The future of local government: Developing a 10 year...

The future of local government:Developing a 10 year vision

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Foreword

by the Deputy Prime Minister

Local government has a crucial role to play in creating sustainable communities. It can lead the local community,reflecting and responding to the needs and priorities of local people. It brings together a wide range of servicesto deliver the outcomes that matter to people locally. And it is democratically accountable to all citizens,balancing the interests of individuals and groups with those of the wider community.

This paper recognises that local government should be at the heart of our communities in the years ahead. But it also makes clear that this role cannot be taken for granted. Both local and central government will need to change to meet the challenges of the next ten years and to ensure that people will look to their council as aplace where things get done.

This paper offers an opportunity to build upon existing partnerships between central and local government, withclearer lines of accountability and responsibility at each level, underpinned by trust and confidence in the otheras a partner. It also makes clear the value of a more coherent approach across central Government towardslocal government, while recognising that different services may need different approaches.

We need to look at local government in relation to the future of regional government. We, and most localauthorities, also recognise that local partnerships are crucial to what local authorities do.

The issues raised here are not easy to resolve and they lead to some difficult choices. Local and centralgovernment need to look hard at what is working well and what is not working well at present.

A clearer and more coherent approach towards local government will help to realise our shared ambition tocreate places where people want to live and to provide services that they value.

Rt Hon John Prescott MPDeputy Prime Minister and First Secretary of State

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The future of local government: Developing a 10 year vision

Contents

Section 1: A vision for the future 7

– why a new vision and long term strategy is needed; the current picture; roles and responsibilities;regional and cross-border issues; the key challenges; next steps.

Section 2: Vibrant local leadership 11

– the importance of leadership and good leaders; the community leadership role; the supply andcapacity of local leaders; political and managerial structures.

Section 3: Citizen engagement and participation 13

– levels of trust, participation and interest; decentralisation and devolution; neighbourhood arrangements.

Section 4: Service delivery and the performance framework 15

– driving service improvement; satisfaction levels and user expectations; the performance framework;approaches to different services; user focus and user empowerment; efficiency and cost-effectiveness;the supply base and procurement; new technology; the workforce.

Section 5: A new settlement between central, regional and local government 19

– the policy context; accountability and responsibility; patterns of service delivery andorganisational structures; local government finance.

Section 6: Next steps 21

– the engagement process; outputs; testing out ideas.

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Section 1 – A vision for the future

This document describes how the Government willdevelop a longer term strategic approach to localgovernment in England. It sets out an overall directionfor reform, within the context of a vision for localgovernment in ten years across four broad themes:leadership, citizen engagement, service delivery anda new settlement between central, regional and localgovernment. We start with a vision of the outcomeswe seek to achieve for people and places over thenext ten years and the implications this has forlocal government.

The development of this vision is rooted in the fourprinciples of public service reform set out by the PrimeMinister in March 2002. These are:

• national standards for the things that matter mostto people, to ensure that citizens have the right tohigh quality services wherever they live;

• devolution and delegation to the front line, givinglocal leaders responsibility and accountability andthe opportunity to design services around the needsof local people;

• flexibility for public organisations and staff to meetthe aspirations of users;

• more choice for service users.

The Government’s aim is to put people at the centre ofpublic services. Local government, at the heart of thecommunity, with a knowledge about local needs andin the front line of delivery, is in a pivotal position toensure that public services are designed around theneeds and preferences of local people andcommunities.

This document is not a full strategy, complete withpolicy proposals, delivery plans and resourcecommitments. Nor does it seek to cover every issuethat affects local government. The objective is toensure that all those with an interest in localgovernment have an opportunity to join a discussionabout its future. There will be a series of papers onspecific issues published over the next few months,leading up to a fuller document once the issues andevidence have been debated.

The world will not stand still while this debate takesplace. In key service areas significant changes arebeing considered or proposed to improve delivery andoutcomes. The development of the longer termstrategy for local government will be taken forwardalongside these, informing and being informed bythem. In some areas these changes present a bigchallenge, asking local government to take on adifferent set of responsibilities – be it as provider,commissioner or customer advocate. But thesechanges also offer new opportunities to develop thestrategic and community leadership role that shouldbe at the heart of effective local government.

What is local government like at present?

The development of a longer term strategic approachdoes not start from a clean slate. Nor should itdiscount the significant achievements of recent years.The investment in and reform of local governmentsince 1997 have contributed to substantialimprovement and demonstrated the enormous energyand potential within local government if it is properlyfunded and imaginatively led.

Year on year increases in Government investment inlocal government have amounted to a 30% rise infunding in real terms over the last seven years.

Local authorities in general and the best performingcouncils in particular have, over the last few years,benefited from a very significant reduction in regulationand prescription, including the replacement of centralborrowing controls with the new prudential regime.Inspections, plan requirements and other regulationsare being greatly reduced and better targeted, allowinghigh performers new freedoms and flexibilities in settingpriorities and delivering excellent outcomes.

