Session 2010-11
Publications on the internet

To be published as HC 547-vii

House of COMMONS



Communities and Local Government Committee


Monday 24 january 2011

baroness eaton dbe dl and SIMON PARKER

RT HON NICK HERBERT MP and rt hon chris grayling mp

Evidence heard in Public Questions 335 - 445



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Oral Evidence

Taken before the Communities and Local Government Committee

on Monday 24 January 2011

Members present:

Mr Clive Betts (Chair)

Heidi Alexander

Bob Blackman

Simon Danczuk

Mike Freer

David Heyes

George Hollingbery

James Morris

Mark Pawsey


Examination of Witnesses

Witnesses: Baroness Eaton DBE DL, Chair, Local Government Association, and Simon Parker, Director, New Local Government Network, gave evidence.

Q335 Chair: Good afternoon, Margaret and Simon . Thank you very much indeed for coming this afternoon to the seventh evidence session of our inquiry into localism. Margaret, you have been before us several times. Simon, you are probably here for the first time, certainly in your new capacity.

Simon Parker: Absolutely.

Q336 Chair: For the sake of our records, please say who you are and who you represent.

Baroness Eaton It is a pleasure to be here at the beginning, although I do not know whether we will say that when you have finished the grilling. I am Margaret Eaton and I chair the Local Government Association.

Simon Parker: I am Simon Parker, Director of the New Local Government Network.

Q337 Chair: You are both welcome. Perhaps we can begin with something in the Localism Bill that I know has been a particular issue for the Local Government Association: the general power of competence, or the power of general competence-I do not know whether there’s a difference between them. Will the power in the Bill make a profound and lasting difference to the relationship between central and local government?

Baroness Eaton: Certainly, we have been pushing for this power for a very long time and we are absolutely delighted that it is in the Localism Bill, which was one of the first measures to come forward for the statute book. It is important because it encourages localism in a way that the wellbeing powers did not. You will remember that the wellbeing powers were challengeable. You will remember the occasion when local authorities wanted to set up mutual insurance. They were challenged and that could not happen. The last thing we want is to put something on the statute book that is challengeable in that way, because it prevents innovation and local authorities truly fulfilling the localist agenda.

We have concerns about the number of occasions when the Secretary of State has the opportunity to intervene and make orders. Some of the language is "local authorities may have a standards board". There should not be any "mays" if it is truly a power of general competence because they should be able to do everything without being told they may do it. Therefore, that is slightly at odds, but we believe it is something that really should be welcomed. I hope that at Committee stage, there will be challenges around the number of occasions, of which there are I think 142, when the Secretary of State can possibly intervene and suggest ways of doing things. We do not want a Secretary of State to tell us what’s local and how. I am sure the intention of the Secretary of State was to give powers to local authorities, and I the Civil Service drafting and interpretation has perhaps not gone along with the intention, as far as I see it.

Q338 Chair: We may explore the actual Bill in a little more detail in a minute. Simon, what do you have to say about the power?

Simon Parker: We have also enthusiastically welcomed power. Over time it will provide much more space for local innovation. It is a very important philosophical shift. It does not just give local government more powers; it says that it can do anything an individual can do as long as it is not banned by law. There is a big question about whether or not this will be a game-changer. Are local authorities clear about reserved powers and what the Secretary of State might do to limit their use? I think that if it is to be a game-changer, we need real confidence and clarity from local government about how much they really can use this power.

Q339 Chair: In your evidence, you said that the powers had to be seen in the context in which they were given, i.e. there is already a lot of legislation which directs what local government should do or prevents them from doing other things, and at the same time there ought to be a revision of all that legislation. Therefore, the power would be much greater if a lot of those restrictions were taken away or the directives were modified.

Simon Parker: Clearly, many of the innovative things local government might want to do are already limited by statute. So if the existing statute remains in place that limits the scope of the power.

Baroness Eaton: And, surely, it will mean that lawyers will fear challenge all the time because there are two conflicting sets of legislation.

Q340 Bob Blackman: I declare a slight interest because I was the lead member for resources on the London Borough of Brent. That was the lead authority on local authorities’ mutual insurance and I still have the scars to prove it. My concern, on which I would like evidence from your respective organisations, is whether the general power of competence as currently framed in the Bill will be sufficient to allow mutual insurance to go ahead in future, for example, or many other aspects that would be financially beneficial to local authorities and local people.

Baroness Eaton: It goes back to what we said about the ability of councils to be innovative. That is what all of us want, because everywhere is different, but unless it is absolutely clear that the Secretary of State and the existing legislation do not create a situation of challenge, it limits the opportunities that will flow from it.

Q341 Bob Blackman: To press you a bit further, in the view of the LGA, has the clause as currently drafted gone far enough, or does there need to be some change to it to improve the position?

Baroness Eaton: I would hope that at Committee stage those points would be made and there could be some amendment to override in some way, if you like, the prescriptive nature. I would have thought that all of the prescriptive legislation would be removed before the power of competence was introduced. I thought that would be the intention, but either I misunderstood or it has not happened because of legal drafting.

Q342 George Hollingbery: To turn the question upside down slightly, over a number of weeks that we have been running this inquiry we have heard a lot of evidence about innovative councils doing all sorts of interesting things. I would like to ask you what it is councils cannot do at the moment and which this will free them up to do. What are the grand themes they will suddenly plunge into if this competence is allowed?

Baroness Eaton: That will arise as things develop, because you do not get true innovation if people are constrained by legislation. They can be innovative to a point, but mutual insurance was something quite new that arose out of a particular time and need. There will be things that come along. Particularly in the present climate, where local authorities are anxiously managing less resource, they may find things they want to do. For instance, if a number of local authorities want to share a contract to do something to save money, I am not sure the present legislation allows that. Therefore, that would be one thing, but there will be things that none of us has even thought about. Birmingham or Saffron Walden might think of doing something they have never been able to do before because of constraints, so it would free up that thinking and ability. It is not that we are saying we need to do this and this; it is just that we need to be able to have freedom to develop what is necessary for our areas.

Q343 George Hollingbery: Forgive me for pressing you on this. I am slightly surprised by that answer-I really am. I would have thought there would be projects straining at the leash, where they have had these fantastic ideas but just cannot make them happen. It does not seem to me that is the case. Is this perhaps a case of, "We’d like to have that power stuck there just in case there’s something we think of, but there’s nothing banging at the door urgently saying, ‘If only we could it this way’"?

Baroness Eaton: I just mentioned that one of the urgent things is the ability to join up and do contracts across the board, which you cannot do at the moment, to save three different councils having different contracts to deal with a particular issue, whether it be home care or whatever else. They cannot do that at the moment. So there are those kinds of things. But local authorities do not just go down the route of saying, "This is a major scheme we would like to do but we cannot do it, and it’s ready on the shelf," because it is costly of time and officers’ commitments. So you would not embark on something unless you knew there was some benefit at the end and you would be able to deliver it. It would be a seed of thought in somebody’s mind.

Simon Parker: I would echo much of what Baroness Eaton has said. I think it is in the nature of permissive powers like this that, with the right kind of amendments to the Bill, they will embolden local government to do more innovative work. We very much hope that, because local government will have this power, other parts of the local public sector will come to councils with innovative ideas; they will join up more things and this power will support that process. The hope is that, particularly in a time of cuts when a lot of councils will be looking for innovative ways to redesign their services, this power will strengthen and embolden their will to do so.

Q344 Heidi Alexander: I am sorry to press you further on the issue of projects that might come forward as a result of the general power of competence. Baroness Eaton, you referred to the possibility of joint contracts. From my own experience, I am aware that the London Boroughs of Lewisham and Croydon have a joined PFI contract for the replacement of street lighting. My understanding is that there is some capability. In addition to the example of joint letting of contracts, or one contract across a number of boroughs, what other examples can you give us about these kinds of things? I appreciate what you said earlier-that it enables innovation and cultural change-but are there other examples?

Baroness Eaton: There would be things coming forward that I would consider around partnerships, as you mentioned, with people who are not local government, or even the private sector, in a way that has not been done before.

Q345 Chair: When you gave evidence to the Political and Constitutional Reform Committee you talked about perhaps trying to take things a bit further. The general power of competence could sit alongside a duty to devolve, and you could therefore have local authorities who felt able to say, yes, they would like those powers to be passed down to them and maybe you would do it by locking it in with a referendum of local people who say, "Yes, we want our councils to do it." In that way, you could give a degree of permanency to a localist agenda that perhaps is not offered at present.

Simon Parker: That speaks more broadly to what we think are some of the next steps for the localism agenda. The Bill has lots of good stuff in it, but there are some very big things left to do. We talked about having a referendum to lock in some kind of constitutional amendment, which I think is important, because if we are to do localism on a sustainable basis it needs to be done in dialogue with the public. The public must be part of the conversation and I am not sure they are as yet. I do not think they quite know what is coming down the track towards them. But there are two obvious further things we would like the Government to do to lock in localism. One is around local government finance. We would like to see a much more sustainable financial settlement.

Q346 Chair: We shall come on to that later.

Simon Parker: There is another one about the right to bid, but I can leave that till later.

Q347 James Morris: One of the advantages of this inquiry is that we have a Localism Bill to respond to. Baroness Eaton, I was intrigued by the LGA’s response to the Bill. You said that "the drafting demonstrates how challenging it has been for the Whitehall machine to translate Ministers’ policies into legislation". That is quite an intriguing comment. Can you expand a little on what you meant by that?

Baroness Eaton: Yes, I can. From the sector’s point of view as represented by the LGA, we have talked a great deal with the coalition Government about the whole objective of a Localism Bill. I have a quote handy. In October of last year, the Secretary of State said: "The years of government interference and micro-management are over. Instead, we are starting an era of genuine local partnership. This is all part of my campaign to replace the command and control approach to local government with genuine localism." It was very clear that there was no command from the top; it was about local decisions involving local people and localism.

Q348 James Morris: Do you think the Secretary of State has been captured by his officials? Is that what you mean?

Baroness Eaton: Well, I would say that most Ministers must respond to advice. Sometimes we wonder whether the advice is perhaps as flexible as ministerial thinking.

Q349 James Morris: Mr Parker, what do you think about the Localism Bill?

Simon Parker: I think the Bill is a good start and contains some very welcome provisions. We have already talked a lot about the general power of competence, which is to be welcomed. Obviously, we would like to see some tweaks, but broadly it is a step in the right direction. There is a lot of good stuff in it on decentralisation, and the right to bid to run services is very interesting. Some things in it we are not quite so keen on, for instance council tax referendums.

Q350 James Morris: Do you think it is a coherent Bill? One of the criticisms is that it is a hotch-potch; it tidies up here; it offers a little bit there; and it does a bit on the other side. Do you think there is coherence in the Bill?

Simon Parker: It is a very good question. To my mind, this Bill is very much a CLG Bill and it affects CLG’s responsibilities.

