Author Matthew Clifton suggests a new methodology for assessing an area’s economic strengths and weaknesses, which in turn should point leaders and chief executives towards priorities for improvement. The ‘competitive advantage’ of one area can differ markedly from another, so councils need to devise their own distinct strategies for economic success.

Building on real case studies from across the country, Trading Places analyses the fundamental building blocks for new growth and regeneration to occur, focusing in particular on knowledge-based service companies. The report makes over 20 recommendations for both national and local government, including:

• The introduction of tax relief on the cost of moving associated with employment;
  
• Devolution of responsibility for transport;
  
• Devolution of responsibility for both pre and post 19 skills;
  
• A share of income tax as a local government grant;
  
• 4p top rate for Supplementary Business Rates

This report offers a strong rationale for the empowerment of local leadership, and to set out local approaches to achieving the Government’s own target of ensuring that each region performs to its full potential. It finds that, while regional variation should be accounted for, and while baselines aren’t always comparable, there are certain key factors that encourage economic development, particularly the knowledge economy and mobile labour markets. Steps should be taken to stimulate their growth.

The report, which is supported by BT and Yorkshire Forward, argues that if the aspirations of the Treasury and CLG for regional economic convergence are to be realised, they need to be converted into tangible, tailored policies relevant from neighbourhood to neighbourhood. The framework set out in Trading Places will help Leaders and senior officers across our local authorities develop strategies to galvanise and lead economic development.

The paper disagrees with a recent King’s Fund report, Should Primary Care Trusts be made more locally accountable?, which was sceptical of the need to devolve health services further and give local authorities a greater role in their delivery. NLGN argues instead that “there are not only strong democratic and service user reasons for improving PCT accountability, but crucially that local democratic control may also be a better route to swifter service improvement and enhanced management arrangements”.

The paper also comes as West Sussex County Council recently passed a motion to make health services in their area more democratic. There has also been speculation that the Government may give local authorities a more prominent role in local health services in its forthcoming Empowerment White Paper.

NLGN argues that PCTs could benefit from incorporating the expertise of senior local authority managers, particularly with regard to financial management. It points out that whilst local authorities have consistently recorded year on year efficiency savings, PCTs recently posted an overall deficit of £633million. The House of Commons Public Accounts Committee has criticised PCTs for a “lack of financial management expertise in the NHS”. The paper argues that “PCTs sometimes lack commissioning expertise and have few officers with specialist procurement skills” whilst “information, expertise and knowledge within local authorities could help inform commissioning and procurement and improve the outcomes of local health services”.

NLGN also argues that because local authorities already commission services related to health outcomes in the area, such as Children’s services, Adult Social Care and Housing, make a coherent argument for a greater role in the strategic delivery and direction of PCTs. The paper concludes by encouraging the Government to pilot schemes to link together high-performing authorities with their local PCTs.

Chris Leslie, Director, NLGN said:

“Stronger local accountability in health services is not only right in principle, but we believe that the advances in local management accrued by local authorities over the past decade should now be available for English primary care commissioning as well”.

“We suggest piloting joint commissioning and pooled budgets where there is a strong management support case to be made in coterminous 4 star councils / 1 star PCTs”.

“If such pilots were successful, it would be a reasonable assumption that a closer working relationship between local authority and PCT boundaries would improve the prospects for improved performance, value for money and increased resilience from closer integration of services”.

Gordon Brown should consider introducing more elected mayors to solve the current constitutional imbalance in the UK according to two leading think tanks. In an article published today, the Institute for Public Policy Research (ippr) and the New Local Government Network (NLGN) have called for more directly elected mayors with powers over local police, transport and health services.

There are currently 13 elected mayors in the UK, including the Mayor of London. The article argues that more mayors would help to spearhead a new era of devolution, offering visible and accountable leadership. They also speculate that areas could receive additional devolved powers if they choose a mayoral model. The article urges Ministers to use the forthcoming Empowerment White Paper to push forward new provisions for elected mayors.

The article, written by Chris Leslie, Director of NLGN and Guy Lodge, Senior Research Fellow, Democracy and Power, ippr and part of a new collection of essays, Directly
Elected, Direct Results, argues that more elected mayors could represent a
powerful indication from the Government that they are serious about devolving power to the English regions. This in turn would help to allay a perceived constitutional imbalance in the UK, whereby Scotland, Northern Ireland and Wales have received greater decentralisation, whereas England has not.

The authors argue:

“By presenting Mayors as a decentralising measure, Gordon Brown would finally have a substantive policy response to the English Question, which has arisen as a result of (asymmetric) devolution to Scotland and Wales. Mayors might not answer the West Lothian Question – a reference to the ability of Scottish MPs to vote on English matters – but by enabling England to be administered in a far less centralised fashion they would significantly improve the way England is governed, something which is likely to be of greater concern to the public”.

The article is published on the same day that an NLGN/MORI poll showed public support for the elected mayor model. The survey found that 38% of people support the idea of a directly elected mayor for their council, with 29% opposing it. Support was stronger when asked whether major cities in the UK should have elected mayors, with 40% in agreement against 16% against. In a worrying indictment of the lack of viable local leadership the survey also found that 71% of people couldn’t name their local council leader.

Also writing in the collection, Secretary of State for Communities, Hazel Blears MP writes that she has been “personally impressed” with local Mayors and argues that “local Mayors offer a form of leadership that is clear accountable and visible. Mayors can balance competing priorities and take tough decisions in the community’s wider interests”.