Introduction of the Comprehensive PerformanceAssessment in 2002 has helped deliver a morecoherent framework for assessing councilperformance. It has also demonstrated significantimprovement, with over half of the upper tier andunitary councils now rated as Good or Excellent. Localauthorities also now routinely consult residents aboutservices. The best performing councils havefundamentally changed how they provide services tousers, using feedback to drive improvements inservice delivery and to provide greater personalisationand choice.

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But these examples of excellence, and the reformswhich have underpinned them, can only increase thesense that much more could be achieved across alllocal authorities, if the right environment is created.

Why do we need a new vision?

One of the Government’s key priorities is to createsustainable communities – places where people wantto live and that promote opportunity and a betterquality of life for all. Local government has a vital rolein this. Sustainable communities require anenvironment of good governance, public participation,partnership working and civic pride. Effective localgovernment is at the heart of each of these. Localgovernment also has a vital part to play in workingwith local people to create the conditions thatunderpin a sustainable community: a flourishing localeconomy; good quality public services; a diverse,vibrant and creative local culture; communitycohesion; and a sense of place and pride.

A new approach to local government couldimprove the local delivery of services, increase publicengagement in the decisions that affect them, andlead to better outcomes for people and places. This isa big prize, and one that makes this project worthwhile.

Roles and responsibilities

The strategy will look openly at the respective rolesand responsibilities of central, regional and localgovernment for different services. Clarity is neededabout those services which require nationallydetermined standards and priorities and those whichshould be locally determined with the minimum ofdirection from central Government. Local authoritiesneed to operate in a variety of roles in differentservices across this spectrum whilst still developing acoherent overall vision and strategy for the area.

For those services which do require nationalstandards, the role of local government will bedifferent, but no less important. For example, therecently published Government Five Year Strategy forChildren and Learners sets out a powerful newstrategic and community leadership role for localauthorities in relation to education and other servicesfor children and young people.

The regional and sub-regional dimension

The longer term vision for local government mustrespond to the emergence of a strong regional voice.The Government Offices for the Regions now carry outwork on behalf of ten Whitehall Departments, drawingtogether a variety of national policies, strategies andfunding. Their work brings them into daily contact withlocal authorities. This includes a role in local PublicService Agreements, civil contingencies planning,neighbourhood renewal and housing.

Regional Chambers also have an important role inpromoting the region, in the overarching sustainabledevelopment frameworks and in economic strategies,spatial strategies (including transport and waste) andhousing strategies. Local government is closelyinvolved in these developments: councillors make uparound two thirds of the membership of RegionalChambers and also serve as board members onRegional Development Agencies.

The Government has set out its plans to decentraliseand strengthen regional policy, including theestablishment of directly elected assemblies in regionswhere people want them, creating a democraticallyaccountable, strategic body at a regional level.Referendums are planned for three northern regions.

The importance of sub-regional approaches is alsocoming to the fore, to allow neighbouring authorities to work together to address issues which cross localauthority boundaries, such as housing, planning,transport and economic development. And somecross-boundary issues, such as policing, do notalways involve areas which share borders but can‘jump’ areas, requiring other ways to ensure joining upnationally or at regional level.

A longer term vision for local government must providea clear view of a local authority’s role and relationshipwithin this strengthened regional level, not just as itstands at present but as it may look in the future.


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What is so important about localgovernment?

Local government provides democraticallyaccountable leadership to the whole community. It hasdirect, regular and frequent contact with the majorityof residents. This provides the potential for:

• delivering government which is close to people andthe issues which concern them;

• involving local communities in tailoring nationalservices to local needs and priorities;

• finding innovative, joined up solutions to specificlocal problems;

• co-ordinating the delivery of other locallyprovided services;

• combining good management with strongaccountability, joining up and balancingcompeting demands.

So local government, in applying the principles ofpublic service reform, is uniquely positioned to make abig contribution to many of the issues that mattermost to people. But this requires strong, self-confidentlocal authorities in all areas – leading theircommunities, securing good local services, workingeffectively with local, regional and national partners,and with a strong democratic mandate.

The challenges in this agenda

There are big challenges in this agenda for all thestakeholders, both national and local. The newapproach we are seeking must:

• establish a more coherent and stablerelationship between local and centralgovernment – the need for national standards inkey areas is widely accepted, but this relationshiphas sometimes been characterised by over-burdensome controls, conflicting priorities andunjoined up initiatives. There will still be a need fordifferent approaches in relation to different services.But central Government as a whole should providea coherent face to local government and, in turn,local government and its partners should be able toengage in a joined up way with central Government;

• clarify accountabilities and responsibilities ateach level for the delivery of services – thecurrent arrangements of targets, standards, funding,monitoring and engagement are highly complex andoften confusing. Clear principles are needed aboutwhere the primary responsibility for setting priorities,standards and targets should lie on a service byservice basis;

• improve local community leadership – somecouncils are seen as major players in their areas,but elsewhere they lack the confidence of citizensand the trust of local and national partners. In somecases, central Government and other partnersprefer to go around rather than work with councilsto get things delivered;

