Does Denham’s direction go the right way?

July 30, 2009

Chris Leslie, Director, New Local Government Network
LGC

June’s reshuffle placed a high burden of expectation on the shoulders of those new Secretaries of State appointed as the chief standard-bearers for the looming General Election. Whether they succeed or fail may determine the fate of the Government. John Denham’s appointment at CLG was a posting he apparently expressed a preference for, an enthusiasm that came across in the comprehensive consultation paper he published last week at an event hosted by NLGN. The paper is essentially Denham’s agenda for democratic renewal in local government and touches on the key areas of central-local relationships and citizen involvement which have been thrust to the fore partly in the aftermath of the MP expenses tumult. So how did his agenda play with a localist audience?

Proposals to give councils greater scrutiny over all local public services, including potentially the utility firms whether publicly or privately owned, were a welcome and refreshing step towards revitalised local government. If councillors have the right to hold all local decision-makers to account for how services help or hinder their communities, then local residents may begin to feel that it is worth turning out to vote. However, scrutiny powers are only a runner-up to the main prize of real power in the hands of elected representatives. In the discussion following his speech Denham hinted that the Government may be willing to adopt NLGN’s proposal for pilot arrangements where local councils appoint PCT non-executive directors. This would send a radical message about the democratisation of local quangos and be a firmer shift in the balance of accountability.

There were some strong signals that the Government would be willing to see constitutional reforms enshrining the devolutionary intent of Ministers, including a proposal for a new Joint Select Committee of both Houses of Parliament tasked with vetting legislation to ensure new laws devolve powers to local level. NLGN has long argued that the legislative process should have a ‘checking’ mechanism to prevent unnecessary centralisation and there is consensus in Parliament now to make this change. If the consultation period ends before the Commons reassembles after the summer break there must surely be a real chance that this reform can come to fruition.

One of the key tests facing the Government is how to disentangle the legal impairment left by the Court of Appeal ruling in the London Boroughs mutual insurance case, which overturned the applicability of the 2000 Act ‘power of wellbeing’. Denham suggested that a narrow amendment in the current Bill might be possible, correcting that ruling and allowing mutual insurance arrangements once again. While this would of course be welcome it would fall some way short of the general permissive power to allow councils freedom to act without constraints. This is still essential if the innovation and efficiency agenda is to advance – there are broader issues than the bulk purchase of insurances at stake here. As a minimum, any narrow amendment must be wide enough to allow all mutual and shared service activities to be defined as potentially in the ‘wellbeing’ interests of a community, as otherwise each separate case could be ensnared in stultifying legal challenge.

There were a myriad of other interesting suggestions in the consultation paper, including speculation on MAA accountability and leadership, as well as support for local authority carbon trading initiatives such as those we argued for in our 2006 Carbon Footprints, Local Steps publication.

While we would have liked more boldness on the balance of finance and distribution of power between Whitehall and localities, the consultation paper does open the door to potentially radical change. Lining up the Government’s offer and comparing it with the Conservative ‘Control Shift’ policy paper begins to give a sense of how the party manifestos may gestate over the coming nine months.


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