Other contributors to the collection include Lucy de Groot and Judi Billing from IDeA; Sir Steve Bullock, Mayor of Lewisham; Stuart Drummond, Mayor of Hartlepool; Sir Robin Wales, Mayor of Newham; Jules Pipe, Mayor of Hackney and Tony Eggington, Mayor of Mansfield.

Local authorities have a history of providing mortgages and would routinely lend to local residents up until the early-1980s. With repossession levels at their highest since the early 1990s and many households struggling with mortgage payments, NLGN argues that councils are in an ideal position to help stabilise the housing market. Such schemes are already commonplace in the United States and is a key part of Barack Obama’s strategy for reviving the flagging US housing market.

Under the scheme, councils would be able to borrow money under prudential borrowing rules and offer support to a select group of people, such as first time buyers or people involved in mortgage difficulties, particularly when numbers of mortgage defaults might impact disproportionately on social housing demand in the area. According to the report’s author, Anthony Brand:

“Prudential borrowing would support lower-interest debt than the markets can support. With mortgage defaults up 17% this year, and likely to top 100,000, supporting those areas hit hardest could be vital to sustaining communities. Government should set £2bn of its £50bn intervention package aside for supporting these measures, and allowing the hardest hit councils to apply for funding. This could help up to 15,000 people out of difficulty and even provide a long-term profit to the Treasury”.

In the report NLGN also says that local councils should be given powers to restrict the amount of Right-to-Buy properties in areas of high housing demand to maintain levels of social housing. The report calculates that since its inception in the 1980s, Right-to-Buy has lead to the sale of over 2 million public sector houses and that this has in part led to a shortage of social housing, leaving 1.6 million households on the housing waiting list. It also argues that the current £26,000 discount of Right-to-Buy properties should be removed as it offers an unfair advantage to buying property below the market price.

The report also calls for local authorities to be given greater freedoms to build and invest in new properties. In 2005 only 239 houses were built by local authorities compared to 173,000 in 1970. To help free up new dwelling, councils should be given powers to borrow money to invest in social housing and be able to take over dormant buildings where they have been empty for five years and turn them into social housing. In areas where the ownership of second homes is affecting the local property marker, councils should also have the option to levy additional council tax on the second property.

The report also found that a substantial number of people in social housing earned enough money to rent property in the private sector. 261,000 households in social housing earned over £2,000 a month after tax, including 57% of who pay less than £300.00 a month in rent. For these households rent represents less than 11% of their disposable income, compared to the 20% average paid by people on an equivalent salary in the private rental market. The report also found that 38,000 households in social housing earn over £50,000 a year, significantly above the average household income for England and Wales of £27,500.

The Sub-National Review will mean that Regional Assemblies are dissolved and that new governance structures will be created in their place. The report recommends that new ‘expert advisory’ arrangements should be developed by the RDAs to ensure that they can make best use of expertise from partners across the region. This would ensure that those with a wide knowledge base in sectoral, financial and governance issues should be consulted when preparing the Regional Strategy.

The Sub-National Review, which was led jointly by the Treasury, the Department for Communities and Local Government and the Department for Business, Enterprise and Regulatory Reform considered how to strengthen economic performance in regions, cities and localities throughout the country. The recommendations included a proposal to combine the Regional Economic Strategies and Regional Spatial Strategies, giving local authorities greater influence over economic development.

To improve engagement between the RDAs and their partners the NLGN report also recommends establishing discussions between them through statutory commissioning and public bodies. It also suggests that stronger links with Local Strategic Partnerships (LSPs) – perhaps through an Annual Regional Conference – should be the means by which community organisations can get involved in regional decision-making.

Author of the report, Chris Leslie, Director of NLGN said:

“Local authorities and Regional Development Agencies will need to redefine their relationships with the outside world once the Regional Assemblies have been wound up in 2010. The Government does not seem fixed in recommending a particular model – which is why we have recommended an overhaul of how partners are engaged. We hope this will kick start a debate ensuring regional decisions are fully informed by key stakeholders.”

Simon Foy, Chief Economist, Yorkshire Forward said:

“The Social Economic and Environmental partners, who include business people, charities, trade unions and public sector organisations, will play a vital role in the delivery of the integrated regional strategy. Both their expertise in developing strategy and their capacity for delivery will be essential to our work following the sub-national review.”

Cllr Arthur Barker, Chair of Local Government Yorkshire and Humber said:

“Councils across Yorkshire and Humber welcome the opportunities provided in the SNR and within the region we have been quick to respond to these. We are determined to ensure the future arrangements within Yorkshire and Humber are appropriate to the needs of the region and council leaders and Yorkshire Forward have agreed a regional approach.

We have not forgotten our partners and their future role and that is why we joined with Yorkshire Forward to commissioned this research. We hope to ensure that in the new arrangements there is clarity about the role of partners and how they can add the most value”.

NLGN – which last year called for council leaders to have the power to hire and fire Chief Constables – said that varying local circumstances meant that local citizens and elected representatives were in a better position to decide how resources should be targeted.

NLGN Director Chris Leslie said:

“The Government has worked hard to bring local citizens closer to policing, however, central control of can leave some communities feeling that their concerns are not fully addressed. Crime is predominantly a local problem and research shows that 90% is committed within 10 miles of the perpetrator’s home. Neighbourhood accountability over local policing is the right way ahead.

“Local government stands ready to take on the role of police accountability and I hope that these reforms will see elected representatives helping their local forces to better target crime”.

Commenting on the Draft Queen’s Speech in general, Chris Leslie said that the programme “was underpinned by a genuinely localist framework”. He said that he was encouraged by the proposals to empower local citizens with more control over local services and plans to reform the House of Lords, although he urged Ministers to look seriously at involving council leaders in a new Second Chamber.