TUESDAY 5 NOVEMBER 2002

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Members present:

Andrew Bennett, in the Chair
Sir Paul Beresford

Mr Clive Betts
Mr David Clelland
Chris Mole
Mr Bill O'Brien
Dr John Pugh
Christine Russell
Mr Gary Streeter

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MRS BARBARA ROCHE, a Member of the House, Minister of State for social exclusion, regional co-ordination, neighbourhood renewal, homelessness and Minister for women and equality, examined.

Chairman

Good morning. Could I welcome you to the Committee, to the first session of our inquiry into the Annual Report. Could I ask you to identify yourself for the record.

(Mrs Roche) I am Barbara Roche. I am Minister of State for the Office of the Deputy Prime Minister.

Do you want to say anything by way of introduction, or are you happy to go straight into questions?

(Mrs Roche) I am happy to go straight in, Chairman.

Mr Clelland

Minister, the Regional White Paper proposes that the Government Offices for the Regions should be given more responsibility. Can you tell the Committee what steps you are taking to ensure that they are more accountable to the regions which they serve?

(Mrs Roche) I suppose the first thing to say as far as this is concerned is that this is a particular area which is very warmly welcomed by the officials who are actually in the Regional Offices. Very many of the officials in the Regional Offices have established very good relationships with local authorities, with members of the local chambers or assembly. The steps we have got in the Chapter 2 provisions of the White Paper are to make sure that comes about. I think the added relationship in that Chapter 2, which is the added partnership working with those regional bodies, will actually provide more accountability, and that is very important for our work.

It does not sound very much like there is more accountability there. You talk about consultation and discussion - for instance, the regional chambers, have a power of scrutiny over Regional Development Agencies; why should they not have a power of scrutiny over Regional Offices?

(Mrs Roche) Of course they are actually going to be looking very strongly at the work of the Regional Offices. What we also propose as you know, Mr Clelland, because I know you are a very strong supporter of it, is a proper regional agenda; and part of that regional agenda is the possibility of elected regional assemblies where people actually want them. I think there has to be a degree of difference between arrangements where there is not a democratically elected body and where there is. Certainly I hope that the arrangements in Chapter 2 of the White Paper will lead not only to strengthened arrangements, but very close arrangements. In reality what happens, of course, and I accept this varies in different parts of the country, is that the chambers do take a very close interest in the work of the government offices. Where relationships are perhaps not going as well as they should, they are very speedily put right because of that close working relationship. What these relationships do, that are outlined in the White Paper, is to strengthen that. I do think you have to have a difference; and that difference, of course, is democratic accountability through the ballot box.

Mr Streeter

Could you explain the day-by-day or week-by-week accountability of the regions to yourself? Do you know what is going on in all of the regions on, say, a weekly basis? For example, if I asked what were the three biggest issues facing the government on the South West would you be able to answer?

(Mrs Roche) I would probably be able to give you an answer based on my own dealings with that. Let me explain to you how this works. The Government Offices report to the Regional Co-ordination Unit, and the official who heads that I see on a very regular basis. That is my way of having an input. I totally accept that you cannot deal with these issues just from Whitehall, and I do go round the country visiting Regional Offices. I have found that there is a god way of doing that. The first thing is to speak to the staff. What I try to do is to speak not just to the senior officials in the government offices, but to make sure I that I am speaking to all the officials, however junior; but also to go out and look at a variety of programmes or different initiatives that the government offices will be involved in. For example, something I would be interested to see in the South West would be the business enterprise and how that was going. I would also be very aware, whenever I go to visit the South West, that it is difficult to take in the whole picture because it is such a big place and such a diverse place. My view of Bristol might be different from views of different parts of it.

Mr Clelland

Could I quote from the report from your Department which was entitled Collaboration and Co-ordination in Area Based Initiatives, published in May 2002: "The Government Offices appear unable to resolve the conflicting requirements of different Government departments and are able to help only at the margins with the integration of national Government policy on the ground". Could you tell us your feelings about that statement, and what actions have been taken to try and overcome this?

(Mrs Roche) I think there are a couple of things I would like to say about this. The first ting to say is that, as far as the Government Offices are concerned, officials who work in them come from their own parent department. The big trick in Government, not only for ministers but for officials, is to try to get people to think not in their "horizontal" lines of reporting, but to think about how they can work across the piece of Government, working together so you forget -----

Chairman

We understand that but, what we want to know is, how do you make that happen in the Regional Offices?

(Mrs Roche) I understand that, Chairman. That was the first thing I wanted to say for the record. For me, in order to make that happen, you need to break down that culture. That is what I wanted to say by way of background. You need to break down that culture; and that is quite difficult to do. You need people to think how they operate as a Regional Office, as a whole. The second thing you also need to realise - and this is what we have done with the Area Based Initiatives Review - is to realise we have a number of very, very worthy initiatives; some of them work extremely well but it can be quite complex on the ground. In order to help the Regional Offices, what we have tried to do is to simplify the number of Area Based Initiatives to make the funding streams much more flexible. Hopefully, that will help officials as to how they deal with the programmes. I wanted to make the point, Chairman, that what you also need to do is change the culture in the Regional Offices, and I think that is beginning to happen and a lot of hard work has gone on.

Chris Mole

Could I follow that up and see whether the Minister thinks the problem lies more at the centre than in the Regional Offices?

(Mrs Roche) I think it is a bit of both really. The whole nature of having the Regional Co-ordination Unit was to make sure that you had something sitting on top of this. There is also work to be done in the Regional Office as well. I am very, very struck when I go and visit officials in the Regional Offices that increasingly they have a sense of what they are doing for that particular region - rather than thinking of the agenda of their own particular parent department - and that is progress, I think.

Mr O'Brien

How do you reconcile the situation where you have got different departments and the aims and objectives of the departments? You have a situation where there are joint targets with your Department, the Treasury and the DTI all involved with Regional Offices - how do you coordinate that particular process?

(Mrs Roche) That particular objective would be about economic regeneration.

It could be housing?

(Mrs Roche) It could be, but let us just take economic regeneration. You will always have creative tensions in government, in any form of government whether it is local, regional or national, as to how you reconcile worthy but different aspects of the same thing; and of course the way you deal with it is by discussion. Let me give you an example where you could possibly have a perceived issue of difference. If you look at Regional Development Agencies are they there for social regeneration or for economic development? Some people say there would be a difference, depending which particular departmental view you have got of it. I would say, you reconcile those by saying you actually cannot have economic regeneration properly until you have had social regeneration. If you are a business you want to make sure that crime levels are down.

How do you arrest the situation of the different departments? A statement was made yesterday by the economic adviser to the Treasury on the question of PFI saying, "Perhaps we've gone far enough, and we should now be looking at the question of public services". That statement was made in the Treasury. It impacts upon regions, and it impacts upon all regional and local government. How do you built into that kind of statement?

(Mrs Roche) In exactly the same way you deal with these issues in government, by discussion, consensus and then, at the end of the day, by collective responsibility.

Chairman

We were asking earlier on in this set of questions about the regional chambers. Why could not the regional chambers have select committee-type hearings with regional officials, so that they can force them not to talk about generalities but to talk about some of the specific proposals that are in the Regional Office at that particular time?

(Mrs Roche) There is all sorts of discussion that they do have. I suppose at the end of the day, Chairman, it comes down to what status you want to give it.

Are you prepared to give the regional chambers that right to have public hearings?

(Mrs Roche) I think the difference in all of this is this -----

I just asked a simple question. Yes or no, are you prepared to give them the right to have public hearings?

(Mrs Roche) If you will forgive me, Chairman, I will try and answer the question, with the greatest respect, in the way in which I intend to, because I think that will be of use to you and of use to the Committee. Let me say this: I certainly would not say that they should operate in a select committee way until you have that democratic accountability. Why? Because there is a balance. Why is it, Chairman, that you and your Committee have the respect and power and status that you have? That is because you are elected Members of Parliament and you come from the ballot box, and that is the difference. We have to get the balance right. This was the balance we tried to do in the White Paper. The first thing was to say, there are some regions that are going to want to have democratically elected assemblies, and there ought to be a step change in the rights and responsibilities and powers that those have. At the same time we recognised the different regions wanted to do things at a different level and a different pace, and we wanted to up what they had. What we achieved, I think, in the -----

What you have said is, no, is it not?

(Mrs Roche) It is, yes. I think it is very important, Chairman, rather than getting into the simplistics of, "Is this yes or no?", that you and the Committee understand why it was that the Government arrived at the balance.

Chairman: I understand that. The only difficulty for the Committee is that we have a lot of questions we want to pursue with you and if we take much longer on this first question your colleagues will be waiting outside for a long time.

Mr Clelland

Given the nature of the Regional Co-ordination Unit - and this is no reflection whatsoever on your abilities - why was the responsibility not given to the Minister for local government and the regions?

(Mrs Roche) I had the responsibility when the Regional Co-ordination Unit was in the Cabinet Office and I carried that responsibility with me. Quite apart from that being the existing arrangement, I would also very, very strongly argue that it goes together with my responsibilities for the Neighbourhood Renewal Unit; because very many of those programmes on regeneration are channelled through the government office. I think it makes a great deal of sense for it to be there.

Mr Betts

Looking at the regional situation last year, Stephen Byers said that he was going to establish some research to look at whether the allocation of spending between regions was a fair one. Has that been done? When can we expect results?

(Mrs Roche) I think when my colleague, Nick Raynsford comes that would be under his purview rather than mine on regional spending.

Chairman

You coordinate the regions but you are not responsible for the spending?

(Mrs Roche) There is a difference. I coordinate the government offices, which is a different area of responsibility.

Mr Betts

So Mr Raynsford would be able to answer that question?

(Mrs Roche) Yes, he would.

We also have the announcements of the Government's intention to have responsibility for housing spending and policy at regional level coordinated through one body rather than the various bodies as it is now. The Chancellor gave an indication it had been decided which body that would be in his speech at the Urban Summit. Could you explain to us which body that will be and where its lines of accountability will be?

(Mrs Roche) Again, that would be a matter, as far as housing is concerned and those arrangements, for Geoff Rooker, who, I understand, is not going to give evidence to you today but will be on another occasion.

But this is about regional coordination?

(Mrs Roche) It is, but it is obviously just the way the Department works, because it is a housing responsibility in the way in which those money will be allocated.

Chairman

You coordinate everything but you do not know what is happening?

(Mrs Roche) Chairman, that is grossly unfair, if I may say so - witty but unfair!

Mr Betts

Could I turn to another question of regional coordination - although perhaps I will get the same answer to it - the issue of skills in economic development. We have got the RDAs, we have the Skills Council, we have Business Link, we have got the Learning and Skills Council at national level, which has regional input; if you go to businesses locally, certainly in my constituency, they have not got a clue. They have some idea that somebody is doing something about skills, but they would not be able to tell you which body was doing what and how they are linked up with each other.

(Mrs Roche) I think this is an issue, and I know this. I am a former minister responsible for medium sized businesses, so would say there are issues as to how people can access this sort of information and sometimes the picture looks very, very complex. I was speaking to some small businesses about this yesterday, and I think as the Learning and Skills Councils develop it becomes more apparent who is responsible. Also as you have the growth of the Small Business Service, often acting through the Business Link, that has been helpful.

Is this a problem?

(Mrs Roche) It is problematic.

Has the Government got proposals to rationalise this to make it clearer?

(Mrs Roche) You have got the Learning and Skills Council, you have got the Small Business Service which, in part, works through the Business Link Network, it can depend on what sort of skills you are talking about. If you are talking obviously about post 16s, you might be talking about the Learning and Skills Council. I would not say I am an expert in that area. If you are talking about skills training and development, that may well be an area where the DTI, through their Small Business Service and through the Business Link, would have a role. I am not quite sure what you are focussing on.

Have you any plans to make it clear who is responsible for these things? Is it your job to coordinate this, and to ensure there is a comprehensive approach?

(Mrs Roche) At the government office level my officials would make it clear. If there was an issue coming up from business that needed to be resolved about, for example, post-16s, then my officials in the government office, particularly that come from DfES, would actually be able to resolve the situation. If it was a question about skills in the small business sector then my officials there would be involved with local businesses. Was there a particular skills gap? How could they help? That would be issued. That would be identified very much at a local level and we would seek to resolve it if we possibly could.

Chris Mole

The RDAs were given a responsibility to establish skills strategies for their regions but they have no direct influence on the work of the Learning and Skills Council and a limited ability to appoint members, but not very much. Is that not a lack of coordination that needs to be resolved?

(Mrs Roche) If you look at the White Paper, that is what happens with the Learning and Skills Council, and powers and responsibilities there are built in one of those options that can be given to the regional assemblies, the democratically elected ones. That is why I come back to the point I made at the beginning, that is why it is very important for the RDAs, for the regional chambers, and for the government offices, to work very closely together. For example, in some parts of the country you will find that those three bodies have signed a concordat on the sharing of information. This is the thing we ought to remember: although on paper you will have these different bodies - you will have the government offices, you will have the chambers, you will have the RDAs - and it can sometimes look at perplexing picture, in reality all the key players in those areas will know each other; they will form working relationships to make sure that they do develop and deliver this agenda.

