Let’s talk about devolution

I’m quite a fan of devolution and the idea that local areas (or Nations, if we’re talking in a UK context) should be able to determine their own priorities and aspirations. So you’d think I’d be pretty pleased with the proposals from the Smith Commission for Scotland to be given a wide range of new powers including setting income tax, lowering the voting age and control over various benefits. And in some respects I am pleased, as I believe these would move things forward considerably. However I also have major concerns over the approach being taken to Scottish devolution and the rest of the UK.

Whilst I have no doubt that Lord Smith of Kelvin has given due consideration to the proposals, his remit was to focus on Scotland. My concern is that in doing so, the wider implications for the UK as a whole and the English regions and cities in particular, are being rushed through.

The Coalition have been pursuing a devolution agenda since 2010 with the Localism Act the legislative cornerstone of their approach. I have in the past been critical of the lack of appetite for economic localism within this as it is my firmly held view that without economic devolution you cannot expect to realise meaningful social or political devolution.

The lessons from the Eurozone area should alert us to the damaging consequences of economic union which is detached from political union. Whilst the situation in the UK is the mirror image of this – existing economic union with growing political separation – the lessons are still relevant. We need to think through what the implications of economic devolution are to all parts of the UK – not just Scotland.

I know David Cameron has said he will plough ahead with English devolution in parallel, but I do not believe that the approach has been fully thought through. State control over economic and social affairs of our lives has become increasingly centralised over the last 100 years. Before the First World War citizen’s had very little day to day contact with the State at a national level, with the exception of possibly the Post Office. Almost everything else was devolved to a local or regional level.

When David Miliband was Secretary of State for Communities and Local Government he used the phrase ‘double devolution’ to describe transfer of power from Whitehall to the Town Hall and from Town Hall to local people. Devolution to Councils was conditional on power being handed on to local citizens, rather than simply concentrated in a different political bureaucracy. Too much of the current debate appears to have forgotten this more radical ambition.

The suggestion that you can unwind a hundred years of centralisation across the whole UK with just a swiftly held Commission is absurd. The decisions that we take over devolution now will affect what happens for many years to come. The proposals must be properly debated by the public and the full implications considered carefully. Citizens across the UK have the right to understand what is being proposed and how it will affect them.

It’s not possible to disconnect what happens in Scotland from what happens in the rest of the UK. This is not simply about ‘English votes on English issues’ it is much more profound. It is about democracy, our economic prospects and the relationships between social and economic areas (communities). Change cannot be rushed nor can it be piecemeal.

2015 will be the 800th anniversary of the Magna Carta the bedrock of democracy in the UK – and a beacon for democracy across the world. It will also see a General Election and a new Government being elected. What better opportunity for us to have an honest, open and meaningful debate about the future of our democracy?

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Something for everyone, or nothing for anyone?

It started as a good news story….DCLG issued draft Best Value guidance following Eric Pickles speech at NCVO’s annual conference saying he would take action to ensure local authorities did not cut funding to the VCS disproportionately or thoughtlessly. This ‘right to reshape’ is something we have been lobbying for along with colleagues on DCLG’s VCS partnership board. It is intended to create breathing space in advance of cuts being made, to explore how things might be done differently with less money. The publication of draft guidance was intended to set out the government’s expectations of local authorities to adopt this approach.

So far so good…

Then I had a look at the ‘guidance’ (I use the term loosely), all two-thirds of a page (or 275 words) of it. My first thought was ‘there’s not a lot there’. In fact, what I actually thought was that it was actually missing the guidance bit. So I checked again….nope…it was right….that was it.

DCLG proudly announced in their news release that the new draft guidance would replace the 56 pages of statutory guidance relating to the Local Government and Public Involvement in Health Act 2007. Clearly much has changed in the last year – for example the scrapping of Local Area Agreements and the Comprehensive Area Assessment – making much of the previous guidance redundant. But an unassuming sentence in the introduction to the draft guidance (which is actually longer than the guidance itself!) announced that the government plans to repeal the Duty to Involve (and the Duty to prepare a Sustainable Community Strategy). This immediately set alarm bells ringing…and clearly I was not the only one to pick up on this apparently minor detail, as blogs by Davy Jones  and Edward Andersson from Involve show.

When the Duty to Involve (D2I) was introduced, it had been heralded as a major step forward (and not just by a labour government) – placing a statutory duty on public bodies to ‘inform, consult and involve’ local people in decision making. Of course it was not without its flaws – the inclusion of the phrase ‘where appropriate’ left it completely open to interpretation. But it was generally welcomed nonetheless; particularly as it was something that local authorities and their partners were to be assessed on.

Urban Forum has taken a keen interest in the Duty from the outset, seeking to raise awareness of it among community groups, and conducting a survey on perceptions towards it at the time of its introduction. We then resurveyed the same people one year on to see how people felt things had changed.  The research – which is available here: Involving Communities – a legal duty produced some interesting findings:

  • There was virtually no change in levels of awareness of the Duty one year after its introduction.
  • Almost 9 out of 10 people felt their involvement would not make any difference
  • Confidence in the Duty’s ability to improve involvement had fallen significantly
  • The numbers of people that felt councillors did nothing to implement the Duty had increased substantially.

In short, the prevailing opinion was that the Duty had not had a major impact on local participation.

So what do we do about it? Three possible responses might be; to focus on making it work better, to replace it with something else, or to just get rid of it.

The government say that they have effectively gone for the middle option – with the introduction, through the Localism Bill, of new Community Rights to Build, Buy and Challenge. However I would argue that these are very different. The community rights, whilst welcomed, are far more specific and focused on citizens or not-for-profit groups being prepared to take on responsibility for doing something. The D2I’s strength (and possibly its weakness) is in its generality – that citizens have a right to express views to inform decision making. They don’t have to want to take over a public service or buy a building, just have their say. The shift from a more general ‘have your say’ to more emphasis on actually doing things seems to go somewhat against the grain of public opinion. