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Date of speech	20 November 2007
Location	London
Event summary	Local Area Agreements 2007: Third Annual Conference

Thank you for that introduction. I don't think I am ever going to live down that Local Government Chronicle designation (as most influential person in local government). However I see it as my job in the next year or two to see that in the next years' awards many more local leaders feature more highly in the top ranks.

I think it is very encouraging to see in the audience today, not just people from local government and a few from central Government, but also people from many of the agencies and partners from the third sector as well as business, the police, education, skills, primary care trusts and wider health interests - you are the people who we need to make the mix within the local area agreement (LAA) a success. And you are the people who will help us make the most of the potential that lies within the local area agreement system.

I will start by saying that I believe the significance of the new LAAs is that they fundamentally redraw the relationship between central government and local areas. Sir Simon Milton (Chairman of Local Government Association) and I are very much at one in this and I applaud the approach he is urging local government to take to the new LAAs.

I believe they set a new balance. A new balance that is better for central government, better for local government and local agencies, and, most important, better for local communities.

I see this as a decisive period for local government. I think LAAs offer the scope to recreate the relationship with national government.

Alongside the concordat which we hope to agree by the end of the year and the new inspection and performance regime, which Michael O'Higgins will talk about next.

But I also think that LAAs backed by the new Local Government and Public Involvement in Health Act offer the scope to recreate and reinforce local government's relationship not just with central government but also with local residents and council tax payers through the duty to inform, consult and involve.

It is also the point at which local government's relationships with local agencies and organisations can be recreated and reinforced too. These are the agencies with whom you work and with whom you deliver for local residents.

The new duty to co-operate and the new requirement to have regard to the priorities you and these agencies have signed up to are important to the potential of this new framework too.

So I see this conference as very timely. It is also timely because we have reached a very significant stage in the new LAA process itself. Today we move on from the period of design and development stage and on to the beginning of negotiation and delivery.

From this point what follows is very much, as Sir Simon said, in the hands of local government and the agencies you work with and the communities you serve.

Each LAA will be unique, tailored differently for each place - whether rural or urban, whether in the north west or south east, tailored to whatever the main challenges are that you face in your area. What they all have in common, however, is that they will capture the purpose and the leadership that their local authority can give.

Local government, in my book, has earned this opportunity through the improvement in its performance and performance management over the last ten years.

No single and upper tier councils are now in the bottom category, compared with 13, five years ago. Then only half were in the top two categories - now four out of five councils are there. And another four in five of these councils are rated as 'improving strongly' or 'improving well' so I fully expect to see this trend to continue.

Local government has earned this opportunity by demonstrating ambition and innovation, and by demanding consistently more of central government.

I think Sir Simon is right here too. In order to see the LAA work, in order to see it pushed to its potential, local government and local agencies will need to continue to make those demands of us.

This is captured through the story of LAAs themselves.

The early pioneers - and David (Walker) is right I followed this from the Treasury - like Telford & the Wrekin, got the show on the road in less than six months from go-ahead to signing. They first explored the potential of LAAs.

Others then developed new approaches through their own LAA.

Like Kirklees with their 'Lighten Your Load' campaign. In partnership with the Pensions Service, Fire and Rescue Service and Social Services this has helped nearly 900 pensioner households to increase their income.

Or Wakefield where they have successfully targeted crime against businesses by working closely not just with the police but also with businesses and business representative organisations. Not only has crime gone down but businesses in that area are working together more effectively as well.

Or Hammersmith & Fulham where the council and primary care trust have aligned their commissioning from the third sector.

Now of course there are many others and many of you in this room have been part of the early LAA development.

Earlier this year 17 areas then volunteered to set up what we called dry runs of the new LAA. Again they have been pushing back the boundaries.

Leeds and Hartlepool focussed on difficult issues that take more than just the efforts of other agencies. They demand the input of other agencies - issues like worklessness and trying to reduce the incidence of health inequalities.

Swindon looked at how they could exploit their position on the M4 to increase local prosperity. Developing as they did so a strong area priority on skills and education.

These are a very few examples of an increasingly wide fund of case studies of using the LAA framework for progress on a number of fronts in all sorts of different types of area. Today we are publishing many more of these case studies in order to try and help others.

