Examination of Witnesses (Questions 560-579)
SIR MICHAEL
LYONS AND
MS SALLY
BURLINGTON
19 JUNE 2006
Q560 Chair: Can I welcome you to the
meeting, Sir Michael, and thank you very much for coming and giving
evidence to our Committee. In a minute I will ask if your companion
can also introduce herself but before I do can I say that we are
looking forward to asking you questions based on the evidence
we have been receiving thus far and also we would very much welcome
hearing your personal views on where you think the issues that
are under investigation are going.
Sir Michael Lyons: Can I introduce
Sally Burlington who leads the team that supports me in my inquiry.
I felt it would be helpful to me—and I hope it creates no
problems for you—for Sally to come along just in case there
are issues of fact and detail which you might want to expand and
where my memory temporarily fails me. She will not be here to
give evidence in her own right.
Q561 Mr Olner: Sir Michael, you mentioned
something that I had not heard of until I was reading the brief
and that was place-shaping. As an ex-craftsman I know shaping
machines is fairly precise. How are your shapes going to get together?
How are you going to ensure that they fit together? How big are
they going to be? It is a very bland statement. I am sure we all
agree with place-shaping but what does it mean?
Sir Michael Lyons: The proposition
that local authorities, the local council, has a place-shaping
responsibility grows out of the work that I have been doing on
what we want local government to do in the 21st century. Although
much of the recent debate has concentrated on local government
as a provider of services, when you get down to the level of the
individual council and the community it represents, there is a
whole set of things that local government does that are not summarised
as the provision of services. The way of looking at those is to
use the term "place-shaping", the responsibility for
stewardship of a place, the people who are living in it today
and the people who will be living in it in the future. Let me
try and make that come to life for you. I might even come back
and say something about place-shaping in Nuneaton but let me give
you a particular example: Gateshead in Tyneside. There you have
a very good example of place-shaping, responding to a decline
in ship building and the anxieties and doubts about the economic
future of Tyneside. Gateshead is not alone because we have seen
other areas in the country that have done exactly the same as
this and built up an ambition to change not only the shape of
the local economy but the very way the community sees itself and
sees its future, working with local people, local firms and—this
is a critical point which might be relevant to your remit—building
a coalition of interest where, in the interests of Gateshead,
you need to work across Tyneside and the UK to connect with the
European Community. This is a way of trying to describe that role
of stewardship and leadership in the community that goes beyond
but includes the provision of local services.
Q562 Mr Olner: I very much agree
with you. It is putting ambition back into local authorities and
to a large extent ambition has been driven out by restrictions
put on local authorities at whatever level and restrictions that
have been put on councillors as well. How do you rekindle that
ambition, because it has to come from the bottom up, has it not?
It cannot come from the top down?
Sir Michael Lyons: It clearly
needs a number of things to come together. Firstly, what I want
to acknowledge is that in the very best examples of local government
you see exactly what we are trying to achieve. You can look across
the country and see some outstanding examples of place-shaping.
To go back to your earlier question, it is not a question of scale.
It is not just the big cities. You can see it, frankly, in good
parish councils, exactly the same work in hand. How is it best
encouraged? In my report, I am saying that there is a danger in
the sheer weight of a growing number of government set objectives
and targets followed up by quite substantial regulation and inspection
procedures and a whole set of hidden controls within central government
departments. The sheer gravitational pull of all those things
means that local government has ended up looking out for instruction
about what it should do rather than looking out to the people
it serves saying, "What do we want to do as a community?"
It is partly about reducing that weight of distraction and it
is partly about government recognising place-shaping is a good
thing and something we want to encourage. Then it is about providing
the flexibility so that councils can do that job effectively on
their own patch.
Q563 Mr Olner: You are quite right.
Local authorities have tremendous ambitions and achieve great
regeneration. Look at the local mining industry. One of the things
that was always a huge brake behind this, in wanting to regenerate,
was providing the infrastructure. It sometimes seems to me that
the providers of the infrastructure do not share the dream and
the ambition. They are put in little compartments and they eventually
trickle down. That is a great inhibitor on towns, villages or
wherever you want to regenerate.
Sir Michael Lyons: I absolutely
agree with that. The importance of infrastructure is again something
which I have tried to emphasise. I have not finished my thinking
about what I want to say on infrastructure. Before I report in
December I probably will have more to say on that. Clearly, you
cannot have every local authority making its own decisions about
its connections with trunk routes, trams et cetera, but there
is a case for more local decision making and a stronger commitment
at a local level from contributions towards improving the economic
prosperity of the community.
