism. Robust data can inform decision-making, improve choice and allow the public to hold elected representatives and public servants to account for the performance and the value for money of services. It supports probity and good governance and underpins open democracy. But transparent data must be fit for purpose, and local bodies responsive to feedback from the public. Data is often of a poor quality and can be difficult to compare meaningfully. (Section 2.) — Transparency adds to, but cannot be a substitute for, public audit as conducted under the three well-established principles intended to protect taxpayers. Auditors provide specialist professional judgement on behalf of the public because of the principles that: — auditors are appointed and their fees set independently from audited bodies, and therefore can speak without fear or favour; — auditors’ work covers not only the audit of financial statements, but also aspects of corporate governance, including regularity (legality) and propriety (probity), and use of resources (value for money); and — auditors report aspects of their work widely to the public and other key stakeholders. (Section 3.) — Transparency alone is unlikely to identify serious failure. It can prevent and detect some problems such as extravagant expenditure, but transparency alone is less likely to reveal gradual deterioration of services, particularly those services out of the public eye. Incidents of failure in public services will inevitably occur. During the Commission’s existence, we and our appointed auditors have uncovered many examples of serious irregularity and failure. We therefore recommend that any structure of service delivery and accountability must include a clear system for seeking to give early warning of failure and allow action to avoid or mitigate it. (Section 4.)

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Section 1: Opportunities and Risks of Localism 3. The government stated in The coalition: our programme for government that it would promote the radical devolution of power and greater financial autonomy to local government and community groups (Ref. 1). 4. The Commission agrees that devolving decision-making to the local level has the potential to improve outcomes for local people and to engage them more in the development of local services. We have stated consistently throughout our work that local bodies should aim to provide locally-focused services that respond to the needs of their populations. 5. However, while localism has the potential to bring about local improvements, the different parts of the emerging localist structure will have different risks—for example, appointing elected police commissioners; the new role of GP commissioners; elected mayors and free schools. The administrative and accountability arrangements developed to support each of these reforms should reflect these differences. The points raised in this submission would therefore have a greater or lesser degree of significance in each area of reform. Opportunities 6. The Commission’s recent research has shown that reform targeted by local bodies rather than national government is often more effective. For example, councils found the numerous national schemes to mitigate the recession confusing. Local interventions were typically quicker and more effective, but too few national schemes used the local knowledge and targeting that councils can provide (Ref. 2). 7. Our work has shown that targeting local services is more effective where councils engage with their communities. For example, councils get better outcomes for young people not in education, employment or training (by reduced lifetime costs and increased well-being) by engaging with young people in order to understand how to best support them (Ref. 3). 8. Decisions on priorities and entitlements are likely to be better where local politicians are accountable for them. For example, setting charges to encourage or discourage people to use services and, through concessions, targeting services at particular groups. In choosing how to use charges, local politicians make an important political decision about the services that users should pay for and the services subsidised by taxpayers. Because of the visibility of these charging decisions, local politicians can easily be held to account for them at the ballot box (Ref. 4). 9 Localism also brings opportunities through devolving responsibility to community groups. Local ownership and management of assets, for example, can help the establishment of local voluntary groups. However, there are obstacles to be overcome. While some councils are enthusiastic about community transfer, others have judged it to be too great a risk. Though manageable, there are real risks in putting valuable assets in the hands of groups that may not be able to own or manage them. In addition, nearly half of councils do not have accurate data in relation to the efficiency, effectiveness, asset value and running costs of their land and buildings (Ref. 5). Poor information therefore compromises the ability of many authorities to manage their assets effectively. Risks 10. Devolution also brings potentially greater risks: — Without a common performance management framework, the public will not be able to take a view on the standard of services in their area compared with others, including those other places most like theirs, where comparison can be particularly helpful. Commission research has found that council data analysts are often not expert and sometimes do not receive enough training and support. This results in data that is too often inaccurate and not fit for purpose. If the quality of data available to local citizens is poor, it reduces the capacity of local people to hold public servants and elected representatives to account (Ref. 6). — Councils may not share notable practice. There are some voluntary schemes to encourage councils to share learning, but their effectiveness is not yet proven. Until the introduction of independent assessment, there was little sharing of good practice across local government. The Commission’s 2007 study on innovation found that, where sharing examples of successful innovations with other organisations took place, improvements occurred elsewhere (Ref. 7). — Duplicating roles and services can lead to poor value for money and waste. Some roles may be more suitably designed or managed at a higher spatial level (regional or national). For example, our research with the NAO on collaborative procurement found that public bodies are incurring unnecessary administration costs by acting alone. National and regional markets for some goods and services exist (for example energy), which provide opportunities for local bodies to negotiate their prices collectively (Ref. 8).

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11. Localism also poses a risk around a postcode lottery, or variations in the level or cost of services experienced by service users in different geographical locations. Distinctions exist between: — Intended and transparent uneven service outcomes. For example, our 2007 study on charging found that locally determined charges for swimming pools vary significantly (between £1.68 to £4.75 for adults). This variation is intended, transparent and typically accepted by the public, who support more flexibility and local control for local services (Ref. 4). — Unintended or hidden uneven outcomes in services where users have little or no choice, such as social care. Variation in personal services for vulnerable people is often invisible, because they may not always be able or willing to scrutinise the personal services they receive. Individual service inspections can serve to highlight where services are failing to meet acceptable standards. 12. There is a risk that some areas may set low levels of provision60 for this second category of services. The public considers national levels of quality and cost to be desirable in such cases (Ref. 4). 13. Our research has also found that a defining feature of success in local areas is the quality of leadership rather than the administrative system in place. The government has proposed the 15 largest cities in England should have elected mayors. Commission research has shown that elected mayors enjoy high levels of local visibility and can use their personal mandate to provide clear leadership on important issues. Despite the fears expressed by some that the elected mayor model concentrates too much power in one person, we have not detected evidence that it has weakened standards of governance. Where the mayor publishes and explains decisions, for example on the internet, the model provides for transparent and accountable local decisionmaking (Ref. 9). 14. Successful leadership builds consensus around priorities and motivates public service workers to tackle the hardest challenges. Where local leadership is weak, and unable to build consensus or motivate workers, we have found that plans developed to tackle local priorities lack ambition and responses to critical inspection findings can be slow or inadequate (Ref. 10). 15. As the government devolves more power to the local level, we therefore believe that it should also develop accountability frameworks to ensure the effective scrutiny of local bodies. Ideally, such a framework would hold local bodies to account not just for their stewardship of public money, but also for the outcomes they achieve. It is important the public has access to independent, neutral and professionally judged information. Without the assurance independent verification of information brings, it will be difficult for members of the public to judge the services in their area. Section 2: Transparency 16. Government commitment to greater transparency of information is clear. We agree the public should have access to as much information as possible. Encouraging better use of information by and about public services has always been a priority for the Audit Commission (Ref. 11). 17. We have found through our audit and research that transparency supports: — Choice. Information can improve the decisions of those choosing the services they use, for example, schools or hospitals, and members of the public engaging in democratic processes. In recent years people in the UK have experienced greater choice in public services. National information such as Directgov, and local information such as NHS Choices, support the public in making choices, offering tailored information about services. — Accountability. Good information enables people to hold those responsible to account for the performance and value for money of local services (Ref. 11). It changes the behaviour of public servants, making them think twice before spending money or claiming expenses. Councils are sometimes using new technology to encourage communication with residents—helping them exercise voice. Publication also encourages improved service performance on its own. For example, publishing information on individual surgeons’ heart surgery success rates in the UK led to improved performance. This was not because of the public using the information, but because the doctors used it as part of the analysis of their practice (Ref. 12). 18. However, putting large volumes of data online does not automatically result in positive outcomes. Information will only result in greater choice and accountability if it is RQP—Relevant, of good Quality, and well Presented (Ref. 13): — (R) Information put into the public domain needs to be relevant to the people who will use it. Providing an ability to compare information, for example about public bodies’ performance, opens up additional uses for information, but it is useful only if it is defined carefully. — (Q) The underlying, raw data needs to be accurate, complete, reliable and high-quality. There’s no point in publishing reams of information if the underlying data is of a poor quality. Building data assurance in from the start is important. As is communicating data quickly, to ensure it is relevant. 60

For example, poor quality services, or services with limited coverage or inadequate safeguarding.

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— (P) Presenting information in an easy-to-understand and comparable way and communicated by methods that the public is likely and willing to engage with is important. Third parties may in future be able to process raw data and present it in an accessible format. However, the market for such “data mashers” has yet to develop, and some third parties will wish to add their own interpretation to raw data, rather than present it in a neutral format. 19. For transparency to be effective, the public has to be willing to use information, and public bodies have to be responsive to what the public says about that information—all the time, not just at election time. 20. However, the current position is far from perfect. Our work has found: — Significant errors in public information. In 2008–09, fewer than 5% of councils had excellent quality data (Ref. 6). The risk with all data is that if you put poor quality information in, you get poor quality information out. Financial data is typically more accurate than performance data, because professional accounting standards are uniform. Breaching accounting standards can lead to penalties and the law says a specific individual must sign off data quality (Ref. 11). However, performance and other information is as important to citizens as financial information. Because its accuracy rarely gets the same attention, it can lead to poor management and represents poor accountability (Ref. 14). — Poor organisational arrangements. As part of the 2008–09 use of resources assessment, our auditors considered whether organisations produce relevant and reliable data and information to support decision-making and manage performance. The assessment concluded that 87 of the 150 single tier and county councils and 152 of the 201 district councils met only minimum requirements or below. Only three single tier and county councils and one district council were performing excellently in this area (Ref. 15). Our 2009 report on data quality in the NHS showed that, despite recognising the need to improve data auditing and review, few boards were taking the issue seriously (Ref. 16). Producing and using good quality data entails having the right culture, people and systems to support it, but many local bodies do not. — Manipulation. Risks of manipulated data, offering a biased picture of reality, do exist. Our work on payment by results has found no evidence that NHS trusts are manipulating the system to secure unwarranted payments (Ref. 17), but there is clearly a risk that such gaming could happen. Our latest exercise found an error rate of 11% in clinical coding entries by NHS trusts but credited this to mistakes rather than gaming (Ref. 18). New arrangements should ensure that people do not have both the incentive and the ability to manipulate data. — Lack of public trust. The public response to the launch of data.gov.uk in January 2010 showed that citizens lack trust in government data (Ref. 19). — Lack of context or explanation. Public bodies that are already publishing their spending data often describe that spending vaguely. Without any contextual information it is difficult for members of the public to decide whether spending described only as “items purchased for resale”, “Lpc expenditure”, “materials purchase”, or “resources” represent value for money. The information currently published only gives a limited view of spending and does not relate it to performance. It excludes the true cost of activities, including salaries and internal overheads, so sheds little or no light on value for money. Section 3: Independent Audit 21. In the absence of effective transparency to date, external audit in the public sector (public audit) has played an important role in identifying financial and performance failure, and the problems with propriety, legality and value for money. 22. The Commission is strongly of the view that the fundamental principles that underpin public audit in the UK are enduring and need to be reflected in any new accountability arrangements. Transparency should complement, not replace, public audit. 23. Those responsible for spending public money are accountable for its use. The accountabilities attached to public money are special, because: — it is raised by compulsory levy—principally, taxation—so tax payers do not have the “exit option” that shareholders in the private sector have; — it can only be used for the purposes intended and authorised by law; — those dealing with public money must be able to demonstrate to citizens that they have conducted themselves in accordance with the highest standards of integrity and probity; and — there is often little, if any, choice of service provider, so citizens rely on external scrutiny to act as a spur for improvement. 24. Citizens, as taxpayers and users of services, must have confidence that public money is safeguarded, handled with absolute integrity, properly accounted for, and spent wisely, and that public business is conducted in accordance with proper standards. Effective external audit helps create such confidence.

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25. To be effective, public auditors must be—and be seen to be—independent of the organisations that they audit so that they cannot be improperly influenced by them. 26. The three principles of public audit are grounded in practice that developed over many years to safeguard public money. They were codified in 1998 by the Public Audit Forum, which brings together all the public audit agencies in the UK. The principles are that: (a) auditors are appointed independently from audited bodies; (b) auditors’ work covers not only the audit of financial statements, but also aspects of corporate governance, including regularity (legality) and propriety (probity), and use of resources (value for money); and (c) auditors may report aspects of their work widely to the public and other key stakeholders. First Principle of Public Audit 27. The first principle in particular is long-standing. Independent appointment dates back to 1864, when a select committee recommended that the appointment of auditors in local government should be completely independent of the bodies under audit. In 1976, the Layfield Committee of Inquiry into Local Government Finance concluded that it was wrong, in principle, that any public body should be able to choose its own auditor. 28. The independence of auditors must be safeguarded, so that they: — can carry out their role freely; — cannot be influenced by the audited body; and — can report without fear or favour, because they are not at risk of losing the appointment if they act or report in a way that is unwelcome to the audited body. 29. Under the current system, the Commission appoints auditors on behalf of the local and national taxpayer. It also has a statutory duty to set the level of fees. This ensures that those responsible for the stewardship and use of public money are not involved in appointing and remunerating those responsible for scrutinising how it is spent and providing assurance to tax-payers. 30. This is particularly important where public bodies have tax raising powers and the auditor must report publicly on failures relating to probity, governance and value for money, and has powers to challenge the legality of transactions. Second Principle of Public Audit 31. The second principle is that auditors’ work should cover not only the audit of financial statements, but also aspects of corporate governance, including regularity (legality) and propriety (probity), and use of resources (value for money). 32. Absence of market disciplines means that there are not the same pressures on public sector bodies and their managers to make best use of scarce resources. There is no “bottom line” other than the tax demand and electoral pressure. 33. By assessing whether public bodies have made arrangements to ensure the proper conduct of their financial affairs and to manage their performance and use of resources, public auditors ensure that public servants are not only accountable for what they do, but also how they do it. 34. The public, quite rightly, expects public business to be conducted in accordance with due process and to conform to high standards of propriety. By reporting on legality, probity and value for money, public auditors help to maintain confidence in those to whom responsibility for spending public money is entrusted and in their effective stewardship of funds, and publicly highlights concerns where necessary. 35. By offering an assessment of whether money is being used efficiently within an organisation, public auditors give the public a broader picture on which to base their voting decisions. Their professional value for money judgments complement those of “armchair auditors”, giving the public a greater ability to hold local bodies to account for their performance as well as their spending. Third Principle of Public Audit 36. Independent appointment allows auditors to speak without fear or favour, and so underpins their wider powers and the principle of public reporting—the third principle of public audit. 37. Reporting in public, whether through the annual audit letter, public interest reports, or (in local government) formal audit recommendations, which the audited body is required to consider and respond to in public, allows auditors of local public bodies to discharge their accountability to the tax payer, on whose behalf they are appointed and act.

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38. The Secretary of State confirmed in his announcement of the abolition of the Commission that: Auditors will retain a duty for reporting issues in the public interest. They will be able to undertake special investigations where they, the local government sector or any continuing inspectorates such as Ofsted in the case of children’s services, or Care Quality Commission on adult social care, raise concerns about a council. Following any such investigations auditors will report locally and be able to make recommendations to the council, the sector, inspectorates, and if necessary to government. 39. There is a significant risk that these existing reporting powers may become inoperable in practice. This is because: — Some local authorities have, in the past, made great efforts to prevent their auditors issuing public interest reports, including trying to get them replaced. For example, in the high profile and long running case in Westminster in the 1980s and 1990s, legal representatives for some of those under investigation sought to have the appointed auditor replaced, requests that the Commission refused. Only the fact that the Commission had stood behind the appointed auditors (and underwritten their costs incurred in investigation) enabled them to do so. In future, where the auditor has a direct contractual relationship with the body and has an associated financial incentive to retain the appointment, we think there is a risk that auditors will be unwilling to jeopardise the commercial relationship with the body by reporting in public in this way. — Given that the body itself will now be meeting the auditor’s costs directly, there is a risk that auditors’ ability to discharge their wider functions will be constrained by the level of the fee they are able to negotiate. 40. These considerations are also likely to apply to the exercise of the wider range of auditors’ special powers and responsibilities, such as dealing with electors’ objections. Section 4: Mechanisms to Identify Failure 41. Public auditors have uncovered several cases of serious public service failure over the last century. However public services are delivered and held to account, incidents of failure in public services will inevitably occur. 42. It is unlikely that these will be identified through greater transparency, or through narrowly focused (not public) audit. Example of types of failure include: — Serious and ethical irregularity in the conduct of public business in an otherwise well performing body. We have found a number of examples of fraud and poor governance resulting from devolved budgeting arrangements. This includes irregularities that came to light at Whalley Range High School in Manchester, when during an investigation by the appointed auditor in 2004–05, evidence was found of nepotism, mismanagement and illegal payments, concluding that there was a significant breakdown in standards of governance and accountability at the school (Ref. 20). This was despite the school continuing to achieve good exam results. — Performance failure. Following repeated evidence that Doncaster Council was not well run, we undertook a corporate governance inspection that resulted in action by central government. The evidence leading to the inspection included a poor rating for children’s services for two years and assessment of poor prospects for children and young people. The inspection concluded that there was a culture of poor governance at the Council. It recommended that the Secretary of State for Communities and Local Government use his powers to issue a Direction to intervene and set out steps to improve the Council’s performance. — Financial failure. Where it exists, concerns over systematic financial management failures are raised by appointed auditors who, through their independent appointment, are able to speak without fear or favour. For example the District Auditor at Liverpool City Council found an inadequate financial position. £20 million of funding for the Capital of Culture celebrations saw the Council’s overall budget shortfall rise to £62 million. Statutory powers were used to make recommendations and force the Council to respond in public. The District Auditor then worked with the authority to set a legal budget and plan a way out of the difficulties (Ref. 21). Acting on Failure 43. Any system put in place should be able to assure that public bodies will be responsive to concerns raised by the public. 44. There was clear service failure at Basildon and Thurrock University Hospitals Foundation Trust, where low standards of hospital hygiene led, in November 2009, to the Care Quality Commission (CQC) criticising the hospital for filthy wards, poor care, and a death rate that was 30% higher than the national average (Ref. 22). With the situation as bad as this, it should not have taken a CQC report to highlight that there was a problem; it was obvious to patients, their friends and their families.

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45. Local people experiencing a service are best placed to identify that improvement is needed. An effective shorter feedback loop allows interested parties to highlight issues. But it is important that public bodies respond quickly and constructively when concerns are raised. 46. Most information that is currently published to support transparency tends to be available after the event, often with substantial delay. It is therefore currently a poor way of identifying potential and impending failure. There should be robust scrutiny of both the accuracy of data and the timeliness of its publication to support decision making. 47. The public needs an assurance that incidents of failure will be learned from. The scrutiny process should assess whether local service plans include adequate arrangements to learn during implementation, thereby creating a system that reduces the prospect of repeated failure. 48. The ballot box is an invaluable tool for holding councils to account, but is not a substitute for professional scrutiny of services and standards. The ballot box is also unable to offer a route to rapid change if it is required, in the face of service failure. 49. The Commission believes that it is vital that the scrutiny system for local authorities should protect local taxpayers and service. Any successor regime to the Commission’s should provide essential safeguards for the independence of auditors, so that they have: — complete professional discretion in the way they exercise their functions; — the resources that they need in order to do so; and — protection against dismissal. 50. The Commission also believes that for strong and successful localism to be achieved there is a need for accountability of performance as well as spending. 51. Any system put in place must also seek to mitigate the risks of service failure by warning of potential failure and requiring local authorities to take action when it occurs. References Ref. 1 HM Government, The coalition: our programme for government, HM Government, 2010. Ref. 2 Audit Commission, When it comes to the crunch, Audit Commission, 2009. Ref. 3 Audit Commission, Against the odds, Audit Commission, 2010. Ref. 4 Audit Commission, Positively Charged, Audit Commission, 2008. Ref. 5 Audit Commission, Room for improvement, Audit Commission, 2009. Ref. 6 Audit Commission, Is there something I should know, Audit Commission, 2009. Ref. 7 Audit Commission, Seeing the Light, Audit Commission, 2007. Ref. 8 National Audit Office and Audit Commission, A review of collaborative procurement across the public sector, National Audit Office, 2010. Ref. 9 Audit Commission, Working better together, Audit Commission, 2009. Ref. 10 Audit Commission, Oneplace national overview report, Audit Commission, 2010. Ref. 11 Audit Commission, The truth is out there, Audit Commission, 2010. Ref. 12 Society for Cardiothoracic Surgery in Great Britain and Ireland, Demonstrating Quality: The sixth national adult cardiac surgical database report, Society for Cardiothoracic Surgery in Great Britain and Ireland, 2009. Ref. 13 Audit Commission, In the Know, Audit Commission, 2008. Ref. 14 Audit Commission, Data Remember, Audit Commission, 2002. Ref. 15 Audit Commission, Auditing the accounts 2008/09: Local authorities, 2009. Ref. 16 Audit Commission, Figures You Can Trust: A Briefing on Data Quality in the NHS, Audit Commission, 2009. Ref. 17 Audit Commission, The right result?, Audit Commission, 2008. Ref. 18 Audit Commission, Improving data quality in the NHS, Audit Commission, 2010. Ref. 19 Data Source: http://newsforums.bbc.co.uk/nol/thread.jspa?forumID=7431&start=45&edition=1&ttl= 20100922151802 Ref. 20 Audit Commission, Public interest report: Manchester City Council, Audit Commission, 2005.