Q351 James Morris: Does that take us back to "being captured by the officials" point?

Simon Parker: I do not think so. I think there is some ambitious stuff in there; I think there is some localist stuff in there. What I mean is that it is not an across-government approach. Some of the big things that you would want to do to embed localism, like the finance stuff, is not necessarily in the gift of the Department. If you want a consistent localist strategy, that is not something you can get solely from DCLG, and I think this Bill has come largely from DCLG.

Q352 James Morris: I want to ask about the number of orders in the Bill that Baroness Eaton mentioned.

Baroness Eaton: There are 142.

Q353 James Morris: Is that not a bit exaggerated? Is it not obvious that in a Bill that needs a legislative framework in the context of what it is trying to do, there is a need to have orders that the Secretary of State, in the circumstances, has power to execute? That really does not cut across localism. In some ways is that not a bit of a non sequitur?

Baroness Eaton: Some of the things that are coming up from those are, for example, around the referendums. The Secretary of State has the ability to decide what is localist-what is a local issue. That is the top telling local people what are the important local issues. To me, that seems a very inconsistent and unnecessary potential order within the Minister’s gift. There are examples of that. A lot of the things referred to are very, very local, like community assets. The Secretary of State decides what is an asset of community value. I would have thought that the people in my ward are more likely to know what is a valuable asset to the community than the Secretary of State.

Q354 James Morris: How often do you think he or she will use that particular power? It seems to me there are times when the Secretary of State or an arbiter of some kind will be required to step in to make a judgment. You mentioned referendums. I think I am right in saying that the Bill provides for local authorities to make up their mind as to what is and is not an appropriate issue for a referendum. A local authority can reject the idea of having a referendum on a particular issue, and then it can be referred to the Secretary of State. There needs to be an arbiter at certain stages, does there not, and that is why a number of powers are prescribed in the Bill for the Secretary of State?

Baroness Eaton: But then what is the point of the power of general competence? Either you believe that each area can be competent to deliver for its residents-that will create variations, because no two places are alike-or you have centralist diktat.

Q355 James Morris: I totally understand what you are saying. I am very much in favour of localism, but all of us who have been local councillors know there are tensions, and sometimes what a local community considers to be an appropriate thing on which to hold a referendum is something about which a local authority has a different opinion for perfectly good reasons, and there needs to be an arbiter. There will be times when the Secretary of State will need to step in to make a judgment, will there not?

Baroness Eaton: There might be a few, but I think 142 is rather a lot.

Q356 James Morris: That is a fair point.

Baroness Eaton: When you look at what they refer to, in my assessment not all of them are ones that necessarily fall into that category.

Q357 Heidi Alexander: On the new powers to make regulations and issue guidance, if you had to name the top five in the Bill to get rid of, what would they be?

Baroness Eaton: I would not like to say; I think it would be an unmeasured response.

Q358 Chair: Drop us a note about it afterwards if you want; and you can give more than five if you like.

Baroness Eaton: I can give you a very good example. There are issues around the housing revenue account, which has been a disaster for years. We are absolutely delighted that it is going to be addressed. But what is of major concern within that is that if local authorities choose to buy out of the housing revenue account-fine, finished-the Secretary of State can come back and demand extra payment. It is as if you have paid £300,000 for a house and the person who sold it to you can come back a year later and say, "By the way, it is now worth £400,000 and I want another £100,000 from you." Those kinds of things are very prescriptive and controlling and are not particularly helpful around innovation.

Q359 Mike Freer: I put a quick question. You can write to me if you do not have the answer at your fingertips. Is there evidence anywhere in the world of any local authority structure that has gone down this path and it has worked?

Simon Parker: I am not aware of such evidence, but that does not mean it does not exist.

Baroness Eaton: Nor am I, and other places are very differently structured from here. You mentioned finance. I know that the Committee was looking very much at community budgets and Total Place. You referred to CLG not being the only Department and other Departments also need to be involved, so we can get too localist a determination about how services are provided by the multiplicity of funding by Government. That does not seem to sit very clearly in the Bill either.

Q360 Mark Pawsey: From what we have heard so far there seems to be less enthusiasm now you have seen the Bill than the account you gave prior to its publication. One of the key objectives of the Bill is to sustain greater democratic participation. We have seen levels of participation fall. Simon, you said earlier that the public had to be part of the conversation, and in your written evidence you point out that only one in 10 people become involved in civic activism. We know that 30% of people actually vote in local elections. From what you have seen of the Bill, will it increase participation in local affairs?

Simon Parker: I think it has the potential to do so, particularly with the decentralising parts of the Bill, so especially things like the right to bid, the referendums to some extent and the mayoral reforms. Those have the potential to engage people more in civic activism. I should not sound too pessimistic. In the written evidence, we highlighted the fact that at the moment people were not engaging. That is true and we need to change that, but we must also recognise that arguably we have had 40 or 50 years of creeping centralisation and disengagement. It will take time to reengage people. I think this is a reasonable start.

Q361 Mark Pawsey: Therefore, you subscribe to the view that there is a mass of people simply waiting to be involved who will come along and grasp all of these great opportunities rather than that they will become involved only if something affects them immediately?

Simon Parker: I do not know there is a mass of people. I think there is evidence that quite a lot of people would like to get a bit more involved and that there are some barriers to that: lack of confidence and free time; and they do not have opportunities. So there are things we can do. One thing we are working on at the moment is to try to understand the kind of financial assets in localities. Obviously, the amount of money councils have is being cut, but we also have social assets. We have things like people’s free time, like social capital. One role that we think local government should grasp over the next few years is a role in managing and building that kind of social capital, civic trust free time, because then people will want to get more involved and be able to volunteer. We will build a stronger society and people will be more engaged with their local authority.

Q362 Mark Pawsey: From where does your figure of one in 10 come? How will you measure a change? If we are looking five years down the road, will we be able to say that this has succeeded in what you would like to see happen?

Simon Parker: I cannot recall now where it came from. If it is not footnoted in the evidence, I will send it through. How do you record an improvement? It will hopefully be considerably more than one in 10.

Baroness Eaton: One thing it will do is make people more readily available and willing to stand for council, and to be a councillor where you can make a difference in your community, rather than feeling that you are responding to restrictions. You know what the community would like you to deliver but there are rules and regulations and boxes to tick and you cannot be the community representative, which is the reason most people become councillors. I am perhaps lucky in that my own ward, which obviously I know best, has five very distinct villages and communities. I suppose that because of community spirit, there is already a groundswell of people actively involved in doing things like village plans and taking part in and having a very active life in the community and working with their elected representatives. My experience has been very positive, although I recognise that in some places there will be far more willing and able people. If you live in a place where most people commute and come home very late at night, very often they will not want to go out during the week to take an active part. They will perhaps want to be active only when they see something going wrong.

Q363 Mark Pawsey: But will the provision of this Bill assist that? Will it make it easier for those people to get involved? Will it incentivise them to get involved?

Baroness Eaton: They will feel that they have more impact and input. I know that you are going to talk about finance in a minute, but one thing I have noticed is that people ask what difference it makes because the council tax is the council tax. The Government will give you nearly three quarters of it and it is all decided what it is spent on, whereas if it was very much more local, people would recognise that they had control over what they were paying out.

Simon Parker: This is increasing the supply of opportunities to participate. I think the next step is to increase the demand for those opportunities.

Baroness Eaton: Yes; I agree with that.

Q364 Mike Freer: We have had some evidence that the Localism Bill is not required; that already good councils do this and it is really a state of mind. Can you think of any exemplars where councils have already done localism? Is there not a risk that a council can use localism to say, "Well, if the community doesn’t want to take on this service, we’ll simply close it down"? Those are two questions. Are there any exemplars and is there a risk of services closing if the community does not step up?

Simon Parker: I suppose there are two exemplars of the kind of community participation we are looking for. One is Balsall Heath Forum in Birmingham, which has been quite a successful form of community governance. I am not an expert on it, but it appears to be an interesting example of the kind of reform we are talking about in terms of neighbourhood governance. I also think that some of what we have seen in the movement towards participatory budgeting is an example of what we are talking about here. In terms of whether or not the Bill is necessary, there is a question about scale. It is certainly right to say that probably there is not much in the Bill that a local authority somewhere is not doing in some way. The question is one of scale. Are we now moving towards turning some good exemplars in some places into a new way of doing governance? A difference of scale is a very important difference.

Baroness Eaton: It would be a very brave chairman of a membership organisation who picked out individual councils as being better than others. If you look across, a lot of local authorities are being innovative. There are always those who could do with a bit more innovation. I know of a number of authorities that have been very ambitious and innovative in small ways, but it is also about confidence. To go back to what we said earlier, you cannot necessarily see a need and be able to do something about it if the legislation gets in the way. As you say, it is about scale. It is usually the big things like the insurance scheme, which would have been amazingly useful but could not happen. On those things local authorities are stymied. There are lots of smaller things they can do, but for some of the larger challenging things, they need the Bill.

Q365 Mike Freer: Is there a risk that councils can use localism to disengage if the community will not step up?

Simon Parker: When I speak to local authorities and look at the evidence we have gathered I do not think that is what councils will use this for. Is it theoretically possible? Yes, of course it is, but I do not see many local authorities that look to do this.

Baroness Eaton: Why would they want to? They are not members because they want to sit in a council chamber at boring meetings; they are there because they want to do something about their community. They certainly would not want to go along and listen and then say, "Let’s not", and back off and do nothing; they want the opportunity to say that if they do not want it they will not do it. Part of leadership is to help people to make difficult decisions that are sometimes necessary for their communities. We have all had it. You do not just avoid it; you have to deal with it.

Q366 Mike Freer: To follow that through, given the scale of cuts in local government funding, is there not a danger that some councils will say they have to close a library unless local people take on its running or staff it for at least half the time?

Baroness Eaton: It depends on how you approach it, does it not? If you say to a group that you will close it unless they do that, you need to take people with you on the whole issue and the pressures the council is under, the statutory things that need to be done and the priorities for them. If you say, "These are the options with this pot of money and these are the costs. Which of these are really the critical ones, because we cannot do all of it? Do you want to take part and use volunteers?" they may say yes. You are not telling them they have to do it. If you are a localist you are listening and sharing the issues with them and working with them to resolve them.

Q367 James Morris: I want to focus on one area of risk to which Mike referred: timing. Is there not a danger that, in the context in which the Localism Bill has been presented-a time of significant reductions in local government expenditure-if it does not deliver what people expect it to deliver and is generally perceived to have been localising the chop, for want of a better phrase, it will set back the cause of localism for a generation?

Simon Parker: I think that if it is seen as localising the chop then that will be the case.

Q368 James Morris: We are hearing a lot of that from the wider local government community, especially in the context of the reductions.

