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

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

3 The role of local government

52. Local government can be configured in a number of different ways, depending upon the role it is expected to perform. In Denmark and Sweden local government takes responsibility for virtually all locally delivered services; elsewhere, it has a more circumscribed range of functions, as in Australia where the core local government responsibilities are limited to property-related services, with the states delivering education, most social services, fire services and the more local aspects of policing—though Australia does have a highly devolved structure with six states and 2 territories governing some 21 million people between them. Equally, local government can have a high degree of autonomy as to how it carries out its tasks, again as in Denmark and Sweden or as in France, or delivery can be heavily prescribed, as in the Netherlands.[45]

53. As we have seen, Sir Michael Lyons promoted a strategic role for local government, but assessed that "the weight of central controls" in England "can lead to local choices being crowded out",[46] stifling innovation and experiment. He also noted considerable public ambivalence about the scope for local variation of services in England. The delivery of social services—particularly for children and the elderly—and healthcare services are particularly sensitive and most likely to be coupled to the emotive term "postcode lottery". The harsh reality, though, is that, given currently available levels of funding, rising public expectations across the full range of public services in every locality are unlikely to be met fully by either central or local government.

54. We concur with the view of Anna Turley, Deputy Director of the New Local Government Network (NLGN), that "by allowing local authorities much more ability to tailor and focus their resources and their powers to provide services in a way people need they would be much more likely to have a substantially better outcome than through a top-down restrictive framework."[47] As Warwickshire County Council observed in its written evidence, "variation in service delivery is not necessarily a negative but a positive reflection of the differences between communities."[48] The real issue is who is best placed to make tough decisions about priorities and to get the best possible outcomes from the finite resources available. Local authorities clearly know their areas better than does Whitehall. Given the extent to which local communities differ, local authorities should have the flexibility—beyond a reasonably set national minimum standard[49]—to vary their priorities to reflect those of the communities they serve.

55. In this chapter, leaving aside for the moment the question of the financial reform of local government, which will be covered more deeply in chapter 5, we consider first whether local government in England has sufficient powers and responsibilities effectively to pursue a commanding local leadership role. The logic of our argument is that local government should have a key role in the decision-making process of virtually all local services. We assess how far the reality departs from this principle, looking particularly at local government's rather limited role in the delivery of local health and policing services. Second, we consider whether current frameworks give local government sufficient freedom of manoeuvre to tackle local priorities and pioneer local solutions. Finally, we ask whether local government itself could do more to pursue a local leadership agenda—whether cultural change within local government is a key prerequisite if the balance of power is to shift decisively in favour of local government.

56. In this report we advance the principle that decisions which primarily affect one area to a significantly greater extent than others, should be taken within that area and not outside it—the subsidiarity principle. Those local authorities taking such decisions should, of course, be able to demonstrate that where there may be a spill-over impact on other areas they should be able to demonstrate that they have taken reasonable steps to take account of any such impacts. The principle should underpin a new hierarchy of decision making which respects and places on a statutory footing the rights of a local community to determine a great deal more of what should or should not occur within their locality, and how the full range of public services are delivered in their area and integrated with each other.

Does local government need new powers?

57. A number of local authorities have made the case for additional powers of a non-financial nature during the course of our inquiry. Birmingham City Council argued that the current "well-being" powers do not go far enough. It wants local authorities to be granted a "power of general competence", to enable councils to do anything to advance service delivery and local democracy within their area, so long as it is not explicitly prohibited, describing this as "the reverse of the current 'ultra vires' approach which prohibits councils from doing things they are not specifically empowered to do through legislation".[50] Kent County Council called for funding streams to be devolved from Regional Development Agency responsibility to a sub-regional level such as a county council.[51] It also pushed for additional freedoms to "run other public services such as health, probation, prisons and policing"[52] in its locality, to take control over incapacity benefit to ensure close co-ordination with welfare-to-work programmes,[53] to pool the budgets of local authorities, regional and local public agencies through the Area Based Grant,[54] and to "be granted Highways Agency powers for non-motorway trunk roads, along with maintenance budgets and transport planning powers residing within their boundaries."[55] Warwickshire County Council argued that "a general power of competence would put local authorities on a firm footing for moving forward in partnership with others, [and] provide confidence in its ability to respond and deal with local issues. It would also remove the need for some of the tortuous legislation that currently exists."[56] Other councils—Manchester City Council and Westminster City Council, for example—covered similar ground in their submissions.[57]

