Memorandum from Local Government Information
Unit (Lgiu)
INTRODUCTION
1. The LGiU is an Award Winning Think-Tank. Our
mission is to strengthen local democracy to put citizens in control
of their own lives, communities and local services. We work with
local councils and other public services providers, along with
a wider network of public, private and third sector organisations.
Through information, innovation and influencing public debate,
we help address policy challenges such as demographic, environmental
and economic change, improving healthcare and reforming the criminal
justice system. We convene the national Children's Services Network
and have launched two social enterprises Local Energy ltd and
the Centre for Public Service Partnerships.
2. LGiU welcomes the opportunity to submit written
evidence to the Committee, and would value the opportunity to
expand on the issues we have raised in oral evidence.
EXECUTIVE SUMMARY
3. LGiU has welcomed the Coalition Government's
early commitment to Localism. Successive governments have steadily
eroded local ability to make decisions on local services. LGiU
believes that councils have a democratic mandate to control and
scrutinise all services at the local level. They should have the
power to take a whole area view approach, to convene the right
organisations and people, and to take responsibility for services.
4. Our response to the Select Committee considers
your questions in the political and policy context, including
the new government's approach to localism and the Big Society,
public service and political reform in an era of public spending
constraint.
5. The Big Society offers new opportunities for
citizens to play a more active role and take greater control of
their local community. Some of the proposals build on previous
approaches, such as a drive towards the community ownership of
assets.The Big Society is still more of a "big idea"
than a set of practical proposals. As these proposals develop
they will need to address how communities will be motivated to
take up the challenges and opportunities that the Big Society
approach presents. For example, we must ask, and the Select Committee
might explore:
- What will motivate people to want to take over
services or assets rather than have the council deliver them?
- When community groups do get involved how will
we ensure that they are properly supported and that they are accountable
in respect of service standards and use of public money?
6. The government will want to achieve this without
reintroducing what many see as the "deadening hand"
of the Big State through a regime of targets and bureaucratic
procedures. Local government may fear that the cost of stimulating
the market of community involvement and of supporting it will
offset any savings that have been realised through divestment
of services and assets.
7. The Big Society is a bottom-up and mass localist
approach that will lead to a diverse pattern of service provision
and community activity. At the same time, the new government is
considering how to build on the Total Place projects and related
initiatives, to connect up local public spending, achieve greater
value for money and better services, at the same time as strengthening
accountability. The new government is referring to this as Community
Budgets. These two elements of localism: Big Society and Community
Budgeting are very different and must be reconciled effectively.
8. "Total Place" and "place based"
budgets approaches, allied to a drive towards shared services
and other measures to achieve economies and improve services through
scale, such as joint procurement, have been criticised as essentially
a technocratic, practitioner-led exercise. There have been concerns
that local politicians, let alone local communities, have not
been involved. Even the discussion of a "people centric approach"
to services is focused around individual users and how more effective
interfaces and clearer customer pathways can be established between
them and the multiple agencies with whom they come into contact.
9. Answering the challenges, fulfilling the vision,
and addressing the contradictions, is not a role only for central
government, or indeed debate at the central level. Local government
itself must be proactive which is why the LGiU has established
a Big Society network to develop thinking and leadership in the
months ahead.
The extent to which decentralisation leads to
more effective public service delivery; and what the limits are,
or should be, of localism
10. Local government is at a crossroads. The
coincidence of a radically localist new coalition government and
the most pronounced contraction in public finances in thirty years
presents a unique set of dilemmas, choices and possibilities.
11. We know the future of local government over
the next few years will be shaped by two forces: a drive towards
localism and the need to achieve efficiencies and cut spending
in a challenging financial context. If we are to prevent these
drivers from pulling us in opposing directions we will need a
fundamental shift in the way we think about local service delivery
and the relationship between people, places and power.
12. Citizens will need to become more engaged
in the process of governance and of public service delivery. No
doubt there is an ideological element to this drive to localism,
both a conservative commitment to a smaller state and a liberal
emphasis on autonomy and self-determination tend in this direction.
However there are also compelling practical reasons to believe
that the relationship between citizens and the national and local
state will have to change.
13. Public expenditure cuts will be real and
deep. They will start this year and continue for the remainder
of this Parliament. Local government should expect to bear more
than its share of these cuts given the new Government's commitments
to "protect" a range of services and their budgets.
Revenue and capital funding are at serious risk. The spending
cuts will be severe. There are, however, some reasons for optimism.
Local government is to be given the power of general competency
and it will retain its duty of community leadership and place
shaping. This should include some coordinating powers over local
public spending, developing on the "Total Place" work.
14. In terms of the "limits" of localism,
what is needed is for any action by government to be taken at
the appropriate level and in a proportionate way. Too often governmental
action has been driven from the centre and been out of proportion.
The incoming government wishes to reverse this and we support
them in that. It must be recognised however that the political
culture presents potential difficulties. In particular, LGiU believe
that local political choices that do not match national priorities,
and the perception and sometimes reality of "failure"
by councils from time to time, may prove a limitation on the new
government's localist approach. Local government organisations
have called for the "freedom to deliver" and the "freedom
to succeed", but it is essential also that they have a freedom
to make local choices and take risks that may lead to outcomes
that central government will not support. One of the key tests
of the new government's commitment to localism will be the circumstances
in which it chooses to intervene in local service delivery, and
the extent to which it puts in place any framework to mitigate
risk of "failure" at a local level. This is also a challenge
for local government which has not in the past been successful
at self-improvement in the most serious cases of poor performance.
15. A further limitation on localism is in local
government itself. Not all local councils have demonstrated either
the willingness or the obvious ability to explore and push the
boundaries of their role. Examples of this are in the varied and
quite often very limited use of opportunities such as the Power
of Wellbeing and more recently the Sustainable Communities Act.
In contrast, some councils are pushing for the maximum freedom
and demonstrating how they would use it. An example is the recent
publication by Westminster City Council, of their Foundation Councils
proposals, which we would urge the Select Committee to consider.
The lessons for decentralisation from Total Place,
and the potential to build on the work done under that initiative,
particularly through place-based budgeting
16. The Total Place pilots and parallel projects
have shown that there are significant opportunities across a range
of services to focus on outcomes for users and communities, ignoring
current institutional and professional boundaries and in so doing
to eliminate duplication and unnecessary expenditure whilst improving
or at least sustaining performance and outcomes.
17. The government's attitude to place-based
budgeting displays a degree of contradiction. Eric Pickles has
expressed firm support for the principles behind place-based budgets
and ministers have said that the Chancellor wants to see options
for place-based budgets properly explored in the spending review.
However, the messages are rather mixed across government. The
NHS budget is ring-fenced. There is to be a national commissioning
board and the devolution to an unknown number of GP consortia
of much of the commissioning budget; that is, to private businesses.
Local GP Commissioning will create further pressures as councils
lose their (in many cases successful) relationships with PCTs.
In education, there will be free schools and many more academies.
Responsibility for police budgets will lie with the police commissioner,
who will have to listen to partners like local authorities, but
will have no duty to co-operate on matters such as pooling budgets.
The position is unclear in other areas of government—the
role of local authorities, for example, in the DWP's new centralised
Work Programme, and how contracting for welfare to work will fit
with what is clearly a decentralising move - the establishment
of LEPs.
18. The public sector needs to deliver a challenging
level of efficiency savings and savings from stopping service
delivery. Savings from individual organisations will not be enough
by themselves and if organisations look for savings only from
within their own budgets this could lead to perverse outcomes
and increase spending in other parts of the public purse (e.g.
if funding on gritting/road repairs is reduced, the cost of accidents
increases; if social service funding is cut, vulnerable people
stay in hospital beds for longer).
19. The logic of these initiatives goes against
the concept of place-based budgets and shared decision-making.
The challenge to the primacy of central departments is perhaps
too much for traditionally independent departments like the Home
Office, Health and Education.
20. We shouldn't take Total Place as a panacea,
but it has shown how strategic planning of public services across
an area can deliver savings. As LGiU sets out in its paper People,
Places, Power (appended), Total Place or whatever it becomes known
as should be regarded as a set of behaviours rather than a series
of processes and project programming. It should lead local leaders
and managers to always explore how benefits, outcome performance
and savings can be achieved through partnership and collaboration.
It should be about focusing on outcomes and the needs and aspirations
of citizens rather than institutional interests. This approach
will be very relevant over the next few years of budget reductions
and constraints.
The role of local government in a decentralised
model of local public service delivery, and the extent to which
localism can and should extend to other local agents;
21. LGiU has consistently argued that local government
has a unique role in public service delivery. Councils have a
democratic mandate to decide and scrutinise public service priorities
and delivery, engaging with and acting on behalf of local people.
