|
UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 813-iii House of COMMONS MINUTES OF EVIDENCE TAKEN BEFORE COMMUNITIES AND LOCAL GOVERNMENT COMMITTEE
THE BALANCE OF POWER: CENTRAL AND LOCAL GOVERNMENT
MR STEPHEN HUGHES, SIR RICHARD LEESE CBE and MR EAMONN BOYLAN MR PETER
MR MIKE MORE, COUNCILLOR COLIN BARROW, MS MOIRA GIBB and COUNCILLOR KEITH MOFFITT Evidence heard in Public Questions 142 - 263
USE OF THE TRANSCRIPT
Oral Evidence Taken before the Communities and Local Government Committee on Members present Dr Phyllis Starkey, in the Chair Sir Paul Beresford Mr Clive Betts John Cummings Jim Dobbin Andrew George Anne Main ________________ Memoranda submitted by Birmingham City Council, Manchester City Council, Kent County Council, Maidstone Borough Council, Westminster City Council and the London Borough of Camden Examination of Witnesses Witnesses: Mr Stephen Hughes, Chief Executive, Birmingham City Council, Sir Richard Leese CBE, Leader, Manchester City Council, and Mr Eamonn Boylan, Deputy Chief Executive (Regeneration), Manchester City Council, gave evidence. Q142 Chair: Can I welcome you to this first evidence session in our inquiry on the balance of power between central and local government? You will know that you are the first of three groups of local authorities this afternoon, starting off with obviously two large metropolitan areas. So can I start with the first question? I note that both of you argued very strongly for greater powers being devolved to councils, from your own experience, and largely it seems to be the arguments are coming from cities. Are you suggesting that cities have a particular claim for greater powers, or do the arguments that you make apply to local authorities generally? Mr Hughes: There is definitely a particular role for cities, and coming from larger cities, you would expect us to say that. Based on the evidence which was done in, for example, the Parkinson report, which demonstrates that cities are a key driver of the economic performance of the country, but also underperforming compared with European counterparts, we have started from the perspective that there is a greater role that we could make, and that we can contribute more if we are able to have more powers at a local level. I do not think necessarily that that means that other areas could not form effective sub-regional arrangements which could similarly deliver benefits, but clearly it is really important that the major conurbations are able to help drive forward the economic performance of the country. Sir Richard Leese: If I could give a practical example, one of the things we are attempting to do in Manchester is tackle enormous levels of worklessness, even more difficult in the current climate, where we have to get not only what local authorities do but services from JobcentrePlus, services funded from the Learning and Skills Council and so on, joined up in a way that they historically have not been. We take the view that we need more power in order to be able to do that joining up effectively, but it is a particularly urban issue, a particularly city issue, and there are other parts of the country who would neither have the need to do that, nor would they have the capacity to be able to do that as well. Smaller rural local authorities simply would not have the capacity to do that. So we would argue for a differentiated approach in that the devolution and decentralisation we would see coming to cities is not necessarily the same that would go to other areas. Q143 Sir Paul Beresford: The other side of the argument, and remember I have been on both sides, not at the same time, I am not a Liberal, I have been on both sides at different times, is that the government have been elected on a programme, they have been elected with control of the economy, including unemployment, et cetera, and they will have a pattern that they wish to be installed throughout the country. How could they risk letting you loose, in effect, from their point of view, with the prospect of possibly not following their guidelines and going off on your own? Sir Richard Leese: I would say that the framework of local area agreements, and, more recently, multi-area agreements, allow a contractual arrangement to be established between central government and local government about meeting agreed outcomes for that particular area. What I think central government often then tries to do, and does not have the capacity to do, is to try and then tell us how we are going to achieve those outcomes as well as what the outcomes are. I think what we would argue is that we are in a far better place -- on outcomes that we agree with government, there is no division between us whatsoever, but we are better placed at a local level to know what mechanisms are needed in order to be able to deliver those outcomes. Q144 Chair: Why does that not also apply to smaller councils? Sir Richard Leese: Again, I go back to the capacity issue. First of all, if you take worklessness in some parts of the country, it is nothing like the level you will find in large urban areas. That is why I think it is a good example of the need for differentiation, but also particularly small district councils simply would not have the capacity to be able to drive an agenda that needs co-ordinating a whole range of public sector authorities. So it is a difference in need and capacity, as I said earlier. Mr Hughes: Just in answer to your question, what local authorities are doing through local area agreements at the moment is effectively trying to knit together all the various different funding streams which are supposedly designed to deal with things like worklessness. So you are working not just with Working Neighbourhoods Fund which authorities like ours have, but LSC funding, JobcentrePlus, the RDAs, all of those have different sets of accountabilities back to central government, and what we are spending a lot of time doing is trying to get them all connected to deliver the local area agreement targets. Part of what we have argued for, both of us, in our slightly separate different ways, is that having cleared one line of accountability on an area basis back up to government, whether that is through a local area agreement or not, would help be more effective in delivering services at a local level. That is about making local delivery agencies all accountable in one way, instead of having lots of different ways in which they are made accountable for what they are doing. Q145 Sir Paul Beresford: Local area agreements, according to the government, are a means of setting you free. Mr Hughes: Local area agreements are a massive step forward compared with where we were, but because you have to work it through a partnership arrangement, it is very dependent on forging relationships at a local level, which sometimes work, and we believe we are doing really well at it, but it is still difficult to make all those things pull together. Q146 Sir Paul Beresford: If I come back to my original point, if you are sitting as a minister, and you are looking at local government, you have, as I have used the phrase before, the good, the bad and the ugly, and I am not putting you into any of those classes: how can government broadly release more down to local government than they are doing now when it has such a piebald mixture of quality? Mr Hughes: I give my own example, which is very close to my heart, what we have to do to get funding to do the refurbishment of New Street Station, £400 million in total, three different government funding streams, three different appraisal processes to get it agreed, and then once you have the funding agreed, we then have micromanagement of the project. It all takes a lot longer than it should do. Sir Richard Leese: Can I take issue with your description of that I think piebald range of quality? Actually most local government is now good to very good, and the amount of poor local government is very, very limited. Indeed, if we are talking about ministers delivering their objectives, if most civil service departments involved in delivery were put through the same sort of competency tests that local government is put through, they would not come out anywhere near as good. So the first thing I say to ministers is: if you really want your objectives delivered, the best way of doing it is through local government. Q147 Anne Main: I would like to take you back to the different funding streams. Obviously there is the complexity that you have said about the follow-through, but do you accept that if you were allowed to do your own thing, shall we put it, you may have difficulty accessing enough funding, because you would not necessarily follow the priorities of the government? Sir Richard Leese: I do not think we are talking about just doing our own thing, we are not talking about some sort of anarchy of 400-odd local authorities -- Q148 Anne Main: You may not be, but someone else might be. Sir Richard Leese: Well, we are not, and in our evidence, that is not what we are saying. I think it is quite clear that the LAA structure, local government coming to a negotiated agreement with central government, is something that we think has real value. We virtually never disagree about outcomes, by the way, it is always about the processes by which we will achieve those outcomes. Mr Hughes: There is an argument about whether we have enough resources, but actually there are lots of resources already being delivered at a local level, and what is not, I think, being done is making best use of them. One of the problems is where interventions to deliver outcomes are all agreed on to deliver benefits for people other than the person who is doing the intervention. So, for example, if we do work which helps reduce crime rates and people going to prison, there are benefits to the police and the Prison Service, Probation Service, but we do not necessarily at a local level capture those benefits, and therefore, the actual cost of doing that investment in the first place is much higher than it otherwise would be. Q149 Chair: Mr Hughes, just to qualify on that example, the benefit is to your local population. The financial saving may be to the police, but the benefit presumably is to the people that your council is responsible for. Mr Hughes: Of course it is, but the point is that if you could pool together the different funding streams, you could make a business case for making the interventions which would reduce the cost to other public agencies which we would not be able to do on our own, because we actually would not have the resources to do it. That is the point, you can make better use of the public resources that are available. Q150 Chair: Can I pick you up on that?
Just one paragraph in the Sir Richard Leese: It
is not a route that we would look to go down, and there is a more powerful
route for local authorities being able certainly to set the strategy for the
area, and then we do have now, through the LAA framework, a requirement for all
public agencies to deliver that agreed strategy. I do not think our ability to hold those
agencies to account is strong enough, nor is our ability to effectively change
the delivery method strong enough either, so we are about halfway down a road,
but actually we do not want to, in that sense, manage everything in our
area. What we want to do is to be able
to oversee the delivery of a strategy for an area, for a place, I think
the place-making role that was described by Q151 Mr Betts: Can I just follow up? There are lots of words around like "hold to account" and "set strategies", they all sound very nice, but what does it mean in practical terms that you want to do? Say with the PCT, should it be the council's job to say, "This is the strategy, we are approving it, you go out and deliver it, and if you do not, we have got certain sanctions against you"? Sir Richard Leese: I
think that is the position we have to be in, and we are not in that
position. We can scrutinise, so we can
call in people from the PCT and ask them what they are doing and say,
"That is not very good", et cetera.
