The Big Society - Public Administration Committee Contents

Written evidence submitted by LGA (BS 105)

The Local Government Group (LG Group) is made up of six organisations that work together to support, promote and improve local government. The six organisations are:

—  (a)  `The Local Government Association (LGA).

—  (b)  Local Government Regulation.

—  (c)  Local Government Improvement and Development.

—  (d)  Local Government Employers.

—  (e)  Local Government Leadership.

—  (f)  Local Partnerships.

The LGA is a cross-party and politically led voluntary membership body. Our 422 member authorities cover every part of England and Wales, and together they represent over 50 million people, spending around £113 billion a year on local services.

The LG Group welcomes this opportunity to provide evidence to the Public Administration Select Committee inquiry into the Big Society. Our response to the specific issues raised by the Committee are provided below.

1.  A definition of what the "Big Society" is or should be

Working with your community, empowerment, diversifying provision, community politics or a strong local society—these are all labels that could be attributed to the big society. Devolving power and responsibility to and through councils to local people will stimulate innovation, choice, accountability and involvement. The LG Group publication Essential Localism[236] sets out the central role that councillors play in stimulating engagement, facilitating action and diversifying provision and choice. Minister for Decentralisation Greg Clark MP commented in his response to the essay that it was "correct to characterise councils are indispensible enablers of the Big Society".

That approaches and needs are different in different places is a fundamental principle of localism. Local councillors recognise this and play a key role in stimulating and supporting community action in a way that makes sense locally. For example:

—  working with the voluntary sector to provide peer mentoring in Lambeth's social housing estates, and transferring assets to community groups such as Weir Link, now a children's centre;

—  working with parish councils in places such as Hampshire, Sussex and Worcestershire on local environmental improvement, helping them build up their capacity, and providing IT support;

—  the work libraries undertake up and down the country to offer volunteering opportunities including helping to run homework clubs, reading groups and day to day delivery of the service - some libraries like Woodberry Down community library in Hackney are now wholly run by volunteers.

This will necessarily and rightly result in different approaches in different places. In the context of localism constant attempts to define what the Big Society means and what it looks like everywhere are not appropriate.

2.  The impact and consequences of reductions in public expenditure on the Government's ambitions to deliver its vision for the Big Society

The financial settlement and significant reductions in funding take us far beyond the territory that conventional transactional efficiencies can cover. Councils are working with their community, business and the voluntary and community sector to make difficult decisions about local priorities and provision and look at innovative means to mitigate impact on the front line.

Councils are strategic commissioners and market makers and recognise the value of a diverse provider base. In 2006-07 councils provided over 50% of the funding derived from statutory sources[237] to the Voluntary and Community Sector (VCS). It would be a mistake however to see the Big Society as simply about paying the voluntary and community sector to deliver services. It is about recreating a culture of responsibility and community spirit. That is essentially local and spontaneous. In some cases the voluntary sector and local community removes the need for publicly funded services because they build self-reliance and reduced dependency.

The LG Group has pressed for a more localised approach to public finance through community budgets which would provide the space and freedom to allow local people and businesses to work together as communities. Some 28 councils are pioneering community budgets in sixteen places, with the support of the Local Government Group. A further 34 councils are known to be exploring community budget models on other complex social issues in locally-led ways and the Group is also offering them support and mechanisms for sharing information and what they are learning.

This builds on past work which has shown the potential for local pooled budgets to transform services: in Leicester and Leicestershire, for example, the estimated costs to the public sector of dealing with alcohol misuse are £89.3 million annually, compared to just £4.9 million to prevent misuse;[238] while in Birmingham 93% of public spending on employment is on out-of-work benefits and less than 7 per cent on supporting people into work.[239]

For now the government is only formally endorsing a limited number of community budgets aimed at tackling a single issue. We believe that the principle obstacle to that is the reluctance of Whitehall departments to see their control of local budgets diminish: future public service reform needs to address that institutional inertia.

3.  The role of and capacity for the voluntary and community sector to deliver local public services including the appropriateness of using charitable income or volunteer labour to subsidise costs

Councils have and will continue to act as strategic commissioners in their areas, working with other agencies including often the voluntary and community sector to stimulate a strong provider base, entrepreneurial action and develop commissioning capacity. We see for example up to 90% of services contracted out of councils in areas such as children's services.[240] They do this not because of centrally set targets and government mandate but because they recognise that encouraging a diverse provider base, supported by the pooling and alignment of resources provides more effective and flexible use of those resources and provides local people with greater choice and more responsive services.

Clearly, there are opportunities of a different kind open to civil society organisations. However there is a particular need to build capacity among some voluntary bodies and social enterprises, both to bid, but also to navigate their first few months and years of holding a public contract. The reality is that many bodies taking on newly contracted out public sector functions face a stiffer challenge than the average start-up business because of the processes and procedures they inherit. Supporting the bodies that will make up a new supplier base is just as important as ensuring contracts are made available in the first place.