Simon Parker: If it is seen as that it will be very disappointing, and undoubtedly it will harm the localist cause. I do not think that is what will happen because, if I look at what a lot of local authorities are doing, they are starting to look at how they transform their services and how to innovate and do things differently. There are some powers in the Bill that will help them to do that; there are other powers not in the Bill. We have talked a little about finance. There is also what we have described as a right to bid. We would like local government to be able to bid to run central services where local government can prove it can run those services better.

That would help; it would give that kind of Total Place budget dynamic, which will help to transform services even more. The key to it-it is certainly what my organisation is trying to do-is to encourage and support local government to innovate and for central Government to provide the right kind of policy context for innovation so that these cuts are a spur for finding new ways of doing things and not just for producing cheap and nasty services under the guise of localism.

Baroness Eaton: I completely agree with that. It would be tragic if people thought it was just managing the chop locally, but it does give freedom to do it differently. It is a challenge. but the challenge in Harrogate will different from that in Bradford, and at least they will have the opportunity to manage the difficulties appropriately for the place.

Q369 Bob Blackman: Part and parcel of the Bill is not just devolving responsibility to local authorities but devolving power to local people. Clearly, there is a challenge here. Certain local authorities may perceive this as a direct challenge to their authority and seek to deny people a say at local level. What support and assistance will your respective organisations give to enable local authorities to recognise the value of devolving further down, and what else needs to be provided by central Government to make that happen?

Simon Parker: In terms of the support we provide, the big thing we are to develop next year is what we call the Commission on Next Localism, and it reflects the fact that we believe the agenda for localism and local government has been very much shaken up over the past year and that the Government do not have the clear long-term vision for the future of local government that we might have expected from past Administrations. As several MPs have pointed out, the approach is one of creative destruction: if we shake everything up, local government will be forced to change or risk slowly becoming irrelevant.

One thing we are doing as part of that commission is to look at the future of local democracy, which has been rather neglected by researchers. Clearly, as you suggest, one thing that is happening at the moment is that we are very much challenging the role of councillors as representatives. That potential explosion of direct democracy will certainly challenge representative democracy but the question is whether it will weaken it as well. How will those two things fit together? So the kind of support that we will be giving is to work with local authorities and to bring to bear our research expertise to try to puzzle out what it will mean to be a councillor and political leader. I think it will mean something quite different from the kind of elected service managers we have seen in the past, because most councils will move down the commissioning route and share their services. That model, which I caricature, where back-bench councillors walk around their patch looking for bins that have not been emptied so they can take the complaint back to the council, will not work in the future, so we need to work out what will.

Baroness Eaton: As an organisation we have done a lot on topics like community budget and Total Place, and issues around more localised services and how you manage that. But I think many local authorities now look at recreating services in a different way and doing social enterprise, which is working with communities for solutions to some of the services that are required to be given in a different way. The organisation also spends a lot of time on member development and training. We have arms of the group which deal specifically with leadership training and training for councillors-"training" is the wrong word; it is "development"-so they can know the issues of the day, the implications of legislation and what it will mean for their roles. I think that when people see the nature of what they can do in communities, there will be very many more people willing to stand for councils than perhaps there have been in the past few years.

Q370 Bob Blackman: I am interested to hear you say that. Mr Parker, you cut off at the end. At the moment, most non-executive or non-cabinet member councillors feel completely isolated. Often I think they see their role as wandering round their wards to find out what the problems are and reporting them to the authority to get them fixed. What you did not go on to say was what you believed would be the role of those councillors in the future. Clearly, they will need support to get to that role. Where do you see them acting in future?

Simon Parker: We shall be doing some research on this and I do not want to prejudge the results of that. It seems to me that probably there is a role there that is about civic entrepreneurship. I talked earlier about building social resources and social capital trust. A lot of back-bench councillors have started to do that already, particularly when they have things like ward budgets. They set up projects that build up the capacity of their communities. I think that increasingly that role will be about almost working like a community entrepreneur and then bringing that back into the council.

Q371 Bob Blackman: To press you, do you see them being decision-makers about the services being provided in their wards? Is that where you see this going?

Simon Parker: I think that could be part of it; it will vary in different areas. For instance, one of the interesting ideas to explore is whether, if we are to share services across several local authorities, it means that wards or neighbourhoods can commission variations in those services. If I am sharing services across a couple of counties, does that mean that each village can choose a tailored refuse collection or street-cleaning service? If you did something like that, where the extra costs of the tailoring are offset by the scale, then that is about ward councillors having quite a big say in how services are delivered in their areas. Certainly that could be part of the role.

Q372 Bob Blackman: Do you agree with that, Margaret?

Baroness Eaton: I do. I think that looking at things like community regeneration is a valuable role for local councillors, because they know their area and their community’s needs. At the moment, with the legislation and thinking around being less centralist, you find organisations like the church, the council, future builders and others coming together.

Q373 Bob Blackman: Can you be a bit specific on the issue of individual councillors?

Baroness Eaton: Sorry, their role?

Bob Blackman: Yes. Do you see any limitations?

Baroness Eaton: There are always limitations when human beings are involved because they are not all coming out of a mould. I think the opportunities are there and inevitably some people will rise to the challenge more than others, but I think it is a very good opportunity. I do not know any councillors who in my experience would not rise to that and be absolutely excited at the prospect of being actively able to do something in their ward. In many councils we now have delegation of budget. In my own, you get highway money to manage highways according to the needs of the rural part of a very large urban area. There are lots of areas that can bring councils into decision making. I think there are plenty of opportunities and they will be grasped.

Q374 David Heyes: Whatever the role or functions of councillors now or following the Bill, I guess you subscribe to the view that a democratically elected authority should have a pre-eminent position in any locality.

Baroness Eaton: Yes.

Q375 David Heyes: Do you think the Government share that view?

Baroness Eaton: Is that because you think the role of elected mayors might blur the two roles?

Q376 David Heyes: I am not really focusing on elected mayors. I think we come back to the lack of definition of what localism is. Is it just decentralisation to the lowest level regardless of the democratic role or, at the other extreme, is it just enhancing the power and status of local authorities? Which of those is it? Is your view of the world, which sees an important and continuing role for local democratically elected authorities, really what the Government want to achieve through the Localism Bill?

Simon Parker: That is a very good question. I subscribe to the view that elected local government is critically important. I find it hard to imagine how you can do localism without local government. The idea that you will have just a direct relationship between the centre and the citizen is absurd, but the Government are introducing new forms of direct democracy, which are challenging to local government. I think local democracy will remain very important just because I do not think we have a convincing alternative. No matter how much direct democracy you introduce, you will still need locally elected councillors to take a strategic view across the area and make trade-offs. Do I think that what the Government want to see happen is stronger locally elected government? You would have to ask them. It would be good to hear them talk a little more about that role, because I do not think we have heard a great deal from them about strengthening the role of officials elected to local government. I would like to hear a bit more about that.

Q377 David Heyes: Do you want to add to that, Margaret?

Baroness Eaton: I also feel that without local democracy, there is no real accountability-for financial things particularly. The business community and many others would have serious concerns if there were no framework of democracy within localism, and how they related and worked with, as you say, groups that are not accountable in the way local democracy is.

Q378 George Hollingbery: We have already mentioned the idea of local government financing and devolving power down. Can you truly have local democracy controlling itself without it having substantial tax-raising powers, certainly much more substantial than now? I want to get a bit more detail on that. I want to turn to another devolved local power: the Total Place project and whatever you want to call it running on from here. I would like a quick comment about how the pilots are going out in the communities. Have you heard anything about those? More particularly, do you think Whitehall truly gets it? Is Greg Clark running up against a massive brick wall here? He does not think so. Recently, we asked him whether he thought it would all work happily. He was smiling away and saying it would be great. Some of us are not particularly convinced. We are to take evidence from the Minister for Work and Pensions, and in a moment we will be taking evidence from the Minister for Policing. What sort of reaction do you think we will get from them?

Simon Parker: On finance, we have been very clear: we would like to see local government raising more of its money locally. It seems to us that, at a time of cuts, local government needs to be able to have an honest and open conversation with local people about what services should be delivered and how they should be paid for. That is very hard to do when you do not raise much of your money locally. We would like to see at least 50% raised locally, and ideally a good deal more. The business rate is undoubtedly part of that, but we would also like to see greater freedom for councils, where their citizens support it, to engage in more charging, particularly where that is means-tested, and to engage in more trading and be more entrepreneurial. We would like to see not only more money being raised locally but for that money to come from a much more diverse and buoyant range of sources.

Q379 George Hollingbery: To intervene quickly, does that not lead to the potential for two-tier councils, so we have some councils that are flexible, well-funded and can rely on their local electorate to fund everything and are responsible and accountable, and those that still rely on central Government and are tied to their apron strings?

Simon Parker: I do not see that it need do. We do not need quite as much money as central Government currently dole out to equalise. You can do that with less. I am not sure what the exact figure is, but I am sure I could dig it out. There is no reason why you could not give local government more freedom while still equalising. There is no reason why you couldn’t do that. Moving on to the Total Place issue: if you are looking for a game-changer for local government, finance is one part of it and Total Place is the other part. Those are the two things on which I would like to see the Government move next.

The way we have started to think of Total Place is through this idea of a right to bid. The idea is that local government should be able to bid on behalf of communities, basically, to get aspects of central Government money. Perhaps that is for Jobcentres and dealing with the problem of worklessness; perhaps it is for criminal justice, but they should be able to bid and the Government should have to respond to that. If a local authority can show that it can join up services and commission them in a more efficient way, it should be able to get hold of that budget. The presumption should be, in line with our idea of a duty to devolve, that that money will be devolved unless the Government can make a convincing case for keeping it.

Q380 George Hollingbery: The Minister told us in plain words, "I am sitting here waiting for the ideas to come pouring through my door." Therefore, local government can write to him at any stage, and he will facilitate things to help that happen across government and perhaps go out and write the cheques. I am not quite sure how it will work. Do you think that will happen? Is Whitehall really going to give up the control?

Simon Parker: The idea of the right to bid means that Whitehall will have to give up the control. If a local authority asks for that budget, central Government will have to come up with a convincing case for not devolving it. The whole point is to move from the old idea of local government earning its autonomy to a new idea of central Government having to earn the right to keep power centralised and having to make that case.

Baroness Eaton: I am sorry; I missed part of your question. Are you talking about the Secretary of State for DWP?

Q381 George Hollingbery: He is coming shortly. We previously heard from the Minister for decentralisation.

Baroness Eaton: We in the Local Government Association believe that the Work Programme should be localised and would be more effective, but DWP have not given any details and confirmed that will happen; they have closed the drawbridge, so we are not getting very far on what we feel would be a good way of delivering a better service. I believe we have given a memo to the Committee on this, which you will have seen. But I think part of the problem with Total Place and what followed, which we prefer to call community budgets, is that it would require all Departments to get it. Although we have started to get some movement around families with complex difficulties, that needs to be much broader than just that experience, but it demonstrates that if resources are brought into one place they can be used in a way that is more effective and efficient and saves money.