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Ref. 21 Audit Commission, Annual Audit and Inspection Letter: Liverpool CityCouncil, Audit Commission, 2008. Ref. 22 Care Quality Commission, Inspection report, The prevention and control of infections Basildon and Thurrock University Hospitals NHS Foundation Trust, Care Quality Commission, 2009. October 2010 Supplementary memorandum from the Audit Commission Thank you for inviting John Kirkpatrick and me to give oral evidence at the Select Committee hearing held on 21 December. Since that hearing, I have been reflecting on the questions raised by the Committee. In particular there were two specific areas where I felt it was not possible, in the time available, to give full answers. These were on the accountability for public money voted by Parliament and the benefits and challenges of coordinating budgets. Therefore, I thought it would be useful if I put my views in writing and I hope you find the attached paper useful. 1. Accountability for Public Money Voted by Parliament The primary accountability for public money voted by Parliament is clearly to Parliament. As I said in my oral evidence, the arrangements for this are well established. Permanent Secretaries, in their role as departmental accounting officers, are accountable for ensuring public money has been applied for the purposes intended by Parliament and that income and expenditure conform with the authorities that govern them. The Treasury’s guidance to accounting officers on how they should discharge their responsibilities is set out in Managing Public Money. The Department for Communities and Local Government (CLG) distributes some £79.9 billion to local authorities.61 Although auditors of local government bodies do not report specifically (as they do in central government and the NHS) on the ”regularity” of local authority expenditure, I understand the CLG’s accounting officer does place reliance on the work of the Commission’s appointed auditors in giving his own assertion about the regularity of expenditure incurred by the Department (which includes moneys distributed to local government bodies). This assertion is included in the annual Statement on Internal Control, which is published as part of the Department’s resource accounts. The Comptroller and Auditor General also relies on the work of the Commission’s appointed auditors in his audit of both CLG’s and the Department of Health’s annual resource accounts. In addition, CLG and other government departments (in particular, the Department of Work and Pensions) require auditors to certify claims for specific grants and other financial returns. The Commission makes the arrangements for such certification work (which technically is separate from the annual audit) and specifies the work to be done through Certification Instructions (CIs), which it agrees with the department concerned. These CIs form part of the departments’ wider system of internal control and are an important source of assurance for Permanent Secretaries over significant flows of public money for which they are accountable. In 2008–09 Commission auditors certified claims and returns from local authorities for schemes covering £45.6 billion of public money. The biggest schemes were housing and council tax benefit and the national non-domestic rates return (£19 billion each). Auditors agreed amendments totalling £54.5 million and qualified 24% of all claims and returns. In the case of the housing and council tax benefits scheme, 85% of claims had amendments, qualifications or both. It is for Accounting Officers, and for Parliament, to determine how the assurance they have drawn from the work of the Audit Commission can continue to be provided in a new audit regime. I understand that this is under active consideration by the Public Accounts Committee and the National Audit Office. 2. The Benefits and Challenges of Coordinating Budgets The difficulties created by different funding streams seeking to achieve similar objectives are well established. Mr Kirkpatrick referred to our research finding that a typical youth project leader spends between a quarter and a third of his or her time identifying and applying for funds and managing budgets.62 Those funds come from seven different government departments and many more national and local public bodies. The problems are greater still where expenditure by one authority can give rise to savings for another in later years. There are many examples. Every £1 spent on providing housing support for vulnerable people can save nearly £2 in reduced costs of health services, tenancy failure, crime and residential care. Adaptations costing between £2000 and £20000 can save £6000 per year in care costs if they allow an elderly person to remain in their own home.63 Yet the disincentives to spend to save are obvious if those savings do not accrue to the same budget, and particularly so in times of very constrained budgets. 61

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The 2010–11 revenue outturn figure for formula grant is £29.5 billion. Specific grants are £45.7 billion. Area grant is £4.7 billion. Audit Commission, Tired of hanging around, Audit Commission, 2009. Audit Commission, Building better lives, Audit Commission, 2009.

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Total Place brought some of these problems into sharp relief, and some of the pilots estimated substantial potential savings from better coordination and joining up of budgets in some quite specific, narrowly-defined areas.64 Many of these approaches are untried, and it will be important to ensure that the potential savings can be captured. Central government has recognised potential in these approaches. Sir Gus O’Donnell has referred on several occasions to the possibility of aligning budgets and accountability to cross cutting objectives.65 The previous government’s response to the Total Place initiative suggested it was moving towards a “single offer” with areas involving a greater degree of pooling of budgets and common objectives.66 Community budgets as proposed by the current government, and the reductions proposed in the number of ring fenced budgets in local areas, are also steps in this direction. We have no evidence yet of whether they work, and central government departments will be [understandably] reluctant to give up budgets until they see some proof. But well managed experiments in this area are welcome. Given the national picture, it is not surprising that there are no straightforward local answers to these questions either. In some areas local agencies have been encouraged to pool budgets. Our work on children’s trusts found that pooled budgets support specific services, including mental health services and services for disabled children, in around a third of areas. Most of these arrangements pre-date children’s trusts.67 Subsequent work has identified that Local Strategic Partnerships have been almost twice as likely to align budgets as to pool them,68 and that pooled funds account for a small proportion of total health and social care spending.69 We found a widespread reluctance to pool budgets; some feared that it might reduce flexibility; others identified significant practical difficulties. Many preferred to align budgets rather than formally pool them. We identified circumstances in which pooling and aligning budgets appeared to be appropriate. Pooling seemed most likely to be successful where small numbers of statutory agencies used explicit legal powers to pool budgets in specific and limited areas as a means of overcoming organisational barriers and establishing long term commitment to particular approaches.70 Likewise, our work on strategic asset management has shown that while accountability arrangements have been seen as an obstacle to local collaboration by some, there are many good examples where such obstacles have been overcome.71 I referred to the potential of equalisation accounts in my own evidence to the Committee. The obstacles are not insuperable if the incentives and the will are in place. Eugene Sullivan Chief Executive January 2011 Memorandum from Barnsley Council In order to answer this question the rhetorical question posed is “What does Localism mean for us?” Summary This paper proposes a radical shift in the English model of governance, with a decentralised framework enshrined in law by a new Constitutional settlement. In turn, the new settlement introduces a new architecture which would deliver the advantages of a governance system based upon “Localism.” Fundamentally, Localism can only work with the right local governance system and with the security of legal underpinning. Detail 1. The first and foremost principle is that there needs to be a Constitutional settlement. If there is to be meaningful progress with this question then a settlement enshrined in law needs to happen. Without this, Localism will continue to be buffeted by the winds of political preference, of changes to and within governments, in a permanent state of flux, which means that this question will be revisited every five years or so. A Constitutional settlement would provide mutuality of understanding for each of the major participants; promote confidence and continuity, without the threat that powers could be withdrawn or transferred at the behest of a future government. It would also help the media and public better understand the distinction between 64 65 66 67 68 69 70 71

HM Treasury, Total Place: a whole area approach to public services, HM Treasury, 2010. For example in his speech to the Institute of Government in 2009. HM Treasury, Total Place: a whole area approach to public services, HM Treasury, 2010. Audit Commission, Are we there yet?, Audit Commission, 2008. Audit Commission, Working better together?, Audit Commission, 2009 Audit Commission, Means to an end, Audit Commission, 2009 Audit Commission, Are we there yet?, Audit Commission, 2008. Audit Commission, Room for improvement, Audit Commission, 2009.

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Central and Local Government responsibilities. One consequence of repeated Parliamentary interventions into the affairs of Local Government is to encourage the media and public to look to Central Government to solve all problems and prompt Central Government to act, when in fact a higher threshold for any intervention should really be set. There are two documents which could form the basis of “Constitutional legislation”: the 2007 Central— Local concordat (between the LGA & Central Government) and the European Charter of local self government. The former has had a disappointing impact and giving statutory effect by incorporation of the latter into existing law would go some distance to addressing the disregard thus far shown. The Charter establishes the principles of proportionality and subsidiarity (more of which below) which would help establish the autonomy of local government and provide “space” for it to undertake its local leadership role, but this too is bedevilled by the lack of enforcement and monitoring. Whilst it is welcome that the UK has, since 1997 signed and ratified the Charter, it has crucially failed to implement, which means its worthy provisions can be ignored with impunity. We note that the last review of the UK’s compliance with the Charter recommended: — Establishing a legal framework which would give local government a clear basis & a general competence for the benefit of its citizens, with strong community leadership. — Clarify the distinction between powers delegated to local government by Central Government compared with local Government’s own statutory powers. — To increase Local Government’s financial capacities by developing a much higher share of its own income as compared with State grants, “capping” (or similar) and relocalisation of business rates (with protection for low rate areas). — Give Councils greater accountability to citizens. — To incorporate the Charter into domestic law and to be considered legally binding. Monitoring could be carried out by a cross party committee of the Lords and Commons, as recommended by the CLG select committee in 2009. That said, it is recognised that laws and agreements do not of themselves create relationships and there is some merit in the argument to say that political and cultural barriers have to be overcome, but equally it has to be recognised that a mature democracy ought really to have achieved that point by now. 2. The meaning of “Localism”—the problem with “Localism” is that like sunshine, no one can be against it, which means that everyone is a “localist”. But the concept is sufficiently broad so as to invite a number of varying interpretations from a range of people and political parties. Often, this ensures that there is a perpetual sea of uncertainty and structural and functional change, some of which is genuinely supportive of localism, some of which, despite the stated claims, is profoundly not. Most international comparators have a constitutional guarantee for decentralised government and administration. England is of course a highly centralised State. To counter that position, a “bottom up” building block of localism needs to be established. There should be a reverse presumption of Localism—in other words, the burden of proof should be to establish what services are genuinely and inherently national in nature? In this respect defence and foreign affairs readily spring to mind. This model recognises that it is not possible to deliver strong economic public services that meet public expectations using the bold top—down, one size fits all solutions. Localism if properly done, offers sensitivity to local circumstances, which benefits the setting of priorities, delivery and accountability. Within this framework central oversight would be limited and boundaries placed around Central Government’s capacity to intervene in LA activities. 3. Subsidiarity— is the second fundamental principle to support the Constitutional settlement —ie establishing , services at the correct (lowest) spatial level—in other words “what matters is what works” and all services should be subject to this test. The Constitutional settlement would need to recognise the notion of “scale” and thereby support the existence of a number of spatial levels and the attached diagram attempts to articulate this vision. The present English governance arrangements leave a large gap between the national and local tiers. Whilst there is no tradition or comprehensive support for regional “government”, the previous government and the new coalition government have, in their own ways, recognised that there is a gap to be filled by functions which need to be performed between the national and local level, by support for “Functional Sub regions” which could perform functions which are decidedly not local, or national in nature and which make economic sense to be performed at the Sub regional tier. Examples include economic development, transport and skills and chime with the establishment of new Local Enterprise Partnerships. Similarly, there needs to be explicit recognition of the “neighbourhood tier” which is where certain functions, perhaps local policing; clean and green functions, should rest. The test would be:—Where does the activity connected with this function naturally occur? Where does it make economic sense to carry out this function?—What are the economies of scale?—for example, it would not make rational or economic sense to carry out the Commissioning of Social Care at neighbourhood level. Reversing the test, we would argue, against powerful central oversight or thousands of micro institutions.

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The additional point about subsidiarity is that it establishes government closest to the people which, in an era of globalisation and increasingly remote systems of government, economics and markets is to be promoted because: — This is a more effective means of providing opportunities for citizen participation in political life leading to greater electoral & political engagement. — The closer to people that decentralisation can be, the more sensitive & more intelligible it is to their needs. — It achieves greater legitimacy for the decisions taken. — It protects and enshrines freedom by dispersing governmental power and creating a network of checks and balances upon Central Government and all other tiers. 4. Form of decentralisation—under the new constitutional settlement, there would be a combination of political, administrative and fiscal decentralisation. There are certain services that could be administered on behalf of Central Government—its planning, financing and management of public functions, which would be delegated or devolved to participants and which would not be retained as Central government “offices.” There are certain services for which tax raising powers would be permitted at local level. Local government as the only elected body outside Central government has the democratic legitimacy to raise taxes and adjust the level of taxation. There needs to be a rebalancing of the local dependence on Central Government funding. Councils with a low Council tax base would still need to be protected but could raise additional finance in other more innovative ways with greater powers to borrow, levy fees and charges and levy sales and property taxes. The abolition of the “Ultra Vires” rule as suggested by a leading think Tank and the proposed introduction of the new general power of competence offer an opportunity in this regard. The New Local government Network argues for a reverse presumption from one of not straying “beyond the powers” to one of permissive powers, unless explicitly forbidden by law—which is more consistent with English legal principles, otherwise the Coalition Government’s proposal will not work effectively. NLGN also make sensible proposals for Councils to have greater freedom to develop new revenue streams and income with partnering of private sector, community groups & other Agencies to drive out savings and redesign services, which could include enhanced trading powers for a wider range of products and expertise; localisation of fees to reflect local economic conditions; adjusting tax rates seven reliefs to incentivise behaviour/reflect local policy; localised banking facilities & credit services for business & residents. 5. Accountability—there are several strands—democratic accountability via voting for example; managerial accountability (within, or by organisations) the localist model described would be more accountable in being closer to local people, where local bodies have more power and visible decision making and spending powers and where, as a result, citizen engagement is increased; but that in itself is not sufficient. Equally, we have to ask whether the ballot box is sufficient to ensure accountability. What is needed is greater transparency; this could be achieved in part by more and better quality information about the performance of Local Government and public service performance and better quality “Local Spending Reports”. The public needs a solid evidence base on which to make its judgements about the quality of local public service delivery. Somewhere within this accountability framework there needs to be a sector regulator for the “local public service.” This needs to be an outcome focused relationship about what the people want to be delivered and what Central Government expects. Furthermore, Local Authorities have well established models of scrutiny whether carried out by committees of Councillors explicitly created for this purpose, or by other forms, such as Audit Committees. Elected Members also serve on Sub regional “Joint Authorities” with an accountability role. It would be necessary to redesign a “scrutiny function” to reflect the new constitutional settlement and the emerging governance structure under current Government proposals (as with Health and Policing reform proposals, for example) and those emerging from the Place Based Budgeting model. A further principle is one of comprehension—the system of accountability will be opaque if there are too many bodies. 6. The unique role of Local Government—Within any “Constitutional settlement” Local Government has a unique democratic legitimacy among local Agencies and has, therefore, a mandate to be “leader of the community” The Council has a well recognised convening and leadership role, but it is equally acknowledged that it cannot and should not be the provider of all local services, it is however, best placed to articulate community needs and lead, where difficult, often unpopular decisions have to be made and where vulnerable minorities need protection. This is the role into which Local Government has “matured.” Within this framework, the role of Representative democracy is potentially a more powerful tool, when supported by real powers. The local Councillor is able to enhance his/her role as decision maker and “scrutineer” only if decentralisation of power is actually carried out. Decentralisation would make the role of Councillor of greater value with more respect from the community and would as a consequence enhance the level of citizen engagement. This is to be preferred over systems of direct democracy. There is no tradition of referenda in the British Constitution and neither is this method of accountability appropriate for the often

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complex decisions that have to be taken where competing interests, minorities and unpopular decisions have to be contemplated and balanced The elected Member also has a valuable and uniquely positioned part to play in accountability given his/her democratic legitimacy to hold providers and commissioners to account. 7. Co production—in addition to recognising and surrendering powers vertically to both the neighbourhood and functional sub regional tier, some powers would be shared laterally with partners at the local level in “Public service Boards” which would pick up the advantages and lessons learnt from “Total place” and take these forward alongside the introduction of “Place Based Budgeting.” This would secure: — Joined up services on vertical and horizontal axes—where necessary (otherwise there would be no need for separate entities) centralisation of Grants, funding and objectives inhibits service improvement and innovation of delivery methods, ways of working and value for money. — Overcome the appearance to citizen of centrally prescriptive services, of impersonal, fragmented and unnecessarily complex interactions. — Opens up the possibility of more early interventions and preventative work rather than corrective work, which is much less effective and efficient. — Consistent accountabilities for local Agencies. — Data sharing, which central prescription inhibits. — Genuinely thematic services, designed around citizen needs—integration; back office shared services; shared management & joint working arrangements. — The Commissioning of appropriate local public services would rest with a locally accountable governance body—of which the Council should be lead Authority; This Governance body would hold budgets and would purchase services on behalf of citizens to whom it would be accountable via elected Councillors. Barriers to cross organisational working would be dismantled by an emphasis on thematic outputs and shared budgets and a radically amended relationship for each of the participants, with the State, which means removing bureaucratic and legal constraints which make collaboration difficult. October 2010

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A new Constitutional settlement

National Level National Government

Functional Sub - Regions

Sub Regional Level

Local Councils

Public Service Boards

Local Level

Neighbourhoods

Community Level

Memorandum from Staffordshire County Council Introduction Staffordshire County Council welcomes the opportunity to contribute to this inquiry on localism. We are committed to and are fully supportive of the localism agenda and would welcome the opportunity to be more closely involved in further discussions that may take place in the future. For localism to really work, Staffordshire County Council feels that all organisations that work at the local level—including central government departments—need to be involved when appropriate and that the lessons of past partnership working need to be taken on board. Partnership working needs to be more coherent, with more transparency and a change in culture. Central government and each relevant government department has a role to play in this through the devolution of power, the end of silo working and the reduction of bureaucracy. Furthermore, accountabilities within partnerships need to be clear and rest with those organisations within the partnership that have a clear democratic mandate thus ensuring accountability and transparency. In view of this the county council wholeheartedly supports the Local Government Groups’ Place Based Budgeting model. This submission reflects the views of the county council and illustrates how localism is already taking place and working effectively in Staffordshire. It is also supportive of the County Council Networks (CCN) submission to this inquiry. Key Points — Decentralisation does lead to more effective public service delivery. Staffordshire County Council can evidence examples of where this has already occurred and is beginning to make a real difference to our communities. This work can only be enhanced by the move to greater decentralisation and localism nationally.

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— As the local organisation with the clearest democratic mandate, Local government has to provide leadership in any decentralised model of public service delivery. The role of locally elected representatives is therefore, a vital component of this model. — For it to be truly successful, Localism has to extend to all the organisations working locally. — The lessons of past partnership working and the Total Place pilots need to be learned by all involved so that it supports rather than hinders the move to more coherent, place-based, locality working. — Local government has already proven its ability to make efficiency savings and make difficult choices. Greater decentralisation in tandem with the work of central government, can therefore, only lead to greater savings. — A local government, sector-led approach is the way forward for the oversight of performance management. This will allow the sector to take on responsibility for its own improvement whilst working with central government to ensure that certain key services meet common standards. Furthermore, this sector led approach will mean that local government will be accountable to its communities through the democratic mandate of locally elected members. The extent to which decentralisation leads to more effective public service delivery; and what the limits are, or should be, of localism; Staffordshire County Council feels that decentralisation leads to more effective public service delivery. One size does not always “fit all” and decentralisation means that service delivery can be better tailored to the needs of the local community. It allows locally elected representatives and the organisations that are best placed to know their local communities and the services they need to make the appropriate decisions. The criteria determining “what works best” will vary from place-to-place, depending on local circumstances and local democratic decision-making. As such, decentralisation is the key to more effective public service delivery. The concept of subsidiarity should be applied where this is most appropriate. For two-tier areas this means allowing the counties and districts to decide where they are best placed to deliver services and meet local needs. This should take place on a county by county basis thus avoiding the one size fits all approach that would otherwise distance residents from local authorities and has led to structures that do not recognise the reality of peoples’ lives. The extent to which decentralisation has led to more effective public service delivery has already been proven by local government. The Local Government Group has demonstrated that local government is the most efficient part of the public sector and that the sector can deliver efficiencies, improved performance and innovative local solutions to local issues. In Staffordshire, the concept of localism is already being delivered. It has been prominent in the council’s work following the change of administration in the 2009 county council elections. Staffordshire is therefore, well placed to evidence how localism can and does work. Outlined below is a selection of examples conveying how localism is already being delivered in Staffordshire and how the county council and its partners have shaped services in line with local needs—something that can only be enhanced by a move to further localism and decentralisation. — Total Staffordshire: Rather than adopting the “Total Place” initiative wholesale, Staffordshire County Council’s Cabinet and Senior Leadership Team felt it was appropriate to take the core principles behind it and make them appropriate and relevant to Staffordshire and at the same time managing the project within our own budgets. In contrast to the national approach which is focussed upon counting finances, the Staffordshire approach tries to take a broader view on the wider range of resources available to an area. This allows for valuable work such as volunteering to be factored into the planning processes. The Total Staffordshire model is based on the following four questions: (1) What resources are going into the locality? (2) What are the problems we are trying to solve? (3) What are the needs of our customers? (4) What are the ambitions of the wider place? This model, agreed by the Staffordshire wide Local Strategic Partnership, is being implemented through two pilot projects—the Blake project (a locality based project encompassing all relevant issues within a specific area) and one responding to the harm and cost of the misuse of alcohol across Staffordshire. — The Blake Project: The Blake Total Staffordshire Project is about the long term (20 year) sustainable development of the community of Blake in the Cannock Chase area of Staffordshire. This project is addressing the causes of the problems that the local community faces as well as improving the way in which local stake-holders respond to the manifestation of these problems. Thus far all those involved have shown a real commitment to this project and to the Total Staffordshire approach. The work so far has revealed that over the course of 2009–2010, a range of public sector agencies spent an estimated £53,300,000 worth of resources in the Blake area and yet the same issues remain. In response to this, work is being undertaken to collect and understand what the evidence base is

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telling us about the locality. This includes work with frontline practitioners and elected representatives, community engagement and work to understand the change projects and community assets that are already in place in the community. By applying the Total Staffordshire model, partners have been able to identify a vision for the project, the long term outcomes and the shared objectives for delivery in the short/medium term. The focus is on shared objectives where value can be added by working in partnership, where partners can support organisations to do their “day job” (potentially differently) and by ensuring that the work in Blake is linked in with the wider ambitions and plans for the county. The project is now moving into delivery mode. Critical to the success of the project is the role of elected members. For the first time locally elected members from all levels—town, district and county councils—were brought together to address the problems that the community faced. They were able to not only identify the issues that the community faced, but also influence the development and delivery of the innovative solutions to these issues and provide accountability to and dialogue with the residents in the Blake area. This is further evidence of the pivotal role and local leadership that they provide. — Decentralised management structures: In order to reflect, manage and take advantage of the size and diversity of Staffordshire, the county council has implemented a devolved management structure for the local delivery of adult social care services. This supports the local delivery of services through the development of initiatives that meet local needs. This is being delivered as part of Staffordshire’s wider strategic approach to social care and provides communities with a “local identity” for, and ownership of an areas county council provided social care services. Staffordshire has also recently moved to a district management structure to deliver our integrated youth services (Staffordshire Young People’s Service) to ensure effective delivery to meet local needs at the right geographical level. By doing so we are able to reflect the diversity of need across the county and meet these needs in the most appropriate manner. — Families First and Community and Learning Partnerships: “Families First” is a Staffordshire County Council project which will transform our services for children, young people and families. It will ensure an integrated approach to services delivery. As part of Families First, the county council has made a commitment to re-design services around local community needs. Part of the work currently being undertaken is to understand those needs and the consequences for the service being provided. The focus is on early intervention, and identifying those children and young people “on the edge” of harm and entry into care earlier. The development of Local Support Teams will achieve this where universal services (such as Family Assessment Support Services and Education Welfare Officers) will be re-designed to deliver effective services locally. These Local Support Teams will be configured around Community and Learning Partnerships (C& LPs). C&LPs are a critical feature in the successful delivery of “Families First” and have already brought together personnel from different services and agencies to work together to provide more collaborative early interventions and there is a real opportunity to build on this through the Families First project. C&LPs were developed across Staffordshire to raise attainment and achievement for children, young people and families, as well as empowering our communities. The devolution of resources to a locality management advisory group (with governance and local accountability provided by locally elected members) has created 50 localised multi-agency partnerships across Staffordshire. By devolving resources into the locality clusters, we have enabled elected members, locally based agencies and schools, the “Third” Sector, local government officers, parents, children and young people themselves, to inform the decision making process around service delivery for their locality. For example, in the South Staffordshire district, the C&LPs have enabled the development of three local voluntary managed groups. These have now been supported to undergo training to become constituted voluntary managed groups, and as a result they now deliver activities that improve the lives of children, young people and their families, primarily through the delivery of activities in their own community. — Staffordshire Local Community Fund and the Local Priority Scheme: The Staffordshire Local Community Fund highlights the county council’s commitment to connect with and support communities through its county councillors. Launched in 2009 it enables groups that provide important services in their communities to further their work with the help of the county council, benefiting local residents in the process. Community groups and organisations apply for grants for projects, initiatives or for general running costs. Applications are made directly to county councillors who then make the decision on which should be successful. Each county councillor has an allocation of £10,000 per annum—meaning groups across the county receive £620,000 each year. Village hall committees, residents’ associations, sports teams, youth groups, societies, festival organisers and schools have all received funding over the last year. This not only shows how localism works and how the Big Society’ is being built but also the crucial role that locally elected councillors play. For example, the fund has been used by one local councillor to support an invaluable lifesaving service in a rural part Newcastle-Under-Lyme where ambulance services often struggle to gain access. The fund has contributed to replacement light units, sirens and other equipment to help the Madeley and District First Response Team become operational. Furthermore, the fund has helped a community

