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I do not think that we will ever reconcile entirely the views of my hon. Friend the Member for Mole Valley (Sir Paul Beresford) and the hon. Member for Wigan (Mr. Turner) as regards the historical background. I was in local government at much the same time as both of them. However, we can all see that there has been a kind of ratchet effect of centralisation that goes even further back, almost to the post-war period. If Professor George Jones and others came along to give evidence,
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we would probably get some alternative starting points. There is a cumulative effect that often occurs when individual initiatives seem to make sense at a particular time in a particular set of circumstances. That has created what is generally accepted as being the most centralised of all the advanced western democracies. The fact that there is pretty much common ground on that view among informed opinion is an important step forward in our seeking to move forward and address it.

Let me go through some of the issues raised by hon. Members, starting with the point made by the hon. Member for Milton Keynes, South-West-and by the hon. Members for Sheffield, Attercliffe (Mr. Betts) and for North Cornwall, among others-about the power of general competence, which I firmly support. The Government had taken the view that the power of well-being was adequate, but events demonstrated that whatever the intentions behind it, it was inadequate. In particular, the judgment in the London Authorities Mutual Ltd case, which was not available at the time, has shown very clearly that the power of well-being is not enough to give local authorities the degree of legal competence that they need. At the time when the Bill that became the Local Democracy, Economic Development and Construction Act 2009 was going through the Commons, the Government did not support Opposition proposals to amend it to create a power of general competence. I have had the opportunity to listen to the Minister talk about this in the past, but I urge the Government to reconsider it in the light of the developments in the LAML case. I think that if they did, they would have the support of all major parties in the House.

The power of competence is a key issue, but there is a general lack of power in other respects, with a needless degree of micro-management of local authorities. The hon. Member for Stroud (Mr. Drew) talked about local authority internal governance structures. I do not entirely agree that the unitary option is necessarily always the answer, but I do not have a problem with the patchwork quilt approach, to some extent. However, I share his concern about the straitjacketing of local authorities into certain limits in relation to their own internal governance arrangements. Not everybody would want to return to the committee system that most of us grew up with when we were in local government, but that option should be available.

I have never been fully convinced by the argument that the fairly rigid form of cabinet governance for all but the very smallest local authorities is absolutely necessary and has to be imposed centrally. When I was a fairly senior member of my London borough council and when my hon. Friend the Member for Mole Valley was leader at Wandsworth, I suspect that most big authorities-including Wigan, no doubt-had, in effect, a cabinet system. Our cabinet system comprised the leader and the committee chairman; we got together and drove the policy agenda and gave the officers direction. The slight difference was that we had to get matters through our committees and take at least our own group with us, but we could achieve political direction without having to go through the rigidity of imposing a cabinet structure. If we are serious about giving local authorities back power in their own house, one modest but pretty obvious thing to do is say that it is up to local
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authorities to determine their internal arrangements. Similarly, where are there are third-tier councils-parish and town councils-it ought to be open to the local authority to determine the delegation and consultation arrangements. A measure of internal freedom is consistent with my party's position and the Select Committee's report. I hope that the Government will take that on board earnestly.

There is concern about intrusive inspection arrangements, which have grown significantly. The Local Government Association has published a couple of important documents recently on the cost of the inspection regime. Each regime succeeds another. At one time we had compulsory competitive tendering, which the hon. Member for Wigan mentioned, and we now have comprehensive area assessments. Each regime brings its own burdens, and depending on where on the spectrum one comes from, one may like or dislike a particular regime, but the costs are real. The LGA has calculated the costs to local authorities of reporting upwards at something like £2 billion, which is a significant burden. The emphasis should be on reporting downwards to their electors.

Sir Paul Beresford: I have read the report, or a report on the report, and it suggests that there could be savings of £4 billion to £5 billion annually.

Robert Neill: That is entirely right, and compared with the total costs of reporting that is modest and achievable. I hope that the Government will take the opportunity of this debate to welcome and take on board that report, which is consistent with their own "Smarter Government" document and could be seized upon and worked with. My hon. Friend makes an important point, because the LGA is a cross-party organisation and its report comes from local government practitioners. I hope that it will be taken on board.

Linked with that is a matter on which I agree with both Labour Members and my hon. Friends, which is the fact that we should not regard a postcode lottery as always indicating a problem. It is undesirable if it is the result of arbitrary allocations, but where a difference in out-turns is the result of an informed, democratically driven decision, it is something not to condemn but to praise and encourage as it reflects the working of local democracy. An important cultural shift needs to be taken on board, and I am glad that it was addressed in the Committee's report.

