Communities and Local Government

• Corporate
• Newsroom
• Speeches, statements and articles
• New Local Government Network (NLGN) White Paper Conference

www.communities.gov.uk

New Local Government Network (NLGN) White Paper Conference

Date of speech	7 November 2006

---

Draft text of the speech - may differ from the delivered version.

Thank you, Chris. And thanks to you and your colleagues at the NLGN for your contribution to the debate on the future of local government. I am sure you can see many of your ideas reflected in the White Paper.

The White Paper is about the next phase of public service reform. 

Let us go back, for a minute, to 1997 when the local landscape was very different from today. Local services were failing, money was being cut, and local government was demoralised.

To turn this round, the Government put in substantial, year-on-year increases in investment, set national targets and put in place a tough, top down performance regime.

Local government responded with skill, hard work and commitment.

The result has been real improvement in local government's performance, and in local public services. This is clear from the performance indicators and CPA results. But, more importantly, people can see it on every street corner - in the quality of housing, in improvements to community safety, and in the schools, health care, and other services that are essential to their daily lives.

This combination of investment and reform has delivered a huge amount, but I believe that we now need to move on to tackle the new challenges we face today. These new challenges - from climate change to deep seated social exclusion - demand more local flexibility, responsiveness, creativity and innovation.

The expectations of citizens are also rising fast. Not surprisingly, they want more choice, a bigger say over service delivery and higher standards.

We can continue to deliver higher quality more responsive services only if we create space at the local level - space for local government and local service providers to work together for the benefit of their citizens and communities.

The White Paper therefore deals with the three key relationships at the heart of the way we govern our country -

• between central government and local government;
• between local government and local partners; and
• between local government and its communities and citizens.

It draws on the work of the Local Government Association, Sir Michael Lyons, and other organisations, including the NLGN. In particular, it is influenced by ideas about the importance of place, of accountability to citizens and of strong local leadership.

Let's start with the relationship between central government and local government. The White Paper sets out a framework where we - central government - step back and local authorities have a stronger role in leading their communities, set local priorities and bring together services and service providers.

People expect central government to guarantee minimum standards everywhere and set overall national goals. We will do that. But we will allow more freedom and flexibility in how these are delivered locally, and in what needs to be tackled most urgently.

In exchange for this greater local freedom from central government, we expect more accountability to local citizens, stronger local leadership, better and more efficient services, and support for tough action when things go wrong. That is the bargain, and I believe it is a very fair one.

The issue for government is how to translate these principles, which we all share, into practical, effective policies which are hard-wired into the way Whitehall does business. That is the aim of our proposals for a new performance framework.

The new framework will cut the number of national performance indicators from up to 1200, to just 200. There will be around 35 targets tailored to the priorities for each local area, plus statutory targets on education and child care. These will be agreed between local partners and central government, and set out clearly in the Local Area Agreement.

Local Area Agreements will also give greater flexibility, by bringing together disparate ring-fenced funding streams. At present, just over £500 million flows from central government through the Local Area Agreement. Measures in the White Paper will raise that to up to £4.7 billion. In future the presumption will be that, unless there is an exceptional reason to the contrary, all area-based funding will go - unringfenced - through the LAA.

That is not just a promise from me, it is a commitment across Whitehall.

These reforms also need to be carried through into the inspection and assessment regime. We therefore propose to move from Comprehensive Performance Assessment to Comprehensive Area Assessment. This will focus more on the outcomes for the place than on the performance of individual services or public bodies. Crucially, this change will also allow us to move from a rolling programme of inspection to a risk based approach, again tailored to each individual area and focussing on local priorities.

Through this new approach we will continue to guarantee national minimum standards on the things that matter to people, wherever they live - but we will also create more space for local innovation and local priorities.

There is no doubt that success will depend on good local leadership. Under the current system, our best local authority leaders have made a huge difference to their areas and to the lives of their citizens and communities. They have championed a renaissance in our towns and cities; they have driven up local authority service standards across the piece; and they are leading the public service in terms of efficiency.

We want to ensure this kind of visible and stable leadership benefits all our communities. So in future there will be three choices of local authority leadership:

• a directly elected mayor
• a directly elected executive, or
• a leader elected by his or her fellow councillors with a four year mandate.