What we cannot do is then effectively say, "No, you are going to
have to change what you are doing because you are not meeting the objectives
for [in our case] Q152 Chair: Just to press that, supposing Sir Richard Leese: Yes, and there ought to be a balance between them. If you take what is a real case at the moment, there is a tension between preventative health work and spending on acute care, how do you stop hospital waiting lists being too big? One way is to treat people fast when they get on to those waiting lists; the second is to prevent people getting there in the first place. There has been an ongoing tension between local authorities, who would like to see a greater emphasis on the preventative side, as against the Department of Health, who put the emphasis on acute care. Q153 Chair: I thought that might excite people. Mr Boylan, do you want to add something? Mr Boylan: If I might, Chair, just to pick up on your comment, it would not be a matter of us deciding that heart disease was a more significant factor, it would be based on a very clear and rational analysis that shows that cardiac disease is actually one of the things that makes Manchester one of the places with the lowest life expectancy for adult males in the UK, and it is not adequately reflected in terms of the overall priorities that are being set nationally for NHS delivery, so it is a matter of a mediation between local circumstance and national priority. It is not about exclusively one or the other. At the moment, the balance, we believe, is wrong. Q154 Jim Dobbin: That touches on the area that I was concerned about. It is interesting, this debate about the relationship between health and local authorities, in particular Primary Care Trusts. You mentioned balance of power; where does that put a large regional health authority like the one that covers the North of England, in relation to the comments that have just been made about where the power should lie? Sir Richard Leese: Well, the regional health authorities say it is part of the NHS Executive, which as far as I can see is simply an intermediary between a national and a local level. I think where it plays a useful role is a lot of those acute facilities do not and should not be provided simply on a local level, so there do have to be strategies that are over and above the local level, that are sub-national, I think there is a role to play there. I have to say that I think primary health and community health is an area of expenditure that I could see at some point being part of what a local authority provides within the area. I would not expect to see acute care necessarily being part of the same thing. Q155 Anne Main: I was interested to hear you say that you would like to, for example, decide preventative care rather than acute care was the way you would go as a local authority, if you could do that. How would a neighbouring area feel then in terms of a postcode lottery, if you decided to withdraw yourself into that particular stance, and somebody says, "I am not going to get the treatment I need in Manchester because actually they have decided that they should have prevented what I have got rather than treat it"? Sir Richard Leese: There is a fundamental argument there about what is the role of local democracy, and if local democracy is that everybody gets the same wherever they live, then there is not any local democracy. Again, I go back to what Eamonn said, part of what we are talking about is a balance between national and local, but are we going to get different things in different places? Yes, I think not only we are going to do that, but it is right and proper that you should get different things in different places. If the area next door thinks that is unfair, then what they ought to do is elect a different council to get what they want. Mr Hughes: It is also about how you measure these inequalities. You might look at that in terms of access to acute care, but you could also look at outcome in point of fact that sizeable parts of our population have a life expectancy of ten years lower than other parts of the city, or other parts of the country. That should be concerning us as as great an inequality that we need to address as inequalities in access to acute care. Q156 Chair: Can I just mop up a question in relation to the local area agreements, which is whether you have actually had any disagreements with central government over the conduct or process relating to LAAs? Mr Hughes: We came to an agreement at the end of the day, but we had a robust discussion along the route about issues which individual central government departments wanted to be included, the level of the targets that they wanted to have, but at the end of the day, the agreement we came to was one which not only the council but our partners were comfortable with, as was the government department, so the process was robust, as you would expect, but nevertheless, an agreement was arrived at. Sir Richard Leese: Yes, we do have disagreements, as I say, generally about process rather than outcomes, but if I give an example of a disagreement we had with the Department for Work and Pensions, JobcentrePlus, the targets we wanted to set locally for tackling worklessness were far more ambitious than those that JobcentrePlus wanted to set, so we had a disagreement about that. There is a multi-area agreement disagreement around how we tackle skills, but this is rather more complex, because the two government departments that are responsible for different bits of skills, they are having an argument with each other as well, so it is a three-way argument at the moment. Again, I think that demonstrates what I see as part of the thing we ought to be able to do at a local level is to do that joining-up that those two government departments, with all respect, will never be capable of doing. Mr Boylan: Local area
agreements are a huge step forward, as has already been said, but I think
they have an important limitation, and that is that they are defined around a
specific target, and over a fixed time period for the delivery of a single
target, albeit a range of them making up the totality of an agreement. The approach we have tried to take with the
Greater Manchester multiple area agreement, which is an important new
development, because it involves not one but all ten of the Greater Manchester
authorities, working on the delivery of outcomes that actually, in terms of
worklessness and health, would have national significance if they were
delivered, is that it is an iterative process.
It is actually a renegotiated process over a period of time, so
actually, it can monitor trend and performance and not simply the delivery of a
fixed target. Fixed targets, by their
very nature, tend to be out of date rather quickly, and I think that is a
limitation of the LAA framework, although I think we could learn from the
multiple area agreement approach that has been taken in Q157 Jim Dobbin: We are right in the middle of a very difficult economic process. What are your councils doing to support your residents in protecting the local economies through the global recession, and how do you think the government could help you in that whole process? Sir Richard Leese: One of the things we are trying to do, Jim, is to get £3 billion worth of investment in public transport infrastructure, and we have some misguided people opposing us. Actually, we are trying to get investment in our infrastructure. Actually, there are a number of other examples where the City Council is itself using public sector money to invest and maintain momentum in other developments, including commercial developments. We have established a partnership with the Chamber of Commerce that we do monitor, and make sure we try and have realtime information of what is happening in the economy, to make sure we can intervene promptly if we have the capacity to intervene. Clearly, the extent to which any local authority can set itself against what is a global economic effect is somewhat limited, but we are doing what we can. Q158 Sir Paul Beresford: The latest whizzkid idea of central government in both parties seems to be cutting tax. Presumably your local authorities have cut your council tax? Sir Richard Leese: If you look at Manchester's council tax, we have had an increase in council tax no more than the rate of inflation for the last nine years, in which period of time we have gone from, I think, the third highest council tax in the country to what, according to The Times, was the fourth lowest average council tax in the country. So we have taken a fairly consistent approach on that. Q159 Sir Paul Beresford: So there is room for improvement? Sir Richard Leese: In terms of the financial issues, it is one of the reasons why I have argued against supplementary business rates, and said it is no substitute for relocalisation of business rates, because a supplementary business rate only allows you to do one thing, which is to put it up, whereas relocalisation would give us the option of being able to put business rates down as well as put them up. Q160 Sir Paul Beresford: So we warn Sir Richard Leese: There are clearly parts of the country that have such special circumstances; for any relocalisation, there has to be some equalisation basis built into it, and I think we all understand that. Q161 Mr Betts: Were you disappointed with the Lyons report, in that it did not seem to think that actually any devolution of financial responsibility and accountability was necessary, that it was all a matter of simply giving you probably a bit more choice over how you spend the money that you were given? Sir Richard Leese: Yes. I think the power element of this is the most important, but I think money means power, power is money, and I think if we were able to have far greater control over the money we raise, then I think that would deal in a very straightforward way with a lot of the devolution issues. Mr Boylan: If I can
just pick up on that, as Richard said, it is very much around power, and if you
look at the multiple area agreement that the ten Manchester authorities have
put together, it actually does not bid for any additional resources at all. It is purely and simply a plea for better
ability to manage the resources that are currently being spent by the public
purse in the city region. I think that
is the important issue for us. I think
that is where Q162 Mr Betts: So you do not want to put the council tax up any more, presumably, from what you have said; you have argued, fair enough, for the relocalisation of the business rate. What else would you want to do, in terms of additional revenue raising powers that you would like to see local authorities receive? Sir Richard Leese: I think first of all, we would like to see council tax made fairer, and I think a property tax as an element of localisation is quite reasonable, but we have argued for more balance, both top and bottom, clearly for revaluation, because we are on 1991 values at the moment. I think in terms of additional taxes, there are perhaps things we would think about, like a tourism tax and so on, but we are not looking really for substantial new taxes, we are not finding lots of new ways of getting money out of people. Even taxes like tourism tax would have to be very, very carefully directed, and would have to be done in such a way that there is a direct benefit that went back to the people who were contributing to that. Mr Hughes: I agree with that. I do not think it is about new tax revenue raising resources, but better control over the resources that are already available in the local area. Q163 Mr Betts: So that is what Mr Hughes: What you I think said was Lyons was not allowing local authorities to have control or powers over the funding that is in a local area, and that is something which we are arguing very strongly for, that public spending in a local area should be much more co-ordinated through a local authority, if you like, but through some other one form of accountability, rather than through all the myriad that we currently have. Where I think there are some arguments is about where, for example, local authorities need to be able to capture some of the benefits that are created by growth that occurs One of the proposals which the core cities are putting forward at the moment is around advanced development zones, which is like tax incremental financing, in other words that within a particular development area, all of the business rates which occur as a result of development can come back to that local area to fund the infrastructure investment needed to make that redevelopment occur in the first place. Again, it is about making better use of public resources that are actually already there in a local area. Sir Richard Leese: Can
