Examination of Witnesses (Questions 226-256)|
20 DECEMBER 2010
JESSICA CROWE, STEVE FREER, JOHN KIRKPATRICK AND
BETTS in the Chair]
Good afternoon and welcome to our further evidence session on
localism. Just for the sake of our records, could you say who
you are in the organisation you represent?
Eugene Sullivan: Eugene Sullivan,
chief executive of the Audit Commission.
John Kirkpatrick: John Kirkpatrick,
director of studies and policy at the Audit Commission.
Jessica Crowe: Jessica Crowe,
executive director at the Centre for Public Scrutiny.
Steve Freer: Steve Freer, chief
executive of the Chartered Institute of Public Finance and Accountancy.
Q227 Chair: You are all welcome.
Certainly you'll have a chance to have your say, but if you happen
to agree with what's been said, you needn't say it again. You
can just say "I agree" and we are more than happy to
put that in our records.
We've got a very centralised democracy in this
country. A lot of our resources come from the centre, and therefore
accountability is back to Government for the spending of that
money. Can localism ever really work in such a situation?
Steve Freer: I think we can have
a form of localism in that situation, but I do think that for
localism to work really effectively we need to align local decisions
with locally raised resources. I think that's when localism works
most effectively, because I think that's the arrangement that
local people can get their heads around, as it were. They can
see who's responsible. They can see where they need to put pressure
in order to secure accountability. I think where we have a mixture
of local decision taking but resources raised at the national
level and allocated to local authorities, sometimes accountability
can get quite confused.
Jessica Crowe: I would agree with
that, and say that even in a centrally driven performance framework
you could have more localism than we have at the moment if there
was a clear focus from the centre on outcomes, but leaving it
to locally elected bodies to determine the how; because people
at a local level know the problems at local levelknow what
to achieve. There may be some congruity with what the national
Government wish to see achieved, but they should state that more
in outcome terms and not try and set out how it should be done
at local level. They should leave that more to those who understand
their areas better.
One of the problems that we have in our system
is that we don't really have a definition of, or a clear agreed
consensus on, what local government, as opposed to local administration,
is for. I think it's quite difficult to talk about some sort
of localism in the absence of that clarity.
Eugene Sullivan: I broadly agree
with colleagues, and particularly with Steve's point about the
purest form being linking spending powers with tax-raising powers.
Notwithstanding that, one could go further in moving away from
state and central control to engage more with local citizens about
the services and priorities in their areas. I think the question
is: how? How far do you go, and what arrangements do you put in
place to deal with the accountability arrangements?
Q228 Mr Clive Betts (in the Chair):
What arrangements do you think there should be, then?
Eugene Sullivan: First, at the
local level, the people responsible for spending the money should
be accountable not just for the money that they spend but for
outcomes for the people they serve. Their first duty is to give
an account of their accountability, and they can give that through
financial returns and reports, by publishing performance data
or through their newsletters. Those who gave the money are entitled
to hold them to account, and they should hold them to account
for the same sorts of thing. As the Centre for Public Scrutiny
said, that holding to account should be proportionate. It should
be less onerous the less important the sums involved are, and
a bit more rigorous if it's material sums.
Q229 Mr Clive Betts (in the Chair):
Even if we move to a more localist agenda, and even if we take
the point up and if perhaps there is more responsibility for raising
finance at a local level, we're still going to have quite a proportion
of money always coming from central Government, even if it's only
that element that deals with balancing up the different needs,
deprivations and resources of different authorities. In terms
of accountability for that spending, should that come to Parliament,
as opposed to Government? Should there be a different form of
accountability to Parliament for finance that comes from the centre,
if we are going to get away from the idea that the Government
control everything at local level?
Eugene Sullivan: There is a well-established
pattern for accountability to Parliament for the moneys voted
by Parliament for the purposes for which it was to be used, and
I don't think that should change. At the moment, that comes in
large part through the regime of the Audit Commission, and through
the oversight of that through the National Audit Office. I still
think that would be there, but it's a question, again, of what
would be proportionate. At the moment, about £73 billion
of local government spend comes from Parliament, and it gets that
assurance through the existing accountability mechanisms, so there
isn't heavy scrutiny from Parliament of that money.
Q230 Mr Clive Betts (in the Chair):
I would probably challenge that. There's scrutiny of particular
aspects of spending from time to time, isn't there? The National
Audit Office does it, and the Audit Commission gets involved through
comparative value-for-money studies.