Local discretion and appropriate support for these groups is key to achieve this. For example the Localism bill as it stands suggests that local public bodies will be directed to respond to staff and community groups according to a process determined centrally. Instead, the Government should consider how support, entitlements and enablers can level the playing field for these potential providers and how flexibility locally respond to diverse conditions.

The LG Group has over the past four years trained over 4,000 commissioners to work better with the VCS and to raise their awareness of the possibilities/benefits of including voluntary and community organisations in all stages of the commissioning cycle. Quality outcomes from the programme emerged from 12 areas of intensive work with the VCS and councils to together develop smarter commissioning. The most notable successes include large and small voluntary and community organisations working together to bid for contracts and work around supporting infrastructure for personalisation budgets.

4.  Possible problems and challenges from increased commissioning of public service provision from the voluntary and community sector as envisaged by the Government

The financial relationship between central government and the voluntary sector is a complex one. A National Audit Office (NAO) report found that complex funding chains often meant good funding practice was not disseminated.[241] When the NAO considered this in detail in a study of 12 large charities it found that most had at least 200 different funding relationships with part of government, with some having as many as 4,000.[242] Multiple funding providers operating at local, regional and national level each operate different processes; have different priorities and requirements to access funding. This can cause difficulties in accessing funding and may lead to duplication and waste. A place based approach to investing in the voluntary and community sectors through community budgets would allow local areas flexibility to invest appropriately in partnership with the VCS.

One of the biggest barriers to increasing diversity of provision is the complexity of procurement processes, which weighs more heavily on smaller organisations. Additional national provisions relating to the two tier workforce and pensions are ones that civil society organisations report to be particularly problematic.

The voluntary and community sector are increasingly involved in the initial specifying and scoping of services together with councils. The experience of local government can be crucial in establishing what can actually be done to deliver a greater mix of provision. There must be a sustained effort to communicate best practices to commissioners and procurement professionals across the public sector. The Third Sector Commissioning Programme delivered by the LG Group has an important part to play in that.

5.  The right to form employee-owned public service cooperatives including the resources available to co-operatives, proposed powers, and rules governing their operation

6.  Governance and accountability issues arising out of different organisational forms of social enterprises and co-operatives; and the participation of voluntary sector and community groups in greater public service provision

Councils can play a central enabling role in facilitating different forms of social enterprises and co-operatives and, as expanded on in our answer to question 3, encouraging a diverse market of providers. Democratically elected councillors bring democratic legitimacy and accountability to marketised public services.

Firstly, they can help ensure that the local market provides excellent services for local people, championing the interests of local people in a landscape of more autonomous public sector providers, ensuring quality of provision and value for money, and providing a democratic channel of redress. Secondly, they can ensure these services fit with and provide value for money alongside other local services, where there are interdependencies between services. Thirdly, they can manage market failures in the interests of local people.

The LG Group recently held two practical workshops for councils who are considering spinning out services—attended by 60 councils, half of whom are already well on their journey to change.

For example:

—  Brighton and Hove Council has committed to a system of radical outsourcing, emphasising the role of social enterprises and voluntary organisations. The decision to outsource will only be taken if a service can be provided more efficiently and effectively, ideally by the voluntary sector.

—  Sheffield City Council has a contract with Green Estate, a local social enterprise, to manage green spaces in the city as part of a broader environmental regeneration programme. This has meant increased local employment, improved community participation on maintaining the local area, and allowed for the provision of training for disadvantaged groups and the reinvestment of the profits from landscaping contracts into the management of Sheffield's green spaces and parks.

—  Greenwich Leisure Limited is a charitable social enterprise formed when Greenwich outsourced its leisure services and now runs over 70 leisure centres in 13 London boroughs and in Berkshire and Surrey.

—  Local Partnerships is supporting local public bodies with options appraisals on mutual and social enterprise, such as leisure services and is leading the Mutuals information service, working with Co-operatives UK and Employee Ownership Association.

7.  The implications for central government and for the civil service of policies which require them to promote and to enable, rather than to manage and to direct, public services

A fundamental shift is required. We want to see continuing movement away from the command and control mechanisms such as targets, lengthy guidance, bidding pots and detailed legislation which determine not only what but how councils and citizens should go about their business. Crucial to the success of this is cultural as well as policy change. Shifting mindsets so that a localist approach is seen as presenting a higher chance of success and innovation rather than something risky and to be avoided will be the key underpinning factor in sustained decentralisation across Whitehall departments.

There has been movement in some areas; for example the general power of competence in the government's localism bill, consultation on allowing councils to set planning fees at locally appropriate levels and consideration of the removal of unnecessary regulations and micromanagement such as provisions that set out how many meetings a year community safety partnerships should have.

