Local Government Funding

Debate between James Morris and Andrew Bingham

Monday 6th December 2010 Commons Chamber

[James Morris]

My hon. Friend makes a very good point. What he says is true.

The Government have asked local authorities and businesses to join forces in a bottom-up process, where they feel it appropriate, and through local enterprise partnerships, rather than top-down, regionally imposed structures. That will allow for economic development to be based on genuine local economic geographies, for investment to be tailored to local areas, and for LEPs, such as the one I have been advocating for the black country, to focus with laser precision on the particular issues affecting the 1 million people living in the black country.

That also illustrates that local authorities are capable of working together, often across political boundaries, to deliver services more proactively. In my region, Dudley, Sandwell, Wolverhampton and Walsall councils are demonstrating, by working together on shared services, such as information technology, trading standards, legal services and human resources, that we can save money and deliver better services for local people. That is happening across the country. For example, Hammersmith and Fulham, Westminster and Kensington and Chelsea councils are implementing a substantial shared-services programme across education and other services.

[Andrew Bingham]

My councillors would not forgive me if I did not intervene at this point. I have mentioned High Peak borough council already, but with its shared services with Staffordshire Moorlands district council, we saved more than £1 million last year, and will save a further £1.27 million this year. That exemplifies my hon. Friend’s point.

[James Morris]

My hon. Friend makes a very good point. This is the future of local government—working together, shared services and making savings, while delivering services more effectively.

I have long been an advocate of place-based budgets, which were touched on at the beginning of the debate. To give the previous Government their due, they introduced the Total Place pilots. Regrettably, it took them12 years to come up with the idea, but it was a good one. The implementation of place-based budgeting can radically change how services are delivered by pooling funding from a wide range of public, private and third sector organisations to tackle specific issues. I welcome the fact that the Government have announced that initially 16 areas will focus on the broad theme of helping families with complex needs. That model will help to make the delivery of services cheaper and allow for an improved focus on the needs of specific communities and individual users. This model needs to be expanded to encapsulate further policy objectives in the medium term. The Local Government Association estimates that doing so could save £20 billion a year by the end of this Parliament.

There are examples up and down the country of local authorities taking up this strategic challenge. As the Minister remarked, the recent announcements on public health demonstrate new roles and potential funding streams for local authorities that are also very welcome. However, that is not the only way to improve service delivery. The Cabinet Office recently introduced a right to provide for employees of public sector organisations. What this will mean in practice is the extension of mutuals and co-operatives in the provision of public services. The people at ground level often have a knowledge and understanding of the issues at hand, and they will now be able to start delivering services better. I am keen to see this model progressing in my constituency, and I can see the potential of mutuals in offering local services and youth services. The Government are also committed to providing local people with specific powers to improve their local area. These include devolving planning reform back to communities from unaccountable regional quangos, allowing local people to elect their own mayors and police commissioners, and extending the use of local referendums.

In summary, therefore, power is being handed back to local authorities, public sector workers and local people. Unlike what happened during the past 13 years, this will be real localism in practice, not the top-down centralisation that was passed down by the previous Labour Government. Such an approach can lead to a more personalised approach to the delivery of services, greater accountability and transparency and, crucially, given the economic mess, real savings, which the Local Government Association estimates could be as high as £20 billion over this Parliament. Local authorities need to see the current situation as an opportunity fundamentally to rethink how they deliver services, so that they can begin to do so more efficiently, more effectively and in the interests of the local people they serve.