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Date of speech	8 December 2005

1. Thank you for inviting me to speak at this very important conference. I can genuinely say that I recognise the importance of this issue and the complexities that face the modern Chief Executive of a local authority. For a start there is the difficulty of delivering in an environment with multiple accountability - to Council Members, to the Government and to inspectors.

2. In fact it is more complex than that - and that's what I want to examine in my speech. Increasingly of course Chief Executives are accountable to other public sector bodies, partners and other organisations. And I know that SOLACE is itself widening its membership base to reflect that trend.

3. The first point is that there is now an all party consensus that strong leadership at both political and management level is vital to the success of local government. It seems a bland point to make but it wasn't accepted even as recently as three or four years ago. What exactly constitutes good leadership in local government is what, of course, what your document tries to address.

4. I think experience suggests that it takes a combination of strong political leadership with excellent managerial leadership. I noticed in the introduction to the document that you have put your finger on quintessential point about British life and the way in which we do things in Britain. When you identify the difference between politics with a small 'p' and politics with a big 'p'. If you have ever tried to speak to the European Union Committee of Regions, where there are something like 27 different languages going through translation at the same time, and try to explain what political leadership for sustainable communities means - forget it. If you say politics with a small 'p' as apposed to politics with a big 'p' everybody gets it.

5. We want to have both, however there is a problem. If you pick up the job adverts - or increasingly click onto websites - you will not find an advert which says "Wanted: Chief Executive, 10 thousand workforce, salary in the region of £ half a million". You ain't going to get that. You are not going to get the same as the private sector. The question is how do we ensure that we have the quality in managerial positions.

6. One of the things that struck me when I met with the Commission earlier this year is that the average turnover for a Chief executive in Local Government is 2.8 years. I did a quick calculation and I realised that Local Government Ministers nowadays last longer than that! But it is a stark statistic and I'm not sure if that's healthy. The key point is the pride which Chief Executives can take from the job that they do and in the success that's achieved.

7. As David Miliband pointed out in his article last week even the way responsibilities are divided in local government can be confusing. People tell us that in the two-tier system, too many districts are too small to be strategic and too big to be local. Driving and delivering the sustainable community agenda will take good local leadership. And you are right, it is complex. At the moment we have confusion.

8. Today we are launching the start of a consultation on the future of local strategic partnerships. LSPs are relatively new. So far, some have worked well and some not so well. In an increasingly complex world of partnership working and outcomes delivered by a range of partners, I believe LSPs are key to the way forward.

9. We need to simplify and bring clarity to the picture on many aspects of local leadership. I want to pick up three. First - there are the two sides, the political and managerial, working together which I have already discussed. Then there is the challenge of managing with partners, and finally the more strategic role that calls for visible leadership.

10. Working with partners is perhaps one of the major changes in the local authority role. Strong local partnerships are the basis for local area agreements and fundamental to our direction of travel for local government. You need to work seamlessly with partners from other public services, such as the police and the local health trusts, from the private sector, and from the voluntary and community sector.

11. There is plenty of experience and good practice to build on. However the consultation is an excellent opportunity to look at the role of both LSPs and Community Strategies in the context of local area agreements. We need to get the function, governance and capacity of LSPs right for the future. This brings new challenges to Local Government Chief Executives. One is the change from being the Chief Executive of a council to being the Chief Executive of a town or city, or indeed of a district or county.

12. David and I see the LSP consultation as just about the most important we are doing this year. LSPs, as you know, are relatively new, but they are the way forward. The consultation is an opportunity to look at the role of the LSP in the strategies which are being pursued in the context of LAAs. We need to get the function, the governance and the capacity of LSPs fit for purpose. We will be using this consultation as a means of taking stock.

13. The local government managerial role as well as the political role must be as a 'first among equals'. This also calls for strategic leadership - putting together all the pieces of the jigsaw that add up to making life better for people in the area. A community leadership role.

14. To be successful there must be strong, clear, visible leadership so not only citizens understand the local leadership and governance, but other service providers do too. How do we get it? We are not talking about having Mayors everywhere, nor a 'one size fits all' solution. But we are opening the debate - for example, on what is the way forward for two-tier areas and what is the right leadership model for taking our cities and city regions into the global champions' league. Some of you have been involved in our City Summits and know this is one of the main issues emerging.

15. So the leadership has to be strong and visible. It also has to be accountable. Again I agree with you - the regulatory framework is much too burdensome. The one point I disagree with you on is that I believe we are already delivering a less burdensome inspection regime. The point of it is to support the drive to go on improving services. But we need a new performance framework in this changing scene of local public service delivery. This must be customer focussed and it must reduce any unnecessary burden on you. We are making progress towards that but we need to work together to make sure we have clear and transparent local accountability.

16. Similarly under the new so-called 'harder test' CPA assessments. The point of the harder test is to continue to drive forward improvement.