I give two examples of things that we would have done in Q164 Chair: Can I just press you on that? Are you absolutely precluded from doing that with the current powers? Could you not argue, I do not know, through the Sustainable Communities Act or power of general well-being? Sir Richard Leese: The power of general well-being is no, because it specifically excluded regulatory powers within it. Yes, under the Sustainable Communities Act, I guess we could come back with a proposal to be able to do that. The point I am making is if we had a power of general competence with revenue raising powers, we would have done it long ago and we would not have had to ask anybody other than ourselves about doing it. The Sustainable Communities Act is a rather clumsy way of us being able to ask to do things that we ought to be able to decide in our own right to do. Q165 Mr Betts: There is always a bit of concern about having extra revenue raising powers linked to development, or the ability to charge people more in some way. It simply means that those areas which have a greater ability to collect money, whether it be because they have extra development or they have a wealthier population, are the ones that are going to benefit from that; in other words, you get more development, you raise more money on the back of it, and you have the ability to actually create more development. Mr Hughes: Possibly to
some extent, but if I can go back to the example I quoted earlier around New
Street Station, we know that the redevelopment opportunities that are created
by the refurbishment and regeneration that is going to take place there are
likely to generate something of the order of £30 million extra rate income per
annum as a result of the development that is taking place. Now that point is that would have actually
been enough to fund the redevelopment of New Street Station on its own. You contrast that with what the supplementary
business rate will give in Q166 Sir Paul Beresford: Would you not expect the Treasury to look at your extra fundraising and reflect that in equalisation? Mr Hughes: That is the point; if you equalise away everything, then there is no benefit at all, and that is the current situation. Actually, I have an incentive to reduce the amount of businesses I have in my area and the number of properties that exist, because actually, I do not have the pain of having to collect the tax, and I get full compensation through the grant system. That seems to be a very perverse way of operating. We need to have some benefit from those developments ourselves. Q167 Chair: But to use the counter case, it is all very well to argue that you are representing cities which have good economic development, although under the current circumstances that may alter, but if you were representing a place whose major employer had just gone out of business so that your local revenues were falling, would you then have a different argument to put? Where is the funding going to come from for an authority such as that, if there is no equalisation? Sir Richard Leese: I
think equalisation comes through a number of routes, and it is not solely
through the CLG budget formulae or the Treasury budget formulae. For instance, Regional Development Agencies
are one form of equalisation around the economy. If you look at the Q168 Chair: Can I also just get you to clarify, Sir Richard, when you were talking about council tax and being in favour of the reform of council tax, you were not suggesting, were you, that if you had the powers, you would reform the council tax in your city alone? Sir Richard Leese: I do think there is some limited room for things that are national rather than local. I can see the point of having a national benefits system, I think that is a very good example of something where I think rates ought to be set nationally, although even then, how the benefit system -- although the rates ought to be set nationally, how it is operated, there would be room for local variation in order to be able to support particular activities at a local level. Again, it is what Stephen was talking about, how you recycle money. If we are tackling worklessness, then using the benefits system as part of how we tackle worklessness is something that would be better done at a local level rather than through a national programme. Sir Paul Beresford: So we would not have a National Health Service? Q169 Anne Main: I really would like you to expand on how you would alter local benefits in a way that you would not expect them to be where they are now. You just said tackling worklessness, what sort of thing would you be suggesting for that? Sir Richard Leese: It
would not be about changing the benefit levels, it would be -- well, it is now
coming through, I think, the national legislative programme, but effectively,
the requirement of people on incapacity benefit, unless they are classified as
having certain forms of incapacity, to attend an interview to assess whether
people are capable of working in particular ways. I think in Q170 Anne Main: Can I just expand that? You
have just used one that has already been agreed, that you agree with, but would
you, for example, say that in Sir Richard Leese: That is what I am saying. The particular example you have given, I have not thought about, but I will go and think about it, because it might be a good idea for us in some parts of the city. Q171 Anne Main: How about the other cities that are here? Would they say that again, you would still get the same amount of money, but what you have to do to get it may be different from city to city, or area to area? Mr Hughes: We are
doing some of those things; the Working Neighbourhoods Fund, part of it is
being used to ease the transition from benefit to work, so extending benefit
for a period of time once they are in work, because that is a key issue. But the issue around welfare reform I think
is a really important one, because one of the biggest problems about getting
people back into work is about raising their aspirations that there is a
different way of living their lives other than one that they are currently on,
and that is about changing the basis of incentives. Within the proposed reforms, there are
opportunities, I think, for doing pilots along the kind of lines that you have
just suggested, and certainly Q172 Chair: You mean the money could be captured? Mr Hughes: Yes, if we
reduce the benefits of people in Q173 Chair: Because you get them back into work, so they individually do not get less. Mr Hughes: Yes, and then with some flexibility about how the rules work, so that we can make effective interventions which will drive down worklessness numbers, but give a public sector benefit, but we need to see some of that benefit at a local level. Q174 Chair: Financially you need to see the benefit? Mr Hughes: Yes, because otherwise we cannot do the interventions which have that result. Q175 Anne Main: Can I take you to another group then, not just people who are seen as being workless; what about, for example, community offenders, or people who are somehow in the system where they have committed some sort of crime, do you think that locally you should be able to decide what they do, because currently there are strict guidelines on what you can do with people who have offended in the community; would you like to be able to have the autonomy to do something different there? Mr Hughes: Through the local area agreements and the partnership arrangements, we are already having quite close conversations with the Probation Service about how community service can be used to meet local area priorities, so that work is already taking place. Q176 Anne Main: But could you see that maybe if I lived in Sir Richard Leese: That already happens, even within existing sentencing guidelines, the policies of Magistrates' Courts in some towns and cities is different to Magistrates' Courts in other towns and cities, so you already get that differential. Q177 Anne Main: Yes, but how broad do you want to make it? That is the point. Sir Richard Leese: If we wanted to find new ways of taking offenders and rehabilitating offenders, there are punishments, there is restitution, I think we are interested in rehabilitation; if we could have the power that allowed us to innovate in new ways of doing that, then that would be something we would be very interested in. Q178 Andrew George: First of all, my apologies, I got on a train in Penzance at 10.00 this morning, and I have only just arrived, so I do not come from a city, I am sure you understand. I understand that you have covered issues regarding city regions, but I am just quite interested, Sir Richard, in your comment earlier regarding equalisation of budgets, where you were saying there was a de facto nudge and wink as far as the RDA appears to be concerned, that those deficit councils seem to be compensated by the RDA. I just wanted to explore the dynamics between local, central and also regional government, and what messages you are getting from central government, and what encouragement you are getting, that you can take a greater control both financially and in terms of the kind of provisions you are taking. Sir Richard Leese: I
think that is not what I was saying, but I would also say that given the
condition of the West Coast Main Line, in the past I have set off for Q179 Andrew George: But not based on need at all? Sir Richard Leese: No, it is not. Andrew George: They are not based on need, they are based on deficit budgeting. Q180 Chair: I think we are getting into areas which are outside what we should be discussing. Do you want to just clarify, Sir Richard, what you meant by deficit? Sir Richard Leese: By deficit, it is those parts of the regional economy that in comparative terms are performing worst. Cumbria has largely a declining economy, so there is not - I think you are right, Chair, we probably are straying, but there is an argument about whether for a Regional Development Agency, you put money into opportunities for growth or you put them into failing economies. At the moment, more money goes into failing economies than into opportunities for growth, which gives you an element of redistribution. Q181 Mr Betts: The Central-Local Concordats hardly caught the public imagination. Has it caught the imagination of local authority leaders? Mr Hughes: Not really. Sir Richard Leese: No. Q182 Mr Betts: But there is a big issue in there, is there not, somewhere in there,
to be teased out? It is interesting,
say, in Parliament, when Scottish legislation comes forward, it is treated as
constitutional legislation and it goes on the floor of the House; when local
government legislation comes up, it is treated as any other legislation, it
just goes through as an ordinary bill.
It is inconceivable now that Parliament could just rip up the Scottish
Parliament legislation and bring everything back to Mr Hughes: There has to be an argument for looking at that, to have proper constitutional protection. Lots of other countries do, we do not, that is partly because we have not got a written constitution anyway, and the way in which local government has evolved, but I think there are lots of things that could be done which would have a much quicker benefit in the shorter term than perhaps worrying about constitutional matters. The priority, I think, for Birmingham would be about not necessarily changing the relationship in that way, but getting clearer control over all of the public spending resources that are occurring in the local area, because we think that if we can do that, we can deliver things much more efficiently than they are currently being done. Sir Richard Leese: I think there is a very powerful argument for almost creating a constitutional position for local government in England, because it does not exist at the moment, but it would not be my immediate priority, and questions about the current economic state, what we have been saying about worklessness; for me, the priority would be getting powers that allows us to get on with doing those things, rather than going through a period of constitutional change. So perhaps when times are a little bit easier would be the time to be able to do that, but it is not a priority at the moment. Q183 Mr Betts: So it is a medium or longer-term objective rather than in the immediate future? Sir Richard Leese: It would be for me, yes. Chair: Thank you very much indeed, we have enjoyed some of the points you have raised, and teased them out. Thank you for your contribution. Witnesses: Mr Peter Gilroy OBE, Chief Executive, Kent County Council, Mr Paul Carter, Leader, Kent County Council, Mr David Petford, Chief Executive, Maidstone Borough Council, and Councillor Mike FitzGerald, Chairman of the Balance of Power working group, Maidstone Borough Council, gave evidence. Q184 Chair: Welcome, gentlemen. I think
you were all sitting in the back in the previous session, were you? So you have heard some of issues we have gone
round. Before we start, can I just say
how interesting it is that Councillor FitzGerald: It went through cabinet and then through full council before it came to you, so it is a good example. Q185 Chair: Thank you very much.