Eugene Sullivan: Yes.
Q231 Mr Clive Betts (in the Chair):
But Parliament itself does not devote a great deal of time
to holding spending to account at local level, does it? All that
money, and very little time in Parliament, proportionately. Is
that something that's going to have to change?
Steve Freer: I think I would draw
a distinction with demonstrating proper stewardship, which I think
is the appropriate description. If moneys come from the national
level down to local level, I think it's reasonable to demonstrate
proper stewardship in relation to that money. As I think Eugene
was hinting, one of the primary mechanisms for that is through
audited grant claims. I think that's really what he was referring
to. I think the primary accountability for that expenditure should
still be to the local taxpayer. The fact that it's now my income
tax or my VAT that's being spent, not my council tax, seems to
me to be a mere detail. It's still taxpayer resources that have
been spent locally, and for which there should be proper and primary
Jessica Crowe: To add to that,
I think one of the things this Government have said they're interested
in is shifting from a bureaucratic form of accountability to a
more democratic accountability. If you were going to move along
those lines, not only should there be more scrutiny by democratically
elected representatives at local level, as I think Steve is suggesting,
but there could usefully be more co-operation between scrutineers
at national levelyourselvesand scrutineers at local
level to get that balance and understanding right, so that lessons
can be learned with regard to how a policy is rolled out on the
ground, and how money that was voted by Parliament is transferred
down through the Departments. How is that developing on the ground?
Is that money being spent well? Is it delivering what it was intended
to? That sharing of evidence between the national and local could
perhaps add something to what we have at the moment.
Q232 Mr Clive
Betts (in the Chair): Do you have any practical examples of
how that might work?
Jessica Crowe: If a Select Committee
was investigating a particular policy, or looking at how a piece
of legislation had worked and whether it had delivered what was
intended, it might call for evidence from local authority scrutiny
committees, to say, "Have you investigated such issues?".
We have a library at the Centre for Public Scrutiny of scrutiny
reports from local authorities, and it contains more than 3,000
reports, so there is quite a rich source of data about issues
that have been investigated and evidence that has been gathered
locally, which could perhaps usefully inform work at national
level, and vice versa; local scrutineers understanding more about
the national policy-setting agenda and influencing it could be
Q233 Simon Danczuk: Do we
need national minimum standards for services, to reduce the possibility
of a postcode lottery in terms of localism?
Eugene Sullivan: For some services,
you may well do; people talk about the postcode lottery. We may
have some variation of services at the moment. The important question
under localism would be: is the variation intentional, and is
it agreed locally and held accountable locally, or is it just
something that happened? I think that it's quite important for
the Government, in their definition of localism, to decide exactly
where to draw the boundaries around those standards.
Q234 Simon Danczuk: Are there
any particular services that should or should not have standards?
Eugene Sullivan: One tends to
think mostly about the services for vulnerable people. Again,
the Centre for Public Scrutiny made the point that most complaints
about a postcode lottery are about health, and you can understand
that. There is a general tendency for this nation to want fairness,
and fairness seems to mean equality of treatment wherever you
happen to live, understandably.
Jessica Crowe: A lottery implies
that there is no rational basis for the choice that has been made,
and I think that if there was a process by which the choice could
be madeand, importantly, influenced before it was madethen
it would feel less like a lottery for people. When I was a councillor,
I always found that even when people didn't agree with the decision
that you made, if they'd had the opportunity to have their say
and understood the basis for the decision it made quite a difference
to them and it felt fairer, even if they didn't agree with the
final decision, so I think that it is having that opportunity
for influence and being clear about the reasons for a decision
that matter. I think that that could be most appropriately done
by elected representatives who can be held to account for making
that decision, informed by professional advice where that's appropriate.
Q235 Simon Danczuk: Do you
think that there should be some national standards, or not?
Jessica Crowe: Yes, I think there
should be. As Eugene said, it is where the sort of "life
and limb" services, and vulnerable people, are involved.
Equally, it is entirely proper for a national Government, with
a mandate, to wish to set up some things around equalisation of
resources and that sort of thing. That's entirely proper. However,
as I said at the start, it should be around those outcomes, rather
than setting standards around processes and inputs.