58. The message which came through very strongly with big city councils and county councils in particular was their frustration that, even though they were high-performing councils with huge challenges, they were not being given sufficient space by central government and central government agencies fully to develop their leading "place-shaping" role. In oral evidence, Stephen Hughes, Chief Executive of Birmingham City Council, argued that "there is definitely a particular role for cities [...] 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 the local level."[58] Similarly, Sir Richard Leese CBE, Leader of Manchester City Council, felt that a lack of local authority power was inhibiting its ability to create the requisite partnerships to 'place-shape' at the local level. Citing the example of tackling worklessness, where the local council needed to be joined up with other stakeholders such as JobcentrePlus and the Learning and Skills Councils, he told us that

we need more power in order to be able to do that joining up more 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 […] 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.[59]

Paul Carter, leader of Kent County Council, makes a similar case for his county council:

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.[60]

59. The Government, by contrast, clearly believes that local government should be making better use of its existing powers, rather than asking for more. In its submission, the Department for Communities and Local Government (CLG) stated that:

Councils generate £1bn a year through their powers to trade, but only a quarter of the minority that use these powers aim to make a surplus.

Nine out of 10 LSPs are aware of the well-being power but fewer than one in twelve are using it.

Only 60% of local authorities have used the significant new freedoms of the prudential borrowing regime introduced in 2004.[61]

The Minister for Local Government, Rt Hon John Healey MP castigated local government in a speech at the May 2008 Institute for Public Policy (IPPR) conference for not making full use of the powers it has. "By all means make the case for more power, more freedom, more innovation", he said. "But also make use of those you already have".[62] In oral evidence to us, the Secretary of State emphasised the same point: "my challenge to local government is that where there are powers before asking for more powers let us make sure that we are using all the powers we have got to their fullest extent."[63] The government position received some support from Sir Michael Lyons, who stated in his report that he was "disappointed that there has been such a low take up by local authorities of the powers to trade and charge."[64]

60. The current government has granted local government some additional powers. The Local Government Act 2000 provides local authorities with a discretionary power to take any action to promote or improve the "social, economic or environmental well-being" of their area. Local authorities have had the freedom to trade and charge for certain services for a long time. The Local Government Act 2003 extended these powers. Councils that are rated as excellent, good and fair are now able to trade for profit (commercially) through a company. The Sustainable Communities Act 2007 contains a provision for local authorities to request greater powers to promote the sustainability of their area, a provision which is now being put into effect through an invitation to local authorities, issued by the Secretary of State in October last year, to bring forward proposals for further freedoms.

61. Some witnesses, however, have argued that the additional powers are not as generous as they seem. Sir Richard Leese noted that regulatory powers were excluded from the power of general well-being, and observed that 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".[65] Warwickshire County Council argued similarly in its written evidence that "local authorities would use charging and trading more if the legislation was simplified"[66], and noted that the Audit Commission had also commented on the constraints and barriers, in its report Positively Charged.[67] The Association of North East Councils pointed out that "the trading power can only be exercised through a company (or other trading vehicle) and this inevitably presents complex legal, financial and taxation issues to any council that might be thinking of going down this road",[68] whilst Lancashire County Council, in its written evidence, bridled at central government's assumption that it knew best which powers it should be using, pointing out that "central government may want to know why we are not using a specific policy tool but the local context may mean that one power has more relevance than another".[69]

