Session 2010-11
Publications on the internet

UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 547-v

HOUSE OF COMMONS

MINUTES OF EVIDENCE

TAKEN BEFORE THE

COMMUNITIES AND LOCAL GOVERNMENT COMMITTEE

LOCALISM

MONDAY 20 DECEMBER 2010

DR ROB BERKELEY, GEMMA BRADSHAW, DAVID CONGDON and VIC RAYNER

JESSICA CROWE, STEVE FREER, JOHN KIRKPATRICK and EUGENE SULLIVAN

Evidence heard in Public

Questions 213 - 255

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Oral Evidence

Taken before the Communities and Local Government Committee

on Monday 20 December 2010

Members present:

Mr Clive Betts (Chair)

Simon Danczuk

Mike Freer

Stephen Gilbert

David Heyes

George Hollingbery

Examination of Witnesses

Witnesses: Dr Rob Berkeley, Director, The Runnymede Trust, Gemma Bradshaw, Policy Advisor, Communities and Transport, Age UK, David Congdon, Head of Policy and Campaigns, Mencap, and Vic Rayner, Chief Executive, Sitra, gave evidence.

[George Hollingbery in the Chair]

Q213 Chair: Good afternoon. Thank you very much indeed for coming. My name is George Hollingbery. I am not traditionally the Chair of this group. I’m afraid the Chair has not yet managed to make it down to London. I apologise in advance to you and to the assembled audience because I am not as well briefed on these papers as I would have been had I known I was going to chair the meeting. Please excuse me up front for perhaps not being quite as fluent on these issues as I might otherwise have been.

We are scheduled to finish this session at 5 o’clock, and I will be ruthless in ensuring that we do. At this time of year, everyone has other things to do. There are four of you, and if questions have been answered, please don’t repeat those answers, but if you feel you have something to add, feel free to make a comment-don’t feel inhibited in any way, shape or form.

The first thing that occurred to me when I looked at your submissions was that you are all very nervous about the idea of localism, particularly as you are mostly national organisations. There seemed to be a unanimous belief among you that there were real problems for minority groups when power was devolved down.

It is also fair to observe that lots of you talked about the spottiness in the provision of services. Even under the current system, it is fairly clear, is it not, that centralisation hasn’t delivered an absence of postcode lotteries; there are different outcomes in different places. Just explain a little further for us and for the audience generally why localism could be dangerous for minority groups and why postcode lotteries are necessarily a bad thing.

David Congdon: I am David Congdon from Mencap. As you say, localism is not new, in the sense that lots of services are delivered locally; indeed, on the one hand, most of the work that Mencap does is delivered locally through contracts with social services for housing and support under community care legislation. We then have a large number of local groups doing all sorts of things at a local level who are funded by individual local authorities and who often provide low-level support to people who fall outside the eligibility criteria set by social services under community care legislation.

The concern generally is not so much about localism in principle, because localism is here, it’s been here a long time and the trend is obviously to accelerate responsibility downward. The concern is that when decisions are taken at a local level, they are inevitably based on pressures at a local level. People at a local level-councillors, in particular-know best what needs to be done in their area, but there is a danger that minority-group interests can be missed out, although that does not necessarily have to occur.

The generalised example that I would give is that things that are very visible tend to be-this is not always the case-the things that will be protected. I probably shouldn’t mention street cleaning in the current climate, with snow all over the pavements, but things like that are very visible, as are things like town centre environmental issues. If the eligibility criteria for social care services to individuals with, say, a learning disability are cut, and those individuals see their day activity decline from, say, five days a week to three days a week, the only people who know about that are the individuals concerned and their families. That is the danger.

A general point would be that, with increasing localism, there is a need to have mechanisms in place-a framework for accountability is the sort of thing we need. It is very hard to define exactly what that should contain, but we need something to ensure that, as far as possible, what the Government will through funding-most funding for local authorities comes from Government-actually gets delivered at a local level.

Vic Rayner: I’m Vic Rayner. I’m the chief exec of Sitra, which is a national membership body that focuses particularly on housing care and support. A lot of the housing-related support services provided have been funded primarily through the Supporting People programme. Part of our concern, which we raised in our submission, comes from looking at Supporting People as a kind of microcosm of the impact of localism. Two years ago, Supporting People went from an essentially ring-fenced fund, to one that was not ring-fenced through the area-based grant. Our concern is that some of the things that have happened since the lifting of that ring fence, and the way that those things have impacted on the provision of services to the most vulnerable people and the engagement of those people in the development of future services and provision, could be played out on a wider scale through wider devolvement.

Q214 Chair: I am interested in the actual evidence. Could you develop that a little further? There is no need to name names, but just tell us roughly what happened and how it affected vulnerable groups.

Vic Rayner: In 2009, the ring fence was lifted and Supporting People became a named grant within the area-based grant. Over the past 18 months, a number of high-profile authorities took very significant cuts to the Supporting People programme, which came into effect at the end of last year and the beginning of this financial year. Some research has looked at the impact of those cuts within the localities, and we’re already beginning to see some of the changes and reap some of the impact of that. I can give more information to the Committee if it would like to look at research carried out by one of the Link services in a locality that made severe cuts to SP funding in 2010-11.

The level of cuts is talked about across local authorities, and Supporting People funding is seen as one of the budgets that may take a very significant hit. Some research carried out by ADAS came out last week. It stated that 82% of adult social care directors felt that SP funding would have little or limited protection in the round of cuts. Part of what we see is that although the nationally prescribed Supporting People funding was given "relative protection" within the spending review, as it goes out to local authorities for decision making, it is seen as a high risk and a budget that could be taken away from meeting the needs of the most vulnerable.

Q215 Chair: But that is not necessarily a reflection of problems with localism as much as with cuts. I understand that the localism element is making those people vulnerable, rather than the allocation of the budget, but the fact that there is a context of cuts at the same time is perhaps a rather poisoned chalice.

Vic Rayner: Potentially, having the decision about the ring fence made at a time of significant economic pressure might be part of that picture. At the same time, the level of cuts being talked about does not necessarily bear a direct relationship to the level of cuts that the authority is receiving as a whole. The impact on the most vulnerable in that setting will be more significant than the potential cut to the authority as a whole. Again, there are examples of authorities now out in consultation that are looking at cuts of between 40% and 67% to SP funding, whereas the cuts to the authority over the four-year period would not be anything like that. It feels as though there is a disproportionate impact on the most vulnerable within that sitting.

The other part of the issue concerns the engagement of those most vulnerable within the decision-making structures. A year or so ago we carried out research looking at the engagement of the most vulnerable people within the local strategic partnership framework. Already, some significant challenges were emerging in getting the voices of the most vulnerable heard within that decision-making process. As David mentioned, it feels as though, without careful support and investment in working out the right framework for that engagement and the future, the needs of the most vulnerable would be pushed out of that decision-making process.

Chair: I am already breaking my own rules about time keeping. Sorry.

Gemma Bradshaw: I am Gemma Bradshaw from Age UK. As we say in our submission, we raised some concerns about the idea of localism, but that was more about the limits that we want to put on localism rather than localism itself. We think that if you have more community engagement and involvement in a localism framework, you would actually improve outcomes for older people. The question is how do you ensure that that happens within a new localism framework. Unfortunately, we have seen in the past that when local authorities have been given more flexibility about their priorities, they haven’t always prioritised older people. For instance, when they were given the flexibility within the local area agreement to pick indicators for what the priorities were in their area, although there were three indicators that focused on tackling poverty and greater independence for people in later life, only a handful of local authorities picked those indicators. Obviously, that was part of a different system, and there may be many reasons why those indicators weren’t picked, but it showed that at a point when they had to prioritise, particularly when they had a growing and ageing population, they didn’t take the opportunity to focus minds on that particular issue.

