Select Committee on Transport, Local Government and the Regions Minutes of Evidence

Examination of Witnesses (Questions 560 - 579)



  560. You just said yourself that freedom is for a few?
  (Mr Raynsford) I am trying to answer the question. The borrowing approval framework is being abolished for all local authorities; there will be freedom for all local authorities to borrow against the prudential regime. The safeguard is there to guard against the possible abuse of that freedom by a very small number of authorities—I mention two that have had serious difficulties recently. We do not think there will be many; we think it is necessary to have those safeguards. There is a separate issue about additional freedoms which will be available to those authorities that can demonstrate high performance, but that is supplementary to the general freedoms we are extending to all authorities.

Mr Cummings

  561. It has been suggested to the Committee, Minister, that the general view of local government is that central government have been very fast to act on the introduction of comprehensive performance assessments but very slow to provide freedoms and flexibilities. How do you respond to that?
  (Mr Raynsford) The draft Bill which your Committee is considering is part of the process of extending freedoms. The comprehensive performance assessment is also being introduced to the same timetable. We are advancing on all fronts with no bias in favour of one particular element in the White Paper as against another.

  562. But concerns have been expressed by the Local Government Association in respect of several items and there are concerns that it will get neglected?
  (Mr Raynsford) I have to say that at my attendance at their conference in Bournemouth last week and perhaps more importantly at the central local partnership only yesterday I heard the senior representatives of the Local Government Association expressing considerable satisfaction at the progress being made by the government on implementing measures that they very much welcomed to give greater freedoms and flexibilities and to improve the relationship between central and local government.

  563. Have there been any suggestions in the press?
  (Mr Raynsford) There are always some people who will take a pejorative view of what is happening but I think if any fair-minded person asks the generality of those involved in local government, whether councillors or senior officers, they would say that we are making good progress. Some people would like to see us move faster, I accept that.


  564. How many of the statutory plans have now been scrapped?
  (Mr Raynsford) We will be making an announcement in the very near future about our programme for halving the number of plans that local authorities are required to make. That is a real measure of deregulation on which we are committed to making real progress.

  565. How many plans are there at the moment?
  (Mr Raynsford) I cannot off the top of my head give you a precise figure but I can certainly ask officials to do so.

  566. I think the other day I guessed at about thirty and you told me I was totally wrong.
  (Mr Raynsford) I think it is more than that but certainly we are committed to halving the number of statutory plans that authorities are required to comply with.

Mr Cummings

  567. Would you tell the Committee when the review of the balance of central/local funding begins, and have you any idea when you expect it to report?
  (Mr Raynsford) We have already announced our intention to constitute this review in the reasonably near future. We are doing preliminary work at the moment analysing the number of options on which detailed preparatory work is necessary so when the review begins it has the basis of sound research. I hope to make an announcement in the reasonably near future about our timetable for this review. I cannot at this stage anticipate when it will report because it will be dealing with very involved and complex issues, but it is certainly high in our priority list as one of the ways of carrying forward commitments in the White Paper.

  568. Minister, it has been suggested to the Committee that the Bill as drafted by central government is not yet trusting local government, as perhaps the rhetoric suggests. How do you respond?
  (Mr Raynsford) This is a Bill which does extend freedoms and flexibilities to local government. I have mentioned three specifically and I could mention others but just to repeat those: the new capital finance framework removing borrowing approvals, greater freedom for authorities to make charges in respect of discretionary services, and freedom for high-performing authorities to trade. Those are significant freedoms and have been widely welcomed by local government.

  569. SOLACE, in giving evidence to the Committee, Minister, referred to the "prevailing attitude of mistrust of local government" in relation to the part of the Bill that deals with financial administration.
  (Mr Raynsford) I have to say I think that is reflecting a past view and, as I said in response to an earlier question from Mr Betts, the progress, the change of relationship will probably take a little time for the consequences really to work through and people to feel confident about the new relationship.

  570. SOLACE only gave evidence this week, Minister.
  (Mr Raynsford) But I see an awful lot of chief executives of local authorities and SOLACE is a representative organisation. I have to tell you what chief executives say to me privately does not confirm the view expressed to you. A lot of chief executives of a very wide range of authorities are quite open about the fact that they believe this government is improving the relationship between central and local government: they welcome measures such as the new capital regime, the new freedoms and flexibilities; a number of them are saying to me quite openly that they welcome the new comprehensive performance assessment because it will help to drive higher standards in their own authorities, and they want to see us continuing to make progress on this agenda.