62. A number of other witnesses were critical from another perspective. They were broadly content with the powers they have in principle, but argued that in practice they are so constrained by central government interference—whether through performance monitoring or departmental directives—that they are unable actually to deploy these powers fully. Councillor Colin Barrow CBE, leader of Westminster City Council, told us "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".[70] Councillor Keith Moffitt, Leader of Camden Borough Council, observed that "our frustration again is not so much about the powers that we have, but the fact that we have been given the top possible score by the Audit Commission, and yet we do not seem to be trusted to run our affairs".[71]

63. Perhaps surprisingly, the Local Government Association (LGA) too told us that it was not asking for more formal powers for local government. Appearing before us in oral evidence, its party spokespeople told us very firmly that "we have not come here today to ask for more legislation. We have not come here to ask for more powers".[72] Instead, the LGA made a persuasive case for "cultural change in the way that central government and its organisations relate to the LGA and to our member councils" and greater clarity with regard, for instance, to the well-being duty, "which sounds fine in theory but in fact, if you try to do anything major through it, would be an accountants' and solicitors' charter."[73] This issue of the need for a cultural change in central government will be explored in the next chapter.

64. We are clear that local authorities need both sufficient formal powers and more general autonomy to pursue a leading local leadership role. We are encouraged that a number of councils have embraced the potential offered by the well being powers to pursue this agenda aggressively. We note, by way of examples, the decision by Essex County Council to open the first council-run post office to save it from closure; Kent's decision to launch Kent TV, among other initiatives; the ambitious programmes Westminster and Manchester both have to combat worklessness; the provision by North Yorkshire County Council of a broadband network; and Lancashire County Council's innovative restorative justice models.

65. We urge more councils to test the strength of the assertion by the Secretary of State that "the power of well being is virtually a power of general competence" and her commitment to "look very closely at the power that exists, how much it is being used, what it is stopping people from doing, and if it is stopping people from doing things which would be beneficial and are proper things for them to do then obviously I want to examine whether any changes would be necessary."[74] We have considerable sympathy with the case for local government to be given a power of general competence, to provide greater recognition of the local leadership role that central government is asking it to play, and which we support. If local government is able to accumulate evidence that the well-being powers are falling short of a power of general competence to the extent that they are impeding its local leadership role, then we recommend that the Government should introduce a power of general competence for local government.

66. We have also noted the frustration that, regardless of their track record, local authorities remain subject to invasive central government scrutiny and interference. The Government has promised that "as councils step forward, central government can further reduce the burden of appraisal and approval regimes, the ring-fencing of funds and prescriptive guidance."[75] We urge the Government to take a more flexible view of decentralisation, and to deliver on its promises of earned autonomy. We consider this issue in more detail later in this chapter.

The delivery of local police, health and healthcare services: the role of local government

67. During the course of our inquiry, we asked whether local government's role and influence needed to be strengthened in relation to local policing and health services. The answer from local government, and local government think-tanks, was "yes". Sir Richard Leese, told us that "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, Manchester.'"[76] Birmingham, Gateshead and Kent similarly pressed for the ability to direct the local delivery of primary healthcare. With regard to local policing, Westminster was adamant that there was an accountability gap with regard to local policing, "a pretty disconnected picture" even though "they have come a long way in the Met."[77] Camden highlighted instances where the council and police were working to competing targets, such as entrance into the youth justice system where "our target is to get it down and the police's target is to get it up."[78]

68. Similarly, the think tanks Local Government information Unit (LGiU) and New Local Government Network (NLGN) argued that both the police and primary care trusts (PCTs) are insufficiently accountable to local people, the LGiU stating in its written evidence that:

In practice, services such as police and PCTs are primarily accountable to Whitehall; this lack of direct accountability has an immediate impact on the ability of these services to respond to local priorities and meet local concerns.[79]

