Brown’s Future is Real
15 March, 2007

Dick Sorabji, Deputy Director, NLGN

The Comprehensive Spending Review 2007 (CSR07) is likely to be Gordon Brown’s final act as Chancellor. Like biennial Spending Reviews CSR07 will set service spending levels three years ahead. But CSR07 goes much further, deciding government priorities over the next 10 years. This in turn is based on an analysis of all the challenges facing Britain for the next decade.

To support those decisions reviews have been commissioned reflecting the Chancellor’s assessment of the political goals for the decade ahead. His priorities are Sustainable growth & employment, fairness & opportunity, a secure & fair world, and modern & effective public services.

CSR07 aspires to be far more than the government’s biggest business planning exercise in a decade. Through its choice of political priorities we can see how the government plans to renew itself after a decade in power. Through its analysis we can see Labour’s strategy for governing Britain over the next ten years. That strategy is also Gordon Brown’s manifesto for his, hoped for, next job – as Prime Minister.

The questions being asked by CSR07 are global in scope. But as reviews start to report, the evidence is mounting that CSR07 will conclude that answers to the global are found at the local level.

Independent reviews include Leitch on skills, Stern on climate change, Eddington on transport, Barker on planning, Varney on efficiency and Lyons on local government. Internal reviews include children and young people, counter terrorism and security, housing growth, the third sector and sub-national economic development. Local government will be directly affected by ten – if not all – of these reviews. In each case independent reviewers are concluding that devolution is the key.

This is not a coincidence. It is the consequence of rising public expectations and a world that is both more complex and more connected. But it will be a challenge for this Chancellor to be told that success depends on becoming the most devolving Prime Minster in our history.

However, the challenge for all in local government will be greater still. We must learn the new skills and accept the greater uncertainty that goes with moving from a culture of compliance to one of leadership. For that is the emerging message, even in policy areas like transport that in the 20th century were known for grand national projects.

Sir Rod Eddington concluded that “Transport demand in the UK is predominantly local”. The challenge is to solve local congestion and so ensure economic growth in a sustainable environment. This demands greater decision making powers at the sub-national level. He argues for road pricing to solve local bottlenecks, not deliver national plans. Local government needs tools to deliver better bus services and stronger PTAs.

All these arguments point to the need for devolution to partnerships of local councils working across natural economic areas, often at sub-regional levels. If CSR07 is to follow through on Eddington it will deliver devolution on transport.

The same story emerges from the Barker review of planning and land use. Kate Barker argues that planning decisions are too slow and do not engage citizens in the right way. National government needs to make fewer, clearer interventions with call-ins cut by 50%. Councils need to be more pro-active in their approach to planning.

Barker sees financial incentives for the fruits of successful planning strategies as essential to make local government grow into this role. She hints at reforms in local government funding including business rates on empty and derelict property, Planning Gain Supplement and improved LABGI, rewarding councils for growing the number of businesses in their area.

So a review that began by asking how planning reform could deliver more growth in a globalising world, ends up concluding that central government should step back and let local government take a greater lead.

We must wait for Barker’s conclusions on the barriers to housing growth, but the expectation is that they will point in a similar direction.

The Leitch review of skills says almost nothing about local government, yet the ambition in the report places councils at the heart of the solution. Sandy Leitch demonstrates that in a knowledge economy national wealth depends on individual skills. He calls for a doubling in the improvement trend to ensure that 95% of adults have basic skills and 1.9 million have ‘intermediate’ NVQ Level 3 skills by 2020.

At the heart of Leitch’s prescription is creating a demand led approach to skills. That requires closer understanding of industry sector needs. It means tackling low aspirations and poor information. Leitch says less about how these goals will be met. Yet the evidence from the training world is that it will require joined up policies at local level, removing obstacles, promoting choices and offering flexibility.

Local government is the obvious co-ordinator for this task. Yet the challenge to councils will be to modernise leadership style adopting Lao Tzu’s maxim that a leader is best when people say ‘we did it ourselves’.

Devolution and new approaches to leadership are likely themes for other reviews still to be published. The Treasury’s review of economic development flows from the conviction that globalisation is increasing the threat of unequal growth across England’s regions. The Treasury is convinced that solutions can only come at local level.

They want local leaders with governance, accountability and incentive regimes that will keep them focused on the challenge. If the Treasury is to pass its own test of success, then CSR07 will devolve authority and responsibility for economic development to partnerships with local government at their heart.

Calls for devolution and new leadership styles are repeated in interim reports and ministerial comments from other reviews including those on children and the third sector. We should not be surprised at this, because it is central to the one review that is officially about local government, the Lyons Inquiry.

Wherever we look the thinking that informs CSR07 is concluding that the central challenges for Britain in the coming decade require devolution. The old top-down model of government is wearing out.

CSR07 is the Chancellor’s blueprint for transformation into the next Prime Minister. The evidence so far is that the guiding rule for the next successful Prime Minister will be devolution.

The challenge for local government is far greater. Whether or not national government uses CSR07 to devolve, the CSR policy reviews already suggest that national success depends on local leaders stepping up to this greater challenge.

The devolution agenda is a skills agenda for local government.

New skills in engagement and listening are needed to manage the growing range of collective choices, including congested roads, climate change and community cohesion that confront our communities.

In future, successful partnerships will not only ensure everyone has a seat at the table, but deliver better outcomes with fewer resources. To succeed local government needs let go of management through command and control, learning new skills in delivering through networks of influence.

These changes combine to create a third challenge for local government. Enhanced responsiveness to citizens and managing through partnerships combine to create a more uncertain world. Councils need to develop skills for delivering their goals when there is no certainty.

At the heart of that challenge will be new forms of financial management and performance management. Here again CSR07 is looking for devolved area based forms of performance management. The more that councils embed performance management in all staff development, the more we will influence this agenda.

The decisions of CSR07 will be made at national level. They are intended to renew national government. But the lesson from the emerging CSR07 analysis is that the most important factor deciding Britain’s success in the next decade will be local government’s ability to step up to the challenge of the 21st century.