I am not sure that all parts of Whitehall get it. Health is beginning to get it more than we ever thought it would, and certainly education is, but there is a long way to go in other Departments. As for local government finance, for a long time we have advocated the return of the business rate in local government. If we want true localism, that really would be a time when all money was raised locally in one form or another, whether or not by local taxes. You would then have genuine localism because each local authority would be able to manage the resources according to the needs of the place and have less control from the centre.

Q382 Heidi Alexander: Perhaps I may ask one or two questions about the appropriate role of central Government in delivering localism. A number of witnesses who have come before the Committee have talked about setting either a framework or minimum standards for services. What do you see that framework or minimum set of standards looking like and how do you think it might be negotiated?

Baroness Eaton: There are some services where it is perfectly right that there should be a national standard, for example, child protection and some of the sensitive issues, but there are other areas where the local decision would be to do something differently because of the nature of the population. If Government provides the framework, I am quite happy for Government to say what they would like to have delivered in that context, but how it is delivered is where localism comes in. In the past, we have seen something like outcomes. For instance, Whitehall might think that an outcome for health might be the number of children who have had an injection for something, whereas probably the outcome is the number of children who do not get the disease. There are some issues about measuring what outcomes are. Therefore, when things come to a local level, the outcomes are demonstrated in the lives of people rather than that a particular box is ticked to say that so many pills have been given out and those are the outcomes. I think there is scope for a framework and minimum standards-but not in everything-in areas where one would expect a national quality.

Simon Parker: To a large extent that is right. There are services where you would want minimum standards. Clearly, you will need failure regimes and that is a big one for central Government.

Baroness Eaton: Yes, market failure.

Simon Parker: Yes, but not just for individual local government services. If local government were to fail corporately-local authorities do-then how will that be dealt with? I do not think that is clear at this stage. Central Government have a role in creating the right kinds of conditions for local innovation. We have talked about what some of those things might be. Some of it is around the Total Place approach and right to bid; some of it is around finance; some of it is around what CLG seem to be focusing on now, which is the removal of barriers and burdens. It is better if that can be done in a joined-up way across government.

The Government have chosen not to do it, but I think there is a legitimate role for central Government in setting a small number of strategic goals they want to achieve across society. I would probably limit those to five or 10 really big outcome-focused ones, but I think it is useful if central Government are able to be clear about the things they really care about and focus activity at local level. I do not think they need be very bureaucratic. There is another role around making sure there are good data out there, so we know what is going on on the ground and is being achieved. Therefore, it is information, strategic goals, the conditions for innovation and that kind of safety net and, on top of that, ensuring that the sector is regulating itself effectively, so providing some kind of quality assurance.

Baroness Eaton: One thing we have not mentioned is the removal of ring-fencing. That is to be welcomed because it means local government has freedom to be more flexible with some of the money. We did not mention that earlier. To come with prescribed boundaries around money is not helpful.

Q383 Heidi Alexander: Do either of you see a role for central Government in assessing the efficiency of local government and value for money?

Simon Parker: It is a very interesting question and I am just trying to think. To put it this way, I think there is a very important role in assessing efficiency. I do not know that it is necessarily central Government’s job to do it. If sector self-regulation plus armchair auditors can do that, that is fine by me. We need to wait and see the quality of the data we get and how effective is the combination of self-regulation and armchair auditors.

Baroness Eaton: There is a lot of work going on at the moment about creating a process of self-regulation. A push across local government for better data has been going on for quite some time. There must be value for money, but I do not think it is necessarily the role of central Government.

Q384 George Hollingbery: I know the Chairman wants to close this and move on to the next session, but we are particularly advised to ask you about skill sets and whether or not there are skills at the officer, council and third-sector level to make all of this happen. Perhaps you would give a very brief reply.

Simon Parker: They are there to some extent in some places and they will need to become much more widespread.

Baroness Eaton: There is a danger in being too prescriptive about what sort of person and what skills make a good councillor. Sometimes some people surprise you.

Q385 Mark Pawsey: Does that mean that we will not get the immediate benefits of localism because we have to wait for the existing cohort of councillors to be retrained or for new ones to come forward, or will we get the benefits fairly immediately?

Baroness Eaton: I think that the existing collection of councillors across the country will come up to the mark.

Q386 Chair: Margaret, in terms of the LGA’s position on the business rate, do you favour not merely authorities keeping the amount they collect but also being able to set the rate?

Baroness Eaton: Ah. I put my hand up; I do not know.

Q387 Chair: Can you drop us a note about that?

Baroness Eaton: Yes, of course. We believe in collecting it locally and having the ability to spend it locally, but I do not know about raising it locally. We will drop you a note. I am terribly sorry not to know that. It is a fundamental point that I should know.

Q388 Chair: Referring to what Simon said about the broader range of options for local government to raise money, perhaps I may put a naughty little question at the end. Therefore, would the LGA support the suggestions by the Deputy Prime Minister, which I understand are being resisted by the Secretary of State, that the review of local government finance might go a bit broader than simply the localisation of the business rate?

Baroness Eaton: I think it is for discussion, because it is one of those things some members would wholeheartedly support and others would not, but it needs to be looked at.

Chair: We finish with a politician’s answer. Thank you both very much indeed.

Examination of Witnesses

Witnesses: Rt Hon Nick Herbert MP, Minister of State for Policing and Criminal Justice, Home Office, and Rt Hon Chris Grayling MP, Minister of State, Department for Work and Pensions, gave evidence.

Q389 Chair: Ministers, thank you very much indeed for joining us this afternoon for the seventh evidence session in our inquiry into localism. For the sake of our records, would you just identify yourselves and say which organisation you represent?

Nick Herbert: I am Nick Herbert, Minister of State for Policing and Criminal Justice in two Departments, the Home Office and the Ministry of Justice, although I think I am here principally as Policing Minister.

Chris Grayling: I am Chris Grayling, Employment Minister.

Q390 Chair: Thank you both very much for coming. All Departments have business plans at present. What conversations took place within your Departments and, presumably, others-maybe CLG with the Minister for Decentralisation-about the extent to which those plans properly and completely reflected the Government’s aim of decentralisation?

Nick Herbert: We have had ongoing discussions that began in opposition and continued in government with colleagues responsible for driving the localism and decentralisation agenda and promoting the big society right the way through. I believe that the policing proposals in the Home Office for the creation of directly elected police and crime commissioners strongly reflect the agenda of devolving power. It is very important that we continue what I think have been important relationships at local level between local authorities and policing widely in terms of ensuring that communities are made safer-the community safety agenda-at local level. That means the Home Office has ongoing discussions with CLG about those sorts of issues, and CLG are partly responsible for funding the police. So I think it’s fair to say that the conversations we have at both ministerial and official level on these issues are quite extensive.

Chris Grayling: The same is true for us. Our position is slightly different in that a number of the welfare reform programmes we have brought forward are national by nature but will clearly be local by implementation. There is a difference in approach between what we are doing and what the Home Office and MoJ are doing but, most fundamentally, where we can we look for ways to devolve and decentralise, where we can add value and we think local communities can deliver better solutions, and where local authorities would benefit from local discretion. We have had extensive discussions not only with CLG but other Government Departments about the best way to deliver change in the right way.

Q391 Chair: Is there any formal process whereby business plans almost have to be signed off by the Minister for Decentralisation, who says that that Department gets it, it is on track and it is doing the kinds of things he would expect them to do in line with the Government’s overall policy?

Nick Herbert: I think the formal process is that the business plans are signed off at the centre, if you like. They ensure that the right principles, which apply to the Government as a whole in terms of trying to drive this agenda, permeate the plan. But we are very conscious of them in shaping policy and then executing it, and the fact that the starting point for this coalition Government is about returning power to people and communities and decentralising wherever we can and making the notion of the big society a reality. It is not something that is done just by tick boxes and compliance with the requirements of the CLG; it is about the attitude of the Government as a whole, and we have been more than willing to engage with this agenda.

Q392 Chair: Before the Minister replies from the DWP’s perspective, what you have said really echoes our look at the business plans. DWP had many fewer references to the localist agenda in its business plan. Is that because you did not get round to thinking about it or simply because you do not think there are as many possibilities in terms of your Department’s remit to adopt localist solutions?

Chris Grayling: It depends on how you look at localism. To go back to the frame of your question, all of the business plans are signed off by Ministers in the Cabinet Office, whom I see as the guardians of ensuring that the business plans are consistent with Government policies in relation to areas like localism, and they will certainly hold us to account if they do not feel we have the right mix. Broadly, what we have not done is devolve responsibility to local government. A lot of the delivery of our programmes will be handled through the third sector, the private sector and local community groups.

Local government certainly has a role in partnership with the DWP, but the essence of what we seek to achieve with our welfare reform programmes is more to capture the strengths of the third sector, the voluntary sector, in those communities than to devolve power to local government. I will explain why we have taken that particular approach when we talk about the Work Programme. That does not mean we are not looking to devolve responsibilities to local government. In some areas, for example the proposed changes to the social fund, clearly we look to move powers to local government, but it not quite as clear-cut as simply saying we are trying to take responsibilities out of the DWP and migrate them en bloc to local authorities; there is a mix.

Q393 Chair: We will come to the Work Programme in a minute. I think you have answered my next question about whether your Departments see localism as being about local government or local communities. Perhaps the Minister for Policing would respond from his point of view.

Nick Herbert: The principle we have always tried to set out across government is that we should aim to return power and devolve it to the lowest possible level and, where possible, put power in the hands of the individual. Where that is not possible, practical or desirable, it may be a question of putting it in the hands of community organisations. It may then be appropriate to put it in the hands of local government, but in the case of policing, we are talking about transferring power from non-directly elected, invisible and relatively unaccountable police authorities to individuals who will be directly elected. That is not an agenda that in itself is about returning power to local government, although it is very important that these individuals work alongside local authorities. Representatives of local authorities will have a big part in these reforms, because they will play a part in our new police and crime panels. Therefore, there is a fit between the two organisations. I do not see the decentralisation agenda as being purely about returning power to local government. That is a very important element of it.

Q394 James Morris: To press you a little on that, do you not think there is potential for identifying a contradiction in Government policy? On the one hand, the Government talk about decentralising power to local government, but in other parts of government-not necessarily your remit-there are initiatives going direct to communities and individuals. Is there not a danger that the tension that sets up will create some policy breakdown?

Nick Herbert: I do not think so. The important thing is that we reverse the decade or more of deep centralisation where power has accrued to Westminster and Whitehall, and decisions that properly should be taken at local level have been taken at national level. Policing is a very good example of that. In what I am sure was a benign effort to drive up standards, there was an ever greater direction of policing by the centre, reflected in a proliferation of targets, some but not all reversed by the previous Government, and a policing pledge that was very prescriptive about how local policing should be delivered. The paradox is that where central Government became ever more prescriptive in these kinds of areas, which I think divorced local policing from local people, they were not strong enough where they needed to take a strong stance on things like serious and organised crime, which cross force boundaries.