Steve Freer: It is proper that
there is consideration of national standards across a range of
services, really. I think that the critical issue is to what extent
you then put in place arrangements to try to performance manage
those standards and ensure that they are applied on the ground
from Land's End to John O'Groats, as it were. In a sense, that
is the mistake that we make too frequently: we over-engineer those
performance arrangements. I think that the challenge for us is
to step back from over-elaborate arrangements for monitoring and
to try to get back to the sort of fundamentals of trusting local
accountability to tell us whether appropriate standards are being
delivered on the ground.
Q236 Simon Danczuk: In terms
of refuse collection, fortnightly or weekly? That is a national
standard. I know that's slightly tongue-in-cheek, but should central
Government be setting that sort of standard, or is it for local
authorities to decide? It is not a "life and limb" service,
or one involving a vulnerable group, is it? Briefly, what is the
Eugene Sullivan: We certainly
do not think that the Audit Commission should be setting those
standards, and haven't done. But I think, again, that that is
a matter for local discretion, and I think that you see that with
the exchange of views around that particular subject up and down
Jessica Crowe: Yes. I agree with
that. It's not an outcome; it's an input.
Steve Freer: Yes. I agree with
that. Again, I would emphasise that I think it's for local accountability
to exercise judgment as to whether the local authority has made
the right choice in that area, or the wrong choice.
Q237 David Heyes: Steve, you
have referred several times to the importance of local accountability.
Should that be through the ballot box? What are the limits of
Steve Freer: The ballot box is
obviously very important, but it would be a huge mistake to put
all our emphasis on one mechanism around which local accountability
operates. We want to see local authorities straining to improve
accountability every day, in every transaction and in every service.
For the core of accountability, you have to seek to establish
a dialogue with local people and try to engage and involve them.
You have to listen very hard to what they say, and either respond
to their requests in a positive way or explain why it's not possible
to do that.
Q238 David Heyes: But what
do you see as the framework for doing that? Do you see it as a
supplement to the ballot box, or even in some cases as a replacement
for the ballot box? How does it work?
Steve Freer: A whole range of
different options are available to local authorities, and they
are being added to all the time. There are councillor surgeries,
public meetings, and websites that invite people to tell the local
authority where it can save money and how it can improve services.
There is a whole range of different options.
Jessica Crowe: I endorse that.
The centre produced a piece of research earlier this year called
"Accountability Works", which identified many different
forms of accountability. The ballot box is a very important one,
but in between elections there need to be other forms of accountability.
Those could be regulation and inspection, or internal performance
management. We would obviously say that scrutiny by elected representatives
and non-executives is a really important form of accountability.
It could be about publishing your information and being held to
account by the public, or indeed the media. There are lots of
different ways of being held to account and we think it is important
that there should be a sort of webwe described it in the
research as a web of accountabilitywhere those forms interact
and work together. As Steve was saying, accountability needs to
be supported by transparency and involvement, and we identified
those things as the three really important figures that support
and bolster representative democracy. They all have the potential
to work in more participative ways; you need all three of those
things working together.
Eugene Sullivan: I agree with
most of what has been said, but I would add that periodic elections
are not going to be a perfect mechanism for dealing with the views
of citizens about the services they currently enjoy. Performance
information is very important, as is engagement through some of
the mechanisms that Steve talked about. There are also referendums
on key subjects, and some people have even piloted work around
budget and citizen stakeholder groups, to get people involved
in the decisions, priorities and choices that are available.
Q239 David Heyes: Forgive
me, but I have not heard any drastically new ideas emerge from
that. Those are all worthy things and worthy ways of supplementing
the democratic process, but most of the local authorities that
I am familiar with already practise many of the things that you
advocate. What else can we do?
Jessica Crowe: One very practical
thing would be to reinforce the position of councillors in what
you might describe as the democratic wing of the big society,
about which we hear a lot. We should see democratically elected
councillors as being at the heart of a lot of those mechanisms
and accountabilities, with stronger powers than they have at present,
to look at a range of different service providers, whoever they
might bethe council, the voluntary sector, or the private
sector. We are going to see greater diversity in service providers
and decision makers. If all those people recognised that they
could potentially be held to account by people who have been democratically
elected and who would provide information to them and respond
to their recommendations, that would give a strong and consistent
set of powers that we don't have at the moment. That would be
a new thing, and there is a real opportunity to bring that in
at the moment with the Localism Bill that is about to start going
Steve Freer: You ended with the
phrase, "What else can we do?", but it is actually about
what we should stop doing. Through a variety of different mechanisms
over the past few years, we have put all this emphasis on upward
accountability. We could stop doing that and encourage local authorities
to major on some of the things that they already do, butas
was said by the previous witnessestend to exist as illustrations
of good practice rather than standard practice across the sector.