Obviously since there are four of you, on the whole, we would prefer it
if it is only one of you from each council that answers each question, and do
not feel obliged for each council to answer each question. But we will kind of take it as we go. I would like to actually start on the issue
of the use of existing powers with separate questions to each of you in fact,
so starting with Mr Carter: Thank you, Chair. I would like to think that, as you are suggesting, Kent is taking full advantage of its well-being powers, and also its powers as an excellent authority to do things that authorities that are not classified as excellent are allowed to do, like running trading businesses, where we are involved in a number of innovative entrepreneurial activities which add substantial income to the overall County Council budget of some £2.2 billion a year in providing to enhance and run frontline services for the 1.35 million residents that we represent. Yes, of course, and you will have read from our submission that we are very keen, and have an appetite to take up significant additional powers. We are much encouraged by talk about post-16 funding, LSC funding coming to Kent County Council; we believe we have an enormous amount to offer in welfare dependency reduction, based on a significant amount of innovation that has gone through the Supporting Independence programme, that was set up by Lord Sandy Bruce-Lockhart in 2002, and our educational transformation in preparing young people for employment, both through apprenticeships and sustained employment. So a whole raft of issues that we would like to have enhanced powers over. As I say, specifically, we believe we have an enormous amount to offer in the debate about welfare reduction, particularly for the younger generation of people entering employment. Q186 Chair: So you still have not answered the question though: do you think, given that most councils do not use all the powers, that it is reasonable to expect ministers to give councils generally more powers still? Mr Carter: I do generally believe in earned autonomy, and I think we do not necessarily have to apply a one size fits all policy, we have a completely different landscape of local governments, and I am interested to see you have cities, you have two-tier authorities, you have London boroughs that you are talking to today. The landscape in local government is highly complex. But why do we have to have a one size fits all? Government could say to us, there you are, Kent, we like your ideas, we like your innovation, let us try it for five or three years and review whether the outcomes for the residents of Kent are better or worse than they would be from a centrally managed, centrally administered direction. Q187 Chair: If I can move to Mr Petford: Yes,
indeed, Q188 Chair: In your submission, I do not think it would be too strong to say that you feel that Kent County Council gets in the way of you exercising all the powers or freedoms that you would wish. Do you want to be more specific? Mr Petford: Well, I think we are both top performing councils, and we are both very ambitious councils, and we are both keen to make a difference. So because of that vibrant energy to try and do things better, quicker, smarter, sometimes yes, we get in each other's way. I do not think it is Kent County Council, it is probably Maidstone just as much as Kent County Council, but at times, we get in each other's way, because I think with a two-tier authority, sometimes there is confusion on who does what and all the rest of it, and perhaps that is an area that could be looked at. Indeed, my own council has the view that a unitary structure would be preferred, but then there is a long debate, and one that my council has not finished yet, what size should that authority be? It is all about size rather than -- Councillor FitzGerald: Quickly, our evidence did say the powers were not being used because they were risk averse and created by inspections and constant measuring and so on, so I suppose it is a nervousness to move into a field that does not then get carried through. So what they want is the greater -- we have the powers to do it, what we want is the freedom to enact it. Mr Gilroy: Chair, if I can just add one point about health, it did come up in the last discussion, the health economy spending is about 1.2 billion in Kent, and it does seem to me that outside of scrutiny, there does need to be a new dynamic about how we work with the health economy, particularly now we have the GP contracts out, we have a whole range of things happening. For us, it is really important that in terms of, for instance, assessment costs, I would like to take more power on actually making judgments about our global assessment costs, which seem to be getting bigger within what I call the systems of health and social care, and I do not think we have enough power -- Q189 Chair: Sorry, can you just explain, what do you mean by assessment costs? Mr Gilroy: If you look at the way we all operate, we all operate on the basis that the general public, when they need healthcare, much of healthcare will touch social care, and therefore people need assessments. We have what we call single frameworks for assessment, local government and health, but the truth is it has become so convoluted, so confused, that when I was going out visiting clients, the general public, three or four months ago, the sort of message you would get is everybody is really nice, but everybody wants to do assessments, nobody wants to do the washing up any more, it is that sort of theme. From a commercial point of view, from a business point of view, I would like to see much more dynamic interplay between what those gross costs are, because if you spend too much money on clinical assessment, you are wasting a lot. If you suddenly find that those costs are getting into 12, 14, 15 per cent of gross expenditure, somebody needs to be able to look at that independently, not an individual silo, and that is the point I am making. I think local government could have a major part to play, added to scrutiny, on that issue with some measure of power, that would have the power to -- not direct, but the power to shape and influence much more dynamically than we can at the moment. Q190 Chair: Just a practical point, how many PCTs are there in Mr Gilroy: Two. Q191 Chair: Only two? So each would cover several districts presumably. Mr Gilroy: Yes. Q192 Sir Paul Beresford: So you, in effect, like our previous witnesses, would prefer to keep the core of the N in the NHS, you want to look at it but not control it? Mr Gilroy: The NHS is a massive system, and what you need to work out between local government and the NHS is what bits of those services would be best, as it were, managed globally. I have always said, having worked in the health service, that primary health is much more akin to local government and community services, that is a personal view as a chief executive. If I had a view, it would be that primary health should be much more accountable to local government in its commissioning function than acute trusts or foundation trusts. Q193 Chair: So the question we asked previously was: how exactly would it be accountable? Mr Gilroy: I would do
it through the commissioning part.
Coming back to the earlier questions about council rates or coronary
heart disease, et cetera, I do think, to be honest, if you look at Europe, if
you look at the Q194 Anne Main: Just on the health, before we leave that and go on to what I was going to ask you, could I just ask you then, would you be in favour, for example, in terms of raising local tax, say, for example, having a local health insurance? Mr Gilroy: Yes. You know, we are not alone in this. Anne Main: So then would you stop someone from a neighbouring authority using the special thing? Q195 Chair: Mr Carter, you seem to be slightly excited by this contribution. Mr Carter: It all
depends to a degree on the distribution mechanism, the needs-led analysis in
the way funds are distributed for the health economy, the same in local government. At the moment, we do not have clarity, all I
see is fog in how a revenue support grant is distributed around the country,
and how the health funding is distributed.
For example, Islington, per resident, gets about £1,950 per
resident. Q196 Chair: Can I just clarify, Mr Carter, we may have it wrong in our briefings, but we think that Kent County Council rejected the case for establishing an independent commission to oversee local government finance, on the grounds it would undermine the principle of accountability of central government to its electors, indeed. Mr Carter: That is something I have never subscribed to. I have always totally supported Lord Bruce-Lockhart in his position on, as I say, having a national body. Mr Gilroy: As I understand it, I think the issue was that if there was going to be a commission to make these judgments, it should be a national commission, not a sub-regional commission. There was a question of whether these structures are going to be further quango land, development of new commissions in the nine regions. We say if you are going to have a commission, just have one. Q197 Chair: Just for clarity then, so Kent County Council would be in favour of
an independent commission to sort out distribution if it were national? Meaning Mr Gilroy: Yes. Q198 Anne Main: Can I just not leave the postcode lottery? I am sorry, we went off at a slightly different tangent, but you did say you believed an area should be able to come up with a special project, maybe a health project; how would you not be then competing with other areas in terms of if they want to use your project, or would you say it is local things for local people? Mr Gilroy: We have a bit of mythology already about this question. The Primary Healthcare Trusts across the country are all actually doing different things, and there has been example after example, whether it be to do with drugs or whether it be to do with services, we are talking about human beings providing services. There will always be difference. I do not think there will be a rush; there would be some of that going on probably in the country ultimately, but I think in the end, what you would be providing is a much more coherent -- if I could say one thing, the more you decentralise, and I have found out in my own career, the more you decentralise: for instance, we now give purchasing power to citizens in Kent, big time, you have your own purchase card for your own services. When we started out on that journey, we were told this was going to be terrible, it was going to be fragmented, and the public would not use it. The public love it, they are more frugal with the money we are spending, we are controlling our money more effectively. So my argument is the same in healthcare, the more you decentralise, the more you give freedoms, citizens will be better, they will be healthier, and it will be less driven by what I call the centralised notions that you can run everything from London. I think it is one of the dilemmas the government have had, and the previous government, if I am honest, and I just think we need to change that. Chair: Can we move on to local government finance? Q199 Mr Betts: You have both put forward ideas about how you would like to create greater financial freedom, including relocalisation of the business rate. Is that not because you are both quite wealthy areas and you think you would do quite well out of it? Mr Petford: First of
all, I think if you look at Q200 Mr Betts: There is probably somebody else somewhere else who is collecting £5 million and getting £35 million back, and they probably rather like it. Mr Petford: I am sure
they do, but they are not living with the industry and the commerce and all
that that goes with the £35 million.