Q395 James Morris: Is the corollary of what you are saying that in certain circumstances, local government has been part of the problem rather than the solution; hence you want to get it lower down?

Nick Herbert: I am sure there are opportunities also for local government to give away power too, but as far as concerns community safety, one of the advances in recent years has been the way in which local authorities now accept a role in the delivery of it. It is a statutory responsibility. We know that crime is fought effectively through local partnerships and the police cannot do it on their own. Improving those partnerships and making them action-oriented with less process and ensuring the local authorities continue to step up to the plate, even though funding will be tighter, is all really important. But in all of this the under-developed element is communities and the ability of people to have a say in policing and a greater role in the safety of their own streets and neighbourhoods. That is an under-developed piece. I do not think it is the fault of local government-in partnership it has a big role in helping to facilitate a lot of it.

Q396 Mark Pawsey: Minister, you spoke about communities and voluntary groups becoming more involved in service delivery. Clearly, in the case of the police, special constables are an easy example of where volunteers can get involved, but in the Work Programme, how will communities and voluntary groups get involved? What can they do at a practical level?

Chris Grayling: We have sought to create a framework for the Work Programme within which there is a clear place for those smaller local groups. It has been a challenge to find the right balance, because in order to deliver a system of payment by results and the AME/DEL model that uses benefit savings to pay for the cost of the programmes that get people back into work, we have needed to approach overall contracting on a national basis. A number of representations have been made by local authorities to be part of the commissioning process. With respect to all of them, it is just not practical, because in theory we would be trying to work with a very large number of local authorities around the country to put together a complex commissioning process with ultimately one financial path that allows us to access and spend the money. It was simply impractical to try to do it on a fragmented basis.

We have established a framework on a regional basis. For want of a better way to express it, it is an approved supplier list from the private sector. There are potentially some prime contractors from the voluntary sector in the framework among those who came forward and bid. Obviously, for those organisations, the key requirements include the ability to do the job but also the ability to bankroll it, because clearly on a payment-by-results system they need the capital base to deliver. Therefore, at that level it is very difficult to involve smaller local community groups, because they do not have either the legal status or the financial substance to bankroll a proper payment-by-results system.

We all know, however, that some of the best support delivery, particularly to the harder-to-help groups, comes from within the voluntary sector, for example the local community group that works with young people in an area where there is a gang problem; it may be a specialist charity that has expertise in working with people with mental health problems, and so on and so forth.

Basically, we have done two things. First, we have said to would-be prime contractors-those that have bid to join the framework and are now bidding to take up the individual contractual pieces of the Work Programme-that it is their job to assemble, to use a topical phrase, a coalition of organisations that can deliver the breadth of specialist support that is needed by the individuals we seek to help. That will involve them assembling a group of smaller voluntary sector, private sector and local community groups in their teams. If they do not do that, they will be severely disadvantaging themselves in the bidding process and effectively they will move to the back of the queue and will not get a contract. From the contacts I have had with the voluntary sector, I am encouraged to see that a lot of smaller groups are now involved in the process and are talking to the prime contractors. When we see the bids come forward in about a month’s time, I expect to see a broad range of smaller local organisations in the mix.

The second piece is to ensure that those organisations are not disadvantaged in terms of commercial arrangements and are not duffed up by the big guys. Therefore, we have introduced a code of conduct called the Merlin Standard, which effectively provides contract protection for those individuals. Basically, if the big guys duff up the little guys, they can lose their contracts.

Q397 Mark Pawsey: Do you sense that the smaller providers know where to go, understand the mechanism that you have put in place and you are confident that plenty of them will come forward?

Chris Grayling: I think so. We have gone out of our way to try to make sure they are there. When we first advertised the Work Programme in the summer, we had about 800 expressions of interest from all kinds of organisations. Of those, about 100 came forward to bid to be prime contractors. First, we established a series of briefings for voluntary sector organisations. We established an online dating service for them with the big guys, so they could put in details of their organisation and capabilities on a site that was also used by the major contractors to assemble capabilities.

We have completed the framework and started the second phase of bidding. We have contacted all of those 800 organisations and explained to them how to get involved with the would-be prime contractors. We have explained the Merlin Standard to them and the duties on the shoulders of the bigger guys to have the little guys working with them. I think we have done everything we can to put them into the mix. From the conversations I have had with smaller groups, they seem to be part of the equation and are in discussion with the big guys, and I expect them to be there when the bids come in. I cannot guarantee that every single community organisation around the country will be in that mix because clearly not all of them will be, but I am very confident that we will see a really diverse mix of organisations involved in this right across the country, which is what we are trying to achieve.

Nick Herbert: It is the same in the field of criminal justice. We are also piloting the notion of payment by results to reduce reoffending, which is a really radical advance analogous to the welfare-to-work proposals. We also do not want to shut out the voluntary sector. Clearly, there is a role for new commercial providers, but voluntary organisations are doing fantastic work in this field as well; similarly, we want to find ways to ensure that they can be part of the process in the pilots that we are about to undertake.

Q398 George Hollingbery: To be absolutely clear, Minister, you say that effectively the single Work Programme isn’t compatible with decentralisation, but the overall framework is. You are levelling the playing field at the bottom level to ensure that useful community assets are brought into the mix.

Chris Grayling: Yes.

Q399 George Hollingbery: But effectively it is incompatible with decentralisation.

Chris Grayling: The problem we face in trying to decentralise is to do it on a local basis through local authorities. If you think of the mechanisms that underpin the Work Programme, effectively the prime contractor carries the financial risk of getting people into work. They are paid when they are successful. As to the payment arrangements for the Work Programme, in the first three years of the contract there is a small upfront fee per placement, but after that it disappears. Typically, they will receive about 25% of the payment after six months and the rest in instalments over the following 12 months for a typical jobseeker. So they need the capital base to cope with that.

Fundamentally, it is no different from setting up any other business because you need to carry cost for a while until you start to make a profit and eventually hit break even. It is a similar approach; they need to be able to carry that cost, but in terms of our payment mechanisms, we then need to be able to say to the Treasury, "They have got so many people into work for this period of time. The AME savings are this much and therefore hand over the money so we can pay them." Although there is a mix of AME and DEL in the programme, what uncaps it-basically, there is unlimited potential for the providers-is the ability to use AME money for the first time to offset those costs. I think it would be impossible to try to create an AME/DEL mechanism of that kind to have big enough providers to deliver the capital base to support a payment-by-results system, and then to try to do it across dozens of local authority areas in anything like a sensible timeframe, monitor it and deliver it.

Q400 George Hollingbery: You are saying that basically there is no role in the single Work Programme for local government.

Chris Grayling: In terms of the structure of the programme and the contracting, no, but I entirely expect that local government will form partnerships at a local level with the providers. There are compatible services and both will want to work together. Another key point is that the framework, the approved supplier list, is designed to allow other public sector bodies that have additional demands to contract for additional services quickly and easily from the Work Programme providers.

Where I see the real opportunity for local authorities is that if your local authority area has a particular problem with NEETs, for example, it can decide to allocate a chunk of money to contract with the Work Programme provider effectively to deliver an enhanced bolt-on service over and above the core service that the Work Programme provider is offering, and for the provider to do it quickly and cheaply, because some of the overhead is already covered in the core contract. I think the real opportunity is for local authorities to use the framework to add a local dimension to the national programme. I hope that is where the partnerships will be formed.

Q401 Chair: When we asked the leaders of both Barnsley Council and Surrey County Council which area they thought ought to be opened up to greater local government involvement in trying to shape services currently delivered by central Government, both named DWP. The chair of the Local Government Association told us just a few minutes ago that DWP basically had pulled up the drawbridge on their communications with local government. I think they would see all the explanations you have given, Minister, as simply a government Department that just does not get the localist agenda.

Chris Grayling: I do not accept that at all. If you take other areas, for example the social fund, we look to localise. I think it is right and proper that support of that kind should be handled by a local authority. Where there are areas like the social fund and we can devolve responsibilities to local communities we will do so, but, for the reasons I have just explained, to try to contract a pretty revolutionary programme like the Work Programme on a fragmented basis was, in our judgment, simply impractical. Also, time-wise-this is a real imperative for us-we have pressures in the labour market that we want to address, and we need to end some of the relatively unsuccessful and extremely expensive programmes we inherited from the previous Government, and replace them with a payment-by-results approach that we think has a much better chance to deliver tailored specialist support for individuals.

It was a judgment call. It is the kind of thing that can be organised only in the way we are doing it on a national basis, but what we have to do is make sure there is clear space within that for local government to play a role. I think the framework offers a really valuable opportunity for local government to build on a core that we provide through the Work Programme and add enhancements tailored to their local area at relatively low cost.

Q402 Chair: I heard the point about the timeframe. Are you saying that, given more time to develop over the medium term, the drawbridge might be lowered slightly and there would be opportunities for local government to become more involved in the future?

Chris Grayling: The mechanism that the framework involves provides that route; it provides an opportunity for local government effectively to match fund some of the money we put in. We are paying for the core overheads through the Work Programme mechanisms, the teams that will help individuals and the centres where you see that support provided. It provides the ability for local government to buy an extra dimension to that service at a much lower cost than would be the case if it was simply starting from scratch. I think the framework offers local government a huge opportunity to tailor something extra for their area that really meets local needs and challenges. It is a great opportunity for them, even though I do not think you can approach the contracting of something like that on the fragmented basis that would involve tens if not hundreds of local authorities up and down the country.

Q403 Heidi Alexander: I would like to ask a few questions about the culture change that is required in your Departments in order to deliver the Government’s stated drive towards localism. Minister, you talked about the Work Programme. Clearly, the advice you have received from your officials is that this is too complicated and bureaucratic. Can you tell me what steps you are taking if you have a problem in changing the ethos among civil servants in your Departments?

Chris Grayling: I have not really found that to be a particular problem. As the ministerial team, we have been very pleased by the calibre of support we have received and the openness of the Department to change. We are taking the Department through a revolution. If you look at the combined impact of the universal credit, the Work Programme alongside the move to start the migration from incapacity benefit, together with all the measures announced in the spending review last year, this is probably a bigger programme of change for the DWP than it has ever been through. We have not found any resistance to change or to thinking out of the box. There is a genuine willingness to help us deliver the agenda.

From our point of view it is about identifying where things should be done centrally and where they can be done locally. In terms of the localism agenda, I give you one internal example of what I seek to do. I want to devolve much clearer power and responsibility to Jobcentre Plus frontline staff. I want local managers to take far more local initiatives in their own right. In our programmes to try to address some of the employment issues, we are consciously not prescribing from the centre what they should look like and how they should be done; we are leaving local Jobcentre Plus managers to take those decisions and to form local partnerships, whether with employers or local authorities.

