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'Let me start by saying what a pleasure it is to welcome you to this important conference to be led by the prime minister today.

And to thank everyone here who works in public services for the contribution you make and in particular, for your preparedness to change and transform our public services.

All of us here remember the inspiration we received from a teacher at school; the care of a nurse, doctor or carer working in our health and social services; the security we gain from people who patrol our streets; and indeed all those who serve us as the public in a variety of ways.

We meet at a time when three challenges come together forcing us to intensify and extend the public sector reform agenda.

The challenge of ever rising individual aspirations - people's desire for an individual, often personalised, tailor-made service that is customised to meet their needs and their requirements.

The challenge of new needs - from action on security and terrorism to new frontiers of the public's demands for services like provision for the under fives - emphasising that at a time of rapid global change, people's desire for what you might call an insurance policy, services they can depend and rely upon.

The challenge of value for money - in each economy round the world we have moved from an era of public sector surpluses to large deficits and debt, generally far higher than ours in the USA, Japan and France, Germany and the euro area.

So an era of more limited fiscal resources - forcing governments to review their public sector responsibilities and to secure the greatest cost effectiveness.

And in Britain, as you know, the next Comprehensive Spending Review moves us from a time when public spending was rising by 5 per cent a year as we caught up and addressed the investment backlog, to one where we expect it to rise by 2 per cent.

And you will have seen my determination to address public sector pay.

And with this year's public sector pay settlements averaging just 2

1/4 per cent - we are maintaining vigilance in the fight against inflation - and next year and the year after that we will maintain this discipline of low overall settlements. And I am making it clear in writing to departments that public sector pay settlements must in future be founded on meeting our 2 per cent inflation target.

The theme of this conference is how to modernise our services - in ensuring both efficiency and equity, we compliment the setting of national output targets and the ethic of public service with the other drivers of change.

First, competition and contestability and second, local choice and

voice: the means by which we can personalise services for the patient, pupil or citizen and enable professionals, like you here today, to pioneer innovative approaches to delivering these services and drive up standards all round.

So much is covered in the agenda today on the full range of public services that I look forward to studying and absorbing the new ideas and new approaches.

Let me give one other example of what the Treasury is now working on for our Spending Review - what has been called the double devolution of power from Whitehall to the Town Hall or County Hall, and from the Town Hall to citizens and communities: how we can better respond in local authority service delivery to local needs and individual requirements, to ensure choices can be made and voices heard, and most important, change can be triggered.

Let me emphasise first the importance we attach to matching the local setting of objectives in the new ways that will be proposed by the Local Government White Paper, with the flow of publicly available real time data of what is happening on the ground.

Real time information that enables the professionals who run public services to use their expertise to best effect.

And transparency that empowers citizens to make informed choices about how they use public services and the standards they expect.

We have seen the potential of this new approach and the new technology that makes it possible.

And we will be examining in America the CompStat model pioneered by Mayor Giuliani in New York, which helped cut crime by two thirds in ten years, and now the CitiStat model in Baltimore, applied not to just to policing but across all local services. We are now seeing the same potential in Britain. As we roll out neighbourhood policing across England and Wales, we will publish more police performance data.

And we are interested in how local authorities across the country now have web portals that allow people to customise the information they receive about the services they use. In Shoreditch in Tower Hamlets, the digital bridge allows police to alert residents as events happen, and residents to alert them about abandoned cars, graffiti or vandalism. In Lewisham, texting to report and texting back to say the problem has been addressed.

But just as we need information on the ground for consumers to respond, we need also far better triggers for action so that local people who find the services unacceptable and in need of change, can secure change.

The Police and Justice Bill has a 'Community Call for Action', in this case the ability of councillors to trigger change in law and order services.

But think of the community call for action extended from policing to all services, think of that call for action broadened out from councillors to citizens able to trigger action.

Putting local people in the driving seat, and not just by holding service providers accountable, but taking power themselves.

And think in addition to the community call for action of neighbourhood advocates and managers that can act as advocates and brokers for local people. And already there are over 150 such initiatives in neighbourhoods across the country, from Bolton to Hastings.

Neighbourhood agreements and charters can form the basis of a renewed set of mutual rights and responsibilities between local people and local authorities. And today there are 60 such agreements in neighbourhoods across Bradford alone.

Delegated budgets can give councillors and the wards they represent the freedom to design and run local projects and priorities. In the Pre-Budget Report we allocated on average half a million pounds for each local authority over the next two years to amenities not only for young people, but run and decided by them as well: putting power about the issues that affect them in the hands of young people themselves.

Just as we should think of how we empower the aspirational individual, the active citizen, the responsible parent, the informed patient taking more control over their lives, so we should seek to strengthen community power and voice in their local neighbourhoods through community panels and reinvigorated parish councils.

Now today you range widely from service to service, with Ministers playing their part, a reform agenda that will intensify and grow, and drawing on the best of ideas from all parts of the world, and let me say, just as we pioneered PFI and public private partnerships, as we prepare the coming Spending Review, the most challenging for some years, we will absorb the new thinking you are introducing to the debate.

And let me thank all of you here again for the role you are playing in making this new vision a reality.'


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