The four year mandate has been a talking point. Our aim is to tip the balance in favour of stability, a longer mandate and greater visibility. 

It takes good, stable leadership to knit together all the key agencies and organisations that contribute to making a place somewhere people can be proud to live and work. That is why we are strengthening the Local Strategic Partnership and introducing the new duty to co-operate, giving the partnership structure a sound base.

We are also looking to all two-tier areas to strengthen the leadership they provide to their communities. This will include proposals for unitary councils where this is the solution with broad cross section of support.

And I know there is a crucial leadership role for local councillors as champions of their communities. That is why we are giving non-executive councillors a clear role in making sure local people can demand answers and make things happen. The Community Call for Action and the strengthened Overview and Scrutiny committees will support councillors so they can take effective action.

Citizens will also have more say through the reformed best value duty. This will require local authorities to secure the participation of citizens in their activities - informing, consulting, involving and devolving as appropriate.

The promotion of neighbourhood management, charters and parishes will give communities more control over services and assets. I have asked Barry Quirk, Chief Executive of Lewisham Council, to lead a review which will look at existing policies and what is needed to remove barriers to communities owning or running assets where these are underused and it makes sense.

People said the White Paper wouldn't be devolutionary. They were wrong. Be in no doubt our proposals represent a major shift in power to local government and to local people. Many of those in local government have welcomed the direction set out in the White Paper, but some have said that we should go further.

We have set the direction for further change. And there is more to come. In moving forward we will continue to follow the principle that we need decisions to be made at the right level to achieve the best outcomes.

On economic development, local authorities should lead the local partnerships that deliver economic growth on the ground. I have given my support to the development of Multi-Area Agreements and City Development Companies. The Joint Review of Sub-National Economic Development is looking at how best to devolve more powers and resources. This will report in time for the Comprehensive Spending Review. And over the coming months we will continue to work with our towns and cities on the powers and governance arrangements they need to overcome barriers to prosperity.

On transport, the White Paper confirms the intention of the Department for Transport to reform of PTAs and PTEs and to give new powers to local authorities on bus services. The Eddington Review, due to report soon, will provide the basis for decisions on further transport reforms.

On employment and skills, Regional Skills Partnerships have already been established in the nine English regions. Employment consortia will be piloted in cities from April next year. And I have signalled my support for the creation of Skills and Employment boards in the core city regions that want one.  The Leitch Review of Skills is due to make recommendations alongside the Pre-Budget Report. This will report specifically on how skills and employment services can complement each other even more effectively in supporting labour market flexibility, better employment outcomes and greater progression to productive and sustainable jobs.

On finance, we have already delivered the stability and predictability of two, and then three, year settlements, and prudential borrowing. We will decide on further reforms when we have studied the recommendations of the Lyons Inquiry on local government funding, due to report to the Chancellor and myself in December.

And on housing and planning, we have reinforced local government's strategic housing role and made the planning system faster, more responsive, fairer and more transparent. Looking ahead, Kate Barker's review of Land Use Planning, the new Planning Policy Statement 3 on housing supply, and the review of the housing and regeneration are all still to come. There will always be a need for central government to play a part in setting overall housing numbers. But, as part of their place-shaping role, local authorities will have an important contribution to make on issues about how new housing is delivered.

On each of these important services, I fully understand the impatience of those who want all the answers and action now. But it is right to do things in the proper order and after full consideration of the evidence. That is the approach that has resulted in our outstanding progress so far.

In July, in a speech to the LGA conference, I set out the direction I wanted to see in the White Paper. I said I wanted us to move:

• from the top down state to the trusting state
• from earned autonomy to presumed autonomy
• and from a process driven system to a people driven one.

It was an ambitious vision, and one met with some scepticism. But this White Paper delivers in each of these areas. It sets the framework for a new relationship in which local government is trusted to deliver, and in which local people will become the main drivers of change.

The local government White Paper is a strong vote of confidence in local government. It is a vote of confidence in its leaders, in councillors and in local communities. The proposals build the right framework and tools for central government, local government and local communities to tackle the challenges of the 21st century together - all playing to their strengths.

It is now up to local government, working with its partners, to make the most of the opportunities on offer. I hope everyone will take up this challenge.

Thank you.