A good case in point is the development of work clubs, where all we have said to local Jobcentre Plus managers is, "This is a good idea. We are not going to tell you how to do it. Work it out in a way that is suitable to your area. You do not have to do it yourself but you can be a facilitator with other people to set up such clubs. We will not impose targets on you; we will not tell you how many have to be set up. Just go and do it, and here’s a bit of money to help you do it." That is the approach we have taken and so far we are very encouraged by the development. They are all very enthusiastic. Every time you talk to a Jobcentre Plus district manager they will say these things are growing very fast. The localism agenda does not have to be about saying, "We will take powers and put them in a different organisation"; sometimes it is about saying, "We will interfere less from the centre." That is something we are really trying to do.

Q404 Heidi Alexander: Do you discourage discussion between your frontline staff and local authorities? Do you actively seek to include local authorities in that agenda?

Chris Grayling: I do not discourage local discussions in any way, shape or form; indeed, I am very keen to see partnerships formed with local authorities, particularly at local level. We have some good professionals in Jobcentre Plus who I think will benefit from the formation of partnerships. One area I want to see more of is colocation of services between what we do and they do; for example, more opportunities for shared services that sit side by side in Jobcentre Plus offices, or for Jobcentre Plus offices to move into local authority buildings so that effectively people can get more for a single visit.

Nick Herbert: That is certainly true of policing, where there is a big opportunity for shared services between policing and local authorities. Like Chris, I think that far from there being any kind of cultural resistance within the Home Office, I think there was an interest and enthusiasm in terms of the new agenda, which was not unexpected, from the incoming Government. Our commitment to decentralisation, localism and the big society had been well flagged up, and it married very well with the Liberal Democrats’ long-standing belief in localism in their coalition programme.

The fact that the Home Office is Ministry for the interior or security means it is a challenge for them to identify areas where power can be returned or exercised somewhere other than in the Department. I think the challenge is not just for officials but for everyone in substituting a form of democratic accountability of policing at a local level-police forces sprang from local communities-for what exists at the moment, which is a very bureaucratic form of accountability. It requires new ways of thinking.

Very often, we have found that people are still attached to the old way of doing things because that is what they have known for some time. That is true of some in the service themselves. We often find that the police service asks Ministers to intervene and do things and prescribe because that is the world they are used to. Similarly, Members of Parliament, if I may say so, often ask Ministers to intervene or comment on what are very often operational policing matters or where the governance has shifted. In relation to London, the Home Secretary is no longer the police authority; the Mayor and MPA have that function, yet we are very often asked questions and asked to do things that imply we are the ones who have some kind of answerability.

The whole agenda, which is a very big one, requires new ways of thinking and getting used to that, but it is nevertheless an immensely empowering one, which, as Chris says, is also about restoring professional discretion and local decision making. The strong sense I have from local communities is that they want more of a say in the areas of community safety and policing; there is a great appetite for it.

Q405 Bob Blackman: Those answers lead on to the questions that I want to pose. One of challenges under the Localism Bill and agenda is the temptation for Ministers to make comments or issue diktats from the centre on what should be done at the same time that decisions on services are being taken at local level. Could both of you give me an example of an area where either part of your team or your predecessors have made comments or commitments in the past that you expect to see devolved down to local level for decision making?

Nick Herbert: If I may go first, I give the example of the policing pledge, which was instituted by the previous Government. £6 million was spent on promoting it. If you look down the list of items in the policing pledge, it is impossible to disagree with any of the things that forces were undertaking to do, for example answering calls within a certain time and so on. The question is: was it right for the centre to be so prescriptive about the process of how policing should be done, or should we be much more interested in the outcome-crime falling and people being safe-and trust the service and professionals to deliver but hold them more strongly to account for those outcomes? I think that is a very good example of where we have very consciously stepped away from that kind of very directive form of government.

There is some criticism because there are some who say that there are good things in the pledge and Government should remain signed up to them, and we should be forcing forces to implement them. I think that is the old politics of seeking to control from Whitehall and not understanding that the great price for that was the sapping of morale and erosion of professional discretion, leaving too little space for local innovation. It was done for benign reasons, as I said before, but it had the wrong effects.

Chris Grayling: I would echo that. I do not look back at the previous regime and say these were people who deliberately set out to cause problems, but the consequence of trying to do too much from the Minister’s desk was hugely disruptive for the organisation. This morning, I spoke to a Jobcentre Plus manager from East London, who told me that now we had got rid of some of the mechanisms of interference, her staff had so much more time to get on with the job. She said they used to have to fill in all kinds of forms and paperwork for the Department, and they now did much less of it, and therefore they were able to do useful things like form partnerships with local authorities, get work clubs up and running and hunt for opportunities for young people to do work experience.

That is really what we want the Jobcentre Plus teams on the ground to do; we want them to look outward and sort out problems in their communities, not look over their shoulder at the Minister, wondering whether they are doing the right thing. Therefore, we have tried to reduce the number of performance targets and the mechanisms for interference. Trust the professionals and devolve power to the front line.

Q406 Bob Blackman: I move to the general power of competence that is being created for local authorities. That suggests there is potential that at local level they will do things that your Departments do at the moment, and that there will be challenges. One thing on which I want to question you, Mr Grayling, is local authorities’ responsibility for the administration of housing benefit, which is hugely expensive and bureaucratic, being repeated by every local authority all over the country with armies of bureaucrats. At the same time, most people in receipt of housing benefit will receive all sorts of other benefits. Why not combine them all under local authority control?

Chris Grayling: The current situation on housing benefit and other out-of-work benefits will inevitably be superseded by the universal credit when it arrives after 2013 anyway. So the current arrangements are bound to change. As to the universal credit as the national system of single benefit to be paid across the whole country, although we have not taken final decisions on implementation and exactly how it might be paid out, my expectation is that would be held on a national basis. By contrast, for some of the other support we provide, for example through the social fund, the intention is to devolve, so that crisis loans become very much a matter for the local community to deliver, and to decide and identify priorities for the local authority to administer. Where it makes sense to bring things together we will do so. You could not create a national benefits system but devolve it. What you can do is devolve the things where there is clear logic in taking decisions locally. The social fund is a case in point.

Q407 Bob Blackman: Are you saying that it will not be the responsibility of local authorities to administer universal credit?

Chris Grayling: I think it is likely that it will not be, but we have not taken final decisions about the detail of that aspect of the implementation. At the moment, we are working through it to try to make it a reality.

Q408 Bob Blackman: Are there any areas within your Department’s responsibility that you see falling under the general competence that local authorities will take over as a natural reaction, apart from the social fund?

Chris Grayling: The social fund is a case in point; that is the main and immediate example. We are still considering the issue of council tax benefit where clearly there is a potential, but we have not at this moment reached a decision on that.

Q409 Bob Blackman: Mr Herbert, are there any areas of general competence that local authorities are likely to take on?

Nick Herbert: Yes. Far from being concerned about the general power of competence and local authorities doing more in the area of crime and criminal justice, I welcome that. First, we want them to maintain their existing level of activities in ensuring community safety. This is an important advance and I am very anxious that local authorities continue to forge these partnerships with policing and other services to ensure that their areas are safer. Even where they have less resource to work with, this is a high community priority. There may well be opportunities to extend their role in the wider field of criminal justice policy, as that potentially is devolved in future.

There will be some areas where there is a role for local authorities, and others where the role is more naturally for police and crime commissioners, who naturally will look after forces within their areas but have responsibility, too, for community safety, with a devolved budget from the Home Office to help to deliver community safety programmes and work in partnership with local authorities. So I think the strong direction of travel will be for more to be done at local level, and it will evolve as the right balance between what local authorities do and what police and crime commissioners do is achieved.

Q410 Bob Blackman: What guidance or help and support are you providing in advance of the Bill becoming law?

Nick Herbert: First, we are communicating with community safety partnerships to ensure that they become action-oriented and maintain their agenda as I described. That is very important. As the Police Reform and Social Responsibility Bill is going through at pretty much the same time as the Localism Bill, we will want to articulate how newly empowered local authorities will work alongside newly empowered police and crime commissioners with their police and crime panels. There is not a problem with that because it is exactly the same form of local partnership that local authorities currently undertake with police forces. It is a development of it, but I think both will have rather more power devolved to them by central Government.

Q411 Mark Pawsey: Mr Grayling, You said it was not possible for local authorities to become involved because of the way the operation was working, but you did not mention LEPs. What input can the new LEPs have on welfare-to-work programmes?

Chris Grayling: I hope they will have a very close input. The way we have established the Work Programme really puts it upon the shoulders of the local providers to deliver the best possible approach to getting people into work; otherwise, they will not be paid. My vision for the local Work Programme is that effectively it will be a close partnership between the provider, the LEP, the local chamber and the local authority, and we will see joined-up working across those local agencies. It is in the interests of the provider to make sure that happens, sit at the centre and bring in such support as is available, whether it is specialist advice or employer engagement. Crucial to ensuring the success of the Work Programme are the ties built up between the Work Programme providers and local employers. I see the role of LEPs effectively as a marshalling point for local business and economic interest, and as an essential partner for the Work Programme providers.

Q412 Mark Pawsey: Because it is the LEPs as employers that will know what is needed coming forward?

Chris Grayling: Exactly.

Q413 Mark Pawsey: It is a bureaucratic body that is to be created. How do you see it happening?

Chris Grayling: I think it will happen in an unprescribed way, as it should. At the end of the day, if you are running a provider under a payment-by-results system the key to your success is to match individuals and employer need, and ensure you have the kind of close working relationship with local employers that means that, when you say to the employer you have somebody for them, they automatically assume that it is likely to be somebody who is good because of the relationship they have established.

In order to build those relationships, they will have to work through the bodies that bring those employers together, listen to and understand the needs of local employers, and form a close working partnership to try to meet local skills and employment needs, so to work with the LEP to deliver it is a natural and obvious thing to do. I do not need to dictate that that happens; it will happen naturally. To give an analogy, when we were in opposition. I was once asked by the leader of one of the local authorities in the South East how, when we scrapped the regional assemblies, they would all meet together to discuss common interests, to which my answer was, "Well, just fix it. Clearly, it’s the right thing to do, so go and organise what needs to happen." I believe I do not need to dictate what happens in terms of local authorities, LEPs and Work Programme providers, because it needs to happen and it will, and it is down to them to work out the best mechanisms to deliver it locally.

Q414 Mark Pawsey: What will you do if it is not happening?

Chris Grayling: What will immediately happen is that the Work Programme providers will struggle financially and will have to make it happen. The benefit of the payment-by-results system is that you cannot not achieve excellence, because if you do not chase best practice all the time you will not make money.