Q564 Chair: Can you expand on that
slightly? What specifically do you think the government is micro-managing
at the moment that should be left to local government initiatives
and what should remain essentially under government direction?
Where does regional government fit into that as well?
Sir Michael Lyons: I cannot give
you today a full map of what future local government responsibilities
might look like. If I take you to page 25 of my report, I have
tried to lay out what the characteristics of genuinely local services
are there. This is an area where I am going to do some more work.
We are working very closely with nine authorities selected to
represent as wide a range of views and political controls and
socio-demographic circumstances as we can achieve. We are working
with those authorities to look in more detail at a range of local
government services, six in total: economic development, public
health, community safety, children's services, adult social care
and waste collection and disposal. That is not by any means the
full story of local government services but we are looking in
some detail at these areas to see if we can map more clearly what
are those things where it is right to set out national expectations.
What are those things where it would be better to leave local
flexibility? With the resources and the time I have I will not
be able to produce a map that covers every detail but I think
I might be able to offer some pointers towards a rebalancing of
national and local responsibility.
Q565 Chair: Are you taking any view
on the regional level?
Sir Michael Lyons: In short, I
am looking at where the appropriate responsibility should lie.
I am looking at the regional level in the same way that I am looking
at the level of neighbourhood or parish. I recognise that some
things are best dealt with at different levels and there may be
some issues which need to be tackled at regional level.
Q566 Martin Horwood: I am very pleased
and encouraged by some of the language you are using but obviously,
as the Chair has suggested, a lot of this has to be tested in
practice. Can I suggest two test areas and get your reaction to
those? Our local authority at the moment is shouting into the
wind about the imposition of regional housing supply plans, saying
that a certain number of houses is okay but so many more will
push into the green belt and they want to oppose that. They are
also shouting vociferously about the devastating effect on the
local NHS of what they perceive as Department of Health policy.
Would you see a role for local authorities in some form in being
able to shape their place to the extent that they could stand
up and perhaps provide alternative funding for those kinds of
plans and strategies?
Sir Michael Lyons: Both housing
and particularly primary health care represent excellent examples
where meeting the needs and aspirations of our communities is
going to require the right balance and connection between national
level promises and aspirations and local level delivery. I would
identify both of them as areas for further work. It is already
clear to me that, in the case of primary care trusts, the government
is itself moving in the direction of closer, more integrated work
between local and central government, towards making PCTs coterminous
with their local authorities. The experimentation in local area
agreements points in this direction as well. Of course, Derek
Walness has very clearly pointed to the fact that you do need
local level co-operation, responding to the particular needs and
choices in the community if we are going to seek to moderate growing
expectations and expenditure in this area.
Q567 Martin Horwood: You say that
PCTs are moving towards coterminosity. That is sort of true but
they are moving towards coterminosity with social services authorities
in two tier areas like mine. That means they are moving away from
the district coterminosity. There is a gain on one side and a
loss on the other. You might argue it is getting more remote rather
than less. PCTs are also funding tertiary and secondary care.
Would you see a role for local authorities exercising more control
in those areas as well as just primary care and public health?
Sir Michael Lyons: I want to be
careful about how far I go.
Q568 Martin Horwood: Be brave.
Sir Michael Lyons: I know you
would encourage me to be bold but I want to be careful about how
far I go in terms of first steps. My remit is to look at the role
of local government. It does not extend to the role of PCTs. All
I am doing—and I am being very open about it—is recognising
that there is a series of very important services at a local level
provided elsewhere in the family of government and these need
to be connected up. You yourself draw attention to the difficulty
of deciding what is the right level at which these are joined
up. I do not want to say that I have the final word on that. In
housing and health and, particularly if you are interested in
dealing with issues that we might generally put in the box of
health inequalities, there is room for much closer integration.
What I came out with in this report published in May was that
local government might properly be given explicitly the convening
role. Where local strategic partnerships and local area agreements
are working well, it is because they are well led and usually
because they are well led by local government. There is everything
to be gained by being more explicit that that is a job that you
expect local government to do because of its place-shaping responsibilities.
