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As government initiatives go, local public service agreements seem to be a roaring success. But the money comes wit...
As government initiatives go, local public service agreements seem to be a roaring success. But the money comes with strings attached, says Nick Triggle

On the face of it, local public service agreements have been one of the more successful initiatives between central and local government during prime minister Tony Blair's premiership.

Since the round one agreements started three years ago all but a handful of upper-tier councils have taken part, with more than 1,000 targets agreed and a potential£1.5bn windfall in the pipeline for local government.

A full evaluation of the effectiveness of LPSAs is still a few years away, but the Office of the Deputy Prime Minister was confident enough to unveil the format of the second generation agreements in December 2003.

Early indications from the 20 pilot agreements, which were completed in March, show 60% to 70% of the targets agreed at the start were met. And the government has already paid out£10m to 13 of the pilots who agreed interim targets for the second year of the three-year agreements.

However, the final results and the rewards for the pilots are not expected until the autumn.

'While people will always have some concerns, the LPSAs have been incredibly well received especially for what was a voluntary initiative,' says Simon Edwards, a senior policy officer at the Local Government Association.

Tony Travers, director of the London School of Economics' Greater London Group, also has high praise: 'I think local government was comfortable with LPSAs because they felt they gave them direct access to the centre of government.'

However, he believes central government has still been too controlling. 'The weakness with the system is that it is still a form of central control, perhaps a more benign form of central control. You cannot get away from that.

'Government has set targets and objectives centrally and that has been resented. The more they are set locally, the more likely they are to be met.'

Research supports these concerns. A survey of 25 of the 33 London boroughs by the Association of London Government, published in June, reveals that while the councils 'generally supported the rationale behind LPSAs', they were concerned there was an over emphasis on national priorities in the target setting. They also said they found the approaches taken by government departments ranged from 'innovative and constructive' to 'inflexible'.

And the councils complained the rewards system for meeting targets discouraged innovation as it

deterred 'authorities from tackling difficult issues as they are likely to receive less reward funding'.

The themes were also taken up by the New Local Government Network in a November 2003 report. Freedoms and flexibilities for local government said the first generation agreements 'failed to offer genuinely radical opportunities'. It blamed a lack of commitment across central government departments, with the exception of the ODPM, and the balance between local and central government targets. But it also laid some responsibility at the door of local government, saying councils 'were not always demanding and ambitious enough'.

Research by the LGA LPSA team has shown central government's approach to freedoms and flexibilities was so negative that some councils had more requests denied than granted. For example, Newcastle City Council made 64 requests but the final agreement allowed for only 23.

The council wanted to relax the eligibility criteria for the New Deal back-to-work strategy to tackle unemployment and hold open a number of secondary school places for excluded pupils. In both cases, the answer was 'no'.

Some councils have also found targets hard to meet through no fault of their own. Lancashire CC signed an agreement in July last year covering 12 targets, from education attendance and attainment, to drug rehabilitation and teenage conception rates.

Council performance manager Joanne Platt says Lancashire would have preferred to have negotiated more locally-relevant targets. But she also says the council feels hampered by forces outside its control as it looks to meet the targets.

'For example, two targets in the agreement are to reduce youth offending and re-offending. We are doing lots of innovative work but because the national agenda is to clamp down on youth offending, the police in Lancashire are making more arrests.

Just how much the problems hamper the councils is hard to gauge. Nonetheless, Mr Edwards accepts the agreements could have been better. 'Not everything has worked out as we would have wanted. The delivery of freedoms has been terribly disappointing.

'There are two reasons for this. Local authorities were not always as focused and ambitious in what they asked for. But [most critical] was the lack of delivery from central government. Some departments saw freedoms and flexibilities as a distraction.'

He also acknowledged problems with the targets. 'Councils in the north wanted to tackle authorised absences from schools, rather than the traditional truancy which is unauthorised. Councils found many parents were signing their children out of school so they could go shopping but the Department for Education & Skills was not prepared to countenance this.'

Despite the complaints, most pilot councils are already setting up second generation agreements and many councils which have not yet completed their agreements, including Lancashire, have already expressed an interest.

This can be partly explained by the relative success of the first round but councils have also been impressed with how the ODPM, in conjunction with the LGA, has tried to address the concerns raised after the first round.

The ODPM's publication, LPSA 2G: building on success, unveiled in December, said there was 'scope for significant improvements'.

While the paper stated the principle behind the scheme would remain the same for the second round, it did set out a number of key changes, including more local focus for targets and a renewed effort from government departments to work with councils.

Many have welcomed the changes. Institute of Local Government Studies director Sir Michael Lyons says the new tact will enable councils to make the best use of the second-round agreements. 'When the first round was conceived, local government wanted to get closer to central government to discuss priorities and agree agendas. If you look at them in that context, they have been a success.

'But what we have learnt is that they were too permissive. The important thing with the next round is that there is more structure and emphasis on local targets.'

And nine months after the criticisms in the New Local Government Network report, its director, Dan Corry, is also positive, believing government departments may become more proactive.

'ODPM and the Treasury have always been up for this agenda, while some of the other delivery departments have remained suspicious of the extra freedoms being offered - such as the Home Office, Department for Education & Skills and Department of Health. The signs are, however, that their views and behaviour are changing and greater engagement is more likely.'

But with the first second-round agreements not expected until the end of the summer, only time will tell whether the next generation can improve on its predecessor.

Local public service agreements explained

Local public service agreements were first announced in the 2000 comprehensive spending review.

Developed in partnership with the Local Government Association, the agreements are a means by which councils can access extra money, freedoms and flexibilities by committing themselves to a range of national and local targets.

Councils receive an initial 'pump-priming' grant, and are able to negotiate statutory and administrative freedoms with central government departments.

Those achieving the targets earn a reward grant of up to 2.5% of the budget.

For the majority of the 147 councils taking part, the grant is determined by what they have achieved by the end of the final year of the agreement. However, some negotiated interim targets for the second year, allowing some of the grant to be released early.

Case study: Kent CC's first-round knockout

Kent CC's local public service agreement was undoubtedly one of the stars of the first round. As the largest county council in the country, Kent was one of the original 20 to pilot LPSAs.

Its agreement was made up of seven national and five local targets, covering crime, education, regeneration, the environment and welfare.

The agreement came to an end in March with all but two of the targets met. The successes included adoption rates doubling, a cut in time the elderly spend in hospital because of a lack of home care and a 30% reduction in public disorder incidents.

The council expects to receive£21m in grants for the improvements and is in negotiation with the ODPM about a new agreement in the second round.

The secrets to Kent's success were its good negotiating skills, ambitious approach and strong sense of direction, according to the joint NLGN and Improvement & Development Agency paper, Improvement and the use of LPSAs.

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