• increase levels of citizen engagement – peoplehave low levels of trust in politicians and low levelsof participation and engagement in local decisions.It is vital to increase both in order to deliversustainable communities and to make publicservices more effective and responsive;

• secure improvements in public services – risingexpectations of service users are not alwaysmatched by improvements and innovations inservices. Local authorities should drive improvementin the services they deliver directly and alsoinfluence the other services which local people relyon. Services must become much more focussedaround the needs and preferences of service users,with increased personalisation and choice;

• ensure the finance system is fair and fit forthe purpose – supporting what we expect localgovernment to deliver in the years ahead andsupporting local flexibility and local accountability.The Balance of Funding Review has looked at thepros and cons of options for improving the currentsystem. Work on finance will continue alongside thedevelopment of this strategy, ensuring a clearlink between the two.

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For both local and central government, this agendameans building trust and confidence in the other as apartner. This trust cannot be simply willed. It must bebuilt on evidence of change on both sides anddemonstrable improvements in the outcomes thatmatter. But this also means both sides being preparedto try out new ways of doing things and taking somemanaged risks.

Taken together, these challenges present a tough andwide-ranging agenda for reform. But one which,if it is secured, would create a stable, long termrelationship between local and central government,allowing both sides to meet the priorities andexpectations of local people.

What happens next?

The remainder of this document describes someof the main elements that a longer term strategicapproach to local government must address:leadership; citizen engagement; service delivery andthe performance framework; and a new settlementbetween central and local government.

The intention is to start an open but focussed debatein each of these areas, using all the best evidenceavailable, which will then lead to a clear sense ofdirection, underpinned by a coherent set of policies.

Whilst this debate will be an open one, it does nottake place in a vacuum. The public service reformagenda is now well established and has somesignificant strands of activity. The 2004 SpendingReview has concluded and Government Departmentsare setting out strategic plans with public serviceagreements and targets. There will be referendums onelected regional assemblies in three regions and,depending on the results, further activity in establishingnew structures. Some far-ranging changes are beingconsidered or proposed in areas such as children’sservices.

The development of a vision and strategic approachto local government will need to recognise all theseactivities and their impacts. However, this underlinesthe importance of a project which looks to the longerterm and at local government as a whole.

Under the umbrella of this document we will publish anumber of related documents in the coming months,clearly identified by the local:vision logo, which explorein more detail the issues that underpin the strategy.We will also organise events around the country toengage stakeholders in discussions of differentaspects. We then aim to draw the discussions backtogether in a document, possibly in the form of aWhite Paper, next year.


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Section 2 – Vibrant local leadership

Good leadership is essential to driving improvement.This means securing individuals with the right skillsand qualities to provide strong and visible leadershipto communities. It also means developing theleadership role of councils at both political andmanagerial level.

Abundant evidence exists of the importance of goodleadership in local government, including AuditCommission reports following ComprehensivePerformance Assessments of local authorities.Councils with strong leadership generally do well;councils with weak leadership often perform badly.

Strong leadership has a number of elements. It meansbeing:

• enablers of the community – standing up for,learning from and empowering local people,including the most vulnerable members of thecommunity;

• champions of the area – building a vision, setting aclear direction, and ensuring this is delivered;

• challengers and scrutineers – of public servicesmore generally;

• shapers of services around the citizen – forginglocal partnerships to marshal resources in a waythat best meets the community’s needs;

• decision-makers – setting priorities and beingaccountable for tough choices in balancingcompeting demands and interests.

There are three key issues to look at:

• the role of local councils as leaders of communities;

• how to attract, retain and equip good calibre peopleto lead local government – politically andmanagerially;

• the political, managerial and constitutional structuresthat can best underpin good local leadership.

Community leadership

Councils have a clear local democratic leadership roleas the only body elected by and accountable to thewhole community. This role requires a number ofdifferent skills and attributes. There is leadership indecision-making and the accountability for what isdelivered directly by the council. There is a role inleading local partnerships and bringing stakeholderstogether to help meet local needs and priorities,providing a focal point for local decisions. And thereis a leadership role in enabling communities to leadthemselves, developing social capital, fostering greaterengagement in local decisions, and taking action topromote inclusion.

Government has promoted the community leadershiprole of councils. Recent examples include thedevelopment of Community Strategies and LocalDevelopment Frameworks. The creation of a power ofwell-being has allowed local authorities to carry outactivities which promote the economic, social andenvironmental well-being of their community. But thereis still some uncertainty about the nature and thelegitimacy of this leadership role.

The role raises fundamental issues about the spacethat councils and their partners have to respondeffectively to local priorities. Overall delivery might bebetter served by, for example, securing a relationshipbetween the council, its partners and Government thatallows more focussed and coherent engagementbased on an agreed set of priorities.

Whilst the basis for the community leadership roleis the democratically accountable nature of localgovernment, the weight it carries within thecommunity, amongst local people and with localpartners, cannot simply be legislated for. This willdepend on the effectiveness of individual councils andtheir leaders. It must be earned, not granted, but thespace must also be made for local authorities to takeon and demonstrate this capacity.

