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Local Government Reform Programme

Part of Ministerial Statement – in the Northern Ireland Assembly at 4:00 pm on 20th October 2009.

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Photo of Edwin Poots Edwin Poots DUP 4:00 pm, 20th October 2009

— of options for local government service delivery that I am publishing today.

Members will be aware of speculation in the media, in councils and in the corridors of the Assembly that the local government reform programme will not proceed; that it is too costly to implement; that it will not yield significant savings for taxpayers and ratepayers; that it no longer makes sense in difficult economic times; and that insufficient time is available between now and May 2011 to implement the move to 11 new councils.

(Mr Deputy Speaker [Mr Dallat] in the Chair)

Today, I want to scotch those rumours. First, I want to make it clear to Members, to our colleagues on councils and to the public that local government reform is proceeding and that I am committed to delivering that programme successfully. Secondly, I want to demonstrate that we have made, and are making, real progress in implementing local government reform. Finally, by publishing the economic appraisal of options for local government service delivery today, I want to demonstrate that, if we make the right political choices on the detailed design of new local government, proceeding with its reform makes sense, because it will improve efficiency, effectiveness and value for money.

Members will recall that my predecessor Arlene Foster announced the Executive’s decisions on the future of local government in a statement to the Assembly on 31 March 2008. She announced that the 26 councils would be rationalised to 11 new councils that would take on a significant range of functions from central government and other bodies in May 2011. She also announced that the new councils would need a new statute-based community planning process and that, working within a new statutory governance framework, they would have available a power of well-being. Importantly, Arlene set out the Executive’s vision of local government, and that vision bears repeating today:

“our vision is of a strong, dynamic local government that creates vibrant, healthy, prosperous, safe and sustainable communities that have the needs of all citizens at their core. Central to that vision is the provision of high-quality, efficient services that respond to people’s needs and continuously improve over time.” — [Official Report, Bound Volume 29, p2, col 1].

That vision resonates with the Executive’s Programme for Government and strategic priorities. It is even more relevant now that there are difficult economic times than it was 18 months ago.

Where do I and my Executive colleagues stand on the reform of local government some 18 months after the Executive made those decisions? There should be no doubt in anyone’s mind that, in order to deliver strong, effective local government and improve services for all citizens, the Executive mean to deliver local government reform in May 2011. I am fully committed to ensuring that that happens because, as a long-standing councillor, I understand the potential of local government.

The reform programme can and will unlock that potential and enable local councils to become effective local champions that respond to the aspirations and concerns of their communities, and, in partnership with others, guide the future development of their areas.

Since the Executive took those decisions in March 2008, my predecessors and I have worked hard to ensure that the necessary policy, legislation and practical arrangements are put in place to create the new 11 councils in May 2011 and to transfer a significant range of central government functions and staff to local government. In doing so, we have worked closely with the Northern Ireland Local Government Association, the five main political parties and the existing councils to prepare the way for the change.

The strategic leadership board, which I chair, supported by three politically led policy development panels, has agreed a suite of policies and processes to underpin the development and operation of the 11 new councils. That work has underpinned the development of the four Bills that I will take through the Assembly in the course of the next 18 months, which will provide for the creation of the new councils; put in place new governance mechanisms; provide for fair and effective decision-making; create a new performance management and ethical standards regime; provide new powers of community planning and well-being; and transfer reformed planning functions to local government.

The first of those Bills, the Local Government (Miscellaneous Provisions) Bill, is already before the Assembly and has just completed its Committee Stage. I thank the Committee for its effective, rational and timely response. I very much look forward to the Consideration Stage debate in this Chamber in the not-too-distant future. The second Bill, the local government finance Bill, will modernise the financial framework within which local government works. It is currently being consulted on. I look forward to introducing that Bill to the Assembly early next spring.

The final two Bills will give effect to the reorganisation of local government and to the reform and transfer of planning functions. As Members will know, I have just completed a period of intensive and wide-ranging consultation on planning reform. I will consider the outcome of that consultation before I bring detailed legislative proposals before the Executive for agreement.

Policy proposals for local government reorganisation are currently before the Executive. Subject to the Executive’s agreement, I propose to publish those proposals for consultation in November. I will also bring Bills through the Assembly on nuisance hedges and on a clean neighbourhoods agenda, two issues in which local government will have a significant role to play. I intend to bring those Bills before the Assembly next summer.

I have considered the report of the Local Government Boundaries Commission and have issued a paper to the Executive. Subject to the Executive’s agreement, the final report, the draft Order and the statement about modifications will be laid before this Assembly. My intention is that that order should be debated before the Christmas recess. If it is approved by Members, it will take effect at the next local government election.

