Written evidence submitted by Westminster
City Council (LOCO 034)
1. EXECUTIVE
SUMMARY
1.1 Westminster City Council welcomes the opportunity
to contribute to the Communities and Local Government Select Committee
inquiry into the terms of reference for Localism.
1.2 Central Government's definition of decentralisation
is the devolution of powers to citizens and grass roots organisations.
It identifies local government as a barrier to this process, when
in fact our democratic accountability makes us central to any
model of localism, and enablers of Big Society.
1.3 We recognise and stress the importance of
citizens and grass roots organisations in decentralisation. For
the purpose of this submission, however, we have focussed on the
relationship between central and local government.
1.4 We welcome the Coalition Government's commitment
to localism and are committed to working with them to implement
a decentralised model of government. To do this, we seek four
key commitments:
¾ A fundamental
redress of the roles and responsibilities of central, regional
and local government.
¾ Freedom
from the burden of regulation from the centre, including performance
management, statutory guidance and professional dictats.
¾ Full
financial flexibility to manage budgets according to local needs,
invest in preventative service and collect revenue.
¾ Freedom
to generate income.
1.5 We submitted a paper "A New Settlement
for Government" With Hammersmith & Fulham and Wandsworth,
to the Chancellor of the Exchequer in July 2010. This is appended
to this submission and provides further evidence to support our
call for decentralisation.
2. The extent to which decentralisation leads
to more effective public service delivery; and what the limits
are, or should be, of localism
2.1 We believe that decentralisation leads to
more effective public service delivery. Local authorities are
closer to the communities they serve than central government and
are better placed to understand their needs.
2.2 Local councils are democratically accountable
so will shape services in response to those local needs; making
them more effective, targeted and flexible.
2.3 The roles and responsibilities of central,
regional and local government need to be reconsidered to achieve
decentralisation. We believe that there are only two limits to
localism:
¾ Spatial—where
efficiency or effectiveness can be increased on a broader geographical
level, because the services affect a broader area.
¾ National
co-ordination of systems—where there would be high levels
of duplication and inefficiency if local areas were each creating
their own system for a nationally driven service.
3. The lessons for decentralisation from Total
Place, and the potential to build on the work done under that
initiative, particularly through place-based budgeting
3.1 We supported the Total Place pilots and had
previously carried out our own spend-mapping work. Our work highlighted
the complexity of funding models in attempts to create an area
budget.
3.2 The Total Place pilots showed the duplication
that comes from multiple public bodies working to achieve the
same goals in silos. We learned that localism requires local democratic
control, with clear and strong local accountability; liberalisation
from central government, including full financial flexibility
and freedom to design and manage services locally; pooled budgets
to support single service delivery models; and more intelligent
funding mechanisms, which include models and incentives that reward
success in preventative work.
3.3 It is clear that at the right geographical
level, integrated services would result in better value for money.
3.4 However, there is currently a natural movement
away from this. Police and PCTs are divided along different geographical
lines and mergers are taking place across local authority boundaries
which will mitigate place-based budgeting. This will pose problems
for localism in the future.
4. The role of local government in a decentralised
model of local public service delivery, and the extent to which
localism can & should extend to other local agents
4.1 We recognise that decentralisation does not
stop at local government level, and we are committed to giving
more power to grass roots organisations through Big Society.
4.2 What must also be recognised, however, is
that local authorities are central to making a decentralised model
work, because they are the only locally elected, democratically
accountable body. They are the enabler of Big Society and localism,
not the barrier that central government suggests. The bureaucracy
which surrounds local government is too often the result of the
burden of regulation imposed by central government itself.
4.3 We see the local authority role as one of
leadership and commissioning, not necessarily service delivery.
The Westminster City Council approach is based on a shift to a
smaller, more effective commissioning core; a commitment to using
the best and most cost effective providers and a fundamental rethink
of service delivery models.
4.4 Community groups, voluntary sector and private
companies all have a role in providing public services. Their
detailed knowledge of service areas and the local community are
key to devolved localism.
4.5 Westminster City Council welcomes the enhanced
role for local government in leading local strategic thinking
on health and wellbeing as outlined in the NHS White Paper (Equity
and excellence - liberating the NHS). This provides a key opportunity
to further integrate health and social care services to produce
efficiencies and a smoother service for patients/clients.
5. The action which will he necessary on the
part of Whitehall departments to achieve effective decentralised
public service delivery
5.1 Currently, there is a raft of centrally imposed
legislation, targets, and funding restrictions that local service
providers must conform to. Whitehall currently interferes in how
local government meets the needs of our communities, to the extent
that we are instructed which senior managers to employ (eg we
are statutorily required to have a Monitoring Officer and Director
of Children's Services), and duty bound by legislation to produce
a range of strategies, which may not be best fit for the locality.
5.2 The Coalition Government has committed to
reducing this over-regulation, but more still needs to be done.
5.3 Attitudes towards local decision making need
to change. Government must recognise the legitimate democratic
accountability of local government; accept that there will be
diversity in the way services are delivered in different localities;
and let local Members be accountable if they get it wrong. There
must be greater trust in the decisions local people make at the
ballot box.
5.4 To achieve truly decentralised public services,
Whitehall departments must also stop considering issues in silos.
Service users' problems are complex and do not fall neatly in
line with departmental structures; they can cut across service
areas.
5.5 Whitehall should not be deterred by the negative
"postcode lottery" argument, and instead replace it
with a positive story of localism.
