Localism - Communities and Local Government Committee Contents

Conclusions and recommendations

Defining localism and its aims

1.  We welcome the Government's commitment to localism and decentralisation. We agree with the Government that power in England is currently too centralised, that each community should be able to influence what happens in its locality to a much greater extent, that there has been in the past too much central government interference in the affairs of local authorities, and that public services have been insufficiently accountable to their local populations. (Paragraph 15)

The Government's definition of localism

2.  The explanations of localism and decentralisation that the Government has thus far provided invoke very diffuse aims from which it is difficult to construct a coherent picture of the end goal. There is little clarity about who will ultimately be responsible for what. Increasing the influence of local decision-making is bound to result in some unpredictable outcomes, but we recommend that the Government undertake to provide a more detailed explanation of the framework within which it envisages such changes taking place and the limits that will be set to central intervention. A constitutional settlement, overseen by a joint committee, could provide such a framework, at least insofar as it relates to the role of local government. (Paragraph 24)

Localism in other government departments

3.  Allowing frontline workers to exercise their professional judgement is good management practice. Facilitating service choice and reducing bureaucracy may be laudable aims in their own right as well. None of these things, however, sits comfortably within a definition of localism. The Government is stretching its uses of the term in too many, sometimes contradictory, directions. Democratic accountability is privileged by some of these developments but not others; local government is integral to some but appears peripheral elsewhere; some policies contribute to integration while others seem likely to entrench silos between services. (Paragraph 31)

4.  Some policy areas appear to have been granted an exemption from decentralisation. The priorities of the Department for Work and Pensions appear particularly resistant to the arguments for devolving power to local institutions, despite the eagerness of local authorities to be more involved in shaping the response to worklessness in their area. However valid the grounds, such exemptions will necessarily limit the radicalism of the Government's overall vision. They also give the impression that the definition of localism is a matter only of tone and of convenience for the Government as a whole, with each department permitted to ignore localism or to adopt whichever strain of the policy will facilitate its other goals. The views of those outside Government about how the policy should be defined have not obviously been taken into account. We recommend that the Government undertake a formal consultation to gather the views of local government and other stakeholders about what sort of localism they would like to see. (Paragraph 32)

5.  We welcome the appointment of a Minister for Decentralisation. We expect that it will be part of the Minister's role to bring coherence and a sense of priorities to the Government's localism agenda, and we look forward to the outcome of his first report to the Prime Minister about progress in each department. In the light of the evidence we have received, a clean bill of health for every department would be a surprising outcome. We anticipate taking the opportunity to scrutinise this and subsequent reports, and questioning Ministers on it at future evidence sessions. The response of other departments to the Minister's analysis will be seen as a barometer of both the seriousness with which the Government is pursuing localism, and the capacity of the Department for Communities and Local Government to exert influence within Whitehall. (Paragraph 34)

6.  The Minister for Decentralisation will need to make more clearly demonstrable progress in influencing other government departments than he has done so far if questions about his role and his position in DCLG are to be answered positively. If such progress cannot be demonstrated, the Government will need to reflect seriously on whether the role needs to be moved to another, more influential, department such as the Cabinet Office (Paragraph 36)

Localism and efficiency

7.  The Government must be wary of assuming that decentralisation will reduce public sector costs in the short or medium term. It should not be quick to declare localism a failed experiment if efficiency savings do not instantly materialise. Indeed, the chances of localism transforming the way the country is governed may be hampered at the outset by a lack of resources to prime the pump by building community capacity. Localism is a goal worth pursuing no matter what the fiscal circumstances, but realism is needed about how fundamental change will be achieved without resources to support it. (Paragraph 48)

Central government in a localist system

8.  Ministers must rein in their interventionist instincts if the Government's localism agenda is to be credible. Central government cannot have it both ways—on the one hand giving local authorities the freedom to make their own choices, and on the other maintaining that only one of those choices is the 'sensible' one. The Government must make its own choice: does it wish local authorities to exercise local discretion, or does it want to continue to prescribe and recommend courses of action centrally? The litmus test of localism will be the Government's reaction to local decisions with which it disagrees. The concept of 'guided localism' is an unhappy compromise which is neither helpful to local authorities nor as radical as the Government seems content to believe. (Paragraph 57)

9.  Ministers are not alone in needing to curb their appetite for intervention. Changing the cultures of the civil service and of Parliament to support a more localist system will be crucial. The former will be decisive in ensuring that Ministers' intentions are put into practice, and the latter in altering the parameters of debate to reflect the distribution of powers to local agencies. Opposition spokesmen, too, bear some responsibility for ensuring that central government is not tempted to interfere beyond its proper remit. (Paragraph 58)

Setting limits to localism

10.  Localism has its critics, and they have legitimate concerns: about fairness, about the need to safeguard vulnerable people, and about services underperforming. Some stakeholders and sections of the community evidently do not trust the present forms of local democratic accountability to look after their interests when the apparatus of centralised, bureaucratic accountability is dismantled. We recommend that the Government consider how best to help these groups use the available means for holding their local service providers to account, beyond the ballot box. In particular, the Government must address the contribution to accountability that can be made by robust—and if necessary enhanced—local authority scrutiny functions. (Paragraph 74)

11.  We accept the case for some form of minimum national standards in services such as adult social care and child protection, where the needs of the most vulnerable must be protected. We recommend that where such standards are adopted they are formulated in consultation with local government, in order to ensure that they reflect the level of central government oversight appropriate to a localist system and do not simply recreate an overly-interventionist performance regime. (Paragraph 75)

12.  We recommend that the Government make clear the principles on which it will determine at what level different decisions will be made, and the grounds on which intervention in local services will be deemed necessary. These questions should not be decided purely on a case-by-case basis. Communities need clarity about which decision-makers they should be seeking to influence, and an explicit statement of the Government's intent would help to forestall campaigning groups' reliance on national government to enforce acceptable standards of service. A constitutional commitment to decentralisation would be one way of achieving this clarity; in the shorter term, we will expect the forthcoming progress report on localism in each department to be an opportunity to flesh out the principles on which the departments are expected to act. (Paragraph 76)

Localism without local government?