Sir Paul Beresford

You will understand why we see it as a dog's breakfast, and all you are really doing is employing loads of officials and that is a blow towards unemployment?

(Mrs Roche) Sir Paul, I find that difficult, since it was the last government who started the regional offices. You were the Party that did that so you obviously believed in that.

RDAs and Skills Councils and all these other bodies that seem to have trouble finding who they are and where they are and looking for other jobs, we are just trying to find out if there is any coordination. There does not seem to be any coordination at all.

(Mrs Roche) The interesting thing is, I remember being a minister at the DTI when Regional Development Agencies were developed and the idea came, and I remember people saying, "It won't work; it'll be bureaucratic; it won't deliver; business won't like it". If you actually talk to business, they like the RDAs; they think they have delivered. For example, if you look at the way in which more venture capital funds are now available to SMEs, I think that is incredibly progressive. I think it has come about because of this work of the RDAs.

Chairman

I am just worried about the time. We have at least another ten areas of questions that we want to get through.

(Mrs Roche) I am prepared to take them all, Chairman.

Chairman: I think Mr Raynsford might be a little upset if he was kept outside for an hour and a half while we complete the programme! Quick questions and slightly shorter answers, please.

Mr Betts

Is it not rather strange that there has been a split of responsibility in the department or housing and homelessness? It seems one of the cures of homelessness is to get people housing. Why do you need two ministers to do it?

(Mrs Roche) I have responsibility for the Neighbourhood Renewal Unit, for social exclusion and for homelessness. The reason we put homelessness with my responsibilities is, of course, homelessness is very often about lack of access to affordable housing - I take that as absolute; but sometimes it is about other social issues as well. It can be about issues of social exclusion, and that is why it is thought appropriate for it to be together. That does not mean to say that Geoff Rooker and myself operate in mutually exclusive ways - we do not; we operate together.

Some people might say that this leads on to a problem. You can see with the housing corporation now 35 per cent of new homes are going to key workers, and it all seems as if the issues of homelessness are dropping down the agenda in terms of the housing provision?

(Mrs Roche) Absolutely not. I would say less. The fact that it has been separated out and come to me as a major problem of social exclusion (and I speak with some passion in this area as I am a London Member of Parliament where we have got severe problems with homelessness) gives it a reinforced focus. I take the target we have in this area very seriously.

In the Comprehensive Spending Review there does not seem to be any public service agreement targets for either homelessness or rough sleepers. Why not?

(Mrs Roche) You always have a competition as to what you put in there.

But there is none at all. It is a serious issue.

(Mrs Roche) Of course it is a serious issue which is why I, as a Minister, spend a great deal of my time on the issue of homelessness, whether it be about meeting our bed and breakfast targets for families with children, or on the issue of keeping our rough sleepers levels as they are and trying to reduce them.

If we have not got a target, how do you know whether you are successful or not?

(Mrs Roche) I have a target. I have a target that by March 2004, except in the case of emergencies, we do not have families of children in bed and breakfast accommodation. That is a very, very clear public target; and it is a target we are committed to achieve.

And on rough sleepers?

(Mrs Roche) On rough sleepers it is to keep it at the level we have reduced it to; two-thirds of the level we had.

When we have a count this year could we take account of the various allegations made by the Transport & General Workers' Union, a silent community, that the counts last year were a little bit artificial. They had one rough sleeper in Sheffield; two in Birmingham; that they did not go looking in certain areas; that parties were put on to get people off the streets.

(Mrs Roche) Let me be very robust in my reply because I feel very strongly about the integrity of this. I would like to invite you, Mr Betts, and any member of this Committee to come out with the CAT teams late at night, and I am sure you would want to do this in Sheffield, to see how they operate. The counts are done by the voluntary sector; they have always been done by the voluntary sector way before we had the Rough Sleepers Unit and then they come to us. They have been evaluated and they have been found to be robust. I have a great deal of respect for the Contact and Assessment Teams who do that work late at night, and actually make sure we get the people into accommodation. Their task is not an easy one. Come out with us either in Sheffield or London and we will show you exactly what we do.

Chairman

You think the 2001 figures were absolutely accurate? They do show a remarkable change from three years earlier.

(Mrs Roche) I was not the minister then. I have actually looked at those figures and I have been very hands on with the Rough Sleepers Unit, and I was interested in it when I was responsible for social exclusion but not the homelessness director, which is why I have spent quite a time going out with the Unit. I am convinced, from speaking to officials, that the figures at that time were robust. I am very willing to share all the information that we have and how we do this with the Committee.

Why did the figures go up in Liverpool and down almost everywhere else?

(Mrs Roche) It is difficult, there are other places where they are up. I was in Cambridge last week where they are out of line with other places in the country, although great efforts are being made. When I was at the Urban Summit on Thursday I was talking to Birmingham about those figures where they have made great progress. It can be local circumstances; it can be the partnership that is available; it can be a number of external factors. The main thing is to deal with it and to get those figures down.

Christine Russell

The answer to homelessness - the Liverpool question from the Chairman - is the Chester ones have moved to Liverpool! Can I ask you, Minister, about the Cabinet Sub-Committee on Equality, because you are Deputy Minister for Women. How often does that sub-committee meet, and what achievements do you think it has had in the last 12 months?

(Mrs Roche) I chair it - it is DAEQ I think you are talking about. We meet reasonably regularly. I cannot say we meet at any set time. We last met two or three weeks ago. I suppose the great achievement is that we recently published two documents. I published them but they would have gone through the committee. One was the Race and Employment Directive, and we brought forward the regulations on belief and sexual orientation and how we would implement them. The second paper was about what the future of the equality machinery would look like, given the Directive and given that some time next year we will also publish a paper about age. That paper looks at, should we have a single equality body; if not, what should equality arrangements look like. We are beginning the consultation on it now, and I think that ends at about 21 February.

What prompts the meetings, if they are not regularly scheduled meetings?

(Mrs Roche) Like all Cabinet Sub-Committee meetings, we will have a forward-looking agenda and there will be a programme of work that we will be dealing with.

You mention the work you have done on racism and sexual orientation. Can you give an example of the work you have done that takes account of gender equality? Have you got any achievements to tell us about there?

(Mrs Roche) I think on gender equality, one of the things is to see what different departments are doing in this area. I suppose this is not the DAEQ, but one of the things we are doing is the ad hoc ministerial group on domestic violence; which is the first time that ministers from different departments have worked in this way, and it is important. It certainly fits in with my homelessness brief, because we know that sometimes some of the causes of homelessness can be women and families fleeing domestic violence; which is why I made my earlier point about its connection to my other areas. I think that has been very helpful, particularly in some of the activities we have done around awareness-raising, and some of the issues the Home Office have brought forward as well.

We have had discussions about targets. What targets do you use to measure the performance of the Ministers for Women? Do you have a target, for instance, for the percentage of public appointments that are given to women?

(Mrs Roche) We have done a lot of work on public appointments. Public appointments for women in the 1,000 national bodies are running at about 34-35 per cent. Our aim is to get it to 50 per cent. What we have done is to try to widen the base of women who apply, and black and minority ethnic women as well.

Dr Pugh

Could I ask about the National Strategy for Neighbourhood Renewal. It starts quite properly with emphasis on the needs of the community; there is a need also to change these communities. Is there not a good deal of thought put in by the Government on how we attract new residents into these areas? Is it not a reasonable assumption that some gentrification is both desirable and to be encouraged?

(Mrs Roche) Your question, if I may say so, is a good one. The big issue with neighbourhood renewal is for it to be community-led, and that is easier said than done. It really does take a great deal of effort. The temptation sometimes with saying things are community-led is always to rely on the same group of residents. Almost as constituency Members of Parliament, one would think of the voluntary community groups and our church groups. There is a tendency sometimes to consult with the same extremely worthy but busy people. The thing with regeneration is how you get in the frame people who perhaps have not been involved before but have got something to offer.

A great deal of regeneration money actually goes on relatively short-term projects, as opposed to things that may be longer-term beneficial for the whole community?

(Mrs Roche) Not on neighbourhood renewal. The difference with neighbourhood renewal, if you take New Deal for Communities, is that we say they are there for the long term - there for ten or 20 years. When I was in Birmingham on Thursday I also went out to look at one of our New Deal for Communities partnerships. If you talk to the residents there on the particular estate where the New Deal monies are coming in, they are very focussed in the long-term. I said to them, "If I came back to you in a year's time how do you envisage the partnership doing?", and their big thing there was that the local school would be known as an excellent school. They were actually focussing on what could be achieved in the long-term. It was interesting that that was part of their idea, quite rightly, for neighbourhood renewal.

How is the Department actually monitoring what is being done? How is the evaluation done by the Department?

(Mrs Roche) We would evaluate and monitor each NDC individually. In fact, when I went to see the NDC I had to reassure them that I was not coming there as part of the formal evaluation process because that was actually going to take place the next day. Myself and my ministerial colleague, Tony McNulty, who worked with me on this, are pretty hands-on on this, we go and see them, and they will also be monitored and evaluated as well by the Government Offices.

In terms of monitoring, is there some kind of audit done - some kind of breakdown - as to how much of that money has, for example, gone on the costs of supporting community groups or the salary costs of those people actually engaged in regeneration? Do you have those sorts of figures?

(Mrs Roche) Yes, of course. We can supply those to the Committee if that would be helpful.

You are satisfied the money is being spent in the right places?

(Mrs Roche) Yes. The real trick - and I will be frank with the Committee here - that I have been saying to the NDCs that the NDCs, quite rightly, have spent a great deal of time getting their partnerships on the road and making sure they have consolidated, but the big challenge to them now is to start spending and delivering the money. That is the course that we now have to take.

Mr O'Brien

On this question of monitoring, in the Annual Report that you sent us- 22 pages giving all the aspects of the programme - under Objective Four it says "The renewal of our most deprived communities." There is no progress report, there is no addition to it, it just says "Targets are being considered as part of spending review 2002." If targets have been considered, how can you say that there is satisfaction on where the money is being spent?

(Mrs Roche) In my area, Mr O'Brien, of neighbourhood renewal there are three areas that I concentrate on: first on the New Deal for Communities - which I was just speaking about - to make sure that the money is delivering. We do measure it. For example, we know that in some areas where the new deal money has been spent we have actually seen ----

Why is there no big detail with the submission of the monitoring?

(Mrs Roche) If that would be helpful, Mr O'Brien, my apologies and we will supply it to you.

Chairman: That would be very helpful.

Dr Pugh

Moving on to this Neighbourhood Renewal Fund being used as an addition to whatever a community requires from its local authority, there is some evidence that some local authorities have used it to substitute for mainstream funding. Is the Government aware of this? What are they doing about it? Is it not, to some extent, excusable in one respect, because the Neighbourhood Renewal Fund emerged at the very last minute, did it not, prior to local governments constructing their budgets a couple of years ago, in circumstances where a lot of local authorities are actually quite stretched and, understandably, some of that money then went towards other needs, as they needed to do?

(Mrs Roche) Neighbourhood Renewal is not a substitution, it is there to kick-start mainstream programmes.

Chairman

We want to know how you are stopping it being used as a substitution.

(Mrs Roche) We do it by all the ways that we monitor through Government Offices. Funnily enough, more of the complaints that I have had on Neighbourhood Renewal are that sometimes local authorities are not as fast as spending it in the way that we want to. That is sometimes because they have not had the relationship in place in the establishment of their strategic partnerships, as they might have been. For example, I was speaking to a local authority in the last couple of weeks where I felt their programme for spending was slow. They said to me, fairly reasonably, that it took them a little bit of time to set up their structures and their local strategic partnerships. I said to them that was fine but I did not want the excuse next year.

Sir Paul Beresford

Is that not part of the problem? One of the Liverpool team that came here said it took them a year to produce the constitution which they were required, by your requirements, to produce?

(Mrs Roche) No, I do not accept that. Of course, people want to make sure that they get their proper consultative arrangements and that they get that in place, but we have not placed onerous burdens on them in order to do this. The main thing now is we have got the arrangements in place, and in this next period I would expect to see people delivering. Part of my job is to make sure that they do.

Dr Pugh

However, Local Strategic Partnerships represent, in a sense, another example of the distinction between what the Government aims to do and what actually results on the ground floor. It would appear to me that Local Strategic Partnerships have not actually reduced the number of partnerships; they have not responded to what I think Sir Paul Beresford referred to as a "dog's breakfast" of organisations.

(Mrs Roche) It is variable. I will be absolutely honest with you ----

Chairman

Just give us a good example and a bad example.

(Mrs Roche) I have seen a reasonably good example in my own local authority where I think it has worked, and there are a number of very, very key partners going there. I think it would be invidious to actually give you a bad example, because I would expect to see some improvement.

Dr Pugh

Do you think the number of partnerships in existence have reduced as a result of the existence of the Local Strategic Partnership?

