6 Who will deliver localism?|
The Government's plans to diversify
160. In October 2010 the Government published a strategy
for voluntary and community groups, charities and social enterprises,
which stated that:
The Government is committed to ensuring that
charities, social enterprises and co-operatives have a much greater
role in the running of public services. By promoting contestability
to open up more contracts to third sector providers and giving
them more information about the costs of existing suppliers, our
reforms are aimed at giving the sector a bigger role in delivering
more innovative, diverse and responsive public services.
Under this vision, NHS patients would be able to
choose from "any willing provider", the voluntary and
community sector would be given opportunities to bid for criminal
justice contracts for offender and community services, mutuals,
co-operatives and social enterprises would be encouraged to deliver
social care, and "local partners" would be able to influence
the support delivered by welfare to work programme providers.
Publication of a White Paper, Open Public Services, is
expected in early summer 2011. The Prime Minister has said that
it will set out a 'presumption' that private, voluntary and charity
bodies can bid for health, education, justice and council services.
161. DCLG's 'essential guide' to decentralisation
states that "to improve the quality, responsiveness and efficiency
of public services we [
] need to break open the public sector's
] Our default position is that all public services
should be open to diverse provision". The premise is that
"local control over local spending requires a choice of public
These aims are embodied by two specific measures in the Localism
Bill: the community 'right to challenge' and the designation of
'assets of community value'.
162. Under the community right to challenge, voluntary
or community bodies, parish councils and local authority employees
will have a right to make to a local authority an expression of
interest in running a service that the authority currently provides.
The authority must then either accept or refuse the expression
of interest, and, if it is accepted, must carry out a procurement
exercise for the service, in accordance with normal procurement
rules. A DCLG
press release on the publication of the Bill set out the Government's
belief that this new mechanism would lead "to a transformation
in the way that local public services are run", citing children's
centres, social care services, and transport links as possible
subjects of community challenges.
163. The Localism Bill would require local authorities
to maintain a list of community assets and 'land of community
value' within their area.
The owner of an asset thus listed would not be able to dispose
of the asset unless certain conditions had been met, including
written notification to the local authority of their intention
to dispose of the land, and completion of a moratorium period
during which community groups will have an opportunity to raise
capital in order to bid for the asset. The assets will ultimately,
however, be sold on the open market at market value.
164. Although some critiques of these measures in
the Localism Bill have focused on the potential for private companies
to get more involved in public service delivery, the Government's
expressed intention is rather to encourage individuals, communities
and interest groups to spontaneously extend their activities and
to take over services which are at present largely delivered by
the state. 'Liberating' such groups will, the Government believes,
be sufficient to galvanise more widespread voluntary activity
at a level below the geographical boundaries of existing councils.
The Minister for Decentralisation, Greg Clark, explained the motivation
for these plans:
I believe very strongly that the best ideas are
not the preserve of elites, whether they are in Whitehall, Westminster
or, frankly, necessarily the people who occupy the upper echelons
of the town hall from time to time. I think lots of people in
communities and working with their communities have great ideas
but often they do not have either the influence or access to the
mechanisms available to those in power and authority in order
to achieve what they want. Therefore, it seems to be incumbent
upon us as a Government and also upon local government to make
some of the resources and support that we have to make our ideas
fly available to people in communities with good ideas. I am absolutely
certain that if you do that over time and across the country people
will, if they have their head, do things in ways that represent
innovations and will be a motor for progress that can be tremendously
165. We heard from witnesses some of the advantages
that could be realised through greater involvement of the voluntary
and community sector in service design and delivery: innovation,
"imagination and initiative", better understanding of
what is going on in the local area, expertise in delivering services,
and the values of social entrepreneurship.
Voluntary sector organisations often enjoy high levels of trust
in the community, and can engage with local networks largely inaccessible
to the stautory sector.
