Memorandum from the Department for Communities
and Local Government
SUMMARY AND
INTRODUCTION
1. This submission sets out evidence from the
Department for Communities and Local Government.
2. The coalition government is founded on the
principles of decentralisation, localism and the Big Society.
The Department for Communities and Local Government has a key
role in achieving this agenda by redistributing power from government
to communities and people.
3. This action is necessary as government has
become increasingly centralised over time, and complex systems
have been built up to allow central government and other unelected
bodies to disproportionately influence local priorities and decisions.
This interference has stifled creativity, held back public services,
weakened accountability and progressively eroded the link between
citizens and local service provision. It is time for a fundamental
shift of power away from central government to individuals, communities
and local institutions to put them back in charge of making the
decisions about their local areas and services.
4. Our guiding principle is that power should
be held at the lowest possible level, whether this is individuals,
communities, neighbourhoods, local institutions or local government.
We are fundamentally shifting power away from Westminster to local
authorities, communities, neighbourhoods and homes across the
country. The Department's Structural Reform Plan, published on
8 July, is a clear action plan for delivering the radical shift
of power from Whitehall to local councils, communities and individuals.
The Coalition Government is delivering a radical localist vision,
decentralising central Government, and making the Big Society
part of every day life.
5. To achieve a radical devolution of power we
need to take action in six key areas:
- remove central burdens;
- empower people to take action;
- letting local people control public spending;
- breaking down monopolies ;
- make public bodies and services transparent;
and
- strengthen accountability.
6. This submission sets out the underlying evidence
for our approach, the actions that have already been taken, and
how we intend to build on the Government's positive start to embed
localism, through the decentralisation of public services, into
British culture. In some cases, policy referred to in this submission
is being developed for announcement at the Spending Review on
20 October.
7. Government does not have a monopoly over the
evidence and ideas that will help drive this agenda forward, and
we look forward to learning from the Committee's inquiry.
INTRODUCTION
Our organisation and approach
8. The Department for Communities and Local Government
has policy responsibility for local government, empowerment, planning,
housing, local economic growth, regeneration, community cohesion,
fire and resilience. It is also a champion for the decentralisation
of power.
9. Our guiding principle is that power should
be held at the lowest effective and practical level. Britain has
become one of the most centralised countries in the democratic
world, with too much power held at the centre of government. This
concentration of power has held back public services and wider
society. The bureaucratic systems of accountability, imposed by
the previous administration, directly, via the apparatus of regional
government and through unelected non-departmental public bodies
have:
- damaged people's confidence in their own ability
to act;
- weakened democratic accountability;
- suppressed the ability of local institutions
to respond to the priorities of local people;
- eroded the link between citizens and local service
provision;
- created confusion for citizens who do not know
where accountability lies or where to exert pressure for change.
This in turn has led to disengagement from the political process;
and
- represent a significant administrative cost,
at a time when we can least afford expenditure which does not
directly contribute to public service outcomes.
10. Local people and communities often know their
needs better than anyone else. Decentralisation, therefore, should
not just be viewed as a transfer of power from central to local
government, important though that is, but as part of a more radical
agenda where the starting point is always that power is held by
individuals, communities and local institutions. Local decision-making
will be a part of everyday life, giving communities, neighbourhoods
and individuals more say, choice and ownership of their local
facilities and services.
11. For these reforms to work, bureaucratic accountability
must be replaced by democratic accountability. Local institutions
and service providers must be accountable to local people through
greater transparency of information, and stronger democratic accountability.
Power must be pushed downwards to the lowest possible level so
that it is held by the people. We are beginning a new era of transparency,
accountability and openness so local people can hold elected officials
to account.
Remove central burdens
12. The Coalition Government is freeing local
institutions and service providers from central prescription,
guidance, targets and inspection machinery. This will allow them
to be responsive, and focused, on the priorities of their area.
The outcome will be tailored policy solutions to the needs of
each area and savings in bureaucracy and administrative costs
partly due to less time being spent collecting unnecessary data
and conducting inspections.
13. Achieving long term and lasting change will
have major implications for the way that Whitehall operates. Departments
will no longer have a top-down relationship with public service
providers whereby they set standards across the country, and require
burdensome and expensive inspections to ensure compliance. Instead,
Departments will have a facilitative role to ensure that local
institutions are accountable and responsive to the needs of their
residents.
14. The role of the civil service will also change
from its traditional role of providing professional advice to
Ministers, to include helping communities identify and break down
barriers that are stopping them taking action for themselves.
This is already happening -the four vanguard areas launched to
live the Big Society will get specialised assistance from senior
civil servants—and is likely to have wide-ranging implications
for the ways in which civil servants work.