We want to make sure that when local authorities are given greater freedom and more flexibility, there are certain checks and balances in that process. Meaningful participation is a particularly important part of this, and we need to make sure that minority groups are able to do that. Many older people also face different forms of discrimination-gender, sexuality, race-and we need to think about how we bring all these people into the process.

I’m also particularly concerned about accountability and whether there is some possibility still to have national outcomes that all local authorities will be looking at. We’re going to have outcomes for health and social care which local authorities will be looking at, and they could be coming in balance, whereas there aren’t national outcomes for other services that they’ll be looking into.

Q216 Chair: We will come on to accountability a little later, so we’ll move on if we can.

Dr Berkeley: Robert Berkeley from the Runnymede Trust, a race equality think tank. You described us as nervous about localism, but we’re really excited about the potential that localism could provide. What we would be excited about is a real form of democratic local accountability that works for everybody in those areas, but we know that there are some major challenges to get there. The leap to localism suggests that there is an end point but not much of a story about how you get there: how you get competent citizens, well informed, with the information that they might need in order to take part in that. That’s going to be particularly true for those in marginalised groups, who may have a different set of experiences around public services in the past, but also educational experiences etc.

The spectre that comes most to mind in terms of issues around race equality is Travellers and the failure to deliver Traveller sites over a long period of time. There are increasing worries in Traveller communities about localism and what it will mean in terms of the difficulties in getting those sites established.

You mentioned postcode lotteries. We recognise that there’s a massive diversity of experience of services across different spaces and places, but a lottery doesn’t seem to describe it, because too often, there are certain areas that do badly and some areas that very rarely win. We find that those areas that experience high levels of deprivation are often those areas where people from minority ethnic communities are clustered. We understand that there will be a diversity of services and a diversity of outcomes, but we are very keen to understand what the minimum safeguards need to be in all areas across the country.

Q217 Stephen Gilbert: I am struck, reading your submissions, that there seems to be a sense that all the organisations are after a remaining degree of centralised control and some centralised targets. I put it to you that you’re trying to have your cake and eat it. On the one hand, you’re welcoming localism, but you’re saying, "Only this kind of localism is acceptable." Looking at the removal of ring-fencing for Supporting People, for example, what specific concerns are there about the removal of ring-fencing and of the national targets that go with it?

Gemma Bradshaw: We’ve seen a number of examples where the removal of ring-fencing in particular around funding has meant that we have not seen the outcomes that we were looking for. I would move it away from targets and saying that there are specific numbers of things you need to a more generic understanding of what expectations people have of our local authorities. This is particularly important if we are removing any kind of performance management system, because if people, as individuals, are supposed to be challenging the local authority and saying, "This is what I expect," they don’t necessarily have any understanding of what they have the right to expect. I’m talking about people having some understanding of what outcomes they may have for certain services. Maybe that’s where I’m trying to have my cake and eat it.

Vic Rayner: I’m not sure about having my cake and eating it. Certainly in our submission to this inquiry and in the previous submission about the lifting of the SP ring fence, we have been asking for serious consideration of reinstatement of the ring fence, particularly around more disadvantaged groups. Part of the rationale for that is that there are significant concerns that those particular groups-perhaps those that aren’t necessarily the most electorally popular or those that don’t have a voice within the electorate because they’re in prison currently or are outside the electoral system-may need additional protection.

For me, there doesn’t seem to be a particular dichotomy between central Government giving some direction about the money that is allocated for Supporting People spending and then saying to the local authority, "You have some responsibility to spend that in the way that you see fit through a need strategy." In relation to Supporting People, although there was some central direction about the money and some of the processes in place, how that money was spent was very much based on a local agenda, a local strategy and local involvement, particularly of service users and those within the community, regarding the kind of services that were required. It doesn’t seem to me that it’s necessary to say, "Here’s localism. We’re stepping away completely from any responsibility."

The other point on Supporting People funding is that the money that was put together to make up Supporting People involved a partnership of funding. It wasn’t just the local authorities’ money. The local authorities then became administering authorities. What needs to be in place is an understanding of how all those partners can be involved in further decision making, whereas at the moment, the way in which cuts, certainly, are being portrayed is that this is a local authority making a decision about its own money, and actually that money came from a very significant partnership including other members.

David Congdon: May I add to that? This adds to what I was saying earlier. We’ve certainly always argued that we prefer ring-fencing, unashamedly. We recognise the debate has moved on, so there’s no point, in a sense, in going over that, but it still leaves the fundamental question that if Parliament or a Government Department says, "We want to spend £1.4 billion on Supporting People," or says "We want to spend this money over the next four years, building up to £1 billion, on new social care reform grant," what framework is in place to ensure that money is spent broadly in the way that Parliament intends?

We recognise we’re moving into a scenario of outcome frameworks, particularly in the field of social care. Again, there is no disagreement in principle, but there is quite a challenge in ensuring that that does actually mean what it says on the tin-that you do end up with the £1 billion in that example, along with the other £16 billion spent on social care, delivering improved lives for the group that it is intended to deliver for. I don’t in any way underestimate the challenge of doing that. We have regulators and inspectors who don’t always identify when things are going wrong. We have the Public Accounts Committee and bodies like that, but the more money is devolved-an enormous amount of money is devolved; there is no problem with that-making sure that it does deliver in the way intended is, we would argue, very important, particularly for marginal groups, but not just for marginal groups.

Q218 Simon Danczuk: My question relates to what you’ve been talking about. It is about what national safeguards need to be put in place for vulnerable and minority groups. If that is to be the case, how do Government decide which vulnerable and minority groups should be protected?

David Congdon: I wish I could give you a definitive answer. It is easy to analyse the problem. I have read some of the previous evidence, which does highlight some of those difficulties. At one level, there has been an inspectorate that has changed its form from CSCI to the Care Quality Commission. I am slightly nervous to say that that is a panacea, because I think of some of the things that have gone wrong on its watch, if I may put it that way.

Nevertheless, despite the difficulties, having a framework that says that we are trying to achieve certain things for this group of people and then monitoring it in not too heavy a detailed and bureaucratic way but in a broad way, has to be the way to go. Ultimately, in the field of social care, often to check what is going on, you have to have inspections on the ground, what quality of care is being delivered, both in residential care homes and in supported living situations, and then try to do that at a macro level as well. Simply to say that we have inspected some homes and they are doing well does not necessarily answer the question, "Is that group of people getting a good quality outcome from that particular social services department?" It is a challenge: I wish I could give you a more definitive answer. What we want to do is flag up that that there is a need to have mechanisms in place that ensure that degree of accountability.

Dr Berkeley: Some groups are protected by the Equality Act 2010. It is worth thinking about how the Equality Act is put into action, particularly with the proposed cuts to the Equality and Human Rights Commission and, at a local level, what kind of local transparency and forms of accountability could be developed. We had an extensive structure of race equality councils across the country. In 2007 there were 100, now they are down to 42 and they seem to be declining. I was in Gloucester recently and there was one member of staff in the race equality council. I am keen to go with the spirit and suggest that localism can deliver, given local accountability to local citizens, but the structures need to be in place. I suspect that they are not currently. I do not hear any plans to support and establish those local organisations that might begin to hold local authorities to account a bit more on equality.

