It’s wonderful to be here at the late Queen Mother’s favorite race course, looking back over the glorious changing landscape of the capital, with the Shard shimmering in the distance.
Thinking not about the famous feats of Arkle or Desert Orchid, but the great achievements of our 7 local thoroughbreds. I know it is corny, but better to be called thoroughbreds than old nags.
You’ve asked me to talk about the challenges ahead, so, if you’ll forgive a horse racing analogy: the stakes are high and the hurdles steep and the going sometimes sticky.
The deficit has fallen by a quarter in just 2 years but last year we still borrowed £108 billion, in the region of the spending power of local authorities.
Some people say it is impossible to improve services when budgets are being reduced, but frankly, councils have shown that necessity is often the mother of invention.
You’ve shown though, well run councils can make savings and improve services at the same time, with a bit of innovation and imagination thrown in.
I could pick out any number of examples of your good work:
- Surrey’s procurement team managed to claw back nearly £56 million simply by doing better deals
- Hampshire is working with neighbouring authorities and members of the public sector such as police and fire to co-locate back-offices, share services and reduce operating costs by 20%
- the South East 7’s approach to special educational is really making a difference to parents and children
Now 1 parent wrote about their son who has learning difficulties. He is: “starting to develop relationships outside the family, where he is safe and being part of his community - he is one step closer to doing things that 11 year old boys should be doing.” I think that’s a great thing.
Now over the past 3 years we’re putting reforms in place that mean - as long as you keep local people are uppermost in your minds - you’ll find local conditions in your favour.
We passed on structural change or more particularly passed on restructuring change. If we’d done that your thinking would have become dominated by governance and process.
In local government, as in central government, government governance and process are like the ‘Creatures from the Black Lagoon’ that sucks you down into the dark abyss stamping out all available life and original thought. Nor is it what matters to people.
It’s important to change the substance first not the structure. You only get real change when structures catch up with reality.
We had a different approach.
First we took steps to free you as much as possible from Whitehall. Abolishing the regional straitjackets, costly Comprehensive Area Assessments and the 100s of top-down targets in Local Area Agreements.
Second we introduced the Localism Act. So along with the General Power of Competence, you practically have no restrictions on what you can do.
People sometimes misunderstand the Act. It wasn’t just about passing power on to local authorities and beyond. It was about passing power down to local authorities to community groups and residents.
Local folk now have the community right to challenge as well as reformed planning. And I think it is something of an unknown change that 450 communities are now working together to put in place a neighbourhood plan.
And today the very first is subject to a referendum in the Lake District. They have the power to understand to effect change in their local area and to make a difference.
Third we gave you much more control over your local budgets. Removing ring fences and rewarding people who build more houses, create more jobs and start up new businesses.
Starting with the new homes bonus and repatriation of business rates. From around a third of your budget raised locally it’s now more than two-thirds today.
So we’ve rebalanced the system. Finally, rewarding success not failure. So:
- loosening Whitehall control
- introduced the Localism Act
- given you local control of budgets
And fourthly, we brought in Local Enterprise Partnerships.
Local Enterprise Partnerships are a way for local authorities to work together sharing finance, and particularly sharing sovereignty to co-ordinate functional economic areas.
Growing Places is a perfect example of how we expect things to work in practice. There is legally a single lead authority acting on behalf of others. In practice, to make things work you have to work with the Local Enterprise Partnership to identify the practices that benefit everyone.
There are plenty of examples of this in the south. Oxfordshire Local Enterprise Partnership is one, using £8.4 million from the government’s Growing Places Fund to ‘unlock’ critical infrastructure projects.
I think the next logical step is for local authorities and Local Enterprise Partnerships to merge their business rates.
So what next?
We’ve already seen that local authorities are the most flexible, most adaptable, most innovative parts of our constitution.
And when I look at what’s happening with Troubled Families it’s clear that local authorities are much, much more capable of productive collaboration than Whitehall itself.
Local government, particularly the magnificent South East, have often been the first to identify where there is wasteful duplication whether in highways maintenance or in procurement.
You’ve nothing to prove. So you’ve proved yourselves. And that’s why you can expect plenty more from us, both in terms of freedom and powers.
Now we’ve seen the first wave of City Deals. And there are roughly 20 more to come. I expect even more to follow, because the clamour for powers is growing all the time.
Similarly Community Budgets have shown how it’s possible to transform services and make a difference to local people.
That combination of these 2 - City Deals and Community Budgets - is where this relationship is going to go. I’ve said to you before I see neighbourhoods as the central building block and these will be an important way forward to arrive at that.
And we’d like to help you do to share services and growth across the wider public sector, because the beneficiaries are always local residents.
I’ve little doubt that Lord Heseltine’s idea of having a single pot of money that supports much greater working across local authorities and other public bodies is a sign of things to come.
In other words, we’re going to keep fighting your corner, because only local authorities can transform their local services.
Local authorities have got the right connections. They’ve got the right contacts. They’re elected and accountable. Above all, they’re got the track record of achievement, to deliver a far, far, better deal on behalf of the people you serve.
It’s been a long time since Tip O’Neill said “all politics is local”. It was in the context of showing that the success of national policies is tied to the ability to understand and influence local services.
Whitehall doesn’t understand the pinch points, where it can make a difference at a local level, but that’s what local authorities are all about.
We’ve seen with the Growing Places Fund how they can work with Local Enterprise Partnerships to take the strategic view.
And even in difficult times this represents the future. Because the future is bound to be local.