Examination of Witnesses (Questions 560
THURSDAY 11 JULY 2002
MP, MS PAM
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 authoritiesI 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
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
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
(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
(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
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.
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
(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.
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 businessesthat
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 buildconfidence 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.
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
(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