In oral evidence, Andy Sawford, Chief Executive of the LGiU, further observed that in polls they had commissioned "both the public and councillors feel that there should be stronger accountability at a local level around policing and healthcare. Policing comes out as the number one issue that people want a say over in their community, and one where there is least opportunity for them to do it."[80]

69. There was a similar amount of consensus as regards how to improve the situation, with a number of different local government and think-tank witnesses advocating a model where local authorities would commission local health and policing services from the local NHS or police authority. For example, in oral evidence Cllr Merrick Cockell, Chair of the local authority representative body London Councils, explained that:

We think the way ahead is for commissioning to be carried out along with the budget for level one policing, particularly neighbourhood policing, in other words to be joined to the budget that local authorities spend, which is often quite substantial these days, pool those together and then for the local authority to commission the borough commander to deliver level one policing in our area. [81]

He also confirmed that "the same would apply to health. Certainly the London Councils model is that it would apply to PCTs, that we would be the commissioners for local health services in our area."[82] Andy Sawford observed at the same oral evidence session that "we developed a similar model. […] commissioning is the key and how you use local commissioning, what an opportunity that presents. It is the key to innovating, to getting people involved."[83] In written evidence, the Association of North East Councils felt that a commissioning model "under which the local authority would hold the budget for, and be responsible for the commissioning of, local health and policing services" would "be a bold innovation but it would take us a long way forward in securing democratic accountability", and suggested that the model be trialled "in the first instance in a few authorities."[84]

70. Advocates of the commissioning model recognised that its implementation would be challenging, not least because local authority boundaries did not always match local health and policing boundaries. They felt though that, given the potential benefits for local service delivery and local democracy, any obstacles could and should be overcome. With regard to the boundaries issue, it was suggested that local authorities working in partnership, possibly within a Multiple Area Agreement (MAA), would offer a potential solution. Cllr Merrick Cockell observed that:

we would from our own free choice agree to form groupings to do it [commissioning]. It may not be necessary or ideal to have 33 of everything in the case of London. There may be very good reasons, again without changing the structure of local government, to ally together with neighbours or others to achieve certain things better.[85]

Anna Turley similarly emphasised the need to "think about the appropriate level for all the kinds of services we deliver", and felt "really encouraged"[86] by the multi-area agreement process.

71. Finally, advocates of the commissioning model stressed its advantages over an alternative model whereby commissioners of local health or policing services would be directly elected by the local people. At the time of our inquiry, this model was being floated in a Home Office policing Green Paper, From the neighbourhood to the national: policing our communities together. Published in July 2008, it proposed the establishment of local directly elected Crime and Policing representatives (CPRs), who would be responsible for ensuring that the police were tackling the priorities that concerned local people most. Our local government and think-tank witnesses were more or less unanimous in arguing that such a model would actually undermine local democracy. The LGiU, in its written evidence, was clear that the model as articulated in the Green Paper "has the potential to undermine the progress in joined up government that have been made within local strategic partnerships."[87] The LGA, in its published response to the Green Paper, argued that directly elected crime and policing representatives would:

undermine partnership working between police and councils

make it more difficult for local people to decide who is responsible for reducing local crime and anti-social behaviour—in effect councils would no longer have a significant role in holding the police to account.

waste scarce resources and create substantial new financial and administrative burdens for police authorities.

have no more flexibility to address local crime priorities than police authorities currently do.

remove a significant amount of local spending from local authority influence.[88]

Similarly, in oral evidence Anna Turley felt that the principle of a local say in local policing was not best served by "the creation of a new elected representative on an authority which most people have very little awareness of, and which perhaps not only duplicates some of the role of the local authority but may start to fragment policing from the wider place-shaping agenda."[89] Lancashire County Council observed that "recent suggestions that policing or health should adopt separate democratic mechanisms to ensure public accountability are misguided," adding "In addition to creating wasteful taxpayer expense, directly-elected health or police boards could confuse voters, especially in three-tier areas like Lancashire."[90] It is clear from the above that it is not just the specific Green Paper example that the local government family is opposed to; it is opposed in principle to directly elected policing and health representatives because they believe they would undermine local government and hence local democracy.