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radio station get onto air in Tamworth. Total Choice Radio is run by volunteers and thanks to contributions from a number of local councillors was able to buy the equipment needed to launch the station and to continue broadcasting local news, features and music keeping the local community better informed. The fund has also been used to support a number of community groups to continue running community projects, leisure clubs and to help raise funds for the Staffordshire Hoard to ensure its future preservation for the region. Linked to this, Staffordshire County Council also has a Local Priority Scheme in place. This scheme places democratically elected representatives at the heart of the service planning process. It allows them to influence the county council’s priorities through engagement with their communities. For example, the development of each Divisional Highway Programme is led by the local county councillor and is very much focused on the needs of their Division. Working with the Community Highway Manager, they liaise closely with the local parish/town councils and other local bodies. This allows for the identification and prioritisation of local concerns, thereby exercising power and responsibility closer to the community level. The agreed priorities are then translated into a clear work plan to focus on the delivery of these established priorities at greater pace. Twice a year the local county councillor leads a review of progress and priorities to ensure that it continues to reflect local needs. They are also able to use their Local Community Fund to support these highways improvements where this is appropriate. To illustrate how the Local Priority Scheme and Local Community Scheme work together, one local elected representative for Tamworth highlighted lighting on a pedestrian bridge as a key priority for community safety reasons. The decision was taken for the locally elected member to contribute funding from their local community fund together with an agreement for a contribution from the borough council, as well as from the county council. Work will now take place with residents to ensure that the lightening meets the community’s needs. This scheme therefore ensures that our resources are directed towards the priorities of local communities. The scheme is not just about existing issues or initiatives it is also about identifying new local needs and can be used to attract additional investment from elsewhere. It also allows issues that were thought not to be priorities—such as Highways for example—to be articulated by local people through their locally elected representatives and inform decision making. Thus areas which were thought to be “low” on the priority list can become more visible through the work of the county councillor. — Neighbourhood Highway Teams: Staffordshire Highways has established Neighbourhood Highway Teams to tackle issues important to local communities. The teams deal with the high volume of small, non-safety related highway maintenance problems that are important to the appearance and environment of local communities. The work programme is designed in advance through discussions with local community representatives, often local parish councils. Devolving decision making in this way enables parish councils to work together with Staffordshire Highways to improve the effectiveness of this element of the Highway service. For example, following local discussions the Neighbourhood Highway Team visited Brereton in September last year to clear overgrowth and weeds, strim footways and remove green waste. Similar activities have been undertaken across Staffordshire. Of particular importance is the fact that much of the work identified by local communities is work that is already scheduled by the county council any way, therefore the work of the teams not only enhances the local environment and allows the county council to respond top local need—it also saves money by preventing duplication and by ensuring that the work required is prioritised in the correct way. — Norton Canes Library: Staffordshire County Council’s Library and Information Service (LIS) works with Norton Canes Community Partnership (NCCP) on the management and running of the new Norton Canes Library and Community Hub. NCCP formed a library sub group to consult the local community about how they would like to see the library service develop. Following this LIS put in a successful bid to the Big Lottery Community Library Fund to build the new library. NCCP and LIS formed a steering group to progress the project. The local community were also consulted about the final design of the new community and library hub. Norton Canes Library and Information Hub opened in September 2009. Local people continue to be involved with the facility through Community Advocates who gather feedback from the community on what they want to see at the library and promote the library in the community, and through Learning Champions who promote the learning courses to local people. The lessons for decentralisation from Total Place, and the potential to build on the work done under that initiative, particularly through place-based budgeting As previously stated, we have adapted the principles of Total Place to make it more relevant to needs of Staffordshire—Total Staffordshire. The commitment to this new approach by partners has been essential and there is a real sense that we can really make a difference by improving outcomes and reducing waste and duplication. A clear benefit is the opportunity to streamline processes with partners and reduce duplication, the result being a better customer journey, a more satisfied customer, savings and a shared vision for the “place”.

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Our experience thus far with a place-based approach has however, revealed some potential barriers to success that need to be addressed. The inflexibility of budgets across partners has been a key issue that has meant partners are unable to reallocate resources as they would like. As a result they have had to be much more creative about using budgets to support projects, which can slow down delivery and increase bureaucracy. Furthermore, there have been issues about data sharing between organisations which could inhibit a whole public service approach. Hopefully these issues will be resolved through greater transparency, the end of “ringfencing” and the forthcoming legislation relating to localism and decentralisation. It is clear however that all involved will need to be more open and more willing to work together to ensure that the right information to support decision making is available to those involved at the right time. Moreover, experience from working with Local Strategic Partnerships and Children’s Trusts has shown that decision-making can be difficult as a direct result of unclear accountabilities. As a result, devolution of responsibility would need to be accompanied by clear accountabilities, which ideally should rest with those local organisations with a democratic mandate to ensure greater transparency and accountability to local people. Staffordshire County Council has already fed into the Local Government Groups work on community-based budgets. A greater proportion of the resource that is spent locally should be under local democratic control and this would be achieved through extending the involvement of local elected councillors. As an organisation we have already begun to reshape ourselves as one more focussed on strategic commissioning based around the people and places of Staffordshire. Consequently, the proposed move to place based budgeting would be welcomed as it would make the delivery of our vision much easier to achieve. The role of local government in a decentralised model of local public service delivery, and the extent to which localism can and should extend to other local agents The county council feels that Local government is central to the decentralised model of public service delivery. Local accountability is clearly a vital component of the localism philosophy; therefore, the role of local government as the only local organisation with a democratic mandate is essential. The mandate that locally elected representatives hold is central to Localism and we would welcome central government’s support to reinforce this role in all policy areas. Localism should and needs to be extended to other local agents if it is to work. Partners at a local level need to have the same or at least a similar mandate to ensure effective partnership working and service delivery. The lessons from past and present partnership working, such as the Total Staffordshire work, are proving this to be the case. Total Staffordshire also reinforces the need to have all the appropriate agencies engaged, committed and in agreement in order to make a difference. If local agents are not part of the localism agenda, then there is a worry that inefficiencies and past silo working between organisations will reoccur. This would bring with it the risk that the Localism agenda will then fail. The county council would however, like to reinforce that while all local agents need to be involved, Leadership should come from local government as the democratically accountable body. In this sense, the county-based budgeting model proposed by the LGG is very much supported by Staffordshire County Council, providing that the accountabilities are clear. The action which will be necessary on the part of Whitehall departments to achieve effective decentralised public service delivery The county council would like to see Central Government and the Civil Service adopting a coherent approach localism. Mixed messages from government departments in the past have left organisations with confused and competing priorities. We would like to see all relevant central government departments engaged with localism “brought to the partnership table”. This will then encourage more effective partnership working at the local level. It will also prevent it from being hampered by the fact that for many local bodies the primary accountability was previously “upwards” ie centrally, rather than outwards to the community, which was the case for many year recently. The county council recognises the role that the Structural Reform Plans will have in delivering this vision and the attempts being made to prevent this from happening. The bureaucratic nature of performance management also needs to be reduced if localism is to work. Local Government can be trusted to “get on and do it” to ensure that Localism turns into a reality. The county council sees the abolition of the CAA is a positive sign in the right direction as is the rationalisation of regional government, various Quangos and other agencies across the government spectrum. This will allow the establishment of more accountable and coordinated public bodies that better reflect the needs of both government (central and local) and of our citizens and allow a greater focus upon the delivery of local outcomes. In doing so it will also reduce administration, improve the consistency of, and prevent contradictory advice being given or decisions made. Again we welcome the actions already taken by the Coalition Government as a positive indication of moving in this direction. Staffordshire County Council also feels that there needs to be an end the ring-fencing of specific grants and remove central control on capital receipts, whilst also giving local authorities powers to trade for profit. Greater flexibility in local government funding is needed to support the localism agenda and closer partnership working.

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The impact of decentralisation on the achievement of savings in the cost of local public services and the effective targeting of cuts to those services Decentralisation can lead to the achievement of savings providing that the appropriate action highlighted above is taken by all the relevant parts of government. Furthermore, if the legal and administrative barriers to a more joined up approach locally, this will allow local authorities to develop innovative solutions. The Total Place pilots and our own Total Staffordshire work have already proven the extent of resource that could be saved if more joined-up solutions are supported to go ahead. Moreover, it will mean that resources are more effectively targeted based on local need and priorities. Local government has already proven its capabilities in making efficiencies. As such there should be no doubt that more decentralisation will lead to the achievement of savings. For example, Staffordshire County Council is at the beginning of a process of introducing a new operating model that is predicted to make £120 million worth of savings over the next three years. The new approach will allow us to operate more as “one council” by better understanding the needs of our citizens; using this knowledge to help decide what should be our priorities (outcomes), what is needed to deliver these outcomes (services) and who is best placed to deliver them (delivery).

What, if any, arrangements for the oversight of local authority performance will be necessary to ensure effective local public service delivery Staffordshire County Council supports the view that local authorities are now capable of governing and assessing themselves and ensuring that improvements in services, performance and efficiency continue to be made. We also recognise that there are certain areas where central government still has an oversight role and we will work with the LGG and central government to ensure that this is delivered in the most efficient, effective and proportionate manner. The sector-led approach proposed by the LGG would help to reduce the burden upon local government and free up central government resources. It is felt that this sector-led approach should have local priorities at its core and should be focused on outcomes. Consequently it would be helpful if there were fewer top-down performance indicators collected by central government and instead, give local government the remit to develop its own indicators of performance that reflect the local priorities that are relevant and important to local communities. The abolition of the CAA indicates that the government is prepared to shift responsibility away from nationally imposed regimes and towards the local government sector itself. We would however like to see a reduction in the quantity of special reviews such as those undertaken by the Care Quality Commission which it is felt are time and resource consuming compared with the value that they give—for example the county council is subject to one such review every six weeks/two months. Furthermore, performance management needs a benchmark in order to allow robust measurement of our performance against our peers. A sector led approach led by local government would be one way of achieving this end and deliver real localism to our citizens and communities.

How effective and appropriate accountability can be achieved for expenditure on the delivery of local services, especially for that voted by Parliament rather than raised locally Staffordshire County Council is in agreement with the County Councils Network (CCN) in believing that a greater proportion of the resource that is spent locally should be under local democratic control and direction and that there are good arguments for local authorities taking direct responsibility from Quangos or other agencies both in terms of cost effectiveness and enhancing democratic accountability. Alongside this, a placebased budgeting model that ensures local democratic accountability for local services is the appropriate way forward. Finally, Staffordshire County Council believes that this is a once in a generation opportunity to develop a new model of how government at the national and local levels work. The county councils welcomes the devolution of power and the greater subsidiarity that this brings, however it recognises that there is much more to be done and that the organisation has a clear role to play in addressing this—both on its own, in partnership and with the local government sector as a whole. In all cases however, locally elected representatives have a fundamental part to play—a role that cannot be underestimated with appropriate involvement at an appropriate level for the local decision to be delivered. October 2010

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Memorandum from South Gloucestershire Council Executive Summary 1. South Gloucestershire Council is a Council which is actively works with local communities and to devolve power and support localism in a number of ways. This submission outlines some of the mechanisms used to do this. It goes on to focus on two of these mechanisms in more detail, and to explore the practical lessons learned by carrying out this work in practice. Lessons highlighted are thus grounded in practice rather than a theoretical framework. 2. The development of Safer and Stronger Community Groups (the local implementation of Police and Communities Together (PACT)) is described. These very clearly meet the localism agenda in holding the public sector to account. However freedom from the central prescription of PACT operation is required in order to move this agenda further. 3. This example also leads to consideration whether the limits of localism need to be defined or not; and on the cultural changes needed within the public sector to respond to localism. 4. The Council and partners are united in their belief that in order to make sustainable improvements in areas of deprivation, there has to be a role for local communities. The experience of South Gloucestershire’s Priority Neighbourhoods is described, and a number of lessons from this work identified. 5. Depending on the maturity of local community organisations this role could involve representing the community; working in partnership with the public sector; or actually driving that work and holding the public sector to account in its delivery. 6. The Council’s experience within Priority Neighbourhoods indicates that the prevalent culture within communities needs to be taken into in developing an individual response to the localism agenda. The key elements of this culture are not solely determined by deprivation, but rather are influenced by other local factors. 7. A key lesson from these experiences is that implementing localism effectively is a journey, with changes needing to be made at appropriate stages, as communities and organisations mature and develop, rather then a single set of rules to be implemented at the same stage. 8. Finally the submission presents some recommendations about implementing localism. These are: 8.1 Plans need to leave sufficient time to develop the shared understanding and confidence that is needed for effective localism. 8.2 That there needs to be flexibility in how localism is implemented in order to take account of local circumstances. The Government can best contribute to this by highlighting examples of good practice rather than dictating individual processes. 8.3 A key factor in making localism effective will be changing the culture of the public sector. 8.4 That initial support will be needed to help develop groups in some communities; building their capacity and confidence. 8.5 Government requirements for the operation of PACT meetings should be removed in order to permit local arrangements reflecting local circumstances to be implemented. Introduction to South Gloucestershire Council 9. South Gloucestershire covers 49,700 hectares with a population projected to reach 267,200 by 2011, an increase of nearly 21,560 (8.7%) from the 2001 census and a 46,836 (21%) increase from 1991. 10. The area stretches from the Severn Estuary in the west to the Cotswolds Area of Outstanding Natural Beauty in the east. Its southern boundary borders Bristol, abuts the River Avon and extends almost to Bath. Both the first and second crossing of the River Severn lie within South Gloucestershire, and the area is well served by both motorway and rail links. 11. Our black and minority population is not large (4.2%) and is mostly located in our urban areas. 60% of the population lives in the built up areas immediately adjoining Bristol, namely Filton, Patchway, Bradley Stoke, Kingswood, Downend, Staple Hill and Hanham, 19% live in the towns of Yate, Chipping Sodbury and Thornbury and the remaining 20% live in the more rural areas of South Gloucestershire. 12. South Gloucestershire has been one of the fastest growing areas in the country with over 30,000 jobs and 18,000 homes created since 1991. The area has well established manufacturing industries such as aerospace and newer commercial development. Many high technology companies are now based in South Gloucestershire and a high profile science park is being developed. The area has also attracted a number of larger employers in recent years such as AXA and the Ministry of Defence. 13. This scale of growth brings its own challenges to localism with the need for both existing communities and also new communities to have opportunities. For this reason the Council welcomed the “Green Flag” award as part of the 2009 Comprehensive Area Assessment for the local approach to managing growth.

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14. South Gloucestershire Council itself is a unitary authority providing the full range of local authority services. It was a four star authority under the last Comprehensive Performance Assessment. 15. The political make-up of the Council is as follows: Figure 1 POLITICAL MAKE-UP OF SOUTH GLOUCESTERSHIRE COUNCIL Conservative Liberal Democrat Labour

33 seats 28 seats 9 seats

16. As a local authority South Gloucestershire Council has actively sought to work with local communities and to devolve influence and power to them. The Council Plan explicitly states that “the Council [is] determined to work constructively with Communities by supporting the aspirations of our diverse communities, engaging with them to identify and help meet their current and future needs. 17. A number of mechanisms and processes have been utilised to do so and some of these are described below 18. The Council is now shaping its response to the changing expectations of local Government expressed by the Coalition Government. The Council recognises that to promote meaningful change requires changing processes, delivery models and organisational culture in line with a clear vision and service priorities. It is therefore establishing a vision will shape organisational change. Key to this vision is to enable the role of the community, to facilitate existing and potentially new community organisations to meet their own needs and expectations. Experience of Localism 19. Key results from the 2008 Place Survey are shown in Figure 2. They demonstrate that residents are broadly satisfied with the local area as a place to live. Although the proportion of residents actually involved in making decisions that affect the local area is low, an extremely small proportion of residents would like to be more involved. Figure 2 SELECTED PLACE SURVEY RESULTS 2008 Indicator % residents who are satisfied with their local area as a place to live % residents who agree that they can influence decisions in their local area % who have been involved in decisions that affect the local area in the past 12 months Would like to be more involved in the decisions that affect local area

Result

South Gloucestershire Quartile

83.0%

2nd

24.7%

4th

10.5%

4th

21.2%

4th (and 3rd lowest of all scores)

20. Therefore the benefits of localism itself need to be promoted in order to persuade more people to want to get involved. This is at least as important as establishing powers and mechanisms to enable them to do so. 21. As a local authority South Gloucestershire Council has actively sought to work with local communities and to devolve influence and power to them. A number of mechanisms and processes have been utilised to do so, with varying degrees of success. 22. The Council transfers operation of community assets to local management groups and trusts. In recognition of the need to ensure such groups are equipped to successfully operate these facilities the Council also provides support to help the groups develop their capabilities. Currently 5 individual trusts are being supported and assisted by the Council with a view to taking over the management of community buildings owned by South Gloucestershire Council. 23. Local community-lead planning is supported through advice and assistance provided both directly by the Council and indirectly through expert groups funded by the Council. Community lead plans regularly capture the views of over 90% of residents in the area covered. They provide a strong basis for action in the community, and also make explicit to the public sector the desires and aspirations of local communities. 24. Local Area Forums have operated across South Gloucestershire for a number of years in order to consider decisions at a local level and to obtain local views to take into account in the decision-making process. They are comprised of ward councillors for the area, and provide an opportunity to involve local residents and others

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in the community. While they champion local needs and aspirations and provide a focus for active public participation, decisions remain in the gift of elected Members. 25. There are two specific areas which I shall now explore in some detail in order to draw conclusions and recommendations that are grounded in practice rather than theory. These two areas are (a) Safer and Stronger Community Groups; and (b) Priority Neighbourhoods. Safer and Stronger Community Groups 26. Police and Communities Together (PACT) Groups were initiated across the country at the instruction of the Home Office. These instructions established a number of logistical and administrative arrangements by which the groups must operate. 27. In South Gloucestershire there has been recognition for some time that the strength of communities is closely linked to community safety and public confidence. For this reason the remit of the Crime and Disorder Reduction Partnership was expanded in early 2007 to encompass wider issues of stronger communities as well as the crime agenda. In addition, PACT meetings were evolved at that stage into Safer and Stronger Community Groups with the support and encouragement of the Police. 28. There are 20 Safer and Stronger Community Groups operating across the whole of South Gloucestershire. They are chaired by local people chosen by the individual Groups. Some are South Gloucestershire Councillors; some from Parish and Town Councils; and some chairs are prominent members of the local community. 29. Administration and operation of the Groups has been taken over by South Gloucestershire Council to free Police capacity. In response to the views of local communities a 12 month rolling programme of meeting dates and venues is available for all Groups while publicity has been improved through posters and increased material to advertise meetings. A dynamic electronic communication scheme has been introduced which enables real-time information updates to be provided—a key wish of local people. There are now almost 1,000 registered members of the system. 30. These changes in the work of the Safer Stronger Community Groups has lead to an 8% improvement in the National Indicator for the proportion of residents who feel able to influence decisions in their local area with the score increased from 25% in 2008 to 33% in 2009. 31. In the early stages the role of these groups was largely to bring to the attention of the public sector immediate issues of local concern in order for these to be dealt with by public sector organisations. However there was an increasing recognition that this led to short-term work responding to symptoms, and did not enable the underlying causes of problems to be addressed. Over the past 18 months positive attempts have been made to move to the latter approach. This requires local communities to get involved in taking actions in response to identified issues. Figure 3 demonstrates this shifting emphasis. Figure 3 DESIRED MOVEMENT OF SAFER AND STRONGER COMMUNITY GROUPS

Concentrating on community safety issues

Concentrating on strengthening communities

Action by public sector

Action by local people

32. There are some practical and logistical problems which hinder this movement. These include Home Office instructions on the boundaries and operation of PACT Panels. 33. Some of the actions taken by local people through Safer Stronger Community Groups include: — Better co-ordination, promotion of, and resources for community Speedwatch groups. — Development of strong links between Neighbourhood Watch Groups across South Gloucestershire.

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Figure 4 ACTIONS TAKEN BY LOCAL PEOPLE THROUGH SAFER AND STRONGER COMMUNITY GROUPS Safer Stronger Community Group

Action

Boyd Valley and Bitton

Adoption of national guidance for use by the emergency services in the event of accidents involving horses Planter to discourage dangerous parking outside the primary school Partnership working on ASB on local playing fields

Charfield Frampton Cotterell, Westerleigh, Coalpit Heath & Iron Action Hanham & Longwell Green Severn Siston & Warmley Stoke Gifford

Joint working on the Friday Night Project to tackle ASB DVD made by young people about how they feel about living in Olveston Formation of Siston Hill Estate Residents Association Development of a Neighbourhood Volunteers group

34. Increasingly issues are being brought by residents to Safer Stronger Community Groups at the expense of other formal mechanisms. This is because residents believe Safer Stronger Community Groups “get things done” whereas other mechanisms do not. This causes tension at times with those who believe they are the appropriate route the community should use. 35. In similar vein members of Safer Stronger Community Groups are concerned at times that the agenda for these public meetings can be hijacked by those with a specific (and single) agenda. Ways in which localism groups can be more representative of their wider community therefore need to be explored where they are involved in shaping the agenda rather than delivering specific services/actions. 36. Safer Stronger Community Groups are also being increasingly used to bring difficult and contentious issues to the fore. While this makes for difficult meetings it also begins to show confidence on the part of the public, who believe the groups are an appropriate mechanism to challenge public sector organisations. 37. Nonetheless there are issues—often where a separate decision / action route needs to be followed— which Safer Stronger Community Groups are not able to resolve. In some cases residents continue to raise the issue at Safer Stronger Community Groups meetings, even though the Group cannot resolve the issue. This has caused public discontent with the work of the Safer Stronger Community Group, and prevented significant other topics being raised. 38. Other lessons for localism emerging from the experience of Safer Stronger Community groups include: (a) The need for a clear understanding of the boundaries between local community decision making and work that is the responsibility of other bodies and systems. (b) That localism will be most effective if the current progress of a wider range of decision making also needed to be communicated to the public on a regular basis. (c) Implementing localism effectively is a journey, with changes needing to be made at appropriate stages, as communities and organisations mature and develop, rather then a single set of rules to be implemented at the same stage. Priority Neighbourhoods 39. In the mid 2000s the Council along with other public sector organisations used new technology to map the areas where there was greatest demand for services. When they shared the results of this work the same areas were highlighted irrespective of the issues being measured (unemployment; crime; poor health; below average educational attainment; the number of secondary fires.) 40. Through the South Gloucestershire Strategic Partnership working together to address the needs of these communities was included within the Sustainable Community Strategy. In 2006 five “Priority Neighbourhoods” were established. These consistently showed amongst the 20% most deprived areas in South Gloucestershire as assessed through the Indices of Multiple Deprivation. 41. The five Priority Neighbourhoods established were: (a) Kingswood. (b) Patchway. (c) Staple Hill. (d) Cadbury Heath. (e) Filton.

