The 2020 Public Services Trust Blog

Today we are publishing “Delivering a Localist Future: a route-map for change”.  This is much more a ‘how to’ guide than another report about how centralised our political system has become.  There is a very wide consensus that we need to take power away from the political centre and give it back citizens and localities but the thing is to make it happen.  Unfortunately in British politics it is unwise to underestimate the force of inertia.

Rarely can there have been a more appropriate moment to shift power to local citizens.  We face a very large deficit which we know is going to lead to cuts in public service expenditure.  And our political process could not be held in much lower regard. The challenges we face as a society are ones which require all of us to play our part in resolving. As our interim report ‘Beyond Beveridge- Principles for 2020 Public Services’ argued what we need is a new culture of social productivity.  This is about citizen power and responsibility. It goes beyond an emphasis on rights and entitlements to stress the contribution we will need to make as individuals and communities.

Michael Portillo addressed these themes in his TV programme “Power to the People” BBC2 on Saturday.  As he argued, there is a dangerous and growing disconnect between people and politics and a big part of the problem is over centralisation.  The two longest running governments of the modern era were equally to blame for this – the Thatcher government because of capping and abolition of the Mets and the GLC and the Blair government because of targets and managerialism.  What Portillo’s programme showed is that people are much more likely to trust and engage in politics and public services at a local level. Yes mistakes will be made at local level.  But the Iraq war, Individual Learning Accounts and the NHS IT project illustrate that political and administrative failings can happen at every level of government. 

But the most sobering parts of Portillo’s programme were the interviews with national politicians and journalists – such as David Blunkett and Simon Jenkins – about just how hard it is to switch the centralising gears into reverse.  Whilst chronically low levels of trust and the need to get local consent over difficult spending decisions might sound like powerful cases for localism, that does not mean that a shift in this direction is inevitable. A persuasive argument will be put by the Treasury to new Ministers that, at a time when the imperative will be to reduce the deficit, loosening the purse strings on local government would be foolhardy.  Unfortunately modern British history tends to show that Sir Humphrey tends to win on this one. 

That’s why our report today seeks to make the case for localism in the context of the fiscal deficit.  What we propose is a deal between the big cities and counties and central government at the heart of which are ‘more for less’ single place budgets.  At the Budget the Government will reveal the scale of savings which have been identified through the Total Place Pilots, led by Lord Bichard.. Joint working and collaboration across public services and local government in conurbations like Manchester and Birmingham and Kent and Essex has been highly effective both in promoting better and more integrated responses to areas such as worklessness and youth re-offending.  This process has also spotlighted the extent of duplication at local level, as a result of national agencies and policies cutting across each other in local places.  The danger is, though, that the Government will just bank the savings identified, with no gain to localities and this will simply undermine the good work which has been done through Total Place

The alternative, which we propose, is to negotiate a new deal with localities in which they get a combined budget for their area which includes not just local government funding, but also significant parts of DWP, MOJ and DH spend and new powers over these functions in return for accepting a flat rate percentage less in government funding.  This is a win for localism, but is also a win for the Treasury in its desire to reduce the deficit.

As the Portillo programme argued, this kind of more powerful localism has to have a local face.  So a key part of the deal will be the new accountability arrangements, if a place is going to have new powers and much greater autonomy then local citizens must be clear about who to hold to account.  There are a whole range of options – Mayors, Governors, Sheriffs, Commissioners and there may be others still, that should be for localities to decide. But the principle should be that negotiated autonomy must be based on highly visible local accountability

We don’t suggest that this could happen or would work everywhere in England.  Some localities don’t currently have the capacity, confidence and civic leadership to take on such a role and there is a limit to the capacity of central government to negotiate these agreements. Our report was written with the support of Manchester and Birmingham City Councils, as well as Mouchel.  Manchester is one of two statutory city regions, and it has already taken on new powers – they now run the skills budget for their city region and would like greater control over welfare funding. The council and other public service organisations across Birmingham have formed one of the most effective Total Place Pilots.  Meanwhile Counties like Kent have pioneered combined services and have also called for control over welfare budgets.  These places are ready for devolution, and so they are the natural starting point for a new phase of localism.

Each political era brings with it the opportunity to create a new political reality. After 1997, devolution to Scotland, Wales, Northern Ireland and London established a new settlement, but it left the English question unanswered.  The challenge for the next government will be to ensure that people power is extended to citizens in the rest of England.  And the trick will be to combine this with answering our other major challenge – the fiscal deficit.