Q569 Lyn Brown: Given your analysis
of Gateshead which I so agree with, I was interested if you felt
that regional government might in any way in particular hinder
the shaping of place. If we looked at London as an example, for
instance, with the additional powers that are being sought by
the Mayor around planning, do you think that such a system like
that could hinder the shaping of the place by London boroughs,
for instance?
Sir Michael Lyons: The proper
starting point for this is for all of us to accept that these
are difficult issues. There are no simple solutions in these areas.
If we take planning, for instance, on one level you want a planning
decision to be taken as close as possible to the community that
it affects. You certainly want dialogue so that local people understand
the pros and cons of the change that is involved and a recognition
that new development sometimes—indeed, quite often—brings
a set of external costs. It changes the amenities of that area.
It sometimes brings gains of course because it brings jobs or
better services, closer access to retail facilities. Still, those
are issues in which there is proper local discussion. However,
we know that there is a whole set of big planning concerns where
you have to take into account the interests of the wider community.
Sometimes that is sub-regional; sometimes it is regional; sometimes
it is national. The whole debate about the location of wind farms
clearly has some national implications. The art I think is to
have a planning process where you can balance these local and
wider interests. Historically, we have tended to have the matter
referred up to a higher decision making level and it is difficult
to map exactly what the right level is for any particular decision.
One thing I am clear about is that there is more work to be done
about making sure that at a very local level, even when something
has been decided, whether at regional or national level, the local
people understand why it has been done. I have a sense that far
too frequently, once the decision is referred up, people at a
local level feel disconnected from it and sometimes do not understand
why it is not the decision they wanted. That means mistrust in
the whole process. We cannot afford that as a nation. I am sure
that there has to be an issue of different levels and matters
being referred up when there are wider costs and benefits, but
the issue of close communication with the community about the
outcome is something that we could do better at.
Q570 Mr Betts: City regions have
been fairly in vogue or at least they were under the previous
regime at ODPM. We are still waiting to see whether that enthusiasm
continues. What is your view? Are they really there to make a
contribution to the whole question of devolution and moving powers
downwards, do you think?
Sir Michael Lyons: This is not
a straightforward issue. As you know, I spent a fair bit of my
time as chief executive of Birmingham City Council, acting as
secretary for the Core Cities Group. The Core Cities Group have,
for a number of years, been championing the need to give a clearer
recognition of the needs and opportunities that our big cities
represent. Part of their case, which I strongly support, is a
recognition that the administrative boundaries of our cities do
not reflect the functioning city. The closest we get to that is
arguably Leeds but for cities like Manchester and Sheffield we
know that the city economy goes well beyond the administrative
boundaries of the city. If what we are talking about in terms
of city regions is to try to capture the area of influence so
that, in debating the future of—let us take Manchester—you
include and think about all of the area that Manchester impacts
upon. That can only be sensible. Recent reports have suggested
that British cities are not performing as well as some of their
European counterparts. They clearly argue that most of those other
cities, in one way or another, take account of the wider spatial
pattern of the city. All of that points in favour of city regions
being taken into account. I should probably stop there because
the next set of questions is about how you do that.
Q571 Mr Betts: That is exactly right.
Three models that have been presented to us or a range of opinions.
One is the NFBR model saying that, if you are going to have an
area which has real powers and fund raising powers in particular
attached to it, you are going to have to formalise it and get
an elected mayor for the whole region. Others say if you go down
that route you will kill off much of the developing work that
is going on. We went to Bristol the other week and talked to them
as well as Birmingham and Manchester, saying that collaboration
and co-operation and working in partnerships is the way to develop
city regions. They are two very different models.
Sir Michael Lyons: I absolutely
agree. Some of the models around at the moment go beyond my definition
of city region, to try to capture a conurbation-wide area. In
the West Midlands at the moment, the debate is much more around
the boundaries of the old metropolitan county than it is around
the functioning city of Birmingham. There is a dimension there
to be explored. Again, there is no right or wrong solution. Our
history tells us that this country is sceptical about multi-tiered
local government even though just across the Channel most of Europe
finds a strength and a benefit in it. One might be cautious about
introducing further elected tiers. I am generally in favour of
gradual change. It seems to me that virtual structures have much
to commend them. The danger is that people will say that they
are willing to adopt a virtual structure rather than change. Government
always has to make a judgment about whether this is a good, practical
way of moving forward or whether it is the turkeys getting together
to avoid Christmas.