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The supply and capacity of future leaders

The Government has recognised the importance ofsecuring, developing and retaining high calibrepolitical and managerial leaders and has launched,with the Local Government Association, a Capacity-Building Programme and supported the establishmentof a local government Leadership Centre to facilitatethis. This is responding to apparent difficulties insecuring sufficient numbers of managers andcouncillors with the diversity of backgrounds andexperience and the range of skills necessary.

Further measures should be considered to help enhancethe supply, quality and diversity of managers andcouncillors. For example, there should be more women,young people and people from ethnic minorities ascouncillors and in senior management positions.

Some of the issues are for political parties and othersto consider, but there is also a potential role forGovernment. This might mean:

• measures to promote greater clarity amongst thepublic about who is responsible locally for thedelivery of each service;

• examining the roles and numbers of councillors, theways they are recruited, the training they get, andremuneration;

• looking at the relationship between councils andother more local neighbourhood forms ofengagement and representation, including the rolesof people on each of these bodies;

• addressing the image and status of localgovernment, to make it more attractive to a widerrange of people with a wider range of skills.

Political and managerial leadershipstructures

Changes to organisational structures can have animpact on leadership roles and on the calibre ofleaders which can be attracted. For example, theseparation of executive and scrutiny roles wasintended to facilitate efficient, transparent andaccountable decision-making in councils. The latestpreliminary evidence suggests that this is having animpact – decisions are being made more quickly, theprocess is more open and visible, and there is agrowing feeling of enhanced accountability.

The evidence is that the new political managementarrangements work best where there is both strongleadership and strong scrutiny, and with a clearseparation between the two. The elected mayoralmodel offers a version of these conditions and somemayors have achieved a relatively high degree ofpublic recognition compared with traditional leaders ofcouncils. In those places where strong, visible leadershave emerged and worked well, we should look at thefactors that played a part in this and whether thesecould be applied elsewhere.

The role of scrutiny is still bedding in and is lessdeveloped and understood than the executive role.The separation of the roles has also left some local politicians unclear about the contribution theycan make.

If the separation of executive and scrutiny roles is tobecome the foundation for local structures, bothelements will need to be developed. This raiseschoices about the form of executive and scrutiny roles.

Our vision is: councils looked to by local peopleand local partners as effective community leaders.

This requires: new ideas to develop the communityleadership role, to attract and develop high qualitypolitical and managerial leaders, and to ensure wehave political and managerial structures that are fitfor purpose.


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Section 3 – Citizen engagementand participation

Greater public influence over the delivery ofpublic services will ensure they better reflect thecommunity’s needs and preferences – including thoseof vulnerable or marginalised groups – and increasesatisfaction in those services. Greater engagement willalso enhance people’s sense of pride and involvementin their place.

A high level of citizen participation and engagement isvital to the health of government. It can help to:

• build sustainable and cohesive communities byre-engaging citizens in civic life and buildingsocial capital;

• make the delivery of public services at local levelmore effective and responsive, increasing theunderstanding, influence and choices citizens haveover them.

Trust, participation and interest

People trust political institutions, local and national,less than many other bodies. A minority of people nowvote in local elections. When asked in a recentNOP/Electoral Commission survey why they didn’tvote, 45% said they didn’t have time to vote, 41%said they didn’t think voting made any difference, and37% said they didn’t know what the issues were.

But we know people will vote in numbers if there areissues of immediate relevance, as evidenced by thehigh turnouts for votes on Large Scale VoluntaryHousing Stock Transfers (LSVTs).

The introduction of postal voting has also shown thatmore people will vote if it is made more convenient,but a real shift in participation levels will depend onconvincing people that councils and councillors matterand can make a difference to their lives.

Decentralisation and devolution

The health of representative and participativedemocracy are interrelated. Alongside local elections,as well as voter turnouts, there need to be more andbetter opportunities to participate and exert influenceon local issues and decisions. Devolution should notstop at the town hall. Devolving and decentralisingwithin local areas can maximise the ability of the frontline to tailor services to the needs of communities.

There are a variety of models for giving local people a stronger voice in smaller areas within localauthorities, including:

• setting up new parishes;

• council led decentralisation and devolution, suchas through area committees, and an enhancedrole for non-executive councillors within thesearrangements;

• self management arrangements such as tenantmanagement organisations;

• development of neighbourhood managementinitiatives or arrangements which also exercise somegovernance functions;

• a bigger role for interested individuals in runningservices, extending the examples of parentgovernors in schools to other areas.

This list is not exhaustive, but all will require significantcommunity capacity building in order to increaseengagement and give citizens the skills andopportunities to engage in them effectively. However,community capacity building, whilst resource intensive,has direct benefits. It can reduce crime and the fear ofcrime, anti-social behaviour, vandalism and socialisolation. And it can improve health, confidence andthe quality of life.

The services that have been the major candidates formore decentralised arrangements have in the mainbeen those associated with the liveability agenda andthose which most affect how satisfied citizens are withtheir council – eg street cleaning, waste collection,community safety, management of the environment,youth activities, traffic management and housingmanagement.

