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Date of speech	28 November 2005

1. Thanks ever so much for coming today. And, in particular, thank you to CIPFA for arranging this seminar and playing host to us today. There is something very reassuring about launching a consultation on issues that impact on quality of service, assurance, probity, value for money and improvement, at the home of this highly respected organisation.

2. Today marks the start of our consultation on a single inspectorate for local services. I know this is something that local authorities around the country have been waiting for so I'm grateful for their patience. This is a further step in the significant reduction of bureaucracy and cutting the cost of inspection - both for local authorities and for us in central government.

3. Our prime goal is that local public services must improve - and there's no doubt that they are improving - and go on improving. Inspection will play a part in that, but we need to define what part that is and be clear that, overall, there will be less inspection. The aim of this consultation is to further free up councils and local service providers so they can deliver better services for residents and tackle what needs doing in their area. Rather than spend inappropriate time dealing with the queue of inspectors, they can deal with the queue of customers. It doesn't mean we can do without inspection, it does mean we ensure the balance is right, and it is doing the right job, namely securing improvements.

4. There are some very exciting things happening on the local delivery scene. Local Area Agreements, for example, are transforming the way local authorities, other public service partners, private and voluntary sectors come together to decide shared objectives. We know councils must have the freedom to make the most of these opportunities.

5. The performance framework has to keep up, has to be subservient to this. It must facilitate this new wave of local service delivery. Today's launch is an opportunity for you to influence the consultation from the outset, and gives you a chance to have a say on the direction we are going.

6. That's why it's fitting that John Foster is here. As I said improvement is what it is all about and John has huge experience of this. He took over Wakefield when it was on the verge of being categorised as 'poor' in 2002 and he and his team have turned it around. Wakefield is now officially 'good' and are currently putting a lot of energy and imagination into negotiating their local area agreement. I was particularly pleased to hear that strong project management is helping with progress and the respect agenda features prominently.

7. I am sure John will tell you what he thinks of the current regime - hopefully a few positive points too - and how he believes the future framework should evolve. We do need to see this in the context of the whole performance framework. In other words we need to see inspection as one part of a whole system of external challenge. A system that involves partners holding each other to account, peers across local government - David Miliband and I are very much of the view that improvement is best delivered by peer group pressure - by local authorities challenging one another, and real pressure being exerted by the people who use public services. And we want very much for the public to be the inspectors. By the same token, external challenge goes alongside the other key ingredients of a new performance framework. Namely:

high quality, comparable information
robust local performance management, and
a framework for supporting improvement in general and tackling under-performance in particular.

8. So this is not about seeing inspection as an end in itself. Too often thinking around local government has been based on silos. We are breaking out of that with LAAs on the delivery side, and we must break out when it comes to everything else as well.

9. Our aim is to build sustainable communities. I have a very simple definition of this - that is places where people are proud to live and proud to say they come from. The building blocks are decent housing at prices people can afford, good public transport, access to schools, hospitals and shops, and a clean safe environment. It also means people having a say on the services they receive and what happens in their neighbourhood.

Our goal is that the local delivery scene will no longer be a bewildering array of silos that are confusing enough for us in government, let alone people in local communities. The LAAs approach - which we believe will be in place in every local area in England by 2007 - will enable the area to be the delivery brand - so it will be 'Team Telford' you go to for example - not each individual service provider. Then the focus is on the customer and providing a comprehensive seamless service based on what he or she needs at that stage in their life. That framework does allow a very important step change in public service delivery by focusing on the individual rather than the providers.

10. We are committed to decentralising and devolving powers and responsibilities. Our approach is to say if there is a good case for handing them down, we will - and a good case is whether it benefits people in our communities. There must be freedom for governance, at whatever level is the right level, to be able to act effectively. I believe that for local government and local partners that means having the freedom to set their own priorities and reducing the number of national outcomes set at central government level.

So this is the challenge for the performance framework - it must be joined-up, customer-focussed approach based on strong local partnerships, devolved responsibilities and the freedom to address local priorities.