Q572 Mr Betts: If we are going to
develop that sort of model—and most of the evidence from
the various city regions is saying we are working together and
developing arrangements which are leading in that direction—the
further evidence is that what we really need for the city regions
is to have some power over planning and more power over transportation,
pulling together things and devolving them from the centre and
also on skills. Have you any evidence that the Department for
Transport and the Department for Education and Skills are signed
up to this agenda at all?
Sir Michael Lyons: I think that
goes beyond my area of competence as to whether they have signed
up to it. There are some signs that they are willing to discuss,
as I understand it, but I am not involved in the detail. The Department
for Transport is interested in finding solutions to transportation
problems in our big cities and they understandably recognise that
those issues need to be addressed not just within the administrative
boundaries of those cities. I think there is some appetite at
the moment to find a solution to these big, ongoing problems.
I guess my starting point would be to empower the councils that
make up those areas, to incentivise them to work collectively
and to then hold them to account for whether they can find mechanisms,
working together, to make the difficult rationing and prioritising
choices that have to be made.
Q573 Mr Betts: Can I pick up the
transport question because this is a big issue in metropolitan
areas. Most of the travel to work areas go beyond the boundaries
of any one council. Indeed, the PTAs were set up for that purpose
but even they sometimes do not form the whole of the travel to
work area. How are we going to get accountability? If, for example,
we really are into devolution of powers and passing the ability
to regulate and franchise bus services down to some form of democratic
local control, how can we do that? We cannot do it through individual
councils, can we, in a city region area? What is the body that
will have the powers and the fund raising abilities?
Sir Michael Lyons: I do not want
to give a final view on this because clearly these are issues
where there is room for more debate and I am watching the discussions
taking place amongst city regions unfold. To answer your question,
I might return it as a question: why is it impossible to imagine,
in the case of the authorities of south Yorkshire, holding those
authorities individually to account for moneys that are raised
and used in that area, even when they are used collectively? Since
the demise of the metropolitan counties, in each one of our major
conurbations, a range of services has been provided on a joint
basis. Are we so dissatisfied with the accountability for those
services that we are confident we have to change? It is at least
worth debating whether things can be done without new boundaries
and new structures.
Q574 Alison Seabeck: Mr Betts talked
about different sorts of structures that might make up a city
region and the informal model particularly. If you have an informal
model it is made up of different building blocks that are flexible,
big ones and small ones. It will change with time. Do you feel
that government funding streams are as flexible in terms of meeting
that changing mass, if you like? If so, is it something which,
if you want to incentivise councils, you will have to consider
as part of the local government finance element of your review?
Sir Michael Lyons: Firstly, I
absolutely agree that one of the benefits of taking a virtual
approach to these things is that it recognises that all areas
differ. There is no one size fits all and needs and expectations
change over time. We could but it would be divisive and expensive
to keep redrawing the boundaries of our councils. Moving to a
greater recognition that councils need to co-operate across their
boundaries with their neighbours and that the level of co-operation
will depend upon the issue in hand seems to me the key principle.
The rest follows from that. Is local government funding flexible
enough? There is a danger that this debate becomes too preoccupied
with government funding. There is an equally strong argument.
What we want to establish in this country are local communities
that can themselves be clear about what they want to do and raise
the money to do it. The move towards prudential borrowing at least
provides the proposition that, with the right income streams,
we might be able to do rather more before you call for central
support. The model that says we can only deal with all the infrastructure
of the UK by going back to central government to raise the money
is problematic.
Q575 Alison Seabeck: Suppose you
have authorities where there is a real common sense bond between
them to do something. One is a Walsall at its worst or Hackney,
when it was performing diabolically, and the other is a very excellent
authority. The folk in the excellent authority, despite the obvious
benefits perhaps, will say, "Is this sensible?" Will
government want to encourage the linkage between the two if one
is performing particularly badly and needs the support of central
government?
Sir Michael Lyons: At the moment,
the family of local government is eager to argue, I think with
some credibility, that they should and want to take more responsibility
for dealing with weaknesses elsewhere in the family so I would
be surprised if there is anywhere where you have excellent and
good councils saying they do not want to work with weak councils
because they are committed to showing that can work. Indeed, it
has been shown to work very well. Where councils have improved
has much to do with support from other councils. That is less
of a problem for us really. You could posit a situation where
you might have a collection of weak councils and maybe in those
cases government would want to take some action to reinforce and
support. This is about co-operation between tiers. I am clear
about that.
