Localism - Communities and Local Government Committee Contents

Written evidence submitted by Westminster City Council (LOCO 034)


1.1  Westminster City Council welcomes the opportunity to contribute to the Communities and Local Government Select Committee inquiry into the terms of reference for Localism.

1.2  Central Government's definition of decentralisation is the devolution of powers to citizens and grass roots organisations. It identifies local government as a barrier to this process, when in fact our democratic accountability makes us central to any model of localism, and enablers of Big Society.

1.3  We recognise and stress the importance of citizens and grass roots organisations in decentralisation. For the purpose of this submission, however, we have focussed on the relationship between central and local government.

1.4  We welcome the Coalition Government's commitment to localism and are committed to working with them to implement a decentralised model of government. To do this, we seek four key commitments:

¾  A fundamental redress of the roles and responsibilities of central, regional and local government.

¾  Freedom from the burden of regulation from the centre, including performance management, statutory guidance and professional dictats.

¾  Full financial flexibility to manage budgets according to local needs, invest in preventative service and collect revenue.

¾  Freedom to generate income.

1.5  We submitted a paper "A New Settlement for Government" With Hammersmith & Fulham and Wandsworth, to the Chancellor of the Exchequer in July 2010. This is appended to this submission and provides further evidence to support our call for decentralisation.

2.  The extent to which decentralisation leads to more effective public service delivery; and what the limits are, or should be, of localism

2.1  We believe that decentralisation leads to more effective public service delivery. Local authorities are closer to the communities they serve than central government and are better placed to understand their needs.

2.2  Local councils are democratically accountable so will shape services in response to those local needs; making them more effective, targeted and flexible.

2.3  The roles and responsibilities of central, regional and local government need to be reconsidered to achieve decentralisation. We believe that there are only two limits to localism:

¾  Spatial—where efficiency or effectiveness can be increased on a broader geographical level, because the services affect a broader area.

¾  National co-ordination of systems—where there would be high levels of duplication and inefficiency if local areas were each creating their own system for a nationally driven service.

3.  The lessons for decentralisation from Total Place, and the potential to build on the work done under that initiative, particularly through place-based budgeting

3.1  We supported the Total Place pilots and had previously carried out our own spend-mapping work. Our work highlighted the complexity of funding models in attempts to create an area budget.

3.2  The Total Place pilots showed the duplication that comes from multiple public bodies working to achieve the same goals in silos. We learned that localism requires local democratic control, with clear and strong local accountability; liberalisation from central government, including full financial flexibility and freedom to design and manage services locally; pooled budgets to support single service delivery models; and more intelligent funding mechanisms, which include models and incentives that reward success in preventative work.

3.3  It is clear that at the right geographical level, integrated services would result in better value for money.

3.4  However, there is currently a natural movement away from this. Police and PCTs are divided along different geographical lines and mergers are taking place across local authority boundaries which will mitigate place-based budgeting. This will pose problems for localism in the future.

4.  The role of local government in a decentralised model of local public service delivery, and the extent to which localism can & should extend to other local agents

4.1  We recognise that decentralisation does not stop at local government level, and we are committed to giving more power to grass roots organisations through Big Society.

4.2  What must also be recognised, however, is that local authorities are central to making a decentralised model work, because they are the only locally elected, democratically accountable body. They are the enabler of Big Society and localism, not the barrier that central government suggests. The bureaucracy which surrounds local government is too often the result of the burden of regulation imposed by central government itself.

4.3  We see the local authority role as one of leadership and commissioning, not necessarily service delivery. The Westminster City Council approach is based on a shift to a smaller, more effective commissioning core; a commitment to using the best and most cost effective providers and a fundamental rethink of service delivery models.

4.4  Community groups, voluntary sector and private companies all have a role in providing public services. Their detailed knowledge of service areas and the local community are key to devolved localism.

4.5  Westminster City Council welcomes the enhanced role for local government in leading local strategic thinking on health and wellbeing as outlined in the NHS White Paper (Equity and excellence - liberating the NHS). This provides a key opportunity to further integrate health and social care services to produce efficiencies and a smoother service for patients/clients.

5.  The action which will he necessary on the part of Whitehall departments to achieve effective decentralised public service delivery

5.1  Currently, there is a raft of centrally imposed legislation, targets, and funding restrictions that local service providers must conform to. Whitehall currently interferes in how local government meets the needs of our communities, to the extent that we are instructed which senior managers to employ (eg we are statutorily required to have a Monitoring Officer and Director of Children's Services), and duty bound by legislation to produce a range of strategies, which may not be best fit for the locality.

5.2  The Coalition Government has committed to reducing this over-regulation, but more still needs to be done.

5.3  Attitudes towards local decision making need to change. Government must recognise the legitimate democratic accountability of local government; accept that there will be diversity in the way services are delivered in different localities; and let local Members be accountable if they get it wrong. There must be greater trust in the decisions local people make at the ballot box.

5.4  To achieve truly decentralised public services, Whitehall departments must also stop considering issues in silos. Service users' problems are complex and do not fall neatly in line with departmental structures; they can cut across service areas.

