Examination of Witnesses (Question 120-139)
RT HON
HAZEL BLEARS
MP, RT HON
YVETTE COOPER
MP AND JOHN
HEALEY MP
29 OCTOBER 2007
Q120 Mr Olner: Minister, I am grateful
for your listing the achievements of the Department and it has
moved forward somewhat since the last annual report, but there
is a bigger agenda now, a big agenda that was highlighted very
early on, and that is the provision of council housing, houses
for rent, social housing. It is a major and growing problem. I
just wondered, Minister, what your Department had done to cut
through the red tape to enable local authorities and housing associations
and the other providers to be able to do it fairly quickly, because
at the moment we are running backwards up and down the escalator
and I am sure many members in many constituencies have got this
pressure on council housing, housing to rent and social housing
to buy.
Hazel Blears: Mr Olner, you are
absolutely right. This is a top priority for the Prime Minister,
for government. That is why Yvette now attends Cabinet and reports
to Parliament on housing issues. That is an indication of just
how important this whole area is. I read the transcript of your
inquiry into the Housing Green Paper just recently, and I know
that you particularly raised issues about how we could cut through,
as you have put it, some of the constraints to make sure that
we can make really swift progress. I think at one point you said,
"I want to know how in Nuneaton we can make this happen",
and you were absolutely right, so this is a top priority for us,
not least because people need to have homes, both in the social
rented sector and indeed in the private sector as well. I do not
know if Yvette wants to add anything further to what she was able
to say at your specific inquiry.
Yvette Cooper: I only want to
add that when we discussed this previously I did say that we were
looking at whether we needed legislation in some of these areas
as well to simplify the process and make it easier for councils.
We do now think that we need a few legislative changes as well
to make it simpler, exactly as you say, for councils to be able
to, for example, bid for housing corporation grants in order to
be able to build homes.
Q121 Mr Olner: Is that primary or
secondary legislation?
Yvette Cooper: Primary legislation.
We are looking at that as part of the Housing and Regeneration
Bill.
Q122 Mr Olner: And we can expect
to see a statement?
Yvette Cooper: That is our hope.
Q123 Sir Paul Beresford: Secretary
of State, some of us also have contact with local government,
some of it quite close.
Hazel Blears: Indeed.
Q124 Sir Paul Beresford: The comments
made on the targets of 1,200 down to 200 are positive for your
Department, but it is extremely negative to the other departments.
What they are saying is that, yes, the targets have gone down,
but it is like having one of these computer screens where you
have got things still there so you can press the button and click
on them and the rest of it is greyed out but it is still there,
and they still require the Department of Health, the Department
for Education and Skills and so on to reply and provide the information
just as they did before. The comment made by a very senior chief
executive to me today was that it is all spin from your end, the
Government's end, and all handcuffs at theirs, so could you go
and look again, just quietly? Could someone just quietly go down
to local government and find out their experience, because I think
you will find it is disappointing?
Hazel Blears: I think, Sir Paul,
I can reassure you in two regards. One is that we are very closely
in touch with local government and it is not a matter of going
to find out. Constantly all of us are in dialogue, not just with
the LGA but also with a whole range of different local authorities,
different shapes and sizes, rural, urban, different backgrounds,
because I am very concerned to find out what it is like on the
ground for people. That is how I do my business. What I can say
to you is that the local government performance framework is new.
The very small indicator set is new. The new generation of local
area agreements that are about to be negotiated will be of a different
quality from the ones that have gone on previously. There, people
were trying to juggle literally hundreds of different indicators.