If we remove some of the upward accountability, put the focus
on local accountability and really encourage local authorities
to major in that area, a lot of these techniques would be used
more widely and we would end up with a healthier system and a
stronger relationship with local people.
Q240 George Hollingbery: I
was going to ask in a moment or two about accountability. As we
have strayed on to it, I shall develop it with a couple more bells
and whistles that I wanted to talk about. We have got armchair
auditing of £500 and so on and so forth. That has its attractions
for certain people. In my local authority we have one or two people
who constantly challenge us in great detail and with great vigour,
which costs a great deal of money to deal with every year. It
did when I was a local councillor. I would appreciate some comment
on how much challenge can reward and how much it can damage local
authorities, particularly in times of restricted budgets.
I wonder about the emphasis on £500: that
is fantastic and transparent, but is it really what people think
about when challenging their local authority? Or is the fact that
the carer did not arrive this morning, or that there is not as
much money this year to clean street X? A constituent said to
me this morning: "Why don't we just open up all the intranets
of the all the local authorities across the country and let everybody
see everything about how the decisions were made about a particular
issue?" Obviously, some bits have to be confidential. What
do you think of that idea?
John Kirkpatrick: We've done a
fair amount of work on different forms of transparency. Some people
are interested in everything that has been published, and is increasingly
being published, on the £500 basis. That is a good way to
identify some things that may have gone unidentified before, such
as the duplicate payments and other such stories that we have
seen. There is potential in that. If people are interested in
how good the value is from the services, we would argue that only
publishing sums over £500 is not going to help much with
answering that. People need a bit more context, they need to understand
context and performance, and about all the money that is being
spent in a particular area, rather than just that bit.
There is a way to go before transparency can
achieve the aims set out for it. As to whether there could be
more transparency and how much it would cost, there is some evidence
in research from the US that, as more is published voluntarily
online, that reduces a bit the burden of responding to freedom
of information and other requests. We may be in a period of turbulence
while we introduce the measure. Some of that might settle down
over a longer period of time. We don't know that yet, but there
is hope that that might be the case, as transparency becomes more
embedded and useful, and people become used to using it for the
purposes that you described your electors and constituents as
Jessica Crowe: You've hit on the
crucial point, which is not just how much money is spent but what
was achieved as a result of that spending. Otherwise, you know
the cost of everything and the value of nothing. You need a bit
more. There could be potential in this move to develop, as John
just suggested. The important thing is what people do with the
information that they discover. There could be a strengthening
of the relationship between the public and elected representatives,
if people can go to their councillor and say, "I spotted
this," because there will always be people who have particular
interests and hobby horses, who will want to invest the time and
will spot things. The matter needs then to be delved into, to
uncover whether it is a legitimate form of expenditure and has
achieved what it was supposed to. By investigating, listening
to service users about their experience, listening to how the
service is provided and how other people do it, you can analyse
and decide whether that money is being spent to good effect. Councillors
are in a good position to do that, in partnership with the public.
Steve Freer: You've made the distinction
between the small number of local enthusiasts
George Hollingbery: Yes, enthusiasts.
Steve Freer: You've made the distinction
between the small number of local enthusiasts and most people.
These are early days in this transparency process, and I'm sure
that it will develop, but at the moment, the emphasis is on publishing
lots of raw data. That probably will work quite well for enthusiasts,
but much less well for most people. The challenge, therefore,
is to start to move from raw data to something more informative,
to good information about local public services that enables you
to form judgments about whether your local services are quite
as good as they should becomparative data and so on. I
hope that's the direction in which we will move over the period
Q241 George Hollingbery: But
intermediation is always dangerous because you get one particular
person's view of what a standard is. I accept that. The difficulty
with financial data is that they are very raw and, for a lot of
people, very intimidating, but if you could look more deeply into
the mechanisms of a council and see pieces of paper where decisions
were made and you didn't intermediate that and say, "This
is how we're going to judge these across councils," you could
see why someone denied you that service or denied your area that
service and then maybe you might come to accept it a little more.
My constituent made a very powerful case to me this morning, and
I was somewhat taken with it, I have to say. Can you see us getting
Steve Freer: That sounds like
an enormous leap. I think it would be an interesting approach
to try to pilot in some areas, but it does seem to be a very big
leap from where we are at the moment.