Cllr Steve Reed described a community-led initative in Lambeth
which aimed to reduce the exposure of young people to gang activity
and violence, and the ways in which it had been more effective
than council-led efforts in the same vein. One of the advantages
was the potential for savings:
that community group delivered, for a fraction
of the sum of the council's own service, better outcomes. If we
can place more of our resources at the disposal of communities
in that way and appropriately support the communities to be able
to analyse their needs and then procure for them, you will get
value-for-money savings. It will differ from service area to service
area, and place to place, because the level of capacity will differ,
but you will see that happen.
Sarah McAdam of the Commission for Rural Communities
cited an example of a town council which had taken on responsibility
for some highways maintenance work from the principal authority,
with local people doing the work: "they are very responsive
and have that local knowledge about where the issues are likely
The Community Development Foundation concluded that a more diverse
group of service providers would make for "a more vibrant
suite of public services", bringing greater capacity and
166. Ben Kernighan of the National Council for Voluntary
Organisations sketched out how the mix of local service providers
might change over the next five years:
At its best I think we will see some exciting
examples at neighbourhood levelso quite localisedof
where services have been transformed and the voluntary and community
sector has played a significant role in that. In particular, in
terms of your question about the users of services, they are therefore
engaged in shaping and designing those services [...] We will
also see lots of examples at a neighbourhood level as well of
different statutory services coming together and really exciting
multi-purpose community solutions. We will also see other areas
that have not got to grips with what is a complex agenda, where
we will see a lot of fragmentation, disorganisation and big fears
in relation to the period of change could be really tricky.
Ralph Michell of the Association of Chief Executives
of Voluntary Organisations added that in some areas the provider
market might in fact shrink if the local authority, bruised by
funding cuts, reacts by "in-sourcing and looking after their
Who will deliver the Government's
167. Many examples already exist of the type of organisation
the Government hopes will expand into public service provision.
This is a sub-local authority layer of institutions which could
be described as embodying the 'Big Society'; indeed, there is
some concern that in promoting such an idea, the Government is
"seeking to reinvent the wheel".
Parish councils are one of the most traditional and widespread
of such institutions (though largely absent from the most urban
parts of the country). Local authorities have in many cases established
ward or neighbourhood forums or committees at their own initiative;
these may include local councillors in their membership and many
are allocated a small budget. Schools are self-governing institutions
and are moreover a natural focus of much activity that the Government
might characterise as 'localist', such as parent-teacher associations,
volunteering and fundraising drives. Tenants' co-operatives, residents'
associations, Business Improvement Districts and voluntary forums
for town-centre management, chambers of commerce, single-issue
campaigning groups, amenity or user groups, community trusts that
run buildings or other facilities, neighbourhood housing associations,
councils for voluntary service, safer neighbourhood panels, local
branches of national charities, youth clubs, faith groups and
sports clubs are further examples of 'localist' bodies that already
occur in some combination in most communities across the country.
168. Indeed it is questionable whether the Government's
characterisation of public service delivery in England as a monopoly
which needs to be broken open is accurate. On our visit to Croydon,
it was put to us that it is in fact very difficult to draw a definite
dividing line between the state and 'the community'; a Children's
Centre leader, for example, might be employed by the local authority
but be in many senses also a community figuresomeone who
might advocate for the community, or galvanise others to take
part. Alison Seabrooke of the Community Development Foundation
described a distinctive type of third-sector body which she called
'self-help organisations': primarily volunteer-led, they tend
to be established "because people are angry [about] some
service delivery shortfall." Ms Seabrooke cited an organisation
working on domestic violence issues that was set up, on a shoestring,
by a woman whose daughter had been a victim of domestic abuse;
the organisation now receives a substantial volume of referrals
from social services and is highly regarded for its work, although
it receives no core funding.
169. However, whether this array of different groups
and institutions has the capacity or appetite to rapidly 'scale
up' or to take on new responsibilities is an unexplored assumption.