5.6 The customer must be put at the centre of
service delivery, but ring-fenced funding acts as an obstacle
to this. One example of an integrated, intervention service that
cuts across service silos is the Family Recovery Programme (Appendix
1, pg 13). For such services to continue, however, a new funding
mechanism is required; not only to cut across funding streams,
but to ensure localities feel the financial benefits of such successful
projects.
6. The impact of decentralisation on achievement
of savings in the cost of local public services and the effective
targeting of cuts to those services
6.1 We refer you to our New Settlement
for Government paper, attached at Appendix 1.
7. What, if any, arrangements for the oversight
of local authority performance will be necessary to ensure effective
local public service delivery
7.1 Regulation of local authority activity is
complex and has increased markedly since 2000. English local government
suffers from probably the most onerous regulatory regime of any
western country.
7.2 In total, there are over 2,500 separate pieces
of data councils have to provide to government and quangos. In
Westminster, we estimate that up to £1m is spent annually
complying with government requests at a time of budget restraint
where we can we want to refocus this resource on providing valuable
local services.
7.3 We welcome the decision of the Coalition
to cut local government inspection and abolish the Comprehensive
Area Assessment, as well as plans to phase out grant ring fencing,
increase transparency around local spend and performance and wind
down quangos. We know, however, that there is much regulation
by the "back door" beyond inspection events; for example,
funding conditions, detailed regulatory regimes (especially in
relation to children and adults services) and statutory reporting
back to government departments.
7.4 While we accept the need for some regulation
in essential services, a proportionate approach is required which
supports local legitimacy and is linked to genuine risk.
7.5 CLG should operate in a gate-keeping role
on behalf of all government departments and agencies to ensure
that there is a live business need for current data from local
authorities and duplicate requests are eliminated.
7.6 An audit of the regulation/data collection
overhead between central and local government should be carried
out. Where data collection is considered essential for central
government, the local authority or third party should be paid
for collection. Where data collection is mutually beneficial to
Government and the local authority, innovative approaches for
data collection should be considered, to reduce burdens where
possible.
8. How effective and appropriate accountability
can be achieved for expenditure on the delivery of local services,
especially for that voted by Parliament rather than raised locally
8.1 Councillors are directly accountable to their
local voters and taxpayers for outcomes, and for the expenditure
of money raised locally; and directly accountable to Parliament
for the proper use of nationally-raised taxpayers' money voted
by Parliament.
8.2 Currently however, accountability is predominantly
upwards, because the majority of local authority budgets come
from central funding streams. There is a clear line of accountability
to local residents, but it is unbalanced because while there is
a strong focus on council tax, it only makes up a small amount
of councils' budgets.
8.3 A shift is needed so that more of the money
spent locally is raised locally. This could be raised not through
increasing council tax, but through business rates, fees and charges.
We would argue to keep some of the business rates we collect.
Businesses in Westminster contribute £1.2 billion in business
rates to the national economy, but the council receives only 12%
of this to invest locally.
8.4 As previously discussed, local government
should have the financial flexibility to generate income. Councils
should be given the power to raise fees and charges. Currently
nationally-set fees and charges, for example in planning and licensing,
mean that local authorities are unable to recover their costs
(see Appendix 1, pg 5).
8.5 Estimates put the number of quangos at around
1,200. The coalition government has made a useful start in getting
rid of the most excessive. Local councils with their clear democratic
mandate have a duty to hold to account (on behalf of local taxpayers)
the remaining quangos, and act in a scrutiny function.
9. The Committee would be particularly interested
to hear of examples, from the UK or overseas, of models of decentralised
public service delivery from which lessons could be learnt for
further decentralisation in England
9.1 Examples of decentralisation in Westminster
have been used as case studies in the New Settlement for Government
paper (Appendix 1). Integrated Offender Management and the Family
Recovery Programme highlight the innovation and efficiency of
local government. They show our commitment to localism, and we
see this best implemented through integrated, preventative services
which provide savings for the medium to long term.
9.2 Full financial flexibility and freedom from
the burden of central micromanagement and regulation are key themes
running through this submission. These examples of decentralised
public service delivery can only continue to be successful with
devolved budgetary arrangements and new funding mechanisms such
as payment by results.
10. RECOMMENDATIONS
FOR CHANGE
¾ The
roles of national, regional and local government should be agreed
through the Decentralisation and Localism Bill and clearly communicated
with the electorate.
¾ Decentralisation
of power to local authorities must come with full accountability
for locally led services and complete financial flexibility to
provide services best suited to the local community.
¾ Intelligent
funding models should be introduced including incentives that
reward success.
¾ Whitehall
must free councils from the burden of regulation.
¾ An audit
of the regulation/data collection between central and local government
be carried out. Where data collection is considered essential
for central government, the local authority or third party is
paid for collection. Where data collection is mutually beneficial,
innovative approaches for data collection should be considered
to reduce burdens.
¾ CLG
should operate a gate-keeping role on behalf of all government
departments and agencies to ensure that there is a need for current
data from local authorities and duplicate requests are eliminated.
¾ A proportionate
approach should be taken to regulation which supports local legitimacy
and is linked to genuine risk.
¾ Councils
should be able to keep some of the business rates they collect
as well as have the power to raise their fees and charges and
generate income.
¾ Local
councils should have the power to hold unelected quangos to account.
October 2010
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