Jessica Crowe: I think as well
there are perhaps distinctions between the developing of policy
and working up of policy and considering options, and it would
need such a change in the culture of how policy debates are discussed
and, indeed, reported. Decision makers have to consider, sometimes,
unpalatable options and have to consider all of those to carry
out due process and due diligence. I can see that people would
be nervous, in having those debates in the full glare of the public,
that the debates would be misinterpreted and that hares would
be started running that didn't need to be. As John was saying,
a whole change of culture is perhaps required in how we make policy
and take decisions, to have that more mature understanding that
your constituent wants and that I think is right, but my worry
is that we're not in a place where that could happen at the moment.
Q242 Chair: In terms of accountability,
we seem to be talking about community groups and other types of
organisation that aren't elected and therefore aren't accountable
in the same way, operating beneath unitary or district councils.
We probably don't often mention parish councils, which tend to
exist in rural areas, although there are one or two ideas about
parishes appearing in London now. Is that another way forward,
whereby localism could really be enacted, or is it a bit of an
artificial creation to say, "We don't want all these disparate
community groups; we'll make them organise themselves into parishes"?
Jessica Crowe: Superficially,
that is a clear and attractive approach, but I'm quite nervous
about parishes in urban areas where there aren't distinct geographical
communities; there are communities of interest. It's very difficult
to decide where those boundaries might lie. When I was on the
Councillors Commission, we looked quite closely at the role that
parishes could play, and I think they do have an important role
where you can identify the community that they represent, but
we also heard from witnesses that there were weaknesses, that
a number of parish places were not filled through elections and
they were co-opted, so there wasn't that strong accountability
through elections that you might hope for. I don't think they're
necessarily a panacea for all areas. What is really important
is that whoever the organisation is, the way it operates is open,
accountable and transparent. That's the crucial thing.
Q243 Chair: Do you generally
agree with that, Steve?
Steve Freer: Yes, generally. For
me, it's probably principally an efficiency test as to whether
we focus localism at parish level, at district level, at borough
level or at county level, but I'm not hugely optimistic about
the capacity of parishes to take on significantly greater responsibilities.
Q244 Simon Danczuk: I am particularly
interested in accountability as it relates to vulnerable marginalised
groups, homeless people, whoever they might be. It was suggested
earlier that we needed national standards for certain services,
particularly those that related to vulnerable and marginalised
groups. Is that because they don't have a voice and they struggle
in terms of accountability with local authorities? Is that why
national standards are being suggested in terms of services like
that and/or how do vulnerable, marginalised groups hold local
authorities to account? What can be done in that regard?
Jessica Crowe: I think there is
a need to make sure that it is clear how all sorts groups can
influence decisions. And there will be groups that are not always
organised or able to shout the largest. So there is that worry
if you've got a very local system that those groups that are more
organised will be able to exercise more influence. As I said just
now, the important thing is that all organisations are clear and
transparent about how they will make decisions and can show that
they have taken account of how those groups that might not readily
be able to access decisions will be heard. At CfPS we are developing
something we are calling at the moment an accountability charter
to help organisations work through their multiple accountabilities
and set out in a very clear, simple form: this is how we will
take decisions; this is how we will work; this is how you can
influence us. That could work for a local authority, for a partnership
and for all sorts of things. We think it is really important that
organisations set out how they are going to do that, and can then
be held to account for that, as well as for how they make wider
Eugene Sullivan: For vulnerable
people, the degree of accountability, the degree of voice, the
degree of engagement and how far you go on that is a choice. Sometimes
it's a risk. Sometimes you can afford to risk failure. It is less
acceptable to accept failure when you are dealing with vulnerable
people. That is an important aspect of it all, which is why inspection
regimes are kept in place for some part of that regime.
Steve Freer: I have nothing to
Q245 Stephen Gilbert: From
my way of thinking, accountability has to be slightly more than
just being transparent and clear. I would have thought that any
working definition has to include the ability to change the decision
taker, which is why, I guess, the democratic process is our touchstone.
You can't fire a spreadsheet. You can't sack a committee of councillors.
It is very difficult to break up a partnership. So when we are
looking at a much more complicated, evolving architecture on a
local level, perhaps simplicity, with that ability to sack the
decision maker, comes with the model of the elected mayors. At
the end of the dayit is a point that you were making earlier,
Mr Freerthe buck stops there. That is where people will
recognise that that is the case. Do you have any thoughts about
elected mayors being the way forward to solve this conundrum?