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42. In July 2009 West Yate/Dodington was added to this list. This area has a cluster of Local Super Output Areas which showed the greatest increase in total deprivation compared to the rest of the district. It was felt this area needed to a addressed as a Priority Neighbourhood for preventative reasons to prevent future problems. 43. During 2007 & 2008 Planning for Real activities were held in each priority neighbourhood and over 2,500 residents were engaged in helping to identify local needs and priorities. This provided a very effective community engagement process. However the changes local communities wanted to see were often unrelated to the factors influencing and underpinning the Indices of Multiple Deprivation. 44. Through Planning For Real and further engagement work, local people defined a good/strong neighbourhood as having a range of local shops; a colourful and clean environment with no empty shops; a communal building; activities for all ages especially young people; accessible transport links; knowing your neighbours; a mix of people and a mix of tenure; a local post office; community leaders and activists prepared to motivate other community members; a library; green spaces; good schools; youth clubs open as much as possible; young and old getting on together; a village atmosphere; having a centre or heart; affordable housing; and an affordable cafe 45. Key principles for working in priority neighbourhoods agreed by all partners include: (a) That work will involve influencing core delivery, not setting aside separate funds specifically for priority neighbourhoods. (b) Partners must be honest to each other and the public about what can and cannot be achieved. (c) There must be a key role for the community in delivering some of their own solutions. (d) Outcomes will take years to show. However it is important to build and retain the confidence of the public, and shorter-term measures need to be planned, delivered, and monitored. 46. In order particularly to address the third of these principles—which is localism in practice—Council officers have been working within communities to identify groups who could lead this work in each Priority Neighbourhood. 47. It was very soon apparent that the circumstances in each neighbourhood are very different, and that different models needed to be applied. For example there are strong communication links between community groups operating in Staple Hill and a general approach to getting involved in getting things done. However in Kingswood—just a mile away—the community is not so strongly linked, and there is a greater expectation that the public sector should do everything on behalf of the residents. This is despite the Indices of Multiple Deprivation showing greater deprivation in Staple Hill than Kingswood. 48. With the help of community groups and leaders a flexible model for localism was therefore developed. This involves a Community lead Group for each Priority Neighbourhood that would work on an equal footing with an equivalent group representing the public sector. The model is shown in Figure 5 below. Figure 5 MODEL OF DIFFERENT COMMUNITY LEAD GROUPS

Reference Group

Partner Group

Leading Group

49. The Community Lead Group in each community can participate at the level where it feels most comfortable. There is an expectation that the public sector and infrastructure support groups (such as the Council for Voluntary Service) will support Community lead Groups to move towards the Leading Group stage. 50. Some characteristics of these different stages are compared in Figure 5 below. It needs to be emphasised that this sense of structure has been requested by community groups in order to help them understand the role they may play; and to help them consider how they would play it. The description of these characteristics has therefore deliberately been left vague so that each group will determine its own operation and approach rather than those being dictated by the public sector.

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Figure 6 CHARACTERISTICS OF DIFFERENT COMMUNITY LEAD GROUP STAGES Reference Group

Determining local boundaries; priorities and sequence to achieve goals Impact on plans of the public sector Contribution to success of delivery

Overall projects and plans Operating support

Structure

Partner Group

Leading Group

Involves and engages with local community and brings together local organisations so as to represent whole community Advises Helps shape Develops

Comments and advises on plans.

Helps develop plans Helps contribute to success of public sector projects (eg by promoting them within the community). Leads delivery of some projects

Stronger role in determining public sector projects Helps deliver

Co-ordinates identification of local projects and the work of local groups to deliver these projects May need degree of Would need less support Support principally for support from the public from public delivery of individual sector to operate sector to operate; some projects led/delivered/ support for project commissioned by the group. delivery Very informal. More formal with a Formal status (or partnered Principally a forum constitution with another group which bringing people together has such a status (eg Town or Parish Council) which is able to act as a responsible body.

51. The prospective Community Lead Group for each Priority Neighbourhood is different in nature, depending on local circumstance. They range from Town and Parish Councils to Community Partnerships and a regeneration partnership. In the case of Kingswood there is currently no group that is able to fulfil this role, and a new group would have to be established locally. 52. One of the successes of the approach to Priority Neighbourhoods is the wide range of organisations that have signed up to this work. These include Avon and Somerset Police; Avon Fire and Rescue; the health service and Council for Voluntary Services. South Gloucestershire Council has not only agreed to co-ordinate this work, but has directed all services to direct their services to working with the relevant communities to help deliver improvements. Crucially services have been instructedto get on and deliver improvements, not seek to develop comprehensive action plans and performance management frameworks. Instead a few very broad headlines will be agreed with the communities, and the public sector held to account by the Community Lead Group for their delivery. This reflects what communities have asked to see, rather than the approach public sector organisations are more familiar with. 53. Other lessons which have been learned in developing and working through this approach include the following. 54. Effective localism takes time to build, and needs to reflect the different circumstances and willingness to get involved each neighbourhood (including those areas where a sense of the value for local people of participation still needs to be generated). 55. Initial discussion with communities and community groups highlighted a need to translate a deprivation driven approach into a language and approach that is meaningful to local communities. 56. Any structural approach needs to ensure flexibility and freedom to change in response to emerging issues and beliefs. Recommendations 57. Plans need to leave sufficient time to develop the shared understanding and confidence that is needed for effective localism. 58. That there needs to be flexibility in how localism is implemented in order to take account of local circumstances. The Government can best contribute to this by highlighting examples of good practice rather than dictating individual processes.

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59. A key factor in making localism effective will be changing the culture of the public sector. 60. That initial support will be needed to help develop groups in some communities, building their capacity and confidence. 61. Government requirements for the operation of PACT meetings should be removed in order to permit local arrangements reflecting local circumstances to be implemented. October 2010

Memorandum from North Dorset District Council (LOCO 69) The Submitter of Evidence North Dorset is a rural area with a population of 64,000 dispersed over a large geographical area including four market towns and many villages. There is an acute shortage of affordable housing, poor access to services, below average incomes, poor transport links and an economy based on agriculture and micro businesses. North Dorset District Council has one of the lowest district council tax rates in the country at £105 per annum for a Band D property. The Council’s make up is 17 Conservative, 13 Liberal Democrat and three Independent Members. Localism has been delivered over the last four years by cross party co-operation. The localism approach is based on the core principle that people who live locally know best what is needed to build sustainability. Community partnerships and partners are given the money, trust and autonomy to commission projects and influence policy. They are engaged as partners in the process. The Community Partnership Executive for North Dorset is a “partnership of partnerships”, an executive group led by the community. It co-ordinates community partnership activity across the district with the input of the Association of Town and Parish Councils and the third sector partner, Dorset Community Action. Localism is transforming the face of North Dorset. Our community partnerships and parish councils representing their market towns and surrounding areas come together to decide what services are important and take responsibility for safeguarding those services whilst improving the quality of the service and reducing the cost to the tax payer. This has been independently evaluated as the best and most coherent community planning model looking at local community, district and county level, helping the area to buck the trend of rural decline and maintain a resilient economy. Executive Summary — The District Council and Partnerships have a four year experience of decentralising services and enabling neighbourhoods to determine their own future. Over 12 incorporated companies or social enterprises have been set up, designed and run by local volunteers to deliver services and projects, using a variety of governance models suited to each venture. — It has gone beyond place based budgeting to grant aiding capital to community organisations to commission and build major facilities themselves. Over 190 projects have been delivered successfully. — District and Parish Councils have found new ways of working together with services delegated as close to the frontline as possible. Begun as a cost cutting exercise, it soon became clear that this way of working delivers high quality services and high calibre social involvement and interaction. It has proved to be far more than simply achieving efficiency savings. — The Council seeks to build capacity in the community through the partnerships and they in turn build capacity in the Council, for example, they have attracted resources and commissioned town design statements of sufficient quality to adopt a supplementary planning document to shape the future of towns and villages. Lessons Learned — It takes time and commitment to set up, to win hearts and minds and to build two-way trust. — It takes investment in the third sector to provide community development, expertise, to build project management skills and to train volunteers in business planning skills and governance. — It takes commitment and hard work from local councillors and a willingness to spend time listening, providing information and planning together. — It is useful to have the local knowledge and local connections of a district council and if one does not exist, that local connection must be built. — People will volunteer if investment is made in the service to be transferred, ie, they are not interested in run down buildings and neglected services. — It will need continual nurturing to make links with new volunteers and sustain those already working hard in the community. — Large community theatres and facilities can be self sustaining without subsidy if the volunteers and community are involved from the outset in establishing the vision.

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— Even small projects such as new play areas, if given to the community to drive, can bring new people into the democratic process, for example, people in a local housing estate have now stood for election at the Town Council. Recommendations for Action — North Dorset Scrutiny Committees have done effective inquiries into access to health services but find it difficult to influence decision making in acute services and the PCT, although the resulting contacts with GP surgeries and dentists have been beneficial to a wider contribution to the neighbourhood. The local Scrutiny role could be established. — Current VAT regulations on capital expenditure and charity legislation create barriers for community based trusts and usefully could be reviewed, eg introducing the planned secondary legislation to enable charitable incorporated organisations. — “Competing” initiatives from Government Departments confuse what happens in neighbourhoods: eg Police PACT panels were set up in a prescribed way which cut across other community forums. — JobCentre Plus operates at too great a distance from benefits authorities and the advice voluntary sector such as the CAB. Its services could be decentralised to benefits authorities and regulated by DWP. — A great deal of time and resource is given by local authorities and the voluntary sector to advising people about what Benefits are available and where/how to access them. The high volume of different Benefits and different criteria are confusing and create a barrier. They are also inequitable: …. two people living side by side may qualify for a different level of Housing Benefit because of the date they became eligible, even if their outgoings and situation is exactly the same. If less resource was given to managing the complexity, more resource could be given locally to return to work initiatives. Factual Information 1. North Dorset is a rural area with a population of 64,000 dispersed over a large geographical area including five market towns and many villages. There is an acute shortage of affordable housing, poor access to services, low average incomes, poor transport links and an economy based on agriculture and many very small and some highly skilled small businesses. North Dorset District Council has one of the lowest District Council Council Tax rates in the Country and smaller than many Town Councils at £105 pa. 2. What sets North Dorset’s approach to Localism apart from others is the degree to which it influences long term sustainability. The Council gives genuine power to the community to shape its own sustainable future. The partnerships deliver award winning, ambitious schemes involving people in the continuing prosperity and appearance of their towns, attracting about £15 million in the last five years. The partnership model has proved its capacity to deliver and has been commended by the Local Government Chronicle/Health Service Journal: winning “Best Community Partnership, 2010”. 3. It is at the cutting edge of community improvements. Our partnerships have been proud to showcase their achievements as exemplars of good practice to other Councils. 4. The core principle is the belief that people who live and work in the area know best what is needed to build a sustainable future. By giving power to local residents and putting them in the driving seat, the Council has ample proof that this approach can succeed. The role of local government in a decentralised model of local public service delivery, and the extent to which localism can and should extend to other local agents 5. North Dorset believes that our community partnerships are our eyes and ears and are best placed to ensure that the public sector really takes on board what matters most to our communities. The Community Partnership Executive for North Dorset (CPEND) is the partnership of partnership made up of four community partnerships, representatives from the County Council, Town and Parish, the Dorset Strategic Partnership and Dorset Community Action. 6. There are four community partnerships which cover all parts of North Dorset district centred on the four largest towns of Shaftesbury, Blandford Forum, Gillingham and Sturminster Newton. The objectives of the partnerships are: — To involve as many local people and community or voluntary groups as possible in the towns and the surrounding villages to plan the future of their market town areas. — To commission developments to regenerate the towns. — To deliver social, economic or environmental projects, involving volunteers, that enhance and care for the towns and villages and their local communities’ well-being. — To create opportunity to take community ideas up into strategic levels.

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7. Dorset Community Action (DCA) supports the four community partnerships and, with dedicated funding and support from the District Council, employs a small team of community resource workers that are based in each of the market towns, working directly with the community partnerships to define priorities, strategies and action plans, achieve the partnerships’ work programmes, identify and secure funding opportunities and implement projects. 8. The involvement of DCA is a key element, which enables the District Council to support the partnerships both with officer time and specialist knowledge but also financially (through an annual grant), whilst at the same time DCA providing independent advice and support to the partnerships, a step removed from the local authority. 9. Working in partnership, the community, local Town and Parish Councils and the District Council have secured over £3 million per annum of savings whilst safeguarding those services that are critically important to the community. We believe that our approach provides one blueprint for Localism and shows how Councils can successfully work differently to improve the quality of local services, engender greater community responsibility and become more efficient. 10. The District Council’s Tough Choices Programme was an instrumental part of achieving Localism in North Dorset, which involved all North Dorset community partnerships and local councils. Tough Choices also enabled the District Council to respond to the financial pressures of having its Council Tax increases “capped” in 2006. 11. Tough Choices built on the Vision for North Dorset72 with the aim of safeguarding services that were decided by the local community to be important, improving the quality of service and improving cost effectiveness. The Programme focused on three areas: Local Delivery, Focused Resources and Business Transformation.73 The District Council achieved a 25% reduction on its net revenue budget between 2006–09. 12. The services that were included within Local Delivery included leisure centres, public conveniences, funding for the Citizens Advice Centre, Countryside management service, sports development, arts grants, tourism promotion, maintenance of public open space, car parks, markets and street cleansing. Local Town and Parish Councils and the community partnerships were consulted and asked which of these services were important to their communities and, if important, would they be prepared to work with the District Council to safeguard their future provision. 13. The relationship of the unelected people that constitute the community partnerships and the elected District, Town and Parish Councillors is critically important. The elected Councillor role is critical for community leadership, which we believe is best provided at district level. Of course all these people are to a lesser or greater degree, volunteers. North Dorset now has a significant number of volunteers, a strength that has been deliberately encouraged and expanded through: — putting volunteers and local Councillors at the centre of decision making; — taking responsibility for services; and — providing resources: revenue and capital funding, transferring assets, training, technical and professional advice and skills development. 14. Relationship management has at times proved critically important to gain an understanding of each partner’s role and contribution, ensuring that existing roles and responsibilities are protected and not considered as being undermined. That requires involvement from the District Council and support from DCA including mediation and brokering agreement between organisations and individuals. 15. Community partnerships work side by side with locally elected Councillors. 16. In addition, co-ordination across public service including County, Districts, Police, Fire, health services, housing associations and the business community is achieved through officer and Member liaison. 17. The approach in North Dorset is different because it: — is in lieu of a district wide LSP; — works across local authority boundaries (into Wiltshire, for example); — influences policy and strategy and informs Council service business plans; — engages in decision making on which services considered important locally and should be retained through new working arrangements; — has experience and track record in engagement in the delivery of substantial programmes and projects; 72

73

North Dorset District Council Vision: where thriving, balanced and environmentally responsible communities in our market towns and surrounding villages build economic prosperity while safeguarding our unique and diverse surroundings. Local Delivery: supporting local communities to take ownership of discretionary service provision. Focused Resources: prioritising our services, focusing resources on our highest priorities and reducing what we do. Business Transformation: making best use of the Council’s investment in ICT through increasing efficiency.

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— goes beyond participatory budgeting towards trust and managed risk. Substantial budgets are passed to partnerships to deliver large schemes with technical support and financial risk management from the Council; — has CPEND representatives on various steering and working groups in the council; — included the vision for each community partnership and the priorities identified through CPEND in the Draft Core Strategy of the Local Development Framework (LDF); — provided training to support partnerships and professional resource through the Community Development Workers (CDW) and administration team, who are employed independently by the Third Sector on behalf of the partnerships, funded by the Council and partners eg training on legal implications of the roles and responsibilities of directors in partnerships, trusts and charities, and on project development and management principles; and — proper engagement, devolution and trust. The partnerships have a tremendous track record—we believe they will deliver and give them the tools to do the job. 18. The North Dorset approach has enabled the District Council to improve whilst at the same time achieving its financial challenges and improving the quality of service. 19. However, the story does not end there; we: — have achieved the Best Community Partnership in Britain 2010—celebrating the work of the community; — have a huge army of volunteers without whom, this journey would not have been possible; — have completed a review of the community planning model in early 2010 to further strengthen the arrangements, delivery and measurement of outcomes; — are well placed for the future through our long track record of local community engagement and commitment to take advantage of the new Localism and Big Society agenda; — have given community partnerships and partners the tools and trust to be autonomous; and — have Members that demonstrate long term commitment. The extent to which decentralisation leads to more effective public service delivery; and what the limits are, or should be, of localism The impact of decentralisation on the achievement of savings in the cost of local public services and the effective targeting of cuts to those services 20. Local delegated services including street cleansing, tourist information centres, public conveniences, maintenance of open spaces, town markets and leisure/community centres are now operated at a lower cost to the taxpayer. This is achieved not least through lower overhead costs, use of volunteers and business rates relief. Equally important, the customer service standards have improved through the extra care and attention provided by local councils and community charitable trusts taking responsibility for the success of the local services as businesses, which are dependent for survival on customer demand. 21. Locally managed services have proved to be more responsive services to local demands and better placed to be reduce bureaucracy and processing / communication of work requests; immediately tailor the service to respond to priorities. By doing so, again efficiencies are achieved to the taxpayer and customer service is improved. 22. Working across organisations (eg local councils) and with the voluntary / community sector takes time; to win hearts and minds can take two to three years, as we found with the Local Delivery programme. 23. It is essential that local decisions (eg of Town / Parish Councils and community partnerships) need to be respected and decisions cannot be imposed, although the consequence of local decisions need to be clearly explained and understand. For example, the decision of a local community to agree that there is little importance of a leisure / community centre, is likely to lead to that service being lost to the community. Such a closure has been made with full local agreement. The lessons for decentralisation from Total Place, and the potential to build on the work done under that initiative, particularly through place-based budgeting 24. There appear to be significant opportunities arising from the interventions to reduce later demand for services. For example the Dorset “Total Place” study highlights early intervention through fitness / leisure activities may reduce demands on acute health services. Our experience demonstrates the difficulties in achieving this; it is unlikely that health services will be able to support fitness / leisure services, because of annual budget pressures, to provide funding of preventative measures (eg investment in leisure activities) in the short term with the expectation of longer terms health benefits and their commensurate cost reductions. 25. We agree that Total Place aims to improve services that are locally important and needed to the benefit of local people holistically. Local councils should work with other public agencies (eg Jobcentre Plus), the voluntary and business sectors (eg Federation of Small Businesses) to maintain people in work; re-organising

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the benefits framework; promoting voluntary work; managing debt; avoiding homelessness; promoting start-up businesses; and developing jobs growth. How effective and appropriate accountability can be achieved for expenditure on the delivery of local services, especially for that voted by Parliament rather than raised locally 26. Government Grant supports part of the costs of statutory services only and locally raised income supports local decisions and services and contributes to the statutory services cost. What, if any, arrangements for the oversight of local authority performance will be necessary to ensure effective local public service delivery 27. Accountability and performance should be locally decided and the locality responsible for the success or failure. Local PIs agreed and monitored by locally elected representatives (working with the community and voluntary sector) with audited accounts. What were the Outcomes and how were they measured? 28. Practical outcomes now form a remarkably long and diverse list, from major regeneration projects to smaller ones such as a fishing platform for wheelchair users, from big community events to regular activities. Over the last five years the partnerships have been instrumental in attracting and delivering about £15 million worth of projects in the area. Projects are “delivered in partnership”, and outcomes include: — “The Exchange”, a £2.6 million redevelopment of a major site in the centre of Sturminster Newton with a large and impressive community facility, health centre, supermarket and community offices. Run by volunteers, the centre has broken even in its first year of operation. It has taken on a full time manager and is attracting national performing arts to the area. It has transformed the town, generating more visits to the town and increased social activity. The Sturminster Cheese festival attracted 13,000 visitors this year and huge sales of local products. The town has also won “Cittaslow” status, the first town in the South West. The SturQuest Partnership has recently been a regional winner for partnership and strategic working in the National Market Town awards. — Newly refurbished public toilets have been transferred by the District to the Town Councils together with Town Orderlies and the District pays the Towns for keeping the town clean. We now have a multi skilled response to cutting grass, clearing litter, sweeping the streets, cleaning the toilets, removing graffiti, and the rapid removal of fly tipping. The overall look of the towns has improved hugely. The Town Councils now offer cleaning services to some of the parishes. — In Gillingham the community partnership has taken over an old leisure centre building and is commissioning its own refurbishment to create a new leisure centre, community hub and community centre. The District has helped to train and develop expertise to do the business and project planning and has granted the partnership £4 million capital funding. The partnership has business plans to run the facility without District Council revenue funding. — The “Exchange” community complex and the new Gillingham facilities both incorporate renewable energy sources. — A community communication: Unity.Com magazine delivered free to over 3,000 homes—not subsidised. — In Shaftesbury and Blandford Forum the community are successfully running Tourist Information Centres in each town and have won business funding to help to support them. A small community pool is being run by volunteers in Shaftesbury following an asset transfer and assistance. — The District Council was the only authority awarded “Liveability” funding to use it to create a community “challenge fund” and skills development, to help build capacity in partnerships to deliver sustainable projects based on their own ideas. Over 190 projects have been delivered to improve the access to open space, all community generated and community run. — 15 play areas have been developed by the community and are now looked after by the community, parish and town councils. — A high level of volunteering in North Dorset shown in the Place Survey (top quartile). New people are coming forward to Town Councils and to community partnerships. — Increased democratic capacity/engagement from hard to reach groups, eg families were engaged in the provision of a long needed large play area in their recreation ground, therefore felt empowered, became less cynical and sceptical about having their voices heard and have subsequently joined a Town Council. — Increased democratic engagement Local Delivery—number of important services and facilities retained in the area. — 48 Parish Plans have been produced and four community action plans. — Town and village design guidelines written by the community, and facilitated by the District, are now adopted as planning policy documents; the District wrote a toolkit to share good practice and assisted in the process.