However the predisposition of civil servants to fall back on traditional levers and tools to enact change can be seen in legislation currently making its way through parliament. The localism bill contains at least 142 powers for central government to lay down regulations, issue guidance and otherwise dictate how localism will work in local areas. This includes powers for the Secretary of State to make regulations on how local referendums will operate, including a power for the Secretary of State to determine what constitutes a "local issue", and a tendency towards mandating unduly complex series of procedures to stipulate how local people and councils work together on service provision (the community right to buy and challenge) and planning.

Democratically-elected councillors, representing their communities, have a unique role to play in enabling the local engagement which will drive the Big Society. For many councillors, this is a welcome opportunity to reshape their role away from bureaucratically-driven, paper-heavy meetings and processes, to much more creative roles leading and energising their local communities and encouraging self-organised groups to be ambitious.

8.  The place of local authorities in the transfer of power from Whitehall to communities and the role democratically elected local councillors should play

Democratic local government is an enabler of the Big Society. Councils exist precisely in order to foster and express local community identity, encouraging community activism and creating opportunities for voluntary groups to develop and succeed - as well as to ensure accountability to the community for taxpayers' money spent locally. In many cases councillors themselves will have a long track record of community activism before they were elected—their inspiration to serve their local communities will often have its roots in community work. Councillors are not the executive state, but are elected to put pressure on the public sector machine—whether the council's own executive functions or those of other organisations acting locally - to tailor what it does to what local communities want.

From citizens' juries, area committees, meetings with businesses, participatory budgeting, neighbourhood forums and ward councillor surgeries councils pioneer ways for local people to have their say and to access the information they need to make informed choices about the issues important to them.

The role of the local ward councillor is central. Many local authorities and the LG Group are providing support and training to their elected members and many local neighbourhood groups and forums are led by councillors and are well developed to take on more responsibility and lead community action.

For example:

—  Many councils also already take the lead in local Funders Forums alongside health partners and local charitable trusts and have strong links with Community Development Foundations as a means to share information and strategies across a local area.

—  Councils are in a variety of ways working to put local people in the driving seat to shape the physical future of the places where they live. North West Leicestershire District Council provided planning expertise and support for the Long Whatton and Diseworth Community-Led Plan—which resulted in community development schemes for five units of six houses. Bristol City Council provided financial assistance to the Ashley Vale Action Group. The Group purchased a central plot of land and an office block financed by sub selling 20 plots to self builders and 6 to a Housing Association for homes for the elderly. The LG Group will continue to work with authorities to support the sharing of experience and good practice in engaging and stimulating community led planning and the essential role that councillors play in this.

—  Post Office Limited is working with Sheffield City Council on how the local community can take more responsibility for the future success of the local post office network in the city and identifying ways in which post offices can make public services more effective at lower cost. This is an important step in recognising local communities' strong support for local post offices and Post Office Limited (and the Shareholder Executive in the Department of Business, Innovation and Skills) should be encouraged to extend this initiative in other parts of the country.

—  Many councils are working closely with Parish and Town councils to devolve services. For example every local (parish and town) council in Eastleigh delivers at least one delegated service. In Hamble-Le-Rice Parish Council this involved taking ownership of local playing fields which allowed additional services to be provided to the community and cut down on vandalism and graffiti.

9.  Potential conflicts with other aspects of public service delivery, such as individual focus of personalised public services or universal provision and uniform standards of public services (i.e. avoiding post code lotteries)

National or uniform standards and entitlements have an important place however there needs to be a balance between providing focused outcomes without prescribing how local areas go about delivering in a way that meets their needs and priorities locally. Critically uniform standards must be based on a bottom up appraisal of the views of practitioners and service users.

In a truly devolved world, it should be for local people and their councils to take decisions about which services they want and the level of expenditure they need. This will allow decisions relating to public services to be tailored for the place, and people to be involved in doing this. Wider local discretion to vary services in the light of a vision for the locality and local priorities is an appropriate and inevitable consequence of this. This is not a postcode "lottery" but rather an informed choice taken by local people and their democratically elected members.

March 2011

236   Essential Localism, Local Government Group, February 2011. Back

237   The National Council for Voluntary Organisations (NCVO) suggests that a third of funding received by the voluntary sector in 2006/7 was from statutory sources. Of this local government was the principal funder providing £5.7bn of funding. Central government provided £3.3 billion 2005-06 amounting to around 1% of total expenditure. The State and the Voluntary Sector. Recent trends in government funding and public service delivery, National Council for Voluntary Organisations, 2009. Back

238   Leicester and Leicestershire Total Place Final Report, February 2010. Back

239   Birmingham Total Place Pilot, February 2010. Back

240   Developing the Local Government Services Market to support long term strategy for local government, Communities and Local Government, 2006. Back

241   Working with the Third Sector, National Audit Office, 2005. Back

242   Public Funding of Large National Charities, National Audit Office, 2007. Back

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© Parliamentary copyright 2011
Prepared 14 December 2011