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Development Trusts Association conference

Date of speech	19 September 2006

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Transcript of the speech as delivered.

Thank you. 

It has been inspiring to hear about the work of Development Trust Association members. 

Up and down the country organisations like South Wye Development Trust and Ibstock Community Enterprises, which many of you have been visiting 'virtually', are getting things done right at the heart of local communities. And projects that many of you here today are leading or working on are harnessing the energy, knowledge and expertise of local people. 

When people come together voluntarily because they care about something and want to make a real difference, this can be a powerful agent for social change. More powerful in many cases than government acting alone.

Historical context: the need to be instinctive localisers

And this is why today I want to set out just why the thousands of community groups in Britain will be central in the forthcoming local government white paper. These can be small or large groups. They include Development Trusts and social enterprises but also groups such as tenants associations, neighbourhood watch, local sports clubs and parish councils.

A belief in government working with community-based groups and with civic society more generally has deep roots in Labour party and progressive thinking.

It is true that there is a powerful strand of thought that stresses the importance of government guaranteeing that people have access to the same services and quality of life, no matter where they live. The first answer was centralization. At the time this may have been right - but time moves on. The founding fathers of the NHS, for example, were horrified by the degree of unequal access to treatment for different groups of people and in different areas. Social Justice demanded a clear set of national standards and a nationally delivered service. And of course we do still require national standards in key priority areas - but I'm clear that we now need to shift the balance towards greater local flexibility and initiative.

The top-down drive to improve access to services has always existed in creative tension with one which stresses the vital role of associations created by local people. From Alexis de Tocqueville to the founders of the co-operative movement and guild socialists like GDH Cole, a broad range of political opinion has recognised the value of community. Many key social reforms have arisen from the work of local initiative - from the housing association movement to credit unions. And of course the Labour Party has its origins in friendly societies and local associations. I think that now more than ever we need to learn from this heritage, and find new ways of ensuring that all people, regardless of their background, have the opportunity to engage in public debate and influence the day-to-day decisions that affect their lives.

Partnership with communities to face up to key challenges

This is why the forthcoming Local Government White Paper is so important in getting the balance right between state and citizens. For me the White Paper is about more than local government - essentially it is about people and communities. It is about ensuring that, wherever possible, communities and individuals themselves have control over the decisions that affect their lives. And when they have a contribution to make and are part of the solution to problems, they are not held back.

From being reluctant decentralisers, I believe we have reached a tipping point. We must now instinctively hand down power unless there is a good case not to.

Just consider public service reforms. In 1997 many of our public services were in such a poor state of repair that there was little option except for central government to take a strong hand and tackle failure. This did deliver real improvements to people's lives and measurable improvement in local government performance. 

And of course, cracking down on poor services which fail local people must continue. Indeed I believe we should be tougher. But the top-down approach across the piece has served its purpose. Our goal now must be to design local services around the expressed needs and interests of people, their families and communities - a principle that has underpinned public service reform under this Government. Now I believe we must take it a step further.

Increasingly, for example, the performance framework should value the views of citizens and communities. It should encourage local authorities and their partners to listen to what their citizens and communities have to say as a way of improving public services.

Citizens should be able to put forward their ideas and views - certain they will be heard. People should be able to take action when something goes wrong - confident there will be a response. Groups should be able to take an active part in making their neighbourhood a better place to live - sure they will get support and encouragement, not artificial barriers placed in their way.

And to make progress the state will have to work closely with community and voluntary groups and social enterprise. When people come together with the energy and passion to improve their local area and their day-to-day world, they must have the opportunity to make a real difference. The community sector is changing with the growth of more innovative social enterprises that combine hard headed business acumen with a clear moral purpose. This means we have more groups who know their patch and the people who live there. And more groups who have a pretty good idea of how to solve local problems.

Being open and responsive to the community is also about strengthening the fabric of local society and local democracy. Community groups represent people's views. They are where many citizens get together and become interested and engaged in politics, in its broadest sense. So we must respect and listen to their views. And when community groups provide public services and are funded by the public purse they must not find themselves muzzled or feel that their independence is threatened.

Although we have driven change from the centre in many areas this doesn't mean this Government hasn't already worked with community groups. From Sure Start to the New Deal for Communities and neighbourhood management pathfinders we have put more power into the hands of communities. And with the £15 million Adventure Capital Fund, in which the Development Trusts Association is a major partner, we have pioneered new ways of investing in community enterprises.  This is on top of the £125m Futurebuilders fund which is specifically helping to develop the capacity of the voluntary and community sector.

My own department is one of the biggest funders of the third sector in central government. Almost all new social housing is now supplied by the sector, in the shape of Housing Associations. And our Supporting People programme - that helps the most disadvantaged people in our communities - depends heavily on the work of the voluntary and community sector.

The future: a growing role for communities

But for all the progress we need to do more. There are times when communities are not given the role that they should have. And there are times when we fail to really get the most from community groups. That is why the White Paper will do more to ensure that the best of local government - where councils are open to working with community organisations constructively and in active partnership - becomes the norm. 

The White Paper will say more about how citizens as individuals or in small groups can influence local decisions. The Government is already legislating for a 'community call for action' on crime and disorder matters. I see no reason why this principle should not be extended to other local services. Citizens want to know that there is a simple route through which they can raise issues, give ideas and get answers. They don't want to be told that each local service has its own distinct system of engagement. So we will consider a quick, simple mechanism enabling the ward councillor to act effectively as the community's champion, and giving the 'overview and scrutiny' committee of the local authority the ability to bring problems into sharp focus, and get them resolved if at all possible. Not side-stepping representative democracy, but making it more relevant to the needs of the local community.