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Central Government could play a bigger role in furtherencouraging decentralised or more localisedgovernance arrangements. The specific locus ofGovernment might be strongest where additionalfunds are being provided for the renewal of themost deprived areas.

Who defines a neighbourhood?

There is an argument for local governancearrangements which are developed in the light of localcircumstances. But there are issues aroundconsistency and coherence which might add weightto a broader approach. Self-selection can riskthe emergence of arrangements which reflect somenarrower neighbourhood interests and reflect divisions,for example across racial or income lines. These mightnot easily sit with the wider community interest inbuilding community cohesion or addressing pocketsof deprivation.

Funding

The funding for neighbourhood structures mustalso be addressed. Should they, for example,have the power to raise money locally as well as tospend delegated budgets? This could give them morecredibility and independence but could reinforceinequality, with richer areas able to afford betterservices and the poorest being asked to pay moreto fund improvements.

Trust and engagement

Structural or technocratic changes such as theintroduction of new neighbourhood models, postalvoting or all-out elections, may have a part to playin increasing participation. The fundamental issueremains, however, to connect people with politicalprocesses and make them believe that participationwill make a difference to their lives. This is a nationalas much as local problem and will require an ongoingeffort from all those involved and interested in thepolitical process.

Our vision is: greater participation by people in the decisions that affect them locally, leading toservices which better match the needs andpreferences of communities.

This requires: building trust that engagement willmake a difference, and offering new opportunitiesto engage, particularly for those who have not felt empowered.


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Section 4 – Service delivery and theperformance framework

All councils should secure a wide range of highquality, cost-effective services, tailored to the needsand preferences of citizens. This requires a constantfocus on improvement and a constant challenge tocurrent ways of delivering services. Councils, asrepresentatives of the whole of the community, areuniquely placed to ensure that integrated services aretailored around the needs of users.

Recent years have seen some real improvements inlocal service delivery. Education and social servicesinspections have shown substantial improvements inperformance. Local authority performance morebroadly, measured against a basket of Best ValuePerformance Indicators, has improved by almost 7%since 2000/2001. And Comprehensive PerformanceAssessment of councils has found significantimprovement, with over half of the upper tier andunitary councils now rated as Good or Excellent.

However, there is evidence that in some areasperformance is beginning to plateau and that there willbe a need to secure more local commitment to drivefuture improvement. There is also some evidence thatthe most disadvantaged citizens may not be benefitingas much as the average from service improvements.

Rising expectations and falling satisfaction

Citizens’ expectations of services are rising. A People’sPanel survey and a Best Value user satisfaction surveyboth show a decline in satisfaction with local councilsoverall, though with higher levels of satisfaction withmany individual services and with a markedly higherlevel of satisfaction amongst those who use theservices.

New ways must be found to encourage and enableauthorities to offer a wide range of attractive publicservices which meet the needs and preferences ofcitizens, and which are delivered through a diverserange of partnerships and approaches.

The performance framework forlocal services

The improvements in public services over the last fewyears, including improvements in local services, haveoften been driven by national priorities and targets.This was particularly appropriate at a time when manypublic services were being turned round after a longperiod of underinvestment and underperformance, andwhere people across the country had expressed astrong desire for decent national standards.

However, the creation of large numbers of nationaltargets and standards, accompanied by detailedinspection and regulation, now risks creating anincreasingly rigid system. Whilst it was effective insecuring decent minimum standards in many areas, it limits the opportunities for competent deliveryorganisations to provide additional value or to tailorservices to local circumstances and priorities. In otherareas, the approach has not secured the standardsaimed for, with high levels of variation in performanceacross public bodies, ranging from excellence topoor performance.

This raises two questions: firstly, whether there is morethat can be done to free up all councils fromunnecessary inspection and input based controls; andat the other end of the spectrum, whether the currentframework for addressing persistentunderperformance is effective.

HM Treasury’s Devolving Decision Making Review hasmade recommendations for a more devolvedapproach. Its report, ‘Devolving decision making:Delivering better public services’ (March 2004)includes the following:

The review concludes that the pace of publicservice improvements will quicken if there is asubstantial reduction in external targets and controlsbeyond PSAs. This approach should clarify theGovernment’s true priorities, so increasing thelikelihood of achieving them. At the same time, it provides the freedom and responsibility for schools,hospitals, police forces and local authorities to tailortheir services to the needs of their communities andto develop priorities that reflect needs acrosslocal areas. (6.2)

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It goes on to say that:

These changes must be underpinned by increasedlocal performance management capacity. (6.3)

This points to a performance framework in whichcouncils take more responsibility for continuousimprovement in their area. If this foundation of stronglocal performance management is secured, otherchanges to the framework could follow, including: asmaller set of national targets and minimum standardslimited to areas of high national priority; fewer input-focussed levers; a strategic and joined up approach toregulation, inspection and performance management;a greater acceptance of local diversity in areas whereuniversal standards are not appropriate; tailoredsupport, including capacity building and intervention,proportionate to risk and opportunity; and a moremature, open, joined up and individualised relationshipbetween local, regional and national government.