Gemma Bradshaw: May I add a point on the public sector equality duty? That is an important piece of legislation coming through. It is a particularly big step forward for age discrimination. We want to raise the concern that, when we start to look at new models, it is not just the local authority any more, it will be community and voluntary groups. How will the public sector duty transfer to them when they start looking at running services? We are concerned that we don’t lose what has been a big step forward when we start looking at the new models delivering.

Vic Rayner: I have a couple of quick points about safeguarding. That I suppose goes to the supported people services, but the quality assessment framework has been developed and intended as a localism tool for quality management. It looks at services very much from a local perspective, involving service users within the inspection framework. From that point of view, it works as a good mechanism and tool for accountability.

Another area of concern in the shift from Supporting People funding into formula grant is about that transparency and accountability, and about how once that money is put within formula grant, how difficult it is going to be to hold the local authority to account about the level of funding it is spending on Supporting People and housing related support services, and therefore how effective and appropriate those services are for the local community. There are big issues there about how safeguarding at a national level can be thought through in terms of how that national funding is being allocated, then taking that further to a local level to say, "Within our locality we have this much money that should be spent on housing related support, because it has been identified as a need." Yet it is going to be very difficult to hold that local authority to account. There are concerns there.

Q219 David Heyes: The area that I was going to ask questions about has been covered to a great extent, so I think that my question only needs a brief response from each of you. Whatever your concerns or worries about the role of local authorities in this, including whether they need some direction or framework from the centre, they are still key players and will continue to be key players. What should they do themselves? What can local authorities themselves do to improve their understanding of local needs and to ensure that we avoid some of these traps that you are fearful of?

David Congdon: One of the things is consulting very deliberately with minority groups. We would say, as a learning disability charity, that they should do more consultation with people with a learning disability. In fact, there is a mechanism at the local level, called learning disability partnership boards, which was set up in 2001 when "Valuing People" started out with the original White Paper. There was a subsequent document, "Valuing People Now", a couple of years ago.

One of the problems with those mechanisms is that they are not on a statutory basis, and the research evidence is that they are often marginalised. So one message that we want to put across very much is that local authorities should engage very powerfully and deliberately with minority groups and listen to them, to enable them to play a part in that local democratic process.

Dr Berkeley: I would add that just being transparent is not enough; being accountable is important too. So it is not just a case of publishing reams and reams of Excel sheets, but of trying to find ways of giving that accountability back to citizens. There are some really good examples, as in Ipswich in Suffolk, where the Race Equality Council has produced a scorecard that is very accessible for the local citizens, which is worth having a think about.

However, the fact that those local organisations are disappearing at such an incredibly fast rate suggests that local authorities are already standing back from supporting local organisations that challenge them. I think that local authorities should welcome some of that challenge, rather than always responding negatively to it.

Gemma Bradshaw: I would agree with both those points and I would add that it depends on how you carry out this consultation and engagement. We did some research looking at the latest NHS proposals, and 60% of the older people we surveyed agreed that local decision making is the right way to go. They also agreed that they would like to be involved in some way; but when you ask them if they want to be on a committee or involved in a consultation, the figures fall to less than 10% in many cases.

So you’ve got to think about what people are getting out of this process. Do they feel like they are really influencing the change, or are they just part of another tick-box exercise? I think it’s how you do this that matters.

Chair: Simon, I think that that leads us on to the next question that you wanted to ask, so perhaps we can move on to that.

Q220 Simon Danczuk: Yes. You were mentioning some ideas that have been used to involve marginalised groups or vulnerable groups in the local democratic process. Overall, do you think that local authorities are particularly good or particularly bad at that, and do they need to get better if localism is going to be successful?

David Congdon: That is a really difficult question to answer. When we looked at some consultation exercises that have gone on, my criticism would be that they are often misleading in terms of what they are consulting on. So, to give you a practical example, one of the issues in the learning disability field is about day centre modernisation, which most of us would agree is a good thing. Sometimes when you read the consultation documents, the words are fantastic, the vision is fantastic, but where is the meat? What will it actually mean for, say, the 800 users of existing facilities? Is there a guarantee that they will get some alternative, because that is often the issue-which alternative is better?

When you read the consultation documents, it is often quite difficult to know what the consultation is really saying. So, the consultation has to be really meaningful and it must be very straightforward in clear, accessible language that anybody can understand. Otherwise, you get not a lot of people responding and, if they do respond it is not terribly meaningful in terms of an answer. So there should be an honest, straightforward, transparent consultation about what the issues really are and a willingness to follow the response-not always to follow it rigidly but certainly to take on board those concerns.

I’ve seen consultations where the response has been pretty negative, but you wouldn’t know it when you read the report that’s gone back to the council committee. That’s not fair. It has to be open, fair and transparent.

Vic Rayner: I think the other point I would add to that is that it’s not a cost-free option. A meaningful consultation is expensive and involves time, and really to get to the bottom of how people feel and can get involved in the community isn’t something that’s going to be easy and straightforward; but there are huge numbers of good practice examples out there, and I think, just to pick up on Mr Heyes’s point as well, it is about what can local authorities learn around engagement. I think it is partly about listening to partners, because there will be partners that they can work with who’ve got very effective and key routes into working with the more vulnerable people. There needs to be perhaps a levelling of that partnership approach that enables those voices to be heard at the right level-and getting people engaged early enough in order to have some kind of meaningful dialogue within there. But there are some very good examples out there-very creative, inspirational examples where people have made that change-and it fits into that model of encouraging active citizenship and encouraging people to move and become part of their community.

Q221 David Heyes: Where? Can you name them, exactly?

Vic Rayner: We’ve done quite a lot of work up in Bradford with the service user forum there-a very active, very engaged group of people who have contributed not just to agendas around supporting people but around a whole wide range of areas. There are other examples in Bolton and Torbay. These were all leading examples of authorities that really took on board service user engagement.

Q222 Simon Danczuk: It does puzzle me though-this is the question-that this doesn’t seem to apply across the board of local authorities, or to the majority. It’s always good practice examples in a small minority of local authorities, which causes me some concern.

Dr Berkeley: You are right to point to this, because there is a real problem with us not knowing. We know that there’s a lot of activity going on. We don’t know what the impact of that activity is, or what the outputs are, so there are numerous BME forums up and down and around the country. The people who take part say that they had a very nice afternoon. Whether that actually has left them feeling more involved or more engaged in decision changing, they are not sure. The citizenship survey seems to highlight that there are certain groups that constantly feel left behind, left out, of decision making, but we may not have that citizenship survey much longer.

Gemma Bradshaw: Similarly, we have examples of where our local partners, Age Concern, or Age UK, have been involved with the local authority, helping them to point to the priority needs, but they have been also been able to help facilitate some of the discussions, which might otherwise might have been more difficult. For instance, in Rotherham, Age Concern has been working in the residential care sector, working with families and residents so that they can influence their service and change the service in Rotherham. That’s an area where normally people in residential care wouldn’t necessarily feel that they could communicate or change their services. But, as you say, it is trying to make sure that these good ideas are across the board.

Q223 Chair: Dr Berkeley, you might want to stay for the next session if you have the time, because we’re going to be talking to the Audit Commission about monitoring outputs and so on, so it might be of some interest to you to come along to that.