72. We put the local government case for increasing their powers over local policing and health to the Home Office and the Department of Health, and were struck by the extent to which they were opposed to it. Local councillors do currently serve on Crime and Disorder Reduction Partnerships (CDRPs) and on police authorities (commonly 9 out of 17 members of a police authority are councillors). They do, therefore, have input into local policing priorities. They are not, however, the leading voice, lacking as they do control over local policing resources. As well as the contentious CPRs proposal discussed above, which the Government has since announced it will not proceed with at this time, the Policing Green Paper also advocates more partnership working, bringing together local policing with the broad range of local services—provided by local councils, housing associations and others—that contribute to community safety. Whilst it sees a leading role for local government in crime prevention as part of its wider responsibility to support communities, this is still some distance from the leading role in many aspects of local policing advocated by many of our local government witnesses. It was therefore unsurprising that the Minister of State (Policing, Crime and Security), Mr Vernon Coaker appeared somewhat taken aback when we asked for his response to the proposal that neighbourhood policing should move to local authorities, who would become commissioners for these police services, responding:

I do not know about local councils controlling the police but certainly what we would want to see is the strengthening of the partnerships that already exist.[91]

He appeared more comfortable envisaging local authorities in purely supportive crime prevention roles, observing that:

we see the involvement of local authorities in a crime reduction role, a role which includes all the various aspects that lead to communities feeling safer and indeed tackling crime. This is particularly important if you look at local councils in terms of what they do with respect to graffiti, with respect to litter, with respect to lighting, with respect to council housing. All of those matters are fundamental to the importance of delivering safer communities, but on their own are not necessarily connected strictly with policing.[92]

Later on in the evidence session, he commented that "I think local councillors, local authorities, have a very real role to play through the CDRPs with respect to the broad community safety agenda, of which policing is a part."[93]

73. The implication of his comments, we felt, was that most aspects of local policing needed to remain firmly under the control of the Home Office and the police themselves, that local policing ultimately needed to be left to the professionals—albeit with the proviso that the professionals were willing to negotiate local priorities under the Local Area Agreement process. The difference—subtle, but profound—is that whereas under current arrangements the professionals have the whip hand at the negotiating table, were local government to have commissioning powers, the balance of power would move substantially in their favour.

74. Under current arrangements, local authorities have even less influence over local health priorities than they do over local policing. Whereas councillors are at least guaranteed a place on policing authorities and CDRPs, they have no equivalent automatic right as councillors to sit on the local NHS equivalent structure, the Primary Care Trust (PCT). Under the terms of the Health and Social Care Act 2001, local authorities have the power to scrutinise local health services, and local NHS bodies are required to co-operate with local authorities. However, this still places local authorities at some distance from the decision-making process for the delivery of local health needs and health care services. The Department of Health and CLG published a joint document in December 2007—Delivering health and well-being in partnership: the crucial role of the new local performance framework—which did place further emphasis on PCTs working in partnership with local authorities to determine the health and well-being needs of the local community, and reflect them in the LAA. In some areas, local authorities and PCTs have agreed locally to pool budgets and commission some health services jointly. However, PCTs have a range of priorities to meet, and local government witnesses have suggested that in the main the NHS remains likely to prioritise national targets over locally agreed targets.