The necessary corollary of this devolution anddecentralisation is a strengthened accountability tolocal people, including better, more timely informationon how local bodies are performing, and bettermechanisms for local people to challenge existingstandards and forms of service delivery.

As part of a new performance framework – shiftingto a greater focus on outcomes and more localaccountability about how such outcomes are secured– the Government will need a more tailored dialoguewith individual places about priorities andperformance. Local Area Agreements (LAAs) mayprovide a new focus for this dialogue.

The intention to pilot Local Area Agreements wasannounced in the 2004 Spending Review. LAAs couldprovide a common framework for channellingadditional funding to local authorities and bringtogether local partners to achieve better outcomesagreed with Government. Further details of LAAs, andproposals for piloting them, are being published inconjunction with this document.

All of this implies a greater alignment in Government’soverall approach to performance monitoring acrossboth services and corporate interests, as well asgreater coherence in the way those relationships aremanaged. Enhanced capacity in Government Offices,utilising practitioner expertise along with others, islikely to be key to this future.

The characteristics of an effectiveperformance framework

An effective performance framework must:

• drive continuous improvement in the delivery ofcost-effective, efficient services that meet users’needs and expectations;

• support greater accountability to local people andacross local partners for performance;

• secure the effective delivery of national interests andpriorities;

• encompass the contribution of partnership workingto delivering local outcomes.

This in turn requires the following elements:

• robust internal performance management systemsand a culture of challenge within local authorities;

• stronger challenges to current performance levels,including effective ways to deal with persistentunderperformance. A reduced reliance on pressurefrom central Government through targets,inspections, and other levers, must be balanced bygreater internal and external challenge. This shouldinclude challenge from within the organisation andchallenges from local people, either as users,potential users or as taxpayers. For many services,a viable market of alternative providers should alsoprovide a challenge to the current model ofprovision, so offering a genuine alternative anddriving up standards;

• an effective forum for dialogue between centralgovernment and its local partners. Within a moredevolved structure, central Government will continueto have a legitimate interest in the delivery ofnational priorities. This may be expressed through anarrower set of national targets and minimumstandards. Beyond these, a genuine dialoguebetween local partners and central Governmentshould consider what the local partners have agreedas local priorities and set as challenging targets;


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• a model for setting out clearly the responsibilities ofall the partners in delivering the agreed priorities,with mechanisms to hold them jointly accountablefor delivery and to provide the resources necessary,alongside rewards and incentives for success and,where necessary, effective sanctions in case offailure. Local Public Service Agreements haveevolved into an effective model for bringing localdelivery partners together in a dialogue with centralGovernment. Local Area Agreements could build on these;

• useful and timely performance information.This should include information that is useful to thedelivery organisation, to users and taxpayers, toGovernment and to inspectorates, regulatorsand auditors.

Applying the principles of reform to differentservice areas

Applying the principles of public service reform anddevolved decision making to local government andlocal services throws up significant challenges forcentral Government. These include: how to reduceinput levers and controls; how to agree and sharepriorities and outcomes; and how to establish adelivery dialogue on priorities and performance thatreplaces levers which give the illusion of control.

The way the principles of reform and the performanceframework are applied will vary from service to service.A uniform approach will not be appropriate to all. Thework in developing this strategy must therefore berooted in an understanding of the different servicesand of the outcomes each is intended to deliver. Andwork to develop the overarching framework must betaken forward alongside work in each of these majorservice areas.

An acceptance of greater local diversity in outcomesby central Government must follow from evidence thatit is also acceptable to local people. At present there isevidence that, for some services, people are not willingto accept variations from place to place, often referredto as the ‘postcode lottery’. However, in otherservices, particularly those related to liveability issues,local people see merit in being able to set localpriorities and standards. In all services, it will beimportant to ensure that minimum standards aresecured and that variations result from local choices,not poor performance.

Education and other children’s services provide anexample of an area of high national priority whereGovernment has recently set out a radically reshapedrole for both local and central government. TheGovernment’s Five Year Strategy for Children andLearners challenges both to move towards a newenabling and empowering role.

Children’s Trusts, first set out in the Green Paper,‘Every Child Matters’, will bring together social care,education and health in a way that is focussed aroundthe needs of children, young people and families.Local authorities will, as a key partner in the Trusts,need to develop new ways of working with others tointegrate services and provide the best deal forchildren, helping to bring together all those who cancontribute to this outcome.

For education this means, as set out in the Five YearStrategy a future role for local authorities aschampions of the interests of parents and pupils,providing leadership and vision, linking the educationalstrategy to the overall vision for the area, as well asretaining a key strategic role in co-ordinating manyactivities.

Other services will require different approaches, but inall the key services which matter to local people,whether or not the local authority is the direct provider,there will be a strategic and community leadership rolefor the council, bringing partners together to ensurethe needs of the whole community are met.