I was going to ask about the danger of services becoming atomised in your particular fields. I think I already have the answer to that. I suspect-there’s not much point in pushing this-you believe, although this may be putting words in your mouth, that there is a real risk of these services becoming atomised across the country, and so individually delivered that you lose the strategic approach. It did prompt, though, another thought in me, which is: I just wonder if you, as organisations, have been able to tease out and separate the danger that your organisations face in terms of national policies and the ease of dealing with one organisation rather than a whole myriad across the country, and whether some of your thinking might be coloured by that. It’s an unfair question, to be honest, but I think we’re all human beings and it’s worth asking it.

David Congdon: I think it certainly makes campaigning harder-there’s no doubt about that. I reflect on the fact that you can fight very hard to get laws changed, which is a typical campaigning activity, but then actually you’ve got to fight 152 local battles to get change on the ground. But I think a broader point is that balance between what should be decided nationally and what should be decided locally is critical. In the social care field, all the reading of the work done on the previous Government’s consultations on the Green Paper and the White Paper showed there was a strong consensus on some significant strategic changes in terms of having a much stronger national framework, albeit with a local delivery mechanism. From the provision point of view, most of our organisation’s work is done through bilateral negotiation with individual local authorities, so what you’re talking about doesn’t really make any difference to that.

Q224 Chair: Listening to what’s been said, it occurs to me that in another area-the NHS-the Government are looking at separating a national commissioning service and a local commissioning service, so these things aren’t without precedent across Government.

Vic Rayner: This is back to the cake, isn’t it? When you talk about services being atomised, meaning that it’s very difficult to compare like with like, it’s important to mention that we’re not seeking to have a completely standardised housing-related support service that looks exactly the same and feels exactly the same in every locality. That’s not what we’re focusing on. I completely agree with David that, in terms of influencing policy, life will be more challenging as we think how to work with different authorities, but we do that all through our membership structure anyway, because our members work with different authorities.

You’re not talking just about changes to membership or national bodies like ourselves. Many of our providers-particularly those working in London-might work across 30 or 40 different authorities. One of the other challenges that comes from taking away ring-fencing or the national parameters that determine how funding will be applied is that bodies need to think about how to meet the commissioning structures, the different priorities and the different monitoring and regulatory arrangements for different authorities. The challenge for voluntary and community sector organisations, which are already trying to meet authorities’ efficiency targets through their commissioning procurement structures, is enormous.

So, yes, supporting our members in that will add to the challenges of organisations like ourselves, and our members are already incredibly challenged by the changes that are in effect and those that are coming in the future. You mentioned the changes around the commissioning of health services in the future and the fact that we will potentially have two local funding sections. Provider organisations and, therefore, the service users they work with will need to understand and engage with them to be effective local participants in strategy formation.

Gemma Bradshaw: We are a national organisation. Obviously, local Age UKs and local Age Concerns have been influencing things in this way for many, many years. It will give us some challenges, but from working in partnership already-providing services, but also influencing things-we’ve seen that localism can work. That’s why we’re cautiously positive about localism.

Dr Berkeley: We’re 15 people in the corner of east London. We have always tried, and we will continue to try, to give people the evidence and information they need actually to make a difference at their local level.

Q225 Chair: Thank you very much for coming in today. I feel we haven’t really done you justice, so I apologise for that. My sincere and extended thanks for coming in on a particularly difficult day. I hope you feel you’ve had a chance to say everything you wished to. You’ve got two minutes left. If there are any burning points that you wanted to get on the record, but which you haven’t been asked about, please fire away.

Vic Rayner: You mentioned the challenge of moving to a local agenda, but we as an organisation feel that that will not stop us talking to central Government, and trying to encourage central Government to continue taking a leadership role on the protection of the most vulnerable people and honouring the direction that they set out in terms of making sure that the most vulnerable are protected. That’s our continuing commitment.

Chair: Splendid. Thank you very much indeed for your time.

Examination of Witnesses

Witnesses: Jessica Crowe, Executive Director, Centre for Public Scrutiny, Steve Freer, Chief Executive, CIPFA, John Kirkpatrick, Director of Studies (London), Audit Commission, and Eugene Sullivan, Chief Executive, Audit Commission, gave evidence.

[Mr Clive Betts in the Chair]

Q226 Chair: Good afternoon and welcome to our further evidence session on localism. Just for the sake of our records, could you say who you are in the organisation you represent?

Eugene Sullivan: Eugene Sullivan, chief executive of the Audit Commission.

John Kirkpatrick: John Kirkpatrick, director of studies and policy at the Audit Commission.

Jessica Crowe: Jessica Crowe, executive director at the Centre for Public Scrutiny.

Steve Freer: Steve Freer, chief executive of the Chartered Institute of Public Finance and Accountancy.

Q227 Chair: You are all welcome. Certainly you’ll have a chance to have your say, but if you happen to agree with what’s been said, you needn’t say it again. You can just say "I agree" and we are more than happy to put that in our records.

We’ve got a very centralised democracy in this country. A lot of our resources come from the centre, and therefore accountability is back to Government for the spending of that money. Can localism ever really work in such a situation?

Steve Freer: I think we can have a form of localism in that situation, but I do think that for localism to work really effectively we need to align local decisions with locally raised resources. I think that’s when localism works most effectively, because I think that’s the arrangement that local people can get their heads around, as it were. They can see who’s responsible. They can see where they need to put pressure in order to secure accountability. I think where we have a mixture of local decision taking but resources raised at the national level and allocated to local authorities, sometimes accountability can get quite confused.

Jessica Crowe: I would agree with that, and say that even in a centrally driven performance framework you could have more localism than we have at the moment if there was a clear focus from the centre on outcomes, but leaving it to locally elected bodies to determine the how; because people at a local level know the problems at local level-know what to achieve. There may be some congruity with what the national Government wish to see achieved, but they should state that more in outcome terms and not try and set out how it should be done at local level. They should leave that more to those who understand their areas better.

One of the problems that we have in our system is that we don’t really have a definition of, or a clear agreed consensus on, what local government, as opposed to local administration, is for. I think it’s quite difficult to talk about some sort of localism in the absence of that clarity.

Eugene Sullivan: I broadly agree with colleagues, and particularly with Steve’s point about the purest form being linking spending powers with tax-raising powers. Notwithstanding that, one could go further in moving away from state and central control to engage more with local citizens about the services and priorities in their areas. I think the question is: how? How far do you go, and what arrangements do you put in place to deal with the accountability arrangements?

Q228 Mr Clive Betts (in the Chair): What arrangements do you think there should be, then?

Eugene Sullivan: First, at the local level, the people responsible for spending the money should be accountable not just for the money that they spend but for outcomes for the people they serve. Their first duty is to give an account of their accountability, and they can give that through financial returns and reports, by publishing performance data or through their newsletters. Those who gave the money are entitled to hold them to account, and they should hold them to account for the same sorts of thing. As the Centre for Public Scrutiny said, that holding to account should be proportionate. It should be less onerous the less important the sums involved are, and a bit more rigorous if it’s material sums.

Q229 Mr Clive Betts (in the Chair): Even if we move to a more localist agenda, and even if we take the point up and if perhaps there is more responsibility for raising finance at a local level, we’re still going to have quite a proportion of money always coming from central Government, even if it’s only that element that deals with balancing up the different needs, deprivations and resources of different authorities. In terms of accountability for that spending, should that come to Parliament, as opposed to Government? Should there be a different form of accountability to Parliament for finance that comes from the centre, if we are going to get away from the idea that the Government control everything at local level?