75. Our oral evidence session with the Under Secretary of State (Health Services), Ann Keen MP certainly provided evidence of the 'centre over local' attitude of the Department of Health. We asked whether there were any circumstances where the Department of Health would be willing to drop national targets in favour of other locally-set priorities, and were told very firmly "no".[94] Whilst the Under Secretary was quite prepared to encourage greater local consultation by the PCT, and to support scrutiny of the PCT by the local authority, she saw no need for any more fundamental change, arguing that "the NHS does not need further reorganisation. It needs a period of stability [...]".[95] When we suggested that replacing the current members of the PCT with elected councillors would not require a change of structure or organisation, she argued that "people want Parliament to be accountable for the health spending of their local area",[96] echoing one of the key challenges to changing the balance of power between central and local government (public perceptions) that we identified earlier in this report. This does however lead to a situation where the centre becomes accountable for every local health decision, which is not a comfortable position for a Minister to be in. When put under pressure, such centralism cannot hold. Unsurprisingly, the Minister shied away from the implications of her stance, asserting that "people have to take that responsibility locally as well."[97] When pressed on how an appointed PCT could in practice be held accountable locally, she had to accept that the main line of accountability actually led to the Chief Executive of the NHS.[98]

76. Jo Webber, Deputy Director of the senior managers' representative body the NHS Confederation, provided a further glimpse of the NHS's centralist mentality, which is clearly not limited to Whitehall. We asked whether she would feel comfortable with a model where local councillors had the responsibility to commission health services at local level instead of the current arrangements through PCTs. She replied that "what we would be comfortable with is, to a certain extent, what we have already."[99] She did see further opportunities for joint commissioning at the preventative end of the health spectrum, but argued that "maybe local authorities might not want to get involved in commissioning very specialist, heavy end, regional or national specialty services",[100] and did not accept the arguments in favour of sole commissioning by local authorities. We were left with the impression that, as with the Home Office and police, the Department of Health and the NHS felt that, ultimately, the professionals knew best and should be left to make the most important local health decisions.

77. We are concerned that neither the Home Office nor the Department of Health, on the evidence put before us, are ready to allow local authorities a real role in local policing and health and healthcare services. Despite recent changes that have brought in greater transparency and more consultation, the balance of power remains very firmly in favour of Ministers and the policing and health professionals over locally elected politicians. Whilst we acknowledge that there is much useful joined-up working going on in some aspects of local policing and health services, involving some joint commissioning, it is by no means sufficient to alter the overall balance of power. The picture is particularly stark with regard to the NHS, where it is not even standard practice for local councillors to sit on PCT Boards. Moreover, hospitals, particularly where they have Foundation Trust status, also remain powerful brokers whose Boards have no requirement to include local authority representation. Our concern is twofold. First, local policing and health care services remain insufficiently accountable to their local populations. If local councils commissioned these local services, local accountability through the ballot box would be much stronger. Second, at present, local councils are unable fully to assimilate local policing and health and healthcare services into their strategic vision for the locality. So long as two such important local services—arguably the most important for most local people—remain outside its scope, the full benefits of an empowered, autonomous local government cannot be realised.

78. On balance, we are convinced by the local government case of the potential for local people to benefit if local authorities were able to set local priorities for local policing and health matters. In principle, we can see no reason why most aspects of local health and policing should not become the responsibility of local government. We can see merit in local authorities or sub-regional partnerships taking on sole responsibility for many local health commissioning priorities and, via sub-regional partnerships, for many local policing priorities. We recommend, therefore, that the Department of Health and Home Office work with CLG to establish a local authority commissioning model for local policing and health and health care. As a first step, we recommend bringing forward pilot projects in localities where there are matching boundaries and where some joint commissioning already takes place.