13.  The Government's attitude to local government is inconsistent, and local authorities' role in localism unclear. A parallel democratic structure is being established for policing, schools are to be further removed from council control, and there are to be binding referendums on council tax increases above a certain level. Assets of the former regional development agencies are to be transferred to central rather than local government or Local Enterprise Partnerships. All these developments imply that the Government may be more interested in circumventing local government than further empowering it. On the other hand, local authorities will have a new general power of competence and new responsibilities for public health. The Government must decide what it wants the role of local authorities to be and how it should develop, what powers they will have and how they will exercise them in relation to other bodies. We recommend that each department set out how it will devolve further powers to local government, and we look forward to seeing clear evidence of this in the Minister for Decentralisation's progress report. (Paragraph 101)

14.  We recommend that the Government work with the Local Government Association to set out examples of specific ways in which the general power of competence will enable local authorities to extend their role beyond that conferred by the well-being powers. In particular, it is unclear what activities currently carried out by central government might be taken over by local authorities using the new power. We recommend also that the Government undertake an assessment of the extent to which exercise of the general power of competence will be restricted by existing regulation and statute. If there is in practice little room for local government to expand into, the power is likely to have very minimal impact. (Paragraph 102)

15.  Greater financial self-sufficiency for councils is a crucial foundation for localism. If the Government truly wishes to promote far-reaching decentralisation, we expect that the more radical options for reforming local government finance will be considered as part of the resource review. In particular, the case for increasing and broadening the tax and revenue-raising powers of local authorities, and their ability to borrow, must be central to the review. Decisions reached on these matters must be justified in terms of localism. (Paragraph 103)

How will local authorities have to adapt?

16.  If variations in local services are to be embraced as the expressions of local choices, the legitimacy of the process by which those choices are made is paramount. Local authorities are accountable at the ballot box. They are visible to local people, and if they are not accessible, they can be punished for that at election time. Their democratic mandate puts them in a uniquely strong position to be leaders of the community, and it is their job to take a whole-area view, adjudicating between competing groups and safeguarding minority interests. As the scope of local decision-making is extended, therefore, the Government must seek to strengthen and support rather than marginalise the role of local authorities. (Paragraph 134)

17.  It is obvious however that some local authorities are better than others at engaging with, understanding, and representing their communities. The Government's immediate solution to this is to put in place through the Localism Bill new mechanisms that can be triggered by any community, regardless of whether their council wants it or not. It is our recommendation that, alongside such mechanisms, the Government and the local government sector consider together how to enhance the effectiveness of the democratic tools already at the disposal of communities. While the Government should not be seeking to dictate how councils engage with their communities, it could play a role in promoting standards and skills for effective engagement. This includes working with the Local Government Association to disseminate best practice and explore ways in which elected members can operate effectively within a decentralised system. (Paragraph 135)

Integration or fragmentation?

18.   Across departments, policy developments that may individually be inspired by the ethos of localism risk entrenching silos rather than enabling creative responses to local problems. Alternative power and delivery structures such as GP commissioning, elected police commissioners and free schools may fragment accountability, and make it more difficult to corral public resources in any one area into a Total Place-type vision. We recommend that the Minister for Decentralisation include in his progress report on the departments an assessment of how far their individual policies facilitate or inhibit local service integration. (Paragraph 155)

19.  There is palpable enthusiasm for community budgets on the part of the DCLG ministerial team, and the Department of Health has also been praised for its engagement. However, the ministers we spoke to from the Home Office and the DWP gave the impression not only of not being so enthusiastic, but of being barely aware that they might be expected to contribute to such an initiative. We hope that this does not presage a damp squib. We recommend that the Government publish regular reports on the progress of the community budgets programme, specifically the progress that is being made by individual departments in identifying their contributions, and how those contributions match up to requests made by local authorities. This is a crucial programme that demands a great deal more concrete commitment from government departments than has thus far been demonstrated. (Paragraph 156)

20.  As long as localism remains in the gift of central government it remains insecure. There is a risk that only the Department for Communities and Local Government will participate fully and that other departments will be allowed, to varying degrees, to ignore the agenda. The Localism Bill contains measures intended to give communities a right to challenge local authorities that are reluctant to relinquish power; we were encouraged to hear the Minister agree in principle that local authorities should have an analogous right to challenge the centre for services it believes it can deliver better. We recommend that the Government develop a process to facilitate this and legislate to give it effect. There should be a role for Parliament in assessing whether the local government 'right to challenge' has been properly administered and we would welcome further discussion with DCLG about how this could be implemented. (Paragraph 159)

Who will deliver localism?

21.  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. (Paragraph 187)

22.  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. (Paragraph 188)

The accountability of delivery bodies

23.  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. (Paragraph 195)

24.  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 this—there 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. (Paragraph 196)

25.  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. (Paragraph 197)

26.  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 (Paragraph 198)

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Prepared 9 June 2011