Barnsley's multi-agency Early Intervention Project is one of those. It provides support at the right time for families and children experiencing problems not only at school but also at home.

Or Waltham Forest's strategy to tackle violent youth crime through disrupting gang membership and trying to reduce access to weapons.

Or indeed Rotherham's programme to involve young people in assessing services designed to help them.

Alongside these I am also publishing today two important pieces of guidance to give further impetus to the LAAs:

There is the second and final phase of the operational guidance, following the first phase we put out in September.
And there is the draft statutory guidance which is now out for formal consultation.

I think how the guidance itself has been produced is a demonstration of the changing relationship between central and local government. I cannot remember Government developing policy and guidance in quite such an open and collaborative way as we have done with this.

I would like to thank all those local authorities who have contributed and also the Local Government Association who played a big part, particularly in the operational guidance we are putting out today.

The sections for a new framework for making more decisions and better delivery locally are now increasingly in place. Not just for local area agreements that we are considering this morning but the radical cut in the number of national indicators, the further cut in the amount of ringfenced and earmarked funding through the next Comprehensive Spending Review (CSR) period, more scope for revenue-raising policies for local government.

And now, following the new Local Government Act which got Royal Assent at the beginning of this month, and in the guidance published today, we are putting in place more details of the new partnership framework for local agencies, now enshrined in law. If you look at the draft guidance it sets out the proposed standards that will apply to 27 different types of organisation from police authorities to the Highway and Environment Agencies, from JobCentre Plus to NHS Trusts.

What we expect of these agencies and organisations is that they send sufficiently senior and authoritative staff for their part of the LAA process. That the negotiations for these is through the established Local Strategic Partnership (LSP) framework. And that these involve all the agencies that are required to collaborate.

The duty applies to all targets - that is the 35 agreed priorities from the national indicator set but also the targets that may be agreed by you on a purely local basis.

Finally, the guidance makes clear that this co-operation should not be a 'one off' for the purposes of the LAA, but should be part of a continuous process. When partners have agreed to these new cross cutting priorities - then these agencies must have regard to what they have signed up to. And they must also reflect those priorities in their day-to-day business generally as well as longer-term planning. I think it is this which has the potential to breathe real life into LAAs.

There is also captured in the guidance the duty to inform, to consult and to involve - enshrined too in the new Act. This marks the change in relationship between council and local people. It will apply to all authority functions - that means new services, new policies, new decisions. Authorities will need to consider, for each case, whether to inform, consult or involve - or a combination of all three - and then decide how best to do so.

And I am delighted that Michael O'Higgins is following me - not just because of the great respect I have for the work he does in leading the Audit Commission - but because the new Comprehensive Area Assessment (CAA) system on which they published a consultation yesterday will be central in holding local authorities and other agencies to account for the discharge of these new duties, as part of assessing the progress in delivering on targets that have been agreed.

There is one further announcement I am making today which is the launch of 11 demonstration areas for the new LAAs. Some are the dry run areas, some are new. The basis for selection is that it represents a good mix of different types of area and also there is at least one local area from each region.

Hazel and I are putting our weight behind these areas and the work that is going on there because we want to get to the bottom of the blockages and barriers that we might find in putting in place the LAA system.

So these demonstration areas - and those of you from these areas I want to thank you for your willingness to play a part in this - you will help us and be our troubleshooters. We want to make sure that we find the problems fast and make sure that other areas benefit from ways that you find to work through them.

Before I conclude I want to touch on three things.

First, the vision and potential of the new LAAs
Secondly that although the onus now moves to local government in the LAA process, there remain some critical challenges for central government, not least Communities and Local Government with our colleagues.
And third to just touch on a couple of challenges that are there for local areas.

First the vision and potential.

I urge all local authorities to be ambitious for your LAA and for your area.

You already have the starting point of a strong local evidence base which should underpin your sustainable community strategy. The LAA gives you the scope and opportunity to translate the vision into formal priorities not just for the council but for other agencies in your patch.