Such groups vary in the extent to which they are formalised, the
extent to which they levy charges, extract fees from members or
seek external funding, and the extent to which they interact with
the state. Some, such as community trusts or neighbourhood housing
associations, may already deliver services that at one time would
have been a local authority responsibility. Others might have
the potential to do so, but a great many will be engaged in areas
of activity that, while enhancing their area or improving quality
of life, could not be considered any kind of substitute for state
activity. Many have some degree of reliance on the local authority
for support or facilities. Still others may consider that the
strengths of their organisation lie in their distinctiveness from
statutory delivery agencies.
170. The Association of Chief Executives of Voluntary
Organisations reported that its members are concerned by
what appears to be the government's misunderstanding
of what a voluntary organisation is, how it operates, and the
extent to which an army of volunteers can be raised. The process
of helping people engage with their communities is not going to
happen overnight but is a long cultural change.
Community Matters, which represents mainly small-scale
and informal community groups, reported that such groups already
deliver services, but that "our membership do not generally
provide [statutory] services and are mostly not set up to provide
them in future, although a very small number provide housing and
London Civic Forum (LCF) explained that
Many local community groups exist outside the
formal voluntary sector who require little or no money but who
want to make a difference to their area. These groups, such as
amenity groups and after-school groups, emerge through local networking
and are often fundamentally different from those groups who want
to provide a funded services such as job-seeking advice. But that
difference has often been unrecognised by capacity-building initiatives
which focus on the more formal community sector groups and offer
support in areas such as devising a constitution.
LCF's interim Director, Lorraine Roberts, noted the
emphasis the Government has put on relatively formal mechanisms
such as mutuals, co-operatives and social enterprises, commenting
that many people do not want to be involved to that level.
The success of this version of localism is also likely to vary
a great deal according to the characteristics of different communities.
171. The role that volunteers might play in a new
landscape of public service delivery is contested. North Dorset
District Council has implemented its own version of localism with
"a huge army of volunteers without whom this journey would
not have been possible".
Volunteering has helped the council deliver a range of services,
including tourist information centres, open space maintenance,
town markets and leisure centres at lower cost and, the council
stated, with greater responsiveness to customers and the community.
Cllr Colin Barrow, Leader of Westminster City Council, argued
that the full potential of volunteers had not yet been reached:
"This has quite a long way to go before we run up against
those buffers. I don't think we'll know until we try it. We must
be allowed to move in that direction, as far as the capacity will
allow, and then more capacity will arise".
NESTA recommended that local government "presume community
capacity to innovate", and stated that "giving communities
ownership of developing and delivering their own responses to
the big social challenges they face is a self-fulfilling prophecy".
172. Community Matters, however, warned that volunteers
and voluntary services should not be considered "a free,
limitless public good. In reality these groups operate in a low-consumption
economy, often in practice a gift economy, but the resource requirements
in terms of time, stress or the modest amounts of income required
are very real constraints".
Cllr Richard Kemp suggested that "lots of people want to
be involved" and it was up to local authorities to "bring
together that coalition of the willing", but this must be
tempered by pragmatism: "at the end of the day, libraries
will not be run by volunteers; they'll be run by librarians. We've
got to make sure that volunteering and support is complementary
to, and not replacing, basic services".
Cllr Steve Reed, Leader of Lambeth Council talked about individuals'
motivations to get involved:
Participation is based on reciprocity, what you
get out of it. It's not just altruism; it's because you perceive
a need and, because that need directly affects you, your family
or your household, you will get involved in finding the solution,
because it matters to you that much. [Parents in Lambeth who set
up the country's first 'parent-promoted' school] didn't become
involved in a Parent Promoter Foundation because they fancied
doing a bit of volunteering. They did it because they cared passionately
about the education of their children, and they feared there wasn't
a good enough place for their children to go and they wanted to
be part of that solution.
A retreating statutory sector?
173. There was some concern about the prospect of
different layers of government withdrawing from service provision
on the assumption that the vacuum would be rapidly filled by newly-empowered
and volunteer-led initiatives, said Age UK, should not be seen
as a substitute for existing publicly-funded provision.
Sense pointed out that in the case of services for people with
low incidence disabilities, it is not a given that there will
be a local group to which services might be entrusted.