Members will also know that we have established and provided a range of guidance to voluntary transition committees across the 11 council groups, and that those committees have driven forward the implementation programme at local level. I will take time to visit each and every transition committee of the merging councils in the coming weeks to brief them on the progress of the programme of change, to thank them for the efforts that they have made in preparing the way for the new councils and to encourage them to continue to do so. I have already had the pleasure of visiting three transition committees and have been impressed by the work that they are doing to prepare the way for the creation of the new councils. None of us underestimates the complexity and difficulty of the task that lies ahead.

I have also established negotiating machinery — the local government reform joint forum — to enable the employer organisations that are affected by the programme to come together with trade unions to negotiate and agree the detailed arrangements for dealing with staffing issues that arise from the change process. That forum is making rapid progress in addressing and agreeing some of the most complex change-management issues that we face in taking forward this programme.

We have made good progress in addressing a wide range of policy, legislative and practical arrangements for delivering the programme. I pay tribute to my predecessors and all others who were involved in the regional and local implementation machinery for what has already been achieved.

I have also been working with my colleagues on the strategic leadership board to conduct a full economic appraisal of the options for local government service delivery. In January 2009, PricewaterhouseCoopers (PWC) was commissioned by the strategic leadership board to identify the operational arrangements of the functions to be transferred from central to local government, and those currently delivered, on a group basis, by local government.

PWC was also required to analyse the proposed operating models for delivering functions after the May 2011 transfer. In taking forward that work, PWC identified and assessed options for the delivery of local government services and made preliminary recommendations on a preferred option to the strategic leadership board in July.

The key recommendations arising from the phase 1 report were: the adoption of a design approach to the development of a consistent operating model for the new councils, giving local government a unique opportunity to design a purpose-built solution for Northern Ireland; that a full economic appraisal should be conducted on the shortlisting options for the design of operating models in the new councils; that the definition of each option in the economic appraisal should articulate the associated role and responsibilities of transition committees, the key elements of support that each committee will be offered, and the key actions; dependencies and milestones on the overall implementation plan for which transitional committees will be responsible; and that decisions should be taken on the design of appropriate regional structures for local government in Northern Ireland.

The phase 1 report was accepted by the strategic leadership board on 3 July 2009 and is available on my Department’s website. PWC then moved to the second phase of its assignment, which it completed and presented to the strategic leadership board last week for initial discussion. However, my colleagues and I on that board felt that it was important to widen the debate on the report’s recommendations by seeking the views of key stakeholders.

That is why I am publishing that report today and have arranged for copies to be made available to Members. It will be placed on the Department of the Environment’s (DOE) website and will be made available to a wide range of stakeholders who have an interest in local government reform. I intend to allow six weeks for stakeholders to consider and discuss the report and to submit their views to me on its recommendations.

I will also seek the views of my Executive colleagues, most notably the Ministers who are responsible for the functions that are due to transfer to local government in May 2011. I will also discuss the report with my colleague the Minister of Finance and Personnel to explore the implementation and longer-term funding options that may be available to the Executive, with a view to putting detailed proposals to the Executive towards the end of the year.

For the most part, Members will not have had an opportunity to consider the report. However, I encourage all of them to do so. I want to take the opportunity to set out the report’s core recommendations, which include 11 new councils in Northern Ireland, each of which will deliver the full range of local government services. Current group-working arrangements for environmental health and building control will cease, and each council will develop a self-contained capacity to deliver those services. A regional business services organisation will be formed that is wholly owned, operated and run by local government, which will enable collaborative solutions across local government. A single waste disposal authority wholly owned and operated by local government will be created, aimed at delivering efficiencies in future procurement and contract-management activities.

The report creates a new local government association that revitalises the representation of local councils; it enhances the Northern Ireland Audit Office to reflect its new role of monitoring the new comprehensive performance-management framework for local government; and that of the Northern Ireland Ombudsman’s role to reflect its monitoring of a code of ethics for councillors. The report recognises that such a scale of change cannot be delivered overnight and that the transformation process will not end in May 2011 with the creation of the 11 new councils, but will continue up to 2015.

The report also recognises that change of such a scale and complexity does not happen without significant, upfront investment. PWC has taken a prudent approach to its estimated costs and the benefits of implementing the programme. Its estimates of implementation costs are likely to be on the high side, and, conversely, estimates of savings may be on the low side.

The report concludes that the programme delivery will require an up-front investment, at today’s prices, of approximately £118 million over a five-year period. However, that investment will deliver projected savings of £438 million, again at today’s prices, over a 25-year period. Under the preferred option that is set out in the report, the reform programme will begin to realise a reduction in local government operating costs by 2013-14, with the break-even point on the return on the initial investment being reached by 2016-17. That makes economic sense, and it represents long-term value for citizens, ratepayers and taxpayers.