17. What I will say is that local government overall is driving up its performance and delivering for its citizens. Now we need the harder test to keep that momentum going and focus more on what customers need. You have to aim higher still. That's what your customers expect - better and better services that meet their needs and suit their lifestyles. The problem is now that the public's expectations are getting higher and higher and at a time when we know objectively that public service delivery is improving, dissatisfaction is growing. I call it the expectation gap - and it is getting wider. That's how it is out there.

18. Last week we launched our consultation on a single inspectorate for local services. This is an important step in the significant reduction of bureaucracy and freeing up your time and resources. Rather than spend inappropriate time dealing with the queue of inspectors, you 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.

19. Inspection is one part of a whole system of external challenge. A system that involves partners holding each other to account, peers across local government challenging each other, 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.

20. I know one issue of concern is that Chief Executives are seen to be directly accountable to Government rather than to their elected leadership. At the moment Government provides 75 per cent of the funding. Does it follow that we are dictating 75 per cent of the job? There will always be a need to see that, nationally, we are getting value for money and things are improving. But I can assure you - and David Miliband has made this point publicly - that I see your job as implementing local policies and meeting local priorities. Everything we are doing in ODPM is pointing in that direction - and through agendas like LAAs, it is quite clear that is a cross-Government view. There has been a fundamental shift in the relationship between central and local government.

21. Your challenge is to build strong relationships - with central government, with local partners and with your political leadership. All are vital to the job. The LAA agenda recognises the complexity you face and provides a much more mature framework for a dialogue between central and local government through the Government Offices. But more than that, it provides a framework for a dialogue between local partners. This is the only way we can effectively tackle agendas around, for example, problem families and community safety.

22. It is early days for local area agreements but they do bring greater clarity to partnership working. And again I urge you to take part in the LSP consultation - the involvement of all of you is essential if LSPs are to fulfil the new and demanding expectations placed on them through LAAs. I would urge you to take part in the consultation and to take it very seriously - as we are.

23. The other question which comes up in the document is the freedom to tackle local priorities and problems, focussing funding where it is needed. This also gives more space and opportunity for local leadership. And this will increase.

24. The Government is firmly committed to devolution - and to LSPs and LAAs. If there is a good case for handing down a power or responsibility, we will do so. And a good case is whether it benefits the citizens in our communities.

25. We have also made it quite clear that devolution does not stop at town or city halls. However devolving beyond the town hall does not mean devolving beyond the influence and involvement of local government. Quite the opposite. It is just that your role is changing - possibly more challenging, certainly more rewarding, because you can work more closely with your customers and more closely with local partners.

26. Engaging people in our neighbourhoods is a crucial part of the agenda. This will mean a changing role for Councillors, particularly for backbench Councillors, and a shift in your relationship with them.

27. One of the big challenges now is to attract high calibre leaders of tomorrow into local government. We do recognise how important this is - and we are providing support through the Capacity Building Fund. The Local Government Leadership Centre and the IDeA programmes are an invaluable resource in bolstering the skills needed to face the future with confidence.

28. Another of your concerns is the capacity and calibre of the political leadership. As I said at the beginning excellent managerial leadership is only half the story. I think it is fair to say there is a consensus across the political parties that this is an issue we must tackle. I have recently met with my counterparts in the main parties and we all recognised the need to improve both sides of the leadership coin. I know the Leadership Centre is already beginning to work with the LGA on this too.

29. I know that you feel you need more protection from the slings and arrows of 'outrageous' politicians. You do have protection already. You have the law and you have the Standards Board. And let me make it clear I consider probity absolutely vital. Very soon we will be setting out our proposals for the future of the conduct regime for local government, and you will have the opportunity to comment on them.

30. I do fully recognise that you need the space to run your organisations and some separation from the whims of political life.

31. So how is the world looking as we come to the end of the year and are beginning to focus on what will happen in the new one? I applaud what local government is doing in a complex and changing environment and I think the prospects for the future are exciting. There are lots of questions up in the air - not just for us, but for you and for the political side. For example, how do you get the people, process and structure aspects of your own organisations right so you can plan for the future and deliver efficiencies?

32. There are questions to answer in the important consultations on inspection, standards and LSPs.

33. For us I think determining the proper function of local government in the modern world is top of the priority list - than form, then finance. Sir Michael Lyons will be letting us all know his initial thoughts soon which will help progress.

34. 2006 will be a big year for local government and we are all facing it together. Some directions of travel are clear - many being taken forward in local area agreements - for everything else there's the White Paper. And its no good looking for hidden meanings and coded messages today - there are none!

35. What is beyond dispute is that we must never lose sight of our vision of sustainable communities. There are challenges ahead and difficult issues to resolve, but it is a prize well worth winning.

Thank you.

Speech by Phil Woolas MP on 8 December 2005