Eugene Sullivan: There is a well-established pattern for accountability to Parliament for the moneys voted by Parliament for the purposes for which it was to be used, and I don’t think that should change. At the moment, that comes in large part through the regime of the Audit Commission, and through the oversight of that through the National Audit Office. I still think that would be there, but it’s a question, again, of what would be proportionate. At the moment, about £73 billion of local government spend comes from Parliament, and it gets that assurance through the existing accountability mechanisms, so there isn’t heavy scrutiny from Parliament of that money.

Q230 Mr Clive Betts (in the Chair): I would probably challenge that. There’s scrutiny of particular aspects of spending from time to time, isn’t there? The National Audit Office does it, and the Audit Commission gets involved through comparative value-for-money studies.

Eugene Sullivan: Yes.

Q231 Mr Clive Betts (in the Chair): But Parliament itself does not devote a great deal of time to holding spending to account at local level, does it? All that money, and very little time in Parliament, proportionately. Is that something that’s going to have to change?

Steve Freer: I think I would draw a distinction with demonstrating proper stewardship, which I think is the appropriate description. If moneys come from the national level down to local level, I think it’s reasonable to demonstrate proper stewardship in relation to that money. As I think Eugene was hinting, one of the primary mechanisms for that is through audited grant claims. I think that’s really what he was referring to. I think the primary accountability for that expenditure should still be to the local taxpayer. The fact that it’s now my income tax or my VAT that’s being spent, not my council tax, seems to me to be a mere detail. It’s still taxpayer resources that have been spent locally, and for which there should be proper and primary local accountability.

Jessica Crowe: To add to that, I think one of the things this Government have said they’re interested in is shifting from a bureaucratic form of accountability to a more democratic accountability. If you were going to move along those lines, not only should there be more scrutiny by democratically elected representatives at local level, as I think Steve is suggesting, but there could usefully be more co-operation between scrutineers at national level-yourselves-and scrutineers at local level to get that balance and understanding right, so that lessons can be learned with regard to how a policy is rolled out on the ground, and how money that was voted by Parliament is transferred down through the Departments. How is that developing on the ground? Is that money being spent well? Is it delivering what it was intended to? That sharing of evidence between the national and local could perhaps add something to what we have at the moment.

Q232 Mr Clive Betts (in the Chair): Do you have any practical examples of how that might work?

Jessica Crowe: If a Select Committee was investigating a particular policy, or looking at how a piece of legislation had worked and whether it had delivered what was intended, it might call for evidence from local authority scrutiny committees, to say, "Have you investigated such issues?". We have a library at the Centre for Public Scrutiny of scrutiny reports from local authorities, and it contains more than 3,000 reports, so there is quite a rich source of data about issues that have been investigated and evidence that has been gathered locally, which could perhaps usefully inform work at national level, and vice versa; local scrutineers understanding more about the national policy-setting agenda and influencing it could be valuable.

Q233 Simon Danczuk: Do we need national minimum standards for services, to reduce the possibility of a postcode lottery in terms of localism?

Eugene Sullivan: For some services, you may well do; people talk about the postcode lottery. We may have some variation of services at the moment. The important question under localism would be: is the variation intentional, and is it agreed locally and held accountable locally, or is it just something that happened? I think that it’s quite important for the Government, in their definition of localism, to decide exactly where to draw the boundaries around those standards.

Q234 Simon Danczuk: Are there any particular services that should or should not have standards?

Eugene Sullivan: One tends to think mostly about the services for vulnerable people. Again, the Centre for Public Scrutiny made the point that most complaints about a postcode lottery are about health, and you can understand that. There is a general tendency for this nation to want fairness, and fairness seems to mean equality of treatment wherever you happen to live, understandably.

Jessica Crowe: A lottery implies that there is no rational basis for the choice that has been made, and I think that if there was a process by which the choice could be made-and, importantly, influenced before it was made-then it would feel less like a lottery for people. When I was a councillor, I always found that even when people didn’t agree with the decision that you made, if they’d had the opportunity to have their say and understood the basis for the decision it made quite a difference to them and it felt fairer, even if they didn’t agree with the final decision, so I think that it is having that opportunity for influence and being clear about the reasons for a decision that matter. I think that that could be most appropriately done by elected representatives who can be held to account for making that decision, informed by professional advice where that’s appropriate.

Q235 Simon Danczuk: Do you think that there should be some national standards, or not?

Jessica Crowe: Yes, I think there should be. As Eugene said, it is where the sort of "life and limb" services, and vulnerable people, are involved. Equally, it is entirely proper for a national Government, with a mandate, to wish to set up some things around equalisation of resources and that sort of thing. That’s entirely proper. However, as I said at the start, it should be around those outcomes, rather than setting standards around processes and inputs.

Steve Freer: It is proper that there is consideration of national standards across a range of services, really. I think that the critical issue is to what extent you then put in place arrangements to try to performance manage those standards and ensure that they are applied on the ground from Land’s End to John O’Groats, as it were. In a sense, that is the mistake that we make too frequently: we over-engineer those performance arrangements. I think that the challenge for us is to step back from over-elaborate arrangements for monitoring and to try to get back to the sort of fundamentals of trusting local accountability to tell us whether appropriate standards are being delivered on the ground.

Q236 Simon Danczuk: In terms of refuse collection, fortnightly or weekly? That is a national standard. I know that’s slightly tongue-in-cheek, but should central Government be setting that sort of standard, or is it for local authorities to decide? It is not a "life and limb" service, or one involving a vulnerable group, is it? Briefly, what is the panel’s view?

Eugene Sullivan: We certainly do not think that the Audit Commission should be setting those standards, and haven’t done. But I think, again, that that is a matter for local discretion, and I think that you see that with the exchange of views around that particular subject up and down the country.

Jessica Crowe: Yes. I agree with that. It’s not an outcome; it’s an input.

Steve Freer: Yes. I agree with that. Again, I would emphasise that I think it’s for local accountability to exercise judgment as to whether the local authority has made the right choice in that area, or the wrong choice.

Q237 David Heyes: Steve, you have referred several times to the importance of local accountability. Should that be through the ballot box? What are the limits of ballot-box accountability?

Steve Freer: The ballot box is obviously very important, but it would be a huge mistake to put all our emphasis on one mechanism around which local accountability operates. We want to see local authorities straining to improve accountability every day, in every transaction and in every service. For the core of accountability, you have to seek to establish a dialogue with local people and try to engage and involve them. You have to listen very hard to what they say, and either respond to their requests in a positive way or explain why it’s not possible to do that.

Q238 David Heyes: But what do you see as the framework for doing that? Do you see it as a supplement to the ballot box, or even in some cases as a replacement for the ballot box? How does it work?

Steve Freer: A whole range of different options are available to local authorities, and they are being added to all the time. There are councillor surgeries, public meetings, and websites that invite people to tell the local authority where it can save money and how it can improve services. There is a whole range of different options.

Jessica Crowe: I endorse that. The centre produced a piece of research earlier this year called "Accountability Works", which identified many different forms of accountability. The ballot box is a very important one, but in between elections there need to be other forms of accountability. Those could be regulation and inspection, or internal performance management. We would obviously say that scrutiny by elected representatives and non-executives is a really important form of accountability. It could be about publishing your information and being held to account by the public, or indeed the media. There are lots of different ways of being held to account and we think it is important that there should be a sort of web-we described it in the research as a web of accountability-where those forms interact and work together. As Steve was saying, accountability needs to be supported by transparency and involvement, and we identified those things as the three really important figures that support and bolster representative democracy. They all have the potential to work in more participative ways; you need all three of those things working together.