(Mrs Roche) Yes, I think it has, or they are working through the main partners. When I go, as the local MP, as I have done, to my LSP I see what I would expect to see, a small number of very, very key players working together. Those key players are not just there because they are at a meeting, they are there because they are actually capable of making decisions. That is very important, because they have money to spend in terms of ----

Is your authority the exception rather than the normal?

(Mrs Roche) No, I do not think that is the case.

Why did the Audit Commission say it is not happening?

(Mrs Roche) Let me say this: these are new instruments. What we are trying to do is rationalise. Are they all going to be excellent overnight? No, they are not. If you invite me back, as I hope you will, Chairman, next year or even earlier - because I cannot wait for a repeat appearance - then I hope I will be able to deliver some real progress there. In the past - we all know this - when you have partnerships everybody wants to come on board; it is a bit difficult to say that what we have got here is something strategic and we want a few key players.

Mr Clelland

You have mentioned the need to reduce underspends on NDCs. Can you say a bit more about what you are actually doing to achieve that?

(Mrs Roche) It is fair to say this is something we should put our hands up to and be absolutely honest about. I think we probably had over-expectations of the New Deal for Communities in the first few years. The aim was to spend the money straight away, but when you suddenly announce to a community "You have got £50 million to spend in, let us say, a 10-year period", it took them a bit of time to get together. These are large sums of money. So I think our expectations were high, which is why we have tried to load the programmes a bit differently, so that the peak sums peak in the middle years. The second thing, also, to say is that we ourselves need to put much more robust forecasting methods in as a department, and I would completely accept that.

Probably more worrying than that is the underspend on European Regional Development Funds. The Committee has been told that in 2001/02, for instance, under sub-head H there was a grant of £19 million, expenditure was £1 million, which is an underspend of 95 per cent. Under sub-head P, there was a grant of £36 million, expenditure was £6 million, so an underspend of 83 per cent. What is being done about that?

(Mrs Roche) We need to do much more work. I think sometimes some of the rules and regulations have been extremely bureaucratic, but there is no doubt there is an issue and a difficulty here. As I said, I was at a meeting ----

So it is Europe's fault rather than ours?

(Mrs Roche) No. No. I would not say that. I was the Minister who negotiated the deal, as you will remember, Mr Clelland, for Structural Funds, and a very good deal we got as well. I think the implementation of it has been difficult. Perhaps we should have realised this. I think it is a mixture, but it is a problem we are going to need to sort out.

Chairman

That money is actually lost, is it not?

(Mrs Roche) We need, Chairman, to up the spending on it and we need to access it.

The failure to spend it in the appropriate year means we do not carry it over to the next year.

(Mrs Roche) Not as far as I am aware.

So actually it is lost. Does that not destroy your credibility? You say you got a good deal but, actually, you were asking for money that you could not spend.

(Mrs Roche) I do not think that is the case, Mr Chairman. Certainly if you look at some areas there has been a problem with the slowness of the programme. If you look in other areas, for example where they have had Objective 1 money and where they have been able to put in fantastic programmes with their business community, really straight away and right from the beginning, I think that has been very impressive. Has it been varied? Absolutely.

If it was worth negotiating, as you have just indicated, then to lose £48 million is a lot of money.

(Mrs Roche) I am not going to say that is absolutely acceptable. I would like to look at those figures and what can be done, but it is not just an issue for us it is an issue for other departments, as far as this is concerned. There has been a problem with bureaucracy and red tape and my job is to see if we can get through that.

Are you confident there will not be an underspend this year?

(Mrs Roche) I never make predictions of that kind, Chairman. All I ----

Have you checked up to see how we are doing?

(Mrs Roche) Of course I have.

Are we on course for actually getting there?

(Mrs Roche) I think we are getting there. Can we do more? Yes. I am still concerned, particularly in my area of neighbourhood renewal, that the money is not being spent as fast as it should be, which is why I gave a very strong message to the NDC partnerships when I addressed them recently.

Chris Mole

What is the role of the Social Exclusion Unit now that the very good job it did with the National Strategy for Neighbourhood Renewal has moved to the Neighbourhood Renewal Unit? Do you need two units?

(Mrs Roche) I will have to have a word on that. That was one of the reports that it did, but the Social Exclusion Unit is an independent unit which basically reports to the Deputy Prime Minister and the Prime Minister, and it works on a project basis. The work it did on neighbourhood renewal was part of that, but for example it is currently doing reports on transport and social exclusion, on young runaways, on the educational achievements of children in care and it has just completed a report which we published in the summer - which has been taken forward by the Home Office to implement - on ex-offenders.

What criteria do you use to identify what those topics should be that the unit is going to work on?

(Mrs Roche) That is a very good question. Because we work in a way which is cross-departmental, we look to find a subject which is not of exclusive concern to one department but can be of concern to all government departments. Secondly, where we can add value. Thirdly, and very importantly, where we, if you like, can stop the progress of social exclusion. If you do something about rough sleeping, for example, then you can stop people being socially excluded. If you do something about the educational achievement of children in care - and 60 per cent of looked-after children get no educational qualifications at all - you can make sure that they are not socially excluded at some later stage.

Changing the subject, how is the Regional Co-ordination Unit fulfilling its gatekeeper role with regard to the new Area Based Initiatives?

(Mrs Roche) Any new Area Based Initiative has to come through the Regional Co-ordination Unit. There is nothing wrong, by itself, with Area Based Initiatives, but what we have to have is a central mechanism to make sure that there is not a proliferation of them.

There was a Review of Area Based Initiatives which made a number of recommendations. Have those been implemented?

(Mrs Roche) Yes. I announced just a few weeks ago that we had substantially reduced the number of Area Based Initiatives.

We touched on mainstreaming earlier on, because that review recommended that a number of the initiatives should be mainstreamed. Where do you see resources coming from to enable that to happen within the main programmes? I know that many colleagues in local government would see that at the end of a lot of these programmes partners expect them to pick up the bill.

(Mrs Roche) It depends what you mean by "mainstreaming". What I mean by "mainstreaming" is that you bend your normal mainstream programmes so that you are delivering in all areas. My mechanism for delivering mainstreaming is through floor targets. That is a bureaucratic, boring phrase for something which I think is quite exciting. I think it is about minimum standards, and the social equivalent of the minimum wage. It is my job to try to get mainstream departments to use their funding so it works in deprived areas, which is why we have the floor targets.

Mr Streeter

Do you sometimes feel that your job is to go from meeting to meeting, produce report after report, and go from talking shop to talking shop? Do you feel that your department is actually doing something?

(Mrs Roche) You are asking me do I feel like I am going from meeting to meeting and talking shop to talking shop, and the answer, Mr Streeter, is no. I am not really a meetings person, so I try to keep meetings to a minimum. The most important thing I can do in my area is certainly around the question of floor targets. I believe it is an absolutely essential piece of work to make sure that government departments mainstream their programmes to make sure that resources and levels of public service delivery get to our poorest areas. In actually doing the job it is dealing with front line staff who are delivering services, whether it is the Rough Sleepers' Unit or the Government Offices. So it is going out and about, not meeting in airless rooms.

Chris Mole

Can you give us an example of how that would work? For example, Sure Start in my constituency delivers services to young families. When that comes to an end, who is going to pick up the tab?

(Mrs Roche) I cannot say exactly what is going to happen there. What is happening with Sure Start is that the Sure Start principles are being mainstreamed because lots of other areas are doing something very similar; even though they do not necessarily have Sure Start funds, they are using the Sure Start principles to set up projects. The interesting thing about Sure Start is that it has got such good main recognition, and, secondly, it has set up a number of genuine partnerships.

Chairman

That could mean that the people in Ipswich, having just had the benefits of it, get disillusioned because it does not continue.

(Mrs Roche) I think that is a very pessimistic and, if I may say so, Chairman, extremely negative approach to take.

Mr Mole actually asked you what was the hope for it? All we wanted was some indication that it is going to remain.

(Mrs Roche) This Government has been committed to Sure Start. The question that was asked me was about mainstreaming. We have put Sure Start in a number of different areas. It has been fantastically successful, but there are some of the principles of Sure Start that you can do by reconfiguring services in other areas. You can actually ask parents of children under five how is it that they want to see those services running? You can use those principles to achieve it. Why, for once, Chairman, can we not celebrate some of the great success that we have had?

I thought Mr Mole was very firmly celebrating the success there was in Ipswich. What he wants is for that success to continue. That is the problem.

(Mrs Roche) I am sure it will.

Can I take you on to this new document that has just been published Living Places: Cleaner, Safer Greener. It is a very nice document. What happens next?

(Mrs Roche) First of all, we have the DEFRA review of the legislation, but what I would actually like to see happen - and we need to take the decision as to how we roll forward the work - is much more of a concentration on how we can get other departments involved and how we can get local areas involved in regeneration of their public space. I think we need to have much more of a discussion about what livability means. I would also like to make sure that we disseminate the document, because there is a lot of good practice in the document.

It is an excellent document. Any money?

(Mrs Roche) You will have to wait and see, Chairman.

When will we see?

(Mrs Roche) As soon as possible.

As soon as possible. Finally, this question of the chewing gum. We have got these issues about producer responsibility across Europe, so that car manufacturers are going to have to take back their old cars. What about making sure that the manufacturers of chewing gum have to pay some of the cost of cleaning it up? I know the document was a little unfair - characterised by the chewing gum issue - but it is quite important when you look at how much effort local authorities are putting into pedestrianised areas and other things, and the one thing that makes them look really grotty is the ground-in chewing gum.

(Mrs Roche) I was flippantly going to say that I have found a piece under here, Chairman----

I am sure ministers do not ----

(Mrs Roche) I would not stereotype in that way, Chairman. It is a serious issue. What people need to do is look at the review of the legislation that DEFRA has initiated alongside our paper. What is apparent is that there is a myriad of different legislation on this. I think, as a lawyer myself, it is very confusing what is out there. People need to know what their rights and responsibilities are. What is your right on graffiti? Who has got the responsibility for removing it? What can you enforce as a private individual? The good thing about the coverage last week is that the issue is alive and up there, and I hope not only in this Committee but people will join in the debate about the legislation.

I just thought you might offer us some solutions.

(Mrs Roche) It is not my department because it is DEFRA, but I will offer you a solution. I think you have got to make the legislation much simpler, much more able to access and much more speedy. The difficulty you have at the moment with some of the remedies, whether it be on chewing gum or litter or on graffiti, is that they take too great a time.

On that note, can I thank you very much for evidence.

(Mrs Roche) Thank you very much, Chairman.

RT HON NICK RAYNSFORD, a Member of the House, Minister of State for Local Government and the Regions, MR PHILIP WOOD, Director General Regional and Local Government, MR IAN SCOTTER, Divisional Manager Regional Assembly Finance and Functions, Office of the Deputy Prime Minister, examined.

Chairman

Can I welcome you to the Committee and apologise that we are running a little bit late. It was fairly difficult to get short answers last time, but I am sure you will give us some very short answers. Can I ask you to introduce your team?

(Mr Raynsford) Thank you very much. I am Nick Raynsford, Minister for Local Government and the Regions. I am accompanied by Philip Wood, who I think was here previously and who is the Director responsible for Regional and Local Government, and Ian Scotter, who is the official working on the regional agenda.

Do you want to say anything by way of introduction or are you happy to go straight to questions?

(Mr Raynsford) No, I take your comment about brief responses and am happy to go straight to questions.

Chairman: Can I just thank you for this response to our report.

Mr Clelland

Good morning, Minister. On the whole, government departments do not trust local government, do they?

(Mr Raynsford) No, as I made clear in my previous evidence, I do not think that is a correct interpretation. We want to assist local government to raise the standard of performance; we want local authorities to succeed and we are putting in place a whole series of measures spelt out in the White Paper which are designed to do exactly that, to devolve greater decision-making responsibility to local government, within a framework that is designed to drive up standards and ensure high-quality delivery of services to local people.

Why does local government not see it that way? They do not seem to think that DTLR represents their views particularly well.

(Mr Raynsford) I beg to differ. The recent Central Local Partnership, which was a gathering between representatives of the Local Government Association and Ministers in DTLR and in ODPM and other government departments, had an extremely positive and very useful, constructive series of exchanges in which a rather different point of view was expressed.

That is not what my councillors tell me. I do not know how they are being represented at national level, but certainly there is a great deal of unhappiness about the relationship between central government departments and local authorities. That is my experience, and I am sure other members have the same.

(Mr Raynsford) If I may express a view, I think there is a time-lag and I think, perhaps, in some areas it takes a little while for people to appreciate there is a very different spirit. Certainly from my experience of talking with leaders of local government, from all parts of the country, there is a growing recognition - and welcome - to the Government's agenda, which is seeking to devolve power. Witness the draft Bill which was the subject of my last evidence to your Committee.

It has been said that spending departments are getting in the way of devolving power to local government. What has been done about that? First of all, do you agree?