Age UK worried that there is "a risk that vital local services
could be lost by assuming that because people don't want to run
the service themselves, they don't want the service at all".
174. North Dorset District Council told us that in
2006-09 it implemented changes which achieved a 25% reduction
on its net revenue budget. Town and parish councils and community
partnerships were consulted about which services "were important
to their communities and, if important, would they be prepared
to work with the district council to safeguard their future provision".
The services under consideration included leisure centres, public
conveniences, sports development, tourism promotion, open space
maintenance, car parks and street cleansing.
Cllr David Milsted told us that it is up to communities what services
they need and want:
If they tell us they do not want it and they
can prove that they really know what they are talking about, it
is not for us to say, 'I'm sorry but you're wrong; you have to
have it'. [
] if genuinely the community does not want to
take something on because it feels it does not want it badly enough,
If supported by research and robust consultation,
such a conclusion may well be valid. However, if a service or
facility is used primarily by the less vocal in the community,
or people who would not be in a position to take on responsibility
for running it, it is possible to see how a local authority in
the hunt for cuts might mistake lack of volunteers for indifference.
175. Community enterprises and voluntary sector groupsparticularly
small oneswill require time, support and resources from
the statutory sector to take on new responsibilities.
This was emphasised by NESTA, who reported findings from a survey
in which eight out of ten respondents agreed that the Government
should allow communities to come up with their own solutions to
difficult social challenges such as youth crime, obesity and climate
change. Most did not know, however, where to get the right support,
with 80% of those who already had ideas saying they would progress
them if they had such support.
This support could include advice, start-up grants, training,
or fulfilling basic practical needs such as access to photocopying
facilities or web hosting.
Cllr Steve Reed argued that "it doesn't work if the community
is simply left to do it on its own. It's too exhausting".
He returned to the example of a community-inspired youth project
in Lambeth that aimed to prevent young people getting involved
When they were left to their own devices to do
it the impact was not as big as it became when the council partnered
them and put more resources at their disposal, so they had more
things to call on. If you went to visit them and speak to them,
they would say, 'Why do you have all of these detached youth workers
over there, doing those things, when we know that this kind of
activity works?' We're trying to find ways to give them more control
over those detached youth workers, so that what they're doing
lines up with the community's own understanding of its own needs.
You could leave the community to do it itself, and just take the
council's youth services away, but that's like pulling the rug
from underneath them, because there aren't always going to be
enough people with the appropriate skills to do all the things
that need doing, but they will profoundly understand what needs
to happen in the place where they live, because they live there
and they see their children getting involved in these kind of
gangs. What we're talking about here is a partnership, not de-professionalising.
176. The Community Development Foundation cautioned
that "complex issues in delivering services and managing
community assets and land can go beyond the average citizen's
skill set"; support from professionals, including council
officers, would therefore be crucial.
Project management, business planning and governance skills would
all be needed by new or developing organisations.
On our visit to Devon, we heard about initiatives including a
community-led planning project, a community-run shop and post
office, and a trust which had assumed countryside management responsibilities.
While the inspiration and much of the hard work came from members
of the community, all the projects had depended on local authority
assistance at some pointfor help in accessing funding,
for planning advice, or for underwriting the new management model.
Barriers to greater diversity
177. Voice4Change England and Urban Forum warned
whilst localism and devolution of power to communities
can support public service reform, it is not a given that public
service reform supports localism. If proposals on opening up public
services are not managed properly then it is not local business
or charities that will take over services, but large corporations.
During our visit to Devon we heard from the Chief
Executive of Exeter Council for Voluntary Service, who used the
analogy of 'clonetowns'local high streets dominated by
branches of national chain storesto describe the impact
that attempts to encourage a wider range of providers to deliver
public services might have. Small local organisations, often with
a very specialised expertise that does not lend itself to winning
large contracts, could be squeezed out by large-scale, national
charities. The effect, he said, could be contrary to localism.