5.5  Whitehall should not be deterred by the negative "postcode lottery" argument, and instead replace it with a positive story of localism.

5.6  The customer must be put at the centre of service delivery, but ring-fenced funding acts as an obstacle to this. One example of an integrated, intervention service that cuts across service silos is the Family Recovery Programme (Appendix 1, pg 13). For such services to continue, however, a new funding mechanism is required; not only to cut across funding streams, but to ensure localities feel the financial benefits of such successful projects.

6.  The impact of decentralisation on achievement of savings in the cost of local public services and the effective targeting of cuts to those services

6.1  We refer you to our New Settlement for Government paper, attached at Appendix 1.

7.  What, if any, arrangements for the oversight of local authority performance will be necessary to ensure effective local public service delivery

7.1  Regulation of local authority activity is complex and has increased markedly since 2000. English local government suffers from probably the most onerous regulatory regime of any western country.

7.2  In total, there are over 2,500 separate pieces of data councils have to provide to government and quangos. In Westminster, we estimate that up to £1m is spent annually complying with government requests at a time of budget restraint where we can we want to refocus this resource on providing valuable local services.

7.3  We welcome the decision of the Coalition to cut local government inspection and abolish the Comprehensive Area Assessment, as well as plans to phase out grant ring fencing, increase transparency around local spend and performance and wind down quangos. We know, however, that there is much regulation by the "back door" beyond inspection events; for example, funding conditions, detailed regulatory regimes (especially in relation to children and adults services) and statutory reporting back to government departments.

7.4  While we accept the need for some regulation in essential services, a proportionate approach is required which supports local legitimacy and is linked to genuine risk.

7.5  CLG should operate in a gate-keeping role on behalf of all government departments and agencies to ensure that there is a live business need for current data from local authorities and duplicate requests are eliminated.

7.6  An audit of the regulation/data collection overhead between central and local government should be carried out. Where data collection is considered essential for central government, the local authority or third party should be paid for collection. Where data collection is mutually beneficial to Government and the local authority, innovative approaches for data collection should be considered, to reduce burdens where possible.

8.  How effective and appropriate accountability can be achieved for expenditure on the delivery of local services, especially for that voted by Parliament rather than raised locally

8.1  Councillors are directly accountable to their local voters and taxpayers for outcomes, and for the expenditure of money raised locally; and directly accountable to Parliament for the proper use of nationally-raised taxpayers' money voted by Parliament.

8.2  Currently however, accountability is predominantly upwards, because the majority of local authority budgets come from central funding streams. There is a clear line of accountability to local residents, but it is unbalanced because while there is a strong focus on council tax, it only makes up a small amount of councils' budgets.

8.3  A shift is needed so that more of the money spent locally is raised locally. This could be raised not through increasing council tax, but through business rates, fees and charges. We would argue to keep some of the business rates we collect. Businesses in Westminster contribute £1.2 billion in business rates to the national economy, but the council receives only 12% of this to invest locally.

8.4  As previously discussed, local government should have the financial flexibility to generate income. Councils should be given the power to raise fees and charges. Currently nationally-set fees and charges, for example in planning and licensing, mean that local authorities are unable to recover their costs (see Appendix 1, pg 5).

8.5  Estimates put the number of quangos at around 1,200. The coalition government has made a useful start in getting rid of the most excessive. Local councils with their clear democratic mandate have a duty to hold to account (on behalf of local taxpayers) the remaining quangos, and act in a scrutiny function.

9.  The Committee would be particularly interested to hear of examples, from the UK or overseas, of models of decentralised public service delivery from which lessons could be learnt for further decentralisation in England

9.1  Examples of decentralisation in Westminster have been used as case studies in the New Settlement for Government paper (Appendix 1). Integrated Offender Management and the Family Recovery Programme highlight the innovation and efficiency of local government. They show our commitment to localism, and we see this best implemented through integrated, preventative services which provide savings for the medium to long term.

9.2  Full financial flexibility and freedom from the burden of central micromanagement and regulation are key themes running through this submission. These examples of decentralised public service delivery can only continue to be successful with devolved budgetary arrangements and new funding mechanisms such as payment by results.


¾  The roles of national, regional and local government should be agreed through the Decentralisation and Localism Bill and clearly communicated with the electorate.

¾  Decentralisation of power to local authorities must come with full accountability for locally led services and complete financial flexibility to provide services best suited to the local community.

¾  Intelligent funding models should be introduced including incentives that reward success.

¾  Whitehall must free councils from the burden of regulation.

¾  An audit of the regulation/data collection between central and local government be carried out. Where data collection is considered essential for central government, the local authority or third party is paid for collection. Where data collection is mutually beneficial, innovative approaches for data collection should be considered to reduce burdens.

¾  CLG should operate a gate-keeping role on behalf of all government departments and agencies to ensure that there is a need for current data from local authorities and duplicate requests are eliminated.

¾  A proportionate approach should be taken to regulation which supports local legitimacy and is linked to genuine risk.

¾  Councils should be able to keep some of the business rates they collect as well as have the power to raise their fees and charges and generate income.

¾  Local councils should have the power to hold unelected quangos to account.

October 2010

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