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Department for Communities and Local Government — Central and Local Government

Part of Estimates Day — [1st Allotted Day] — Vote on Account, 2010-11 — Department for Business, Innovation and Skills – in the House of Commons at 3:47 pm on 10th December 2009.

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Photo of Phyllis Starkey Phyllis Starkey Labour, Milton Keynes South West 3:47 pm, 10th December 2009

The hon. Gentleman anticipates one of the specific proposals-albeit not in relation to the London Mayor-that the Committee made when we got down to the detail of our recommendations on local government income. He makes the point that under the existing system, especially when there are several layers of local government, it is extremely difficult for voters to understand exactly what they are paying for and the relationship between local tax-whatever it is-and the quality of services. In my view, the clearest form of accountability comes when someone is able to see a relationship between what they vote for, in relation to paying, and the services that they get.

On giving greater autonomy to local government, we certainly felt that central Government should reduce the number of performance indicators and specifications that they make on the detailed way in which services should be provided. We felt that the subsidiarity principle should be adhered to properly, and that local government should be given a power of general competence, if it was demonstrated that the existing well-being powers were falling short. At the time when we concluded the report, the court case on a mutual company had not concluded, and we would now say that there should definitely be a power of general competence because it is clear that the well-being powers did not deliver quite what they were supposed to.

The Committee felt that there should certainly be statutory rights for local communities to determine the way in which public services are implemented and co-ordinated in their areas. We thought that the power of councils to vary service standards should be limited, in that there should still be reasonable national minimum standards below which councils should not have the freedom to reduce services. This is a difficult issue, but we got the sense that the British public were not quite ready for councils to have complete freedom to reduce such things as the level of education provided or standards of street cleanliness. While there should be national minimum standards, however, councils should have the freedom to vary above them. Obviously, that suggests that the standards should not be so prescriptive that no reasonable council would want to vary from them one way or another. We certainly feel that councils should have oversight over the full range of public services in their area and the way in which they integrate with each other, as I shall point out when I set out our suggestions on policing and health care.

The Government's response shows that they at least partially recognise what we are saying and that they are moving in the right direction. However, I think that we would conclude that they are still not moving far enough and that they need to lighten up considerably more.

Health care and policing, especially neighbourhood policing and public health, are incredibly important local services, and there is already a degree of co-operation between local councils and those services through crime and safety partnerships. Several local authorities have pooled budgets, particularly with the NHS, and some make joint appointments. For example, my council's director of public health is a joint appointment, so there is already some joint working. However, the Committee feels that a local authority, as the only elected local body, should have much more direct control over other public services.

Specifically on health care, we suggest that where there is a coterminous primary care trust and unitary authority, the Government should consider introducing a pilot scheme that effectively gets rid of the PCT board and replaces it with the council. We recognise that that process would be relatively simple in such areas, whereas it would be difficult to introduce throughout the whole country because the boundaries of PCTs and councils are not coterminous in many places and a huge reorganisation would be necessary. However, it would be worth trying that out in some areas. We also suggest that, in the absence of such a development, the Department of Health and the Home Office should at least work much more closely with the Department for Communities and Local Government to establish local authority commissioning models for both health care and local policing.

When members of the Local Government Association representing the three main parties were asked in our evidence session about democratic control over police services, it was extremely impressive that they spoke with absolutely one voice. I understand that the one voice with which they spoke differed from each of the parties' Front-Bench policies. Essentially, that one voice said that we should certainly have local, democratic control over the police, that there is already a local, democratic body-the council-and that it should have such control. The members of the LGA were root-and-branch opposed to directly elected police chiefs and police committees. We were extremely impressed by that, and I think that we largely agreed with them.

Ministers in the Department for Communities and Local Government have at least some understanding of local government and some feeling for devolution to local government, but we were unimpressed by the Ministers from the Department of Health and the Home Office, who did not seem to have much understanding of how local government worked or how it impinged on their Departments. I suspect that we would have gained a similar impression had we asked for a Minister from the Department for Children, Schools and Families or any other Department.

That points to a problem: even if DCLG is signed up to devolution, it has a big job to do to persuade the Ministers and civil servants in other Departments whose responsibilities impinge on local government to take the same relaxed view; to recognise the virtues of devolving power to local councils; and to realise that devolution might lead to departmental policy delivery locally that was more effective and cost-effective than it would be if they continued to try to micro-manage it.

On local government finance, we expressed the view that the Government must consider a variety of options to increase local government's revenue-raising powers. The issue is particularly relevant, given the country's likely economic climate and the need, as we come out of the recession, to rein in public spending. Local councils should be given greater flexibility in terms of revenue-raising powers, because future extreme funding shortages, as constrained by central Government, will mean that, even if councils are given increased powers to take decisions, they will not have any effective ability to vary services; they will simply be given flexibility in terms of what to cut. Indeed, local councillors will once again be held responsible for cuts that they have no power to vary. It is therefore particularly important that we increase local government's revenue-raising powers.

On local government taxation, the Committee concluded that there should be a supplementary local income tax alongside a property tax, and a corresponding reduction in central income tax rates so that the overall tax burden remained the same. Obviously, that could not be introduced tomorrow, but it is a potential long-term solution to the balance-of-funding problem, and one that the Government should seriously consider. Unsurprisingly, they immediately responded by saying that they had no plans to undertake such a project. I shall leave it to the Minister to explain why.

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