Steve Freer: I thought you were
going to make a slightly different point there. This is quite
interesting. The point I thought you were going to make was that
Chair: That's a politician's way to answer
Steve Freer: Go with me; it is
interesting. I thought you were going to make a point about complex,
innovative partnerships and their role in delivering local services.
Obviously they have a great currency at the moment. I am bound
to say that there is potentially a governance problem with those
sorts of complex arrangements to deliver local services. You use
the word "simple". I think that fundamentally, good
governance requires clarity and a degree of simplicity. I don't
particularly agree that that has to revolve around a single individual.
I think it has to focus very strongly on a single institution.
That critically for me makes the case for the local authority's
leadership role in a locality.
I was a councillor in a mayoral authority, and I think mayors
bring great strengths, like clarity, accountability and the ability
to speak for a whole area, not just the council, when they've
been elected by their peers on the council. There are great strengths
to mayoral models of governance, but you have to have something
that works in between elections and ways of bringing to the fore
and exploring the decisions that are made in those four years
so that the public have a kind of evidence base on which to decide
whether they should re-elect someone at the end of their term
of office. The mechanisms of accountability, transparency and
involvement that operate in between elections are also important
and can support electoral accountability.
Eugene Sullivan: I agree with
Steve's point about leadership, but it's not just about local
council leadership; the leadership positionwhether we're
talking about the leader of the council or an elected mayoris
very important. It should be chosen with that in mind, it should
have a job description, it should have its own accountability
framework for evaluation within the council to the council, and
it should pay a rate for the job. Therefore, the expectations
of the leader will be higher, and the leader paying the price
if something is their fault would be more acceptable. So I don't
think these things are unthinkable.
Q246 Stephen Gilbert: Just
to follow on from that, I have served with a councillor from Haringey,
where just over half the borough is of one political persuasion,
and it always provides the ruling party, while the other half
of the borough takes a different view. One half of the borough
has no ability to influence decision making, which, almost by
tradition, reflects the institutional vested interests of the
other half. I'm not quite sure how any accountability arrangement
would address that problem in the structures going forward.
Jessica Crowe: I think you've
illustrated the weakness of relying just on an electoral mandate.
You need those mechanisms to involve people who may not be represented.
That comes back to your question about vulnerable groups, which
may not even vote. You need other ways of hearing a wider range
of voices and being clear about how decisions can be influenced
by those whom the decisions then affect.
Q247 Stephen Gilbert: But
without that electoral gun at a politician's head, you can't change
the decision taker. You can explain the decision that's been made,
and you can have a clear and transparent look at the process,
but without that mechanism, you won't actually be able to effect
change, will you?
Steve Freer: I think, in a way,
this links back to setting minimum standards and so on. In a way,
setting minimum standards and some of the other architecture of
legislation is about ensuring that a council, once elected, is
there to represent all the constituents, as it were. Also, this
is about the obligation to serve and make decisions in the public
interest and, where councillors fail to do that, about their being
challenged accordingly. Those are the other sorts of controls
that apply, but I am bound to say that most of the politicians
I've worked for have been very keen to persuade non-believers
to vote for them in the future. Therefore, they've often been
very keen to get into dialogue with people who are not natural
supporters of their particular party.
In this more complicated world, central Government grantwe
talked about this earliergoes to local authorities, so
there has to be accountability in some form about how that grant
is spent, as well as accountability to local people. But if we
look at the Total Place projects, where we start to look at total
Government spending in an area or at community budgets, which
the Government are going to pilot in a more limited field, money
is allocatedby Parliament, ultimatelydown different
income streams. Councils aren't ultimately responsible for it,
but they may be responsible for helping to spend it. How do we
deal with financial accountability in that sort of situation?
Is this a lot more complicated?
Eugene Sullivan: It is. There
has been some discussion of that. Part of the problem with Total
Place is that people need to pool budgets in some way and look
at their total resources. There has been some success around that,
but there have also been some exceptions, which Whitehall doesn't
always play in the Total Place budgeting. A lot of the money that's
going in, that could influence an initiative or a programme there,
isn't necessarily within the control of the group that's there.
I know Gus O'Donnell was talking at one stage about budgeted
programmes that cut across the Whitehall boundaries of accounting
officers, down into place-based budgeting or programme-based budgeting.