Other witnesses, however, argued that the better national organisations
fully recognise the need to work with local partners or through
local structures, and to tailor their service to the needs of
178. Many small-scale voluntary sector organisations
feel that they are put at a disadvantage compared to established
players in the market by current commissioning practices. They
might therefore suspect that they have little to gain from increased
opportunities to tender for contracts such as might be unlocked
by the community right to challenge.
The Association of Chief Executives of Voluntary Organisations
(ACEVO) noted that bidding organisations will have to to have
large amounts of time and other resources at their disposal.
Regulations about payment in arrears or annualised spend, or procurement
rules, can pose significant barriers to community organisations
seeking to compete for services on an equal footing with large-scale
includes, for example, St Petrock's, a small charity providing
'first contact' services for homeless people, which we visited
in Exeter. The trustees told us that the lack of a full-time bid
writer, the difficulty of providing some of the outcome evidence
asked for in tenders because of the very early interventions they
provide, and unhelpful feedback from unsuccessful applications
all jeopardise their chances of taking on new services. St Petrock's
also reported that some commissioning processes are founded on
an assumption that a regional-scale provider would be the most
appropriate delivery agency.
179. The challenges are illustrated by the explanation
of the Work Programme given to us by Employment Minister Chris
Grayling, who explained that the 'payment by results' basis of
Work Programme contracts means that bidding organisations need
to be able to "bankroll" their tenders.
Wider application of the payment by results model for service
delivery contracts might, therefore, restrict the organisations
that are able to get involved. In its strategy for the voluntary
and community sector and social enterprises, Building a stronger
civil society, the Government has committed to producing proposals
to "modernise" commissioning practice to ensure that
more opportunities are open to civil society organisations.
180. Several organisations argued that a culture
change will be needed to ensure that commissioning decisions assess
benefits other than cost savings, specifically "social value",
the sort of criteria on which local community organisations might
be better able to compete.
The Government has said that it will look at "how to enable
commissioners to use assessments taking full account of the social,
environmental and economic value in their commissioning decisions".
A Private Member's Bill introduced by Chris White MP, the Public
Services (social enterprise and social value) Bill, would require
public bodies to introduce social clauses into their procurement
and tendering processes, thus requiring all businesses that bid
to declare the social value their tender would produce. The Bill
was given its second reading on 19 November 2010. Greg Clark has
said that it is the Government's intention that "social value
in the local area" can be taken into account during procurement
exercises triggered by the right to challenge in the Localism
181. A further concern is the prospect of grant funding,
as opposed to contract funding, being cut or disappearing.
One North West argued that grants promote innovation and quick
responses to need, and enable new groups to get off the ground
and develop capacity. It pointed out that many organisations "are
best when they remain small", and it is these sort of groups
that are better served by grants than having to negotiate commissioning
and contracting processes.
182. The capacity of voluntary sector organisations
to respond to the localism agenda may also be undermined if they
find their funding substantially reduced. Figures compiled by
NCVO show that in 2007/08, 52% of statutory funding to the voluntary
and community sector came from local government, so the risk of
cuts as councils adapt to straitened circumstances is significant.
Ralph Michell of ACEVO told us:
the key concern is cuts. Our estimate is that
if local government passed on the cuts it is facing proportionately
to the third sector, it would mean a loss of income to the third
sector of £1.8 billion a year by the end of the Parliament.
We are already starting to see cuts being passed on disproportionately.
[...] There is the danger that Whitehall has a particular view
of the third sector and clearly values its role, but in some areas
local government will not share that view and will see the third
sector simply as an easy option to cut. It is a soft target and
nice to have in good times but not necessarily in bad times. That
is our main fear.
Community Matters, a national federation of community
organisations, reported a local government officer saying that
"It feels as if there are two conversations being had; the
one about cutting costs, and the Big Society one about building
community. We haven't got the resources to do both in the time
that's been given to us and in the end, the savings will have
to come first".
183. Ministers, including the Prime Minister, have
been vocal in urging local authorities not to pass on cuts in
their own budgets "disproportionately" to the voluntary
sector organisations they fund. Greg Clark said it "would
not just be the wrong thing to do but would be a bizarre and counter-intuitive
thing to do".
