Select Committee on Transport, Local Government and the Regions Minutes of Evidence

Examination of Witness (Questions 340 - 359)



Mrs Dunwoody

  340. Where the councils will still remain, they should link with them?
  (Mr Raynsford) We think there is a great deal to be gained for the public in different tiers of local government working together, and indeed local government working with other public service bodies so that there are links with the health service, with the police and others who will have an impact on service delivery locally.

Christine Russell

  341. What do you think central government can do actually to help those residents who live in areas where local government is not delivering?
  (Mr Raynsford) We have had perhaps the harshest test in relation to the London Borough of Hackney, of course, in the last few months, where evidence from both the Local Authorities' Chief Finance Officer and subsequently from the Audit Commission indicated that there was a serious failure, as a result of which we have served directions on Hackney Council. Those directions have aimed to ensure that the authority builds up the capacity to run its affairs competently and efficiently and achieve a balanced budget again. That is the basis of our intervention, and we think it is right that there should be that intervention in such cases, but our overall framework is one where we hope that the regime will encourage local authorities themselves to improve performance, without the need for the use of intervention perhaps.

  342. Maybe you have just answered the question I was then going to ask you, which was, is Hackney unique, or do you see the need for intervention happening in other authorities?
  (Mr Raynsford) I do not think it is unique, but we do not want to intervene except where it is quite clear that something additional is required because of a serious failure at a local level.


  343. So if it is not unique, you have got a sort of supplementary list of people that you might be intervening in, have you?
  (Mr Raynsford) I have no supplementary list, but I know that concerns have been expressed on a number of counts by the Audit Commission about services in certain areas. Indeed, my colleagues in Government have indicated concern about services, whether it is social services in particular authorities or other services that are not delivering as high a standard as they should. Our concern is to put in place, as I said, a performance management framework which will enable a rounded judgement to be formed on the performance of the local authority as a whole, as well as its performance on individual service areas, so that this will help the drive to improve performance standards, with the intervention powers available if necessary but very much the last resort.

Christine Russell

  344. It has been widely trailed that the forthcoming White Paper on Local Government will in fact introduce great freedoms for local authorities. Is that true? If it is, what will they be and will they apply across the board to all authorities?
  (Mr Raynsford) The answer is yes, it is true, and while I cannot give you all the details now, I have already indicated in response to a question from Mr Betts the financial freedom in relation to capital which is one of the areas. We intend to carry through a programme of deregulation which will free local government of some of the burdens and restrictions. At the moment there are large numbers of consent regimes requiring the approval of the Secretary of State, certain actions which could perfectly well be taken by a local authority on its own initiative. There will be reductions in the number of requirements to produce plans. Currently there are very large numbers of plans that local authorities are required to produce. We believe there is scope for reducing that significantly.


  345. You mean the Government actually imposed burdensome restrictions on local authorities?
  (Mr Raynsford) I made it clear that we are in the process of trying to create a framework which will give greater freedom and opportunity for local government, together with a performance management and incentive regime which will help to drive up standards.

Christine Russell

  346. The NHS has developed this model of "earned autonomy". If you get your three stars, then you are going to be free to develop your own services and not have the high level of monitoring from the centre. Will this kind of principle that has been developed in the NHS actually be repeated in local government?
  (Mr Raynsford) The approach that we will adopt will involve a removal of unnecessary regulation and a provision of greater freedom to all local government, but there will be a graduated approach which will give greater freedoms and greater benefits to those high-performing councils. In response to an earlier question I talked specifically, on inspection, of how a lighter-touch inspection would be a natural consequence of an authority achieving a high level of performance, because there would not be the requirement for detailed scrutiny by the Audit Commission of that council to the same extent that there would be of an authority which was having difficulty. So there will be a combination of general benefits, general freedoms, but also additional ones as a reward and an incentive for high performance.

  347. But will that then not risk creating a two-speed system where you will get some authorities that will be really struggling either because they do not have the resources or the capacity to improve, or would you say that they should have that and it is their own fault if they are not using those resources?
  (Mr Raynsford) We have been discussing one such authority a moment ago. It is right that there should be intervention in such cases, but our view is that it is right that there should be incentives for all authorities to raise the standards of performance, and it is a matter of judgement as to what is the best way to achieve that. When you see our White Paper you will form a judgement as to whether we have got that balance right.