15. As Whitehall removes barriers to local accountability,
it needs to undergo a culture change so that it risk-taking on
the frontline. At the same time, there will also need to be a
change of culture within the broader public sector which is accustomed
to central management. Therefore, Whitehall will support the transition
to a decentralised world by helping to create a permissive culture
of innovation where the public sector is encouraged to innovate,
to disseminate the lessons of that innovation and to learn from
peers rather than to wait for central government to pilot and
approve new approaches. Local bodies will no longer be overwhelmed
by prescriptive guidance and legislation.
16. This process has started; actions taken to
date include:
- plans to remove outdated or unnecessary guidance
and regulations, following 400 ideas from the local government
sector;
- abolition of the Comprehensive Area Assessment
which forced local authorities to respond to central assessment
and targets, rather then the needs of their local area;
- abolition of Government Office for London and
the announcement of the intention in principle to abolish remaining
Government Offices who monitored the performance of local authorities
against central government targets; and
- abolition of Regional Spatial Strategies including
the imposed top-down regional housing targets so that local citizens,
businesses and communities, not central or regional government
will now determine the correct level of housing and employment
provision for their areas to meet local needs.
17. Other Departments have also taken important
steps to remove barriers and embed decentralisation in public
services. For example:
- Department for Education.
The Academies Bill which has Royal Assent has made it easier for
schools to become Academies, and gain independence from local
authorities.
- In addition, the forthcoming Education Bill will
free outstanding schools from unnecessary intervention or inspection;
focus inspection on core areas; allow "free schools"
to be set up, further diversifying provision; remove bureaucratic
burdens on schools, such as unnecessary duties to promote cohesion
or wellbeing; give teachers greater autonomy in dealing with school
discipline; and allow schools more local freedom to determine
their curriculum.
- The Home Office Police Reform and
Social Justice Bill will be introduced in the autumn. The main
elements include the introduction of elected Police and Crime
Commissioners; removing red tape from police work; and increasing
the professional discretion of officers.
- The Department of Health will introduce
a Health Bill in the autumn. Reforms to the NHS, as set out in
Equity and Excellence: Liberating the NHS, and public health,
will give patients more choice and influence over the services
they use; introduce a strong patient voice into the NHS and a
Public Health Service; and increase democratic legitimacy in healthcare.
- Department for Business, Innovation and Skills
launched the new One-In-One-Out policy
which will reduce the impact of regulation on business by requiring
an equal deregulation ("out") for any new regulation
("in") that is put in place.
18. We are also replacing top down housing targets
with powerful fiscal incentives for local authorities to drive
housing growth through the New Homes Bonus. This will allow local
communities to control the way in which villages, towns and cities
develop and to derive direct benefits from the proceeds of growth,
thereby encouraging local authorities to deliver the housing communities
want and need. We are also proposing to introduce a new "presumption
in favour of sustainable development" to secure essential
housing growth and economic development that meets local needs.
19. We are seeking to legislate through the Localism
Bill for a far stronger role for neighbourhood planning and community
engagement within the planning system, giving communities real
power to shape, determine and take responsibility for the future
development and planning of their areas. In addition, opportunities
to further reduce the level of central inspection and regulatory
requirements are also being considered.
20. However, we recognise the importance of strategic
planning particularly to address infrastructure needs that impact
beyond the level of a single local authority. We are also seeking
to legislate for a new statutory "duty-to-cooperate"
on local authorities and other public authorities to encourage
joined-up working on plan-making and information sharing.
Empower people to take action
21. Removing barriers, in isolation, will not
achieve the level of social and community action we are aiming
for if there is a general perception that Government holds a monopoly
on policy ideas. We will develop a permissive approach to public
policy making so that local communities can develop proposals
that reflect the needs and opportunities of their area.
22. We will empower local communities to take
control and develop their own approaches to public policy. People
regularly come together to tackle issues at neighbourhood level
and this approach needs to be strengthened and encouraged. It
is recognised that some groups face barriers to participating
in social action in this manner, and we will seek to eliminate
these. We will also seek to empower communities through rights
to demand to take action so that communities have both the opportunity
and freedom to do things differently. In addition, we will explore
options to encourage communities to participate in social action
and the Big Society by developing the right incentives.
23. Furthermore, our proposals for a Community
Right to Build will shift power from Government to communities,
allowing local people to build the new homes or community amenities
they want, providing they can demonstrate strong local support.
We will be publishing a White Paper to consider the most appropriate
framework of incentives for local authorities to support growth,
including exploring options for business rate incentives, allowing
local authorities to reinvest the benefits of growth into local
communities.
24. These are important first steps which should
help local communities move into the space that will become available
for individuals to develop solutions for their own areas as central
government removes top-down barriers.