  571. Will you tell the Committee how many new powers will be vested in the Secretary of State as a result of this Act?
  (Mr Raynsford) I think it almost inevitable that you would highlight the new powers given to the Secretary of State, and I can say quite openly there are a number—


  572. Can you give us the number?
  (Mr Raynsford) I cannot precisely because—

  573. There are so many that you cannot put a number on it?
  (Mr Raynsford) Let me explain why. If you take the business improvement district area, that is probably where there is the largest single number of new powers for the Secretary of State to do things by regulation. We have a simple choice: this is a new and innovative framework which we will be trying. We could try to encapsulate in legislation the precise framework that we think should operate in business improvement districts. We have chosen instead to do the bulk of it by regulation because that gives us the flexibility in the event of experience telling us that changes need to be made to make those changes. I accept entirely we could have had a better headline, less new government regulation, if we had tried to do as much as possible on the face of the Bill, but the downside is we have not then got the flexibility to make adjustments if the practical experience of rolling out a new and innovative scheme reveals the need to make changes.

Chris Grayling

  574. But surely we should be looking at an environment where you are effectively allowing the councils themselves to shape what works for their own area? Why is it necessary for central government to prescribe, except in the broadest sense, that which could be done on the face of the Bill?
  (Mr Raynsford) Because this is an area where there is a need to build confidence and trust between local authorities and business, and you will know the very clear concerns that business has expressed about the whole question of charging businesses—that is why they were strongly opposed to the localisation of the national non domestic rate. Business has accepted the idea of business improvement districts which will allow additional charges to business for defined purposes, but it has to be within the framework where they feel confident about the outcome, and that is what we are trying to build—confidence between business and local authorities. If we simply left it entirely without a framework, I have to say I think we would be hearing quite strong representations from the business community about their worries.


  575. There is an argument that Parliament should have control of tax raising powers and in a sense the bids is a new tax rising power. Ought Parliament not to be able to decide it rather than Ministers?
  (Mr Raynsford) We see this as a levy which is agreed not in all areas but in some areas where there is agreement between both small and large businesses and the local authority, and I think it would be somewhat cumbersome if agreement on the business improvement district had to be subject to Parliamentary approval in each case. That is why we have done it the way we have.

Mr Cummings

  576. We understand, Minister, that the Office of Public Service Reform have recently carried out a review of the Department. Are you able to share this with the Committee? Did it suggest weaknesses in capacity, experience and skills, because it has been reported that it has found the DTLR had insufficient capacity and co-ordination to bring about the programme of reform set out in the White Paper.
  (Mr Raynsford) The report from the Office of Public Service Reform on the former DTLR takes the form of advice to ministers and no final decisions have been taken on that report and, therefore, I am not I am afraid in a position to be able to share with you the components of that report.

  577. Will the report be made available in due course?
  (Mr Raynsford) The decision of ministers will be announced publicly but, as with other advice to ministers, the advice itself will not be published.


  578. Can you understand though that it is a bit of a difficulty that the whole question of performance of local authorities is being judged, and part of that is judged on the skills and experience of the senior management? Now there are people who suggest that people who have been dealing with, for instance, the local government finance in your Department have not been doing the job that long and do not have the historical knowledge on all the problems that you would expect someone in a local authority to have in senior management. Are you satisfied the way the Department is set up that your civil servants have really been there long enough to grasp these problems?
  (Mr Raynsford) As with all senior management teams in any vibrant organisation one has a mixture of people who have been there for a long time and others new to the job, but people being appointed to a senior position, a position of considerable responsibility, have to have the capacity to learn very quickly and I am confident that the staff within our Department do have that capacity. That is not to say that we do not need to consider some changes, and there probably will be, arising from the OPSR report's recommendations to ensure that we can play a positive role not just as our Department but across the whole of government to ensure a better co-ordinated response from government to local government, and that has been a message that I have heard from many people in the course of last year and local government that they get different responses from different government departments. One of the ways we are trying to address that is through the Office of the Deputy Prime Minister being enabled to co-ordinate better the cross-government response to the needs of local government.

  579. So if we looked at the review on local government finance that you published this week, the formula grant distribution, how many people working on that have been in the Department more than two years?
  (Mr Raynsford) Well, the official who probably did the greatest amount of work on it I first met in the winter of 1997 when I was a junior Minister and I was meeting local authority representatives who were coming to argue about deficiencies in the SSA. He was a senior adviser at that stage: he remains a senior adviser.

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