  348. Is not one of the best ways probably to encourage improvement actually to trust councils a bit more?
  (Mr Raynsford) I agree entirely, and that is one of the reasons that we are seeking to remove unnecessary restrictions, but also there has to be an expectation of improved performance. We do not believe it is right simply to turn our backs and say, "Okay, it's over to you and we won't pay any further attention." We think it is right that they should be encouraged, through deregulation and the removal of unnecessary controls, to exercise more initiative and more freedom, but with the clear expectation that that will result in better service delivery and more effective community leadership.

  349. Can we move on perhaps to Local Public Service Agreements. How will they actually fit in with the proposals for freedom in the White Paper?
  (Mr Raynsford) They marry very well with the proposals for freedoms, because local PSAs are based on the framework which allows a local authority, in response to setting or agreeing to meet stretched targets for performance which would be higher than they otherwise would be likely to reach, to receive freedoms and flexibilities to help it to achieve that. So there is a direct link between expectation of higher performance and greater freedom, and there is also a financial reward.

  350. What is the period for which the Government is committed to the Local PSA model?
  (Mr Raynsford) We have completed the pilots which involve 20 authorities. We are now in the process of negotiating Local PSAs with over 100 authorities who have indicated their wish to participate in the national rollout . The first four have been agreed. I signed the first of those with the East Riding of Yorkshire last week. Leeds, Peterborough and Buckinghamshire are the other three which are due for signature in the next week or so, then there are a further 12 currently under negotiation at the present time, and that will be followed by groups of 12 authorities over a six- to eight-week period thereafter, to allow negotiations with each authority on a package which reflects both Government's concern and priority to raise the standards of key services such as education, and local government's priority—because local government brings its priority to that negotiation—and a framework which allows agreement on stretched targets and greater freedoms and flexibilities to help deliver it and the reward grant of 2½ per cent of budget at the end.

Mr Cummings

  351. Will this apply to district councils in the shire counties?
  (Mr Raynsford) This applies to only top-tier authorities, but we have encouraged co-operation between councils and districts.

  352. What encouragement are you offering to the districts?
  (Mr Raynsford) We are offering more money to those county authorities that involve the districts in their negotiation. I am pleased to say that Buckinghamshire involved all four of its districts, so that its Local PSA which we are about to agree involved some important contributions, particularly in relation to housing involving the districts. So there was a joint proposal from Buckinghamshire County Council and all four district councils in that county.

  353. Is there not an obligation on the councils to involve the districts?
  (Mr Raynsford) It is not an obligation, but it is working well, and we hope that other counties will want to follow that route.

Mr Betts

  354. Coming to the White Paper which we are expecting, initially we assumed it was going to be a Government Finance White Paper, now it is going to have modernisation issues in it as well. What is the proportionate weighting of those two elements?
  (Mr Raynsford) It will be a very comprehensive White Paper which will chart the way forward for local government. It will set out the Government's overall objectives which can be defined simply as meeting higher standards of service delivery and providing effective community leadership. It will cover a very wide range of issues which I have been discussing with the Committee up to now, including the performance management framework, freedoms and flexibilities, the incentives and rewards that will be available, the arrangements for handling failing councils and a whole variety of other issues.

  355. There will be a timetable, will there, for the financial elements and their implementation?
  (Mr Raynsford) The financial elements will divide between those that require primary legislation, where clearly we will have to await the first legislative opportunity, and those that can be done by regulation, where we will indicate our timetable for introducing some of those freedoms. A number of them can be done without the need for primary legislation, and we do intend to take forward a number of those.

  356. Going on to key elements, then, of the financial changes, one of those is the Standard Spending Assessment with regard to which clearly the major review is going on. Do we now have a date when it is likely that the Department will be able to give an indication of the changes they are going to be recommending for 2003?
  (Mr Raynsford) The programme involves fairly detailed discussions initially between government departments and then involving the Local Government Association, which will result in proposals which will be discussed more widely before conclusions are reached in the summer of next year, the summer of 2002, for implementation from the financial year 2003/04.

  357. So is the Government going to be producing a discussion document?
  (Mr Raynsford) We are already involved in discussions at the moment.

  358. Will there be a document for discussion?
  (Mr Raynsford) I do not think there will be a single discussion document, because a lot of this work will involve a lot of technical discussion about the impact of particular indicators and the interface between different indicators, but there will be a full opportunity for local government to be involved in this process before decisions are taken.

  359. So are the proposals going to come next summer?
  (Mr Raynsford) The work is already ongoing. There will be continuing discussion and there will be a full involvement of local government before decisions are set out next summer.

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