Local Government Association Conference: Speech by John Healey

 John Healey MP

Minister of State

Transcript of the speech as delivered.

Thank you for inviting me to join you. I know the first night of the LGA conference is a big night, so thank you for turning out for this early conference start.

Sir Simon promised the audience would build through the morning, especially after I finish!

It's good to join you in what was officially designated by last year's First Direct Bank survey as the happiest place in Britain… although a few of the faces I can see here now were in the bar at the Highcliffe Hotel when I arrived at 2am last night, and are dragging down Bournemouth's happy average this morning!

Last year when I spoke to you, it was my second full day in the job. Today I'm starting my second year. I am lucky to be in one of the best jobs in Government at one of the best times for local government.

Why?

Because in this day and age, no part of government - department or agency - can deal with the challenges it faces or deliver the services it's charged with, on its own.

From James Purnell's jobs ambitions, to Jackie Smith's local policing pledges, to Hilary Benn's climate change aims, all require the alignment and effort of others. In other words, much greater collaboration.

Furthermore, no part of government can any longer deliver a centralised and standardised service if it is successfully to meet the needs, aspirations and performance required in widely differing local areas.

And no part of government can any longer deliver successfully without considering the contribution of local government.

After this first year in post, I would like to pay tribute to the professionalism of the LGA staff; and a personal tribute to Simon Milton, Jeremy Beecham, Margaret Eaton, Richard Kemp and Keith Ross. Their leadership binds the LGA together in a common commitment to local government, which is also the basis of the work that we as Ministers are able to do with you.

Last year at your conference I said that I would consult you and I would challenge you, which I've set out to do in the areas I've had responsibility for:

• Local government reorganisation
• Council tax capping
• The three year finance settlement
• Local and multi area agreements
• Floods recovery
• The planning bill
• The sub national review
• Efficiency and improvement plans

This year, after one year, I can also congratulate you.

On standards of service, with the Audit Commission showing four out of five authorities rated good or excellent; three out of four improving well or strongly; and - for the second year running - none in the lowest performing category.

On setting this year's budgets with council tax rises at 4 per cent - the second lowest since the tax was introduced 15 years ago.

On efficiency gains of £3.2 billion over the last four years - the equivalent of £123 off the average Band D council tax bill.

And on council tax collection rates - up again this year for the eighth year running, to 97.1 per cent in-year and, of course, because councils continue to pursue unpaid bills beyond the one financial year the actual collection rate is higher still.

While councils are doing better and better on collection, there are still people who do not pay their council tax bills.

And each year there are also some who can pay but won't pay. This is not fair to the vast majority who play by the rules and pay what's due. And it prevents councils putting this money into public services.

So I can announce today that I am working with the Ministry of Justice to look at new ways to collect and enforce council tax.

Since its introduction in 1993 council tax has been an anomaly. It is a civil debt enforced through the magistrates court, with sanctions often designed for and more suited to criminal offences.

368 people went to prison for not paying their council tax in 2005-06 and a further 335 were committed to prison but didn't serve a sentence.

In some cases this sanction may be needed.

But most civil debts - like rent arrears and unpaid credit card bills - are effectively enforced through the county court system, with tough sanctions available if needed, like freezing and seizing money in banks or building societies to ensure payment. And a county court judgement that's not settled can also affect a person's credit rating.

We will therefore look at allowing councils to transfer council tax debts from magistrates to county courts.

Our aim is to increase collection rates still further and cut the number of people sent to prison each year for not paying their council tax.

Officials from the two departments will discuss this plan widely with interested groups, including local government and the courts, and report back to me by the end of the summer.

I argued last year that there were new imperatives and new opportunities to renew the relationship between local councils and local communities.

As service users, people now demand and expect more. As citizens - and voters - they want more too.

As citizens, people are expecting and demanding more:

• Information
• Consultation
• Say on decisions
• Ability to demand answers and action when things aren't right

They want to be able to call those making decisions to account directly - and have others do so on their behalf.

The central question of our age in public services must be: how do we answer this appetite for engagement in all its different forms?

The latest citizenship survey told us that under a half of people felt well informed by their Council about the services in their area. Two in five felt that they could influence decisions in their local area - but that means that the majority did not.

When you boil this down, it is about the process of politics and democracy.

It is my long-held belief that local government is the point at which people can best connect with politics. That local democracy is central to strong communities. That local involvement and trust in people is how we make public services respond to people's needs.

In our Department for Communities and Local Government, we're looking to answer some of these aspirations in the white paper on empowerment very shortly.

So when people ask:

• How can I get involved in my community?
• Where can I get information on this local concern I have?
• What's my way of having a say on this issue?
• Why have these decisions been taken? Who has made these decisions and how can I challenge them?… the White Paper aims to provide the answers.

Hazel will talk more about this tomorrow… but as Bill Gates has said: 'As we look ahead, leaders will be those who empower others'.

What we have put in place together over the last year is also a good base for renewing that other essential council relationship, between local and central government.

The next year or two will determine how much further we can build on that base. And the onus lies just as much in your hands as it does in mine; just as much with local government as it does with ministers.

I would argue that there have been four important developments:

1. The central/local concordat has helped clarify respective roles and responsibilities.
2. The first-ever three-year finance settlement has given local government the flexibility to make longer-term plans and investments.