Therefore, the gearing seems certainly to my members and to me totally
inappropriate. The gearing needs to be looked
at. Also, if you are not using lots of
the NNDR tax, the business tax, you do not have that close relationship that I
think you really need with business.
With taxation, a relationship builds up, and it is far more fruitful if
you can show business where the money is going locally. Business is contributing, as it sees it, to
the council's funds, and if you can show business where it is going, that seems
far more appropriate. It just seems the
gearing at the moment, where you have, in Maidstone's case, and I am sure there
are those that are far worse than Mr Carter: If I may,
Chair, as well as being leader of Kent County Council, I am also, for my sins,
chairman of the South East Regional Assembly, and it is interesting to reflect
on the amount the South East region contributes to the Treasury, and how much
the Treasury spends on public services in the South East. We are the most significant contributor to
the Treasury, between the net input and what we get back, even compared to the
whole of the GLA region. There is only
one other region in the country, which is the Eastern region, which is a net
contributor. Now our argument is that we
need again a fairer redistribution, but somewhere along the line, equalisation
has to come in. I mean, I am not in any
way suggesting that we could retain all of the commercial rates, but it is all
dependent upon how much revenue support grant you get back through this opaque
calculation about what Q201 Chair: You are assuming it would come to the county, I imagine the districts are assuming it would go to them. Councillor FitzGerald: I would just like to say, the point is it will bring businesses on board and feel more part of what is going on. I think we put in our report about financial devolution is real devolution, and as we see it, we have suffered in terms of electoral support and the rest of it, and democratic support, as a result of them not seeing that we have the power to deliver for them. Q202 Mr Betts: The business rate comes back, there seems to be quite a widespread amount of support for that, I think there is a general push in local government, probably more support than I have ever known, for more devolution. That seems to be a common message we are getting right across the board. But if the business rate went back, we have really only turned the financial position back to what it was before the poll tax. Is there something more radical that you would like to see in terms of financial devolution, and the ability to have even more tax or revenue raising powers, or indeed the right to simply decide how you will raise revenue, full stop? Mr Carter: And how that is differentiated. We all know that local government finance is the graveyard of many. But when you actually look at the percentage of the turnover of a small business, the commercial rates makes up a significant component part of its expenditure, whereas for big businesses, it is pretty peripheral, the significance of the business rate to the bigger businesses. So it would be lovely to be able to have your own way of supporting small and medium-sized enterprises by having a different differential between what large businesses are paying and what smaller businesses are paying. Indeed, if we want to encourage the creative industries into Kent, for example, to be able to have freedom and flexibility in saying, well, for five or ten years, to get that underlying investment in various technologies, various business sectors, we could then discount the commercial rates to encourage and incentivise new businesses of a particular type coming into the Kent economy, that would be a really useful tool to have. But at the end of the day, everything is interdependent on A leads to B leads to C, and the amount of pounds, shillings and pence that we end up with to provide the local government services within the family of local government, including obviously the 12 districts and the 12 boroughs. Q203 Chair: I think Mr Betts was asking whether there were some other things apart from business rates. Mr Gilroy: What you are raising is, for me, going back to first principles. What is the relationship between central government and local government? Whether or not it requires a constitutional shift, because one of the real issues certainly I feel acutely as a chief exec, and have so for some years, is when you have a government that sets its own policies and its own aspirations, and it then wishes those to be delivered, it is true, since the war, that governments have not been very good at delivery, it is not something they do well. If you look historically, local government has been very good at delivering things, when you go back in the last century, local government has done very well in that. If you look at how effective local government as a family have been, it is true, they have been more efficient, over the last 10 years it has just been extraordinary. Now they can get better, but if you really want to sweat the public assets financially, it is not simply about the business rates, it is actually about having a better, more mature relationship with central government, both in its aspirations, in terms of its policy, what it wishes to achieve, and what local government wishes to achieve. I always remember, we were one of the first authorities in the country to do the public service agreement 1, and we had a very simple relationship with government, very mature, the strategic targets were very few, and we delivered all of them, and they were all stretched targets. So I would come back to whether it is a constitutional change or whether it is just a simple change in the relationship between central government and local government, I think the time is right for that conversation to happen, because I think you then reduce your public expenditure in a way that you would not imagine. Q204 Sir Paul Beresford: So what you are actually saying is the bureaucracy imposed upon you by central government in checking up on everything you do, setting targets, et cetera, costs you big money, and that going over here, because of gearing, costs the council taxpayer an enormous amount of money? Mr Gilroy: An enormous amount. Q205 Sir Paul Beresford: Have you ever tried to assess what it could be brought down to? Mr Gilroy: If you look at the current attempt by government, and ministers I think have been genuinely trying to reduce the burden, they called it reduce the burden of PIs, and I think they did, but if you look at what has actually happened, all the regulators have said, yes, we will go down to, whatever it is, 230 targets, but quite frankly we still expect you to provide exactly the same information as before, so in terms of this is my business commercially, as I say, actually my costs have not changed, they are still the same, so the burden is still the same financially. So I think there is a new relationship that we could develop which would reduce that regulation, but it would still deliver on a new relationship, the real things, the important things that government wants. Q206 Chair: Mr Petford, do you have some suggestions for additional sources of funds? Mr Petford: Not directly, but I think it is important that the Committee appreciates perhaps where the funds come from. We have three areas, one is income, about a third of our income in a District Council is purely from car parking charges, crematorium, whatever; there is then, of course, government grant; and then tax. Now I do not think it is about more taxation, because that is just not possible, the economy cannot possibly deal with that, but I think it is about more income, and councils could do a lot more. You have given us freedom of trading, and that is very good. But I think it is also about more flexibilities around that, and we need to look at that and get to the heart of that, what councils can and cannot do. I mentioned right at the start about extra responsibilities and duties, and I think if we could look at that then we could free up some extra money for local government, and I think one of the keys is around income. I think the other is around government grants, we have mentioned the business rates, I think that is just -- in some areas, it is just so unfair, and we need to look at that, but I think you have already accepted that certainly that needs to be looked at. Whether you agree or not is another matter, but I think around income, there is quite a lot that we could do. I do accept that in overall taxation terms, that is probably not possible, and certainly not possible at the moment, but around income we could do a lot more, given more flexibility and freedoms. Q207 Anne Main: Moving on to the effect of regional bodies on your ability to make local decisions, speaking as someone from the East of England, I have enormous sympathies with being a net contributor. So do you think the funding stream should be devolved down from, for example, the RDAs to a more local level? Mr Carter: Of course. I think that answer will be no surprise to you. I am very disappointed by Lord Mandelson starting to suggest that the centralist model is going to come back. We were promised some real prizes potentially under the sub-national review, I very much hope that they are not removed, on economic development, funds being devolved to sub-regions. I have been the author of a paper called The Kent Solution, looking at solutions for real economic sub-regions where we can match the skills agenda with the needs and economies of the businesses within our local area. I ran population massings of about 2 million populace, which has gained considerable popularity actually, certainly amongst all the South East leaders of all political persuasions, and has been well received elsewhere in the country. So I am very much of the belief that the regional architecture needs to be dismantled and sub-regions really need to be empowered, and I accept that the regions up and down the country are all very different, but when you have got a region the size and scale of the South East of England, where there is very little commonality between Milton Keynes, the Isle of Wight and a peninsular authority the size and scale of Kent, big issues. How can an RDA grapple with the diversity of the economies that are functioning within that South East region? They cannot. Therefore, devolve and empower to local government to do what they know best in their sub-region of the South Eastern economy. Anne Main: I am sure you have a view on the fact that, for example, the government made a decision to take 300 million away -- Chair: Can we not divert into that area, please? Q208 Anne Main: No, I am not diverting away, it is particularly germane to this: would you be saying then that you would not want the funding to be diverted off into other government targets? Mr Carter: Of course not. Q209 Anne Main: And you would like to retain the control over the funding, for new business, for new housing, whatever? Mr Carter: Yes, and likewise I think the real exciting prize to be won is being able to determine how the post-16 funding is spent, as I say, to match the skills agenda -- Q210 Chair: Which you will be getting, with the LSCs going. Mr Carter: It
depends. If they are still going to work
to a national prescribed formula, it is going to be a massive missed
opportunity. You talk to every FE
college principal in Q211 Andrew George: Can I just be clear, Mr Carter, that you are saying that there is in fact no relevance any longer in maintaining the existing structure of quangos for planning, economic development, transport and health within the government zone of the South East? Mr Carter: I think there is the need for a vestigial function, which would be in strategic transport planning and strategic infrastructure planning for the Greater South East, and also looking at the impact of the GLA, to make sure that we respond to whatever Boris may have on his list, and I am meeting him later this week as part of the Eastern region/South East region to discuss the impact of the Greater London economy on the peripheral counties and unitaries outside that. So I think there is a core function, but it is pretty minimalistic, compared to the current architecture in the regional landscape. Q212 Andrew George: Would a better solution be the creation of voluntary partnerships between the local authorities working together, where there is clear need for strategic -- Mr Carter: Absolutely, through multi-area agreements or whatever. Q213 Andrew George: And you are saying that the economies of scale required for the delivery of some of those decisions would be around the 2 million mark, not the current -- Mr Carter: Well, if
