Changing places, by Peter Hetherington

30 Aug 07
There has been one gaping hole in Labour's devolution success: the English regions. RDAs and non-elected assemblies have not lived up to expectations and the new PM is looking to give more powers to council-led city-regions. Peter Hetherington reports

31 August 2007

They're switching the name plates and plaques all over Whitehall. But where does Tony Blair's hurried reshuffle leave policy initiatives on local government and communities? Peter Hetherington surveys the scene

Like a family downsizing for hard times ahead, a small empire spread across central London is calling in the removal men. One of the two grand offices is being vacated. The new Department for Communities and Local Government, headed by the former education secretary Ruth Kelly, is moving out of John Prescott's splendid former HQ at 26 Whitehall – refurbished at great expense for a deputy prime minister with a sense of importance – to the more functional Eland House, across Hyde Park at Victoria.

'It makes more sense to have us all in one spot, instead of rushing all over London for important meetings,' says a bemused official still coming to terms with a reshuffle that has thrown domestic policy-making in England into confusion, if not quite turmoil.

Tony Blair's Cabinet shake-up – abruptly removing a string of ministers, barely a year into their jobs – appeared to have scant regard for delivery and that much-vaunted, if elusive concept of joined-up government. In the words of a disgruntled Charles Clarke, smarting over his removal from the Home Office, it 'failed to give a sense of direction'.

While Clarke's replacement by the peripatetic John Reid caught the immediate headlines, the other changes – Alan Johnson to education and skills, Douglas Alexander to transport, Alistair Darling to trade and industry – will have implications in key policy areas.

But, at a lower level, the switching of impressive junior ministers, such as Liam Byrne (social care at the Department of Health to police – and now immigration – minister at the Home Office) and Jacqui Smith (number two at education and skills to chief whip) raised concern. The government's commitment to its ambitious children's agenda – developed under the Every Child Matters policy in the wake of the killing of Victoria Climbié – is a particular worry. This is based mainly on merging the children's element of social services with local education provision under new directors of children's services. But it is proving more expensive than expected.

John Prescott's own removal from the former Office of the Deputy Prime Minister will probably have little immediate impact, apart from MPs ridiculing him over his diminished role when he faces monthly questions. But the departure of former communities and local government minister David Miliband to the Department for Environment, Food and Rural Affairs has left a trail of unanswered questions. When will the white paper on local government, already in draft form and presaging legislation to underpin a new initiative on community and neighbourhood governance, be delivered? It was due for publication next month, and might still emerge before the summer recess. Will conurbations outside London, cautiously confident of being given more powers following a string of Miliband's 'city-region' summits (and a powerful Treasury-ODPM policy paper that accompanied the budget) be given a priority in the remodelled department?

And will Kelly have the inclination, or the stomach, for a fight, if necessary, with a cautious Downing Street over the financing of – say – local government when Sir Michael Lyons makes his final report on council funding later this year? 'Miliband, with the ear of Number 10, could have made the intellectual case,' says one insider who regularly meets ministers. 'I'm not so sure about Ruth.'

These big issues were only partly answered by a revealing open letter from Tony Blair to Ruth Kelly when the new minister swept into Eland House two weeks ago. To be fair, this was accompanied by more powers for the DCLG, with the transfer of the active communities unit and social cohesion functions from the Home Office (along with equality issues from the Department of Trade and Industry). 'While the details are still being worked out, the idea is that the new home secretary (John Reid, a Scottish MP, most of whose departmental writ does not cover Scotland) will concentrate on core issues,' explained one minister close to the action. 'Miliband would have loved to get his hands on this wider brief.'

But what of Ruth Kelly? In what seemed a crib sheet, the prime minister told her to push ahead with a 'radical, devolutionary white paper', concentrating in part on 'empowering local communities' to achieve 'democratic renewal'. The DCLG has to make sense of the wider reshuffle in which the former chief whip, Hilary Armstrong, was moved sideways to fill the vacant Chancellor of the Duchy of Lancaster slot in the Cabinet, vacated by John Hutton's earlier move to the Department for Work and Pensions. Confusingly, Armstrong, now in the Cabinet Office, has been told to oversee social exclusion work, which is also part of the DCLG's brief. Exactly how she will work alongside the DCLG is not clear. 'It's still being worked out,' volunteered an official.

Intriguingly, the other Miliband – Ed, David's younger brother – has entered the government as a junior minister in the Cabinet Office where he'll look after charities and the voluntary sector, under Armstrong. But Hutton, too, has thrown his hat into the social exclusion ring by declaring, in a speech to the Fabian Society, that tackling child poverty will be his department's 'number one priority' – offering a little comfort to those who fear that the costly children's services agenda no longer has priority across Whitehall.