11. Reducing the number of inspectorates will help reduce the burden of inspection and it is a step forward. But it is not enough. To go further we need to ask some very fundamental questions about inspection. Let's focus on three:

Why do we inspect?
What should we inspect?
When and where should we inspect?

12. Why inspect? I am sure some of you are tempted to say 'why indeed' but inspection does have a vital role - for central government, for customers and for the councils themselves. In part it is that external challenge necessary to make sure services are up to scratch and as good as people elsewhere are getting - and also to show the public that that is the case. But it must be based on the level of risk that exists and it must be proportionate to the benefits it can bring.

13. What should we inspect? This is an interesting question when local service delivery is more about partnerships and even the role of local government is not so much service provider as facilitator or commissioner, a sort of 'first among equals'. We certainly must avoid duplication in inspection - this just wastes time and money. And inspection must be consistent in how it approaches different services and suppliers.

14. We need to be shifting the focus of inspection towards the outcomes experienced on the ground, in a local area. Experienced by different groups of service users - for example, by children, by older people, by those who are socially excluded or in danger of being so.

15. Last question - When and where to inspect? We are asking whether we need to move away from national programmes of inspection covering everyone, to more targeted programmes - more where the level of risk is greatest and where the burden of inspection is not out of proportion to that risk.

16. We are proposing that the new local services inspectorate should have gatekeeper powers. That is they should be able to challenge any other inspectorate if they feel local authorities or their partners might be subject to unnecessary or excessive inspection. In the past I think we can all agree that voluntary arrangements have not worked well enough to stop inspections being unco-ordinated and overlapping.

17. There are many other important issues covered in the consultation document. I urge you to have a very careful look at it and let us have your views. We must get this right and there are lots of decisions to make and balances to reach in order to improve service delivery. We must also make sure we are not just thinking about how local government and its partners operate today. We must look ahead and must allow for where we are going and where we are likely to be in ten years' time. Some vision called for!

18. Allied to those fundamental questions about inspection, there are some other issues that will be of interest to you all. We are proposing to build on the strong and positive brand I believe the Audit Commission has in forming our local services inspectorate. We don't immediately see the case for creating an entirely separate body - but let's see what people responding to the consultation say. Under our proposal, the Commission would come together with the Benefit Fraud Inspectorate. This allows some very important linkages to be made.

19. One is the link to audit and financial probity. It can be very difficult for residents to understand where their money goes. Local government finance is very complex and hardly an open book for many of us either. We all need reassurance that any potential fraud or corruption, which is thankfully very very rare, will be spotted quickly and dealt with effectively.

20. The Audit Commission has played a key role in highlighting this and the Benefit Fraud Inspectorate has reduced fraud in the social security system. This needs to carry on, as we are talking about huge amounts of public money here - our citizens' money. So we must be sure it is both being used for the purpose it was intended and that we are getting good value for the money going in.

21. What next? We are going to take this discussion forward through a series of events with local government and with partners in the public, private and voluntary and community sectors. And we will be consulting that all-important interest group - the public themselves.

22. Of course we are talking here about one of four new inspectorates, down from eleven when this process is complete. We intend to establish the local services inspectorate by 2008 and that is the same timetable as the Department of Health has for its new Health inspectorate. The Office for Criminal Justice Reform and the Department for Education and Skills have already consulted on their proposals. They hope to set up the inspectorate for justice, community safety and custody and the inspectorate for children and learners by 2007, a year earlier. However, all of us are genuinely working together to make sure that the essential issues about the role and purpose of inspection in the future are shared across our work.

23. I'll just finish with a little culture. Some of you may have caught a play called 'Playing with Fire' at the National Theatre a month or so ago. It is rare the Office of the Deputy Prime Minister and inspection matters make an appearance on stage. Most critics only gave it three stars out of five I'm afraid - and I won't go any further down that track! However I was struck by Michael Billington's review in the Guardian saying "there is bags of fizz and energy on stage" - that is just what we need in local areas, and we need a performance framework to support it. Keep that in mind for the rest of the day.

Thank you.

Speech by Phil Woolas MP, 28 November 2005.