As I am sure Michael will remind you, the CAA will not just assess how your organisations are meeting the targets you set, but it will also assess whether you have chosen the right targets, and the right level of challenge for the needs of your area.

Now in addition, of course, the LAAs are the key means of delivering locally the national priorities set out in the Comprehensive Spending Review. This makes LAAs mainstream to central government and so the quality of the discussions about priorities, the quality of the supporting evidence, and the quality of the negotiations will need to be of the highest standard.

That said, I am much more optimistic than many about this process. We have seen as a common factor emerging from the dry run areas is the high degree of agreement between local and national government on what is most important and should be in those 35 priority targets. I think you have got good understanding and good will on which to build.

Authorities and their partners can also look beyond their own civic boundaries. 13 areas have already signalled an interest, particularly for economic development, in looking at the potential of multi-area agreements, and formalising the collaboration which means they can boost their local economy and jobs more together than they could within their own boundaries.

Turning to central government and the challenges for us. Having delivered what I would regard as the completion of the design phase, with the publications today our role in central government now clearly has to change significantly too. I see three principle priorities for us.

First we need to continue to champion the new framework. We need to be ready to take the feedback and reaction that we receive, both from within central government and locally. We need to be ready to refine the framework where it is clear we need to do so, based on the reports and evidence you have given us.

Secondly, we will need to work with local government, with many of the agencies here today and with the IDeA to disseminate the lessons as widely and as rapidly as possible that come out of the demonstration areas.

And thirdly, we will need to ensure that the negotiations are maintained and are going at the right pace. I really do want the difficult aspects of any negotiations to come to the surface early and not to come as a surprise later down the track, when they may become a showstopper. This is going to be very important for you in local areas and it is going to be very important for us nationally too.

The challenge for our department - Hazel and I are both very clear about this - is both to marshal the attention within central government to this LAA process, to make sure there is a much clearer and better understanding that this is the principal way in which central government will commission what it wants to see from local government.

I am also clear that there is still a 'hearts and minds' task to be done with certain parts of central government. There is a question which we can help to answer - there is a question in the end only you can help to answer - which is around not just the comprehension of this process but the confidence that it can deliver on the national priorities that other government departments, and the government as a whole, has.

In the end it is going to be the quality of the discussions, the negotiations, the agreement, and then the actions that you are going to need in your local areas that will reinforce this process for the future and allow us potentially to do a great deal more through it in future too.

The third point is the challenge for local government. In many ways this is a summary of what has already been said. These are a challenge for many areas. While we in central government turn our attention away from the detail of local government, you in turn must turn your attention away from us and more towards your local area and your local communities.

Finally I hope you will allow me to finish on a wider, and slightly more philosophical note that tries to pull everything together.

It is this. I said earlier on that we are at a decisive point in a decisive period of the development and recasting the relationship between the centre and local government.

What I think is clear to us now is that overstrong central government doesn't work in practice and is wrong in principle. Whitehall is simply too remote to make the calls about what will improve day-to-day life and how to do this in each area. In each area the unique mix of heritage and contemporary economic, social and environmental circumstances make this task from the centre impossible.

Central solutions may work in some places, but are unlikely to fit as well elsewhere. Nor are the solutions likely to be fully 'owned' or driven by local leaders, or are they likely to inspire them to be ambitious and innovative for their communities.

However, at the other end of the spectrum, a kind of council UDI is equally implausible in practice and in principle. Frankly removing all rules, ringfencing and auditing is just plain wrong. Wherever people live they expect to see certain standards. They are fully aware nowadays of what life is like for people in other parts of the country. And they expect certain things to be tackled or changed or determined at a national level. And they rightly expect elected national governments to ensure that they are.

What is clear is that the complexities and interconnectedness of modern society means that the splendid 'go it alone' municipal action of the Victorian era or indeed the 'no-holds barred' local government 'party' of the 1960s, neither are useful models for us in this decade.

So the modern governance challenge is to map out a new settlement - a new balance between the proper responsibilities and accountabilities at the national, regional, local and neighbourhood levels.

For me this is the context, this is part of the challenge for LAAs. This is why LAAs are really so important because they are a part - potentially a very important part - in meeting that wider modern governance challenge. Thank you.