But if the DCLG has more powers, there is concern that the new secretary of state – who has already buckled under pressure from Downing Street in her previous role at education – will struggle against the might of Number 10, where policy chief Matthew Taylor, former head of the Institute for Public Policy Research, is helping to set the localist agenda. 'I wonder whether she'll be strong enough to take on the PM and his key advisers,' says one former Cabinet minister. 'Her record on this front in education, after all, was not good, and she backed down over plans to replace the

A-levels, for instance, and Downing Street got its way.'

Not everyone is so pessimistic, however. With Dan Corry following Ruth Kelly from education as a principal adviser, some believe the DCLG could still prove to be a reforming force. Corry, who was an adviser to Stephen Byers when he was transport and local government secretary and subsequently director of the New Local Government Network, is probably in tune with Number 10's agenda to push for more elected mayors. A former minister describes him warmly as 'a localist before his time'.

Sir Brian Briscoe, outgoing chief executive of the Local Government Association, is similarly impressed. But he's unsure about the timing of Kelly's first big test: the local government white paper. 'Officials are still saying no decision has been made,' he says. 'I'm fairly confident that if Miliband had stayed, it would have been published in the middle of June. Ruth Kelly has to decide whether she likes what David Miliband was going to say.'

While Blair wants the DCLG to push community and neighbourhood governance, along with elected mayors, the means to pursue that goal are far from clear now that Miliband has departed. He adopted an inclusive approach, with various groups feeding into the white paper process. For the past few months, several organisations – notably the Local Government Information Unit and the Local Government Association – have been meeting senior officials and ministers, reaching broad agreement on the way forward. The result is the emergence of new and refined community models – 'robust neighbourhood councils' in the words of one adviser – which partly build on the foundations of England's 8,500 parish councils. These currently serve only 30% of the population, mainly in rural areas. Under 1997 legislation, new parish councils can be created by a petition of at least 250 electors, or 10% of the local electorate. But any application still has to be approved by the DCLG.

Building on this, it is widely expected that the white paper will make the case for piloting strengthened neighbourhood councils, 'super parishes', which would gain stronger, devolved powers from local councils – a move that could be flagged up in the 2007 Comprehensive Spending Review. Significantly, a YouGov poll for the LGIU recently found that 73% favoured greater neighbourhood control over services and budgets.

Insiders say that 'user empowerment' – giving people in active neighbourhoods greater power over issues such as community safety, road maintenance and the environment – would be the counterweight to a slimmed-down Comprehensive Performance Assessment inspection review. The hope is that the hundreds of performance indicators could be reduced to about 30.

This week, in what amounted to an alternative white paper, the Local Government Association sought to fill the vacuum left by the ministerial reshuffle by calling for a vastly slimmed down performance framework and various other new freedoms. Neatly complementing Miliband's 'double devolution' agenda – more power for town halls in return for councils passing some functions to neighbourhoods – it accepted the case for neighbourhood devolution with an enhanced community role for councillors. The buzzwords are 'place making', with communities and councils joining up a range of public services currently provided by councils, government and other agencies.

Significantly, the LGA called for conurbations outside London to be given the powers of transport regulation enjoyed by the capital's mayor, Ken Livingstone, through his Transport for London agency. The LGA paper – Closer to people and places: a new vision for local government, published on May 22 – suggested greatly enhanced Local Area Agreements could be the vehicle for this.

But in calling for a new settlement between Whitehall and town hall, the LGA also urges ministers to 'realise the economic potential of cities, counties and towns by devolving powers for transport, planning, economic development and skills'.

Although this is a big agenda, Briscoe insists it is in tune with the devolving mood sweeping through the government. But the unanswered question is whether other reshuffled ministers – notably the new secretaries at the DTI and transport, Alistair Darling and Douglas Alexander – share this enthusiasm. The DfT, particularly, has to agree to bus re-regulation in conurbations, similar to the powers enjoyed by Transport for London (which franchises services), while the DTI is key to giving councils greater economic powers. This is because it is the sponsoring department for eight regional development agencies, although their future direction is in some doubt.

Insiders say the DCLG is making a bid to reassume responsibility for RDAs – they were originally the brainchild of Prescott in 1998 – in a reorganisation that also includes the likely merger of the regeneration agency English Partnerships with the Housing Corporation, which funds social housing.

All in all, Kelly has her work cut out making sense of her new department, while trying to co-ordinate the wider communities agenda across Whitehall. 'We've really got to find a way of getting better co-ordination of public service locally so we find a way of going beyond current LAAs,' says Brian Briscoe. 'While there's not a single model for neighbourhoods or city-regions, what is needed is a genuine buy-in from central government so that you can do more things locally. I think there is ministerially, but they can't make the machine do it.'

There's the rub. But the many advocates of greater devolution from the centre have the edge of the argument this time – because they've been encouraged by a government that has said it is willing to change course, let go and devolve. Will actions speak louder than words?

Peter Hetherington writes on community affairs and regeneration


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