(Mr Raynsford) I would not agree. I believe there is a general pattern of commitment to the overall approach to public service delivery. That approach was spelt out by the Prime Minister as being based on four key principles. The first of those is setting clear, national standards so everyone is absolutely clear as to what is to be achieved. Secondly, devolving greater power and decision-making to the front line. Of course, this can cause difficulties, because the front line may refer to schools rather than local authority education departments, and there can sometimes be a tension in that local authorities often see devolution ending at the Town Hall whereas others see devolution extending beyond the Town Hall to local communities. So there is an issue there. Thirdly, giving greater opportunity for flexibility to address local issues and to respond to changing demands. Fourthly, giving greater choice to members of the public so that they feel services are focused on them. Those are the four objectives and those are objectives which we are seeking to implement in relation to local government.

I agree with you in terms of devolution cascading down to and beyond local government - that is absolutely right - but concentrating on the local government aspect, at the moment, we had Lord Rooker in front of us a week ago and I put a question to him about the sale of council houses. I suggested to him that we ought to give responsibility to local authorities to decide in their own areas whether or not they should restrict sales. He was quite adamant that that should not happen. In fact, I think he said that "we did not want to go back to the 1980s", whatever that meant, because I remember in the 1970s and 1980s local government was having to put right housing problems which were foisted on them by previous governments. That was not an example of wanting to devolve power to local government, was it?

(Mr Raynsford) There is a classic instance of where, if you devolve power only to local government and no further, you can have a conflict between the views of individual councillors and individual residents, who may not agree that a national framework is interrupted at the local level. These are difficult issues.

On the set of shared priorities which have been announced, looking through them I do not think anybody could disagree with them. Could they? Promoting healthier communities and narrowing health inequalities; raising standards across all schools - all pretty simple stuff. What practicalities are behind all of that?

(Mr Raynsford) A very large number of measures being undertaken in very many areas with a great deal of creativity, I am pleased to say. I could highlight a number of ways in which this is happening but perhaps I can just focus on the local PSA programme which has been, in my view, a very considerable success in getting from local government a commitment both to locally determined objectives and national priorities with a system which gives initial pump-prime grant to help local authorities achieve the objectives and then, when they do so, a reward grant of 2.5 per cent of their budget, which provides a very significant financial incentive to authorities. That seems to me the classic instance, and I have seen many examples of innovative approaches taken by different local authorities in the field of improved health care, improved social services, improved education, improved anti-crime and safety measures, and a variety of others.

When people are asked about what needs to be done more to improve their local area they generally relate to the local, physical environment. It appears that your department does not have any targets in that area. Why is that?

(Mr Raynsford) The local physical environment is hugely important but, I have to say, that is largely the responsibility of my colleagues, particularly Lord Rooker.

Does he have a target?

(Mr Raynsford) He most definitely does have targets in terms of the decent home standard. At the Urban Summit last week in Birmingham the Deputy Prime Minister and other Ministers stressed the importance of improving the quality of life and the environment in which people live. This is fundamental to urban renaissance. My only caveat is that this is not specifically part of my ministerial brief.

Presumably there is some sort of co-ordination between departments?

(Mr Raynsford) Of course.

But there is not a co-ordinated effort to set a target in terms of improving local environment generally? They are all separate little pockets, are they?

(Mr Raynsford) I think there is a great deal of co-ordination, but, again, this is something where you have to have local discretion. Different local authorities will adopt a different approach as to how best to improve the quality of their area. If I may say so, in your area there has been a very, very significant improvement as a result of imaginative local initiatives which have transformed and improved the cultural infrastructure - which, of course, is rather important to your bid for the European Capital of Culture, which I shall say no more about because I would not want to imply I was in any way prejudiced in the outcome of that.

Mr Clelland: On that very positive point I had better leave it there!

Mr Betts

Freedom of local authorities. It might be a bit of a caricature of what happens, but many of them will see now they have got the educational funding and they have got to spend up to SSA pressure; extra money for social services has to be spent up to SSA, in line with the Department of Health guidelines, and housing spending has separate and very clear government targets. When you get to the built environment it is very important to people the physical environment in which they live, and it is almost starved of resources on which councils can make decisions. When money is around it is through New Deal for Communities or Neighbourhood Renewal Funding or Estate Action (?) - those sorts of things which are very specific and where the Government is directing, really, how the money should be spent. Is that really a commitment to giving local government greater freedom to act?

(Mr Raynsford) Let me say three things on this. Firstly, the overall pattern is one of substantial increases in government grant to local authorities, which has increased, in real terms, by 20 per cent over the last five years. There is, as you know, a provision for further real-term increases announced in the 2002 spending review. So, overall, funding for local government has increased. I accept entirely - this is my second point - there are some programmes that are ring-fenced. There are often good reasons for ring-fencing. If I can take one illustration, in our department's area: the arrival of the "Supporting People" programme, which involves significant transfers from other departments or other agencies, could be problematic if there was not a clear incentive to ensure the spending is allocated to very vulnerable people who are not always the most popular groups in society - people who may be in need of support and accommodation because of an alcohol or drug-abuse problem, and so on. It was felt necessary to have a ring-fence to enable that programme to come in but our approach is that the ring-fence should be only for priorities which cannot be delivered by other means and, wherever possible, time-limited so that there is a clear exit strategy. That is the approach we are trying to adopt to reduce the amount of ring-fencing and restrict it to areas where it is essential to deliver very, very important objectives. Thirdly, the overall approach that we are trying to create is one in which authorities will have greater freedoms to decide on their local priorities while, at the same time, recognising the importance of national priorities. One of the things we have done in the course of the last year is to agree a joint series of priorities, agreed between the Local Government Association and Government as a whole, to ensure that there is consistency between the local perspective and the national perspective. It is not always possible to do that, sometimes there are conflicts, but a good understanding and a greater willingness to work together, I think, helps to overcome some of those tensions that have created problems in the past.

Mr Streeter

Obviously I accept there is more money but are you not concerned that because more funding comes with strings attached - and more and more ring-fencing, it seems, these last two or three years - you are deterring high quality people from standing for local office, because the joy of being a local councillor is to make decisions and exercise judgment, and not just to do what Government wants you to do? Are you worried at all in your department about the quality of local councillors. Is this not part of the reason why, perhaps, it is not as high as it might be?

(Mr Raynsford) I can say straight away I share your concern that we do need to make it possible for people to stand for office, be elected and to deliver results for the communities they are serving. It is right that they should be given the scope to use discretion and to make a difference. We want to do that, which is why we are setting tight limits on ring-fencing and seeking to reverse the trend over recent years, which, as I acknowledged in my response to Mr Betts' question, has been the cause of some difficulty. Having said that, I do not think that this is the only reason for some of the problems of attracting people into local government. There have been, often, pejorative images of the performance of local government, some of the procedures have been slow, cumbersome and bureaucratic and people have not wanted to spend long hours sitting through committees that did not seem entirely purposeful. So part of our reform of local government management structures was designed to create a more efficient, transparent, decision-making process that would enable people to get results and be seen to be responsible ----

Chairman: You are tempting the Committee into a whole lot of follow-up questions. We are actually making slower progress on the first questions than we did in the last session.

Dr Pugh

Your Public Service Agreement contains a target for Comprehensive Performance Assessment but it contains nothing in relation to the new freedoms for councils. It was supposed to have been a combination of carrots and sticks, and you are certainly offering some financial carrots but they are not the sort of carrots that local authorities are looking for - if I can put it like that. They are not freedoms. Does that not show a lack of good faith on the Government's part here, because PSAs were supposed to be, to some extent, "performance in return for freedom"?

(Mr Raynsford) Our whole approach is based on that, and that was the principle which underpinned the White Paper we published a year ago and which we have been working to implement. We will be announcing in a very short period of time - later this month - our proposals for freedoms and flexibilities for local authorities related to Comprehensive Performance Assessment - the two go hand-in-hand.

We just have not seen that side of the picture. Is there any reason why you show one side first and keep this back until now?

(Mr Raynsford) You have seen a number of freedoms. You had an opportunity to look at our draft Bill, which extended borrowing freedoms, freedoms to trade and freedoms to charge for discretionary services. You have seen our plans to reduce the number of bureaucratic burdens; 84 consent regimes which we have either abolished or announced we are going to abolish. You will have seen our consultation principles behind a more proportionate inspection framework which would reduce considerably the number of inspections for high-performing authorities. So there is a lot of work in train, some of which comes out slightly faster than other elements. I can assure you, this is all part of a consistent approach.

Can we move on to the Comprehensive Spending Review. In 1998 the DETR had 23 Public Service Agreements with local government, five for the Fire Service. Following the 2002 Spending Review there is one for local government and none at all for the Fire Service. Is this Government suffering from target fatigue, or can you explain the rationale for that change?

(Mr Raynsford) No, we are seeking to rationalise our overall approach, in just the same way that we are seeking to reduce the number of plan-making obligations and best value performance indicators for local government.

So it is a mistake to have many Public Service Agreements?

(Mr Raynsford) I think it is important to get the focus on the issues that really matter and to have objectives that help to drive the improvements in performance that we want to see achieved at both central and local government level.

One particular target seems very weighty (?). That is the target for e-government. A lot of research shows that 80 per cent of people prefer to make contact by telephone or face-to-face. Why is the Government stressing this to such an extent?

(Mr Raynsford) It is a question of improving accessibility to local services. If I can pick up your example of the telephone, often people's experience of contacting the council is making a telephone call to one department and, perhaps, going to the wrong department or, perhaps, having another question which has to be answered by another department, and then being referred on and on to other people within that same local authority.

Do you think e-government will resolve that?

(Mr Raynsford) Yes, it will, because good pilots have already been put in place which deliver new comprehensive call centre answers, where people do telephone the local authority, and it enables them to get an immediate answer on a range of different services, including services delivered by other public authorities - by the police and by the health service rather than just the local authority. This is all about improving the quality of service delivery to the public and the accessibility of the public to a high-quality local service.

Finally, in a previous session of this Committee you actually suggested that all local authorities were capable of making 2 per cent savings in cost-effectiveness year-on-year. You said the Government assumed that. Do you know whether they actually do?

(Mr Raynsford) We are undertaking very detailed research on this, because this is an extremely important issue and it does need to be looked at very carefully indeed. There are different possible measures that can be adopted and different ways of judging success. I have to repeat my commitment to an overall framework of seeking efficiency savings. It is not unreasonable for any organisation - whether in the public or private sector - to make continuous improvements in the efficiency of their service.

As of now you do not know who has made the 2 per cent and who has not, but you hope soon to be in a position to name names.

(Mr Raynsford) We are undertaking further research to identify the key elements that will drive those efficiency savings.

That is not quite the same thing. I would like to know which local authorities have made the 2 per cent and which have not.

(Mr Raynsford) I am not in a position to give you figures at the moment. Our research will, I hope, inform our judgment on those matters.

Chairman

Does that mean you are going to give us a note, in due course, telling us which authorities have managed to make those savings?

(Mr Raynsford) As and when we have completed the research into this area, I would certainly expect that to be made public, and we would certainly send a copy to you.

Have you any idea of the timescale for completing that research?

(Mr Raynsford) No I do not.

Sir Paul Beresford

This will be based on value outputs - with finance set aside - instead of procedures?

(Mr Raynsford) Yes.

Mr O'Brien

Can I follow some of the points you have made? Performance reviews, inspections, district auditors, accountability, best value, national care standards for social services, Council Tax bills to reflect who is responsible for expenditure. In your statement to the House on 30 January, column 3456, you said: "We will help councils by cutting red tape and reducing central prescription." When does it start?

(Mr Raynsford) We have already, as I said in a response to an earlier question, announced our intention to do away with 84 separate consent regimes which did require local authorities to get government approval for specific actions. We have already set out our proposals for reducing the inspection burden on high-performing authorities.

That is a point. You reduce it for high-performing authorities but officials from the low-performing authorities are going to have to spend more time with inspectors, which means to say that the work they should be doing in trying to bring round the authority is going to be spent discussing issues with inspectors. Is that not red tape?

(Mr Raynsford) Our paper suggests that there should be a proportionate inspection regime that focuses specifically on the issues that need to be addressed if the authority is to improve its performance. So it will be related to the Comprehensive Performance Assessment and will inform the action plan that we want to see all authorities introducing to drive up standards and tackling weaknesses.

Comprehensive Performance Assessment, best value, both running side-by-side. Is that not a performance monitoring regime too?

(Mr Raynsford) No, it is not because Best Value reflected the performance of individual authorities across a large number of different service areas. What it did not do was give us the overall picture of the corporate performance of the authority - its capacity in handling finance, in handling personnel issues, in its management ability - and the Comprehensive Performance Assessment brings together the best value performance information together with the assessment of the corporate capacity of the authority to give a bigger, better and more rounded judgment of the overall performance of the local authority.

In your experience, what actions are most effective to improve poor performance by local authorities? What evidence do you have to show that there is some progress being made there?

