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GOVERNMENT CHALLENGED TO BRIDGE THE GAP BETWEEN NHS AND COUNCIL FUNDING FOR IMPROVEMENT

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We must tackle the major disparity between what the central government spends on inspecting and supporting improvem...
We must tackle the major disparity between what the central government spends on inspecting and supporting improvement in local government and what it allocates to the NHS for the same thing, LGA chair Jeremy Beecham said today.

LGA leaders have long-used the metaphor that you don't get a horse to run faster by measuring it.

While inspection is a vital tool in identifying problems it does not help to solve them. Local government badly needs more investment in support and capacity building to help councils improve.

Sir Jeremy said: `The figures speak for themselves. Local government's Improvement and Development Agency got£12m from government this year compared with the£600m cost of inspecting councils and the NHS Modernisation Agency's budget of£140m. These imbalances must be corrected in the current spending review'.

FREEDOM FROM RING-FENCING

Sir Jeremy went on to welcome the support in the white paper for councils to be freed from central controls and regulations and for central and local government to work on an agreed set of priorities.

But, he warned: `The real test for the government is whether the major spending departments genuinely and wholeheartedly commit themselves to the deregulation of councils and the move away from specific grants and earmarked resources.

`The delivery of tangible improvements in public services hinges on a new relationship between central and local government. The white paper sets out an encouraging agenda, but requires a commitments from across government if it is to really benefit local people.'

Sir Jeremy's full speech to the LGA conference on the local government white paper today follows:

'It's a great pleasure for me to share the platform this morning with Steve Byers. According to Opposition politicians and much of the media, after seven months in office Steve is personally responsible for decades of under-investment in our transport system, for the managerial and operational failings of Railtrack and the operating companies, and for his inability to act like an inverted Delia Smith and extract the individual eggs from the omelette of rail privatisation cooked up in the days of the previous government. And on top of that, he had the effrontery to go on his annual holiday for a couple of weeks!

But the same press which has attempted to demonise Steve was nowhere to be seen when he launched the major White Paper which is the subject of today's conference. In the run-up to publication and since, Steve has demonstrated an accessibility, openness to ideas, and complete familiarity with, and sympathy for, the problems of local government, unmatched by any of his predecessors with whom I have had dealings in the last 20 years. In fairness to John Prescott, it should be said that it was his many other responsibilities which perhaps prevented him from engaging as fully as he would have liked with the problems of local government.

There is much in the White Paper which accords with the LGA's view of local councils as key partners, individually and collectively, in the governance of our country, with a crucial role in civic and community leadership underpinned and legitimised by local accountability through the ballot box, and through the day-to-day interaction with, and scrutiny by, those we represent.

We are particularly pleased that the White Paper recognises the crucial role of local councils in improving public services. It is especially welcome that it does so by going beyond the concept of local councils as mere agents for delivery and recognises the contribution that the devolution of power and responsibility can make to delivering higher quality services. We warmly welcome the recognition of the need for a review of the resources devoted to improvement, support and capacity building in local government. The recognition in the white paper of the value of the IDeA's work, particularly the Local Government Improvement Programme, is valuable.

The balance between the money spent on inspecting councils - some£600m a year - and that available to help them improve is wrong. We might have over-used the metaphor that you don't produce a winning racehorse by constantly measuring it, but have done so for understandable reasons. And there is a stark contrast between the NHS Modernisation Agency's budget of£140m a year and this year's£12m budget for the local government Improvement and Development Agency. These imbalances must be corrected. And we will be pursuing this issue in the spending review.

The White Paper accepts what we have been arguing for some time, namely, that a streamlined, integrated, lighter touch inspection regime, coupled with the review of best value, whose outcome we await imminently, will be more effective. Similarly, the Government's renewed commitment to deregulating local government and dismantling unnecessary consent regimes, is extremely welcome. The deregulation of local government is something I have been advocating for eight or nine years and at last we are beginning to see some results. The significant reduction in performance indicators, consent regimes and plans, already announced or foreshadowed in the White Paper, very much accords with the LGA's thinking.

But the White Paper goes beyond striking off some of these shackles so that like the prisoners' chorus in 'Fidelio', we can shuffle, uncertainly blinking, into the sunlight, with a firm and positive role for local government in identifying and meeting local needs, promoting diversity, and contributing as partners to tackling major national issues around poverty and social exclusion, economic and environmental sustainability, community safety and the care of the vulnerable. These are enshrined in the six commitments that the LGA proposed to Government after the election, which have been well received across Whitehall and Westminster and which are being developed by pathfinder authorities.