We have also said that the performance frameworks for the police
and for the health service and for other public services should
be aligned wherever possible so that there is only one conversation
that goes on between local government and central government,
and that is in the framework of the local area agreement. We have
also got a significant commitment to cut down the data requirements
for local government. We want to do this acronym, because we are
always doing acronyms, are we not? It is called COUNT, which is,
Collect Once Use Numerous Times, so you collect your data once
and then you use it for a whole range of different services. There
is an absolute focus, and there needs to be, I entirely accept
this, on simplifying this system. I have said that what I do not
want to see is, if you like, stealth targets coming in by the
back door, whether that is through soft measures or particularly
prescriptive guidance, because I want this system to work. There
is an awful lot depending on it, because central government is
saying, "We will take the plunge and get down from 1,200
to 198. From that you choose 35 improvement targets that are relevant
to your local community, so you are doing the things local people
want, and in return for that we will try and ensure there is a
simplified system". I am absolutely determined to make sure
that happens. Perhaps if I come back after the new generation
of local area agreements have been negotiated we might be able
to see where we are.
Q125 Sir Paul Beresford: Local government
tells me it just is not working, and I think they are probably
saying nice things to you. Perhaps what I should do is offer,
as I did to one of your predecessors, to quietly take you on your
own, without officials, to one of the top performing local authorities—it
has not got quite the same political complexion—and they
will explain to you why things are so difficult down there and
what the handcuffs are on local authorities and what you could
do to improve it. I realise politically it is a disadvantage from
my point of view, but I also want local government to work, so
the offer is on the table.
Hazel Blears: I am grateful for
the offer. I think we share the commitment to making this system
work. What we want to do with these new local area agreements
is to do as you said and say to people, "Where are the blockages?
Where are the difficulties? Where can we use our brokering skills
with our colleagues across Government to try and remove those
blockages?", perhaps to take off the handcuffs and give people
the freedom to do the things that local people say are priorities.
That is the whole purpose of this new system. We need to make
that work.
Q126 Sir Paul Beresford: I understand
your intention to effectively in the legislation take over local
area agreements; at least, that is the way local authorities see
it. You have to meet your own targets, targets set by the Government,
and local authorities are being told that they are free to have
the finances, free to move ahead, but they tell me that they have
real holds on them from central government: the reports, the questions,
the questionnaires, youngsters coming down to try and tell them
what to do and how to do it, when they have been there for many
years, they know their area, and yet you are second-guessing them
at every turn, and the cost in time and effort as well as in finance
in answering these questions, meeting these reports, having these
meetings and so on is really dragging local government down at
a time when you want them, and I want them, to get on with the
job.
Hazel Blears: I would say two
things in response to that. First of all, it is absolutely right
that where we are spending significant amounts of public money
we are able to evaluate and see exactly the results that we are
getting and that is why this is a negotiation between central
government and local government. I do not accept that we should
simply have a free-for-all. I think there is a balance to be struck
here. I do not accept that we just say, "Here is the money.
You spend it as you like", and the only check and balance
is at the ballot box every four years. I do not accept that. I
think it is perfectly proper for government to say, "We are
spending this amount of money to try and raise children out of
poverty, we are trying to get more youth services, we are trying
to provide good public transport and therefore it is a negotiation".
We have made it very clear to the Government Offices which will
be doing this on behalf of the whole of Government that it is
a genuine negotiation, not diktat from the centre but a hard-fought,
brokered deal to say, "Right: where are you weak in your
area? We want to see some improvement targets in the areas in
which you are weak. In areas where you are strong you might decide
that you want to concentrate on something else". That is
the essence of a deal between the centre and the locality, and
I think that local authorities are absolutely up for that challenge.
When I talk to them they are looking forward to getting really
stuck in to this negotiation and getting the freedom and space
to be able to do the things they want to do for their local people,
but I absolutely will say, Sir Paul, that there is a role for
the centre in saying that if we are spending a lot of money there
ought to be accountability and probity, and I am sure that you
would agree with me on all of that.
Q127 Sir Paul Beresford: Yes, I do,
but I think the reality is very different from that you have portrayed,
so do look at it very carefully.
Hazel Blears: Indeed.
