Select Committee on Office of the Deputy Prime Minister: Housing, Planning, Local Government and the Regions First Report


DELIVERY

Local government

19. The 2004 Government Spending Review tasked all local authorities to achieve annual efficiency improvements of 2.5 per cent. This was an increase of 0.5 per cent on the target set in 2002 and should lead to overall savings of £6.45 billion by 2007-08. At least 50 per cent of these savings should be available for reallocation by Councils either to support services or relieve pressure on Council Tax.[17]

20. We asked the Department to tell us how local authorities were achieving these savings, first in cash terms and secondly as a percentage of service budgets. We were told that the biggest gains were expected in cross-cutting corporate services and in adult social services (£307.1 million and £289.6 million in this financial year respectively).[18] The sectors facing the largest percentage reductions in funding were environmental and homelessness services (reductions of 5.4 per cent and 4.4 per cent respectively).[19]

21. Although we have been repeatedly reassured that efficiency savings are to be achieved without an impact on delivery, we are concerned about the potential impact of savings in the areas of adult social services and homelessness. The Times on 1 December reported comments by the Chief Inspector of Social Services, David Behan, about the potential impact of future efficiency savings on social services departments, stating that "only 65,000 of the 900,000 adults who provide more than 50 hours unpaid care are receiving the support, such as respite breaks, to which they are entitled and which [they] most desperately need…the 'thresholds' that individuals had to cross to become eligible for help from social services departments were continually being raised by local authorities as a way of controlling spending".[20] In these circumstances we question the scope for further efficiency savings without a consequent, negative, impact on delivery. Mr Neil Kinghan, the Director-General for local government within the ODPM, agreed that adult social care was an area where it is "difficult" to make efficiency gains.[21]

22. Homelessness is an area where the Department is also looking to make savings centrally, to total £125 million by 2007-08. It defended these plans, stating that:

    "National statistics confirm there have been sustained reductions in new cases of homelessness since the start of 2004 and show no further increase in the number of households in temporary accommodation since September 2004".[22]

Such reductions in cases of homelessness are of course very welcome, but we would caution that sufficient contingency should be maintained in case the current downwards trends reverse.

SCRUTINY

23. Our concern in both cases is compounded by a degree of complacency we identified in relation to the scrutiny of local authority efficiency savings. We were initially told that local authority chief executives were required to produce an accredited estimate of their savings to date and their plans for further efficiency gains. These estimates were submitted to the Audit Commission as part of local authority efficiency statements: "…there is no question", we were told, "that they can get away with things which are not really efficiency gains".[23]

24. When we probed further we were told that:

    "The auditors appointed by the Audit Commission carry out an annual 'use of resources' assessment covering 5 broad areas of financial management…which will include a review of the Backward Looking Annual Efficiency Statements…

    This work does not constitute a formal audit of the figures in the Annual Efficiency Statements. Such work would be costly and add significantly to the burden of regulation and would therefore be counter to the purpose of the efficiency agenda".[24]

25. The £6.45 billion saving required of local authorities is hugely significant to the Department in reaching its efficiency targets—as well as being a major challenge for local authorities themselves. We are not satisfied with the audit process as it was finally set out for us. If the scrutiny process and the support for local authorities are inadequate, authorities under pressure may ultimately be tempted either to reduce services rather than striving for ever greater improvements in efficiency, or to label changes in internal priorities as efficiency savings when they are nothing of the kind.

26. The Department should investigate the recent reports that thresholds to access adult social services are being raised, and develop plans to work more closely with local authorities and the Audit Commission to ensure that efficiency savings are genuine and that the term "efficiency savings" is not being used to camouflage service cuts.

Sustainable communities

27. One of the key messages communicated through the Annual Report 2005 is that the ODPM is uniquely dependent on the action of other Government departments to achieve its goals. This is particularly the case with regard to the delivery of its sustainable communities agenda.

28. Mr Miliband told us that the idea of a sustainable community is "the defining idea of the Department".[25] Mr Housden described the sustainable communities concept as "a very powerful blender…of disparate policy areas" which brought the Department into important relationships with the Department for Environment, Food and Rural Affairs (DEFRA), the Department for Transport and the Department of Health.[26] Other departments which are involved to a lesser degree in the promotion of the sustainable communities agenda include the Home Office, the Department for Education and Skills and the Department for Work and Pensions.

29. In these circumstances we thought it important to explore how ODPM sought to influence other Government Departments, and to persuade them to share its priorities. Our experience as Members of Parliament tells us that senior figures in Government can have significantly misconceived ideas about the effectiveness of co-operation between Departments. Mr Housden, who joined ODPM as Permanent Secretary from a senior position within the Department for Education and Skills (DfES), chose the Education White Paper as an "overwhelmingly…good" example of collaboration between ODPM and DfES in spite of our pointing out to him that the White Paper disregards the role of schools as learning resource centres for the wider community—a role which is highly important in the sustainable communities agenda.[27]

30. Mr Miliband was closer to the truth when he said that: "the revealed preference of government is not to be the most perfectly joined-up organisation in world history".[28] Yet he, too, was anxious to present a positive image of ODPM's authority in Whitehall, telling us that he sensed "a real urgency on the part of other departments to take this [sustainable communities] seriously". As evidence, he cited inter-departmental co-operation on development of the Thames Gateway. Yvette Cooper MP, Minister for Planning and Housing, similarly told us that "everybody is working together" on the flagship Thames Gateway project.[29]

31. We were disappointed at the Ministers' reliance on this single example as evidence of their success in working through other Departments. While the Thames Gateway is a flagship project, it is also a highly complex one and is still in its early stages. It may not ultimately be the success the Department hopes. Ministers will need to take effective action to maintain the pressure on other Departments through the years it will take to realise these goals.

32. Mr Housden told us that each member of the ODPM leadership team had responsibility for engagement with a specified Government Department. He believed that the key to effective delivery through third parties was to commence dialogue at an early stage, "to understand where they are coming from".[30] It was also important to have "good, clear arguments that we can back up with evidence as to why a particular course of action works".[31] He did not give us any convincing example of where this was happening.

33. In 2005 the ODPM commissioned both a staff survey (discussed in paragraphs 35-44 below) and a review of perceptions by its external stakeholders. One of the most significant findings of the stakeholder review was a perception that the ODPM's agenda was poorly connected to the rest of Government (43 per cent), and a scepticism about the ODPM's ability to achieve its objectives. While staff within the organisation report that they increasingly understand what the Department stands for, there is clearly a need for the ODPM to work harder at communicating its vision outside its own walls.[32]

34. We recognise that the sustainable communities agenda sets a significant challenge for the ODPM, in achieving its objectives through the agency of other Departments. Ministers, senior officials and other staff throughout the Department are enthusiastic about this challenge. Nonetheless, like other external stakeholders we remain to be convinced that the Department will be able to ensure the co-ordinated Government action needed to meet its goals.


17   HC Deb, 17 November 2005, c1140W Back

18   Ev 35 Back

19   Ev 47-48 Back

20   Social services cannot cope with demand, says inspector, The Times, 1 December 2005 Back

21   Q37 Back

22   Ev 52 Back

23   Q37 Back

24   Ev 48 Back

25   Q131 Back

26   HC 680 (2005-06), Q2; Q11 Back

27   HC680 (2005-06), QQ11, 24-30 Back

28   Q175 Back

29   Q171 Back

30   HC680 (2005-06), Q12 Back

31   HC680 (2005-06), Q12 Back

32   Ev not printed Back


 
previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2006
Prepared 26 January 2006