Compact Voice, however, reported that "despite these reminders,
local decision-making has only followed the spirit described by
national policy in some instances."
184. A 'transition fund' set up by the Government
to support organisations through this potentially tricky time
amounts only to £100 million.
The transition fund is part of a larger package of £470 million
over four years which is intended to help community groups realise
the 'Big Society'; this includes funding for 5000 new community
organisers, recruited and trained centrally. The Government plans
to establish a 'Big Society Bank' using funds from dormant bank
accounts to provide new finance for social enterprises, charities
and neighbourhood groups. The bank will be a wholesale organisation,
investing in financial intermediaries which will in turn increase
access to finance for social action groups.
185. Transfer of assets to community groups and social
enterprises, as envisaged by the 'assets of community value' provisions
of the Localism Bill, is not a new idea. A review of community
asset ownership and management was conducted for DCLG in 2007,
following which an Asset Transfer Unit was funded to provide technical
advice to community groups, local authorities and others. During
our visit to Devon, we heard about ongoing asset transfer projects
in the county, each initiated by the community. Devon County Council
emphasised that such projects could be very difficult to bring
to a conclusion, that they could be easily de-railed by unforeseen
circumstances, and that committing a building to one community
group could in certain circumstances have the effect of excluding
another. The assets to be transferred were sometimes in poor condition,
and so a great deal of investment was needed before they could
be handed over. Groups needed to have a very robust business plan,
and some of the possible avenues for income generationsuch
as car parking feesmight bring other problems. Finally,
changes in the membership of a community group's committee could
seriously affect the viability of a project, especially if committees
did not retain the high-level skills required to manage it successfully.
186. The Audit Commission commented that, while community
asset transfer is manageable, "there are real risks in putting
valuable assets in the hands of groups that may not be able to
own or manage them."
Alison Seabrooke of the Community Development Foundation drew
on her personal experience to highlight the possible pitfalls:
I've raised money for, developed and built a
large community building, and I know how damn difficult it is
to run it and to keep it going. Particularly if you are looking
at generating your own earned income, that becomes harder if you're
in a community that doesn't have much money to spend, or with
local public bodies that do not have much money to distribute
to support it. So I think in terms of the principle, actually
owning, developing and managing a building for the community is
a real privilege, and you run it in a way that is effective because
you know when people want to come and use it. [...] But in terms
of getting them off the ground, and ones that are perhaps up and
running at the moment and what their futures are going to be like,
it's going to be very tough.
London Civic Forum, while enthusiastic about the
contribution that asset transfer could make to the growth of the
social enterprise sector, noted that councils would have to ensure
that there is a large enough revenue stream to enable social enterprises
that take over assets to manage them effectively.
Action for Market Towns described the mix of capital grants, loan
finance and revenue that was typically necessary for successful
asset transfer, and the possibility of promoting community share
and bond issues to support this.
There is some concern that disposal of assets will be undertaken
by local authorities primarily as a means of making savings, rather
than seeking to support local groups to take them on.
187. To roll back the state on an assumption that
civic activism will fill the vacuum would be a leap of considerable
optimism. We do not wish to imply that there is no scope for the
community to get more involved in directing and running servicesthe
potential gains in terms of innovation and responsiveness are
huge, and we have seen examples of what can be achieved by motivated
and dedicated people. But there are limits to the responsibilities
that communities can be expected to take on in a localist system;
private individuals and community groups do not have infinite
capacity to expand their activities, nor do many wish to. The
Government must acknowledge that the 'Big Society' already exists
to some extent, and therefore must be realistic about how much
further it can grow. It has not explained how it expects to achieve
a substantial increase in the number of volunteers and community
bodies willing to take on the provision of services.
