The Balance of Power: Central and Local Government - Communities and Local Government Committee Contents


Examination of Witnesses (Questions 184-199)

MR PETER GILROY OBE, MR PAUL CARTER, MR DAVID PETFORD AND COUNCILLOR MIKE FITZGERALD

10 NOVEMBER 2008

  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 Maidstone chose to set up a special scrutiny committee to answer the questions that the Committee posed in its evidence. It is a very interesting example, I think. We are grateful for the fact that you took this extremely seriously, and obviously we too take very seriously what local councils say to us.

  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 Kent, because as I understand it Kent seems to pretty adequately use all the powers that it has already, and is asking for some more. Do you nevertheless expect ministers generally to devolve powers to councils when, unlike yourself, most councils seem not to be using all the powers that they have?

  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 not 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, which 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 Maidstone, I think in your submission, you were making the argument, I mean, you recognise that councils including yourself do not necessarily use all the powers that you have. Would you like to tell us why you think you have not used all the powers that you have? And indeed I suspect your relationship with Kent.

  Mr Petford: Yes, indeed, Kent are a very important partner and we work well with Kent. I think the question is not just about powers, I think there is a difference for me between powers and duties and responsibilities. I think there are strong arguments to increase duties and responsibilities, in fact move duties and responsibilities, so the complexity of councils at different levels in different areas doing different things, but I think in terms of powers, the legal power to actually-whether you can actually do something is quite different to that. I think currently, with the well-being power, which is clearly the power of first resort, not last resort, first resort, that does open up quite a wide range for most councils to do lots and lots of things. So from that point of view, I do not think powers for me is the issue, I think it is more about whether we should be involved in other areas and whether or not our duties and responsibilities should be extended into other areas.

  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 just 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 by the merits of who should govern—

  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% 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 Kent?

  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 US, we do tend to be overcentralised in the UK. I mean, there are things that you could decide as a government and say, "These things we need to do better on", cancer rates might be that, it may be other things, but it seems to me that the discretion should be much more open to having difference. We have got into the lottery postcode in a way that it is becoming now politically incorrect to even talk anything against it, and I feel there needs to be a bit more pragmatism about local communities' different needs, we should in commissioning terms have much more power to determine, set against what the Government's broad policy objectives are. I think at the moment, the Government has too many policy objectives and too many targets, we need to reduce those and give local government much more say in how that is managed.

  Q194  Anne Main: Just on 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. Europe has the same problems, and I cannot see, in certain thresholds, if a local community decides it wants to have something special in its healthcare, and that is what it wants, why should we not say yes? We do it in other parts of our business.

  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 No, but 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. Kent on average for both PCTs gets about £1,100 per resident. If you looked at the index of multiple deprivation in East Kent, it would match or rate anything in the North or North East of England. Yet where is the transparency and the needs-led allocation? It comes back to Lord Bruce-Lockhart, when he was chairman of the LGA, suggesting that we have an independent body that looks at the needs-led analysis and statistics before the cake is carved up between authorities or between PCTs, and before we start having supertaxes and supercharging over and above the national allocation, let us look in a common sense pragmatic way at the way existing resources are distributed around.

  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, do not have more costs.

  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 England, presumably.

  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 other 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 Maidstone, I think we collect something like £35 million, and then we are allocated from business rates, and I think from central government we get something like £5 million back. So that does not seem very appropriate, certainly from my members' point of view.



 
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