Speech

Localism and the public services revolution

This speech was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

Transcript of the speech as delivered. There’s nothing milk and honey about localism. There’s nothing easy about it - there’s no guidance…


Transcript of the speech as delivered.

There’s nothing milk and honey about localism. There’s nothing easy about it - there’s no guidance manual. That isn’t really the point. Localism won’t deliver homogenous, bland, uniform public services. This is about pushing power outwards, downwards as far as possible. And all the possibilities that arise from local communities seizing power themselves. And taking on the responsibilities and the consequences of getting things right and getting them wrong. So localism is red in tooth and claw.

My message is it’s time to wake up. Because if you don’t localism will have moved on without you.

For the past decade or so everybody’s been singing in favour of localism. No one could get enough of the grassroots and how could you be against the grassroots? But in reality Secretary of States handed out their gold stars to councils doing a really good job at jumping through bureaucratic hoops. And wrote encouraging notes to the ones that were getting better at meeting central targets. We moved from local government making democratically accountable decisions - to local management of services.

Now the Government is putting councils back into the driving seat. So they can go their own way. This seems to alarm people enormously. The most terrifying phrase that is thrown against the localism agenda is ‘postcode lottery’. There’s an idea that if public services are different in one part of the country that this is inherently evil. This rather spurious argument seems to go that if differences arise by chance - that’s okay. But if a Councils makes a decision to do things differently - then that’s not fair.

Well I don’t think rigid uniformity equalled fairness. And if local areas want to prioritise different services because that’s what suits their local area’s needs, then that’s a good idea. We should become comfortable with the truth - that Cornwall is different from Canterbury, and Reading from Redcar - and Norfolk from just about anywhere else in the universe. So I’m happy for them all to drive off in different directions.

My role, the role of central government is to remove any obstacles and create the right conditions for local decision making. Our Localism Bill - currently in the House of Lords - will give councils the legal confidence to act in their residents’ best interests rather than relying on specific powers. Councils will get a ‘general power of competence’ - legal shorthand for cutting central government’s leash.

We’ll also cut red tape. Put an end to thousands of Whitehall targets, to monitoring and inspection. And we’re handing over control of the purse strings and ending ringfencing. Community Budgets are the start of councils and local areas getting a single pot of funding from Government, to spend as they see fit. But I have to say one thing that struck me on Community Budgets. At first I thought it was about putting money together. But it’s about power. It’s actually about one agency accepting and agreeing with another.

Retention of business rates will give councils a direct stake in the local economy. Councils will get the powers and incentives to do what local voters want them to do.

But I still hear arguments that we can’t afford to do localism now. It’s true the country’s credit cards are maxed out. And as with a credit card bill, the longer you leave to pay it off, the worse it gets. But that’s why we can’t afford not to do localism now. When times are tight, people deciding where the money is spent should be people who know and understand their communities - not me.

Councils’ revenue spending will still be nearly £53bn this year. And councils have a choice. They can panic - and salami slice services. Or they use their new freedoms to ask big questions about how services are run. And if they offer the best possible value to the taxpayer. Most councils have taken the second option.

Take the £50bn procurement spend across local government. We’ve put out research by industry experts Opera Solutions today - that backs up estimates made by local government itself - showing councils could save 10 to 20 per cent in procurement spending. That’s £10billion a year. Opera tested their theory across three adjoining councils just looking at spending on energy, mobile phone and legal services. By taking the best price for the same goods and using consolidated spending these councils could shave a collective £1.4m off their bills - a 10 per cent reduction.

This isn’t a criticism of local councils - corporate bodies face exactly the same problems. My department is not immune to that. But attitudes need to be more commercial.

The top three tips that come out of this research are:

  1. compare your spending with your neighbours
  2. join forces and bulk buy
  3. and shop around so you get the best deal

Things every council can do.

The Local Government Group’s own productivity programme is also supporting councils to do things differently starting with quick wins like e-auctions and recovering duplicated payments. To longer-term change such as better asset management and building better business relationships with suppliers. The best public bodies don’t assume they have to do things the way they always have. Deliver the same old services in the same way.

It’s disappointing recent data has revealed that only 29 per cent of local councils currently share back office operations such as finance and Human Resources. We can do better than that. And councils are showing the way across the country.

In Sussex, Adur are one of the first councils to set up a partnership working scheme with neighbouring Worthing by sharing management services and a single Chief Executive. Four years on, they have extended this to nearly all their services including bin collections, financial services, legal, planning, parks, IT. With an annual spending power of just over £10m - Adur have already made over £2m in savings and anticipate ongoing annual savings of £1.5m.

Bury Council have taken the initiative on fraud after realising that nearly 70 per cent of blue badges they issued belonged to persons who were deceased. They drew up new procedures to cut down on any fraudulent abuse and save at least £4,000 a year. With the National Fraud Authority recently revealing that councils could save £2bn a year improving their prevention, detection and recovery of fraud - every step like this is important.

Cornwall Council made sure that out of the £170m savings they identified within a week of the Comprehensive Spending Review, that £9 out of every £10 came from efficiency savings. Including streamlining their waste collection contracts from six to one council wide contract - saving £3m.

And you don’t need to have a unitary council - which have been expensive and time consuming to create - in order to share services. Do we for example need over 350 different business rate collection departments across England, when the policy is generally just to collect the bills on time?

It’s important that there remains democratic accountability, and services are responsive to the ballot box. But I am certain that if councils improved their procurement and joint working on waste services, councils could afford to offer more frequent and regular rubbish collections.

Adur, Bury, Cornwall - that’s an ABC of can do councils protecting the services their communities value with creative thinking. And last week I was in South Tyneside where I saw the great relationship they have with BT. I want to encourage more of this kind of thing. It leaves me in no doubt that local communities have the talent and initiative, to harness the new powers coming their way.

And if people are still concerned that all this untrammelled freedom is going to leave councils answering to no one - let me reassure them. I’m not removing accountability. But instead of being accountable to me, councils are accountable to their residents - their electorate. Transparency is at the heart of this - letting residents see for themselves where their tax money is going. All councils bar one are publishing their spending data over £500. The best remedy for discovering and stamping out fraud, waste and duplication. We are also working with local authorities to improve the way the data is published to make it more accessible and usable. Anyone who thinks asking councils to do this isn’t localism is missing the point.

Localism won’t work if councils just take all the power off central government - power needs to go as far out as possible. Something, which I say with a lot of respect, the recent Select Committee report didn’t seem to comprehend. Local people have got to be able to hold their local bodies to account and make sure their needs are being represented. Which is why the Localism Bill isn’t just about council freedoms. Residents will get to decide for themselves what their area looks like. Community groups will get new rights to save or take over treasured local assets like shops, pubs and post offices. And people will be able to hold local referendums on issues that matter to them.

As this landmark Bill makes its way through Parliament, to anyone who is still complaining that it’s too centralist or not centralist enough - because I still hear complaints there isn’t enough guidance and direction. My message is it’s time to wake up. Because if you don’t localism will have moved on without you. Powers will have passed to local communities and they’ll be using them. They’ll be demanding action from their council too.

So it’s an exciting time to be in local government if you went in because you wanted to listen to people’s needs and act on them. If you just wanted to follow directions and get a pat on the back if you put the right tick in the right box, well that time is gone. This is a time of big challenges and big opportunities. It’s not a time for sleepwalkers. Localism is happening and if you want to grasp it - the sky is the limit. This is a real opportunity to be responsible to local needs, that’s why you got involved and that’s an honourable thing to do.