you are looking at a devolved agenda, from Westminster, you cannot just sort
out the solutions in the South East, you have to have a template that fits the
whole of the country, and if you end up with population massings of about 2
million people, I think I am right in saying that including the city regions
built into that, you end up with about 28 to 30 sub-regions. Now could central government from Q214 Andrew George: If you take the issue of planning and say, for example, housing
numbers, where the regional spatial strategy largely sets the tone and provides
for the numbers in Mr Carter: We would be empowered with Kent and Medway, Medway being a unitary, to sort out a realistic housing growth agenda against a government target that may be suggesting that the numbers are there or thereabouts, and having a really good dialogue with the 12 districts plus Medway in working out the sensible allocation, the infrastructure needs for the sub-region; as I have said, with the retained function of a greater area on some of the cross sub-region transport infrastructure needs, which is absolutely essential and absolutely important. The roads infrastructure as well as the rail infrastructure will obviously be part of it. Q215 Andrew George: But a Secretary of State would seek to impose through the examination process the numbers which central government required in the same way as they are through the RSS. Mr Carter: Yes, but it does not mean to say that the sub-regional structure, in my view, would work much better, be much more streamlined and much more efficient than regions trying to tell the unitaries and the local government authorities what is good for them when they do not have the democratic accountability, and they do not have the intimate knowledge of those sub-regions in the way that I would hope I do in Kent and Medway. Q216 Andrew George: But as a chair of a regional assembly, you are democratically accountable, presumably the majority members of that assembly are also accountable, so are they not democratically accountable indirectly for the decisions they take? Mr Carter: You will know only too well obviously that there is democratic fudge in all the regional assemblies up and down the country. You have the social and environmental lobby imposed in that forum, and a sub-national review in the South East that is saying that we want a minimum of 60 or 70 per cent of democratically elected leaders of councils on the RDA body. That at the moment is causing John Healey an enormous amount of tension and friction in trying to resolve the sub-national review for the South East; a big issue, but it has to be resolved, and in my view it has to engage democracy in the appropriate way. Q217 Chair: Mr Petford, do you have any comment? Mr Petford: I think in
all of these things, size matters. I
think one thing that is clear at the moment is the scale is too big. I think my council would agree with Mr
Carter, the scale is too big, it needs to be smaller and more local. Where you pitch that is a different issue,
and probably my council would take a more localised arrangement than that
explained by Mr Carter. But
certainly, size is a real problem. It
feels very remote. We are a growth point
in Councillor FitzGerald: We do want democratic accountability. We are going to get empowerment as it goes down, we will not get it unless we get democratic accountability. Q218 John Cummings: Whilst localism might be a popular political stance, opinion polls indicate that it is not very popular amongst the British public. How do you think your residents would react, do you think they would be in favour of local authorities having additional powers, and if you do think so, what evidence do you have to present to this Committee to support that? Mr Gilroy: It depends on what conversations you have with your local residents on any given day of the week. Localism is a jargon word -- Q219 John Cummings: That would be same for the local government in their opinion polls. Mr Gilroy: If you talk
to ordinary people about local government, in the main, they are not going to
be terribly excited. We are doing this
at the moment in Q220 John Cummings: Have you done that? Do you have the evidence to support what you are saying? Mr Gilroy: Yes, we have. Q221 John Cummings: Can you present that to the Committee? Mr Gilroy: Not today I cannot. Q222 John Cummings: But you would be able to send it in? Mr Gilroy: Yes, we can get you evidence to show that. Q223 Chair: Can we try a different one?
As indeed did Mr Carter: I referred to the Supporting Independence programme, and the activities that we have been on working in the most deprived wards in the county of Kent, comparable with the rest of the country, and had that analysed by Oxford University, and the interventions that we have made since 2002 on incapacity benefit, the conclusion that Oxford University reached is that those people on long-term incapacity benefit of maybe up to 10 years or beyond have a 30 per cent greater chance of getting back into employment having had the interventions of the Supporting Independence programme in the Kent economy. We have statistics that Peter probably has in his briefing note -- Q224 Chair: That is not quite the question. That is the evidence the programme works. What we are asking is whether you have evidence that your local populations would support you getting those extra powers. Mr Carter: My answer
would be, you talk to those 30 per cent who have been on long-term incapacity
benefit now being able to enjoy employment opportunities that were not there
for them before. We have a massive
thrust on what we call our 14-24 unit for the young people getting generational
change by making sure that we maximise the opportunity of vocational programmes
which we have been pioneering for the last seven or eight years into quality
apprenticeships into sustained employment.
How can the public sector, I chair the public service board in Q225 Chair: Sorry, Mr Carter, I do understand that, that is not question that was asked. The question was asked: before any of these powers are given, have you checked with people beforehand and asked them whether they want you to do it, and therefore is there any evidence that local people, before the power is given to you, actually want you to be given extra powers? That was the question. Mr Gilroy? Mr Gilroy: The answer would be yes if you are talking to the particular users of that particular service. If you talk about the generic population of 1.4 million, or nearly 2 million if you use the unitary, the answer would be no, but it would be the same for central government. Members go out and have a manifesto and they tell local people what they are going to do, the same as central government. Anne Main: That is the bit I wanted to get to. You probably say that politically, you would have to ensure that this was spelt out as a political message: does that cause any problems where different authorities operate on different electoral cycles, some coming up in thirds; for example, my own district comes up in thirds. You would need an electoral mandate at a local level to carry through much of what you want to do. Do you see there is some sort of need then to ensure that we have a degree of maybe electoral reform to ensure this happens? Chair: We really do not want to go down that -- Q226 Anne Main: I am only talking about terms of authorities -- Councillor FitzGerald: And we are on thirds. Chair: And we need to get Q227 Anne Main: If you are on thirds, that is a good question to you. Mr Petford: I do not want to deal with the specifics, but the difficult questions I think are all about engagement and leadership. To pick up your point, sir, about localism, I think that again is about engagement and leadership. As a council, my cabinet goes round and visits every parish, calls a parish meeting, and talks about its work, what it is achieving, what it is not achieving, enters into a dialogue. That is very time-consuming. I have to say, when we first started it, as a chief executive, I thought, mm, we are not going to get much from this; it has been tremendous, the feedback has been tremendous, and the council does things differently because of that. I think you can do it on a larger scale, we have had some difficult issues in Maidstone, so we have had things called a big debate, and we have taken over the local picture house and called the public, it has been packed out, and the cabinet, and leaders of the opposition within the council have had a debate with the public. Now I think if you engage and you express those leadership skills, you do move forward, and I think it is how you do it. It is not about imposition, it is about how you actually manage that process. It is hard, it takes a long time, but it is certainly worth it in terms of localism, and that for me is all that localism is about. Chair: Thank you all very much. We
have to move on to the Witnesses: Mr Mike More, Chief Executive, Westminster City Council, Councillor Colin Barrow CBE, Leader, Westminster City Council, Ms Moira Gibb CBE, Chief Executive, London Borough of Camden, and Councillor Keith Moffitt, Leader, London Borough of Camden, gave evidence. Q228 Chair: I am not sure whether you have been here through both of the previous sessions? Excellent, great. So I do not need to repeat the bit about only one of you speaking unless absolutely necessary on each question. Can I start off then with the issue of the use of existing powers, to ask each of you whether you think that you currently have sufficient powers to enable you to fulfil your place-shaping roles, and what you would do differently if you had a power of general competence. I do not mind which one goes first. Councillor Barrow: I will take it first, if you like. I think this is, if I may say so, not the biggest issue. The issue is about being hamstrung. But we have the powers to do really quite a lot if we want to. The issue is that we do not have the entire freedom to spend our money the way we might want to. That is not the issue, because the power of general economic well-being actually allows for much of what we might want to do. The trick is to build in other partners into that enterprise, people who spend vast amounts of public money in our boroughs, to stitch those people into a process is the much bigger issue than having or not having the power of general competence. Councillor Moffitt: I
think in the case of Q229 Sir Paul Beresford: What does it cost you? All of this auditing and CPAs and checking and rechecking and revalidating by the government; have you any idea what it costs? Ms Gibb: We have not done the sums, but it is very clear, and in a way it is difficult because actually it is a lot of time and preparation that is invisible, and actually gathering it together, but just since the Audit Commission came to us last December and reported in May on our score, our top performing children's services has eight different sets of inspectors coming in to do different things. We all have a limited amount of attention, and I think our concern is not so much about powers, but actually trying to ensure that public sector spending is used as well as possible. My analogy that I think is relevant is combined heat and power, that so much of the electricity is lost in the translation that central government -- 60 per cent, I am told, and I think that central government trying to direct things locally just loses a huge amount of the power, as it were. We are much better placed to actually know what would work in a particular setting. I think our sense is that they do not ask us often enough, they set out to do things from the centre without taking into account what our experience and knowledge of the locality is. Sir Paul Beresford: What is your council tax gearing? Q230 Chair: Could we try and stick to the first point, before trying to get on to a different one? Councillor Barrow: Could