Developing current frameworks

79. As well as considering the scope for granting local government additional powers, during the course of this inquiry we have also considered the scope for developing current frameworks in a more devolutionary direction: the potential for further incremental change. From the evidence we have received during this inquiry, local government and other stakeholders have given a cautious welcome to the frameworks introduced by this government. The Local Area Agreement (LAA) between central and local government in a local area is at the heart of this framework, and a number of witnesses felt that it was a positive development. For example, Stephen Hughes, Chief Executive of Birmingham City Council told us that LAAs "are a massive step forward",[101] while Sir Richard Leese, Leader of Manchester City Council, told us that the LAA "is something that we think has real value".[102] We noted with interest too, given that the NHS is a key stakeholder, that Jo Webber, Deputy Director of the NHS Confederation, was also supportive of LAAs, telling us that "in principle, yes, it is absolutely the right way to go in terms of bringing together targets where everybody has a role to play in delivering good outcomes for the local community."[103]

80. LAAs are of course still quite new, and we heard concerns expressed that the LAA process remained too 'top down' rather than a genuine negotiation between equal partners—effectively hindering the development of more tailored local solutions. Warwickshire County Council wrote that "the fact that LAAs have 16 mandatory education indicators speaks for itself," asking "How do we encourage people to engage in local democracy and empower communities to believe they can make a difference when there is this level of prescription?"[104] Councillor Jill Shortland, Leader of Somerset County Council, told us, with respect to the LAA, that "the direction that we get from central government is quite clear and harsh."[105] Councillor Susan Williams, Leader of Trafford Council, observed that "there was no way of being able to choose your own local set of 35 [targets]. It came from the government shopping list."[106] Jules Pipe, Mayor of Hackney, further felt that some central departments were inclined to turn the screw after the 35 targets had been agreed:

[…] There were some really hard tussles, particularly on NI25, the one on preventing violent extremism. The pressure that people came under from the Home Office to include that was quite extraordinary.[107]

Research undertaken by the NLGN adds further weight to the suggestion that the LAA process remains too "top down".[108]

81. There is nevertheless hope for the future of LAAs as a genuinely devolutionary development. Telford and Wrekin Council expressed a cautious optimism which seems appropriate in this context, writing that "a revised and refreshed LAA model still has the potential to be a bespoke negotiation mechanism through which there can be a balancing act and a focusing of key national and local priorities".[109] The challenge now, for local government, central government and other local strategic partners, is to ensure that the LAA process develops as a true partnership with sufficient flexibility to register local priorities as well as minimum central requirements. In particular, we look forward to seeing more pooling of resources under the LAA, and for those resources to come more equally from other partners as well as local government.

82. A number of witnesses were also taken with the potential for Multi Area Agreements (MAAs) to enable local councils to pioneer local solutions at the sub-regional level. In their written evidence, NLGN argued that "the roll out of MAAs from 2008 onwards promises the prospect of a new functional, viable and organic tier of government that operates at the correct spatial awareness to solve cross-boundary challenges such as skills, transport and employment."[110] Written evidence from London Councils saw the MAA model as a means for devolving commissioning powers to local authorities where boundaries (eg for policing and health) are not coterminous with one local authority,[111] and pushed for the devolution of budgets to MAAs where they had an agreed policy, for example for sub-regional transport or adult skills projects.

83. We welcome the commitment the Secretary of State gave to us that:

[…] where local authorities and their partners are prepared to put their differences to one side and say, "these are our priorities around planning, housing, transport and skills", key economic drivers, again they will get more devolution from the centre, not just from CLG but from DIUS and DCSF […][112]

We agree that MAAs offer some scope for local government leadership at the sub-regional level. We welcome the fact that, following the conclusion of its Sub-National Review (SNR) consultation exercise, the government is currently legislating to put MAAs on a statutory footing, and that groups of council leaders will have joint responsibility with Regional Development Agencies (RDAs) for drafting and implementing regional strategies. We also welcome the Chancellor's recent announcement in his Budget speech that Manchester and Leeds will become city region pilots with enhanced powers.