The concept is also embodied in the development and intended roll-out of local public service agreements, and in partnership for ambition, which the White Paper endorses. The opportunity for central and local government to agree a joint set of priorities is crucially important. It should help to deliver ambitious local public service agreements and a mature discussion between the two spheres of government about how each can contribute to improving public services. What is crucial here, however, is that what we have offered is a deal, giving us the option of signing up to agreed objectives or not doing so. The process, if it works, will both influence and depend upon the outcome of the comprehensive spending review, but it does offer the prospect of a much more productive relationship between central and local government than we have enjoyed for a generation.

On the financial front, we can again wholeheartedly welcome the renewed pledge to change the arrangements for capital expenditure and the abolition of the council tax benefit subsidy limitation scheme, thankfully interred after a short and unhappy life. We can also welcome the flexibility of council tax discounts for second homes, charging regimes and council tax banding, all of which reflect the recurrent theme of the White Paper in devolving decision making to councils.

On the other hand, whilst the alarming rise in specific grant and ring-fencing is scheduled to end, it is disappointing that the White Paper does not, as we had hoped, contain targets for reductions - presumably because other departments remain reluctant to let go. Both the Prime Minister and the Chancellor, however, support a reduction although we have been unable to persuade the Government to abandon the reserve power to ring-fence schools' expenditure in what the Education Bill describes as 'exceptional circumstances'. We will use the current spending review to continue to pursue the case for less ring-fencing, using the principles set out in the White Paper to support our case.

Many across local government will wish to see the return of the non domestic rate. This has unfortunately been ruled out, at least for the time being, although some marginal assistance may be derived at least on a project basis through business improvement districts.

But at least the Government has recognised the need to debate the issue of the balance between centrally and locally raised revenue and the implications this has for accountability and local democracy. I hope that the review referred to in the White Paper will get underway as soon as possible. We hope, too, that the Government will commit itself more explicitly to requiring quangos and other concerns, especially the utilities, to take into account councils' community plans and to facilitate the scrutiny of their role in local affairs, just as the Health Service bodies will be required to do.

Readers of the White Paper will, happily, search in vain for the dreaded words 'earned autonomy', a fashionable phrase much deployed in Department of Health circles and backed up by a star rating system with rewards, albeit fairly limited, for the favoured few. It might be acceptable to speak in terms of earned autonomy for bodies which are wholly financed by the Government, and in which accountability is exercised, if at all, through government appointees. But local councils are different. They have their own legitimacy. Here the watchword should be not 'earned autonomy' but 'subsidiarity'.

We, therefore, have some concerns over the proposed performance rating system outlined in the White Paper, although there are significant differences between what is proposed for local government and the proposals affecting the Health Service. In particular, the White Paper sets out a framework in which the vast majority of councils will have access to additional freedoms and flexibilities through local PSAs. The White Paper does not open the way for the creation of a local government premier league.

We are determined to ensure that the process of assessment genuinely measures outcomes, deals with quality and not just process, and is accepted as robust. We are working with the Audit Commission to ensure that it is credible within local government and beyond. Even then, we wish to ensure that not too much weight is placed upon a structure which, at best, will be

indicative rather than a wholly objective measure of performance. Part of the exercise must be to inform the new scrutiny processes within councils and better inform service users and the electorate. Deluging the latter with statistics and incomprehensible charts does no service to local democratic engagement, but nor will simplistic across-the-board evaluations of a council's performance.

Beyond the White Paper there are, of course, major issues around the pressure on local councils' budgets, especially in the realm of social services, and in common with the rest of the public sector, real issues about the recruitment and retention of quality staff, made more difficult in some respects by enhancing the role of the private sector which often, to the extent that it succeeds at all, does so by draining talent from the public sector.

I warmly welcome the Secretary of State's conversion to a somewhat more sceptical, or perhaps I should say balanced, view of the role of the private sector. On any view, the private sector will have an important part to play, but in a mixed economy of provision, rather than one in which there is a relentless squeezing out of public sector providers. For that matter, we need to address the role of the third sector, the not-for-profit sector, perhaps more fully than either central or local government has done thus far.

I believe that most of local government will sign up to most of this White Paper. I know that DTLR ministers, with the support and No 10 and 11 Downing Street, have already done so. I am bound to say, however, that the real test for the Government will be whether other departments, whose interests and activities impinge upon the local government world, will also genuinely and wholeheartedly commit themselves to the new approach. In this context we will be watching with particular care how the local PSA agreements operate in practice, whether, for example, departments and ministers are genuinely prepared to be less prescriptive and allow flexibilities and freedoms to experiment, and to learn, both from the successes and failures which will ensue. If in local PSAs, in agreeing a national PSA as part of partnership for ambition, in the comprehensive spending review, and the operation of the single capital pot, Government collectively and in all its manifestations demonstrates that commitment, then this White Paper will be seen as marking a decisive turning point, not only in the history of central and local government relations in this country, but also in the development of a mature, self confident and effective local democracy. But in that event, don't expect to read about it in the Daily Mail.'

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