User focus and user empowerment

Services should be designed, delivered and joined uparound the needs and preferences of users, whereverpossible with the users involved in the key stages ofdesign, development and review. In many areas, usersare demanding more personalised services, includingchoices about the services provided and the waysthey can be accessed.

More opportunities for tailoring services to meet theneeds and expectations of users should bedeveloped, including options about the services thatare provided, how they are accessed and delivered,and who provides them. This will also need to addressthe impact that offering more choice and personalisedservices may have on equity and efficiency.

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The empowerment of users to challenge performanceis a potentially powerful driver for improvements inservices. It can be a positive force in shaping servicesaround the needs and preferences of users. It meansdeveloping mechanisms for users and local peopleeffectively to challenge councils when things go wrongin individual cases and collectively in the face ofpersistent poor performance. This might include theright to demand an alternative model of provisionwhen a service is not meeting expectations.

A greater say for users may require a framework forneighbourhood level activity that enables local peopleto become involved and which channels theirinfluence. This does not necessarily mean a uniformityof approach – the diverse natures of local communitiessuggests that a variety of neighbourhood modelsmight be needed to fit different local circumstances.

Doing business better

Councils must get value for money for local people,providing good quality and affordable services. Thepotential for greater efficiency and savings across thepublic sector has been highlighted in studies related tothe 2004 Spending Review. These confirm that localgovernment accounts for a very significant part ofpublic spending and has opportunities to make a bigcontribution to increased public sector efficiency,particularly in areas such as procurement and backoffice integration. However, these are not new ideas.Some councils have adopted innovative partneringarrangements with the private sector to develop theconcept of services available round the clock to localpeople and to expand choice about how they accessthose services. Others have adopted joint solutionswith other councils in a bid to achieve greaterefficiency and economies of scale.

We need to consider why these solutions have notbeen taken up more extensively across localgovernment to date. As well as incentives within theperformance framework, this may mean newapproaches which will speed up transfer of bestpractice and standardised solutions where appropriate.

The development of a contestable and competitivesupply base can provide opportunities for greaterinnovation, efficiencies and higher quality services.Councils should play an active part in the developmentof the supply base, attracting new service providers

including public service providers such as councilswith excellent service teams who could provide thoseservices to others. Securing the benefits of this widerand more efficient supply base will depend on councilsadopting progressive procurement and commissioningstrategies, recognising the strong link between goodprocurement and performance improvement.

The strategy must demonstrate how we can continueto invest in new technology in ways that securesignificant pay-back in streamlined back officefunctions alongside improvements for the public interms of access, quality and coverage.

Improvements are also critically dependent on councilshaving access to the right people with the right skillsat all levels. Local government must become moreattractive to good people from a wider range ofbackgrounds, becoming a first choice employer.

Our vision is: improvements in local services whichsecure national standards where set and whichmeet the needs and preferences of local people.

This requires: a new relationship between localand national government based on dialogue,strong performance management within all local authorities, clarity about where nationalstandards and local differences are appropriate,and effective use of the range of providers andtechnology available.


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Section 5 – A new settlementbetween central, regional and localgovernment

At the heart of a more effective framework fordelivering local services and improving localgovernment must be a more coherent and stablerelationship between central, regional and localgovernment. A new settlement should build onthe Government’s principles of public service reform,underpinned by a strong performance managementframework and clarity about responsibilities andaccountabilities at each level of delivery.

The Government has set out the key principles of publicservice reform – national standards, devolution, flexibilityand choice. In the context of the 2004 SpendingReview, the Devolving Decision Making Review, theEfficiency Review and the Lyons Review have all putforward ideas for improving the delivery andmanagement of public services which share many ofthe same characteristics. These provide a basis fordeveloping a new approach to local government, withclearer lines of accountability and a greater capacity forlocal people to influence delivery and hold thoseresponsible to account.

Accountability and responsibility

There is a high level of complexity in the deliverychains of even relatively simple single services, withlarge numbers of bodies involved in accountability (forfunding and for performance) and in delivery. Fundingpatterns are also complex, with many services relianton a number of different funding streams and with noobvious consistency or rationale for differentapproaches.

There is also strong evidence of a general lack ofunderstanding by local people of who is responsiblefor what at a local level, or where the money comesfrom. Clearer lines of accountability are necessary,both horizontally between local bodies and vertically toregional and national bodies, if citizens are to influenceand hold to account those responsible for delivery oftheir local services.

A more coherent approach across centralGovernment

Better joining up across central Government isneeded to ensure that a coherent message is given tolocal government and that actions by one part ofGovernment complement and support the overall aimsfor local delivery. At present there is a risk thatfragmentary and contrasting (and even occasionallycontradictory) approaches can hinder improvement.

A more coherent approach does not mean uniformity.Different services will require different approaches. Italso does not mean simply removing some of thelevers available to different Departments. If a newapproach is to work, and to secure the vital support ofall those with an interest in the services, it must startby identifying better ways to secure the outcomes thatlocal and central government want to see, building agenuine working partnership that delivers results.

