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A popular move to towards increased local control could be an emergent theme in Labour's bid for a third term, says...
A popular move to towards increased local control could be an emergent theme in Labour's bid for a third term, says Mark Smulian

John Fletcher of Coventry, whoever you are, please step forward.

You were, at least at the end of May, the only person to respond to the local government topic on the Labour Party's 'Big Conversation' website.

The question read: 'Currently, local government raises locally only around a quarter of what it spends, much less than in other countries. Is this the right balance between national and local revenue sources, and should we consider new ways of financing local government?'

No one but Mr Fletcher was moved to contribute their thoughts. Things did not improve when the ODPM twice fielded its junior minister Phil Hope in a webchat with big conversationalists.

Among questions like, 'Where can I obtain Labour Party stickers?' and, 'What is it like working with John Prescott?' - bliss itself, judging by Mr Hope's reply - was one about the extent of regional assemblies and the proposed new unitary councils below them.

One school of thought suggests Labour is keen on all-unitary local government across England, since it was Downing Street that insisted one tier of local government should go where regional assemblies are to be created.

Mr Hope gave nothing away and though ministers will not speak out of turn, there is a fair amount of thought and argument going on within Labour about the future of public services in general, and local government specifically.

In a way, this is a little surprising. One of the few forecasts about the next general election that can be made with certainty is that no one will cast their vote solely on the basis of what a party's manifesto says about local government.

And here is another prediction. Whatever a party has done or would do in government, no one will publish a manifesto calling for increased control over councils by Whitehall.

Labour faces a conundrum as far as local government is concerned. While voters routinely demand central government should step in if their council tax bill is too high or their council has done something they find objectionable, there are no votes in calling for more centralisation - local is virtuous.

A quick glance at the Conservative Party confirms this; it is still trying to scramble free from the reputation for centralisation that it acquired during its lengthy stint in power, when, as local government and regions spokesman Bernard Jenkin has recently admitted, it regulated every council as though it were Ted Knight's Lambeth LBC.

But localism has its limits, as local government minister Nick Raynsford has found. He said in May that he had capped even councils with an 'excellent' rating because Tory-controlled Wandsworth LBC had put its council tax up excessively.

For Lambeth in the 1980s, read its neighbour now: the temptation to step in is still alive and well in Whitehall and could thwart Labour's localists.

Because voters tend to hold central government responsible for everything, there is little stomach within Labour for the sort of pure localist position that says councils should be left alone, and if they are incompetent, extravagant or dishonest, voters can remove those responsible. This view has adherents in all three main parties, but would represent a huge political risk for any government. The clearest pointers to thinking within Labour come from two ex-Cabinet members, both loyal Blairites who might still harbour ambitions of a return - former transport secretary Stephen Byers and former health secretary Alan Milburn.

Whether they represent majority thinking in Labour is beside the point, because both are known to have the ear of prime minister Tony Blair.

So is Geoff Mulgan, the recently departed head of the 10 Downing Street Strategy Unit, which was asked to carry out a wide ranging review of the future of local government over the next 15 years, starting with a clean slate?

Mr Blair has not even hinted how this unit's conclusions might be used, so general is its remit, but it is expected that accountability and choice will be at the heart of its recommendations.

In a foreword to a pamphlet from the Blairite New Local Government Network, Mr Mulgan suggests that voters might prefer neighbourhood bodies, separate from councils, a step that could bring 'more choice and more contestability, with a bigger role for the non-profit sector, rather than devolution to local authorities'.

This fits in with an emerging agenda on this wing of Labour, loosely based around 'choice' and 'empowerment' for public services.

On the other side of the Labour Party, little can be heard. Trade union leaders attended a meeting hosted by the Catalyst think-tank in May to debate a document that appeared to call for a traditionalist approach with public bodies providing public services from public money - 'appeared' because Catalyst insisted the meeting was private and declined to discuss it.

In April, Mr Byers gave an example of choice when he told the Social Market Foundation that parents should be able to sack head teachers for poor performance. He also said that popular schools should be allowed to expand their pupil numbers in response to parental demand and that residents of care homes should be able to choose new providers.

Mr Byers said: 'The government has taken the first, often tentative steps on the path to a choice-based system of public service provision, but it must now go much further.'

In a similar vein, Mr Milburn told a conference run by pollster MORI in March that: 'Public services cannot be run by diktat from the top down, accountability needs to move downwards and outwards to consumers and communities.'

He wants to see councils' performance scored by local service users, rather than by national inspectorates, and sees neighbourhood councils as the right level to deal with 'crime and grime' issues.

Mr Byers has also been busy on the local government finance front, telling an NLGN conference in February that the government would pay a high price at the polls if it fails to reform local government finance.

He advocated a council tax system based on regional banding, with local referendums on proposed increases of more than twice inflation and a return to local control of business rates, though with similar safeguards.

But in case anyone thought he was becoming carried away, he said it would be 'far better to take time and get it right than be rushed into yet another short-term fix for local government finance'.

This is the government's position too, with Mr Hope's webchat urging questioners to wait for the balance of funding review before discovering what local government finance reform will look like.

Mr Milburn spoke to the Association of Chief Executives of Voluntary Organisations in May, and set out a blurring of the boundaries between voluntary bodies and territory councils have long considered their own.

He noted that the voluntary sector's role was increasing in the provision of mainstream services, and observed: 'The next few years present unrivalled new opportunities for the voluntary sector to expand still further.

'It offers just the sort of services that are needed today - personally delivered, fairly provided. With the right support it can become even more prominent as the government renews itself in office around its core purpose, a future that is fair for all in our country.'

He said the whole government is hard at work on reforms that would be 'the best antidote to the right's desperate attempt to paint Labour as the party of the centralised, out-of-touch state'.

Power should be passed to the lowest possible level, he said, with the principle of subsidiarity 'at the heart of public service governance'.

Mr Milburn said he would like to see government at all levels focus more explicitly on helping local communities run things themselves.

He added: 'More direct elections to the boards of local services could take place, building on the NHS foundation hospital model we have put in place.'

That he was able to say this even after the embarrassingly low turnouts for the first foundation

trust ballots suggests a faith in the localist principle

that will not be put off by the public declining to use the powers offered.

'Local colleges and housing estates could be opened up to direct community control, drawing on the imagination and creativity of citizens themselves,' he said.

Nothing much here suggests enhanced powers for councils, which Mr Milburn criticised, saying: 'Too often contracts are tentative and short-term, bidding and procurement processes are bureaucratic, decision-making is too slow.'

Those remarks may well raise a hollow laugh from council officers on the receiving end of Whitehall rules about just such processes.

There is as yet nothing cut and dried but the outlines of Labour's approach for a third term, if it wins one, are emerging - more local control over services, but not necessarily directly by councils, and the possible creation of new local bodies with their own accountability.

The shift away from centralisation and inspection is being clearly signalled by Blairites, though whether it would really happen is another matter.

As Mr Milburn has said: 'Giving up power is never easy, but it is necessary.'

One person has however come up with a pithy summary of what they think Labour should do with local government.

Mr Fletcher's response to the Big Conversation question reads: 'More local control, better services, much more involvement in local decision making - local government has to learn to involve people at a local level, not just consult them.'

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