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— The district was top in two of the five categories in the Ecosgen study of economic resilience in the South West and was in the top five overall. — CPEND and the AONB Partnership have been awarded £2.85 million Local Action for Rural Communities funding for community led projects deriving economic benefit from the environment to improve the quality of life. This programme is being managed by the community. — CPEND is working with the Senior Management Team and Cabinet of Council as part of Team North Dorset. Members see community partnerships as part of the solution for the future and a voice for the community. — The Dorset Strategic Partnership (the County and District LSP) and the Community Strategy for Dorset are influenced by and informed by evidence and ideas from the Community Partnerships and the County provides a small contribution to the financial resources and the DSP provides small grant funding of £38,000 to CPEND for local community projects. — North Dorset is selected, alongside Newcastle, as one of two national pilots to undertake a “green map”—a Climate and Action Community Map, funded by the Green Alliance Supplementary Material Community Partnership Awards: Community Partnership Executive North Dorset—Building Strong and Inclusive Sustainable Communities, date 2010. October 2010 Memorandum from Surrey County Council Summary — I welcome the direction of the government’s plans for localism and decentralisation of public services. Localism offers the potential for more efficient, joined up decision-making and delivery that meets local needs. Resources can be targeted to where they are most needed within a particular area and decision-making can be quicker and more responsive. Councils are best placed to make these decisions. — Localism is consistent with the direction of travel in Surrey. Surrey County Council has deciding and delivering locally as a priority in our corporate plan and work is underway to consider what more the council can do. — I welcome the steps taken by the government to devolve responsibility and resources to the county council. The council is also working with neighbouring authorities to prepare to take on the more strategic issues and we are working with local partners to pilot greater devolution to district and borough level or further and to evaluate the benefits. The extent to which decentralisation leads to more effective public service delivery; and what the limits are, or should be, of localism I believe there is significant potential for localism to enable more effective public service delivery. In particular for areas of service where: — there is variation in local needs and circumstances; and — significant local coordination is needed to deliver an effective service. Local councils are better able than government to decide the priorities for their area and better able to design and deliver the services to meet the needs of their communities. I welcome steps being taken to increase local accountability for economic development, planning decisions, public health and policing and believe there is further to go. More accountability and resources could be further devolved to district, borough, parish and town councils in order to ensure services are tailored and resource targets to best meet the needs of local people. There could be a danger that the needs of minority groups may be overlooked, particularly where they are geographically dispersed and less likely to be represented within local decision-making. Deprivation in Surrey is focussed very locally. A single estate or a block of houses may be associated with the majority of health, crime, education and employment issues in a district or borough. Political engagement and volunteering can be low in many of these areas and it is important that local decision-making and delivery engage and target these areas to reduce disadvantage and do not reinforce it. Checks and balances will be required to ensure that services are accessible to all and that vulnerable people are supported. The lessons for decentralisation from Total Place, and the potential to build on the work done under that initiative, particularly through place-based budgeting Total Place pilots highlight the scale of spending in local areas and in particular on a few individuals and families in those areas. The pilots have also highlighted the need to rebalance influence that local government has in its areas in comparison with the rest of the public sector. The pilots demonstrate the failure of the silo

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structure in public services that is propagated from the departments of Whitehall. They demonstrate that devolution can deliver on its promise as well as indicating the size of the prize available. In Surrey, we are taking forward several initiatives with partners using a total place type approach: — Surrey First—we have established a joint committee to oversee collaborative working arrangements to develop a shared service approach to back office functions. Core work streams underway are Assets, ICT, Waste, HR and Procurement. — Review of local decision-making arrangements with the aim of establishing a single strategic decision-making body in each district and borough to strengthen local decision-making and delivery. — Pilot needs analysis and resource mapping at district and borough level. — Priority places: focussing partnership work on those places in the county requiring the greatest support as identified by “heat maps” which show the well being of local places across the county by performance against a range of indicators. The role of local government in a decentralised model of local public service delivery, and the extent to which localism can and should extend to other local agents Local government has a key role in a decentralised model of local public service delivery as it has the democratic mandate. For example, local authorities would be the obvious place to locate responsibility for a community budget and current proposals to make upper tier councils’ accountable for public health are welcome. However, accountability for outcomes in a local area does not mean responsibility for all service delivery. Local authorities have a role to play in working with local people and other local agents to decide what are the best ways to deliver specific services. They might then have a commissioning or enabling role, while services are provided by the voluntary or private sector. Localism should extend to other local agents to the extent that they are all partners working to increase wellbeing of their area. In particular, the model should increase accountability of other public services to local people by putting them under local democratic control. It should encourage joining up across the public sector in a place, such as more shared buildings, joint contact centres, shared back office functions and joint commissioning and contracts. Voluntary sector organisations can offer huge potential for delivering more local services through: excellent value for money, high level of trust and lack of stigma in the community and strong access to local networks. However, there are risks of relying too heavily on the sector, particularly for statutory provision, without the necessary support and contracts in place; and many organisations may be vulnerable in the short-term due to current or imminent funding cuts. Local decision-making must be underpinned with robust engagement and consultation with residents. Local members have a key role in interpreting the concerns of individuals to enhance the evidence base for their patch and lead the debate locally on how to reconcile the needs of the local area with the resources available for services. In Surrey, the Safer Community Policing Panels are an effective mechanism for promoting engagement with residents and there are trials in one borough with councillors chairing these and covering a wider agenda. The action which will be necessary on the part of Whitehall departments to achieve effective decentralised public service delivery Government must continue the drive to remove red tape and barriers to local innovation: — Remove prescription regarding partnership arrangements and joint working and instead allowing locally appropriate arrangements to be developed through practical necessity. — Increase the accountability of local authorities for the outcomes in their area and underpin this with community budgets and a single streamlined local accountability framework for funding received from central government. This would necessarily involve more services being under local democratic control. — Commit to achieving a target minimum level of funding to be channelled directly to local areas through community budgets and to invest a proportion of savings achieved in prevention and early intervention. — Establish a power of general competence and including removal of the ultra vires principle. — Increase the ability of local authorities to be entrepreneurial for example by increasing freedoms around company ownership and our ability to trade our services and expertise.

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The impact of decentralisation on the achievement of savings in the cost of local public services and the effective targeting of cuts to those services The areas where localism has the potential to enable the achievement of savings in the cost of local public services include those areas mentioned above that enable more effective public service delivery: — there is variation in local needs and circumstances so local decision making and delivery can tailor services to meet local needs; and — significant local coordination is needed to deliver an effective service. For example doing as much work as possible when you close a local road minimises disruption and reduces costs. But also those where: — those where there is not significant potential for economies of scale; — the size of the task more closely matches local organisations and SMEs. For example, a quote from a local firm to dig a hole for planting a tree is a fraction of the quote from a major contractor for the same task; — Surrey County Council is working with local authority partners to devolve service delivery. This has the potential to both improve service and reduce costs as resources are targeted to lower cost local providers and local coordination of work better meets local needs and reduces disruption; and — however, replication of functions across several areas means that decentralisation can be a less cost effective solution, that is district/borough-level commissioning of universal services where needs are consistent across the county.

What, if any, arrangements for the oversight of local authority performance will be necessary to ensure effective local public service delivery Local government should be accountable to local people for budgets funded by local taxation and to central government for money received for budgets funded from national taxation. Transparency is essential to local accountability and councils need to provide local people with the information they need to hold them to account. Ways to compare performance between areas (unit costs, productivity, outcomes) will be needed. Surrey County Council has already taken steps to increase transparency for example, by publishing accounts on line and web casting public meetings. Some mechanism of external challenge will be needed to provide confidence that organisations are being transparent and robust in their self-assessment. Peer review offers good value for money and the potential to support effective learning and improvement across the sector.

How effective and appropriate accountability can be achieved for expenditure on the delivery of local services, especially for that voted by Parliament rather than raised locally A truly localist solution would be based on accountability to local people. Allowing local authorities to keep more of the tax that is raised locally would address the underlying problem the question poses. Assuming that parliament will continue to distribute a significant portion of funding and will remain reluctant to truly devolve accountability, any framework imposed should be very streamlined and based on a few key measures of outcomes related to national priorities. Grants for local areas to deliver against these priorities should be pooled from existing departmental budgets or formula grant and there should be a single channel of accountability for outcomes and use of resources in an area to parliament. In two-tier authorities there is a potential tension between locally commissioned services and upper tier accountability for performance measurements. As an example, youth provision lends itself to being decided and delivered at a district/borough level, yet is central to addressing some of the performance outcomes that the county council is judged upon such as teenage pregnancy or NEETs. The council is working with Surrey’s districts and boroughs to exploring the extent to which devolving both budget and accountability to a joint strategic decision making body that is accountable to both local authorities in the district or borough will help resolve that tension. October 2010

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Memorandum from Lancashire County Council Executive Summary Decentralisation and place-based budgeting promise significant improvements for the sector but success will demand tough choices on service integration and the “right” spatial footprint. Localism will be either propelled or proscribed by the quality of local political leadership. The public must be assured of clear lines of prioritisation and accountability for service delivery, backed by national minimum standards. Whitehall should focus on its policy role. Establishing commissioning frameworks, investing in sector advice and support, and offering new accountability models for councils will be vital. Consultation Questions 1. The extent to which decentralisation leads to more effective public service delivery; and what the limits are, or should be, of localism 1.1 Lancashire County Council believes in decentralisation and accepts that services can improve if shaped by greater local knowledge, insight and management. So long as nationally-prescribed minimum standard ensure a floor-level standard of service, services do not need to be delivered on a national model. Councils are democratically accountable to the people and can prioritise the allocation of diminishing resources accordingly. 1.2 We’ve proved that localism works by devolving power downward to parishes and town councils (backed up by a set of agreed actions) and work with city and borough councils in Lancashire to identify policy areas where shared or combined services could be viable. Individual district councils can express interest in a specific, programme-based policy area—like our “public realm” pilot—and work with us to tailor local delivery to local demand. Many of our own councillors stress the differences between different parts of Lancashire and we have worked hard over the last eight years to develop an integrated and yet flexible approach based on the specific needs of districts. 1.3 Where we differ from traditional localists is that we do not underestimate the public’s appetite for strong geographical equity, defined as the same or similar services or level of entitlement from one place to another. It may well be that, under a more localist system, varying levels of provision or service design would be a pure function of political choices which lead to better outcomes due to a locality’s particular socio-economic needs or history compared with another’s. But localists must take seriously the potential for intense media and public criticism (and its longer-term effects) if service provision falters. Sizeable sections of the media and public remain largely unaware or unconvinced of performance improvements made by councils over the last 10 years and have come to expect uniform provision, especially in health care (eg drug availability), an area where place-based working promises the biggest rewards. 1.4 Councillors and ministers must both be clear with the public where the buck stops. So, in addition to winning hearts and minds, localists must offer strong local leadership that is responsible—and seen to be responsible—for local performance as a strong counter weight to the media’s obsession with “postcode lotteries”. Seen this way, the limits of localism lay in the capacity of the localist political class and its attendant bureaucracy, which may prompt a debate about the Coalition’s government’s plans for referenda on elected mayors in England’s biggest cities. As there is currently no guarantee of effective local leadership, localists must be attuned to calls to strengthen political leadership on the local level at the expense of “managerialism” and excessive audit regimes. Ultimately, the effectiveness of decentralisation will be either propelled or proscribed by the quality of local political vision and the resources allocated to local control. 2. The lessons for decentralisation from Total Place, and the potential to build on the work done under that initiative, particularly through place-based budgeting 2.1 In principle, Place-Based Budgeting promises to use local knowledge flexibly and target policy interventions at the most appropriate level. Tallying the totality of public investment into an area—not a new idea in Whitehall—clearly illustrates the reach of the state and identifies costly duplications of effort or the well-known market failure of “split incentives”. As policy makers improve their understanding of the myriad inter-connected drivers of socio-economic outcomes, it becomes clearer why the strategic commissioning of health services for the disabled and elderly need to be devolved to consortia of place-based agents. Housing providers now work with the National Health Service where housing quality has been shown to be a factor in poor health, and the health service has a role in getting long-term incapacity benefit recipients back into work. In perhaps the clearest example of the “win-win” promise of Total Place, PCT managers in Durham approved a contribution towards winter footpaths, reducing the number of falls and their cost to the NHS. 2.2 But the promise of Total Place goes beyond “counting” resources into an area: We must be sensitive to the scale and contours of the “place” itself, how its internal characteristics behave compared with other places and the specific demands of different policy issues when applied on varying scales (early interventions on a neighbourhood-scale, for example, with issues like transport and economic development on a larger footprint) or across the spectrum of wealth and well-being.

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2.3 Implementation, therefore, is tricky. Different incentives and rewards for different parts of the public sector bedevil partnership working beyond the immediate municipal sphere and complicate efforts to join up with the NHS or Department of Work and Pensions. Moving to genuine pooled-resource arrangements poses stiff challenges, like co-ordinating different budgetary cycles and financial and accounting regimes. Variations in training, performance monitoring and other work practices must also be considered. 3. The role of local government in a decentralised model of local public service delivery, and the extent to which localism can and should extend to other local agents 3.1 Currently, councils both commission and provide local services. In a decentralised model, councils will have to work harder to show that any services that they continue to offer meet exacting “value for money” standards. Central government may yet have a role in delineating the responsibilities of councils as commissioners and providers of local services, perhaps via the formation of national minimum standards. 3.2 Whether councils out-source delivery or not, they will still be responsible for monitoring performance. In the case of children’s services or care for vulnerable adults, councils will not only remain accountable for delivery but may well find that localised regulation will actually increase as councils micro-manage providers in a politically sensitive area. These scenarios undermine some of the localist arguments welcoming the demise of national performance management regimes in favour of a local “enabling” or “commissioning” role. 3.3 Localism means defining the geographic point where performance and cost intersect. Local government’s role lies in selecting the right level of subsidiarity—choosing the appropriate spatial footprint and attendant public agencies—and managing the resulting diversity of agents with a simple, flexible approach that decides where and how. We are using this approach in our talks with district and parish councils; our “devolved services protocol” works on a programme basis which is flexible and inclusive as units of local government below the county council can self-select how and where they get involved (this kind of tailoring evades issues that, in a two-tier area, can bog down service delivery when more comprehensive agreements are sought). It is also important to consider how many upper-level authorities worked in recent years with other public agencies through Multi-Area Agreements (MAAs), many of them imbued with this kind of localist thinking. While now defunct, the footprints of MAAs and their (in our case, relatively loose) governance arrangements, offer a starting point to build spatially-aware models of decentralisation and cross-agency co-operation. 4. The action which will be necessary on the part of Whitehall departments to achieve effective decentralised public service delivery 4.1 Whitehall departments are not set up to be delivery vehicles and criticisms of this “silo” culture are a tenet of localist doctrine (a review of the coalition government’s draft structural reform plans demonstrates the lack of co-ordinated thinking across departments). In policy areas of national concern, local government needs Whitehall to be clear on outcomes regarding what local agents should address but not prescriptive about how they tackle specific priorities in their area. Place-based agencies must also have the latitude to decide on local priorities themselves and negotiate on those priorities with the centre. Whitehall should then develop broad minimum standards of provision, offer a limited safeguarding role and facilitate local government’s commissioning and accountability roles through professional training, guidance and support. In this way, councils could become the executive agencies hitherto used by Whitehall departments to implement policy. 5. The impact of decentralisation on the achievement of savings in the cost of local public services and the effective targeting of cuts to those services 5.1 The Total Place pilots demonstrated the potential for savings through integrated decentralisation. But asset rationalisation and shared or uniform services are just the start. Higher up the value chain lie the real prizes of decentralisation, in terms of savings, whereby closer agency interaction with customers can identify demand, streamline interventions and target delivery. As before, the key skill is identifying the appropriate level of intervention, then empowering and incentivising public agencies to collaborate. 5.2 It is generally assumed that the dynamism of decentralisation is somehow more efficient than the current model—because agencies pool their budgets and knowledge to tackle issues in ways appropriate to local conditions. But the Total Place Pilots did not sufficiently test whether decentralisation would create greater flexibility to respond to these conditions (eg substance abuse delivery in rural areas, or areas with significant homeless populations). Localist arguments may require more robust evidence to counter claims that centralisation generates economies of scale and is therefore inherently more efficient. There is also no clear evidence that decentralised, devolved systems would better target cuts. An obvious objection is that this would bring narrow self-interests to the fore and disadvantage the less “sharp elbowed” amongst us, leaving the most vulnerable and least vocal out in the cold. Localists must address these arguments through the provision of clearly understood threads of local accountability. 6. What, if any, arrangements for the oversight of local authority performance will be necessary to ensure effective local public service delivery 6.1 Councils across the country must respond to the crisis of faith in public institutions. Lancashire County Council, the fourth largest authority in the nation, was among the first to webcast Full Council and committee

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meetings. Council portfolio holders regularly go before the public through our popular “Cabinet Question Time” programme. We regularly publish performance data and are looking at real-time provision of service information to the public. 6.2 Coalition plans to expand the amount of municipal data provided to the public is welcome in this regard, although it has not been proved that this will lead inevitably to a revolution in citizen habits. The “wisdom of crowds” model requires significant public engagement and, especially early on, other accountability mechanisms must be deployed alongside citizen-driven scrutiny. There will also be significant variances in the type and quality of information provided, linked to the differences in size, capacity and population across the UK’s complicated council map. 6.3 As suggested by the Local Government Association and others, policy makers could look at an expanded Duty to Cooperate, increased powers for Overview and Scrutiny committees, including an examination of limited local subpoena powers, greater use of participatory budgeting and other mechanisms to boost accountability. Accountability models should be council-led. 7. How effective and appropriate accountability can be achieved for expenditure on the delivery of local services, especially for that voted by Parliament rather than raised locally 7.1 The limited nature of local government’s revenue base means that, in the absence of any reform of the municipal funding system, Parliament must keep councils accountable for funds disbursed by Westminster. The Comprehensive Area Assessment, despite its faults, did provide a nationally consistent approach, which many feel is still needed for monies approved by Parliament. The Coalition’s intention to conduct a review of the local government funding system may further illuminate options in this area. 7.2 Given that there is a clear commonality between local and central government based on their democratic credibility, it is surprising that, unlike other western democracies, formalised links between Parliament and local government are not a feature of UK politics. There is some potential, therefore, for expanding Parliament’s outreach services or Select Committee structure to include a new improvement and support role for councils in scrutinising the expenditure of monies approved by Parliament, including joint council-MP committees. “Big Society” reforms may also allow for formalised scrutiny of spending by building capacity within the voluntary sector and bring in parishes, resident associations and other “little platoons” willing to play a bigger part in keeping big institutions accountable to everyday people. Ministers and civil servants, as well as councils, must also clearly communicate the role and responsibility of local government in any new approach, which echoes our earlier comments about the political independence of place-based choices. October 2010

Memorandum from the Local Government Association Executive Summary — The public sector faces an urgent challenge—how to move from a flawed top-down, target-based approach to improvement and delivery to a system more responsive to the needs and wants of local people, which is able to protect frontline services while delivering the savings that will be required following the Comprehensive Spending Review. — Radical reform is urgently needed. This must be through a devolved structure which will allow services to be more effectively targeted, allow for services to be integrated, and bring about the removal of the current complexities of fragmented provision stemming from a myriad of public bodies responsible for a multitude of funding streams. — A place-based budget model will allow for this radical reform, strip unnecessary bureaucracy, and allow for local economies of scale. It will strip out layers of costly and unnecessary bureaucracy and crucially will also allow for a shift towards prevention, in which the costs and benefits of a policy accrue to the same set of decision-makers, and to increased transparency and accountability. — The Total Place pilots made it clear that place-based budgeting will allow local areas to focus funding where it will have the greatest impact on overall outcomes, target spending to the most significant local priorities, support strategic spending decisions, reduce a layer of bureaucracy from tracking multiple funding streams, and control the deployment of resources to meet changing local and national priorities. — A place-based budget holder would play a strategic enabling role, allocate nationally-determined place-based budgets to address both national and local priorities, and strategically commission a set of local services from these budgets to meet these outcomes. — Government Departments should, where appropriate, pool their budgets into a place-based budget to allow commissioning decisions to be made locally. This would apply to a wide range of departmental spend where spending decisions are currently determined by departments themselves or by Quangos.