Eugene Sullivan: I agree with most of what has been said, but I would add that periodic elections are not going to be a perfect mechanism for dealing with the views of citizens about the services they currently enjoy. Performance information is very important, as is engagement through some of the mechanisms that Steve talked about. There are also referendums on key subjects, and some people have even piloted work around budget and citizen stakeholder groups, to get people involved in the decisions, priorities and choices that are available.

Q239 David Heyes: Forgive me, but I have not heard any drastically new ideas emerge from that. Those are all worthy things and worthy ways of supplementing the democratic process, but most of the local authorities that I am familiar with already practise many of the things that you advocate. What else can we do?

Jessica Crowe: One very practical thing would be to reinforce the position of councillors in what you might describe as the democratic wing of the big society, about which we hear a lot. We should see democratically elected councillors as being at the heart of a lot of those mechanisms and accountabilities, with stronger powers than they have at present, to look at a range of different service providers, whoever they might be-the council, the voluntary sector, or the private sector. We are going to see greater diversity in service providers and decision makers. If all those people recognised that they could potentially be held to account by people who have been democratically elected and who would provide information to them and respond to their recommendations, that would give a strong and consistent set of powers that we don’t have at the moment. That would be a new thing, and there is a real opportunity to bring that in at the moment with the Localism Bill that is about to start going through Parliament.

Steve Freer: You ended with the phrase, "What else can we do?", but it is actually about what we should stop doing. Through a variety of different mechanisms over the past few years, we have put all this emphasis on upward accountability. We could stop doing that and encourage local authorities to major on some of the things that they already do, but-as was said by the previous witnesses-tend to exist as illustrations of good practice rather than standard practice across the sector. If we remove some of the upward accountability, put the focus on local accountability and really encourage local authorities to major in that area, a lot of these techniques would be used more widely and we would end up with a healthier system and a stronger relationship with local people.

Q240 George Hollingbery: I was going to ask in a moment or two about accountability. As we have strayed on to it, I shall develop it with a couple more bells and whistles that I wanted to talk about. We have got armchair auditing of £500 and so on and so forth. That has its attractions for certain people. In my local authority we have one or two people who constantly challenge us in great detail and with great vigour, which costs a great deal of money to deal with every year. It did when I was a local councillor. I would appreciate some comment on how much challenge can reward and how much it can damage local authorities, particularly in times of restricted budgets.

I wonder about the emphasis on £500: that is fantastic and transparent, but is it really what people think about when challenging their local authority? Or is the fact that the carer did not arrive this morning, or that there is not as much money this year to clean street X? A constituent said to me this morning: "Why don’t we just open up all the intranets of the all the local authorities across the country and let everybody see everything about how the decisions were made about a particular issue?" Obviously, some bits have to be confidential. What do you think of that idea?

John Kirkpatrick: We’ve done a fair amount of work on different forms of transparency. Some people are interested in everything that has been published, and is increasingly being published, on the £500 basis. That is a good way to identify some things that may have gone unidentified before, such as the duplicate payments and other such stories that we have seen. There is potential in that. If people are interested in how good the value is from the services, we would argue that only publishing sums over £500 is not going to help much with answering that. People need a bit more context, they need to understand context and performance, and about all the money that is being spent in a particular area, rather than just that bit.

There is a way to go before transparency can achieve the aims set out for it. As to whether there could be more transparency and how much it would cost, there is some evidence in research from the US that, as more is published voluntarily online, that reduces a bit the burden of responding to freedom of information and other requests. We may be in a period of turbulence while we introduce the measure. Some of that might settle down over a longer period of time. We don’t know that yet, but there is hope that that might be the case, as transparency becomes more embedded and useful, and people become used to using it for the purposes that you described your electors and constituents as wanting.

Jessica Crowe: You’ve hit on the crucial point, which is not just how much money is spent but what was achieved as a result of that spending. Otherwise, you know the cost of everything and the value of nothing. You need a bit more. There could be potential in this move to develop, as John just suggested. The important thing is what people do with the information that they discover. There could be a strengthening of the relationship between the public and elected representatives, if people can go to their councillor and say, "I spotted this," because there will always be people who have particular interests and hobby horses, who will want to invest the time and will spot things. The matter needs then to be delved into, to uncover whether it is a legitimate form of expenditure and has achieved what it was supposed to. By investigating, listening to service users about their experience, listening to how the service is provided and how other people do it, you can analyse and decide whether that money is being spent to good effect. Councillors are in a good position to do that, in partnership with the public.

Steve Freer: You’ve made the distinction between the small number of local enthusiasts-

George Hollingbery: Yes, enthusiasts.

Steve Freer: You’ve made the distinction between the small number of local enthusiasts and most people. These are early days in this transparency process, and I’m sure that it will develop, but at the moment, the emphasis is on publishing lots of raw data. That probably will work quite well for enthusiasts, but much less well for most people. The challenge, therefore, is to start to move from raw data to something more informative, to good information about local public services that enables you to form judgments about whether your local services are quite as good as they should be-comparative data and so on. I hope that’s the direction in which we will move over the period ahead.

Q241 George Hollingbery: But intermediation is always dangerous because you get one particular person’s view of what a standard is. I accept that. The difficulty with financial data is that they are very raw and, for a lot of people, very intimidating, but if you could look more deeply into the mechanisms of a council and see pieces of paper where decisions were made and you didn’t intermediate that and say, "This is how we’re going to judge these across councils," you could see why someone denied you that service or denied your area that service and then maybe you might come to accept it a little more. My constituent made a very powerful case to me this morning, and I was somewhat taken with it, I have to say. Can you see us getting there?

Steve Freer: That sounds like an enormous leap. I think it would be an interesting approach to try to pilot in some areas, but it does seem to be a very big leap from where we are at the moment.

Jessica Crowe: I think as well there are perhaps distinctions between the developing of policy and working up of policy and considering options, and it would need such a change in the culture of how policy debates are discussed and, indeed, reported. Decision makers have to consider, sometimes, unpalatable options and have to consider all of those to carry out due process and due diligence. I can see that people would be nervous, in having those debates in the full glare of the public, that the debates would be misinterpreted and that hares would be started running that didn’t need to be. As John was saying, a whole change of culture is perhaps required in how we make policy and take decisions, to have that more mature understanding that your constituent wants and that I think is right, but my worry is that we’re not in a place where that could happen at the moment.

Q242 Chair: In terms of accountability, we seem to be talking about community groups and other types of organisation that aren’t elected and therefore aren’t accountable in the same way, operating beneath unitary or district councils. We probably don’t often mention parish councils, which tend to exist in rural areas, although there are one or two ideas about parishes appearing in London now. Is that another way forward, whereby localism could really be enacted, or is it a bit of an artificial creation to say, "We don’t want all these disparate community groups; we’ll make them organise themselves into parishes"?

Jessica Crowe: Superficially, that is a clear and attractive approach, but I’m quite nervous about parishes in urban areas where there aren’t distinct geographical communities; there are communities of interest. It’s very difficult to decide where those boundaries might lie. When I was on the Councillors Commission, we looked quite closely at the role that parishes could play, and I think they do have an important role where you can identify the community that they represent, but we also heard from witnesses that there were weaknesses, that a number of parish places were not filled through elections and they were co-opted, so there wasn’t that strong accountability through elections that you might hope for. I don’t think they’re necessarily a panacea for all areas. What is really important is that whoever the organisation is, the way it operates is open, accountable and transparent. That’s the crucial thing.

Q243 Chair: Do you generally agree with that, Steve?