I think that there's more scrutiny there if you've got a programme
where there's one accountability line. People are not happy giving
up their budgets, and even more so at a time of cuts. It's going
to be very difficult to get partnership to come to the table on
total budgeting. But the accountability can be worked through
if the willingness is there to work together.
Q249 Chair: Do you think you
Eugene Sullivan: Yes.
Q250 Chair: In all aspects?
It's fairly easy, if your organisations share a building. You
can divvy up the costs and it's quite straightforward. But if
you start to get into, "Well, we're going to spend more from
the health budget on helping to keep people out of hospital, because
that's going to help us with the cost in the long term"but
that's local authority expenses, because they are delivering
social caredoesn't that start to confuse lines of responsibility?
Eugene Sullivan: It does. The
single conversation that the Treasury was starting around the
Total Place pilots, I think, tries to address that. Also, I think,
the net cost to the Exchequer should be the prime goal but you
need to make sure that there aren't winners and losers. So, on
estate management, it could be having some sort of equalisation
account or whatever, so that winners and losers can be evened
out, and what you're left with is the net gain to the Exchequer.
But we have to be more creative about how we do that.
Jessica Crowe: Yes. The powerful
message that came out from Total Place was that we would all save
money if some of these budgets were pulled. It showed that money
spent by one agency would save another agency, and therefore the
total amount of public spending. The sums of money were just
so significant. It's clearly something that has to be done, but
I think it's right that it's going to be more challenging at the
I also think that there are lessons about things
to avoid from the past analyses of how partnerships have workedthat
they haven't been open or transparent in how they've worked.
Nobody has known quite how the local strategic partnership reached
its decisions on spending the money that came for expenditure
by LSPs. I think we need to learn those lessons and not repeat
them, and so if shared budgets do emergeand I think it
will be tricky, for the reasons that Eugene gave us around people
not being willing to give up their control and local empiresI
think it will be very important that there are clear governance
It was clear from some research that we did,
looking at the Total Place pilots, that nobody had really thought
about that yet. They'd done the mapping and they discovered this
information, and they reached positions in principle about what
needed to be done, but nobody had yet thought about how the decisions
would be made going forward. And I do think that some thought
would need to be given to that, so that there are very clear decision-making
structures. I've referred to our accountability charter, which
could help organisations think those things through. I think
that's really important.
Steve Freer: I think the mindset
of the pilots in this area needs to be different from the mindset
we normally have in relation to pilots. Rather than seeing this
as something we want to see working in a few areas and then rolled
out across the piece, we should expect these pilots to show us
some of the positive benefits that might come from a more joined-up
approach, but also to expose more fully some of the real problems
that you have alluded to. I think then it will be very interesting
to see what the right kind of solutions are for the problems that
are exposed: whether this can be done simply by sticking broadly
with our existing architecture within the public services, and
just wiring it up better with different protocols, or whatever,
about sharing resources; or whetherand personally I suspect
we will have to do thisit will take us to a position where
we conclude that we have to simplify the architecture, improve
the structure of our public services, and have fewer agencies
responsible for delivery of public services.
John Kirkpatrick: May I just add
one point to that, from our research? If those pilots were to
do as Steve suggests and illustrate a variety of different ways
in which things might work, one of the things we could do is to
compare them with what we see now. Let's not pretend that what
we have now at a local level in many of these areas is an ideal
situation. We've done work that shows that a youth worker in many
places is, for example, spending somewhere between a quarter and
a third of their time on working out how to feed the different
arrangements for different funding streams coming into a single
youth work project. At the moment, there are people spending a
lot of time, which they could be spending on actually solving
the problems that they'd like to solve, working out how to make
all these arrangements that we currently have work. It may be
that that's the way it has to be, but as Steve says, if we can
find different ways and compare them with that, we may find that
there is indeed a better way coming out of that.
Q251 Chair: So, fewer income
streams and fewer agencies responsible.
We move on, then, to another aspect of localism,
which is about getting more organisations involved in service
delivery as opposed to just involved in the consultation process,
whether they be voluntary groups, community activists or social
enterprises. How do we ensure that accountability is properly
organised and effective with regard to those organisations, which
could end up spending considerable amounts of money at local level?