They have capacity unlike any other actor in the local state with
procurement capabilities, resources, convening power, and a whole
area view.
Police services
22. LGiU calls for the Government to reconsider
directly elected police commissioners as proposed in the Police
Reform and Social Responsibility Bill. LGiU has long campaigned
against directly elected police representatives, arguing that
local councils and councillors already have an electoral mandate
and should be the natural representatives to hold policing to
account within communities.
Schools
23. The mix of schools with different governance
and funding arrangements has been getting more complex for some
time now. While the effect of the Academies Act have made this
mix even more complex, local authorities have continually demonstrated
their ability to work with all types of schools including the
200 plus Academies created during the past seven years. Given
the oft demonstrated ability of local authorities to be flexible
to meet new circumstances, there is no reason why this cannot
continue with a new wave of Academies, albeit following conversion
from maintained school status, and possibly against the advice
of the local authority. The task of reconfiguring support services,
and local authority finances, will be significant if many schools
opt for Academy status. This is especially so in a period of reductions
in Government grant to local government but, as with past changes
in Government policy, local authorities have shown they are up
to the task.
24. LGiU supports action to improve standards
in schools and in many cases a change in governance via the Academy
route may be right for schools. LGiU has concerns over Free Schools.
Health
25. The proposals for GP Commissioning have significant
implications for local authorities, not only in relation to areas
of recent close working with the NHS, such as social care and
safeguarding, but also in relation to the proposed new local government
responsibilities for health improvement and public health. One
issue of considerable concern to local authorities is that of
co-terminosity with NHS boundaries. Councils could hardly be blamed
for feeling that, no sooner have geographical boundaries been
rationalised so as to facilitate joint working through virtual
co-terminosity with PCTs, than the whole issue of co-terminosity
is up in the air again. The consultation document on the changes
emphasise the government's desire for local flexibility of GP
consortia, which means that there will be no real external incentive
for commissioning consortia to be aligned geographically to local
authority areas.
26. A close working relationship between GPs
and local authorities would, in many areas, involve a huge cultural
change, since most GPs are not used to the idea of mutual accountability
or responsibility with local councils. Nor are most GPs used to
thinking in a holistic way about the health and social care needs
of whole populations or to thinking of themselves as community
leaders. Their training and their practice to date has been much
more about individual clinical relationships with patients, and
this will doubtless remain the case for many GPs. However, the
GPs who have been chairs and members of PCTs' professional executive
committees (PECs) will have had considerable experience of thinking
in terms of commissioning issues, and local authorities will wish
to build on or develop relationships with PEC members as a way
in to deepening their collaboration with local GPs more generally.
27. The LGiU has raised some concerns about the
proposed local authority-led local health and wellbeing boards,
as strong vehicles for local authority/NHS partnership. The consultation
on commissioning highlights these concerns, as it again places
considerable reliance on the health and wellbeing boards as a
conduit for partnership. At the same time as playing a leadership
role in developing working partnerships with commissioning consortia,
the health and wellbeing boards will also, under current proposals,
take over the statutory health scrutiny functions from health
overview and scrutiny committees. This dual role might prove difficult
to play, particularly as, at the moment, GPs, being independent
contractors with the NHS, are not covered by any of the requirements
of the health scrutiny legislation. Local authorities will no
doubt wish to put forward their views on how well health and wellbeing
boards could carry out the functions envisaged for them and what
support, in terms both of legislation and resources, they might
need to do so.
28. In addition, councils may wish to give their
views on the specific roles envisaged for them in this consultation
in relation (a) to managing major health service procurement exercises
in which local GP practices are bidding and (b) to selling their
services to commissioning consortia to provide support with needs
population needs assessments or other issues.
The action which will be necessary on the part
of Whitehall departments to achieve effective decentralised public
service delivery
29. For councils to harness the potential of
differing and complex forms of public service delivery presented
by the Big Society and Place-Based Budgeting central government
will need to abandon ring-fencing at a local level in its entirety
and allow councils the powers to over-see and convene budget holders
across the local state.
30. There are also questions about what functions
central government demands that councils should perform. LGiU
has posed the following questions in "People, Places Power";
- Services: How should particular services
be delivered and combined, how should budgets be pooled toincentivise
efficiencies, how can functions be shared and economies of scale
achieved?