I shall pick out two of the recommendations and explore them in a little more detail. The first is the proposed single waste disposal authority. I pay tribute to the work of the three waste management groups in bringing us this far in dealing with our municipal waste. Nevertheless, the single waste disposal authority is a better model to take us on the remainder of that journey.

Reducing, reusing, recycling and managing waste effectively are the most important environmental challenges that we face. Unless we learn to recognise our waste for what it is — a valuable resource — and manage it effectively, we run the risk of damaging our environment and economy and of placing a huge financial burden on families throughout Northern Ireland as a result of European Union infraction fines that could amount to £500,000 a day.

It is my long-held view that the best way to meet those challenges is through a single waste disposal authority. There are three reasons for that. First, a single waste disposal authority would ensure that there is a strategic approach to waste management, and it would make the best use of that valuable resource. In addition, a single corporate body that is accountable to the new councils would establish a clear and transparent line of authority. Working on behalf of those councils, the authority would seek to reduce the amount of waste that is generated and to maximise reuse, recycling and recovery. It would also manage waste in a way that minimises its impact on the environment and on public health.

Secondly, a single waste disposal authority would ensure that ratepayers receive the best value for money, driving efficiencies in future waste management procurement procedures and in managing waste handling contracts. The three waste management groups have achieved efficiencies already, working on a subregional basis. A single waste disposal authority could build on those efficiencies by encouraging Northern Ireland-wide competition in the waste market.

Thirdly, a single waste disposal authority could promote the best and most practical environmentally sensitive solutions to waste management. Working on behalf of the councils, it would, by its nature, be responsive to the needs of individual councils and the ratepayers that they represent. It would have a responsibility to take on board the real concerns that people have about various types of waste treatment facilities and to promote the highest sustainability standards. At the same time, a single authority would recognise our collective responsibility to ensure that Northern Ireland people are not faced with the environmental and financial consequences of failing to manage waste effectively.

It is too early to set out details of the structure of the single waste authority, but there are some obvious characteristics that I believe it should have. First and foremost, it would be a local government organisation that is accountable to, and includes representation from, the 11 councils. It would be a mandatory, joint committee of the councils, and it would be incorporated. Such an authority would take on the responsibilities of the existing waste management groups, including managing existing waste contracts and procuring new contracts as necessary. The body would have the necessary specialist expertise to ensure that it achieves the highest procurement standards, and it would be a centre of procurement excellence. Finally, it would be a lean structure that is designed to deliver efficient services with low overheads.

The proposal for a single waste disposal authority cannot, and will not, put current infrastructure procurement processes at risk in any way. The ongoing infrastructure development programme will proceed to completion, and, on its establishment, the contracts will move to the new authority.

The second recommendation that I want to highlight is the proposed business services organisation. The report proposes the establishment of a business services organisation whose key characteristics are that it is wholly owned, operated and governed by local government and that should deliver a range of collaborative solutions across local government. There are a number of functional areas where it is likely that the councils will be able to gain financial efficiencies and service improvements through collaboration with other councils in the design and implementation of shared solutions.

It is recommended that the new business organisation should lead on the design and implementation of collaborative solutions for local government. Councils will be fully involved in the design of the most appropriate solution for each of the functional areas that is selected for collaborative delivery. There should be no fixed approach to the design of collaborative regional solutions across local government. Approaches to service delivery that should be adopted by the business service organisation include: a network of council-based resources; lead councils; centres of excellence; shared service centres; public sector solutions; and commercial providers. It will be the responsibility of the business service organisation to agree the most appropriate solution, or range of solutions, for the provision of each service and to negotiate and agree with the 11 councils how and by what means that service might be delivered.

On the question of collaborative working, it strikes me that there are, potentially, areas to which the new councils could give early consideration, especially the new planning functions. I encourage stakeholders, in considering this report, to think about the possibility of collaboration in delivering citizen-facing planning functions.

The report’s recommendations offer the opportunity to deliver a world-class, cutting-edge, effective, efficient and value-for-money system of local government in Northern Ireland. I strongly encourage Members, and all local government stakeholders, to consider the report fully and carefully and let me know their views by the end of November. I am particularly keen to hear from the political parties, the Northern Ireland Local Government Association (NILGA), the Society of Local Authority Chief Executives (SOLACE), the councils and the transition committees. I also welcome the views of other interested stakeholders.

This is a uniquely challenging change process to manage and deliver and no one involved underestimates the challenges. However, I am confident that, by working together, we will achieve our goals of creating 11 strong and effective councils in May 2011 and of transforming the way in which those councils and the local government sector operate by 2015. The Executive believe that the local government reform programme will yield real benefits for citizens, ratepayers and taxpayers. The reforms will produce better performing, stronger and more effective councils to deliver real improvements in services to local communities.

The economic appraisal published today clearly demonstrates how that can be achieved and what the benefits will be. That is what the programme is about, and that is what I intend to deliver.