(Mr Raynsford) I think there is a lot of evidence. One can see the evidence in individual service areas, where my colleagues in other government departments have been engaged in working with authorities to raise the standard of performance, whether in social services or education or in benefit delivery or other areas, and I can say from my own practical experience that I can see real evidence of improvement in authorities, like Hackney which suffered very, very serious collapses, in fact, in the performance of its public responsibilities. One can see from the evidence how effective action supported by government intervention is now leading to real improvements.

When do you start cutting the red tape that you referred to?

(Mr Raynsford) We are doing so. We are cutting red tape all the time, and we are making our whole inspection regime very much proportionate to the programme of improvement of council services. So it is all about trying to drive up standards. That is our objective.

Chairman

As far as Hackney is concerned, a bucket-load of money helped a bit, did it not?

(Mr Raynsford) I have to say, and I have said this very widely indeed, the Government does not believe that it is right that failing authorities should be rewarded for failure by hand-outs. In the case of Hackney the financial position was so precarious and so disastrous that it was necessary to stabilise the position to ensure that they were capable of putting a budget in place in the current year. I am pleased to say that as a result of that we are now seeing significant improvements - for example, in the collection rate of Council Tax, in the delivery of benefits and in some other services. I would just like to add, that is an authority that has been in very, very real difficulty and there is still an enormous way to go. We certainly should not be complacent but things are going in the right direction.

Mr O'Brien

One more question about the Comprehensive Performance Assessment. The Audit Commission has admitted that the outcome of the Comprehensive Performance Assessment is being verified against expectations. How can this be objective? They are saying "This is what we expect"; how can that be objective?

(Mr Raynsford) This process has been the subject of very detailed consultation with local government, firstly through the work of the pathfinder authorities, then through a series of consultations and discussions in which local government has been fully involved, to refine the methodology and the arrangements for mediating where there are differences of opinion between the authority itself and the Audit Commission about the outcomes. That has been going on, in my view, in a very constructive way over the last few months and will inform the final judgments which the Audit Commission will be publishing early in December.

Sir Paul Beresford

The CPA results for London come out fairly soon. I understand it is polarised: you have got a few very good authorities at the top and the usual suspects at the bottom, and not much in between. There is a feeling that there might be a little bit of A-Level-type massaging being done on behalf of the Government (would you like to give a disclaimer at this point), but, seriously, what are you going to be doing about those people at the bottom? The top-quality people who you would hope would move into those authorities to work there will not want to have anything to do with these authorities.

(Mr Raynsford) I can say three things on that. Firstly, there is no question of "massaging" the figures. This is an independent operation, conducted by the Audit Commission.

Chairman

In the Local Government Chronicle they said that they were changing them slightly - tweaking them. What is that but massaging the figures?

(Mr Raynsford) They have had a process of mediation in which authorities have been able to make representations, quite rightly and properly. I think you in your report suggested there should be an appeal procedure, and the mediation process performs exactly that function to enable authorities to challenge judgments, and for the Audit Commission to reach a final decision based on that process. That does not seem to me to be massaging, that seems to be a fair process of proper evaluation of the evidence. Can I, secondly, say that I cannot pre-judge the outcome of assessments in relation to any individual area or type of authority, but if I can just say in regard to failing authorities, I have been talking, in my response to a previous question, about the action being taken in respect of Hackney to raise the standard of performance there. It was widely known to be a failing authority. I am pleased to say that, far from other authorities not participating in helping, the input from staff from other authorities has been crucial in turning around some of Camden's failing services. I mean Hackney of course. The reason I said "Camden" is that the benefits staff from Camden have played a crucial role in turning round the benefits service in Hackney. That is a very good example of the best practitioners in local government helping in the recovery programme in failing authorities, and that is informing our decision as to how we move forward after the Comprehensive Performance Assessment figures are published and how we help those failing authorities to improve.

Sir Paul Beresford

There will be a general move, therefore, from some of the top authorities down to help the lower authorities? I can see that going down like a lead balloon.

(Mr Raynsford) I think across local government as a whole there is a recognition that the local government family does have a responsibility to help tackle the problems of some of the weaker authorities. To give another illustration: the chief executive of Telford and the Wrekin is currently acting chief executive in Walsall where he is making a very significant contribution indeed and helping to change an authority which has also been in difficulty. I was there last Friday and saw for myself the progress that is being made. I think this is an absolutely correct and, if I may say so, responsible and brave decision by the councillors in Telford and the Wrekin to release their chief executive to help in this process. I think there is an appetite in local government to ensure that they do help those that are not doing as well as they should to improve.

Chris Mole

I could not help but think of A levels when you were talking about mediation there. Are there enough competent people to carry out all this inspection? I gather that in the move from the first round of CPAs, which looked at counties and unitaries, the role of the peer assessor is going to be dropped for district authorities yet I would have thought these are the individuals that would instill confidence in the authority that was being inspected in the independence of the process and its value?

(Mr Raynsford) Two things. If I can say straight away that no final decisions have been taken yet on how the CPA process will roll out to districts. There are important issues to be addressed because of the different nature of the responsibilities of district councils and the importance of having a proportionate regime that does not simply replicate what is appropriate for county and unitary authorities. Secondly, the peer review process has been an important part, if I may say so, of the Comprehensive Performance Assessment and the experience of people who have gone as peer reviewers into other authorities has been generally very positive indeed, not only in helping the authorities that they have inspected or reviewed but also in widening their own horizons on how local authorities respond to particular challenges. I have had a series of very, very encouraging feedbacks from peer assessors. Of course there is a question of capacity and we do recognise that there is a much bigger challenge to roll out the programme to the large number of district councils far greater than the number of county and unitary authorities.

Perhaps we will return to capacity in a moment. Has inspection increased or reduced over the last 12 months? What evidence do you have to support your answer?

(Mr Raynsford) I think there has been a change in the pattern of inspection. We did express a view that the best value inspections should, where possible, move towards a more thematic and cross-cutting approach rather than be very narrowly service focused. Also there has been a need to complete inspections to ensure that the Comprehensive Performance Assessment was based on data from all authorities, so we have been in a transitional period. I want to see, as I have already indicated in response to an earlier question, a proportionate inspection regime reducing significantly the amount of inspection for the better performing authorities and targeting inspection on other authorities in those areas where there is a need to raise performance so it does mesh together with the Comprehensive Performance Assessment.

OFSTED and SSI are claiming that they reduced their inspections last year by about 20 per cent. Is there any evidence of that?

(Mr Raynsford) I think there is, yes.

If these processes and inspections are producing savings, will they be reinvested in the local government framework entirely?

(Mr Raynsford) The whole process is designed to improve performance of local government and clearly those authorities that are high performing will benefit from less time and less expenditure having to go into the process of inspection. That is one of the incentives that is there to help drive up standards.

Chairman

But most of them are experiencing increased bills, are they not, for next year's inspections?

(Mr Raynsford) Most authorities, in my judgment, will continue to have inspection and rightly so.

And it will cost more.

(Mr Raynsford) No. That will increasingly focus on those areas where they need to improve their performance and therefore they will be related to the Comprehensive Performance Assessment and will be better targeted. I think that is the right way forward for inspection. We believe that inspection is a useful tool to identify weaknesses, to help show how services can improve and to provide a real incentive to authorities to raise their performance.

It is a bit worrying if an authority has not got enough money to provide its services and therefore is a poor performer and then is going to be charged more for someone to inspect to demonstrate what the local authority knows, that it has not got enough money.

(Mr Raynsford) If the outcome is that the authority delivers a better service I think everyone, and particularly the public in that area, will be extremely grateful.

Chris Mole

You mentioned capacity just now and you have set up a capacity building team in your local government division. What do you mean by "capacity building"?

(Mr Raynsford) Capacity building involves a range of activities designed to help local authorities improve their performance. This can at one level simply reflect training programmes for staff or experience building programmes for councillors. It could involve more extensive, longer range objectives, such as increasing the number of graduate entrants into the local government service, assisting career progression and development throughout.

It sounds like what the Improvement and Development Agency exists for and has some top sliced resource to undertake.

(Mr Raynsford) They are very much part of this process. We are working closely with local government and the Local Government Association has warmly welcomed our approach which has sought to match the funding which they are able to put in through the top slice for the RDA with additional government money to extend the options because capacity is one of the difficulties. We do need to do more and this is what we are seeking to do.

Good. What difference has the Beacon Councils scheme made to the quality of local government services across the board?

(Mr Raynsford) I think its biggest single benefit is that it recognises the achievement of front line staff in a range of services where they get recognition and they are able to then extend their skills to others. There are no other programmes that give the same degree of recognition to the staff who deliver at the front line. The chief executives may be very pleased if the council is rated as the top performing council of the year in Local Government Chronicle Awards or things of that nature, but it is the staff who deliver the individual services who get the recognition and who say to me when I talk to them that they particularly value the Beacon Councils scheme. It is a way of recognising success, acknowledging performance and spreading the word to others. I can see it having lots of benefits, which is why I am delighted that there is a very, very large and enthusiastic expression of interest in the coming year's Beacon Councils scheme.

Do you believe that ministers are able to engage as much with the spreading of excellence as might be wished? Are they able to attend as many Beacon events as possible?

(Mr Raynsford) I met every single Beacon Council winner last year and have used a number of opportunities to highlight the scheme and to publicise it because it seems to me a very important scheme indeed.

I meant the follow-up events that are part of the Beacon programme where councils show off, if you like, their excellence to others.

(Mr Raynsford) Obviously if ministers are invited and are able to participate I would strongly welcome that. I certainly have done so and will continue to do so.

Mr Streeter

Do you think that more councils should recruit senior staff from the private sector and, if so, what are you doing to encourage it?

(Mr Raynsford) I think there is a real benefit of an interchange not just between local authorities and the private sector but between central and local government. One of the things that I have been very keen to do is to ensure that we have more people from local government in our performance unit in ODPM and that there will be opportunities for our staff to spend time on secondment in local government as well as in the private sector. We are doing both of those things and I would certainly want to see local government adopting a similar approach.

Dr Pugh

Reducing ring-fenced funding and the numbers of plans, what timetable have you got for this?

(Mr Raynsford) As far as plans are concerned, we have announced our objective to reduce the number of plan obligations by 50 per cent and to reduce dramatically the number of plan requirements for the top performing authorities.

What is the timetable?

(Mr Raynsford) I was just about to get to that point, if you will bear with me a moment. We intend to announce our package of freedoms and flexibilities, which will cover both the plan reductions and ring-fencing, later this month.

I ask simply about the timetable because there was an announcement saying that plans would be reduced by 50 per cent by October 2002 and we are in November now. I figure the timetable has slipped a bit. What timetable have you got for reducing the number of ring-fenced plans?

(Mr Raynsford) We will be making an announcement later this month.

Will it specify a timetable or will it just be another announcement?

(Mr Raynsford) It will indicate our proposals for dramatically reducing obligations for making plans, particularly for best performing authorities but also achieving a significant reduction in plan obligations generally and our future proposals in relation to ring-fencing.

So ring-fenced grants will go down appreciably within the next 12 months?

(Mr Raynsford) I cannot pre-empt what we are going to announce later this month.

The next two years?

(Mr Raynsford) As I said earlier, we are seeking to restrict the growth in ring-fenced grants and to limit them to those areas where we regard it as necessary to achieve objectives, such as the one I outlined in the case of Supporting People.

Why did you not bring the issue of ring-fenced grants in the consultation on the SSA?

(Mr Raynsford) The consultation on the changes to the Formula Grant Review was about the distribution mechanism for distributing Formula Grant, as we now will refer to it, between individual local authorities. It is already a pretty complicated process and to have added in an additional complication on ring-fenced grants would not necessarily have been welcomed.

Back to ring-fenced grants. The local authorities recognise now that about 12 per cent of their money comes via ring-fenced grants. They would like four per cent. I think four per cent is probably an acceptable figure. What is your figure?

(Mr Raynsford) I do not have one and I do not know what the basis of your four per cent figure is.

Four per cent is their preference. You do not have a preference?

(Mr Raynsford) As I said, we believe that ring-fencing may well be necessary for particular objectives. I mentioned one example and there are others. The caveat that I added was that wherever possible that should be time limited and there should be an exit strategy so that one does not build ring-fencing permanently into the process. If you are introducing a number of very important changes in policy, such as Supporting People, which I believe is a very important initiative making care packages respond to people's needs rather than making people fit into particular types of provision, that requires extremely sensitive handling because you are taking money from different sources and you are expecting local authorities to assume new responsibilities. If they do not do it a number of vulnerable people will fall through the net and you will have serious consequences, which I do not think anyone would want to contemplate. For that reason we believe that a ring-fence is necessary for a period of time. If you have two or three programmes of that nature coming in that would inevitably raise the level of ring-fencing for a period of time, but as long as there is an exit strategy in place it will not be a long-term one. That is why I am being guarded about this and saying that our objective is to limit the amount of ring-fencing and to ensure that there are exit strategies so that where ring-fences do apply ----

Chairman

So we can assume that 12 per cent is the top and things will come down?