I answer Sir Paul's question from Q231 Chair: Would you not have to measure it anyway, for your own management? Councillor Barrow: We would have to measure some of it for our own purposes, but you could imagine that some of it is unimportant to us, it is important only to the government. Q232 Chair: Can you give an example of that which is unimportant to you and important to the government? Councillor Barrow: The amount of tactile paving that is on the edges of our roads. Q233 Chair: That is presumably quite important to people with visual handicaps. Councillor Barrow: It is, but it might not be important to us, we might elect for it not to be important to us. That is the point I am making. The government does not get to choose what is important for us. It can choose what is important to it. Q234 Sir Paul Beresford: So what is your gearing? In other words, for every pound you spend doing this stuff for government that you do not want, what does it cost the council taxpayer? Councillor Barrow: It is about four to one. Q235 Chair: Just to go back to what you were saying at the beginning, Councillor Barrow, about partnerships, this is a different point, so what is it that prevents you from working in your partnerships as effectively as you would want to at the moment? Councillor Barrow: Let
me take worklessness. We have some wards
in Q236 Chair: Are you asking more than was put forward by some of our previous witnesses, where they were suggesting that if by getting people into work, they reduced the total benefit expenditure in their area, that they, the council, should be able to keep that extra money; are you suggesting something extra to that? Councillor Barrow: I would not particularly want to keep the extra money, but what I would want to do is to enforce a regime of invest to save on all of the public agencies who are working for the same end, it is that. So I would like to be able to get a bit of that money which they will save and say, "Let us have a go at saving it together", mutatis with the other things. Q237 Chair: I am not sure whether Councillor Moffitt: We
think we are very ambitious in using the power of well-being, for example, in
social cohesion, which is a massive issue for Q238 Chair: Apart from the necessity to report to central government, are there any other things that prevent you at the moment from doing things that you want to do? Ms Gibb: Probably resources, but I think that our concerns are more about the relationship between central and local government, rather than individual powers, because again, usually resources are required to go with delivering those. I think we would welcome the sense of the local council, the democratically elected body convening, I think Lyons' view on that seems to me to make sense, to have the opportunity to convene local services in the way that others have referred to, in the interests of the local community. I think everything that is required to do to fit one size really makes us less effective and therefore ultimately government and public services less effective. Councillor Moffitt: If
I could add something on housing, that Colin just mentioned, it is a source
of great regret in Camden that we have lost £283 million because we did not go
down the ALMO route on decent housing.
Again, it fell to us, as a top performing borough, to be told we were
going to be dictated to as to how we could run our own housing, it just did not
seem right, and the people of Q239 Anne Main: Do you actually feel that you should have more powers given back to you, because then you can have greater decision-making, instead of actually being dictated to, in the way you just said? For example, you gave the ALMO as a perfectly good example. Do you think there should be more and more powers given back to you, and in which case, which particular ones? Councillor Barrow: Some freedoms and flexibilities on housing would be helpful. For example, we have quite a difficult situation for housing, because not only do we have, as in common with all other Central London boroughs, very expensive property, not quite as expensive as it was, but expensive nevertheless, quite expensive property, and it is a huge economic magnet for people coming into it, but the bureaucracy that you have to go through to build and deliver social housing on the ground is phenomenally complex. I can add, I may be one of the few people who does understand local government finance, but I have to say, housing finance completely leaves me in the dark. It is unbelievably complex, and wherever you go, there is a Pooh Trap about charity status, about tax, about public sector borrowing requirement, about some agency or another that is interfering with the whole process. It really does need clearing out, and happily, not solely in today's trailer, but it sort of needs some attention paid to it, because it is not effective, it is not easy to do what we might want to do. Chair: There is a review going on, of course. Q240 Anne Main: If your authority is rated less than excellent, say, do you think then it would be wise to give additional powers to authorities? Councillor Barrow: Yes. You have to make the philosophical point that if an authority is rated less than excellent, there are two ways to correct it. One is to send in the men in the black hats, the other is to send in the electorate, and those two are two philosophically well-argued points that everybody knows, but those are the two competing sources of wisdom. Q241 Anne Main: In which case then, how could the police, for example, be accountable for delivering national priorities if there were not national policing targets, or are there certain strands that you say, no, those have to stay with national targets? Councillor Barrow: I think if colleagues spend as much time in local community meetings as I do, they will have heard exactly the same thing, that approximately half of the views that the public express to us are about policing. If ever there was something where the connection of the police's activity with local demand needs to be there, it is in that context. Is it murder or is it rioting, I do not know, that is a national -- but there are some things that are very important locally, and residents have a right to have a say about that. It is a pretty disconnected picture, even in one where -- I chair a meeting every quarter with the police commander, a great big public meeting, you have never seen as many policemen in one room as for that meeting, it is a very effective partnership, but in the end, it is dragging the police kicking and screaming into local accountability, and they have come a long way in the Met. Councillor Moffitt: We are sometimes set conflicting targets. There is a target about first entrance into the youth justice system, our target is to get it down and the police's target is to get it up, so actually some joined-up working on the setting of targets would be extremely helpful. Q242 Anne Main: But locally joined-up thinking, and also trusting yourselves locally, because you did say about even if an authority is not rated excellent, it should be allowed to make these decisions, so whatever the rating of the authority, local priorities, local targets and joined-up local thinking seems to be, correct me if I am wrong, what you are advocating. Ms Gibb: Also I think I would say a respect for local democracy. It often seems that those other public services are directly accountable to the centre, and do their best, I think, to join in partnerships, but if we do believe that actually locally elected representatives matter, then they ought to have a say in those other services as well. Q243 Anne Main: And no stepping in and rescuing you if it looks to central government like you are not doing it as well as they would like you to? Ms Gibb: I think it has to be a settlement really, and I think it is an issue of principle at the heart of this that somehow or other we have been turned into the children -- Q244 Chair: Right, there are two points we want to bring in on that. One is directly to Councillor Barrow: I
do not think you will find that Q245 Chair: We understand that point, I will read back to you from your own
press release: "Along with the Local Government Association and London
Councils, we will be lobbying the government hard to underwrite these deposits
and ensure far greater financial security and probity in the Councillor Barrow: If I may, Chair, I was halfway through explaining what precisely it was we were saying, which was that if the government wishes to restore confidence in the system, it cannot have £25 billion, being local government's investments in -- being pulled out for safer waters, because that will be the inevitable consequences of saying, "You are on your own". That is the slightly more indirect -- though there are people, and the LGA is one of them, saying we should just be repaid, and we have not taken that view. Q246 Mr Betts: Just a couple of issues there: there might be an argument for saying that actually local government is an awful lot better run now than it was 20 years ago, and one of the reasons is that central government has insisted that standards get raised, and has taken the opportunity to insist that there are targets to measure that improvement by. Secondly, if the alternative is you leave it to the electorate, there are some rather bad examples, are there not, like Hackney a few years ago, where the electorate kept changing their minds about who they wanted to run the council, but it still got run very badly. Councillor Barrow: Yes, it is a philosophical debate to which I can adduce no evidence whatsoever. You are asking for evidence, I am not going to give you evidence, I do not have any. Q247 Chair: Such refreshing frankness! Ms Gibb: I was just going to say that if it is about government setting targets, then why is local government the most improved part of the public sector? I think local government must have done something itself; I think it was challenged by various target setting and regulatory inspection regimes, but it has raised its game. It seems to me again that the sense in central government is that actually, with due respect to my political colleagues here, that it is the management of local government, so there is a desire to see it as just the administrative end of central government, and actually I think the bit that is missing is respect and a proper place for the democratically elected government that is not local administration, it is local government, and therefore that central role in relation to the other public services in their areas as well is very important and has not had enough attention. Anne Main: Can I just task you on that? That was leading on to what I wanted to ask, about the respect for the representatives of local government. I am sure we have an excellent group of councillors here in front of us, but some people have argued that the very fact that we do not have very high quality calibre councillors is because they are not actually allowed to do a lot, and if actually they had more influence and more say, you might attract younger, more dynamic, more business savvy councillors in. Chair: As they obviously are! Q248 Anne Main: I am saying they are, but it is an issue in some areas that people do not put themselves forward. Councillor Moffitt: It is an issue about retention. I would say I have eight councillors under 30 on my council, and they have given up four years of their life at a point where a lot of people are pursuing their careers very vigorously, and they are not really sure how much influence they have. Equally, members of the public come