188. The voluntary and community sector will require
practical help to scale up its activities. We welcome the Government's
commitment to reviewing commissioning processes to ensure that
small-scale groups are not habitually at a disadvantage. Funding
cuts, and a potential reduction in grant funding as opposed to
contracts, will inevitably undermine the potential of some groups
to participate. We note the Government's intention to publish
statutory guidance to local authorities not to pass on 'disproportionate'
funding reductions to the third sector. However, this is another
instance of two types of localism coming into conflict: local
government must be given the flexibility to manage its resources
according to local decisions, even in instances where those decisions
might threaten the development of a 'Big Society' along the lines
envisaged by the Government.
The accountability of delivery
189. Bristol City Council stated that:
If public services are going to move towards
delivery by citizens, communities and voluntary groups a system
for holding them to account needs to be outlined. It needs to
be clear how citizens, communities and voluntary groups will be
accountable for services they deliver, who will hold them to account,
and what the role of the 'Big Society' will be in holding itself
to account. What will be the role of elected members if responsibility
and accountability for services may be moved away from the local
authority? Will councillors become the scrutinisers for an increasingly
more devolved decision making system? There remains a need to
think through how Big Society initiatives interact with the formal
governance and service delivery functions of local government,
especially as these become more autonomous themselves.
Other organisations raised similar questions.
The Runnymede Trust argued that "democratic accountability
is not a key strength of voluntarist approaches", and that
the role of local government in providing transparency and legitimacy
to devolved arrangements had not been properly clarified.
190. Eugene Sullivan of the Audit Commission agreed
that commissioning relationships between purchaser and delivery
body clarified accountability and made it easier for other parties
to monitor the relationship.
The Minister for Decentralisation confirmed that new arrangements
for voluntary and community groups to deliver services would be
arrived at through contracts with local authorities. Bids to run
services under the community right to challenge, for example,
would if accepted be "subject to the contractual regime of
191. However, Mencap argued that contracts with delivery
bodies are in practice often "inadequate" tools for
councils or individuals to use in holding them to account, and
there is a tension between the patterns of larger
contracting arrangements versus real choice of services for people,
which again makes it difficult for individuals receiving services
to exercise 'accountability', albeit via the market route. In
times of financial constraints, smaller specialist providers of
services are likely to be undercut by larger, national or even
multinational organisations. Again this [...] has implications
for accountability, as local individuals will find it difficult
to hold national providers to account.
Jessica Crowe of the Centre for Public Scrutiny described
how contractual arrangements can be of varying utility in ensuring
accountability and transparency:
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.
192. The question was also raised of how the public
sector equality duty introduced by the Equality Act 2010 will
transfer to community and voluntary groups that take over the
running of services.
Age UK expressed concerns about the risks of financial and managerial
sustainability of local services that become community-owned.
Cllr Steve Reed considered that "there will need to be covenants
around some of the contracting that enables communities to take
control of assets or run services so that, if things go wrong,
if groups are excluded, if services are failing, we can still
193. It will largely fall to local authorities, whether
through contract management or other oversight arrangements, to
determine whether the services provided by community organisations
are of adquate and consistent quality. Local decisions will need
to be made about the level of risk councils are prepared to take
on, both in terms of financial underwriting and in performance
management. Ways of transferring services to different providers
may be needed in the event of ineffective service delivery.
194. Accountability for services delivered by non-statutory
bodies is also causing some pause for thought at the national
level. The Public Accounts Committee took evidence on the subject
of accountability on 19 January 2011 from Sir Gus O'Donnell, Sir
Nicholas Macpherson, Rt Hon Francis Maude MP and Lorde Browne
of Madingley. When asked about accountability and value
for money in bodies such as foundation trusts and free schools,
Sir Gus O'Donnell responded that he had asked Sir Bob Kerslake,
Permanent Secretary of DCLG, and a group a colleagues to investigate
the issue of localism and accountability and report back to him:
"We are doing some very new things here; payment by results
for a lot of contracts will create some issues about precisely
where the accountabilities lie. I think that is something we need
to sort out."
195. Even if the capacity of communities to take
over services was infinite, we consider that there would still
be vital roles for democratically-elected local authorities to
play. Prime among these is holding service deliverers to account.