(Mr Raynsford) No. You have just heard me say that if you have a number of programmes that come at the same time there could be in the short-term an increase. I am not going to comment, as I have said, on the actual and overall level.

I thought you were explaining to me what had happened and why it had gone up from four to 12. What you are actually saying to us is that 12 is not the top, it could go up even further if a few more ring-fenced schemes come along.

(Mr Raynsford) What I have said is that I am not able to give a comment on the absolute figures until we make our announcement later this month. I referred to Supporting People, which is a new programme, which comes in from next April and by definition, therefore, there will be some new ring-fencing.

Sir Paul Beresford: It sounds a bit like local authority dictation.

Chairman

So ring-fencing is likely to go up rather than the ring-fencing that the local authorities want, or the amount ring-fenced, to come down?

(Mr Raynsford) No. Can I just try and make this absolutely clear. We do not have a figure about what is an ideal level of ring-fencing for the reasons I have explained.

I would accept that there are ebbs and flows but we want to find out is the tide coming in or is the tide going out?

(Mr Raynsford) The tide is going out, ie in the long-term there will be less ring-fencing. That is our objective and we are very clear about. But in the short-term there can be ----

In the short-term the tide is coming in?

(Mr Raynsford) No. I am not saying that the tide is coming in in the short term.

Chris Mole

It might not go out as fast as you would like.

(Mr Raynsford) Absolutely. I think Mr Mole has hit it on the head.

Mr Streeter

So the value of your ring-fencing can go up as well as down. Does this approach apply also to the money that the Chancellor gives directly to schools because more and more schools are reporting to me that they would rather have the money included in their budget rather than ring-fenced for specific issues. I know you are not the Chancellor, perhaps you will be one day, but what is your view of that? Is this a principle that we can now look forward to across the board?

(Mr Raynsford) As I mentioned in response to an earlier question, there is a tension between the wish for local authorities to have the maximum discretion at their level and then the wish for other bodies in a subsidiary position to local government who would like to have greater discretion themselves and they would like the money to be routed directly through to them rather than to go through the local authority. If you do that then clearly you do limit local authority discretion and there is a tension between these two objectives. What my colleagues in the Department for Education are seeking to do is to ensure that there is both greater certainty on the part of both schools and local authorities about programmes and that they are not unduly circumscribed by prescriptive rules which determine exactly how sums should be spent. There is a tension between giving money direct to schools and giving discretion to local authorities and no-one wants to gainsay that.

Chairman: I think we need to move on to something a bit less controversial.

Mr Betts

There are proposals around for a new revenue grant formula, could you manage to describe how you think the grants are going to be made to local authorities in the future in one very simple sentence without using the words "intelligible" or "simple"?

(Mr Raynsford) We will be announcing our conclusions on this extremely detailed, complex and, I have to say, controversial review of the Formula Grant mechanism. We will announce that when we make the provisional statement at the beginning of December. The objective is a grant distribution system based on four key components. The first is a numerical measure of the particular need of that service, whether it is the number of pupils requiring education, the number of kilometres of road to be maintained or whatever, a measurement of the actual demand, the numerical demand, for the delivery of that service. Secondly, an addition, a top-up, to reflect deprivation where that is appropriate, because that is a factor which can considerably increase the cost of service delivery. Thirdly, a top-up to reflect additional labour costs in those areas where the cost of recruiting staff to deliver the service is higher. Fourthly, additional top-ups to reflect other factors, of which the most significant is sparsity in rural areas where the cost of delivering a service is greater because of the distance between locations and so on. Those are the four key building blocks that will inform the decision in each element of the Formula Grant. As you will know, we proposed in our consultation paper that the elements should reflect the key service areas: education, personal social services, EPCS and so on.

I might be cynical but that is not meeting the lofty aspiration to be as intelligible as possible, which was the initial objective, the idea that you would create a system that the person in the street could understand and it is not fairly intelligible to Members of Parliament, local authorities or even ministers. Many of your colleagues would be hard pushed to describe it, would they not?

(Mr Raynsford) We did run a couple of seminars with a view to trying to help understand what is of necessity a very complex issue. As the former Minister for Local Government in the previous government made the point in the course of the Commons debate on this in urging us not to seek to go too far along the route towards simplification, there is a question of justice. If you do not take account of differing local circumstances, and needs do vary from area to area, you will end up with a scheme which may be simple but which is unfair. The problem is the diversity of the issues, whether it is sparsity in the rural area, whether it is deprivation in a constituency such as yours, whether it is the need to ensure the highest standard of service delivery in all the areas that we represent, all of these factors impact and it is difficult to find a simple way to reflect that and to ensure that authorities get a settlement that broadly reflects the need to spend in a way that is considered fair to an impartial observer.

Mr Betts: So it is difficult, it is complicated, there are lots of new elements. The Association of Local Government have said, and probably other local authorities as well, they are not convinced that some of the options are technically or intellectually robust, they need more testing. Are we really going to have a system that is set in concrete for three years despite all of these problems and difficulties and new elements with no opportunity for changing it at all once the announcement is made?

Sir Paul Beresford

More to the point, should we have it? Should it not have some flexibility to reflect on the difficulties that will come out of the woodwork following your announcement next month?

(Mr Raynsford) I think I would make two comments in response to those two questions. The first is I am not sure that anyone would welcome a further prolonged period of uncertainty about what the future pattern of grant will be because certainty is terribly important for local authorities, particularly those who are planning future financial provision, they want to have a reasonably clear indication of what their budget is likely to be built on. So a period of stability without throwing all the balls up in the air is something that I believe is going to be largely welcomed by local government. Having said that, clearly we do not want to be absolutely rigid about these things and were there to be evidence of a serious problem I am sure that we would be willing to address that. Our intention is to try to create a framework of stability and not to have a further year in which people are frankly arguing among themselves to get the best interests for their own area. Every area is wanting to get the best for its area out of this. Pitting different parts of local government, SIGOMA versus F40 -----

Mr O'Brien

We are looking for fairness, Minister, not to balance one against another.

(Mr Raynsford) I agree but unfortunately the definition of fairness from a SIGOMA perspective is different from the perception of fairness from an F40 perspective and that has been part of the difficulty of the last year.

Mr Betts

Can I go on to one specific issue. The Environment, Protective and Cultural Services block is one that we were referring to previously about the physical environment and local authorities are often very stretched to do anything positive given the amount of money involved. There are major disparities in areas yet the proposals are to use recent spending patterns as the basis for the distribution of resources. Is that going to be a fair way of doing it? Should we not be looking at deprivation and problems rather than what has been done in the past?

(Mr Raynsford) What we have tried to do generally through this process is to reduce the dependence on regression analysis to previous spending patterns. That has been taken forward in many areas. However, in the case of the EPCS block, which does contain a large number of different components, it is difficult to find a single indicator or series of indicators that accurately reflect the need to spend across such a wide range of different services. The conclusion that we have come to, and we have discussed this in detail with representatives of local government, is that there is a need for some of the formula to be based on an analysis of previous patterns of spending quite simply because of the lack of a credible alternative. That does not mean that other factors, including deprivation as you have described, are not taken into account.

I am sure colleagues will come back to grant distribution in a minute. We raised with your colleague, Barbara Roche, earlier the differences in spending between regions and the fact that the previous Secretary of State, Stephen Byers, when he was here before us last year said that a review was being set up to establish what was going on in regional spending, whether it was fair and appropriate and, indeed, how it fitted into the national picture of spending in the regions of Scotland and Wales. Has that review taken place?

(Mr Raynsford) It is taking place. Professor McLean of Nutfield College, Oxford, is in charge of a team which began its work in May of this year and is due to report in April 2003. We are mid-way through the research. You may also be aware that the ONS published just at the end of last month some experimental figures trying to quantify both the contribution in the form of tax payments coming from different regions and the receipts of different regions in terms of benefits received and other costs such as education and health.

The government report, will that be published?

(Mr Raynsford) That is published already.

The review that is going on?

(Mr Raynsford) We certainly would intend to make the findings of our review public when they are available.

When?

(Mr Raynsford) I have already said that the team is not due to complete its report until April of next year, so it will be after then, but I cannot give you any more information.

When the government publishes its findings it will publish them not merely in the context of the distribution of spending in the English regions but it will connect in to what is happening in Scotland and Wales as the Secretary of State indicated to us last time?

(Mr Raynsford) Let me make two things quite clear. The Barnett Formula is not the subject of this review and that is not being reviewed. What the research is doing is trying to get better information about the flows of money into and from individual regions in the way that I have described.

The Secretary of State said that the work has to be done with regard to research between English regions and that will then feed into wider considerations within the United Kingdom about how we do that within the United Kingdom and not just for the regions. Is that going to happen?

(Mr Raynsford) The research is designed to improve our understanding of these rather important issues and that is scheduled to report in April of next year. Clearly when we have the evidence from Professor McLean's team I am sure that will inform what will probably be an extremely vigorous debate about the balance of funding between different regions and different parts of the United Kingdom.

Mr O'Brien

Revaluation of properties and the fact that we should have had a revaluation and some local authorities may be losing because of the fact that revaluation has not been carried out, when can we expect the revaluation to come about?

(Mr Raynsford) We have already announced that the next revaluation of domestic properties will be conducted from 2005 and the conclusions will be implemented from 2007.

Will there be any compensation to the local authorities for the loss of revenues?

(Mr Raynsford) We have not yet discussed any of the arrangements for the phasing in and cushioning, damping, of adjustments that may take place.

You are aware, Minister, that the difference now between the actual expenditure in local authorities and what was allocated to SSAs is three billion pounds. You have told us about the formula that you are going to introduce. That three billion has more than doubled over the last decade and, therefore, the escalation is continuing. Is the new formula going to address this void between what we actually spend and what we get?

(Mr Raynsford) I think the problem with the SSA system was that it was based on a concept which is difficult to sustain, and that is the concept that central government can determine through formulae exactly what needs to be spent in any one part of the country. I think most people now believe that that is quite simply not tenable. What we are trying to do through the new formula is to devise a framework that distributes grants between local authorities on the basis of various factors that reflect the need to spend area by area. There will no longer be a presumption that government specifies through SSA some kind of level of expenditure which is the right level for spending in any one individual area of the country.

The question that we have pursued on more than one occasion is the fact that low income areas are the highest taxed areas and some of the highest taxed areas have the lowest council tax to pay and the imbalance between those two areas. You mentioned F40 and SIGOMA. If you look at the local education system we are both arguing the same point, that the deprived areas are paying more for education and social services than some of the less deprived areas. When will that stop? When can we expect to have equalisation on the question of education provision?

(Mr Raynsford) I have to say my interpretation of the evidence being submitted by F40 is not quite the same in that they are seeking increases in the basic element of spending reflecting the cost of education per pupil as against the increased weighting given to top-up factors, such as deprivation and other elements. There are different perspectives. What we are trying to do through this whole review is to find what in our judgment is the best way forward to do that. That is designed to ensure that each local authority receives support from central government based on a proper appraisal of the needs of that area to spend in order to deliver those services.

Can I just say that the Area Cost Adjustment will now be based on actual expenditure right across the country more than assumed expenditure, will it not?

(Mr Raynsford) No. No decisions have yet been announced. I have said that we will make our announcement -----

You have just told us, Minister, that the cost, particularly on education, will be based on need. I am saying if that is the case the Area Cost Adjustment must be based on need and no assumption.

(Mr Raynsford) I am sorry, I did try and make it clear that there were four components. The first would be the unit cost depending on the number of people, in the case of education, requiring schooling. Secondly, there would be a top-up for deprivation. Thirdly, there would be a top-up for additional pay costs incurred in areas where wage levels are higher. Fourthly, a top-up relating to other factors such as sparsity. Those are the building blocks. The emphasis on the particular element, the unit cost as against the deprivation top-up as against the wage cost top-up as against the sparsity or other top-ups will vary from service to service. We have not reached decisions yet on those. We are moving very near to making decisions, we have had a very useful consultation and we have had a lot of feedback but our final conclusions will only be

announced ----

Mr O'Brien: It will be based on need.

Mr Clelland

Will the best way forward be what is fair and equitable or what is politically expedient?

(Mr Raynsford) It is an attempt to find what is fair and equitable.

Dr Pugh

Can I ask you briefly about the Area Cost Adjustment. The policy has been implemented for quite some time but what research has been conducted into how effective it is in dealing with the problem that it is supposed to deal with? I am not talking about special pleadings by local authorities but academic research or departmental research, evidence led policy?

(Mr Raynsford) This whole debate was kicked off by the Elliott review which was exactly that, an academic attempt to define the key components and the drivers for additional cost. Of course, as always happens on these occasions, following the publication of that report people differed in their view about the validity of the Elliott methodology and a whole series of alterations, amendments and tweaks, if I can use that word, were suggested. That is why in the course of this review we have looked at a number of different formulations, we have consulted on them, we have set out exemplifications and we have been very ready to listen to views put forward in response to that.