Q576 Mr Betts: I take your point
that flexibility, co-operation and not formalising things can
be a good thing. If we get to a situation where taxation is being
raised to fund certain services at city region level, do we not
need clarity of boundaries in some form? I just take Barnsley
which has travel to work partly to Sheffield and partly to Leeds
but, in the end, it cannot be taxed for both areas, can it? Does
there not have to be some degree of clarity over boundaries if
we are going to move that further step to an organisation which
has fund raising and clear accountability?
Sir Michael Lyons: I do not know.
I do not want to dismiss the point. It is certainly worthy of
further discussion. If I come back to Birmingham, a city that
I know better, it is clear to me that it is important that the
taxpayers of Birmingham understand what the money that is raised
from them to be spent in Birmingham is spent on. We have a finance
system where it is very difficult for people to be clear where
their marginal tax pound has been spent. The sheer scale of our
aspirations for equalisation means that, for taxpayers in parts
of London, most of what they pay in tax they have no idea where
it is spent even, let alone what it is spent on. Already we have
a system that is far from transparent. Your argument that a good
system would be one where you could hold to account the person
who decided how your tax pound was spent I would agree entirely
with. For the citizens of Birmingham, for instance, their interests
are clearly fostered by investment at the National Exhibition
Centre. It is owned by Birmingham but it is in another borough.
They are clearly furthered by transportation arrangements that
enable people to go from the east of the city out to the job opportunities
in Solihull and the National Exhibition Centre. Our citizens know
that the boundaries are not a good reflection their lives so I
do not think they have any problems understanding that some of
the expenditures would take place outside the boundaries for their
benefit. I would separate the two points.
Q577 Mr Betts: We have two different
lots of evidence on this as well. If city regions are going to
take over some of the planning and maybe housing and skills roles
which currently are probably done at regional level, where a city
region is up and working, developing policy and taking decisions,
is there really a question mark over the function of the future
of regional government in those areas? We have had evidence from
Birmingham that said no and it would be a matter of carrying on
with two tiers. When we went down to Bristol they said, "We
would not need the region in that case."
Sir Michael Lyons: It is an open
debate. The history of the city region debate has generally been
one of either/or. You would have to question what exactly the
division of responsibility would be and how the different structures
would work together but I do not rule it out. It seems to me quite
a complex map that you then draw if you have both city regions
where essentially you have one administration for the sorts of
issues that we are talking about—strategic planning, economic
development, housing, skills—and it is difficult to imagine
what you then have remaining at a regional level if you have taken
those down to city region level. You are right to draw attention
to the fact that it is a problematic area.
Q578 Mr Olner: You spoke at the annual
conference of the Chartered Institute of Public Finance and Accountancy,
when you called for local councillors to have more powers. You
also called for better training. You said they needed better skills,
more support from officers et cetera. Are you not being a bit
patronising when you are saying that to all of our local councillors
at whatever level?
Sir Michael Lyons: I think you
can be challenging without being patronising. The way that I came
to the assertion that local government needs to up its game is
reflected in this May report. I do not look at what it is trying
to do at the moment. I look at it in a different future where
I am arguing that there is a case for greater local choice and
a bigger place-shaping role for local government to play. Having
put those two on the table, I then conclude that, compared with
the job that local government would have to do, it would need
to strengthen itself in a number of ways and that then follows.
I am happy to defend my propositions. It seems to me that very
clearly local government, if it is going to have a bigger role
in this country, needs to have greater confidence amongst the
people that it represents. I do not think anybody could challenge
that as a proposition in terms of where we are at the moment.
All of the surveys show much less trust and confidence in local
government than you would expect. I do not know that I have the
last word on how you engender that but I am sure that if you want
to devolve more, to give a bigger role to local government, it
itself has to address that issue. Interestingly, when I first
raised these issues with the Local Government Association at their
conference in Gateshead, there was a very wide acknowledgement
that I had just about hit the nail on the head and had described
the right agenda.
Q579 Mr Olner: Is that where you
see that starting to engender back in terms of local authorities
the ambition and leadership roles that we spoke about in the first
question I asked you?
Sir Michael Lyons: Absolutely.
It is about how you build—I have used the term "confidence
and credibility". It is about how you build confidence in
the authority that it is up to these bigger jobs. Part of that
is about developing the skills that are necessary to do that and
we need to develop enough confidence in the community that local
government can be trusted with this.
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