25. The Prime Minister has asked Greg Clark,
Minister for Decentralisation, to take the decentralisation agenda
forward and to produce a progress report by summer 2011. This
will set out principles for decentralisation that apply more widely
across Whitehall.
Letting local people control public spending
26. Localism and decentralisation of public services
require greater local power over budgets. Local institutions can
not respond effectively to the needs of their local communities
if central prescription means that they can not flex resources
in the way that best meets the needs of their area. Decentralising
control over resources will mean that public money will be spent
on the priorities of the local area, not central government.
27. Therefore, we are committed to providing
greater local freedom and flexibility on how funding is spent.
Such freedom will not only provide the flexibility to move funding
to meet local priorities, but can also reduce the cost to service
providers of administrating numerous grant streams.
28. But we also want radical ideas to come from
putting citizens and service users at the heart of defining what
is driving local issues and designing the solutions to them. Transparency
in the funding available within an area permits challenge and
creation of innovative responses to local priorities.
29. The actions that have been taken to date
have included:
- £1.2 billion of grants to local government
has been de-ringfenced allowing local authorities to allocate
their funding to the requirements of their area.
- We are also considering the potential for community
budgets which would be used flexibility to meet local priorities
rather than being fettered by centrally imposed objectives. However,
no decisions have been taken, prior to the outcome of the Spending
Review, on whether they will be introduced, or how they might
work.
- Local authorities will increasingly publish spend
over £500 so local people can see where the money in their
area is going.
30. The Department is supporting the Local Government
Association in its Place Based Productivity Programme. The Programme
will identify both short-term efficiency opportunities, and the
steps needed to deliver long-term transformational change to release
savings. The specific work streams range from Procurement, Collaboration
and Assets to Adult Social Care. Central government will play
a crucial role by addressing the barriers identified by the programme.
31. One benefit of decentralisation and the reduction
of central control over resources will be that local government
expenditure will be allocated to local priorities in the most
efficient way possible. The Local Government Resources Review
will provide more details on the exact implications for local
government budgets, but these reforms will mean that local government
can respond flexibly and resourcefully to future challenges. Further
reductions in restrictions on local government funding and further
funding flexibilities are also being considered through the Spending
Review.
Breaking down monopolies
32. Allowing more diverse suppliers of services
is an important element of the localism and decentralisation agenda.
The voluntary and private sectors have benefited from having a
diverse range of suppliers as have parts of the public sector
where tentative reforms were introduced in the past eg foundation
trusts and academies. Having diverse suppliers stimulates innovation,
efficiency, growth and gives individuals and communities real
choice, consequently improving the outcomes they care about.
33. Key to this is councils moving further away
from traditional service provision to commission services from
others when they can deliver them better and more efficiently.
To achieve this, councils will need to engage citizens and potential
providers early on in helping to identify the range of possible
solutions and encourage innovative solutions to local priorities.
34. Local authorities should also consider the
scope for partnering with voluntary groups, social enterprises,
cooperatives as well as private sector suppliers. Through these
measures, councils will be able to encourage competition and innovation,
drive down costs and pressure existing providers to raise standards.
35. But diversifying suppliers of services goes
far beyond local authorities. For example, the NHS reforms will
see the transfer of public health functions, the Director of Public
Health and resources to local government, and strengthen democratic
accountability. This will embed public health in local communities,
aligning resources with the wider drivers of health, and empowering
communities to address what matters for their health. The market
place for health improvement services will be opened to competition
to a wider range of organisations such as business, the voluntary
sector and wider civil society who may work in partnership.
36. The government has already taken steps to
diversify supply across a number of services. The first wave of
Pathfinder mutuals, to be run by entrepreneurial public sector
staff, who want to take control of their services are already
underway. These pathfinders will be trailblazers for the rest
of the public sector—helping government establish, by learning
from the front line, what type of support and structures will
best enable the development of employee-led mutuals on an ongoing
basis. They include community interest companies in healthcare,
social enterprises in housing support services and employee led
services in youth support and children's services.
37. The department and government will need to
undertake radical reforms diversify suppliers to help build the
Big Society. Monopoly public services will need to be opened up
to new suppliers from the voluntary and private sector as well
as other public organisations. The barriers to entry for new social
enterprises, voluntary and mutual organisations will need to be
removed. The committee's investigation can hopefully help identify
some of these barriers and where there are opportunities to help
diversify suppliers.
Make public bodies and services transparent
38. As central government removes the barriers
that prevent local service providers and institutions from responding
to the needs of their community, people need to have ready access
to data which they can use to hold service providers and local
institutions to account. Therefore, there is a radical shake-up
underway of how local service providers account for their spending,
with reporting outwards to local people replacing the bureaucratic
and costly system of reporting upwards to central government.