But the government are probably mindful not to throw more money down estate agents' throats and subsidise council tax unnecessarily. Whatever formula they go for in the Area Cost Adjustment they want to target it in such a way that it does actually recruit more people.

(Mr Raynsford) We have no intention, in your choice phrase, to throw more money down estate agents' throats.

I am relieved to hear it

(Mr Raynsford) We certainly do recognise that it does cost more to deliver services in areas where labour costs are higher and that is one of the factors that has to be taken into account.

Moving on to the labour picture, the shortage of staff is a consequence sometimes of housing and also a consequence, according to the Audit Commission, of basically local government staff being very unhappy with the amount of bureaucracy that surrounds their job. Are you doing anything as a government to actually improve staff retention within local government quite apart from the Area Cost Adjustment?

(Mr Raynsford) Yes. We think this is a very important issue and it is one of the factors that we are taking into account. I talked earlier about our commitment to reducing red tape and bureaucracy and unnecessary consent regimes and hopefully that will help to address that particular problem which was rightly highlighted by the Audit Commission.

Christine Russell

Can I go back to the consultation on the Formula Grant Distribution. Do you know how many responses you actually received in that consultation?

(Mr Raynsford) We received a lot of responses but they came in different forms. Some of them, as would be expected, came from the main interest groups representing different groupings of local authorities and then a lot from individual local authorities themselves. We also had a substantial number prompted by a write-in campaign from the F40 group which generated about 55,000 letters, many of which were very similar indeed as you may imagine.

You did not get many unprompted responses from the general public?

(Mr Raynsford) We have had some.

Sir Paul Beresford

Will you be receiving deputations from individual councils after the announcement in December?

(Mr Raynsford) We will be receiving deputations after the announcement in December, in the period between the announcement of the provisional settlement and the point at which we then need to firm up.

From whom?

(Mr Raynsford) I was about to answer that question, we need to take decisions by the second week in January in order to enable final settlement to be available for local authorities to meet their timetables. This is a very, very tight period of time. What I have said to individual local authorities and the local government associations, and I will say it to this Committee, is that while we will see delegations from individual authorities, if individual authorities wish to come, there will be some who probably have general concerns which are shared by other authorities and if they wish to come collectively as a group that will certainly ensure that the whole process can be managed in a more expeditious way without going through the motions of meeting people without sufficient time to discuss the issues. If every local authority wanted to come in that very short period of time it would be difficult, as you will know from being a minister who has gone through this process, to give the detailed attention that one would want to. We are encouraging authorities who have a common interest to come together as groupings, but we will see any individual authority that wishes to come individually.

Chairman

You are expecting to see one of them on Christmas Eve and Boxing Day, is that right!

(Mr Raynsford) I cannot imagine my Christmas holiday is going to be a long one.

Christine Russell

Would it not have been simpler to have returned far greater control to local authorities over the amount they raise locally? Would that not have let you off the hook?

(Mr Raynsford) That is another component in our plans. As you will know from previous discussions we are committed to a review of the balance on funding.

What is happening to that? When you came in July you said you were going to initiate it.

(Mr Raynsford) We have. We are undertaking initial analysis in the Department, so that will inform the wider review, which will involve other parties, which we will be making an announcement about probably early in the new year. There is a limit to what can be done in any amount of time.

Are you consulting local authorities on that or are you just doing an internal review of it on the balance between the amount of funding from central...?

(Mr Raynsford) We are currently doing an internal analysis which will inform wider review, which will involve other parties, including local government.

Chairman

Is that available for the Committee to have a look at?

(Mr Raynsford) Not yet. When the conclusions are complete we would expect them to be made available.

Chris Mole

Do you have any idea where you would like to see it?

(Mr Raynsford) No, I do not. The issues are complex and in some respects contradictory.

The issues could be very simple, you need to be over 50 per cent for it to look anything like local control.

(Mr Raynsford) If I can put that point, the last time that 50 per cent, or so, of local government expenditure was raised locally was in the late 1980s, I am not sure that people would regard that as a time for optimum freedom for local government.

For different reasons!

(Mr Raynsford) I say that only because a simplistic view that a percentage of money raised in one source or another does not necessarily get to the heart of this problem, which is a complex problem, and we will need to look into it.

Chairman

I think you are slightly rewriting history because although that may have been the period of poll tax it actually did not increase the amount the local authorities were able to raise locally, it simply found a new way of funding it. Can I very quickly ask you on this, what is happening about the Census figures? The city of Manchester tells me that if they new Census figures are going to be used it could cost them £26 million a year, which is a lot of money. Obviously there were wards in Manchester where only 60 per cent of the Census forms were returned. You have a problem that nobody has accepted the Standard Spending Assessment, but most people simply said that the statistical data was correct, they may not have liked the weighting but they accepted the statistical data, they may want it introduced earlier or later, but now you have added in a further complication, that some people think the statistical data from the Census is up the creek!

(Mr Raynsford) I think this illustrates exactly the nature of the problems we face. Everyone agrees in principle that we should use the most up-to-date and most accurate data. The ONS tell us that the new Census data that they have made available is the most accurate and up-to-date yet. However, some local authorities, not surprisingly those who face significant negative consequences of estimate that are lower than previously expected, have challenged those. That is always the way with this process. We have asked a number of questions about the data, obviously we have listened to the representation we have received. We have made a commitment, and I think this will be helpful to those authorities that are worried about the consequences, that the clause mechanism will cover changes related to census data so that no authority faces the possibility of a serious loss of grant because of new census data, they need not actually fear that outcome.

The little bit of money that is allocated as far as schools are concerned on the basis of where the pupils are at present taught, is there any chance of that being allocated on the basis of their post code?

(Mr Raynsford) The school population is a very interesting example because this is where the general view of local government is that they want the most up-to-date figures to be available. I am expecting us to receive the secondary schools population figures for September literally this week, that is the earliest that we can get them, so that is an indication of why it is not possible for us to make available the provisional settlement earlier than it is, because a lot of this data comes at the last minute. Local government says they want to have up-to-date figures rather than figures that are by definition at least a year out of date.

That is not really answering my question. My question is about schools in Stockport who get £800 per pupil less than in Manchester, even though the pupil may live in Manchester.

(Mr Raynsford) In response to an earlier question I indicated that the components that go to determine the amount of grant available for any individual local authority will reflect a number factors, it is not just the number of pupils, it is also the other factors that I referred to, and those vary from area to area. There will never be a position, if you take account of deprivation, of variations in labour costs and of issues such as sparcity you will never have a situation where you have an identical amount for pupils area by area.

Mr Betts

First of all, in your response to the Committee's report on the draft for the Local Government Bill that it would welcome the decision not to go with the merging of revenue support grants and national non-domestic rate, there is a list of these and others, also in our comments - I have not read all of your detailed responses - we generally had the view in some areas you are quite rightly pushing back the boundaries and giving local government greater freedom, we thought you were being a bit too timid in a few of the areas. When we get the Bill itself are we going to see a move in the Committee's direction?

(Mr Raynsford) You have highlighted one area where we have responded to your recommendations in a positive way. As I made clear when I last gave evidence to the Committee about this Bill, I believe it is an important deregulatory measure which gives extensive additional freedoms to local government and helps to set out the agenda in the White Paper to encourage local government to improve both its performance and it competence. I hope you will welcome the Bill as and when it appears. As you will appreciate I cannot say any more about when that might be.

Are we going to see some further changes, apart from the one that I have just described, to the draft Bill?

(Mr Raynsford) We have also tried to reduce the number of provisions dependent on secondary legislation. The Committee recommended that we should reduce the number of statutory instruments. We have looked very carely to see how we can do that and there are a number of other changes we have made.

In your response you also referred to this issue of the internal analysis of the balance of spending and the Review Group. You say, "it will be inappropriate to consider any provisions in the Local Government Bill prior to this thorough analysis and the review itself". How does that mean that this review of how much money local authorities can raise themselves is going to link in to the Local Government Bill? Does it mean that it is. It says, "it will be inappropriate to consider any provisions in the Local Government Bill prior to this thorough analysis..."

(Mr Raynsford) That is correct. Because the analysis will not have been completed and we will not have undertaken the review which we are committed to we cannot possibly pre-empt the outcomes of that by making any provisions in the Local Government Bill, if that Bill is introduced in the coming session.

Are we to have another Bill in another session to do something about the balance of funding?

(Mr Raynsford) That is axiomatic. If you are conducting a review into a subject you have to wait for the conclusions of that review before you can consider the need for further legislation, if there is a need.

Mr Clelland

On elected mayors, Minister, are you more or less enthusiastic in light of experience?

(Mr Raynsford) I continue to keep a balanced view on this. I think the provision is an interesting and significant provision. It has been used in a number of areas as a way of expressing concern about the performance of the local authority and I think that will continue to be the case. Where people do not feel happy with the way in which the local authority is delivering, and they believe a directly elected mayor could do better, they will continue to consider the use of the petition option. That is quite a useful discipline for local government and I am pleased that it is in place. Obviously on the importance of individual mayors it is too soon to say, they have only just been elected, the first ones were in place in May of this year and some additional ones were elected last month. It will be a couple of years or more before we will be able to assess what impact they are making in their communities. It is almost inevitable that there will be variations in performance between areas, but we will be watching this closely.

There have been occasions recently where you could have used your powers to intervene and direct local authority to go down that way because of the results of referenda in their area being ambigious but you choose not to, does that mean you are a bit more cool on the idea than you might have been?

(Mr Raynsford) No, I think it is consistent with our overall approach that central government should not be telling local government what to do. We are building a new relationship in which there is greater trust between central and local government. These decisions should, wherever possible, be taken by local authorities having regard to the views of their local electorate. That is why I mentioned the petition route as a useful discipline.

Mr O'Brien

Your recent report on the development, overview and the scrutiny of local government concluded a precondition that the effective scrutiny is a responsive executive. Do you agree that there should be scrutiny of decisions before the executive have taken those decisions and the council have approved them so that there would be a real holding the executive to account? Once the decision has been made by the council scrutinising it does not have a great deal of effect. Do you support there should be scrutiny before the actual decision is taken?

(Mr Raynsford) I believe both will inevitably form part of the process of scrutiny. Wherever possible it is desirable that scrutiny committees should be engaged in looking at issues before decisions come to be taken because that helps to inform those decisions, but that is not always possible. There will inevitably in any organisation be a need for decisions to be taken quickly in certain circumstances and then if there is doubt about the decision scrutiny can be a useful way of assessing whether or not the authority was correct to take that decision and whether it might have approached the problem in a different way.

What advice will you give to local authorities as to which should be considered for scrutiny, before the decision or afterwards?

(Mr Raynsford) I think this will vary from case to case because we all know some issues or problems can be anticipated a long time in advance and there is plenty of time to prepare before decision-making is necessary. In other cases, say a major closure of a large industrial complex in the area of which the local authority only had very short notice and it took certain decisions to try and alleviate the consequences of that it simply would not be realistic to have a scrutiny process before decisions were taken. It would be necessary for action to be put in place very quickly.

In the example that you have give I cannot see any member of a local authority wanting to scutinise a decision to try and help an area where there has been local unemployment created. The point I am making is the day-to-day decisions are the issues that affect communities in general, they should be scrutinised before the decisions are taken. Is there some directive we are going to see on that decision?

(Mr Raynsford) With respect, I would regard it as quite appropriate to scrutinise decisions taken by authorities trying to address problems of that nature as to whether they were the most effective way to respond or not. There are different ways of tackling some of those problems. The point I was making was that those are precisely the circumstances where you could not anticipate in advance and have detailed scrutiny in advance. In other circumstances where it is known that the authority will need to be developing new policies in respect of, let us say, a particular type of social service or a new community development initiative there may well be plenty of time for advance examination of the issues and scrutiny before a decision is taken. That is why I think it is necesary to have both options.

Mr Clelland

What monitoring of the Standards Board for England is going on? Do we know how many complaints it is able to deal with per month and how many complaints it is receiving each month?

(Mr Raynsford) We do. I have absolutely up-to-date figures, as of 31 October the Standards Board had received 1,600 allegationss, of which 68 are still awaiting assessment, 843 have been referred to ethical standards officers and 690 have been rejected. Of those 843 already referred to ethical standards officers 777 are currently being investigated and 66 of the investigations have been completed.

Those statistics are alarmingly new to the Committee! In terms of the percentages, what percentage are frivilous and what percentage have some substance?

(Mr Raynsford) I am actually meeting Tony Holland, the Chairman of the Standards Board, later on today which will inform me more about the implications of those figures, which are hot from the press. On a superficial look it is possible to say that of the 1,600 allegations received just about half were referred to ethical standards officers and less than half were rejected, that gives an indication.

Dr Pugh

Before we move on to the Regional White Paper can I ask a supplementary on that, what precautions are being taken by the Department to see that the reference to the Standards Board cannot be used as an electoral technique? I am thinking of a malicious application put into the Standards Board prior to an important election which then turns out to be insubstantial, but nonetheless requires some publicity prior to the election, what can be done about that?

