20 July 2007
Whitehall-set public service targets are to be slashed and councils given greater scope to boost regional economies, the Treasury said this week – indications that the new government may be putting some substance behind its localism rhetoric.
In his first major speech, Chief Secretary to the Treasury Andy Burnham announced that the number of Public Service Agreements was to be reduced from 110 to 30. They would have a more local focus.
'That means more setting of local priorities, by staff, perhaps even at ward level,' he said on July 18. 'If we can create that, I think that we will see more challenging and stretching targets being set, and that staff will have a greater sense of ownership.'
The new PSAs, which will be cross-departmental, are expected to be announced along with the Comprehensive Spending Review in the autumn.
Burnham said their introduction would mark a culture shift as the government renewed its priorities and its approach to public service delivery.
While admitting that the strict target-driven regime of the past decade had served its purpose, the minister stressed that the government was not sanctioning the wholesale abandonment of targets as a tool for performance management or local accountability.
'Existing targets will still need to be met… and there should be no slipping back on those standards the public sector has now achieved,' he said.
A Cabinet committee was due to consider the new PSAs on July 19, but Burnham said there remained scope for wider consultation and feedback until the early autumn.
'It felt to me that it was right to open out the thinking to a broader audience and see if it sparked something of a debate and what kind of response we receive to the general direction of travel. There's still an opportunity to put more teeth into the system where it needs teeth,' he told Public Finance.
'In a tighter spending review it is sensible to flag clearly that we are looking for much more partnership working and more efficient working where that is possible.'
The Local Government Association welcomed the streamlining of the PSA regime, which it said would significantly reduce the burden on councils. Corin Thomson, programme director for improvement at the LGA, said it was encouraging to see the new minister maintaining the commitment to target reduction set out in the local government white paper.
But the funding question remained paramount. 'There's no point setting very ambitious PSAs if you're not going to give us any money to do it. You're setting councils and government up for failure,' Thomson told PF.
The LGA also gave only qualified support to the long-awaited publication of the sub-national review, by which the government aims to reduce the economic performance gap between the English regions.
In the review, the government said it would, together with councils and business, 'consider options' for supplementary business rates.
But LGA chair Sir Simon Milton said the complete return of business rates to local control was the best way to kickstart local economies.
However, he welcomed the government's acknowledgement that the current system of centralised business rates was stifling councils. 'There must be strong local consultation to work out what level extra rates should be set at and what money should be spent on,' Milton said.
The review, published on July 17, promises local authorities more power and incentives to reinvigorate economic performance and tackle deprivation.
The changes outlined included a proposed new duty on councils to analyse the economic circumstances and challenge to their local economy and give them a much stronger role in the scrutiny of Regional Development Agency performance.
From 2010, local authorities will also gain stronger responsibilities in shaping priorities in their wider region as regional assemblies are phased out.
Local government minister John Healey said: 'We want to give local authorities who know their communities best a greater role leading jobs, housing, regeneration and sustainable growth to ensure that no-one is disadvantaged by where they live.'
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