Jessica Crowe: If they were commissioned
to provide services, there's a clear accountability mechanism
through commissioning arrangements. I spoke earlier about the
importance of embedding the local councillor as a key part of
accountability at a local level. In a way, it doesn't matter how
complex the service delivery arrangements are if it's accepted
that local councillors can ask more questions about what they're
doing. Making sure that councillors have comprehensive powers
to ask questions about services that are being provided by anybody
spending public money would go a long way. It would also have
the virtue, as Steve identified, of being quite simple. People
would then know that if they had a question or a problem with
any service provider, they could ask their local councillor, who
could look into it. I do think that that's got to be an important
principle for any new way of delivering services.
Q252 Chair: Are there concerns
about evidence already of voluntary groups probably not doing
things in a criminally wrong way but simply not being as tight
in their control of money, and not necessarily always understanding
the protocols to go through? That might give concerns unless bigger
attention is paid to this before we embark on a bigger roll-out
of spending through these mechanisms.
Eugene Sullivan: There is that
problem, and there is the fact that because they're voluntary
groups, the normal disciplines don't apply sometimes, or they
think that way. But voluntary groups themselves are starting to
think more about not getting the money from grant or fundraising
but through contracts and the commissioning role. The commissioning
role, I think, is an accountability itself between the buyer and
the deliverer. Not only is it easier for others to monitor the
accountability; it actually gives a clearer accountability between
the two parties.
Q253 Chair: Is there a concern,
maybe, that in this brave new world lots of organisations will
spring up and demand to have the right to deliver services whether
they are commissioned to do so or not? On the other hand, it might
be that local authorities say, "All right, this is localism.
We're being encouraged to pass things down, so we're going to
get rid of a lot of our responsibilities. We can say to community
groups, 'Here's the local library. Go off and run it. We'll encourage
you, and maybe give you a bit of help, but it's all yours now,'"
even when those groups may not have the wherewithal actually to
Eugene Sullivan: I think the opening
view of all this was that localism has got opportunities but carries
risks with it. The accountability framework for localism has to
be in place. It has to be proportionate, but there still has to
be an accountability framework. At the moment, I don't think a
lot of the money would be channelled through local authorities,
so I don't think they could ever say, "It's nothing to do
with us." It's a question of what mechanisms they put in
place to get accountability for the funds they pass on. As a commissioner,
they couldn't divest themselves of that accountability.
Steve Freer: Yes, I think it's
about national standards and a minimum of standards, isn't it?
In each service area, we should be clear about whether we can
afford to adopt a laissez-faire approach and risk failure, or
whether there are certain standards that have got to be maintained.
If we had greater clarity in that respect, local authorities would
be clearer about the amount of risk they could take in the sort
of transaction you've spoken about.
Q254 George Hollingbery: Do
you think that any transaction of this sortthe community
right to buy or the community right to run whatever it isshould
have a clause built into it, so the group can demonstrate how
they are going to be held accountable? Is that an absolute requirement?
Jessica Crowe: Yes, absolutely.
We did some research a couple of years ago, looking at different
forms of commissioning and contractual relationships, and how
councillors could hold those contractors to account. It was very
clear that, unless it was built into the contract right at the
start that the contractor was expected to come and supply information
to scrutiny from the start, it tended to be quite easy for the
client-contractor relationship to be quite cosy. The contractor
could just say, "Well, we're accountable to our client",
and the client would say, "Well, we're making decisions and
we're holding the contractor to account", but that is not
very transparent to everybody else. So it has to be built in right
from the start. Where that does happen, however, you can develop
quite a constructive relationship, particularly if it's a long-term
partnership, which you can see. You then get a good understanding
from the contractor and the supplier of what the council as a
body wants to see, and you get a process of dialogue. I think
that that's much more healthy.
Q255 Chair: Thank you very
much. Is there anything you would like to add that you think that
you haven't managed to say yet?
Steve Freer: May I just make a
point about that very last issue? It is something that we didn't
mention. I think that there is an important principle about public
audit in relation to all these satellites, as it were. I think
you have to be able to follow the public pound and audit it through
all those layers, no matter how remote they are.
The other point is that your suggestion that
there should be a requirement in terms of how you would demonstrate
accountability is important, but there are clearly a series of
other requirementsaren't there?about demonstration
of competence. It is also critically important not only that you
can demonstrate that you can acquire the service, but that you
can maintain it over a significant period of time. So you have
to demonstrate long-term thinking as well as short-term ability
to act, as it were.
Chair: Thank you very much indeed for
coming and thank you for your evidence.