Steve Freer: Yes, generally. For me, it’s probably principally an efficiency test as to whether we focus localism at parish level, at district level, at borough level or at county level, but I’m not hugely optimistic about the capacity of parishes to take on significantly greater responsibilities.

Q244 Simon Danczuk: I am particularly interested in accountability as it relates to vulnerable marginalised groups, homeless people, whoever they might be. It was suggested earlier that we needed national standards for certain services, particularly those that related to vulnerable and marginalised groups. Is that because they don’t have a voice and they struggle in terms of accountability with local authorities? Is that why national standards are being suggested in terms of services like that and/or how do vulnerable, marginalised groups hold local authorities to account? What can be done in that regard?

Jessica Crowe: I think there is a need to make sure that it is clear how all sorts groups can influence decisions. And there will be groups that are not always organised or able to shout the largest. So there is that worry if you’ve got a very local system that those groups that are more organised will be able to exercise more influence. As I said just now, the important thing is that all organisations are clear and transparent about how they will make decisions and can show that they have taken account of how those groups that might not readily be able to access decisions will be heard. At CfPS we are developing something we are calling at the moment an accountability charter to help organisations work through their multiple accountabilities and set out in a very clear, simple form: this is how we will take decisions; this is how we will work; this is how you can influence us. That could work for a local authority, for a partnership and for all sorts of things. We think it is really important that organisations set out how they are going to do that, and can then be held to account for that, as well as for how they make wider decisions.

Eugene Sullivan: For vulnerable people, the degree of accountability, the degree of voice, the degree of engagement and how far you go on that is a choice. Sometimes it’s a risk. Sometimes you can afford to risk failure. It is less acceptable to accept failure when you are dealing with vulnerable people. That is an important aspect of it all, which is why inspection regimes are kept in place for some part of that regime.

Steve Freer: I have nothing to add.

Q245 Stephen Gilbert: From my way of thinking, accountability has to be slightly more than just being transparent and clear. I would have thought that any working definition has to include the ability to change the decision taker, which is why, I guess, the democratic process is our touchstone. You can’t fire a spreadsheet. You can’t sack a committee of councillors. It is very difficult to break up a partnership. So when we are looking at a much more complicated, evolving architecture on a local level, perhaps simplicity, with that ability to sack the decision maker, comes with the model of the elected mayors. At the end of the day-it is a point that you were making earlier, Mr Freer-the buck stops there. That is where people will recognise that that is the case. Do you have any thoughts about elected mayors being the way forward to solve this conundrum?

Steve Freer: I thought you were going to make a slightly different point there. This is quite interesting. The point I thought you were going to make was that-

Chair: That’s a politician’s way to answer the question.

Steve Freer: Go with me; it is interesting. I thought you were going to make a point about complex, innovative partnerships and their role in delivering local services. Obviously they have a great currency at the moment. I am bound to say that there is potentially a governance problem with those sorts of complex arrangements to deliver local services. You use the word "simple". I think that fundamentally, good governance requires clarity and a degree of simplicity. I don’t particularly agree that that has to revolve around a single individual. I think it has to focus very strongly on a single institution. That critically for me makes the case for the local authority’s leadership role in a locality.

Jessica Crowe: I was a councillor in a mayoral authority, and I think mayors bring great strengths, like clarity, accountability and the ability to speak for a whole area, not just the council, when they’ve been elected by their peers on the council. There are great strengths to mayoral models of governance, but you have to have something that works in between elections and ways of bringing to the fore and exploring the decisions that are made in those four years so that the public have a kind of evidence base on which to decide whether they should re-elect someone at the end of their term of office. The mechanisms of accountability, transparency and involvement that operate in between elections are also important and can support electoral accountability.

Eugene Sullivan: I agree with Steve’s point about leadership, but it’s not just about local council leadership; the leadership position-whether we’re talking about the leader of the council or an elected mayor-is very important. It should be chosen with that in mind, it should have a job description, it should have its own accountability framework for evaluation within the council to the council, and it should pay a rate for the job. Therefore, the expectations of the leader will be higher, and the leader paying the price if something is their fault would be more acceptable. So I don’t think these things are unthinkable.

Q246 Stephen Gilbert: Just to follow on from that, I have served with a councillor from Haringey, where just over half the borough is of one political persuasion, and it always provides the ruling party, while the other half of the borough takes a different view. One half of the borough has no ability to influence decision making, which, almost by tradition, reflects the institutional vested interests of the other half. I’m not quite sure how any accountability arrangement would address that problem in the structures going forward.

Jessica Crowe: I think you’ve illustrated the weakness of relying just on an electoral mandate. You need those mechanisms to involve people who may not be represented. That comes back to your question about vulnerable groups, which may not even vote. You need other ways of hearing a wider range of voices and being clear about how decisions can be influenced by those whom the decisions then affect.

Q247 Stephen Gilbert: But without that electoral gun at a politician’s head, you can’t change the decision taker. You can explain the decision that’s been made, and you can have a clear and transparent look at the process, but without that mechanism, you won’t actually be able to effect change, will you?

Steve Freer: I think, in a way, this links back to setting minimum standards and so on. In a way, setting minimum standards and some of the other architecture of legislation is about ensuring that a council, once elected, is there to represent all the constituents, as it were. Also, this is about the obligation to serve and make decisions in the public interest and, where councillors fail to do that, about their being challenged accordingly. Those are the other sorts of controls that apply, but I am bound to say that most of the politicians I’ve worked for have been very keen to persuade non-believers to vote for them in the future. Therefore, they’ve often been very keen to get into dialogue with people who are not natural supporters of their particular party.

Q248 Chair: In this more complicated world, central Government grant-we talked about this earlier-goes to local authorities, so there has to be accountability in some form about how that grant is spent, as well as accountability to local people. But if we look at the Total Place projects, where we start to look at total Government spending in an area or at community budgets, which the Government are going to pilot in a more limited field, money is allocated-by Parliament, ultimately-down different income streams. Councils aren’t ultimately responsible for it, but they may be responsible for helping to spend it. How do we deal with financial accountability in that sort of situation? Is this a lot more complicated?

Eugene Sullivan: It is. There has been some discussion of that. Part of the problem with Total Place is that people need to pool budgets in some way and look at their total resources. There has been some success around that, but there have also been some exceptions, which Whitehall doesn’t always play in the Total Place budgeting. A lot of the money that’s going in, that could influence an initiative or a programme there, isn’t necessarily within the control of the group that’s there. I know Gus O’Donnell was talking at one stage about budgeted programmes that cut across the Whitehall boundaries of accounting officers, down into place-based budgeting or programme-based budgeting. I think that there’s more scrutiny there if you’ve got a programme where there’s one accountability line. People are not happy giving up their budgets, and even more so at a time of cuts. It’s going to be very difficult to get partnership to come to the table on total budgeting. But the accountability can be worked through if the willingness is there to work together.

Q249 Chair: Do you think you can?

Eugene Sullivan: Yes.

Q250 Chair: In all aspects? It’s fairly easy, if your organisations share a building. You can divvy up the costs and it’s quite straightforward. But if you start to get into, "Well, we’re going to spend more from the health budget on helping to keep people out of hospital, because that’s going to help us with the cost in the long term"-but that’s local authority expenses, because they are delivering social care-doesn’t that start to confuse lines of responsibility?

