News from the Local Government Association conference on July 3-5 Healey pledges new relationship with local government

5 Jul 07
Newly appointed local government minister John Healey has pledged to forge a 'new relationship' between central and local government and to devolve extensive powers to regional and local levels.

06 July 2007

Newly appointed local government minister John Healey has pledged to forge a 'new relationship' between central and local government and to devolve extensive powers to regional and local levels.

In a wide-ranging speech to the Local Government Association's annual conference in Birmingham on July 3, just days after being handed the portfolio, Healey promised a wide-ranging 'constitutional settlement' that would help 'renew belief in politics'.

As Healey was addressing the LGA, Prime Minister Gordon Brown, presenting the House of Commons with a programme of constitutional reforms, announced that he intended to negotiate a 'new concordat between central and local government'.

Healey told delegates that the concordat, which will now be thrashed out between ministers and town hall leaders, would lead to a new era of devolution. 'It creates new opportunities for local government: to renew the relationship between local and national government, with clear rights and responsibilities on both sides, [and] to renew the relationship between local councils and communities.'

Councils would have 'a clearer duty to be accountable', and residents would be better able to play a part in local decision-making.

He said 'sound political leadership at all levels' was needed to tackle the main problems facing the government. This could be achieved only with the help of town halls, and if authorities were equipped with the necessary powers to act on local priorities.

Healey's last act as financial secretary to the Treasury was to complete the subnational review of economic development, an 18-month study that will feed into this autumn's Comprehensive Spending Review.

Its purpose was to consider how local economies can be kick-started and what structures and additional powers might be needed to help this process.

Healey said it would be published shortly and hinted at what it might mean in practical terms.

'Further devolved decision making and freedoms are required for regions and local areas: first, to respond to rapidly changing economic circumstances; second, to deal with persistent pockets of deprivation or sluggish economic performance; and third, to allow every area to develop their fullest possible potential.'

Speaking to Public Finance afterwards, Healey said Local Area Agreements would be the vehicle for harnessing these powers and the policy objectives they were intended to achieve.

'Whether it's infrastructure to support the development of housing, or infrastructure to develop the economy, we want to help local authorities play a stronger role in the economic development of their areas.

'Local Area Agreements are potentially the way of bringing together the future financial, policy and legislative framework to make that happen.'

Sir Simon Milton, who replaced Sandy Bruce-Lockhart as the LGA's chair on July 3, told PF that Healey's offer and Brown's promise of a concordat were 'very interesting', but that town hall leaders needed to know the detail of what was on offer.

He also warned that finance reform would have to be on the table for the concordat to be meaningful.

'You can't make statements about devolving more powers to the local and regional level unless you're willing to do it in practice, so a set of expectations have now been raised and we will be pressing the government on the detail to make sure it happens,' Milton told PF.

'Any concordat has to include a discussion about finance, otherwise it won't be worth very much.

'Finance is the missing piece and we've made it clear that real devolution requires greater financial devolution. That's something that all councils, of whatever political colour, are agreed upon.'

Milton did, however, say that Healey had told the conference much of what it had been hoping to hear, and added that if the new ministerial team at the Communities department had serious intent, then local government would be an enthusiastic partner.

'We're looking forward to dealing with ministers with whom we can do business.'

But Sir Michael Lyons, who chaired a three-year inquiry into local government, said ministers should be prepared to go further than just agree a concordat.

'I won't be alone in hoping we will go further than just a concordat. It's a first step but it's not enough in reshaping the constitutional settlement in this country.'

Milton pushes for local government control of health services

Sir Simon Milton used his inaugural address as LGA chair to make an audacious bid to gain local control of health services for councils, announcing a commission to conduct a root-and-branch review of existing relationships.

Milton told delegates that, rather than setting up a national independent board to run the NHS, services should be brought 'closer to the people not further from them'.

He cited the possibility of councils and primary care trusts sharing a chief executive, or authorities providing community hospitals and other services as potential ways forward.

The commission will review local services, the relationships between providers, and how these can be reorganised to improve quality and democratic accountability.

'I'm inviting group leaders today to establish a commission to explore how we can make the National Health Service a more local health service,' Milton told delegates.

Elsewhere, he launched an outspoken attack on the government's migration policy, which he said had left local public services underfunded and under strain because there were no accurate figures on the numbers of migrants using them.

Milton warned that this had strained community cohesion in some areas. Local government, he said, should be at the forefront of 'welcoming new citizens, teaching them the values, history and language of this country and celebrating their successes, not their difference'.

Milton also used his speech to offer Prime Minister Gordon Brown a deal, arguing that in return for devolving powers over economic development, local government could deliver 1 million new jobs, 10,000 new businesses, and an extra 500,000 affordable homes by 2020.

But he warned that the housing shortage would never be tackled through 'top-down mechanisms', saying the solution lay in allowing authorities to raise the funds to build new homes.

Local government could help Brown meet his key aspirations, Milton said, but only 'if the government delivers real change and relinquishes real power. We can match the achievements of our Victorian forefathers if government lets us lead.'

Councils likely to be assessed on sustainability

Local authorities might in future be assessed on their 'green' efforts as part of the 'use of resources' assessments conducted by the Audit Commission, its chair has revealed.

Michael O'Higgins told delegates he wanted a sixth category added to the assessment, which would examine specifically whether resources are used in a sustainable manner.

O'Higgins stopped short of confirming that the change would go ahead, but he did give a clear commitment that the watchdog would incorporate sustainability into the post-2008 inspection regime for authorities in some form.

'We aim to put sustainability right at the heart of our work and the work of those organisations we regulate,' O'Higgins said.

His comments, on July 4, came the day after the LGA's Climate Change Commission published its interim report, which called for councils to take a much stronger role in persuading residents to adapt their lifestyles to use energy more efficiently and reduce carbon emissions.

The commission, chaired by Professor John Chesshire, says authorities must ensure that individual households are making efforts to live in a more sustainable manner. They must also promote sustainability through the planning and building regulatory regime, and in the commissioning and procurement of goods and services.

The commission is calling on councils to reduce their carbon footprints in the way they own and operate buildings and vehicles.

Launching the interim report, Chesshire said the need for action from local authorities was now 'urgent'. He added: 'Now is the right time for all councils to explore what more they can do.'

'Let councils borrow to cut traffic congestion'

Government must allow councils to borrow against income from road-pricing projects to fund transport schemes that will help to reduce congestion, says an LGA report.

Breaking the gridlock, published on July 5, found that many authorities were keen to press ahead with local road-pricing schemes but were unable to afford the investment in public transport needed to provide a viable alternative to driving.

The report points out that, with Manchester alone planning to spend £3bn on its transport network, the government's £1.4bn transport innovation fund to pay for such investment is inadequate.

But the legislation providing for local road-pricing schemes specifically prevents authorities from borrowing against the income generated.

David Sparks, chair of the LGA's transport and regeneration board, called on the government to lift the restrictions. 'Councils want to borrow money for these projects at the most competitive rate to provide value for money to the taxpayer,' he said.

'But they are being held back by a bureaucratic throwback. This has to change.'


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