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LGC FINANCE - ALL GOING TO POT

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Local area agreement pilots have been signed off across the country, but confusion reigns over what good they will ...
Local area agreement pilots have been signed off across the country, but confusion reigns over what good they will do. Mark Smulian explains

Readers of local newspapers in 21 areas may have noticed a proud announcement from their council that it had been chosen by the government to have a local area agreement.

It is not only members of the public who might have scratched their heads over what this means to them.

Council officers, even some closely involved in developing LAAs, can be equally perplexed about how they will work, what difference they will make and, above all, whether the promised freedoms and flexibilities will materialise.

Deputy prime minister John Prescott has claimed hundreds of public sector targets will be reduced to around 60, as funding streams from across the public sector are channelled through LAAs for use by councils and their partners on local priorities.

The promise of such progress has been enough for LAAs to be widely welcomed.

But no one is entirely sure yet whether they point to a future of community leadership for councils or a bureaucratic dead end.

The history of LAAs lies in the attempts by the Office of the Deputy Prime Minister to encourage a wider and more independent role for local government in the face of, at best, indifference from the rest of Whitehall.

The ODPM would have been sent away with a flea in its ear had it simply proposed to other departments that a large slice of their budgets should be handed over to councils.

Whitehall departments like to keep a close eye on programmes, so would agree to combine their budgets only if they could be sure their pet projects would not be sidelined.

From this grew the three 'pot' structure for LAAs: children and young people; safer and stronger communities; and healthier communities and older people.

Each pot roughly mirrors, respectively, the work of the Department for Education & Skills, the Home Office and the Departments of Health and Work & Pensions.

The only exception is Telford & Wrekin Council, which has been allowed to experiment with a single pot, combining all three.

A fourth pot covering economic development will be added to the next round of LAAs, when a further 40 will be designated to run from April 2006.

So will LAAs work?

Phil Coppard, chief executive of Barnsley MBC, says: 'It frees up a lot of the bureaucracy, but LAAs get a bit overblown in some discussions.

'This is not about stretching budgets, more about streamlining work and opening up dialogue with government. It could lead to more freedoms and flexibilities. It is a long-term process.'

The three-pot system will cause complications, Mr Coppard fears.

'It is a little difficult, since the boundaries are not well delineated,' he says. 'What is 'health', what is 'young people'? There are some things that can fit into more than one stream. I am even less sure about the third block of 'older people and healthier communities'. They do not seem natural bedfellows, and that is almost two blocks in one.'

Mr Coppard also notes concerns that neighbourhood renewal could fall through the gaps between different pots.

At Derby City Council, the LAA will reinforce long-term work, says assistant director Isabella Stone. It first had a community strategy in 1995, long before this became a requirement.

Derby's main strategic objective is to close the gap of inequalities between different areas of the city.

The council has identified 13 neighbourhoods, which include 'a clear inner city area which is multi-ethnic, and that is one priority', she says.

However, the degree of freedom and flexibility the LAA will bring is as yet unclear, she points out, which leaves councils in a difficult position to plan their work.

'I don't know what financial freedoms and flexibilities we will have, and I would quite like to find out,' says Ms Stone. 'I think everyone accepts that the first year is when flexibilities would get hammered out but, if we are still in this position next year, people will wonder what it is all for.'

Helen Carr, head of policy at Brighton & Hove City Council, says her council is still negotiating freedoms and flexibilities. 'I think it will be the second year before they are clear and really kick in,' she says.

Brighton & Hove has a partnership board that includes the council, police, primary care trust, its new deal for communities, business and voluntary groups and the city's two universities. Most other boards have a similar composition.

Anyone who looks to LAAs primarily for administrative savings is missing the point, says Dick Sorabji, a policy officer who is studying the agreements for the Local Government Information Unit.

'The real gains will come from the leverage effect,' he says.

These gains arise from going through the process of negotiating an LAA. This should, says Mr Sorabji, make a council rethink its priorities and the way it achieves them.

'I get a sense that the government wants LAAs to be the way to build in continuous improvement, and they could be the framework that frees councils to do that,' he says. 'It depends on both sides playing to the sprit of the rules, not just the letter - that is crucial.'

What those rules are and the commitment of both sides is not clear, and there is some feeling among councils that the Home Office's commitment is not wholehearted.

Ms Stone says: 'Different government departments have had different levels of enthusiasm. Some want flexibility so long as they get their performance requirements, though I am reluctant to point the finger.'

Mr Coppard says: 'The ODPM is very good, as you might expect since they promote

it. The DoH is good too, and the DWP wants to use it to move its agenda forward since it

is without strong links to local government.'

One adviser involved in LAA preparations says: 'To some extent, ministers and senior civil servants agree to reduce the burden on local authorities, but it is seen differently lower down. Things agreed at a higher level do not go all the way down. That is where we meet most difficulties.'

He says the good news for councils is that LAAs mark the beginning of the end of the target culture in local government, in favour of one based on agreed local priorities.

Within local government, there is a marked wariness over the creation of additional 'pots', favouring as few funds as possible being earmarked by Whitehall.

In general, people are optimistic. The adviser says: 'LAAs are about governance of whole areas in which the council might have only about one fifth of public money but where it is the only body with a democratic mandate. It is a new era of accountability.'

LGA

in order to maximise local freedom.

It argued unsuccessfully for more single pot experiments, since the lack of any comparator for Telford & Wrekin runs the risk of that pilot judging Telford & Wrekin rather than the single-pot concept.

LAAs are a chance for councils to put themselves at the head of community leadership and gain more freedom. S

Coppart:

'Those funds come under LAAs, but it is an opportunity for the people working in that to come to the table and say what they want to do,' he says.

Stone, Derby:

'We have had a neighbourhood renewal strategy, but it felt like that was a bit separate from the mainstream,' says Ms Stone.

'The other areas we will concentrate on are council estates. Although we have no large ones, there are lots that are pockets of deprivation and we have gone down to quite a small scale of measuring deprivation - not just by wards - to narrow the gap with the rest of the city.'

Carr, Brighton & Hove:

'We want to really cement partnership working to build on what we are doing already,' says Ms Carr.

One project is to try to apply the Sure Start approach - one-stop shops for children's services - to adult services.

The first LAAs:

Barnsley MBC

Bradford City MDC

Brighton & Hove City Council

Coventry City Council

Derby City Council

Derbyshire CC

Devon CC

Doncaster MBC

Dorset CC

Gateshead Council

Greenwich LBC

Hammersmith & Fulham LBC

Kent CC

Knowsley MBC

Peterborough City Council **

Sheffield City Council

Stockton-on-Tees BC

Suffolk CC

Telford & Wrekin BC*

Wigan MBC

Wolverhampton City Council

* = single pot

** = being finalised

What John Prescott said

When the deputy prime minister launched the LAA prospectus, he noted: 'Local area agreements will, undoubtedly, require central government departments to be more willing to let go of detailed day-to-day control of their programmes.

'Central government will continue to set high-level strategic priorities and targets.

'But they will need to allow councils and their partners to decide jointly which local priorities best reflect local circumstances, while still contributing to the achievement of national targets.'

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