Eugene Sullivan: It does. The single conversation that the Treasury was starting around the Total Place pilots, I think, tries to address that. Also, I think, the net cost to the Exchequer should be the prime goal but you need to make sure that there aren’t winners and losers. So, on estate management, it could be having some sort of equalisation account or whatever, so that winners and losers can be evened out, and what you’re left with is the net gain to the Exchequer. But we have to be more creative about how we do that.

Jessica Crowe: Yes. The powerful message that came out from Total Place was that we would all save money if some of these budgets were pulled. It showed that money spent by one agency would save another agency, and therefore the total amount of public spending. The sums of money were just so significant. It’s clearly something that has to be done, but I think it’s right that it’s going to be more challenging at the moment.

I also think that there are lessons about things to avoid from the past analyses of how partnerships have worked-that they haven’t been open or transparent in how they’ve worked. Nobody has known quite how the local strategic partnership reached its decisions on spending the money that came for expenditure by LSPs. I think we need to learn those lessons and not repeat them, and so if shared budgets do emerge-and I think it will be tricky, for the reasons that Eugene gave us around people not being willing to give up their control and local empires-I think it will be very important that there are clear governance mechanisms.

It was clear from some research that we did, looking at the Total Place pilots, that nobody had really thought about that yet. They’d done the mapping and they discovered this information, and they reached positions in principle about what needed to be done, but nobody had yet thought about how the decisions would be made going forward. And I do think that some thought would need to be given to that, so that there are very clear decision-making structures. I’ve referred to our accountability charter, which could help organisations think those things through. I think that’s really important.

Steve Freer: I think the mindset of the pilots in this area needs to be different from the mindset we normally have in relation to pilots. Rather than seeing this as something we want to see working in a few areas and then rolled out across the piece, we should expect these pilots to show us some of the positive benefits that might come from a more joined-up approach, but also to expose more fully some of the real problems that you have alluded to. I think then it will be very interesting to see what the right kind of solutions are for the problems that are exposed: whether this can be done simply by sticking broadly with our existing architecture within the public services, and just wiring it up better with different protocols, or whatever, about sharing resources; or whether-and personally I suspect we will have to do this-it will take us to a position where we conclude that we have to simplify the architecture, improve the structure of our public services, and have fewer agencies responsible for delivery of public services.

John Kirkpatrick: May I just add one point to that, from our research? If those pilots were to do as Steve suggests and illustrate a variety of different ways in which things might work, one of the things we could do is to compare them with what we see now. Let’s not pretend that what we have now at a local level in many of these areas is an ideal situation. We’ve done work that shows that a youth worker in many places is, for example, spending somewhere between a quarter and a third of their time on working out how to feed the different arrangements for different funding streams coming into a single youth work project. At the moment, there are people spending a lot of time, which they could be spending on actually solving the problems that they’d like to solve, working out how to make all these arrangements that we currently have work. It may be that that’s the way it has to be, but as Steve says, if we can find different ways and compare them with that, we may find that there is indeed a better way coming out of that.

Q251 Chair: So, fewer income streams and fewer agencies responsible.

We move on, then, to another aspect of localism, which is about getting more organisations involved in service delivery as opposed to just involved in the consultation process, whether they be voluntary groups, community activists or social enterprises. How do we ensure that accountability is properly organised and effective with regard to those organisations, which could end up spending considerable amounts of money at local level?

Jessica Crowe: If they were commissioned to provide services, there’s a clear accountability mechanism through commissioning arrangements. I spoke earlier about the importance of embedding the local councillor as a key part of accountability at a local level. In a way, it doesn’t matter how complex the service delivery arrangements are if it’s accepted that local councillors can ask more questions about what they’re doing. Making sure that councillors have comprehensive powers to ask questions about services that are being provided by anybody spending public money would go a long way. It would also have the virtue, as Steve identified, of being quite simple. People would then know that if they had a question or a problem with any service provider, they could ask their local councillor, who could look into it. I do think that that’s got to be an important principle for any new way of delivering services.

Q252 Chair: Are there concerns about evidence already of voluntary groups probably not doing things in a criminally wrong way but simply not being as tight in their control of money, and not necessarily always understanding the protocols to go through? That might give concerns unless bigger attention is paid to this before we embark on a bigger roll-out of spending through these mechanisms.

Eugene Sullivan: There is that problem, and there is the fact that because they’re voluntary groups, the normal disciplines don’t apply sometimes, or they think that way. But voluntary groups themselves are starting to think more about not getting the money from grant or fundraising but through contracts and the commissioning role. The commissioning role, I think, is an accountability itself between the buyer and the deliverer. Not only is it easier for others to monitor the accountability; it actually gives a clearer accountability between the two parties.

Q253 Chair: Is there a concern, maybe, that in this brave new world lots of organisations will spring up and demand to have the right to deliver services whether they are commissioned to do so or not? On the other hand, it might be that local authorities say, "All right, this is localism. We’re being encouraged to pass things down, so we’re going to get rid of a lot of our responsibilities. We can say to community groups, ‘Here’s the local library. Go off and run it. We’ll encourage you, and maybe give you a bit of help, but it’s all yours now,’" even when those groups may not have the wherewithal actually to do it.

Eugene Sullivan: I think the opening view of all this was that localism has got opportunities but carries risks with it. The accountability framework for localism has to be in place. It has to be proportionate, but there still has to be an accountability framework. At the moment, I don’t think a lot of the money would be channelled through local authorities, so I don’t think they could ever say, "It’s nothing to do with us." It’s a question of what mechanisms they put in place to get accountability for the funds they pass on. As a commissioner, they couldn’t divest themselves of that accountability.

Steve Freer: Yes, I think it’s about national standards and a minimum of standards, isn’t it? In each service area, we should be clear about whether we can afford to adopt a laissez-faire approach and risk failure, or whether there are certain standards that have got to be maintained. If we had greater clarity in that respect, local authorities would be clearer about the amount of risk they could take in the sort of transaction you’ve spoken about.

Q254 George Hollingbery: Do you think that any transaction of this sort-the community right to buy or the community right to run whatever it is-should have a clause built into it, so the group can demonstrate how they are going to be held accountable? Is that an absolute requirement?

Jessica Crowe: Yes, absolutely. We did some research a couple of years ago, looking at different forms of commissioning and contractual relationships, and how councillors could hold those contractors to account. It was very clear that, unless it was built into the contract right at the start that the contractor was expected to come and supply information to scrutiny from the start, it tended to be quite easy for the client-contractor relationship to be quite cosy. The contractor could just say, "Well, we’re accountable to our client", and the client would say, "Well, we’re making decisions and we’re holding the contractor to account", but that is not very transparent to everybody else. So it has to be built in right from the start. Where that does happen, however, you can develop quite a constructive relationship, particularly if it’s a long-term partnership, which you can see. You then get a good understanding from the contractor and the supplier of what the council as a body wants to see, and you get a process of dialogue. I think that that’s much more healthy.

Q255 Chair: Thank you very much. Is there anything you would like to add that you think that you haven’t managed to say yet?

Steve Freer: May I just make a point about that very last issue? It is something that we didn’t mention. I think that there is an important principle about public audit in relation to all these satellites, as it were. I think you have to be able to follow the public pound and audit it through all those layers, no matter how remote they are.

The other point is that your suggestion that there should be a requirement in terms of how you would demonstrate accountability is important, but there are clearly a series of other requirements-aren’t there?-about demonstration of competence. It is also critically important not only that you can demonstrate that you can acquire the service, but that you can maintain it over a significant period of time. So you have to demonstrate long-term thinking as well as short-term ability to act, as it were.

Chair: Thank you very much indeed for coming and thank you for your evidence.