along to us and ask us to put things right, and as Colin was saying, we end up saying, "No, that is the police, that is TfL", so that is a very frustrating position to be in, so I think it means a lot of people come into local government with high hopes and then do not stay, which is very sad after four years of learning and personal investment, that they do not feel they can make sufficient impact to want to stay. Q249 Andrew George: The impression I get is that despite the ambitions, you are relatively impotent agents of central government, and that is very frustrating to you. I just wonder whether I could test your ambition and vision by asking you the magic wand question, and that is the government comes along and says to you, aside from war-making powers, you cannot declare UDI, you cannot change Treasury priorities, but underneath that, what two policies would you deliver tomorrow, given freedom to actually range very widely? So what are your ambitions in terms of being given more freedom and power, what would you take on, what would you do? Councillor Barrow: Do you mean what would we deliver, or do you mean what powers would we want? Q250 Chair: Both really. What powers, and what would it allow you to do with them? Councillor Barrow: I would like the power, as the local democratic authority, to direct a proportion, I do not know what that proportion is, but to direct a proportion of the DWP's, the police and the health service's budget to priorities determined by the council, in the interests of the place-shaping role, be that 20 per cent, 10 per cent or 50 per cent, I do not know, I have not thought about it in that much detail, but to be able to ask for a proportion of that as being part of the local authority scene, that would enable us to deliver what I touched on earlier on, which is a comprehensive programme of getting after the sort of social costs of worklessness, and so on and so forth, community cohesion, all that sort of nest of things that I can explain but all obviously belong together. Q251 Andrew George: It is quite complex obviously. Councillor Moffitt: If I could have one, I suppose I would like to have that power that the public assume you have: in my ward, we have a major transport interchange that we would like to bring together. At the moment, I feel impotent, it feels like waiting for somebody else to come along and do something, waiting for the private sector or TfL to come along. I would like to be in the position maybe to issue bonds, raise money and make it happen. Again, that is the sort of thing the public imagine you can do, so they imagine you are not very good at your job, because you are not doing it. Q252 Andrew George: Would that address the fundamental issues which actually concern your local population most? Councillor Moffitt: That totally would. That is an issue about transport, about safety, about economic well-being of the community, and there is a danger of having to wait for somebody else to come along and come up with a solution, rather than putting it forward yourself. Chair: Which I think brings us nicely to local government finance. Q253 Mr Betts: So is the fact that you can actually raise only such a small amount of the money you spend yourselves a major obstacle to you actually having a real ability to change the lives of people in your communities? Councillor Barrow: It
is. Mr More: Can I give an
illustration of this dynamic? If you
take localism, it means that every area is different, and if you take the Q254 Mr Betts: This is fine, the Treasury are going to sit there and think, that is great, but currently we are putting more business rate effectively back into some areas than we are collecting from them, some of those are clearly deprived as well, and if we localise the business rate, we as a Treasury are going to have to fund or give extra money to those areas without a great deal of ability to claim business rate. So is there not an element of fairness in the current system, just on the matter of principle that it is more democratic? Councillor Barrow: I do not think it is actually more democratic, just because it has been arrogated to central government, it has gone from one democratic level to another. What you have though is disconnected the business from the rate. The business has no vote, the business has no connection, there is no partnership in relation to the business rate, it is just taken into the centre and redistributed. So there is no engagement. We actually engage with very big businesses in the centre of town, over really quite small sums of money, on Streetscape and that sort of thing, because we cannot discuss the major things that affect major contributions to the business rate, because it is all dealt with by the Treasury. Q255 Mr Betts: Is it just the business rate where you would like to see change in terms of more devolved ability to raise finance, or do you have other ideas about how you would raise more money locally if you had the chance, or do you think you should just be given the general freedom to raise money? Councillor Moffitt: I mentioned bonds; to be honest, I have not thought this through very carefully, because it seems fairly unlikely to happen in London, but maybe it is a response in the present financial situation with the recession if local government is going to take a lead in that situation, take a lead in making investment, we need fundraising powers. Q256 Mr Betts: How, what? Any thoughts? Via a local income tax, presumably. Councillor Moffitt: Sorry, I was not speaking very clearly, I did mention the idea about using a local government bond to raise money, on things like the interchange I have talked about. We are extremely fortunate in Camden in fact we have a major project at King's Cross Central that still appears to be going ahead, which is very helpful for us, but there are certainly many other local authorities, I think, who would welcome being in a position to inject money into similar large scale projects, maybe not quite so large, to be able to give their own economy a bit of a push at the moment. Councillor Barrow: As a matter of principle, I think local government ought to be free to raise taxes in whatever form it chooses, and exempt people from taxes in whatever form they choose, and be accountable to the electorate for those choices. I can see no reason why not particularly. I am no fan of more taxes, nor more types of taxes, but as a matter of principle, it may be that successors of mine might want to raise a tourist tax, because we have huge numbers of tourists and so on and so forth. Might we want to do that? Yes, we might. We are not going to, but people might, and I do not see any particular reason of principle why we should not be allowed to. Q257 Andrew George: Can I just ask whether you have made any kind of assessment about the potential use of the Sustainable Communities Act within your local authority, whether you have any plans to use it; do you have any intention to consult your local communities and to apply the provisions of the Act within your own borough? Councillor Moffitt: We are at a fairly early stage, I do not know if you want to add anything, we think we are doing a lot of the things already that the Act would enable us to do. So to be fair, I think we are not racing ahead in looking at its potential. Do you want to add anything to that, Moira? Ms Gibb: I think again, when you ask government why they are doing something, you often get the answer, well, these authorities over here are not doing anything, but we are; well, tough, you still have to consult your community. Most of the things that we are being asked to do, we do already, people have lots of opportunities to be consulted, and we would certainly consult on it, but it is again a national directive to local government. Q258 Andrew George: No, of course, theoretically at least it is a route by which you can gain additional powers if you make a good case, is it not? Mr More: I think we in
Q259 Chair: You are barred because of the Data Protection Act, presumably? Mr More: Various reasons -- yes, absolutely. DWP rules are not to give us, even though it is anonymised -- Q260 Chair: Because government departments themselves are not allowed to share either. Mr More: That is a resource that is simply stopping effective commissioning, because if we are to deal with worklessness on our estates, as the leader has said, a significant proportion is getting that data, developing strategies with JCP mean we are able to do something much more tailored, so we would like to use the analysis in there to build on that. Then on that basis, we would want to move forward and take the opportunity of the Act to look at transfer of powers, so in the context of worklessness, the idea of measured transfer of powers and responsibilities under an umbrella of joint commissioning. So those would be the kind of things that we would be looking for the Act to do. Q261 Mr Betts: You have probably heard previous witnesses express, shall we say, limited enthusiasm for the Central-Local Concordat that was announced. I also asked them whether they thought that there ought to be, at least in the medium term, a change in local government's constitutional position, maybe not quite exactly the same standard as the Scottish Parliament, but at least one where central government did not come along every two minutes and change the rights of local government to undertake certain activities. Do you think there is a need for a change, it is something we should be working toward, to put local government in a firmer constitutional position where change happened by consent with yourselves rather than by central government or Parliamentary dictat? Councillor Barrow: I have to say that we have not spent a great deal of time in our political group meetings discussing the Central-Local Concordat, there has not been the demand for that debate. It is disgraceful, and I promise I will rectify it immediately, and report back to central government on the progress that I am making with it. Q262 Mr Betts: They will get one report on it. Councillor Barrow: Let
me just say that we are all on the same page about worklessness and the
recession, how important it is, but in the last six months, it says here,
bidding rounds have opened for six different funding streams designed to help
local people into work. They are the
Flexible New Deal; the Working Neigbourhoods Fund; the European Social Fund,
with three sub-strands administered through the DWP, LDA and London councils; the
Child Poverty Unit; JCP programmes; and the LSC adult advancement career
services pilot. Also, the government has
issued 11 pieces of primary legislation with significant implications for Chair: I do have to say though, in the French system they also spend a great deal more money. Q263 Sir Paul Beresford: Have you not understated those, because of course government is giving you that, and then it is going to audit it, and you are going to have to audit it, and it is going to set targets for it, and you are going to have to produce for the targets, and then they are going to come back when you send the information in, and your 45 men or women working on this are going to be 60 or 100. Councillor Moffitt: If I could just pick up a point on the Concordat, I am sure your predecessor would be very sad to hear you have not paid more attention to the document he signed, but I think what I find frustrating is the constant tinkering with local government. Actually knowing where we stand would be very helpful. Each new minister comes along with a new set of initiatives, none of which seem to have a very major impact. Here we are in the middle of a violent recession, if you like, and we are worrying about consulting on the 2007 Act, parish councils and leadership models and so on; it feels like the wrong time to be doing it, and actually having a stable framework so everybody knows where they are and what the relationship is, and hopefully a relationship where local government is seen less as the junior partner would be extremely helpful. Chair: Thank you all very much. |