Another real concern is the growth of the quango culture, which, again, has happened under Governments of both persuasions and over a period of years. The number of unaccountable agencies, and more to the point the degree of public spending that they take up, has grown exponentially. That is now a real obstacle between the elector-the informed and interested resident-and the governance systems, central or local, intended to represent them. I have seen one estimate that there are 1,152 quangos, including the small regional ones. There are a massive number, and they administer something like £43 billion.

I saw an interesting figure, I believe again from an LGA source, that of every £7,000 of expenditure, only about £350 is spent by democratically accountable bodies. That indicates the degree to which we have slipped into a form of centralisation and unaccountability. Many of the functions of quangos could readily be carried out
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by local authorities, and I hope that we can look forward to finding consensus between the parties as a means of achieving a transfer of many of those functions back to democratically accountable bodies. Examples have been given by Members of all parties, and many of us who have worked in the field know that greater alignment of the working of primary care trusts and local authorities could produce significant benefits. There is no doubt that good local authorities could take on valuable roles in commissioning, particularly in the local public health services. The question of acute hospitals is different, but a natural synergy could be achieved with good will and collaboration. That might not only save money, but get better results for the resident and the patient. That is significant.

Linked to that, we could simplify the number of funding streams and agencies that local authorities have to deal with. I have looked at some of the detail. It is striking that in Durham, there are 47 funding streams for social housing. How is anyone going to navigate their way through that? In Luton and Central Bedfordshire-one established and one new unitary authority next door to each other-there are 49 different public sector agencies. Such proliferation gets in the way of making government either joined up or comprehensible to the citizen. The alternative is to concentrate those agencies wherever possible-the obvious place to do that is in the democratically accountable forum of the local authority. If the Minister indicates that the Government are prepared to move in that direction, she would certainly find support elsewhere in the House.

I want to give the Minister ample time to respond to this very useful and constructive debate. I am very impressed by much of what has been said. There are some areas where more work needs to be done, but I hope we will have the opportunity to continue to raise local government issues. Sometimes we do that in rather technical terms, in relation to finance settlements and so on, as we did earlier in the week, but in a sense, they are but the mechanisms by which we try to drive the broader agenda of making services responsive to the needs of local communities. That is why the topics we have debated today are particularly important.

5.47 pm

The Parliamentary Under-Secretary of State for Communities and Local Government (Barbara Follett): I thank all the members of the Select Committee on Communities and Local Government for this timely and relevant report on the balance of power between central and local government in England. Since the Committee first raised the issue, at least three Ministers in the Department for Communities and Local Government have had the chance to comment on it-I am happy to be the fourth.

First of all, despite the somewhat discouraging comments made by the hon. Member for Mole Valley (Sir Paul Beresford), I believe that very significant progress has been made over the past 12 years in the move away from centralisation. Such centralisation has happened for more than a century, as other hon. Members pointed out, and in many levels of government-it applies not only to the relationship between local and central Government. My hon. Friend the Member for Milton Keynes, South-West (Dr. Starkey), the Chairman of the
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Committee, alluded to centralisation in her speech and made some telling points on the need to balance it with the variable delivery on the ground that could happen without it. That is at the heart of the problem that we are addressing today. Centralisation was at least in part driven in an attempt to reduce variation in delivery and increase accountability in the public services, which make such a huge difference to the lives of everyone in this country. The public services that local government delivers are the ones that make us angry or happy-they are the ones that touch our lives most personally.

I pay tribute to the way in which local government has risen to the recent downturn. Specifically in the region for which I have ministerial responsibility, the East of England, but also across the country, I have seen the magnificent response by local authorities as they rally round to help individuals and businesses at this very difficult time.

Sir Paul Beresford: I did not mention it, but several Labour Members did, pointing out that if there is a certain minimum level, variations could and should be the choice of the local population and the local authority. I think that the Minister is wrong on that point.

Barbara Follett: I agree with the hon. Gentleman that variations up to a certain point can and should be the choice of the local authority, but it is the extent of those variations and people's varying expectations that were alluded to in the debate.

Over the past 12 years, after an initial period that hon. Members have rightly categorised as intensive and centrally directed targeting-designed to get services that in many cases were of varying quality to come together and for agreement to be reached on what quality was-central Government are changing gear and reducing the number of strategic performance measures and re-emphasising the importance of local leadership and local decision making. As a result, councils have been given greater powers and freedoms and, thanks to the first ever three-year settlement, greater financial stability.

I am glad that my hon. Friend the Member for Wigan (Mr. Turner), whom I look forward to welcoming to the Department in the new year, recognises the benefits of this settlement and I am sure that he, like me, will discuss the benefits of rolling settlements with the Secretary of State in the new year.