Q415 Heidi Alexander: Mr Herbert, I would like to turn the Committee’s attention back to you. I have a few questions about the directly elected police and crime commissioners. The Government are very keen to see these introduced. Does the Government’s determination to see commissioners in place signify wider doubt on their behalf about local authorities’ ability to take on more extensive responsibilities?

Nick Herbert: Not at all. I have been at pains to say that I think local partnerships to make communities safer are incredibly important, and we want to see them enhanced. Police force boundaries in the main cover a number of local authority areas. Apart from London, there is no force boundary that matches a single local authority, so there was an issue for us. In responding to what I think were very interesting ideas about whether the accountability of forces should be at a more local level with local authorities, we faced the problem that we might have enhanced accountability-if you like, at the basic command unit level; at the local authority level-through the direct election of an individual as some have proposed, but that does not answer the question: who runs the force and who is responsible for holding that person to account? I think we would have ended up with a situation where we had lots of individuals holding bits of a force to account. Somebody has to set the budget, appoint the chief constable and set the strategic plan. The question is: is that to be an invisible and relatively weak police authority, or somebody with a local mandate?

Equally, I do not think anybody wanted to see the break up of forces like the Thames Valley or West Midlands to create smaller units that could be accountable to local authorities. What I think was the sensible way forward was to replace the existing police authorities on existing boundaries with a directly elected individual. But it is quite clear that the police and crime commissioner will have to work with local authorities, just as police authorities and forces do now. We are giving local authorities a stronger role in the governance of policing, because we are setting up police and crime panels on which district councils will be represented for the first time. In two-tier and rural areas, district councils have no voice in the governance of policing and they will be given that for the first time. Every local authority in a police force area, whether unitary, county council or a district council, will be represented on the police and crime panel, so I think that we are strengthening the links with local government in a sensible way.

Q416 Heidi Alexander: If an elected police and crime commissioner said that safer neighbourhood panels or their equivalents were a waste of time and money, what would you say to him or her-anything?

Nick Herbert: That is a hypothetical. I think the whole direction of travel has been for the enhancement of forces that want to talk directly to local people. We have made a commitment to hold beat meetings, which can be expressed, as you described, as safer neighbourhood panels, in the way you describe. We shall institute street level crime mapping, which will be a strong, sharp form of very local accountability for policing. I do not see that that is a realistic possibility. I believe that police and crime commissioners, some elected for quite large force areas, will want to ensure that their forces are connected with communities at a very local level. I do not see that they would to reverse that.

Q417 Heidi Alexander: What kind of variations do you see emerging in police services as a result of issues raised through the election of commissioners?

Nick Herbert: In the local area, I hope that the centre-Government-will interfere far less, and that decisions about how policing is delivered will be taken by the directly elected police and crime commissioner, held to account by the panel, with authorities involved in that way. It may well be that in the style of local policing and how a force is delivering local policing services there are some variations, as there are now. In our system of 43 forces in England and Wales there are rather different cultures. Some chief constables are keener on PCSOs than others. Not surprisingly, there is a different policing culture in some of the Met forces from some rural forces.

I have absolutely no problem with the emergence of those differences in the style of policing, provided that they are a reflection of what the local community wants. It is the one-size-fits-all, top-down direction of policing that has helped to divorce local communities from the police, when we know that what they value is contact with police officers on the ground. There is quite strong piloting evidence to suggest that people also want their force to be held to account by an elected individual as well.

Q418 James Morris: Building on that, is there not an argument that we are imposing directly elected commissioners, albeit elected ones, and it might be more appropriate to do it in a bottom-up way and give local communities the option as to which way they want to hold the police to account, given the local variations that you have described? Does that not go to the heart of the contradiction we teased out earlier about saying it is a form of top-down localism in that sense?

Nick Herbert: I see your point. I think this is a reform where we can already see the success in London, so effectively it has been piloted there, given the way in which the Mayor has been introduced with responsibility for policing. We know that it is popular in London and that the Mayor has helped to deliver local policing priorities and hold the police to account while protecting their operational independence.

If we allowed this reform to develop piecemeal across the country, it would raise a question about the interoperability of police forces and the way in which they need to co-operate in relation to things like serious and organised crime. First, I think that to have radically different governance arrangements would be problematic. Secondly, this is part of an agenda that enables the centre, the Home Office, to interfere far less. We cannot just cut police forces loose; they are monopoly public bodies. You cannot choose your police force if you live in an area; you have to put up with that police force. Therefore, it is very important that police forces answer to someone, and there would be a problem in the Home Office deciding where we were able to let go and where not if some forces had stronger local accountability and others did not.

Q419 James Morris: To press you on that, London has a clearly defined, bounded police entity: the Metropolitan Police Authority. If you look outside London and take the example of West Midlands, which I know a little about, is it not the case that you have lots of different priorities there and a directly elected police commissioner might have too broad a remit geographically to be able to respond to particular local policing nuances in the Black Country, for example?

Nick Herbert: If they have difficulty responding, how much more difficulty would the Home Secretary have? They will be far closer to the community than the Home Secretary and many of those decisions would otherwise be taken at the centre. They are replacing a police authority that already has responsibility in this area. I go back to the point I made before: where is the appetite for breaking up the West Midlands police and creating smaller police forces? It is true that those smaller forces might be very much more responsive to the local community. You can achieve the same thing by the way in which the police force is organising itself, devolves decision making, operates neighbourhood policing and so on, but for this big entity, West Midlands Police, with a budget of over £500 million a year, employing over 13,000 people in its workforce, somebody has to set the budget and plan and appoint the chief constable, and, if not a directly elected individual, then who?

Q420 Chair: Many people complain that they never have contact with their MPs on a yearly basis-probably a few more have contact with their local councillor; name somebody who has had contact. But, surely, in the course of the year virtually 99.9% of the population will have no contact at all with their police and crime commissioner. It will be a faceless person in headquarters somewhere who has no direct contact with the people they represent.

Nick Herbert: All I can say is that that is certainly not the experience in London, where the reform has been popular. I may say that it was opposed by my party. It was a reform instituted by the previous Government, in my view rightly, but it is one to which we now fully subscribe. People like the fact that the Mayor is, if you like, in the line of public fire and is accountable. In the end, the Mayor has to answer for how policing is delivered in London. There are very diverse communities in London. It is a far bigger force in terms of population than any of the other areas will be.

Would Londoners want that point of accountability taken away so that a committee that they had never heard of was responsible for the governance of policing? I do not think so. The Mayor stood on a platform of wanting to see more uniformed officers on public transport and action on knife crime. He has delivered on that and that is broadly popular. Frankly, I think he was also able to take a decision effectively, even though he had no formal power to do so, in relation to the Commissioner of Police in London that again was broadly popular. I think he was expressing what Londoners wanted to see in terms of a change. That was a decision that the then Government were not willing to take.

I think this enhanced accountability works for a very big area in London. There is visibility. What happened, if you talk to the Deputy Mayor with responsibility for policing in London, was that there was a big increase in the number of complaints being channelled into the mayoral office, whereas previously they had gone to the Mayor. That reflected the fact that people saw the new point of accountability and that somebody was there to answer. Again, that is an important outlet that did not exist before.

Q421 Bob Blackman: Before I move on to other matters, I want to clarify this particular issue. As you quite rightly say, the Mayor of London does not have power to appoint the commissioner. He has the power either to chair or appoint the chair of the Metropolitan Police Authority. Is that your model for the rest of the country?

Nick Herbert: No. The police and crime commissioners will have the ability to appoint chief constables.

Q422 Bob Blackman: Will you change the law to allow the Mayor of London to do that?

Nick Herbert: No, because in London, the Commissioner of Police has national policing functions. Therefore, the Government take the view that the appointment must remain, if you like, in part a national one, so it will be in consultation with the Mayor but ultimately it will be the decision of the Home Secretary. It is an appointment made by the Queen on the advice of the Home Secretary. The reality, however, as we saw in relation to the current Mayor, is that if the commissioner loses the confidence of the Mayor, his position is untenable. I do not think the way it is set out formally is the issue. The fact is that it is a joint appointment between the Home Secretary and the Mayor, and will remain so because of the national policing functions.

Q423 Bob Blackman: But in London certainly, the position is that the commissioner is responsible for day-to-day operational decisions on policing and the Mayor will look at resources. Is that the model that you envisage for the whole of the country?

Nick Herbert: Yes. There is a very clear and important divide here. The Mayor is responsible effectively for holding the Metropolitan Police to account for the resourcing, and ensuring it is an efficient and effective force. The Mayor is not empowered to interfere in operational decisions. The principle of operational independence of the police must remain, and it will remain in relation to forces outside London.

Q424 Bob Blackman: I now move on to the questions I was going to pose. Power and responsibility being devolved down is very much part of the Government’s agenda, but with power and responsibility must come finance. What plans do your respective Departments have to devolve real spending power down to both local government and local people?

Nick Herbert: If I may kick off, police forces already raise about one quarter of their revenue from local people through the precept, so that will continue. It will be the elected police and crime commissioners who raise the precept in replacement of the police authorities, but there will be a further devolution of budget. The police and crime commissioners will hold budget for wider community safety responsibilities that will be devolved from the Home Office, so money that is currently spent centrally will be allocated to police and crime commissioners and spent according to local determinations. That will be a real enhancement for local democracy, and in due course we shall announce the details.

Q425 Bob Blackman: When can we expect that to be operational?

Nick Herbert: When police and crime commissioners are in place. Outside London, subject to the passage of the legislation, the first elections will be in May 2012. As an indication of how we wish these kinds of decisions to evolve, police community support officers are currently funded in part by the neighbourhood policing fund. There is a ring-fenced fund in the Home Office. In the spirit of giving more local decision-making, we have decided that in London, the ring-fencing should be lifted because we already have an elected individual, the Mayor, who can take decisions about allocation. It really should be Londoners who decide through the Mayor how they want the balance between constables and police community support officers to be set.

Outside London, we will keep the ring-fencing because we want to ensure that PCSOs remain in place until the election of police and crime commissioners in 2012 so they then have the opportunity to decide going forward how that money should be spent properly. I think it is an example of where we will devolve budgetary decisions when there is a mechanism for taking those decisions via an elected individual.

Q426 Bob Blackman: Do you see that responsibility and power over finance residing with the elected commissioners, or do you see local people getting involved in the decision making about what happens, other than in the elections?

Nick Herbert: They will be strongly involved in the decision making because of the elections, but there will also be all of these other mechanisms, including the regular beat meetings and police and crime panels, through which there will be contact between the public, police and elected individuals,. There will be a great enhancement of the means by which the public can influence these decisions.

Q427 Bob Blackman: To take the question Heidi raised earlier, one of these commissioners is elected and decides that the safer neighbourhood teams are a total waste of money and does away with them. However, that commissioner may be elected for four or five years, by which time the whole infrastructure may be destroyed. I am not saying it will happen; it is hypothetical. How would local people then say that is not what they wanted, challenge it and force a change?

