23 January 2003
Speech by the Chief secretary to the Treasury, Paul Boateng MP, at the New Local Government Network conference
Very pleased to be here today at the first annual conference of the New Local Government Network.
It is important that the NLGN has set down a real marker around the issues of the transformation of the public services and empowering local communities. That goal of empowering and enabling local people is what drew me and so many others of my generation into local politics in the first place. In the Treasury we recognise the importance of local democracy and its role in reflecting the needs of local people which is vital to the transformation of public services and delivery.
The mix of representatives you have here from the world of local government and beyond is powerful and potent in terms of achieving what we seek to achieve - improving the quality of life for local people.
New Localism
There is a growing recognition, across central and local government, that it is no longer possible either to run economic policy or deliver strong public services that meet public expectations using the top-down one-size-fits all solutions of the past. New information technologies, greater competition, a premium on skills and innovation, a wide-ranging media, increasingly demanding consumers, and varying local needs all work to expose the contradictions of old-style centralization and a command and control approach to delivering public services.
That is why we have begun to articulate a framework to underpin a new approach to governance and a new generation of policies. That includes:
a. Clear long-term goals set by the elected government;
b. A clear division of responsibility and accountability for achieving those goals with proper co-ordination at the centre;
c. Maximum local flexibility and discretion to innovate, respond to local conditions and meet differing consumer demands;
d. And, alongside this devolution of power, maximising transparency about both goals and progress in achieving them with proper scrutiny and accountability.
In government now across a whole range of policy areas, we are taking the steps necessary to devolve power downwards, setting clear goals, but within that framework working to maximize the discretion of agencies with technical expertise, and authorities who have credibility and insights that come with their position - the local links:
a. Independence for the Bank of England - and a credible monetary policy regime;
b. Independent competition authorities - free from political influence;
c. A single pot funding framework for the Regional Development Agencies - liberating the productive potential of the regions;
d. And drilling down to a sub regional level - a new framework for working with the voluntary and community sector - freedom for partners in the community to deliver public services around the needs of individuals and families. This all stems from the new Treasury and the first moments of this administration.
Local Government - White Paper and Comprehensive Performance Assessment
Yesterday I attended a central local partnership meeting at Eland House. You get a sense at meetings like that what differences our new ways of working together are beginning to make on the ground. If our commitment to localism is to be meaningful local government has to be at the heart of it. The Chancellor and I see local government as crucial to what it is we are trying to do. We share a vision of empowered local authorities, closely in touch with their communities, and effective in delivering the innovative solutions local people want. To achieve that vision we need to cut back the current system of central control and recognise the importance and validity of local choice.
Of course, we have to take a balanced approach. We will have to think carefully and respond accordingly to the tensions that exist between the economic and democratic case for empowering actors at a local level, freeing them from central controls, and the moral and social case for ensuring that everyone has access to adequate levels of public services, that no one is disadvantaged by where they live, that no one is left behind and that everyone can reach their full potential. That means commitment to local choice and local autonomy, of course, but it also means we exercise that commitment within a framework guaranteeing adequate standards of provision in key areas. In short, as the Prime Minister has said, we need "universal services with personalised provision."
We have done a lot, since 1997, we have begun to move away from the destructive centralism of the 1980s and early 1990s - years characterised by universal capping, strict limits on borrowing, and then the poll tax.
The Local Government White Paper Dec 2001 set out a vision of Authorities as strong local leaders delivering quality public services. We recognised then, and we recognise now, the urgent need to reduce dramatically the burden of central control on Local Authorities and give them the freedom to innovate and to become effective community leaders.
The vision set out in the White Paper posed a challenge to both central government and local government.
Whitehall needs a radical culture change and those of us that work there need to face this - we need to move away from micro-management and a one-size fits all approach to policy-making. But Local Authorities also need to rise to the challenge - demonstrate that they are in touch with their communities and can provide the excellent public services people want.
The key element of the White Paper was the launch of Comprehensive Performance Assessments. At the time, there were fears that the CPA represented an increase in centralism, that it would mean a new examination, and that at the end of a tortuous, bureaucratic, and time-consuming exercise there would be no reward for successful Local Authorities. This was not what we intended, and it was not what we delivered. The CPA was intended as a tool, and I'm absolutely committed to ensuring that it is a tool, for liberating Local Authorities from central controls, and devolving power and responsibility downwards.
I would like to highlight four key aspects of the CPA:
a. Firstly, I see the CPA process as a means of giving councils extra freedoms and flexibilities and encouraging Whitehall to move away from 'one size fits all' and towards a more differentiated approach;
b. Secondly, I think CPA has an important part to play in boosting local accountability. If local political choice is to be legitimate, it requires that people from all parts of the local community are informed and engaged in those choices, and know what the outcomes of those choices are.
c. Thirdly, CPA signalled the first moves away from conflicting silo-based performance management systems - where central government departments pepper authorities with a multitude of different and at times conflicting requests - and toward a more integrated, coherent, corporate approach to planning, to inspection, and to target setting.
d. Fourthly, as is now widely recognised, CPA help Local Authorities recognise their own strengths and weaknesses and provides a basis for the continual self-improvement necessary to deliver excellence in public service.