John Healey: Sir Paul, as Hazel
has said, we are moving into a new era here now and it is right
that central government takes an interest in what local government
is doing and delivering, not least because we have certain national
priorities that we want to see local government help us to deliver,
but the negotiation of local area agreements that Hazel has talked
about includes a maximum of only 35 targets, so it will not cover
the whole range of 198. It includes no mandatory central government
targets that will be set for all local government, and the opportunity
is there for local authorities to lead the setting of the priorities
that are important to their area, not just for the local authority
but for the other agencies that they work with in the interests
of their area. Another indication of the way that we are trying
to move into a different era now is, as part of the spending review,
a shift of at least £5 billion a year into a new area-based
grant system or into the revenue support grant, in other words,
taking off the earmark nature of the arrangements before. What
this means for the area-based grant is that rather than it coming
to local authorities from different departments it will come through
DCLG, rather than having to account for lots of small bits of
funding they may get from all sorts of sources; it will be a simpler
system that they account for to us. What it will also do in some
ways is to put Hazel's Department, our Department, in almost a
banker and buffer role because it will be more difficult for other
departments to put in the sorts of soft controls that tend to
creep into the system when local authorities are having to deal
with a large number of central departments, often over quite small
programmes and pots of funding. As Hazel has tried to outline,
we are looking to move into a new era. There are certainly some
tensions within central government, there are some tensions between
central and local government, but part of our job as the Communities
and Local Government Department is, like you, to try and champion
the interests and ability of local government to do the sorts
of things we want to see them do.
Sir Paul Beresford: I think I had better
extend the invitation to you as well to come and see it.
Q128 Mr Betts: Looking to the next
three years and the Comprehensive Spending Review, the Chairman
of the Local Government Association described it as the "worst
settlement for local government in a decade". In terms of
a real terms increase in finance that is right, is it not?
Hazel Blears: No. I did actually
take this up with Simon Milton. I rang him a little while before
and I said, "This will be the settlement", and he said,
"This will be the worst settlement in a decade for local
government", and I said to him, "That is in the context
of a whole series of pretty generous settlements over the last
ten years and I think an increase of 39 per cent in real terms
for local government", and although I would say it is a tight
but fair settlement I suppose it is the least generous Labour
settlement that we have had. I was looking at some of the figures
recently, and I think we had a 39 per cent real terms increase
for local government. In the period 1993 to 1997, it was -7 per
cent in real terms, so the contrast, I think, is quite marked.
I do not for a moment pretend that everything is rosy; it is quite
tough, but it is a 1 per cent real terms increase and the LGA
obviously will always press for more resources, but I do feel
that they can meet their commitments within that settlement.
The Committee suspended from 5.00 pm to 5.10
pm for a division in the House
Q129 Mr Betts: On the Comprehensive Spending
Review one issue I want to pursue is in terms of how realistic
was, say, local government to have got 1 per cent extra above
inflation, because that does not really take account of the efficiency
savings which local government really has to make to deliver on
the financial settlement? Could you explain first of all where
the 3 per cent figure comes from, why it has been decided that
all of it this time should be cashable—I do not think that
has been the case before—and, finally, how it is decided
which bits of local government finance should be subject to efficiency
savings and which bits should not, because it is not obvious how
the efficiency savings apply to some things and not to others?
Hazel Blears: The figure of 3
per cent is across all public services, including the police,
and that is a figure that has been—
Q130 Mr Betts: It is a finger in
the air?
Hazel Blears: No, I think there
is a realistic assessment that that can be met. For some people
it will be challenging and there is an acknowledgement about that.
If we look at local government's performance over the last three
years, in fact they have come in significantly above their target,
so they have been able to make more savings than they initially
were charged with having to do. One of the things that we have
done in the last few months is that we have talked to local government
about how we can make this next tranche of savings, which is challenging,
but also give them some credit for the over-achievement that they
have done in the last three years. The initial view was that we
should start from zero and ask them to make the savings again.
Now we are going to give them credit for the fact that they have
over-achieved their target and they will be able to carry some
of that over. We have also said that there will not be specific
figures for each local authority. This will be across the sector.