We have also reduced ring-fencing and devolved powers, which, as I am sure my hon. Friend the Member for Stroud (Mr. Drew)-once a member of my local authority, Stevenage borough council-will agree, has allowed the proliferation of parish councils. That can only be a good thing. In my own constituency and region, they have really grown and begun to flex their muscles locally. These increased powers have also led to councils making and enforcing some byelaws and getting increased choices in the democratic processes, both electorally and on leadership matters.

As the hon. Member for Bromley and Chislehurst (Robert Neill) will be glad to hear and as he knows from previous interactions with me, discussions on the general power of competence are ongoing within Government. Although they are at a very early stage, this space is definitely worth watching. We are also looking at ways in which councils can raise money for specific local
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economic projects, and a great deal of work is being done-as yesterday's pre-Budget report alluded to-on ways in which councils can raise money with things such as tax increment financing, renewable heat and light incentives and feed-in tariff revenue streams.

Most recently, the Government introduced the Business Rate Supplements Act 2009, which only received Royal Assent last month, so that county and unitary authorities and the Greater London authority could retain the proceeds of a supplement levied on their business rates to invest in additional projects aimed at promoting economic development-I emphasise the words "economic development"-in their area. As some hon. Members mentioned, we have also introduced the business improvement districts.

We have given local councils an enhanced role in leading their communities, shaping their area and bringing their public services closer together. Indeed, since 2007, we have given this co-operation a statutory underpinning in the shape of local area agreements. Despite the remarks of the hon. Member for Mole Valley-in future we should call him the grand old duke of Mole Valley-we have reduced the performance management burden on local authorities, working alone or in partnership, by reducing the national indicator set to a suite of 188 measures and setting a cap of 35 on the designated improvement targets set by local area agreements. In 2011, we hope to review and consult on the indicators set and to reduce their number even further, and under sustainable communities legislation, citizens can put forward proposals for change in their areas through their local councils.

Alongside those improvements, we have introduced extended scrutiny arrangements to give local councils and their electorate a powerful tool with which to influence the decisions that affect their daily lives. Measures in the Local Democracy, Economic Development and Construction Act 2009 will further extend those, and we will use the Act to change the law to allow local authorities, and other "best value" organisations, to enter into much-needed mutual insurance schemes. In those and many other areas, the Government have demonstrated regularly how seriously they take their relationship with local government. Our ratification of the European charter of local self-government in our first 12 months in office is a good illustration of that commitment. The central-local partnership and the joint signature of the central-local concordat in December 2007 are further clear indications of the value that the Government place on their special relationship with local government.

The debate about the balance between central and local government is not, however, just an academic exercise; as I said earlier, it is about getting the highest quality services for local people. That is where the Total Place approach, as outlined in this week's White Paper, entitled "Putting the frontline first: smarter government", will help to make a real difference on the ground by giving local areas more control over what they spend their money on and by reducing burdens, especially where the cost of national performance monitoring, assessments and data collection outweighs the benefits to local areas.

Once again, and despite allegations, we have made a very serious attempt to reduce burdens, and I hope that
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in putting the front line first, we will go even further through the commitments to reduce burdens. Our measures to put the front line first will go hand in hand with a new drive to make more comparative performance data public and to allow the Government and the people to hold service providers to account for the safety, quality and cost of the services they provide. The new comprehensive area assessment, also announced this week, has a part in that openness and transparency. Unlike its predecessor-the comprehensive performance assessment-the CAA focuses on outcomes delivered by councils in partnership with other local service providers, rather than just on the performance of individual councils.

Despite councils in some areas performing very well, internally and externally, some areas have been flagged up-for example, my county council of Hertfordshire and the provision of social housing-as causing concern. Those areas have been given a red flag. Making data available to the public empowers the public. Total Place is a revolution and will revolutionise how we deliver public services locally, regionally and nationally. We are looking at a huge change, some of which I have seen beginning on the ground. And it works!

Places such as Margate are delivering a comprehensive range of services through the portal of the local library. People can go and talk about refuse or their housing benefit, or attend a sexual health clinic while simultaneously taking their children to the local library. I am glad to say that the number of children attending that library has trebled over the past few months. We are making a huge assessment of assets in areas such as Kent. It is this kind of drive-

6 pm

Debate interrupted, and Question deferred (Standing Order No. 54(4)).

The Deputy Speaker put the deferred Questions (Standing Order No. 54 (5)).

Vote on Account, 2010-11

Department for Business, Innovation and Skills


Department for Communities and Local Government


The Deputy Speaker then put the Questions on the outstanding Estimates (Standing Order No. 55 ).

10 Dec 2009 : Column 607

Estimates, 2009-10 (Navy) Vote A


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