Examination of Witnesses (Questions 40-52)
SIR MICHAEL
LYONS
23 JUNE 2008
Q40 Dr Pugh: I just want to be clear
about what you are saying. Are you suggesting that parliamentary
oversight provides a kind of commentary or an adjudication service?
I think the former rather than the latter. Is that the case?
Sir Michael Lyons: I am just baulking
slightly—
Q41 Dr Pugh: Now we can give a sort
of commentary on how we think things are going.
Sir Michael Lyons: In the current
climate all that you can do is provide a commentary.
Q42 Dr Pugh: Yes, and you want something
more than that for Parliament?
Sir Michael Lyons: Yes. I was
recommending something certainly that went beyond that.
Q43 Dr Pugh: Do you think it would
be helpful if we could separate the issues of what local government
should properly do, and get that sorted first, from the issue
of how local authorities should properly be financed? You think
that it would be easier to take the questions as separate questions?
Sir Michael Lyons: Firstly, let
me acknowledge, because I spent a lot of time initially trying
myself to identify whether it was possible, on the basis of either
public reactions or the nature of services, to distinguish between
nationally provided services and locally provided services. It
is very difficult. There are some things that fall neatly into
one category and some neatly into another category, but there
is a very substantial grey area in the centre. There is not a
simple division between these but, in answer to your question,
you do have to be clear what it is that local government is being
asked to do before you can properly start a debate about how it
is funded and to what extent.
Q44 Dr Pugh: Just a final point of
clarity. My take on this is, there is a lot of talk about partnership,
a lot of talk about place making, and underneath the radar there
is a haemorrhaging of powers of local authorities to other non-elected
bodies, whether they are local strategic partnerships, other sorts
of partnerships, or regional and sub-regional fora. Is it not
the case that most people now currently perceive local government
as, firstly, less accountable than hitherto and, secondly, less
transparent?
Sir Michael Lyons: "Yes"
to both of those, depending on what time horizon you are taking.
"No" to the assumption at the beginning that the movement
of powers from local government to non-accountable bodies is something
that continues apace. I perceive that actually, for at least the
last three years, there has been some reversal of that process.
I personally see the pendulum as moving back from its peak point.
Q45 Mr Betts: I wonder what we can
do to try and lift the whole debate about the relationship between
central and local government on to almost a constitutional basis.
In the absence of a written constitution, all we have is a number
of Acts of Parliament, which are not in themselves considered
constitutional. Two examples: first of all, we have the concordat,
which was supposed to be the basis for this constitutional arrangement.
In reality, my guess is that most members of the public have never
heard of it, many Members of Parliament probably have not heard
of it, many councils probably have not heard of it. It has not
exactly set the world on fire in terms of change in relationships.
If you look at what has happened in Scotland and Wales, the Parliament
in Scotland and the Assembly in Wales have been established by
a constitutional Act. They are constitutional because the Committee
stages are taken on the floor of the House and it is recognised
as being different. Local government legislation is not considered
that way. The Parliament and the Assembly were then backed up
by a referendum, and it is inconceivable that their powers will
be taken away or changed without another referendum. Do we not
have to do something to try and put relations with local government
on to a different standing to what they are at present?
Sir Michael Lyons: I think broadly
I would say "yes" to that. I would say that in my view
issues of devolution and the constitutional position of England
in a UK of devolved nations is unfinished business. However, if
I just come back, I do think underlying all of this is the problem
of a debate with the public of this country which, when surveyed,
believes that more decisions should be made locally but still
has some anxieties about those decisions being made by local government.
Q46 Chair: Are you referring to the
postcode lottery?
Sir Michael Lyons: In part I am.
There are two issues behind my conclusion. In part, it is an anxiety
that local government remains inefficient in its use of resources.
I do not say that it is but that remains a perception and, despite
local government's strenuous efforts to improve on that, it is
difficult to shift, in part, because centralised decision-making
just sounds as if it is likely to be more efficient. Put that
beside the postcode lottery, the belief—and I cannot say
enough how much I do not believe it can ever be delivered—that
standards will be the same in every community if decisions are
made for the nation as a whole. That, excited by press coverage
of what is characterised as a postcode lottery, leads people to
believe that they will be disadvantaged by decisions made more
locally.
Q47 Mr Betts: Coming to this point
you made about the concern people think more decisions should
be made locally but are not sure local government should make
them, is this what you think drives ministers to try and reinvent
different ways of delivering local decision-making outside local
government? We have talked about the Balkanisation of decision-making
locally which means you do not get proper joined-up government.
Sir Michael Lyons: I could take
you back—although I am not going to in the space we have
today—to specific episodes where individual ministers have
further excited that belief by interventions that were seen to
offer consistency across the country as a whole. To matters which
arguably would have been more appropriately left to local decision-making
and local priorities.
Q48 Chair: Could you give an example,
because otherwise we are all going to be thinking of different
examples?
Sir Michael Lyons: Let me go back
a very long way—only because it is safer rather than because
it betrays ...
Q49 Chair: Think dangerously, Sir
Michael. After all, you are not elected so you do not have to
worry!
Sir Michael Lyons: No, but I am
impartial, or struggling to be. As you know, impartiality is not
a state of grace; it is a journey. I became the Chief Executive
of Wolverhampton Borough Council in 1985 and inherited a scheme
for assisting small businesses. This was in the aftermath of a
very deep recession in the West Midlands which had cost one in
three manufacturing jobs. The council was strongly committed to
trying to improve the economic condition of Wolverhampton. We
had a scheme to support new businesses which was lacking in explicit
criteria and, has as a result, both expensive and at times potentially
damaging to existing economic activity. For instance, you would
get applications from people wanting to set up new retail activity
when that was basically in direct competition to existing businesses.
It took us two years to convince both the council and the community
that the council could only sensibly seek to intervene if it asked
the question "What impact would this have on existing businesses
and jobs in the area?" We finally got that sorted out and
working when central government decided that it liked the idea
of Task Forces. A task force was jetted into Wolverhampton and
its first decision was to say "Unlike the council, we will
offer support to any retail business that comes along." That
is an illustration, without anything more to it.
Anne Main: On retail needs, of course,
the retail needs assessment has been taken away by the Government,
so that is another planning thing.
Chair: Not yet!
Q50 Anne Main: With the funding formula,
many local authorities feel they are hamstrung. Have you completely
ruled out any possibility of having a local income tax? Did you
rule that out in your report?
Sir Michael Lyons: No, I did not
rule it out, and what I tried to do—and again, I would like
to underline that I tried to evaluate all of the options and to
lay them out so that anybody at any future point coming to this
dilemma would see as best as I was able to demonstrate the pros
and cons for moving in this direction.
Q51 Anne Main: Is this because radical
reform is so politically nuclear? I think you touched on that
in your comments.
Sir Michael Lyons: It is clearly
difficult for any government to move, but it is difficult for
any government to move faster than the population wants it to.
So the notion of quick and simple local government reform, I felt,
was not possible but I did see that if actually you started to
rebuild trust, to provide the flexibility—flexibility first,
back to our agreed point—the ability for local government
to respond more effectively to the needs of the community that
they serve as opposed to standards set nationally, it would be
possible to make change.
Q52 Anne Main: That does sound as
if you are saying "Get off the councils' backs, Government."
Sir Michael Lyons: Those are the
words you have chosen but they might well be used to summarise
what I said in the report.
Chair: Thank you very much indeed, Sir
Michael.
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