84. Finally in this section, we also welcome the move to replace the Comprehensive Performance Assessment (CPA) with the lighter touch Comprehensive Area Assessment (CAA) under the general oversight of the Audit Commission. It seems sensible to us to place more emphasis on assessing the success of partnership working in delivering the place-shaping role, rather than focusing on a large list of individual indicators. Although we accept that there will always be a need for an external review of standards, the challenge will be to ensure that hard targets are not simply replaced by a range of softer audits, reviews and report backs that, in total, serve the same invasive purpose and continue to tie down local government resources and stifle innovation. We were pleased to hear the Secretary of State confirm that:

I am very conscious and aware, and I am monitoring this very closely, that when we reduce targets sometimes there is a temptation for people to institute softer controls, whether that is reporting, accounting frameworks, whatever. I am keeping an intensely close eye on all of that because what I do not want is for our genuinely devolutionary, lighter touch framework to be thwarted by people wanting to come in at the edges with other forms of control.[113]

We are pleased that CLG is "keeping a really close handle on all of this on behalf of the whole of Whitehall".[114] We look forward to monitoring the success of CLG and the Audit Commission in delivering an effective but genuinely less obtrusive performance framework. Regulation and audit are overhead costs for local government and need to be proportionate to the benefits achieved.

The case for local government cultural change

85. It is our assessment that, however slowly and imperfectly, the balance of power is tilting back towards local government. We believe that a further push is required in order fully to realise the benefits of these positive developments, and to enable local people, through their local councils, to have a greater say in the development of their locality. However, a number of witnesses highlighted to us their concern that local government itself was not prepared to take full advantage of the opportunities.

86. A number of witnesses suggested to us that there is a lack of ambition in local government. Anna Turley, for example, told us that the fact that some 80% of local government budgets come from central government "has created a bit of a culture of pleading and wanting".[115] Andy Sawford, Chief Executive of the LGiU, similarly observed that "local government I think would accept, and we certainly would acknowledge, that it has not been as ambitious as we would like it to be", adding "I do not think they can hide in a corner any more and say, 'we are all being done to. Central government is constraining us and we cannot meet the public's expectations' […]",[116] whilst Sir Michael Lyons told us that, whilst central government needed to change, local government too needed "to put its own house in order".[117] Professors George Jones and John Stewart in their written evidence and Nick Raynsford MP during his oral evidence session all highlighted a culture of "deference" in local government. The Local Government Association (LGA) itself has not been exempt from criticism on this point. Professor John Stewart, for instance, felt that the LGA had "gone too far in accepting the views of central government", and had let itself be "browbeaten"[118] into signing the concordat. Baroness Hamwee told us similarly that the LGA is "too supportive of what is going on and [is] not sufficiently critical either of central government or frankly themselves."[119]

87. We have encountered examples of local government already undertaking a very proactive local leadership role. We were, however, disappointed to note that local government has become so used to existing in a culture of central control that the ambition to take on powers and responsibilities from central government is sometimes limited and even timid. Where local government has been cautious, it is perhaps understandable given past history and the untested nature of some of the new frameworks. What local government, including the LGA, needs to do now, in line with its local leadership role, is to keep testing the boundaries. The more local government can demonstrate that it has the drive, determination and vision to improve the lives of its communities, the harder it will be for outside commentators to sustain the argument that the culture in which local government operates has become overly deferential towards central government.

88. Both in their oral evidence and in a recent publication[120] the LGA made a persuasive case for cultural change also at the national level. Given the extent to which power currently rests with central government, it is on central government that the onus rests to promote cultural change at every tier of government, and hence sow the seeds for a growth in local government ambition. Accordingly, in the next chapter we will consider in more detail the role of central government in the English system.

45 These examples are taken from Roger Gough, With a Little Help from our Friends: International Lessons for English Local Government, (London 2009). Back

46 The Lyons Inquiry, Final Report, (London 2007) Executive Summary, paragraph 25. Back

47 Q 266 Back

48 Ev 158 Back

49 We consider the case for minimum standards in the next chapter Back

50 Ev 124 Back

51 Ev 164 Back

52 Ev 162 Back

53 Ev 164 Back

54 Ev 165 Back

55 Ev 165 Back

56 Ev 158 Back