And there is also scope for giving petitions drawn up by local people more clout. People understand them well, and see petitions as a direct means of drawing attention to an issue, or putting forward a proposition, with clear evidence of support. People need to be assured that local public bodies will sit up and listen when a petition with strong support comes their way. 

I also know that sometimes local people will want not just to influence decisions - but to gain more of a stake in their local area as well. They will want to play an active role in improving it. Many people will look around their area and see derelict buildings or unused land. And many of these will have ideas about how they could use these assets. Indeed all of you here today understand how controlling or owning an asset can give you a more secure and long-lasting stake in your local areas.

For me this is common sense. When individuals hold assets they can think more about their future and plan ahead.  This is why I was so committed to the development of the Child Trust Fund - the 'baby bond' - when I was Financial Secretary at the Treasury. And a similar logic can apply to community organisations. When they own or control assets they can take more risks, act more independently and deliver more for local people.

That is why projects like Community Links in Newham is so inspiring. It took over the derelict Canning Town Hall and turned it into a community centre delivering a wide range of services for local people.

And it is why a range of measures are in place to encourage and enable greater community control.

Local authorities have powers to support the transfer of assets to communities to own or manage. They can sell property or land at a discount of up to £2 million. And they can in some instances lease premises at below market rents. The Secretary of State even has powers to direct local authorities to dispose of unnecessarily vacant land or derelict buildings.

On top of this last year the Treasury revised its guidance on clawback. Traditionally where a voluntary or community organization has received a grant for asset development, it had to hand back profits from the asset's use and some of the proceeds if it is sold. This discouraged organizations from developing the asset or using it for further enterprises. Now this rule has been relaxed, but we need to make sure you are able to realize the benefits.

Yet it remains the case that for every successful project there are many ideas which just don't happen. It must be enormously frustrating when someone has a great idea for how to turn around a derelict building and it is blocked. And there is more we need to do to ensure that more groups get a fair hearing.

That is why I am asking Barry Quirk, Chief Executive of the London Borough of Lewisham to produce an action plan. Working with the LGA and key groups who have pioneered community ownership and management such as the Development Trust Association, the review will take as its starting point existing powers and policies that allow the transfer of the ownership or management of local public assets. And it will consider how these powers can be better used. But he will also consider where further powers and policy changes may be required. 

I take this agenda very seriously. So this review will not just be a talking shop which will make a difference on the margins. But to make real progress I know that local government must be on board and some of the issues they raise need to be properly addressed. For example what will the impact be on local property markets? How can we be sure that local authorities can continue where necessary to take decisions that are in the best interests of their whole patch, rather than just one neighbourhood?

A hardheaded look at these issues will ensure that we have a framework that has widespread buy-in and results in many more tangible and workable proposals. This is why the review will be produce a concrete action plan to deliver real change on the ground. The review will work closely with Ed Miliband in his role as Minister for the Third Sector - and I know this is an agenda he is also committed to - and will report to me in Spring next year in advance of the Spending Review.

Looking to the future, it feeds into a broader picture. The Treasury is exploring, through the dormant assets commission, how to use funds in dormant bank accounts to help acquire or refurbish assets for communities. 

And it is part of a broader approach to working with the voluntary and community sector. The compact has rightly sought to entrench voluntary sector independence even when the sector is providing public services. And we are doing more to ensure that any funding received needs to be fairly distributed, sustainable and stable. The predictability of three-year funding settlements that we have introduced for local government provides this opportunity. The presumption should always be that local authorities should pass on this funding stability to the third sector bodies.

All this is part of a new era of shifting power, not just to the Town Hall, but also from the Town Hall to local communities. I am committed to bringing forward proposals which deliver devolution to the doorstep, putting more power into the hands of local people than we have ever seen. More will be done to inform, consult, involve and devolve to communities.

Many of you have helped us take a fresh look at this already over the last eighteen months. Not from the traditional government stance of deciding what we believe should be done, but from the point of view of communities in deciding what needs doing and how they can play a bigger role in doing it. 

It is also important to remember however that central government still has an essential role. Much of what has been achieved is through Government putting in investment, incentives and schemes at national level to deliver improvements. That is part of the mix that makes things happen on the ground. 

We cannot ignore the need for certain national standards. People expect these. A step-change in our attitude towards devolution and empowering communities does not mean a free-for-all - a kind of post-code lottery gone mad. Central government must still retain a role on the economy, in tackling problems with national significance and in supporting local areas to reach and exceed those minimum standards across the country. Many of the issues that we feel most passionately about require clear national leadership and direction. 

The question is not government or communities. We need central government working in partnership with local government and local government working in partnership with and learning from the communities they serve. 

This is a Government which still has the stomach and desire to drive through important change. We can't afford to soft pedal or step back from radical reform when it is needed.

If we lose that focus on bringing forward change in the interests of better services, we'll become a party of opposition, not a party of Government. All my discussions across Government demonstrate a common purpose and common understanding that we must deliver this.

This will be a 'can do' era where people are confident they can make a difference to what matters to them - the services they get, the neighbourhood they live in, and their chances for the future. It will take a change of mindset for some in central government, for some in local government, for some in organizations like yours and for some in our communities. We must work closely together to achieve that.

I am up for the challenge - I hope you are too. Thank you.