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— Place-based budgets can reduce the overhead costs of the delivery of public services and see intervention preventing high cost social problems emerging. We estimate that a full place-based budget in every place would save £100 billion over the lifetime of the Parliament. — A new more effective approach to the oversight of local authority performance is needed, and the LG Group is consulting on this. — There must be greater accountability on how public money is spent. Unelected officials should not be able to make discretionary decisions about how taxpayers’ money is used without them being subject to strong democratic oversight. Localism can increase that accountability. The LGA The LGA is a voluntary membership body and our 422 member authorities cover every part of England and Wales. Together they represent over 50 million people and spend around £113 billion a year on local services. They include county councils, metropolitan district councils, English unitary authorities, London boroughs and shire district councils, along with fire authorities, police authorities, national park authorities and integrated transport authorities. The Current Problem For a decade, public service organisations have undergone continual reviews in pursuit of better value for money, improved transparency, and increased effectiveness. But these reviews have all reflected the fundamental assumption that an expansion of state machinery, combined with continual attention to process efficiency, will deliver better services and higher user satisfaction. These ten years have produced a significant body of empirical evidence which in fact shows that the topdown target-driven approach to improvement and efficiency has delivered neither uniformly better outcomes, though many outcomes did improve, nor higher public satisfaction, while the view has grown that public spending has reached unaffordable levels. We nevertheless enter the next decade with a public service architecture created on this flawed and overcentralised model, with a public budget and bureaucracy for every issue, alongside an inspection and control regime for each. This means only radical reform can make possible the necessary savings in public expenditure, if frontline services are to be protected. If the current model is not carefully reshaped, there is a significant threat of collapse as a result of the pressures that it now faces. The way public services are funded, delivered and regulated will have to change significantly. The public sector faces three significant and interlocking challenges: — how to restore confidence in public finances; — how to rebuild trust in politics and; and — how to tackle entrenched economic, social and environmental problems. These mean that public services will have to offer: — much better value for money; — more transparency and; and — more effectiveness. How Decentralisation Leads to More Effective Public Service Delivery Devolved governance can bring about fundamental reform in the way public services are delivered. Services can be targeted more effectively on need, removing deadweight costs. For example, there are considerable variations in the level of adult skills between places and a pressing need to improve skills in some communities. National programmes have failed to do this effectively. Around half of the employers whose employees received subsidised training through the Train to Gain programme (which spent £876 million in 2008–09) would have arranged similar training without the subsidy. Over the lifetime of the programme this amounts to a deadweight cost of £1.7 billion. Decentralisation will allow for an integrated, whole public service approach to intractable problems like unemployment. For example, JobCentre Plus is failing to get many of its clients into secure employment: of the 2.4 million Job Seekers Allowance claims each year, around two-thirds, or 1.6 million, are repeat claims. These repeat claimants typically experience barriers to employment—in childcare, housing, personal finances, transport, mental health or alcohol and substance use—that cannot be fixed by Job Centre Plus alone. But the current departmentalism removes the incentives for Job Centre Plus to enlist the help of health, transport or housing bodies, or for those bodies to volunteer their help. Decentralisation will help in the removal of the complexities in provision that arise from a multiplicity of public bodies involved in commissioning and funding. For example, a fragmented approach based around 49 separate funding streams and policies, totalling around £9 billion a year, has failed to reduce the number of young people who are not in productive work or learning. Around 10% of young people are not in education,

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employment and training (NEET)—this is higher now than when the previous Government’s Social Exclusion Unit coined the term and set a target to reduce the rate. Around 1 million young people aged 16 to 24 years old are not in either work or learning. Localised responses could secure better results with less money. Decentralisation will also give the freedoms for innovative local approaches to behaviour change. Progress on a number of social and environmental issues, such as reducing obesity or tackling climate change, will involve individuals and families to changing their behaviour. With constrained public resources, there will be much less scope to do this through national programmes, and there will be a much stronger reliance on local and voluntary action. Local action works. For example, one of the biggest changes in recent years has been councils’ success in persuading and enabling people to recycle more. Devolved governance further allows: — layers of bureaucracy to be stripped out and particular services and functions including procurement, back office and transactional services to be integrated and jointly commissioned, saving money; — scale economies to be brought to bear on functions where the geography of the problem requires it; — single assessments of the same clients; — data-sharing, and client-centred, rather than organisationally focussed, working; and — budgets to be moved between programmes, putting an end to multiple ring-fenced budgets and the constraints that imposes on moving funds from budgets with under spends to those that are subject to pressure. Prevention Rather Than Cure Looking at the totality of spending in a place—even where budgets are demand-led or allocated by consumer choice—enables a shift towards prevention and early action on the intractable issues that blight places, such as inter-generational worklessness, poor educational performance, drug and alcohol dependency, and re-offending. It becomes possible to invest in long-term prevention because: — the costs and benefits accrue to the same set of decision makers managing a place based budget. The classic market failure of split incentives (an entrenched feature of departmental bureaucracies—where the short-term costs fall to one department, whilst the longer term benefits fall to another) can be overcome by benefit sharing rather than cost-shunting; and — services can be de-commissioned safely without unintended costs and consequences passed from one part of the public sector to another. Cuts in spending can be viewed in terms of their wider impacts and costs rather than their impact on a single organisation’s balance sheet. Local areas have already identified several themes where services could be rebalanced towards prevention securing value for money over the long-term: — in Birmingham, 93% of public spending on employment is on out-of work benefits and less than 7% on supporting people into work; — in Manchester, the Early Years pilot is the subject of longitudinal cost benefit analysis to determine the long-term savings of early intervention, exploring the financial efficiencies of ensuring children that begin their schooling “school ready”, reducing expensive specialist support (a place in a pupil referral unit costs £22, 873 per year) with wider savings to the criminal justice, health and benefits systems; — in Leicester and Leicestershire the estimated costs to the public sector of dealing with alcohol misuse are £89.3 million annually, compared to just £4.9 million to prevent misuse; and — in Bournemouth, Dorset and Poole the key to improving services for older people at lower cost is to shift provision from acute care (emergency admission to hospital) and an overreliance on secondary care for older people to investment in well-being, early intervention and prevention (including telecare and telemedicine). Evidence from abroad and in England suggests a strong case for family based interventions—targeted work with families likely to create a high costs to a wide range of public services. This work requires a range of public sector organisations to invest—police, courts, the NHS, local councils and so forth. This integrated work is difficult to undertake with organisational budgets, but much simpler with a place-based budget. More Transparency and Accountability Localising governance also improves transparency and accountability, re-building public trust in government. When they have a complaint about public services, 48% of people go first to their local councillor, compared to 29% who go to their MP. The arrangements for complaining about non-departmental bodies and the health service are opaque.

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The Parliamentary and Health Service Ombudsman received over 16,000 individual complaints last year but has said that many of these complaints could be resolved locally—“essentially, we want people to be able to make the right complaint at the right time to the right organisation, and to achieve a good outcome. It is evident we are nowhere near that position yet.”74 We need a simple system for complaining about public service failure. After a complaint has been raised with an organisation directly, if the complainant is not satisfied with the response we would like people to look automatically to the local councillor to complain about the local services, and to their MP for national services. The Lessons for Decentralisation From Total Place Before the start of the “Total Place” work there was a critical conversation about the need for an offer to help council leaders in a time of severe fiscal crisis. This conversation was sparked by the nature of public finances and the increasing expectation of the public. Its context was one of complexity in local service provision and national government policy, a shift to outcomes and whole customer experience, and a belief that an innovative approach to produce better customer experience through enrolling the “customer”, “citizen” or “consumer” of public services in the resolution of their own problems would lead to a better deal for the taxpayer. One of the biggest challenges will now be moving this beyond the excellent work already done and establishing it as common practice throughout the public sector. This is going to require significant involvement across places that have only so far been peripherally involved, and a deeper engagement from key Whitehall departments, as well as a fundamental shift in the nature of the relationship between central and local government. Place-based area budgets are the next logical step from Total Place. They would ensure that local and accountable decisions on what public services are commissioned locally, and from where, can be made. Initiatives outlined in the Total Place report are a solid starting point, for example: — Coventry, Solihull and Warwickshire—a concordat between the place and central government based on an agreed level of savings in exchange for significantly greater local flexibility. — “Budget for Birmingham”—to increase focus on preventing problems and tackling underlying issues, alongside a shift towards longer-term investment and financial planning return across public services. — Worcestershire has proposed that principal local authorities should be the accountable bodies for greater levels of devolved funding and that they should have a strategic commissioning role. The Total Place pilots made clear that greater flexibilities over the use of resources can support local partners to: — focus funding where it will have the greatest impact on overall outcomes; — target spending to the most significant local priorities; — support strategic spending decisions; — reduce a layer of bureaucracy from tracking individual pockets of spend; and — flex the deployment of resources to meet changing priorities. New models of leadership will challenge senior leaders to work in a way that devolves authority for single outcomes against a single expenditure flow. Cambridgeshire propose a shared leadership team operating with a pooled budget and a single strategic plan that will be enabled to coordinate resources and allocate them based on local needs. This could produce efficiency savings of around £19 million per annum for all partners. The role of local leaders in work on local budgeting is critical to its success. Strong political and managerial leadership throughout public services is required to enable sustainable, fundamental change in the way people and organisations work together to shape services for the benefit of citizens. Leaders who have looked beyond the boundaries of their organisations and their authority are already shaping the future of partnership working. Leaders must be supported in this change, both individually to help them cope with systemic change, and together to build a culture with shared values, aims and behaviours. The Role of a Place-Based Budget Holder The place-based budget holder would exercise three principal roles: — play a strategic enabling role for those services which do not rely directly on public sector organisations holding budgets and instead allow money to follow citizens’ choices; — allocate place-based budgets, determined nationally, between outcomes to address national and local priorities and need; and — strategically commission a set of local services from these budgets to meet these outcomes (and effectively de-commission and enable voluntary action). 74

Parliamentary and Health Service Ombudsman, Annual Report 2008–09.

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Crucially it will involve ensuring the conditions are in place locally to make sure choice-based models work effectively (so, for example, addressing constraints that prevent the development of responsive service providers and encouraging the growth of the voluntary sector). What do Whitehall and Government Departments Need to Do? The Government has said that it will give people more choice and control over public services provided in hospitals, schools and colleges. There are two key aspects to making this policy a success. First, the decisions about broad budget allocations should be made nationally, typically by formula that take account of local circumstances. The decisions about how those budgets are spent must then be made locally, or determined by the choices people make themselves or in the case of the NHS the clinical and commissioning decisions of General Practitioner consortia. Second, in the case of services determined by individual or provider choice, democratically accountable local government should have a role as a strategic market maker, championing the citizens’ interests, to ensure that there are excellent services for local people. Councils can ensure these services fit with and provide value for money alongside other local services, where there are interdependencies between services. Making the local market work is about the classic role of the state in managing market failures and: — helping people make informed choices about services; — encouraging improvement and excellent provision; — ensuring redress for citizens where services fail; — encouraging providers to enter the market and in cases of systemic failure, managing exit; and — ensuring services provide for those people with more complex needs. Local councils bring democratic legitimacy to the discharge of these roles. The Government’s proposed health service reforms recognise that local authorities should play these roles. The budget for local health improvement will transfer to local authorities who will jointly appoint the Director of Public Health with the Public Health Service. Health and Well-being Boards will be established to join up the commissioning of local health services with social care and health improvement. Local authorities will play a strategic role in promoting integration across health and adult social care, children’s services and wider local authority services. This strategic role applies to the reforms to schools, colleges, adult training and health. Where budgets do exist, Government Departments should pool them into a place-based budget to allow commissioning decisions to be made locally—this would apply to a wide range of departmental spend where spending decisions are currently determined by departments themselves or by Quangos. For example, DWP budgets for employment support or the housing and regeneration budgets of the Homes and Communities Agency. The Impact of Decentralisation on the Achievement of Savings in the Cost of Local Public Services and the Effective Targeting of Cuts to those Services Place-based budgets can reduce the overhead costs of the delivery of public services. They can release resources to be focussed on front-line services, enable services to be targeted on local needs, and allow innovative early intervention to prevent high-cost social problems emerging. The LGA estimated in July that a full place-based budget in every place would save £100 billion over the lifetime of the Parliament, with the savings back-loaded towards the end of the Spending Review period. Further work with councils supports this estimate—in steady state the savings are in the range of eight to 15% of the total public sector spend in a place—the equivalent in a large county of between £1 billion and £2 billion. Place-based budgets could make a significant contribution to the savings required to reduce the national deficit and enable places to manage public spending reductions with less impact on frontline services. There are a number of service areas where the potential to make savings is greatest: — over £6 billion in savings from integrating health and social care budgets enabling a coordinated approach to hospital admission and long-term care; — £0.5 billion to reduce re-offending by stripping out duplication and working across the public sector to provide the varied support people need to rehabilitate; — targeted local approaches to tackling unemployment focussed on communities with high levels of benefit dependency could save over £1 billion cumulatively each year; — there are nearly 1 million young people aged 16 to 24 years old not in education, employment or training. The annual benefit cost alone of this group of young people is over £5 billion. Evidence from Essex County Council suggests that a place-based approach would save £104.7 million from a total cost of £855 million, including £44 million in housing benefit alone. At a national level, this would save nearly £1 billion annually; and

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— more modest savings could be made on other issues, using cautious assumptions to gross up evidence from individual councils, for example — Westminster City Council could save 20% on neighbourhood policing—nationally this would represent a saving of £175 million. — Evidence from Gateshead, South Tyneside and Sunderland, and Leicestershire suggests a £100 million saving could be made in responding to alcohol and drug misuse. There are around £5 billion in savings to be made on the running costs of public sector assets and from rationalising public sector assets through reduced running costs and the capital receipts from asset disposals. Asset management A number of places including Cambridgeshire, Kent, Lewisham, Leicestershire and Worcestershire have explored how more effective management of the public sector estate would release capital receipts from asset disposals and reduce running costs. Their savings estimates vary—the disposal returns will vary according to asset values and running cost savings are sensitive to assumptions about the extent of co-location and intensity of use. Using a modest assumption to gross up the savings—multiplying by 50 rather than a factor of [150] reflecting the number of upper tier authorities in England—we estimate running cost savings of £2.25 billion and capital receipts of £2.5 billion. The Oversight of Local Authority Performance The way local public services have been assessed over the last decade needs to change. — Inspection has been helpful in stimulating improvement but is subject to diminishing returns as performance in the sector has risen markedly over recent years. — The compliance costs are no longer affordable in the current economic climate. — The constraints imposed by the panoply of targets, assessment and inspection regimes and data returns prevents councils and their local public sector partners developing innovative joined up and cost effective approaches to local service delivery. The Costs We believe the cost of the inspectorates, Government Offices and councils’ compliance costs to be in the order of £900 million per annum (see “Delivering More for Less II—transparency in action”). The total figure— when taking government departmental activity into account—is much higher. In their final report, the Lifting the Burdens Task Force cited the Gershon 2006 figure of £2.5bn as the annual cost of regulating local government from Whitehall. A new more effective approach is needed based on the principles that: — councils are accountable to the communities and people that elect them; — councils are responsible for their own performance and for leading the delivery of improved outcomes for local people in their areas; and — councils have collective responsibility for performance in the sector and to collaborate through peer support, benchmarking and sharing good practice. The role of the LG Group is to facilitate and support this approach. Based on these principles we have set out our proposals for a new sector-owned approach to regulation and improvement (“Sector self-regulation and improvement”. September 2010—copy attached). Our proposed approach—on which we are currently consulting councils—comprises three key elements. — Transparent performance information: in order to strengthen accountability to their communities councils will make on-going performance management information publicly available in a meaningful way and in a format that local people can understand and use. Because there is a strong desire in both councils and communities to compare performance between places the LG group is developing a new approach to benchmarking unit costs, productivity and outcomes. — Robust self assessment and peer challenge: councils would report annually to local people about the quality of life of the area and performance—including services to vulnerable adults and children—based on a self assessment. This would be backed up by a regular cycle of robust peer challenge with the option to invite representatives from the local public sector, businesses, community and voluntary groups, the inspectorates and local community representatives to be part of the challenge team. The LG Group is developing an updated selfevaluation tool and peer challenge offer.

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— Managing the risk of underperformance: as external inspection and assessment diminishes in the light of improved performance the challenge will be to manage the risk of falling or under performance. We are therefore committed to putting in place the mechanisms that will allow the sector as a whole to spot councils facing performance challenges at an earlier stage so that support can be provided and service failure avoided. The LG group will work with councils, the Inspectorates, political parties and others to develop agreed “early warning” signals and the necessary arrangements to share intelligence. Where performance risks are identified the sector will offer support—but where, in exceptional circumstances, this is ineffective or declined then we accept the right for external inspection and/or intervention. This is a robust approach that invests primary responsibility for assessing performance in the hands of local people and gives them the necessary tools to do so. It also allows for further reductions in inspection and government monitoring through data returns. Accountability for Expenditure, Especially to Parliament Accountability is vital and there is not enough of it in the system of government the country currently operates. It is not right that unelected officials should be able to make discretionary decisions about how taxpayers’ money is used without them being subject to strong democratic oversight. Localism can increase that accountability. The spending of money voted by Parliament raises particular problems. Most voted money is dedicated by the ambit of the Vote to specific departmental objectives. Over the last few years, those objectives have been expressed as constraining targets. Accounting officers have put in place detailed controls in order to give themselves the assurance they feel they need in order to do their duty to Parliament to assure propriety and regularity. This degree of targetry, specification and control is seen as a brake on localism and the assertion “but I am accountable to Parliament for that” has become the argument of last resort of Whitehall officials who are reluctant to decentralise or devolve. This perceived Parliamentary barrier to decentralisation is, however, a delusion made possible by the failed culture of central control. Even at the height of the target fad, some £25 billion of unhypothecated grant was allocated through CLG to local government through the formula grant settlement without central control over the purposes to which it was put. It is perfectly possible for place-based budgets to be achieved simply by increasing the amount of unhypothecated grant paid to councils and correspondingly reducing departmental funding streams for local activity. We see four possible routes for achieving proper Parliamentary accountability for place-based budgets; they are not mutually exclusive and could be combined. (1) Scrapping centrally-controlled funding programmes and increase the formula grant settlement to correspond; this is simple and very attractive; it trusts councils themselves to work in a decentralising way and to commission diverse provision locally. (2) Creating a “local vote” with specific outcomes set out in the Estimate, with an accounting officer nominated on a place basis rather than departmentally; this provides a more powerful level for Parliament to scrutinise what is taking place locally. (3) Pooling departmentally-owned budgets locally under delegations from departmental accounting officers; this is needlessly complex and would be very difficult for Parliament to scrutinise; it is the weakest model of accountability, putting complexity between Parliament and expenditure, and between the local pool and local voters. (4) Devolving both the responsibility for the services and the tax base to fund them, with locallyelected councillors accounting directly to local voters for local spending, improving transparency by clearly dividing democratic accountability between Parliament’s national role and councils’ local democratic role; this is the simplest, clearest and most decentralising option, and reflects the position in many of our international comparators, but would also represent a seismic shift both in accountability and in control of the total national tax base. October 2010 Supplementary memorandum from the Local Government Association POWERS FOR THE SECRETARY OF STATE—LGA BRIEFING Introduction This note follows requests from Committee members for a list of the key powers for the Secretary of State and Ministers that the LGA would like to see removed from the Localism Bill. The below represent a crosssection of the unnecessary, dangerous and centralising Secretary of State powers in the Bill, but by no means cover all the powers we feel should be deleted to encourage truly local thinking. 1. EU fines 2. Housing finance reform

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3. 4. 5. 6.

Establishing shadow mayors Decreeing what constitutes a “local issue” Micro-managing how the “Assets of Community Value” policy will work locally Micro-managing neighbourhood planning

1. EU Fines Part 2, Clauses 30–34 of the Bill give Ministers the power to force local authorities to pay part, or all, or an EU fine given to the UK by the European Union. LGA View This policy is unfair, unworkable, dangerous and unconstitutional. It allows Ministers unprecedented power to fine local authorities extra-judicially as a result of EU laws that councils played no part in signing up to. There is no indication of how responsibility will be apportioned, and with issues like air pollution it would be impossible to accurately assess fault. This represents a new threat to council finances in a time of significant financial strain, and the LGA offers instead to work with the Government to help ensure that the UK is not fined at all in the future. 2. Housing Finance Reforms Part 6, Chapter 3 of the Bill abolishes the Housing Revenue Account (HRA) system, allowing councils to buy out of the current system and take on a level of debt. However, it also allows the Secretary of State to determine the maximum amount of housing debt a local authority can take on when investing in social housing for the future. LGA View The abolition of the HRA should give councils a clean break and the financial certainty to invest in and plan for social housing. However, the power for the Secretary of State to decree from the centre how much housing debt a council is allowed to take on introduces a new, direct control on councils’ capital finances. It ignores the success of the prudential code which has ensured that councils’ investments are affordable, prudent and sustainable. This power for the Secretary of State to cap borrowing is unwarranted and will limit councils’ ability to invest in social housing for the future. 3. Establishing Shadow Mayors Schedule 2, Sections 9N, 9NA, 9NB, & 9NC give the Secretary of State the power to order that a local authority will operate an elected mayor and cabinet model. On a specified date the council leader will be forced to become a “shadow mayor” with the powers of an elected mayor, with this change subject to a confirmatory referendum. LGA View Localism must allow for local people to decide on their own form of local governance. The power for the Secretary of State to decree that an area must have a mayor, through the imposition of a “shadow mayor”, is in stark contrast to the localist rhetoric of Ministers. The creation of an enforced shadow mayor model will be complex and time-consuming, and allows central government to pre-suppose the wishes of local people. 4. Decreeing what Constitutes a “Local Issue” Part 4, Chapter 1 of the Bill lays out the procedures for holding local referendums, with Clause 44 (6) setting out the Secretary of State’s power to determine by order what constitutes a local issue. LGA View This is a symptomatic, and ironic, proposal which gives the Secretary of State unnecessary, inexplicable power to dictate what constitutes a local issue. True localism will allow for local people, with their elected representatives, to decide what issues affect them locally. It does not require national politicians to tell local people on what issues they can petition. 5. Micro-managing how the “Assets of Community Value” Policy will Work Locally Part 4, Chapter 4 of the Bill lays out how assets of community value will be decided upon and listed locally, giving the Secretary of State power to determine the procedure for unsuccessful nominations, how land owners will be informed that their land has been added to the list, and the moratorium system to allow for community groups to build bids to buy assets on the list.

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LGA View This Chapter is indicative of the huge amount of regulatory powers that the Bill reserves for the Secretary of State. In a Chapter focusing on local people working with their council to determine what constitutes an asset of local community value, there are 54 references to specific areas where the Secretary of State may issue regulations from the centre. These include dictating: — how the list of assets will look; — how entries on the list can be modified; — how to determine whether a building has community value; — how to list assets that do not get on the list despite being nominated; — what the moratorium period on sales of assets is to be; — what constitutes “relevant disposal” of local assets; and — who is to pay compensation in connection with operation of the Chapter. This number does not include further, non-specific powers for the Secretary of State to make any further regulations in conjunction with this Chapter. The heavy emphasis here, and elsewhere in the Bill, on centralised control is in complete opposition to the “post-bureaucratic age” so enthusiastically championed by Ministers, and the Secretary of State’s personal commitment “…to replace the command and control approach to local government with genuine localism” (Rt. Hon. Eric Pickles MP, 15 October 2010). 6. Micro-managing Neighbourhood Planning Part 5, Chapter 3 and Schedules 9, 10, and 11 lay out the new framework for neighbourhood planning including provisions for the creation of new neighbourhood forums which will represent their neighbourhoods and have the power to require their planning authority to make a neighbourhood planning order and a neighbourhood development plan. LGA View This Chapter demonstrates the enormous difficulty that Whitehall has had translating Ministers’ localist ideas into legislation. A commendable idea, of helping people to get more involved with local planning decisions, has been wrapped up in excessive amounts of bureaucracy and red-tape and resulted in a hugely complex piece of legislation. This will affect not only councils but the communities that these sections are aimed at. The powers for the Secretary of State that we would like to see deleted from this section include: — Power to determine what constitutes a neighbourhood area (Schedule 2, Section 61G(11)). — Power to determine if, and how, councils can charge to meet expenses incurred as result of supporting neighbourhood planning (Clause 97). — Power to dictate how a neighbourhood development order must look (Schedule 10 Clause 5). — Power to dictate who should act as an independent examiner to consider Neighbourhood Development Orders (Schedule 10, Clause 7(5)). Conclusion We will be supporting amendments to the Bill as it goes through Committee designed to decrease the power of the Secretary of State and increase the power of local people to decide how their areas are run. Amending the six areas highlighted above would be an excellent start. February 2010

Supplementary memorandum from the Local Government Association The Work Programme and Localism — Local enterprise partnerships will play a key role in promoting the conditions for private sector growth and job creation in local economies. One of the Government criteria for the new partnerships is that they should broadly conform to natural economic geography. — The LGA lobbied for Work Programme contract package areas to follow local enterprise partnership geography—to help bring together the support for job creation with the support to help people secure jobs. But the contract package areas in the Work Programme “Invitation to Tender” follow a different geography even where the local enterprise partnership has scale— such as the Kent/Essex/East Sussex “super-LEP”.

