Examination of Witness (Questions 340
TUESDAY 4 DECEMBER 2001
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
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
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.
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
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.
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
(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
(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
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 prioritybecause
local government brings its priority to that negotiationand
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.
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
(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
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
(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
(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.