We are also putting £380 million in to help them make the
savings because we know sometimes you have to spend some money
up front in order to achieve. We also recognise that for some
local authorities they are tied into longer term contracts, so
it is quite difficult to get yourself out of those straightaway
and achieve the efficiencies. That is why we have tried to say
it is an overarching target for the whole of the sector, you can
have credit for the extra achievement that you have made, and
we do think that that is achievable, because local government
has shown it can do that. I think that there is a lot more scope,
particularly around shared services between local authorities,
and we have now got a national improvement efficiency strategy,
we have got regional groups helping with this, but most important
of all we have got local government themselves taking this on
and saying that they want to make this happen.
Q131 Mr Betts: But it is also difficult
to understand sometimes why efficiency savings are applied to
some aspects of finance and not to others. As I understand it,
in social services funding, if the funding comes from a mainstream
grant then efficiency savings are supposed to be found, but if
you get a Supporting People programme, which could be providing
very similar services or part of a package of services, then efficiency
savings do not have to be found. It is not quite logical, is it?
Hazel Blears: I think in the past
savings have had to be found from Supporting People funds, and
there was a big efficiency programme looking at Supporting People,
seeing where the commissioning could be done in a more effective
way. If you look at Supporting People, the vast majority of it
is actually commissioned from third sector organisations rather
than local authorities doing it through direct provision, and
they have had just the same pressures on them to reduce expenditure
through efficiency savings.
Q132 Mr Betts: But that is true of
mainstream services provision now. Even when it is from a direct
grant much of it is provided by third sector and voluntary organisations,
and indeed private companies, so why the difference between the
different programmes in terms of some being subject to efficiency
savings and others not? It does not seem to be terribly rational.
Hazel Blears: As I have explained,
we have changed the basis on which we do efficiency savings and
we are not saying you have to target it on this particular service.
We are saying that overall in an overarching fashion we expect
over the next three years for you to achieve three per cent efficiency
savings. Now, how that is going to be done is increasingly a matter
for local government themselves with assistance from the centre,
and that is why we have put more money in, to enable them to do
it, because you make an important point, that in some areas you
are able to make more savings than you are in other areas, and
giving local government the flexibility to do that is quite important.
Q133 Mr Betts: Can I just pursue
the issue about where the real pressure points are, where additional
finance will almost certainly have to be found if they have got
efficiency savings? Certainly, talking to local authorities—and
it is not just my own authority of Sheffield where there is maybe
a certain political take and the politicians have talked to me;
I was talking to officers from Kent the other day who are officers
and not politicians—certain issues seem to come across time
and time again where local government is just saying, "We
have not got the resources to deliver". One is highway maintenance.
Hazel Blears: Yes.
Q134 Mr Betts: The second is waste
disposal, where there are real pressures from the landfill tax
which are going to be in the system and extra finance is going
to have to be found, but the third, and probably the one that
comes out over and over again, is provision of adult social services,
people living longer, extra demands, because we asked for more
services to be provided in people's homes, quite rightly, but
also for people with learning disabilities living longer and wanting
not merely social care and day centres but education as well.
It just seems there is not the money in the system to really cope
with those enormous pressures and people will say, "Look
how much the health service has had to cope with similar issues",
and as soon as people stay in the community and it is the local
authority's responsibility not nearly as much funding has been
put in.
Hazel Blears: I think that you
are absolutely right, this is an area of great pressure. If we
look at the increase from the Department of Health in terms of
their Direct Grant contribution to this, their increase in real
terms is 2.3 per cent, so they have had a significantly larger
increase than local authorities formula grant in terms of being
able to make a contribution to the social care package. That will
be an extra £200 million, is my understanding, from the Department
of Health's contribution into this. The very reason why we have
said that we want to have a Green Paper about the future of social
care between ourselves and DH is that we recognise that the demography
has changed dramatically. People are living longer, they need
more support, and it is not just elderly people; it is other vulnerable
people as well, so you are absolutely right to highlight this,
but we do genuinely think that within that one per cent real terms
increase, together with the Department of Health contribution
and through the machinery of the local area agreement, more pooled
budgets, more working together, using that money in a smarter
way and really squeezing as much value as you can out of it, we
can meet the pressures that are there. I would not deny that there
are pressures on social care; that is absolutely common sense,
but I do think within the system there is enough to meet the pressures.