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— Nevertheless local councils and local enterprise partnerships can play a significant role in the success of the Work Programme—helping to manage and scrutinise performance, co-ordinate activity with other public services, provide local information about economic development and share premises to reduce cost. DWP have yet to describe the role they expect local enterprise partnerships to play in the Work Programme. Community Budgeting — The Government has announced 16 community budget areas to focus on complex families. These families present a high cost to the taxpayer and helping them resolve their problems has significant social and economic returns—to the family, the wider community and the taxpayer. Since these families are in contact with and receive support from a wide range of public services, there is a strong case for a much more co-ordinated approach, which is now taking place in many authorities through family intervention projects. — A significant part of the costs associated with these families are benefit costs. DWP should therefore be a major contributor to the community budget—but as yet there is no evidence of a financial contribution. Localisation of the Social Fund and Wider Issues — The Government has proposed the localisation of elements of the Social Fund—crisis loans and community care grants. As a stand-alone measure, it transfers significant financial risk to councils when unemployment is rising and a change in benefit entitlements is more likely to increase the number of people on benefits requiring additional financial help. It also assumes the responsibility can be bolted onto local authority social service departments who support a very different client group. This only makes sense as part of a wider localisation of the face-to-face interface with citizens who have more complex benefit claims, when online or telephone handling will not be appropriate. January 2011

Further supplementary memorandum submitted by the Local Government Association (LGA) Thank you for inviting me to give evidence to the Committee on 24 January in relation to your inquiry into localism. During my oral evidence I promised that i would write to the Committee regarding the Local Government Group’s position on the setting of business rates locally. The difficulty in answering your question came from the fact that the Group does not have an agreed position on this issue currently, beyond the fact that we have consistently called for business rates to be re-localised. In view of the Local Government Resource Review, we are currently drawing up a consultation document which we will be putting out to our members, and this will help to inform any eventual position we take on this issue. I trust this is of some help.

Memorandum from the New Local Government Network (NLGN) The concepts of localism and decentralisation have been the defining emphasis of the work of the New Local Government Network since its inception. We are an independent, not-for-profit think tank that seeks to transform public services, revitalise local leadership and empower local communities. NLGN’s unique networks of innovative local authorities and private companies, voluntary, community and public bodies work alongside the research arm of the organisation to provide thought-leadership and original research into the future of localism and the ways it can improve public service delivery and re-energise democracy in England. We welcome this timely inquiry into localism and decentralisation being carried out by the Communities and Local Government Select Committee. We are grateful for the opportunity to present our thinking and recommendations. Executive Summary — NLGN believes strongly in the ability of localism and decentralisation to deliver better public services, make public money go further and strengthen civic society. The UK’s overly centralised system of government too often leads to unresponsive and wasteful public services. The scale and complexity of social and public policy problems requires a response that can only be developed at a local level between those that access and those that decide and deliver services.

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— The relationship between the citizen and the state is changing as government responds to severe short term financial pressures and longer term social and demographic changes. Councils are at the forefront of renegotiating this relationship, and we expect that they will remain the focal democratic presence in the UK’s towns and cities. In the absence of any realistic alternative to local democracy, local government will have to retain a major role in public service delivery, civic society and the economic health of their areas. — This is not an argument for complacency. The role of local government may need to change radically in the coming years, a fact evidenced by the wide range of institutional innovations emerging from councils like Barnet, Brighton, Lambeth and Suffolk. To maintain their legitimacy and handle the spending cuts, local authorities must redefine their role in dialogue with their communities. — This role should combine, at a bare minimum, the following functions: democratic negotiator and leader, strategic commissioner, service provider, co-ordinator of public bodies, facilitator of civic society, and a driver of economic growth and investment in the locality. — The fiscal consolidation means that councils will have to make very difficult decisions over the coming parliament. This process will be made considerably easier if central government offers a stable and long-term policy framework and funding settlement. — Decentralisation can help councils cope with the cuts by providing the power and flexibility to do things differently. The potential of shared services, collaboration with other local services, better asset management, personalisation, early-intervention and prevention are well known. The reason this potential has not yet been realised is, in part, because of siloed budgets and accountability mechanisms in Whitehall. These silos can be removed by devolution of power and money to councils, communities and individuals. — As this suggests, devolution can only happen effectively if Whitehall is prepared to change radically. The locality—as the totality of all organisations providing public services to a particular area—needs a way to have a single conversation with central government about money and policy, rather than working through bilateral negotiations with each individual department. This would enable all parties to decide upon the allocation of resources according to the unique priorities within a particular area. — Local government’s unique strength lies in its democratic accountability. Councillors are the primary source of legitimacy for their locality, and they have a key role to play not only in renegotiating the role of their council, but in leading the debate about transforming public services more generally. This means that the primary avenue for accountability should be direct election of councillors and mayors, bolstered by increasing transparency and the active participation of citizens. — That said, we recognise the continuing need for some form of light touch central oversight to share good practice, promote innovation and to spot and tackle persistent or systematic underperformance. 1. 1.1 The United Kingdom is a highly centralised country. Whitehall is responsible for a remarkable 70% of government expenditure.75 Among the OECD countries, this level of central control is surpassed only by New Zealand. International comparisons of governmental effectiveness consistently show that the highest performers generally have either strong local government or federal structures.76 1.2 The UK’s centralised model of government means that public services are more often designed to meet the needs of Whitehall silos than to meet the needs of citizens. This can result in significant inefficiency as citizens receive too much of the wrong kind of service, or fall between the cracks in different parts of the public sector. The LGA estimates that area based budgets could save £100 billion over the life of the current parliament by designing out some of these flaws.77 1.3 A major shift towards localism and decentralisation is inevitable. But this shift is also desirable, because it has the potential to remove bureaucratic central constraints and create much more space to redesign services around the needs of local people. Many local authorities have proven that they can deliver excellent services, and that they have ideas on how to go further. 1.4 These practical arguments serve to reinforce the principled case for localism. In a liberal democracy, power should flow upwards from the people, rather than downwards from the centre. Political authority should be exercised at as low a level as possible to reflect this fact and to ensure that power is used in an accountable and responsive fashion. 75 76

77

OECD, Government at a Glance, 2009. See, for instance, the Bertelsmann Sustainable Governance Indicators. The Status Index puts federal countries like Australia, Canada, Germany and Switzerland ahead of the UK for socio-economic performance. The Scandinavian countries, Denmark and Norway, which are small and generally have strong local government, also rank ahead of the UK. Local Government Association figures available at: http://www.lga.gov.uk/lga/core/page.do?pageId=13748140

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1.5 It is important to raise two definitional issues at this point. Localism and decentralisation are overlapping but separate concepts, and they suggest different strategies for public service reform. Localism can be taken to suggest a move to devolve power to local government as a primary democratic institution. Decentralisation is more about giving power to individuals and communities. 1.6 The two concepts can lead to very different policy conclusions. A localist might be sceptical of free schools because they weaken democratic control over education, while a decentraliser might support the same policy because it appears to give parents more choice. A localist would favour giving councils a large degree of influence over all local public services through area-based budgets, while a decentraliser might prefer to go beyond the council and make services directly accountable to individuals through individual budgets. Such approaches are not necessarily mutually incompatible, but issues of clarity about democratic accountability and coherence across local public services are likely to come to the fore. 1.7 One of the biggest limitations on localism is arguably public opinion—the people of England are deeply ambivalent about devolution of power. While many people say they want more local control over public services, it is less clear that people always desire the local variations in service provision that would inevitably follow.78 However, NLGN believe that such views reflect more on the historically centralised nature of decision-making, public services, taxation and funding than they do on community aspirations for greater power and control. 1.8 Decentralisation is a more managerial approach to reform which transcends some of the political barriers to localism. Free schools and consumer choice in health do not require a major shift in public attitudes, partly because they seem to raise fewer concerns about the “postcode lottery”. However, even here the government must contend with the fact that the public does not tend to value public service choice as an end in itself, and that many people are not very inclined to become involved in managing their own local services. Only one-inten of us is currently involved in local civic activism.79 1.9 These objections and barriers must be overcome politically before the Coalition Government’s vision of a localised and decentralised Britain can become a reality. This is partly about ministers having an honest debate with the public about the likely impact of localism, but it may also involve a more thoroughgoing renewal of local politics and civic activism. The UK is not yet a nation of localists. 1.10 There are also a number of managerial conditions that NLGN believes should be in place to allow localism and decentralisation to flourish. Chief among these are safeguards to ensure that localist solutions are successful. This means that councils and other services still need to be able to compare the quality and unit costs of their work, and to develop mechanisms for sharing innovation and best practices. This information is also vital to ensuring that the public can hold the local state to account. 1.11 The government also needs to maintain an “early warning system” for spotting failing services and tackling them effectively. Armchair auditors and benchmarking systems will help to maintain the quality of public services, but alone they do not provide a way to address systemic corporate failure. 2. 2.1 Numerous pieces of research, including work by NLGN, have demonstrated the huge financial potential offered by the concept of Total Place. Its successful implementation is estimated to be worth billions in savings. In addition to financial savings, there are huge benefits to be gained through greatly enhanced, integrated service delivery that is centred on the citizen, which ultimately leads to better and more sustainable outcomes. 2.2 Perhaps the biggest gain from the Total Place pilots was a demonstration that devolution can deliver on its promise. It is the local dimension that can bring a truly citizen-centred approach to policy and services. 2.3 The government currently appears to be moving beyond Total Place towards a revised model of Community Based Budgets. NLGN supports this move in principle, but we await details of exactly how the budgets will work and, more importantly, whether they will allow local government to influence spending in worklessness, the criminal justice system, primary care, policing and schools. 2.4 Moving beyond the concept of Total Place to look at its practical implementation reveals the cultural, architectural and operational barriers that currently prevent greater financial and organisational integration of agencies at the local level. It is clear from NLGN analysis that many of these barriers are the result of an overly centralised government and heavily siloed civil service. 2.5 Whitehall silos can have highly damaging implications for localities—these take the form of ringfenced budgets, professional, organisational and sectoral cultures, performance targets and processes, specific departmental budgets programmes, and a reluctance within the centre to let go. 78 79

Ipsos Mori, The Future of Local Government, 2010. Communities and Local Government, Our Nation’s Civic Health, 2010.

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2.6 Major phased reform is necessary. The long-term ambition should be a mutual and equal partnership of trust and collaboration between central and local government in responding to the challenges in each place, where Ministers feel able to devolve and refrain from intervention in local issues. 2.7 We propose that the Government should encourage interested localities to come forward with clear robust business cases for reform, where responsibility and resources should be handed down to the local level. These should include hard edged deals on responsibility over agreed outcomes, risk and reward. NLGN believe that positive proposals could be forthcoming in areas such as worklessness and skills, acute care, regeneration, transport, offender management and probation service spend, drug and alcohol abuse. 2.8 NLGN propose that the following should be up for discussion and dealmaking through this medium: — All Non-Departmental Public Bodies spend and revenue budgets and over domestic public service spend such as social benefits. — Removal of additional specified performance targets. — Length of budgetary cycles. — Freedoms across space and geography for allocation of resource. — Payment by results approaches. — Propositions from national government for local government on bringing together appropriate services within collaborations or across the country (for instance, HR payroll) and a sharing of the financial benefits. 2.9 We propose that to cut out unnecessary bureaucracy and to allow full discretion over spend across regeneration, transport and housing, a single capital pot with greater longer term certainty should be given to local areas. 2.10 Reform at central and local level must retain a focus on the whole public service agenda whilst recognising the function that each tier of government must perform to ensure fair, efficient and user-centred services and sustainable outcomes. 3. 3.1 The relationship between the citizen and the state is in a process of transition, placed under the spotlight by the Coalition Government’s aims to: decentralise power away from institutions towards people and communities; reduce public expenditure; and to pursue a recalibration of the means by which Government achieves its objectives. 3.2 The size of the state will undoubtedly be scaled-back through a period of fiscal consolidation, and via this process its remit and presence will be redefined. Within the context of a Big Society, questions must also be asked of the role of local government. 3.3 NLGN believes that although local government may operate in a fundamentally different way in the future, as a democratic institution it remains vital to the objectives of thriving communities, economic growth and effective and efficient public services. 3.4 Potential reform could take many directions and NLGN sees that whatever these are, local government will remain a vital presence in local public service delivery. NLGN believes that a sustainable approach to localism must involve local authorities extensively. This is founded on three grounds: — Efficiency—we believe the principle of subsidiarity80 should be used to decide how far power or responsibility needs to be devolved. There are clearly examples where power could be devolved further than a local authority to advance many social and economic aims, but there are also examples where the local authority is the best placed agency to tackle a particular issue or provide a service. This is particularly pertinent to strategic planning and co-ordinating roles, which cannot be performed adequately below this tier. Furthermore, there are clear examples where responsibility may best lie at a supra-local level in order for sufficient scale to be gained (such as infrastructure planning or worklessness prgrammes). — Equity—the principle of fairness is a key ambition of the Coalition Government and it must be recognised that there is a need for democratic representation to protect the rights of the vulnerable and uphold fairness across service provision. In the context of decreasing budgets, upholding fairness necessitates a careful negotiation of priorities. To do this there must be devolution of resources and power to enable a proper dialogue across sectors and with citizens. — Democratic legitimacy—Councils are the major democratic presence at a local level, with a clear mandate and legitimacy with which to make decisions about public service delivery and to lead their communities. Without the involvement of local government it is far harder to ensure accountability in service provision or galvanise the aspirations of local communities. 3.5 A truly localist approach should empower local authorities to define their own role and remit. There would be a number of ways to configure this, dependent on the needs of a locality and the approach the local 80

The principle of subsidiarity states that for efficient operation of a system, power or responsibility should be devolved to the lowest possible level. It is the principle used to bind EU law.

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authority deems to be best. This taken into account, NLGN believes that the role of a local authority in a decentralised model of public service delivery entails at its narrowest: — Strategic Commissioner: local authorities may choose to commission, rather than directly provide, some or all of their services in instances where the desired outcomes are clear and known but where there may be multiple ways of achieving these. As such the council may decide its role is simply to commission from any available resource the service on behalf of the public. Through this lens, the complete resources can be mobilised to meet the services needs whether it be public, private, third sector or communities themselves. — Service Provider: Financial constraint is likely to impel models of delivery to evolve, and services may increasingly be delivered by the private sector, voluntary and community sectors. However, NLGN believes that one of the core roles of local authorities will remain as service provider. — Facilitator: local authorities possess size, capacity and information to be effective facilitators of civic society. This is a role that entails empowering citizens and communities, providing them with the skills and capacity they require to take a more active role in the running of their area. — Co-ordinator: the complexity and/or scale of many social and public policy issues requires organisations from all sectors to work together. As the democratic core, and with a remit that cuts across all public policy at a local level, the local authority is often best placed to lead on collaboration, integration and co-ordination of efforts to ensure that services can be centred around citizens and delivered in the most efficient and fair way possible. — Democratic point of accountability: Local authorities will remain the institution that is visibly responsible for services in the eyes of the public, even in instances where there has been outsourcing or community ownership. As the centre of local democracy and either the provider or commissioner of services, it is councils that must be ultimately accountable for the quality of the service. As community leaders, councillors and councils play an advocacy in representing views and concerns of citizens to other parts of government. — Well-being and economic health: these are fundamental to the successful functioning of a society and sense of “place”. It is therefore crucial for local authorities to have a role in promoting these factors, particularly in supporting its residents to gain employment and providing a suitable network of infrastructure of support businesses, employment and trade in its locality and across neighbouring authorities in line with functional economic geographies. — Municipal finance: local authorities should be recognised as macro-economic entities with an active relationship with the economic destiny of their localities. As such there is a need for them to have a broad remit that includes entrepreneurialism, trading, freedom in taxation and a scope to enable them to drive capital investment locally through active municipal finance that is independent of central government. 3.6 This list is not exhaustive. It is intended to cover the principal roles that local authorities are likely to play in a decentralised model of public service delivery but we accept that there could be wider roles that can legitimately be held by local authorities. 3.7 It must also be noted that councils will have additional or different roles when interacting with other parts of the public sector where there are plans to decentralise functions, such as GP commissioning, free schools and academies, and co-ops and mutuals. However, if these inherent roles are recognised as fundamental to localism, then they should be applied to develop coherent and accountable local public services. 3.8 Some of these plans implicitly entail a less active role for local authorities as power is devolved from them to other agencies or organisations. However, they simultaneously create an important need for local authorities to retain a democratic oversight of these services and to act as convener and facilitator of the myriad of agencies in the field. 4. 4.1 Over the last couple of decades, alongside major public investment, the focus on public service “delivery” and new performance management techniques has led to a deeply engrained tendency for Whitehall departments to organise on a heavily centralised, managerial and prescriptive basis. 4.2 Public services saw major improvement over this period, but in recent years there has been a growing awareness that to get services from good to excellent a far more decentralised approach is necessary. 4.3 Devolution of power to local government, civic institutions, communities and citizens allows far more responsive, innovative and ultimately effective public services. Continuous improvement should be increasingly driven by empowering citizens to shape the services they receive and strengthening democratic accountability, rather than through top-down initiatives and control from the centre. 4.4 However, the devolution of power and decentralisation of services has been frustratingly slow and stunted. Enormous pressure from the national London-based media and lobby groups for Ministers to provide instant responses to issues, combined with the temptation of Ministers to cling on to their levers of influence

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and control, are powerful forces that should not be underestimated. Part of the problem also rests with the passivity of some in the local government sector itself who have been schooled into a dependency on central guidance and direction. 4.5 Referring to Whitehall as one entity hides significant differences. It is important to note that some departments have been better than others at decentralising service delivery. NLGN research has highlighted substantial variation between departments in their willingness to decentralise. 4.6 The current architecture of departments and processes does not facilitate decentralisation of services across Whitehall. The siloed nature of local public services is often an echo of the central architecture above it. Driving improvement at a local level means gaining financial integration and buy-in from the centre. To drive area-based budgets, we need a means by which central and local government can work together to decide on the allocation of resources, dependent on the needs and priorities of individual communities. 4.7 The principle of “earned autonomy” risks creating a mindset within Whitehall that is resistant to devolution. The premise that autonomy has to be earned may serve to perpetuate existing centralised arrangements and we would recommend that it is replaced with an attitude of “earned centralisation”. 4.8 NLGN recommends that the devolutionary rhetoric used by current and previous Ministers is captured in a new “duty to devolve”. Government departments should regularly assess whether their functions have been devolved to the lowest and most appropriate spatial level. If a function has not followed the principles of subsidiarity in this way, central Government should be under a legislative duty to devolve that function in line with specified criteria. 4.9 Government Departments are currently “judge and jury” when it comes to devolution and are open to the charge that they are insufficiently impartial and too institutionally protectionist to make a judgement about whether they should decentralise services. Therefore NLGN also recommends the creation of a Parliamentary Devolution Select Committee to oversee and scrutinise departmental policy and, if implemented, to monitor the implementation of a “duty to devolve”. 5. 5.1 More localised responses at the individual citizen, community, local authority or sub-national tier offers considerable scope for significant savings. The appropriate scale for activity will depend on the nature of the services, economic and labour markets and potential provider markets. 5.2 Whether on their own or in cross-boundary collaborations, localities would have an interest in taking additional responsibilities in worklessness and benefits, offender management, local policing, youth services, drugs and alcohol abuse. Siloed funding streams, duplication of activity and a lack of local responsiveness results in sub-optimal outcomes and the injection of avoidable costs. When local decision-makers are able to access the full spectrum of public budgets going into an area, evidence demonstrates that financial savings of over 10% can be unlocked. In London alone, analysis showed that over £11 billion could be saved if decisionmaking and commissioning functions were devolved and brought together at the local level. 5.3 There is opportunity to create a far wider role for individual budgets and more community decisionmaking and provision of services. When designed carefully and applied appropriately, personalisation can deliver improved services, can increase social capital and reduce costs to the public sector. 5.4 Financial savings can come from handing over greater responsibility to citizens for assessment (which can lead to reductions in staff and process costs) and from each citizen driving value for money for themselves; from channel shift and from tailoring services better to individual needs. For instance, individual budgets in adult social care witnessed cost reductions of approximately 7%. 5.5 To do this effectively also requires sophisticated knowledge of the depth, scale and nature of existing and potential community capacity and capability. Due to its proximity to its residents, local government is in a privileged position to understand where and how to mobilise responses from civil society, and marshal all the local intelligence on its customers. 5.6 Though decentralisation would deliver significant savings, the rapid pace of fiscal consolidation and planned reduction of public funding means that the range of services local authorities provide will have to shrink. Deciding where to rationalise spending over the coming years will prove a considerable challenge. 5.7 NLGN research has found that a number of core tensions are likely to come to the fore: between acute and preventative services; between services that are received by a majority of the population versus resourceintensive services targeted at a minority of more vulnerable residents. There are no easy answers to these tensions and barriers, and local communities should be allowed to negotiate their priorities. 5.8 Councils as local democratically-elected bodies are uniquely placed to engage their communities in meaningful debate on the priorities of their area. A new service settlement is required. In-depth community engagement should underpin the negotiation process in a local area. An honest dialogue is needed about which services currently provided by the council communities and individuals, with proper support, will have to take on themselves in the future.

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5.9 Crucially, for all this to happen, longer term funding certainty is needed from Whitehall to allow councils to develop invest-to-save schemes and to plan strategically, with their communities, over the timeframe of major budget reductions. NLGN has previously argued strongly for a three-year framework which would allow councils to think innovatively and radically. The Government should certainly seek to ensure that unexpected or additional budget reductions are not sprung on the sector. 6. 6.1 NLGN has consistently argued for a series of reforms that would reinforce democratic processes, localism and a focus on the citizen, whilst reducing bureaucratic processes and “red-tape”. 6.2 We believe that local authorities should remain free to choose the institution conducting their audit. However, the lessons from the financial sectors should be heeded, and mechanisms should be put in place to ensure that this does not lead to cosy relationships between auditing bodies and their clients. We also believe that, following the abolishing of the Standards Board, a new Code of Conduct must be established detailing the ethical and behavioural standards expected of public officials and officers, and the recourse mechanisms available to citizens. 6.3 Performance should be based on outcomes, as perceived by citizens and service-users. Greater emphasis should therefore be placed on the means and methods to gather and act upon citizen and service-user input. We believe that any oversight should be based around four key principles: — Transparency: Transparency is an efficient, democratic, and organic way to make elected officials accountable. NLGN has advocated for the publishing online of salaries and expenses of elected officials. NLGN also believes that the financial revenue and expenditure local authorities are operating in should also be published, in order to provide citizens with the tools needed to make democratic decisions. Further thought should be given to the balance between national frameworks of data transparency, in order to achieve consistency and comparability, and allowing for local variations designed to reflect the priorities of local communities. — Centred on the Citizen: Assessment should become a bottom-up process, with citizens defining priorities for areas, and measuring the progress made by local authorities against those priorities. They should act as de facto assessors, and should have a wide variety of options for expressing their views, journeys, and experiences of local services. NLGN has also recommended that the potential should be explored to allow citizens to petition an LGA oversight body to assess a service if it is failing. — Owned by local government: Local Government possesses the democratic mandate and legitimacy, the desire, and the knowledge to organise and oversee self-assessment processes, peer-reviews, mentoring schemes, and best-practice sharing. This should be done on an “areawide” basis, as outcomes are the result of partnership workings. — Designed to protect vulnerable individuals: In difficult financial times, attention must be paid to the most vulnerable sections of society: children in care and vulnerable adults dependent on critical services. This must be achieved through a risk-based, proportional, and efficient system of weighted random inspections for specific services, designed to reassure citizens that vulnerable individuals are being properly cared for. We believe that the organisations—such as Ofsted and CQC—currently conducting those inspections should remain in place. 7. 7.1 NLGN believes that the principles which apply to the oversight of local government performance should be similarly applied to the expenditure on the delivery of local services voted by Parliament. 7.2 Audit should be the primary tool used to ensure that the money being transferred to local services is being properly accounted for. 7.3 Financial and audit trails should be published online, in a way which is intelligible and clear, enabling concerned citizens to understand the financial realities in which local authorities operate. 7.4 The concept of area-based budgeting raises some important to questions relating to accountability, legitimacy, and outcomes. Who in an area should be held responsible for the spending decisions made with regards to place-based budgets? Although the arguments to retain ultimate accountability nationally for funding voted through parliament has some merit, NLGN believes that this has scope also to re-introduce harmful centralising dynamics. If budgets and risks are devolved, then mechanisms should be developed for locally elected representatives to be answerable principally to their citizens. 7.5 Those spending decisions would have to be judged with regards to the outcomes they produce and it would be important for any area-based budget to have a robust business case that set out the intended outcomes and proxy measures that can demonstrate progress towards these goals.