Local authorities are also needed as enablers, market-shapers
and failsafes, evening out inconsistencies or gaps in service
provision, and helping community groups and the voluntary sector
to grow their own capacity. We urge the Government not to assume
that a diversification of provision can occur spontaneously, nor
can it occur without a coherent strategy to manage the risk of
failure in service delivery.
196. Councils might have roles in ensuring community
service providers are transparent and also to step in where there
is failure. But there must be limits to thisthere can be
no serious localism if councils are expected both to transfer
powers to localist institutions but still take the blame for failures
in services thus provided. In some cases services will simply
fail and the Government must accept this.
197. We recommend that the forthcoming White Paper
on public service reform address the issues of the role of local
government, the practical help that can be given to community
groups to expand their activities, reform of commissioning processes,
accountability arrangements for delivery bodies and those that
take on the management of assets of community value, and how the
risk of failure will be handled. It should include an assessment
of how current models of contracting can be made more effective
as tools of accountability, not just for the spending of public
money but for the quality of service users' experience.
198. In the spirit of localism, we would not expect
the White Paper to dictate detailed solutions to these challenges
at national government level, but to set out the principles on
which solutions can be developed locally. Nonetheless, the Government
must acknowledge that some of those potential solutions will be
difficult to implement without sufficient funding to support them.
331 HM Government, Building a stronger civil society:
a strategy for voluntary and community groups, charities and social
enterprises, October 2010 Back
Ibid., p.7 Back
"Open for business", Municipal Journal, 17 March
HM Government, Decentralisation: an essential guide, p.9 Back
Localism Bill, clauses 66-69 [Bill 126 (2010-12)] Back
Localism Bill: local government and community empowerment,
Research Paper 11/02, House of Commons Library, January 2011,
"Eric Pickles: revolutionary new rights for communities will
protect and transform local services", Department of Communities
and Local Government press notice, 11 December 2010 Back
Localism Bill, clauses 71-88 Back
Localism Bill: local government and community empowerment,
Research Paper 11/02, House of Commons Library, January 2011,
Q 495 Back
Qq 150-3 Back
Ev 248 Back
Q 9 Back
Q 184 Back
Ev 192 Back
Q 146 Back
Q 145 Back
Ev 166 Back
Q 185 Back
Ev 166 Back
Ev w177 Back
Ev 179 Back
Q 190 Back
Ev 190 Back
Ev 245 Back
Ev 245 Back
Q 39 Back
Ev 183 Back
Ev w179 Back
Q 39; see also Q 299. Back
Q 17 Back
Ev w136 Back
Ev 202 Back
Ev w1 Back
Ev 201 Back
Ev 244 Back
Qq 293-4 Back
For example, Ev 179, w75. Back
Ev 182 Back
Ev 179, w222 Back
Q 14 Back
Ev 194 Back
Ev 242 Back
Ev w221 Back
Q 196 Back
Ev w222 Back
Ev 165 Back
Q 28, Ev 193 Back
Q 396 Back
HM Government, Building a stronger civil society, p.8 Back
Ev 191, w171, w222 Back
HM Government, Building a stronger civil society, p.11 Back
Public Bill Co Deb, Localism Bill, 10 February 2011, col 469 Back
Q 137, Ev w199 Back
Ev w171 Back
National Council for Voluntary Organisations, The UK Civil
Society Almanac 2010 Back
Q 134 Back
Ev w178 Back
Q 545 Back
Ev w137 Back
Q 141 Back
"Prime Minister launches the Big Society Bank", Cabinet
Office press notice, 19 July 2010 Back
Ev 219 Back
Q 205 Back
Ev 179; see also Q 300. Back
Ev w51 Back
Ev w178 Back
Ev w167 Back
For example, Ev w223. Back
Ev 196 Back
Q 252 Back
Q 553 Back
Ev 204 Back
Q 254 Back
Q 218 Back
Ev 200 Back
Q 12 Back
Oral evidence taken before the Public Accounts Committee on 19
January 2011, HC 740-i, Q 72 Back