Nick Herbert: First, I do not think there is a chief constable in the country who is not committed to safer neighbourhood teams and community policing. It has been an important development over the past few years and one that I think that chief constables are doing everything they can to maintain in spite of budgetary challenges. I am absolutely certain that elected police and crime commissioners will want to continue that, because they will reflect the wish of the people, which is to see this form of community policing. If anything, the criticism we have had is that they will be focused too much on the local and not enough on the national. We are taking steps to address that, to ensure that forces continue to pay attention to national policing issues like counter-terrorism and serious and organised crime, which are clearly terribly important.

People will have a say through the election of an individual who can then indicate his priorities. There will then be a discussion between that individual and the chief constable as to how the plan that is drawn up will be expressed. You could argue in London that the Mayor’s commitment to put uniformed cops on public transport cut across the operational independence of the Commissioner of the Met, but the commissioner did not seek to argue that; he sat down with the Mayor and worked out how to express what it was people wanted, and that was a sensible approach.

Q428 Bob Blackman: But clearly there is a power within the Localism Bill for local referenda. Do you see the position on local referenda applying to police operational activities?

Nick Herbert: The problem is that that would be for just one part of a police force area, would it not?

Q429 Bob Blackman: Potentially, but it could go beyond.

Nick Herbert: It is not a question I have considered before. We shall be giving people a say once every four years, in the election of their police and crime commissioner.

Q430 Bob Blackman: But part and parcel of the localism agenda is to empower people beyond, say, every four years; it is to make decisions at local level about things that affect them day to day. I seek to clarify whether it is your intention to enable them to have that power over the police service that they value.

Nick Herbert: The power over a budget, the appointment of a chief constable and setting the plan will rest with the elected police and crime commissioner. The local authorities or directly elected mayors will have an influence in relation to their membership of the police and crime panels. It seems to me that a local referendum could indicate a view, but it could not cut across the power of the police and crime commissioners to do those things according to their mandate and the legal powers we are giving them. I repeat: somebody has to stand up the force, appoint the chief, set the plan and do all the things that relate to the proper governance of policing.

Q431 Bob Blackman: Mr Grayling, are there any areas where you intend to devolve finance to local authorities or beyond?

Chris Grayling: There are two things. First, where we do make a change, like the social fund, the funding will clearly go to the local authorities; it must. If we devolve power away anywhere in the welfare system, we cannot expect local authorities somehow to conjure up the budgets themselves, so funding will follow. In terms of our own frontline staff, we seek to provide greater discretion to local Jobcentre Plus managers over the deployment of funding. We already have a very substantial amount of discretionary money available to them to deploy as they see fit in their communities, whether for the needs of individual jobseekers or groups of jobseekers. That is a culture we will seek to continue. Where we can, we will give discretion to the front line. Clearly, where a local authority takes responsibility it must have the financial means to do so; where our staff have greater discretion operationally, we want them to have greater discretion over funding that supports that activity.

Q432 Bob Blackman: Apart from the social fund, are there any specifics in terms of responsibilities and finance that you intend to devolve down to local authorities?

Chris Grayling: At the moment, on the finance side, I would not be able to give you any firm announcements. There are things we are considering, which I cannot really detail yet.

Q433 Bob Blackman: When might we hear some results of those deliberations?

Chris Grayling: Decisions will have to be taken over the next few months about how council tax benefit fits in with the universal credit, for example. Clearly, that is one area where localisation is a possibility, but we have to make it work in the most effective possible way alongside the universal credit.

Q434 David Heyes: Accountability for local services is already extremely complicated. The changes we have been discussing today under the Localism Bill will make that even more fragmented and complicated for people to understand. What should we be doing to improve, clarify and simplify accountability for local services?

Chris Grayling: The biggest frustration for our constituents is the sense that it always seems to be somebody they can never quite identify who is responsible for a decision. I think that has been one of the failings of the past. You ask about what will happen to a particular issue within a community and there is nobody anywhere near your community who is responsible for it. I think the broad localism agenda will deliver more visible decision-making within a community, whether it is for a county like Surrey, which I represent, where we will have an elected police and crime commissioner, or whether it is around greater discretion for the Jobcentre Plus manager who, if I come looking for a job and need to buy a new suit for an interview, has discretion to help me out.

In both cases, what you do not want to hear is the local person saying that it is not his decision but the decision of someone in head office up the road. That is the big culture difference that we seek to deliver across government. Of course, you cannot deliver it in every possible area of government activity, but you can make a huge difference by saying these are things that government do not have to do.

Nick Herbert: As MPs, we know that often people come to us about the performance of local services where they are deeply frustrated that they have not been able to get an answer. Often that is in areas where accountability is rather thin. If you take the example of police authorities, whatever their other strengths or weaknesses, they are not visible. I have never been to a public meeting in or outside my constituency and asked whether anybody knows who is the chair of the local police authority and seen a single hand go up, unless the individual happens to be a county councillor or are themselves the chair of the police authority, in which case the question goes down tremendously well.

There is a serious point here. All the survey evidence backs this up. Very few people have any idea who the chair of their police authority is. I think that to create that greater visibility will be helpful in allowing people an outlet and somebody to go to, knowing who is responsible, and in turn that that person is responsive to the community because that individual is elected by the community.

Q435 David Heyes: But councillors have multiple accountability already, for example for transport, social services and education. The social fund in future; perhaps public health. People understand that an elected council representative can have these multiple responsibilities. What is it about policing that requires a separate commissioner that is so different from all those other responsibilities of a local councillor?

Nick Herbert: It does not in London. We have the advantage of a police force that is coterminous with the unit for which the Mayor is elected, so he can do it, but that is not true of any other police force in England and Wales. That is why you need a directly elected individual who is responsible for the whole force, unless you want to break up forces. I do not detect that there is any appetite for that; indeed, much of the advice we receive is to try to create ever bigger forces, with which I disagree.

Q436 David Heyes: But you said earlier in your evidence that there was a lack of understanding of accountability for the Metropolitan Police and that even MPs still took cases to the Home Secretary.

Nick Herbert: That is because it is a relatively new system, is it not, and one which we are all getting used to. It is evolving and will evolve further because we will remove one of the bureaucratic tiers of the Metropolitan Police Authority and have a system of just the Mayor and the GLA to hold the Mayor to account, which I think is broadly welcomed by those concerned. It is nevertheless true that Londoners are well aware of the Mayor’s responsibilities in this area and are very willing to hold him to account for policing. Part of the evidence for that is the increase in the volume of correspondence to the Mayor’s office.

Q437 George Hollingbery: On this issue, are you brave enough to sit here in front of the Committee today and say that neither you nor the Home Secretary will respond to any MPs at all on policing issues when this is in place?

Nick Herbert: I think it depends on the nature of the policing issue.

Q438 George Hollingbery: I thought it might.

Nick Herbert: I think this is important. The Home Secretary will retain lots of responsibilities, particularly for things like national policing issues.

George Hollingbery: Indeed.

Nick Herbert: So if you look at issues like counter-terrorism, serious and organised crime and matters that cross force boundaries, where there is a need for a strategic view, clearly the Home Secretary has an ongoing role. The Home Secretary, effectively representing the Government, is the largest shareholder in policing, because a lot of the money comes from that direction. We will retain responsibility for wanting to ensure that money is not spent improperly. Therefore, there is a continuing role for the Inspectorate of Constabulary because these are monopoly services.

There is a continuing role for the centre but it is very much a changed one, where there is far greater local determination on local matters. It is in those very local matters where there needs to be a change and we stop believing that the centre-the Government-can answer for every single thing that happens when it should be a matter for local answerability and local determination. We do see that in London, but it is evolving.

Q439 Chair: Finally, the Secretary of State for CLG and the Minister for Decentralisation have said that they want to look at devolving more powers to elected mayors in future, and they want to expand the scope of community budgets beyond the 16 pilots in dealing with families with particular problems. Does your Department have a list of powers and responsibilities that you would like to see devolved to elected mayors and a list of items you would like to incorporate in future community budgets? If so, what are they?

Nick Herbert: As far as directly elected mayors are concerned, if those are agreed by local people they will have a role. The role we have identified is to sit on the police and crime panels, which work alongside the police and crime commissioners. Effectively, it is the successor role to local authorities. We have to be clear that it is the police and crime commissioner who is responsible for the police force as a whole. If, for instance, there was an elected mayor for Birmingham, I do not think that they could take sole control of policing in Birmingham because that is just a component of the West Midlands force.

Q440 Chair: More generally, across your Department’s responsibilities, is there a list of items that you seek to devolve? The Secretary of State for CLG has already said it is not just his Department that he looks to devolve; it is government in general. Therefore, does your Department have a list of things that it will offer to the Minister for Decentralisation saying, "Go and talk to local authorities about those; we’d like to devolve them"?

Nick Herbert: I have already identified the key areas of devolution, first in the creation of police and crime commissioners and setting up police and crime panels on which directly elected mayors will have a role and, secondly, in the devolution of budget to the police and crime commissioners.

Q441 Chair: Devolved down to local authorities?

Nick Herbert: Yes. Local authorities have a big role in the police and crime panels.

Q442 Chair: That is not really an extension of their current powers, is it? Are there other areas? You talked about the criminal justice system. There may be areas there.

Nick Herbert: There is potentially an enhanced role in relation to the criminal justice system. I think that that will depend on the evolution of reforms over the next few years as we develop the pilots for our payment-by-results models and so on, but we have already seen an enhanced local authority role in relation to youth offending. I think there will be a further opportunity for a local authority role, and that is something about which we will certainly want to talk to the Minister.

Q443 Chair: And maybe also an involvement in the community budget?

Nick Herbert: That is quite possible.

Q444 Chair: Is the Department for Work and Pension going to be left behind again, or is that unfair?

Chris Grayling: I do not think it is fair to say we are left behind. It is a question of creating an environment in which the Department seeks to do less-that is the whole approach that we are taking with the Work Programme. When we arrived in government, if you got a list of employment programmes that the Government had been running, there was a page of different lines. By the time we finish the Work Programme contracting, we will have a tiny fraction of what was there before. In some cases, there are clear opportunities to strengthen partnerships with local authorities. I want to see local authorities directly contracting with Work Programme providers so that that becomes much more of a financial partnership with them in putting money into buying additional services and our paying for the core. I can see us extending and developing that principle in the months and years ahead. We will always remain open to new ways in which we can forge partnerships, as I described in the frontline with Jobcentre Plus, or bringing together services under one roof. We are not saying "never" to anything, but we have quite a lot to do at the moment.

Q445 Chair: But you do not have any specific ideas?

Chris Grayling: I have no specific additional proposals right now for powers to be handed over to local authorities. That does not mean we would not look at areas in future where we could do more.

Chair: Thank you both very much indeed for the time you have spent with us this afternoon.