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7.6 The National Audit Office should have a prominent role to play in following the audit trail, and in facilitating the implementation and oversight of place-based budgets. Some form of linking between expenditure and outcome indicators would allow for the monitoring and assessing of the efficiency of spending decisions, and enable some form of evidence-based accountability. September 2010

Memorandum from the Department for Communities and Local Government Summary and Introduction 1. This submission sets out evidence from the Department for Communities and Local Government. 2. The coalition government is founded on the principles of decentralisation, localism and the Big Society. The Department for Communities and Local Government has a key role in achieving this agenda by redistributing power from government to communities and people. 3. This action is necessary as government has become increasingly centralised over time, and complex systems have been built up to allow central government and other unelected bodies to disproportionately influence local priorities and decisions. This interference has stifled creativity, held back public services, weakened accountability and progressively eroded the link between citizens and local service provision. It is time for a fundamental shift of power away from central government to individuals, communities and local institutions to put them back in charge of making the decisions about their local areas and services. 4. Our guiding principle is that power should be held at the lowest possible level, whether this is individuals, communities, neighbourhoods, local institutions or local government. We are fundamentally shifting power away from Westminster to local authorities, communities, neighbourhoods and homes across the country. The Department’s Structural Reform Plan, published on 8 July, is a clear action plan for delivering the radical shift of power from Whitehall to local councils, communities and individuals. The Coalition Government is delivering a radical localist vision, decentralising central Government, and making the Big Society part of every day life. 5. To achieve — — — — — —

a radical devolution of power we need to take action in six key areas: remove central burdens; empower people to take action; letting local people control public spending; breaking down monopolies ; make public bodies and services transparent; and strengthen accountability.

6. This submission sets out the underlying evidence for our approach, the actions that have already been taken, and how we intend to build on the Government’s positive start to embed localism, through the decentralisation of public services, into British culture. In some cases, policy referred to in this submission is being developed for announcement at the Spending Review on 20 October. 7. Government does not have a monopoly over the evidence and ideas that will help drive this agenda forward, and we look forward to learning from the Committee’s inquiry. Introduction Our organisation and approach 8. The Department for Communities and Local Government has policy responsibility for local government, empowerment, planning, housing, local economic growth, regeneration, community cohesion, fire and resilience. It is also a champion for the decentralisation of power. 9. Our guiding principle is that power should be held at the lowest effective and practical level. Britain has become one of the most centralised countries in the democratic world, with too much power held at the centre of government. This concentration of power has held back public services and wider society. The bureaucratic systems of accountability, imposed by the previous administration, directly, via the apparatus of regional government and through unelected non-departmental public bodies have: — damaged people’s confidence in their own ability to act; — weakened democratic accountability; — suppressed the ability of local institutions to respond to the priorities of local people; — eroded the link between citizens and local service provision; — created confusion for citizens who do not know where accountability lies or where to exert pressure for change. This in turn has led to disengagement from the political process; and

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— represent a significant administrative cost, at a time when we can least afford expenditure which does not directly contribute to public service outcomes. 10. Local people and communities often know their needs better than anyone else. Decentralisation, therefore, should not just be viewed as a transfer of power from central to local government, important though that is, but as part of a more radical agenda where the starting point is always that power is held by individuals, communities and local institutions. Local decision-making will be a part of everyday life, giving communities, neighbourhoods and individuals more say, choice and ownership of their local facilities and services. 11. For these reforms to work, bureaucratic accountability must be replaced by democratic accountability. Local institutions and service providers must be accountable to local people through greater transparency of information, and stronger democratic accountability. Power must be pushed downwards to the lowest possible level so that it is held by the people. We are beginning a new era of transparency, accountability and openness so local people can hold elected officials to account. Remove central burdens 12. The Coalition Government is freeing local institutions and service providers from central prescription, guidance, targets and inspection machinery. This will allow them to be responsive, and focused, on the priorities of their area. The outcome will be tailored policy solutions to the needs of each area and savings in bureaucracy and administrative costs partly due to less time being spent collecting unnecessary data and conducting inspections. 13. Achieving long term and lasting change will have major implications for the way that Whitehall operates. Departments will no longer have a top-down relationship with public service providers whereby they set standards across the country, and require burdensome and expensive inspections to ensure compliance. Instead, Departments will have a facilitative role to ensure that local institutions are accountable and responsive to the needs of their residents. 14. The role of the civil service will also change from its traditional role of providing professional advice to Ministers, to include helping communities identify and break down barriers that are stopping them taking action for themselves. This is already happening—the four vanguard areas launched to live the Big Society will get specialised assistance from senior civil servants—and is likely to have wide-ranging implications for the ways in which civil servants work. 15. As Whitehall removes barriers to local accountability, it needs to undergo a culture change so that it risk-taking on the frontline. At the same time, there will also need to be a change of culture within the broader public sector which is accustomed to central management. Therefore, Whitehall will support the transition to a decentralised world by helping to create a permissive culture of innovation where the public sector is encouraged to innovate, to disseminate the lessons of that innovation and to learn from peers rather than to wait for central government to pilot and approve new approaches. Local bodies will no longer be overwhelmed by prescriptive guidance and legislation. 16. This process has started; actions taken to date include: — plans to remove outdated or unnecessary guidance and regulations, following 400 ideas from the local government sector; — abolition of the Comprehensive Area Assessment which forced local authorities to respond to central assessment and targets, rather then the needs of their local area; — abolition of Government Office for London and the announcement of the intention in principle to abolish remaining Government Offices who monitored the performance of local authorities against central government targets; and — abolition of Regional Spatial Strategies including the imposed top-down regional housing targets so that local citizens, businesses and communities, not central or regional government will now determine the correct level of housing and employment provision for their areas to meet local needs. 17. Other Departments have also taken important steps to remove barriers and embed decentralisation in public services. For example: — Department for Education. The Academies Bill which has Royal Assent has made it easier for schools to become Academies, and gain independence from local authorities. In addition, the forthcoming Education Bill will free outstanding schools from unnecessary intervention or inspection; focus inspection on core areas; allow "free schools" to be set up, further diversifying provision; remove bureaucratic burdens on schools, such as unnecessary duties to promote cohesion or wellbeing; give teachers greater autonomy in dealing with school discipline; and allow schools more local freedom to determine their curriculum. — The Home Office Police Reform and Social Justice Bill will be introduced in the autumn. The main elements include the introduction of elected Police and Crime Commissioners; removing red tape from police work; and increasing the professional discretion of officers.

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— The Department of Health will introduce a Health Bill in the autumn. Reforms to the NHS, as set out in Equity and Excellence: Liberating the NHS, and public health, will give patients more choice and influence over the services they use; introduce a strong patient voice into the NHS and a Public Health Service; and increase democratic legitimacy in healthcare. — Department for Business, Innovation and Skills launched the new One-In-One-Out policy which will reduce the impact of regulation on business by requiring an equal deregulation (“out”) for any new regulation (“in”) that is put in place. 18. We are also replacing top down housing targets with powerful fiscal incentives for local authorities to drive housing growth through the New Homes Bonus. This will allow local communities to control the way in which villages, towns and cities develop and to derive direct benefits from the proceeds of growth, thereby encouraging local authorities to deliver the housing communities want and need. We are also proposing to introduce a new “presumption in favour of sustainable development” to secure essential housing growth and economic development that meets local needs. 19. We are seeking to legislate through the Localism Bill for a far stronger role for neighbourhood planning and community engagement within the planning system, giving communities real power to shape, determine and take responsibility for the future development and planning of their areas. In addition, opportunities to further reduce the level of central inspection and regulatory requirements are also being considered. 20. However, we recognise the importance of strategic planning particularly to address infrastructure needs that impact beyond the level of a single local authority. We are also seeking to legislate for a new statutory “duty-to-cooperate” on local authorities and other public authorities to encourage joined-up working on planmaking and information sharing. Empower people to take action 21. Removing barriers, in isolation, will not achieve the level of social and community action we are aiming for if there is a general perception that Government holds a monopoly on policy ideas. We will develop a permissive approach to public policy making so that local communities can develop proposals that reflect the needs and opportunities of their area. 22. We will empower local communities to take control and develop their own approaches to public policy. People regularly come together to tackle issues at neighbourhood level and this approach needs to be strengthened and encouraged. It is recognised that some groups face barriers to participating in social action in this manner, and we will seek to eliminate these. We will also seek to empower communities through rights to demand to take action so that communities have both the opportunity and freedom to do things differently. In addition, we will explore options to encourage communities to participate in social action and the Big Society by developing the right incentives. 23. Furthermore, our proposals for a Community Right to Build will shift power from Government to communities, allowing local people to build the new homes or community amenities they want, providing they can demonstrate strong local support. We will be publishing a White Paper to consider the most appropriate framework of incentives for local authorities to support growth, including exploring options for business rate incentives, allowing local authorities to reinvest the benefits of growth into local communities. 24. These are important first steps which should help local communities move into the space that will become available for individuals to develop solutions for their own areas as central government removes topdown barriers. 25. The Prime Minister has asked Greg Clark, Minister for Decentralisation, to take the decentralisation agenda forward and to produce a progress report by summer 2011. This will set out principles for decentralisation that apply more widely across Whitehall. Letting local people control public spending 26. Localism and decentralisation of public services require greater local power over budgets. Local institutions can not respond effectively to the needs of their local communities if central prescription means that they can not flex resources in the way that best meets the needs of their area. Decentralising control over resources will mean that public money will be spent on the priorities of the local area, not central government. 27. Therefore, we are committed to providing greater local freedom and flexibility on how funding is spent. Such freedom will not only provide the flexibility to move funding to meet local priorities, but can also reduce the cost to service providers of administrating numerous grant streams. 28. But we also want radical ideas to come from putting citizens and service users at the heart of defining what is driving local issues and designing the solutions to them. Transparency in the funding available within an area permits challenge and creation of innovative responses to local priorities. 29. The actions that have been taken to date have included: — £1.2 billion of grants to local government has been de-ringfenced allowing local authorities to allocate their funding to the requirements of their area.

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— We are also considering the potential for community budgets which would be used flexibility to meet local priorities rather than being fettered by centrally imposed objectives. However, no decisions have been taken, prior to the outcome of the Spending Review, on whether they will be introduced, or how they might work. — Local authorities will increasingly publish spend over £500 so local people can see where the money in their area is going. 30. The Department is supporting the Local Government Association in its Place Based Productivity Programme. The Programme will identify both short-term efficiency opportunities, and the steps needed to deliver long-term transformational change to release savings. The specific work streams range from Procurement, Collaboration and Assets to Adult Social Care. Central government will play a crucial role by addressing the barriers identified by the programme. 31. One benefit of decentralisation and the reduction of central control over resources will be that local government expenditure will be allocated to local priorities in the most efficient way possible. The Local Government Resources Review will provide more details on the exact implications for local government budgets, but these reforms will mean that local government can respond flexibly and resourcefully to future challenges. Further reductions in restrictions on local government funding and further funding flexibilities are also being considered through the Spending Review. Breaking down monopolies 32. Allowing more diverse suppliers of services is an important element of the localism and decentralisation agenda. The voluntary and private sectors have benefited from having a diverse range of suppliers as have parts of the public sector where tentative reforms were introduced in the past eg foundation trusts and academies. Having diverse suppliers stimulates innovation, efficiency, growth and gives individuals and communities real choice, consequently improving the outcomes they care about. 33. Key to this is councils moving further away from traditional service provision to commission services from others when they can deliver them better and more efficiently. To achieve this, councils will need to engage citizens and potential providers early on in helping to identify the range of possible solutions and encourage innovative solutions to local priorities. 34. Local authorities should also consider the scope for partnering with voluntary groups, social enterprises, cooperatives as well as private sector suppliers. Through these measures, councils will be able to encourage competition and innovation, drive down costs and pressure existing providers to raise standards. 35. But diversifying suppliers of services goes far beyond local authorities. For example, the NHS reforms will see the transfer of public health functions, the Director of Public Health and resources to local government, and strengthen democratic accountability. This will embed public health in local communities, aligning resources with the wider drivers of health, and empowering communities to address what matters for their health. The market place for health improvement services will be opened to competition to a wider range of organisations such as business, the voluntary sector and wider civil society who may work in partnership. 36. The government has already taken steps to diversify supply across a number of services. The first wave of Pathfinder mutuals, to be run by entrepreneurial public sector staff, who want to take control of their services are already underway. These pathfinders will be trailblazers for the rest of the public sector—helping government establish, by learning from the front line, what type of support and structures will best enable the development of employee-led mutuals on an ongoing basis. They include community interest companies in healthcare, social enterprises in housing support services and employee led services in youth support and children’s services. 37. The department and government will need to undertake radical reforms diversify suppliers to help build the Big Society. Monopoly public services will need to be opened up to new suppliers from the voluntary and private sector as well as other public organisations. The barriers to entry for new social enterprises, voluntary and mutual organisations will need to be removed. The committee’s investigation can hopefully help identify some of these barriers and where there are opportunities to help diversify suppliers. Make public bodies and services transparent 38. As central government removes the barriers that prevent local service providers and institutions from responding to the needs of their community, people need to have ready access to data which they can use to hold service providers and local institutions to account. Therefore, there is a radical shake-up underway of how local service providers account for their spending, with reporting outwards to local people replacing the bureaucratic and costly system of reporting upwards to central government. 39. Ultimately, in the future we expect local authorities, and other service providers, to make much more performance and expenditure data available online. This data should be presented in a standarised format so that it is accessible to residents and software developers who can use it to benchmark service quality. It has been reported that around 60 local authorities have started publishing their £500 spend and more are expected

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to do so by January 2011.81 Central Government will also exemplify these principles by publishing government data in an open and transparent manner. 40. The actions that have been taken to date to make public bodies and services more transparent have included: — The Local Government Association has started publishing spend online and the communities and the department has recently called on them to be formally subject to the same Freedom of Information rules as central and local government. — Draft guidance has been issued to support local authorities preparing to publish spend and workforce data. A final version will be released later in the autumn. — To coincide with the launch of the draft guidance, the Department will run a campaign to generate public awareness and ongoing demand for this data. 41. Furthermore, the Department and our Arms Length Bodies have already started publishing all departmental spending over £500 online. The information was provided in an open and standardised format so the public can see what was purchased, how much and from whom. All Government departments will be required to publish spending over £25,000 by November 2010 Strengthen accountability 42. Genuine localism and effective decentralisation needs strong democratic accountability if they are to flourish. At present the balance between democratic and bureaucratic accountability is tipped very much in favour of the latter, driven as it is by prescription, targets, and inspection. This is evidenced by relatively low turn outs in local elections.82 43. However, removing top down bureaucracy will not in itself drive resurgence in local democracy. Local people must have the means to hold the institutions to account for the range and quality of services they provide. That is why we are committed to strengthening local democracy, and putting in place clear, effective routes to influence service provision. In the future, the principal oversight of locally-delivered services will come from greater transparency and accountability to local people. 44. The actions that have been taken to date have included: — announcing the abolition of the Standards Board so shifting the focus on to local people to assess the performance of their councillors; and — announcing our commitment to providing greater choice for local councils over their internal structures so they can work in a way that is best for their area. 45. Strengthening democratic accountability, both at the national and local level, is paramount to increasing localism and decentralising the delivery of public services. Therefore, the Department will introduce mechanisms such as giving residents powers to trigger referendums on local issues and creating directly elected Mayors for the twelve largest cities, subject to confirmatory referendums and full scrutiny by elected councillors. 46. We will also introduce a whole new era of freedom for local government to act in the interests of their local communities through introducing a General Power of Competence. We want to shift the culture from “can we do this?” to “we can do this”—a fundamental change in how councils perceive themselves and in what local people should be able to expect. 47. But democracy is not only about formal structures such as the ballot box and referendums. It is about giving people power to change the things that affect their lives. The market is arguably the most powerful tool that we have for giving people that power. So decentralisation is also about bringing the freedoms and incentives to bear on holding service providers to account—through the power of citizens having choice over their service providers and through mechanisms such as payment by results models which built in rewards for achieving goals. 48. Together, these measures coupled with greater data transparency will mean that bureaucratic accountability—where local institutions and service providers look up to central government—will be replaced by democratic accountability. Local institutions will be accountable to local people who will assess performance and ensure that the right outcomes are achieved for their area. Conclusion 49. The principles of localism, decentralisation, and the Big Society are crucial to the coalition Government. CLG has an important role in leading a radical decentralisation of power, and change of culture so that local areas are empowered to achieve their priorities. 50. Whitehall needs to remove barriers that prevent service providers from responding to the needs of their local community, and encourage local communities and institutions to develop their own policy solutions (page 81 82

The Guardian online, September 2010. Turn out in the 2006 local elections was 36.5%.

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3–5). There will no longer be a single “right way” of delivering services, and local government will have an important role to commission services through an open market ensuring that their communities benefit from the choice and innovation this will entail (page 6–7). 51. For decentralisation to work, it will be crucial that bureaucratic accountability is replaced by democratic accountability. This will mean that local service providers and institutions will no longer mainly focus on ensuring compliance with Whitehall standards but instead will be accountable to their citizens for achieving the local priorities (page 8–9). Transparency will be a key part of this; instead of providing unnecessary data to central government, local institutions must publish accessible and relevant data to their citizens including on service standards and how money has been spent (page 7–8). 52. The coalition government wants people to have control over the decisions that affect them. The default must no longer be Big Government but Big Society, where family and social responsibility, and civil liberties create a stronger society. A rebalanced state, focused on the needs of the people it serves, will improve the lives of individuals, encourage innovation to flourish, and re-energise democratic life. September 2010

Supplementary memorandum from Department for Communities and Local Government (DCLG) Community Budgets: Update Note for Clive Betts What are our commitments? By April 2011 we will help establish a first phase of Community Budgets. 16 areas (see annex) are able to agree with local partners and Government what funding should be available to turn around the lives of families with multiple problems and to address barriers to service transformation. In addition, Departments are working with other innovative areas to help them pool and align local budgets around key local priorities such as child poverty, health inequalities, local policing, tackling re-offending, worklessness, or in small areas like neighbourhoods and wards—which includes support for more integrated services based on the Local Integrated Services (LIS) approach. The intention is that all areas will operate Community Budgets from 2013–14. What progress have the first phase areas made in developing their Community Budget? All 16 first phase areas now have Community Budget proposals which they are taking forward from next month. These explain: — who the partnership is; — the resources in the budget; — the barriers and flexibilities sought from Whitehall; — the outcomes and success measures; — their approach to tackling families with multiple problems; and — the plan for setting up the project post April. How are we driving progress? The Community Budget Group is chaired by Lord Bichard and brings together senior representatives of Whitehall Departments, the Local Government sector and the voluntary and community sector to drive progress and ensure issues are tackled. A senior Whitehall Champion has been allocated to each area to assist in brokering resolutions with Whitehall Departments to specific issues or barriers raised by their area. Ministers have been involved closely throughout and the Secretary of State, Baroness Hanham (who will provide the day-to-day lead on Community Budgets) the Chief Secretary to the Treasury and DfE Minister, Tim Loughton, recently met with Community Budget authority Leaders to discuss ambition and emerging barriers and flexibilities that require Whitehall action. A further meeting will take place on 24 March. How many other areas are Departments working with? Altogether 28 councils are involved in the 16 community budgets focused on Families with Multiple Problems. A further 48 councils have been involved in discussions with departments about adopting other community budgets, but this list is constantly changing as areas make contact with Departments.

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What are other Departments doing to support the development of the CB approach? They have: — set out a menu of central funding available for pooling and aligning to support families in needs in Community Budget areas—this is the starting point—and we are encouraging areas to add to that list, as fits their proposals; — written to their local agencies to encourage them to get involved in discussions with Councils about designing and contributing to their local Community Budget; — begun to receive—and are already actioning—“asks” from areas to change centrally-prescribed rules, systems and practice that are constraining their proposals. For instance DFE is offering the opportunity for Community Budget areas to access funding to invest in innovation and the redesign of services to deliver better outcomes and savings down the track as part of their CB proposals; and — engaged Community Budget areas on a range of initiatives such as shadow Health and Wellbeing Boards and financial incentive models. What next for Community Budgets? The plans set out by the 16 areas are only a starting point for each Community Budget—we expect their approach to widen and deepen over the course of 2011–12 and beyond. Ministers want community budgets to encompass as many funding and policy outcomes as possible, so that decisions can be made freely and flexibly at the frontline. The Government is fully committed to unlocking the potential of CBs. They are challenging to do and for this reason Baroness Hanham is bringing together a small group of CB areas to make rapid progress in tackling complex issues. Annex Which 16 areas are implementing the first phase of Community Budgets? Birmingham Blackburn-with-Darwen Blackpool Bradford Essex Greater Manchester (a group of 10 councils) Hull Kent Leicestershire

Lincolnshire London Borough of Barnet London Borough of Croydon London Borough of Islington London Borough of Lewisham The London Boroughs of Westminster, Hammersmith & Fulham, Royal Borough of Kensington & Chelsea and Wandsworth (a group of 4 councils) Swindon

Which areas are working with Departments on local pooling and aligning? Barnsley Birmingham Blackburn-with-Darwen Blackpool Bradford Bristol Calderdale Cambridgeshire Cheshire West & Chester Cornwall Devon Greater Manchester Hammersmith and Fulham Hertfordshire Islington Kingston-upon-Thames Leeds

Leeds City Region Leicestershire Lewisham Lincolnshire Newcastle-upon-Tyne Plymouth Salford Sheffield Solent South Tyneside Stoke-on-Trent Swindon Tameside Tees Valley Torbay Warrington Worcestershire

In addition, the Ministry of Justice are talking to a range of London Boroughs.

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