Patterns of service delivery andorganisational structures

The organisational structure for the delivery of manylocal functions and services has the appearance ofhistorical accident rather than design. Attention hasrecently been paid to areas such as regulatoryfunctions, to determine whether the current pattern isconducive to effective and efficient delivery.

Where an Elected Regional Assembly is establishedthis will be accompanied by a move to single tierunitary local government, so that there are not threetiers of local government in any area. This will providefurther evidence of the efficiency and effectiveness ofdifferent types and sizes of councils in deliveringparticular services.

Some have argued that stronger, larger unitarycouncils might offer advantages in all regions, such as:

• the political and corporate capacity to secure moreeffective services;

• the clout to reach across local areas, especially inkey services, and to plan services across a widerarea with a range of partners;

• the size and range of opportunities to attract higherquality political and managerial leaders.

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There are increasing signs of interest in unitarygovernment. However the Government has no plan toreplace two tier local government in areas where anElected Regional Assembly is not being established.

Coterminosity is also emerging as an important issue.Public bodies from traditionally separate services arenow seeking to work closer together to deliveroutcomes in areas such as health or communitysafety. Where the borders for different organisationsdo not match, this can be an obstacle to effectivejoint working.

In all cases, form should follow function, but there is aneed for a debate to ensure that local authorities, aswell as other governance structures, are fit for the21st century.

Local government finance

The local government finance system must provide asustainable platform for the roles and responsibilitieswe see for local government in the years ahead, fit forthe purpose.

First, local authorities must be able to plan ahead. A concern frequently expressed by local governmenthas been the difficulty of planning ahead effectivelywhen central Government funding to local authoritiesis determined on an annual basis. In the 2004Spending review, the Government announced that itwill introduce three-year revenue and capitalsettlements for local authorities following a fullconsultation. This will improve certainty and planningfor councils and support them in realising efficiencysavings, improving financial management and reducingthe volatility of council tax increases.

We will also now build on the findings of the Balanceof Funding Review in our work to secure a fair andsustainable system for the future funding of localgovernment. We are already committed to revaluingcouncil tax and to finding further ways of reforming itand making it fairer. The independent inquiry into localgovernment funding which has been announced willalso look in detail at the options for increasing theflexibility of local authorities to raise additional revenueand for making a significant shift in the balance offunding. The inquiry has been tasked with taking fullaccount of the views of stakeholders in this new stageof detailed work.

Our vision is: local, regional and nationalgovernment working effectively together to deliver better outcomes for local people.

This requires: clearer lines of accountability andresponsibility, a more coherent and joined upapproach across central Government, and afinance system which supports this.


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Section 6 – Next steps

This document sets out some key components thatcan underpin a vision of strong, self confident localgovernment, trusted to secure better outcomesacross all local services and for all members of thecommunity, and supported by a new settlementbetween central, regional and local government.

This vision will only be achievable if it is shared –between partners in Whitehall, in local governmentand elsewhere. That is why we need an open andinclusive debate.

This document is not a consultation paper, and weare not seeking formal responses to the issues raised.But it is intended to help frame the debate. We are notstarting from scratch. There are already conversationsunderway on different elements of the vision, andthese will continue and develop. But we also needto keep in sight the longer term future of localgovernment as a whole – and the implications thathas for the work we do now.

Over the coming months we intend to engage witha wide range of stakeholders as part of this debate.We will be hosting and participating in a range ofmeetings and seminars across England. We intend touse the issues raised to shape further discussions,activities and documents on more specific issues asthe debate progresses.

We are also keen to ground the vision in the day today experiences and challenges of working in localgovernment. To that end, we intend to invite individualauthorities to work with us to develop innovative ideasabout the impact of implementing different elements ofthe vision in a co-ordinated way on the ground –tailored to the individual circumstances and ideasof different councils.

Our intention is to bring the issues back togetherby publishing a fully developed strategy for localgovernment, possibly in the form of a White Paper,next year. This will not mark the end of theprocess. Strategies do not deliver themselves, anda new vision will pose ongoing challenges for bothcentral and local government. But the energy,commitment and spirit of partnership generatedthrough debate should provide an effectiveplatform for successful delivery in the years ahead.

If you wish to contribute to the debate, or to find outmore about our work on the future of localgovernment, and the debates, seminars and meetingstaking place in your area, please contact:

Website: www.odpm.gov.uk/localvision

Email: [email protected]

Local Government Strategy Unit, 5/C5 Eland House,Bressenden Place, London SW1E 5DU.

A short leaflet is available which summarises the keyaspects of our approach. The leaflet and thisdocument can be downloaded from our website, andfurther copies, including alternative formats, areavailable on request from [DoC to advise]

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If you wish to find out more about our work on thefuture of local government and the debates, seminarsand meetings taking place in your area, pleasecontact:

Website: www.odpm.gov.uk/localvision

Email: [email protected]

Local Government Strategy Unit, 5/C5 Eland House,Bressenden Place, London SW1E 5DU.

A short leaflet is available which summarises the keyaspects of our approach. The leaflet and thisdocument can be downloaded from our website, andfurther copies, including alternative formats, areavailable on request.


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