(Mr Raynsford) This is one of the many issues I will be talking to the Standards Board about. They have had quite a difficult challenge, a very large number of cases, which were far in excess of what they expected, that has put pressures on them, and they are trying to deal with these in the most expeditious and the most thorough way without opening themselves up to potential abuses, of which you gave one illustration. These are quite difficult issues and I will be talking to Tony Holland about some of these.

Can I take the Regional White Paper now, last year you told us that it would be possible to have elected regional assemblies up and running by the end of this Parliament. Do you still hope for that?

(Mr Raynsford) I hope it will be possible for there to be at least one referendum, possibly more referendums in the lifetime of this Parliament, but given the timetable that we have spelt out which requires, firstly, an identification of those regionse where there is an appetite for a referendum, secondly a consideration by the Boundary Committee of the framework for local government in those parts of the region, which have both county and district authorities, to produce a proposal for wholly unitary local government and thirdly for that information to be made avaialable for the public before they reach a view in the referendum. I think it is unrealistic to expect referendums to be held and the bodies to be up and running within the lifetime of this Parliament. I expect the referendums to be held but I do not think it would be possible to get the bodies up and running, because there is a further stage, which is the substantive legislation, which will only come after a qualitative referendum, which is necessary in order to make it possible to establish an elected regional assembly.

Would it be fair to say, taking on board the local government ramification decision in favour of regional assembly that it is dawning on the government that they have undertaken a Banham-like proportion, if I can put it like that, and this is going to be long, drawn out and convoluted. What difficulties do you see?

(Mr Raynsford) I am sorry to sees the Conservative members of the Committee are not present to hear me say this, I have no intention of us following in any way the pattern of the Banham Review of Local Government.

(Mr Raynsford) You may have opened up a Pandora's box here, might you not?

(Mr Raynsford) I think there are issues and I do not pretend there will not be difficulties. I do believe that it is right that if you are creating a new tier of government you should in parallel with that streamline existing tiers because in all the parts of the United Kingdom where there is the equivilant of a devolved body, whether that is in London, the Greater London Authority; Scotland with its Parliament; Wales with its Assembly there is a unitary local government.

In some areas there might be a huge unitary authority with lots of small unitary authorities, are there not intrinsic difficulties in that kind of template?

(Mr Raynsford) This is a matter for the Boundary Committee to reach a decision on what is the most appropriate structure for local government region by region.

In an area like Lancashire there is a patchwork of metroploitan boroughs and unitary authorities, do you not see any consequences for the unitary authorities that this is an organisation taking place on their doorstep, the existing unitary authorities?

(Mr Raynsford) We not propose the Boundary Committee would revisit the boundaries of existing unitary authorities, the Review will only look at those parts of the region that are currently divided between county and districts. In some regions, Yorkshire/Humberside it is a relatively small part of the region, just North Yorkshire, and in others, you quoted Lancashire, so I will give the north east, it is about one third of the total region currently in two tier local government. The picture does vary from area to area. The principle must be right, in our view, that there should be a stream lining of local government so there is a single tier of local government where there is a new tier of regional government introduced.

Will the government be producing further recommendations of principle, or is it what they elect for?

(Mr Raynsford) We will set out our guidance to the Boundary Committee when we are in a position to instruct them as to which regions they should review in order to produce recommendations on a wholly unitary ---

Will they be the same regardless of the region?

(Mr Raynsford) Yes.

Chris Mole

Can the Minister confirm that this does not necessarily mean the demise of any particular form of local government, either county or district? Can he reassure this Committee that any review of local government following a referendum for elected regional assembly will be informed by the many mistakes and costs associated with the establishment of many of the unitary authorities that followed the Banham Review?

(Mr Raynsford) We have all learned from the experience of the Banham years. One of the lessons is that in some cases a great deal of time and effort was spent to no good purpose because the outcome was no change. In this case we will be very clear that there has to a recommendation for a wholly unitary structure at the end of the process. To take your main point, I can give that assurance because we have no view as to what the desirable outcome should be in terms of a size or type of authority. It has to be effective. It has to be of a size that enables it to deliver services effectively and it must reflect the area. These are proper issues for the Boundary Committee to determine. If they believe this is best modelled on a county as a single unitary authority for a particular area or on a grouping of districts that would be entirely for the Boundary Committee the determine. There is no predisposition in favour of one style or type of unitary authority.

Chris Mole: Except it should be effective.

Mr Clelland

Given the process you have described, when is the earliest date we can reasonably expect a referendum to take place?

(Mr Raynsford) I would have thought the autumn of 2004.

Dr Pugh

Can I put a nightmare scenario to you, you decide against the county options and you decide you are going to make districts but you find with that nest of districts there are a couple of districts that are not big enought to sustain unitary status, what do you do then?

(Mr Raynsford) This will be a matter for the Boundary Committee itself to consider and to make recommendations on. Wer are very clear this should not be decided by government ministers, it should be decided by the independent Boundary Committee.

Mr Betts

For those regions that do not choose an elected regional assembly the governments idea is to increase accountability at regional level to give more strength to government regional offices, it seems a rather peculiar choice, is it not?

(Mr Raynsford) There is an obvious advantage in improving coordination in the regions and the government office is in a strong position to pull together various different strands, that does not necessarily mean giving them more power. One of the illustrations we have had put in both our White Paper and subsequent discussions has been the question of achieving better, more coherent arrangements for housing capital allocations, currently there are quite distinct streams, one of which goes for housing corporation for funding for registered and social landlords, the other of which is determined by our department and by government office, which then goes to local authorities. We believe it is right that those streams should come together. It is difficult to see that happening in a way that does not involve the government office, they would not necessarily be determining the outcomes.

If only it was that logical. That logic that applied to housing does not seem to work its way through to do with skills, it is not proposed the Learning and Skills Councils and Business Link may be members of the regional office. Why?

(Mr Raynsford) This is a very good illustration --

Inconsistency.

(Mr Raynsford) -- about the issue about subsidiarity.

We talked earlier about the fact that councils want often ---

Chairman

Wait a minute, subsidiarity, what you are saying is your Department is subservient to the Department for Education?

(Mr Raynsford) No, I said subsidiarity because at the moment local authorities have representation on Learning and Skills Councils. I am not sure local authorities would be pleased to lose that and for that to be transferred upwards to regional authorities. We have been very clear in our objectives for elected regional assemblies that they should not take power from local government. Local authorities should continue to exercise their powers as the bodies best able to deliver services locally. In general we have not taken decisions which would remove powers from local government and give them to regions, instead we are devolving power downwards to regions from central government, departments or agencies. That is something which applies very obviously in relation to Learning and Skills Councils.

Mr Clelland

There is no reason why the two tiers should not work together, regional government and local government. There is no doubt about it, there is a very important regional aspect to training and retraining.

(Mr Raynsford) Absolutely and that is why we are proposing a framework in which local authorities would still be able to have membership on Learning and Skills Councils and so would the elected regional assemblies and both would be able to make an input.

Mr Betts

Can I pick up on the issue of trying to get some connection back to the democratic process at regional level with Government Offices. There would be regional chambers in those regions which choose not to have a regional assembly. Would there not be some merit in giving those chambers some authority to scrutinise and monitor what Government Offices are doing and maybe call officials in?

(Mr Raynsford) The primary role of the chambers has been to oversee and scrutinise the work of the Regional Development Agencies. We have not just established them with that remit but also we have given them finance to enable them to do that. I am not sure we want to widen their remit so much that they would not be capable of performing that function effectively. Certainly we do believe they should have a wider role and remit, that is why we have given them additional funding and why we have talked about their role, for example, in relation to planning matters where it is important that there is a better co-ordinated regional approach. We do see an importance of the chambers in those regions where there are not elected regional assemblies and we want to see them continuing to do a good job. I do not want to extend their remit so widely that it makes it impossible for them to perform their primary function effectively.

It does actually say in the White Paper that the Government Offices for the Regions will in future "be ready to discuss their work with the regional chambers".

(Mr Raynsford) Yes.

Scrutiny and monitoring should be part of discussing their work.

(Mr Raynsford) There is a difference between discussion and formal scrutiny. Clearly if you are talking about people relating to each other and working together and sharing information, that is exactly what we want. If you establish a formal scrutiny framework you would impose an obligation on the chambers to be able to scrutinise a very large number of different activities which the Government Office is engaged in. This would radically affect the workload, certainly, and the pressures on the chamber and possibly could interrupt its current work and focus on helping to improve regional competitiveness and helping the work of the RDAs.

Mr Cummings

Will there be a cap on the regional authorities?

(Mr Raynsford) We indicated that the overall capping framework would apply but certainly we would not expect to set an arbitrary figure on the ability of an elected regional assembly to raise money regionally.

Christine Russell

We all welcome the fact, obviously, that a damaging strike by firefighters has been averted yet again. As you will be aware, the Bain review is looking at pay and conditions of firefighters. To what extent do you consider that a pay increase for the firefighters will have to be met by increased productivity?

(Mr Raynsford) We have made it quite clear that the discussions about pay for firefighters must be linked to modernisation of the service and that is fundamental. The Bain review team is making good progress. I expect them to be able to feed in to the negotiations which are taking place already between the employers and the Fire Brigades' Union. I hope that they will be able to influence the outcome of those negotiations in a very constructive way. Certainly we want to see an outcome that does recognise the legitimate concerns of firefighters who feel a strong sense of grievance but equally we need to be very mindful of both the wider impact on public sector pay and the wider economy and also we are very conscious of the importance of changes which improve efficiency and deliver a higher quality service to the public. That is why we have always said that pay and modernisation must go hand in hand.

In July you proposed the introduction of a new duty on the fire service to promote community fire safety.

(Mr Raynsford) Yes.

How important an element is that? What effect do you see that having on possible new terms and conditions?

(Mr Raynsford) I think it is right that the service has been changing and will continue to change significantly. It is called the fire service but now a very substantial amount of its work is related to what can be described as rescue activities, dealing with motor vehicle accidents and other natural disasters, not fires. I think that should be reflected in the long term arrangements for the future of the service, as rightly should the focus on community work and preventive work. The more we can do to reduce the incidence of fire in the first place and reduce the need for firefighters to be called out to put out a fire the better. All of these issues are within the remit of the Bain review and certainly I would hope their conclusions would help to inform the appropriate future for the service which will reflect these changing needs and patterns.

Chris Mole

Can I ask if that is likely to change the funding formulae for the fire service to move away from fire calls to include a recognition that prevention is equally important and, in fact, perhaps for the first time to recognise RTAs which are not recognised currently?

(Mr Raynsford) If I can just answer that by saying obviously we have not announced our conclusions of the Formula Grant Review but it has been an open secret that we want to end the fire calls indicators which is a perverse incentive curiously against effective preventive work.

Christine Russell

Can I ask you about the fact that the annual report that we are discussing this morning did not set a target this year for the number of days off sick for firefighters and the control room staff. It did the previous year but do you know what the average number of days is?

(Mr Raynsford) I cannot give you a figure off the top of my head. This is something we are looking at within the overall context of the Bain review. I know that Sir George and his colleagues are particularly keen to come forward with proposals which will help to ensure a more flexible framework for the service and ensure that those firefighters who may no longer be able to do active duties have got alternatives other than the one of early retirement which is broadly the only alternative currently. The emphasis on new preventive work and community based work is an obvious opportunity and that more diverse framework in the future where there are greater opportunities for firefighters to do a range of different activities may well be one of the issues to emerge from the Bain review.

Finally, can I ask you about the proportion of women in the fire service because most fire services are not meeting their target of nine per cent. Why do you think that is? Is it a problem with the culture, the macho culture within the fire service? Is it a problem perhaps that the physical requirements are too tough bearing in mind, of course, that there are increasing opportunities now for non front line work but more the community safety agenda?

(Mr Raynsford) Let me just say two things. I think the current level is completely unacceptable and we need to drive the percentage up from 1.4 per cent as it is currently to much nearer the targets which have been set. Secondly, I believe that is entirely consistent with the more diverse range of activities which I described earlier with greater emphasis on preventive and community work and the ability of the service to respond to a range of ---

More family friendly shifts?

(Mr Raynsford) That is another issue which has some influence on this undoubtedly but I would not like to speculate more on that at the present time.

Chairman

Why has arson gone up in recent years?

(Mr Raynsford) I think the biggest single problem has been the case of abandoned cars which has been a target for fire incidents and the Arson Control Forum is doing useful work already in helping to identify ways in which that particular problem and other problems of arson - because it is not the only one, I think that has been the most substantial increase - can be tackled more effectively. Certainly we believe there is a lot more work to be done in terms of tackling arson, whether it is setting fire to buildings, abandoned cars or other premises.

Can you tell us anything now about sites for travellers?

(Mr Raynsford) I cannot I am afraid. I do not have responsibility for planning matters any more and while I did have and initiated the programme of refurbishment of local authority sites with financial assistance to make that possible there have been further interesting policy developments since then but I am not responsible for those myself.

Chairman: Right. On that note can I thank you for your evidence.