Value for money
92. There are two issues associated with value for
money. The first is with the transition costs of setting up elected
regional assemblies and the second relates to the capacity of
Assemblies to add value once up and running. No concrete estimates
of transitional costs were given in the draft Bill and its accompanying
policy statement. The costs would be the establishment of assemblies,
in particular the transfer of staffing from other public bodies
to assemblies (approximately 200 people) and the provision of
accommodation for assemblies and the reorganisation of local government
into a single tier system in regions which voted to introduce
an assembly.
93. The Government assumes that the transitional
costs would be offset by longer term savings. In the White Paper
it was suggested that more effective targeting of resources and
efficiency improvements arising from scrutiny by members could
result in sufficient improvements in value for money on programme
expenditures to cover running costs. And there is a more traditional
assumption that the reorganisation of local government into a
single tier, despite short term costs, brings longer term efficiency
gains. The Government provided little hard evidence on these points.
Richard Allan, Director of Regional Policy at the Office of the
Deputy Prime Minister did venture an 'average figure for the set-up
cost' of "about £33 million",[110]
but no detail on how this was calculated was provided.
94. The Government has not estimated cost savings
from a move to a unitary system of local government. Nor, indeed,
has the Local Government Association, though the Association did
caution that estimates of cost savings in past reorganisations
have been overly optimistic. The LGA's chairman Sir Sandy Bruce-Lockhart
said: "I think experience has shown from the setting up of
unitary authorities eight years ago that those savings did not
materialise to the extent that the people expected."[111]
95. Richard Allan also ventured an estimate on annual
running costs, at "about £24 million in the North East
and more for assemblies in a larger region".[112]
The lack of detail in how this figure has been calculated provoked
some concern, not least for its implication for the level of council
tax precept. Councillor Gibson said: "It is a difficult one
to work through. I would like to see a paper on this. I do not
know where the 5p comes from. I do not know where the £25
million comes from."[113]
96. With the lack of information about their financial
implications for the electorate and overall resources, it was
very hard to work out the cost benefit analysis of elected regional
assemblies and lay them open to accusations of little more than
costly 'talking shops'. This is particularly the case with the
limited powers and responsibilities proposed for the elected regional
assemblies. Mr Boles from the Policy Exchange said:
It would be hard to design a piece of legislation
that was more guaranteed to increase that cynicism and that apathy
[about governance in this country] than this particular Bill.
There is almost nothing in it that will inspire any confidence
in anyone of the honesty, transparency or real willingness to
do something to improve people's lives than this Bill. These things
[elected assemblies] are a charade, they are a mockery, they will
add no value at all, they will cost a huge amount of money and
they will generate enormous amounts of blether, with absolutely
no purpose.[114]
97. In making the case for any future assemblies,
the Government needs to estimate the likely costs. Otherwise it
will be too easy for stakeholders to express a lack of confidence
in the Government's financial planning. We find it odd that the
Government had done so little detailed planning of the costs and
benefits of setting up, and urge it to produce fuller estimates
in the name of transparency should it at some point revive the
elected regional assemblies proposals.
98. The electorate in the North East were not
convinced about the 'cost-benefit' calculation in regard to elected
assemblies, unable to see in the modest powers of assemblies and
their limited autonomy from central government sufficient prospect
of concrete improvements in their daily lives to vote for their
introduction. When the policy on elected regional assemblies is
revived, the Government - and departments across Government -
will need to invest real powers and resources in elected regional
assemblies.
94 