- Spaces: What is the appropriate spatial
unit within which services should sit? How can we disaggregate
the way we think about place? When is it appropriate to operate
at county, district, town, ward, neighbourhood or street level?
- People: Who has responsibility for which
services and who decides? What should the council do and what
should the community lead? Who makes decisions about particular
services and what is the remit and scope of that decision making?
Thinking about a given issue along each of these axes is likely
to yield very different answers, but these can be mapped on to
each other so that tensions are identified and trade-offs can
begin to be made.
31. The Prime Minister has stated that power
will be devolved first to local communities, and afterwards to
local government. This "double devolution" is welcome
as LGiU does not believe in the primacy of local government structures,
but in the wider question of local democracy. CLG will have to
answer the question whether it believes that councils exist not
to serve as the local arm of government but as the governmental
arm of local communities, not just to deliver services or act
as a strategic commissioning agent, but to provide the stage for
an ongoing dialogue between people about the places they live
in and the power they wield.
The impact of decentralisation on the achievement
of savings in the cost of local public services and the effective
targeting of cuts to those services;
32. The principle benefit of decentralisation
in the achievement of savings is that there will be greater freedom
at local level to innovate to achieve a better use of resources.
This will be across areas ranging from procurement to innovation
in processes and service delivery. It may still be beneficial
though for local authorities and other local public services to
seek to achieve economies of scale by working closely together,
whether that is in joint procurement or shared services. In terms
of the "targeting of cuts", whilst the new government
has made clear its priority areas of spending and priority services,
it has not directed local public services in where to make cuts.
The LGiU believes that local authorities should be free to determine
local priorities.
What, if any, arrangements for the oversight of
local authority performance will be necessary to ensure effective
local public service delivery.
33. LGiU welcomes the move away from the over
burdensome and controlling audit and inspection regime that developed
in recent years. We support the stated objective of the new government
to reduce central targets and inspection regimes. Proposals for
independent private audit should be consulted with local councils
to ensure that a privatised replacement of the Commission simply
replaces its audit function. The Government's rhetoric on this
has so far been welcome.
34. LGiU would offer a note of caution; the initial
aims of the Commission were to improve the performance of local
councils, which in many ways has been a success. The Government
must now set out how free councils will be to "fail"
or more specifically how much risk they will be allowed to take.
LGiU proposes that councils should create Innovation
funds for officers to suggest ways which have an initial start-up
cost but could potentially deliver service cost-savings over a
period of time. Central Government will need to be specific about
how entrepreneurial they will allow councils to be after a risk
averse decade created by all-encompassing inspection regimes.
35. LGiU calls for Overview and Scrutiny Committees
to be given the relevant powers to audit more widely across council
services and also across the entire local place.
36. The government is currently exploring, through
a CLG consultation, the future of the "top slice" funding
which supports certain local government sector wide functions
such as improvement support. Currently a very limited review is
taking place, with CLG focussing funding on a single provider
of improvement support, either through the LGA or the IDEA (LG
Improvement). Consideration should be given to how in addition
to supporting these important sector wide bodies, a more dynamic
market place for improvement support, and specifically innovation,
can be developed.
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.
37. LGiU has long argued that a shift towards
a fairer balance of funding would demonstrate a real shift in
the balance of power between central and local government. As
local government takes a stronger community leadership role which
allows a degree of local choice and diversity, it needs the authority
and means to act, including adequate financial resources and a
reasonable degree of autonomy and discretion in relation to local
taxes. In our view this will involve:
- the return of business rates to local control;
- local authorities having access to a range of
local taxes; and
- reform of council tax and council tax benefit.
38. The present balance of funding creates an
accountability gap, with councils less accountable to local people
than they believe them to be. It is also the basis of an environment
that undermines the ability of local authorities to respond to
changing needs and circumstances quickly and effectively and so
fully undertake a place-shaping role. LGiU wants to see at least
50% or a much larger proportion of funding being raised locally
using the measures that we have identified.
39. Reform of the balance of funding is unlikely
in the near future, despite the coalition's promised review of
local government finance. What additional or alternative approaches
may be taken? One idea that LGiU would like to see explored further
is for local authority Chief Executives, or another appropriate
person at a local level, become the "accounting officer"
for public spending. This would mean that instead of a vertical
accountability to the Permanent Secretary of one of more government
departments, accountability could also rest at the local level.
This could enhance the processes of parliamentary scrutiny, such
as in Select Committees and Public Accounts Committee.
October 2010
| 