We have done a lot of work with the Department of Health to identify
all the pressures coming downstream to see how we can give local
government the resources to meet them, so it will be a challenge
but we do think that we can.
Q135 Martin Horwood: You have said
that there is the possibility of a credit for cashable efficiency
savings made over target in the past, which sounded like an incentive
to carry on achieving good savings but then you rather undermined
it by saying they were not going to be specific to the areas that
had actually made the savings. Surely that means that you might
be rewarding the wrong people and that provides no incentive at
all, does it not?
Hazel Blears: We want to get the
balance right between having incentives but also having flexibility
within the local government sector. Also, part of this policy
is to try and ensure that local government as a whole takes increasing
responsibility for performance, for efficiency, where people are
lagging behind and perhaps not achieving as well as the rest of
local government. It is for local government very often to step
in and say, "Look: if you are lagging behind and you are
not achieving then in some ways you are letting down the rest
of the sector", and therefore for them to have a push, that
it is not always central diktat: it is the point Sir Paul was
making, getting this balance right between us simply at the centre
saying, "You must do this, this and this" and actually
treating local government as grown-ups and giving them authority—
Q136 Martin Horwood: But is the credit
going to be specific to local authorities or not, or are they
not even going to relate to particular local authorities?
John Healey: I think you may have
misunderstood what Hazel said, Mr Horwood. She said there would
be no specific council target for this period for efficiency,
but as a way of recognising where councils have, if you like,
over-achieved their efficiency ambitions in this previous spending
review period, that will count and they will carry that over,
they will be credited in the monitoring of that through the targets,
and also they will be credited for that through the Audit Commission—
Q137 Martin Horwood: So it will be
specific to a local authority?
John Healey: If they have over-achieved
they will be able to count it but there will be no central government
target specific to each council.
Q138 Mr Hands: Can I ask you about
what I think are the mixed messages being sent out here? I am
immensely proud of the fact that I am the only MP in Britain whose
residents are paying lower council tax this year than last year,
yet at the same time the Government is continually attacking that
council for supposed cuts in services which could be defined as
efficiency savings. I am wondering, given the fact that it seems
to be the Government's favourite council to attack and at the
same time you are demanding more and more efficiency savings,
whether you are sending out a very mixed message to local government:
the better they do on efficiency savings the more likely they
are to be attacked by the Government. I refer in particular to
your statement to the last local government Question Time about
Hammersmith and Fulham cutting support on elderly services, which
was actually directly a result of a Government grant cut and I
think a Supporting People grant. It seems to me you are sending
out a very mixed message on this.
Hazel Blears: Mr Hands, I do not
accept that contention at all. I do not think that in order to
make efficiencies it is necessary to make cuts, particularly to
services which support some of the most vulnerable people in our
communities.
Q139 Mr Hands: That is a result of
the Government grant cut, actually, nothing to do with local government
efficiency, but in general in your contention that efficiency
savings are a good thing and also keeping a lid on council tax
rises is a good thing you seem to have a very different set of
rules for some authorities than for others.
Hazel Blears: No, I think there
is a whole range of local authorities which, despite a tough but
fair settlement, have actually been able to maintain services
for some of their most vulnerable residents. They are able to
provide very high standards, they are able to provide excellent
services. What we are trying to do in our Department is ensure
that all local authorities aspire to those high standards and
that we have in place mechanisms to help them get there. I do
not accept for one moment that saying to local authorities, "You
have to be efficient, you have to work with your partners, you
have to have good working relationships between the local primary
care trust, your local hospital and your social services department",
and that driving for efficiency have to be at the expense of some
of the most vulnerable people in the community. That is about
making choices.
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