39. Ultimately, in the future we expect local
authorities, and other service providers, to make much more performance
and expenditure data available online. This data should be presented
in a standarised format so that it is accessible to residents
and software developers who can use it to benchmark service quality.
It has been reported that around 60 local authorities have started
publishing their £500 spend and more are expected to do so
by January 2011.[81]
Central Government will also exemplify these principles by publishing
government data in an open and transparent manner.
40. The actions that have been taken to date
to make public bodies and services more transparent have included:
- The Local Government Association has started
publishing spend online and the communities and the department
has recently called on them to be formally subject to the same
Freedom of Information rules as central and local government.
- Draft guidance has been issued to support local
authorities preparing to publish spend and workforce data. A final
version will be released later in the autumn.
- To coincide with the launch of the draft guidance,
the Department will run a campaign to generate public awareness
and ongoing demand for this data.
41. Furthermore, the Department and our Arms
Length Bodies have already started publishing all departmental
spending over £500 online. The information was provided in
an open and standardised format so the public can see what was
purchased, how much and from whom. All Government departments
will be required to publish spending over £25,000 by November
2010
Strengthen accountability
42. Genuine localism and effective decentralisation
needs strong democratic accountability if they are to flourish.
At present the balance between democratic and bureaucratic accountability
is tipped very much in favour of the latter, driven as it is by
prescription, targets, and inspection. This is evidenced by relatively
low turn outs in local elections.[82]
43. However, removing top down bureaucracy will
not in itself drive resurgence in local democracy. Local people
must have the means to hold the institutions to account for the
range and quality of services they provide. That is why we are
committed to strengthening local democracy, and putting in place
clear, effective routes to influence service provision. In the
future, the principal oversight of locally-delivered services
will come from greater transparency and accountability to local
people.
44. The actions that have been taken to date
have included:
- announcing the abolition of the Standards Board
so shifting the focus on to local people to assess the performance
of their councillors; and
- announcing our commitment to providing greater
choice for local councils over their internal structures so they
can work in a way that is best for their area.
45. Strengthening democratic accountability,
both at the national and local level, is paramount to increasing
localism and decentralising the delivery of public services. Therefore,
the Department will introduce mechanisms such as giving residents
powers to trigger referendums on local issues and creating directly
elected Mayors for the twelve largest cities, subject to confirmatory
referendums and full scrutiny by elected councillors.
46. We will also introduce a whole new era of
freedom for local government to act in the interests of their
local communities through introducing a General Power of Competence.
We want to shift the culture from "can we do this?"
to "we can do this"—a fundamental change in how
councils perceive themselves and in what local people should be
able to expect.
47. But democracy is not only about formal structures
such as the ballot box and referendums. It is about giving people
power to change the things that affect their lives. The market
is arguably the most powerful tool that we have for giving people
that power. So decentralisation is also about bringing the freedoms
and incentives to bear on holding service providers to account
- through the power of citizens having choice over their service
providers and through mechanisms such as payment by results models
which built in rewards for achieving goals.
48. Together, these measures coupled with greater
data transparency will mean that bureaucratic accountability -
where local institutions and service providers look up to central
government - will be replaced by democratic accountability. Local
institutions will be accountable to local people who will assess
performance and ensure that the right outcomes are achieved for
their area.
Conclusion
49. The principles of localism, decentralisation,
and the Big Society are crucial to the coalition Government. CLG
has an important role in leading a radical decentralisation of
power, and change of culture so that local areas are empowered
to achieve their priorities.
50. Whitehall needs to remove barriers that prevent
service providers from responding to the needs of their local
community, and encourage local communities and institutions to
develop their own policy solutions (page 3-5). There will no longer
be a single "right way" of delivering services, and
local government will have an important role to commission services
through an open market ensuring that their communities benefit
from the choice and innovation this will entail (page 6-7).
51. For decentralisation to work, it will be
crucial that bureaucratic accountability is replaced by democratic
accountability. This will mean that local service providers and
institutions will no longer mainly focus on ensuring compliance
with Whitehall standards but instead will be accountable to their
citizens for achieving the local priorities (page 8-9). Transparency
will be a key part of this; instead of providing unnecessary data
to central government, local institutions must publish accessible
and relevant data to their citizens including on service standards
and how money has been spent (page 7-8).
52. The coalition government wants people to
have control over the decisions that affect them. The default
must no longer be Big Government but Big Society, where family
and social responsibility, and civil liberties create a stronger
society. A rebalanced state, focused on the needs of the people
it serves, will improve the lives of individuals, encourage innovation
to flourish, and re-energise democratic life.
September 2010
81 The Guardian online, September
2010. Back
82
Turn out in the 2006 local elections was 36.5%. Back
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