Transparency throughout the process, transparency in the aims to which authorities aspire, transparency in the methods they use to attain them, and transparency in the results they actually achieve, is a valuable tool - not just for auditors in central government - but also for local authorities themselves and the communities they seek to serve. It is all about enabling local electorates to reconnect with their authorities, restoring the link that was all but lost in the dark days of opacity and bureaucratic inertia. The simple truth is that with turnout at local elections down to 38% we all have a job to do to enable local citizens to engage with their authorities. Making up the democratic deficit is an important objective - and transparency is one of the tools that we have to achieve it.
New freedoms and flexibilities
Building on the successful reforms in the White Paper, in November, with John Prescott in the lead, we introduced a new package of freedoms and flexibilities.
For all councils there will be greater freedom over how to spend their resources, and reductions in requirements to produce plans.
For the best councils we intend to go much further:
a. Greater flexibility to decide on how the money received from central government should be spent - with almost no ring-fencing;
b. No requirements to produce plans for central Government;
c. Radically reduced inspection; and,
d. The opportunity to engage with us through the Innovation Forum - another area where we are indebted to the Local Government Network - to agree new approaches to the way local services are commissioned and delivered.
I have talked a lot about the challenges, and I have no doubt that you will hear more about them over the rest of the day, but we also have to celebrate the successes. Who would have believed that just one year on from publication of the White Paper the CPA process would have been successfully completed for all upper tier authorities? And that the government would have supported this with a radical package to reduce controls both for the best authorities and indeed for all councils? And look at the CPA results themselves. Over 50% of councils came out of the first round of assessments either as excellent or good. Now that must be great news for local people and those that believe in local democracy. And as the Audit Commission has said, the process demonstrated innovation and excellence in councils throughout the country.
Challenges for the future
For the future, we need to remember that this is not a one period game. Authorities which perform well need to keep performing well - and set their sights even higher; authorities which perform badly need to recognise that this is not the end of the story, that the next assessment is the next chance, and an opportunity to improve their performance. In Whitehall, we need to rethink our approach to local delivery, and even with the structural changes in place we still have work to do to change the Whitehall mindset. That cultural change - learning to let go - will take time, but it will take less time if local government are able to demonstrate that they are adding value. We need to create a virtuous circle of high performance building trust, trust leading to greater freedom, and greater freedom driving improved performance.
Within that framework, I would like to leave you with a few thoughts, areas where central and local government together need to raise their game, and areas where there are opportunities we can only grasp by working together.
For local government…
Building on the CPA - Authorities need to get improvement planning right, and together we need to ensure the right capacity-building mechanisms are in place.
Lots of local authorities excel at community work, getting people involved in regeneration schemes, and giving them a sense of ownership. We do not want to sacrifice that, but we do need to start thinking harder about the role of Local Authorities at the harder edge of economic development. Local authorities have powers over planning, over benefits, over the quality of the environment, powers that could be used as levers of economic growth. The idea of allowing Authorities to keep a proportion of increases in takings from the business rate is now on the table for discussion, and it's going to be an important discussion, so you could soon have the incentive as well as the opportunity to make a real difference to the economic life of your communities.
In central government…
In Whitehall, we need to continue our efforts to speak with one voice to local government. We need to develop a more corporate approach, to focus expectations on the part we would like each council to play in addressing shared priorities, and then release local energy, ability and commitment to get on with the job.
And together we need to think about Local Public Service Agreements, innovation, and the funding arrangement - where the door is open for dialogue.
Local Public Service Agreements have not just been a tool for incentivising performance improvement. They have opened a more mature dialogue between individual authorities and Whitehall. I want to build on that success so that a second round of LPSAs will enable councils to focus energy on the real priorities for improvement in their own area.
Linked to that, we are establishing the Innovation Forum - with the name borrowed from the Local Government Network - to bring together the best local authorities and senior government officials to test radical ways of improving the delivery of public services locally - not just incremental improvement but a visible step change.
On funding, the government is committed to working with local government to understand whether the current balance is a barrier to local service delivery and accountability. On Monday, Nick Raynsford announced that a major review of local government funding is to start in April and will be carried out in partnership with local government and other experts in the field. The door is now truly open.
We need to think harder about Community Leadership - what it means and how we make a reality of it. Freedoms and flexibilities are a necessary but not a sufficient condition for effective local services. We need to work towards a positive vision of local government, building on and sharing best practice, working with us in central government on national priorities like child poverty and urban regeneration, rethinking public space and the public realm, reconnecting with citizens by working with new partners in the private and voluntary sector;
Conclusion
We are putting the framework in place, but I do not believe that this is a job for central government alone. The challenge of the future is a challenge we share - central and local government working together to achieve common goals - central government learning to let go - local government demonstrating ability through delivery, innovative, accountable, and responsive to community needs. That is why I am delighted to have had the opportunity to speak to you today; and I hope that your discussions at this conference will make a substantial contribution to the emerging consensus on the central importance of local government.
Thank you.