Not just the rising £23.5 billion core grant I was able to allocate to English local authorities each year, but also:

• Sixty-one specific grants from seven departments also confirmed for three years at the same time;
• Forty-three grants now paid in a single sum each month through the new Area Based Grant with no strings on how the money can be spent;
• Ring-fence restrictions on spending of an extra £5 billion removed over the next three years; and
• £384 million to support improvement, innovation and efficiency in local councils.

3. Local Area Agreements have changed the way priorities are set at the local level.

Local authorities are tackling some of the most challenging and controversial concerns. And across the country they're taking a consistent view of what is most important in our communities today. More than three in four LAAs are prioritising 16 to 18 year olds who are not in education, employment or training. Two in three want to tackle teenage pregnancy, increase affordable housing, lower CO2 emissions, cut crime and reduce obesity in primary school kids.

If we can make this LAA approach work over the next couple of years, why should we not see this in future as the way that the centre commissions and funds local services - well beyond local government - with stronger shared services, pooled budgets, duties to co-operate, and cross-agency scrutiny?

4. The Sub National Review of Economic Development and Regeneration (SNR) has set a new framework for economic leadership.

This is not a conventional central government prescription for England's 'every town'. But principles to support the progressive evolution and devolution of new powers and freedoms for regions, cities and local authorities.

Since last summer, you can see a range of areas of government in which this progressive reform is taking place:

• 14-19 year old skills funding;
• City strategies on employment;
• The new Working Neighbourhoods Fund;
• Train to Gain brokers moved to business link;
• Multi Area Agreements;
• The new transport bill;
• Consultation on a new economic development duty for Councils and streamlined new regional arrangements; and
• Powers for local authorities to introduce new planning levies and business rates supplements.

For years I've wanted to see a stronger emphasis on supporting economic success in local government thinking.

Now, with the new LAAs you've picked priorities - economic priorities - essential to the future prosperity of your areas:

• Three out of four of you place that priority on reducing the 16-18 year-olds not in education, jobs or training;
• Two out of three have selected skills levels and more homes for action;
• Half of you now look to increase the numbers of new businesses and reduce the numbers of adults on benefits in your areas

Now, with the new MAAs you are also responding to the economic reality that skills, jobs, housing and inward investment markets or transport systems and planning spheres are not constrained by council boundaries.

To lead or act effectively on the economy means doing so in collaboration with other authorities and other agencies, as well as with business.

The introduction of MAAs is not a policy for cities - though they are often the most important economic engine for the wider region.

We are looking to sign MAAs later this month: in the South and in the North; in rural and in urban areas; on the coast and in cities.

After that we'll look to extend the scope for sub regions, but we'll do so both with local authorities as the base and within a wider regional policy.

I know some doubt the value of regional level policy and strategy.

But regional economies of around 5 million people are as big as many EU member states.

Our own in Yorkshire is a bigger economy that Ireland or Norway or Singapore.

We will lose out with serious investment if we don't have clear economic priorities at this level.

And we need such policy in all regions. In the '80s and '90s too much was focussed on the Greater South East, while the potential and the problems of the North and Midlands were largely overlooked from London.

Now, despite the economic slowdown we still have more people in work than ever before and eight out of the nine English regions have grown faster than Europe. With economic shocks - like Longbridge, the Selby put closures, foot and mouth and last summer's floods - RDAs have proved that they can respond more rapidly than Whitehall and with more clout than a single council could bring.

Regional policy should claim some - though not all - credit for this.

National decisions, taken by people in London without the local knowledge needed, or big councils holding sway, with smaller towns and cities losing out.

Without a regional level strategy and a regional development agency both committed to seeing every area - especially the disadvantaged - fulfil its economic potential:

• Great Yarmouth would not be looking forward to the completion of Eastport this Autumn, bringing an extra 1,000 jobs and 120,000 visitors to the area;
• Hastings and Bexhill would not have the new university centre, the new business district, 700 students in town and a household income that has risen 9 per cent above the regional average
• Plymouth, Falmouth and nearby Poole would not have networked marine skills centres that have already trained over 16,000 people in marine engineering and manufacturing.

When I debate the economic role of local government - or in fact almost any local government issue - I always hear the argument for more freedoms and financial powers. I'm always receptive. And I'm looking at new funding tools, at the moment.

But research tells us that:

• Councils generate £1 billion a year through their powers to trade… but only a quarter of the minority that use these powers aim to make a surplus;
• Nine out of ten LSPs are aware of the wellbeing power but fewer than one in 12 are using it;
• Only one in five councils are using charging to the full potential. Not just to cover costs but to shape their area - reducing congestion, improving levels of health and exercise, encouraging the use of local shops - and half of councils don't even have a clear policy on charging to guide their decisions on how to use their powers; and
• Even with the significant new freedom we introduced from the Treasury in 2004 with the new prudential borrowing regime, only 60 per cent of local authorities have used it since.

Sir Michael Lyons was right in his authoritative report last Spring when he said: 'Local government needs to strengthen its own confidence and capability, engage more effectively with local people, and make best use of existing powers'.

By all means make the case for more innovation, more powers, more freedoms.

But also make use of those you already have.

By all means, let's develop policy and debate what is best for the people we serve and represent.

But let's make it constructive, well evidenced and respectful. Let's not permit local government to be used by anyone as a political football.

And by all means, challenge us in central government, as we challenge you.

Because this - surely - should be at the heart of healthy, modern central-local government relations.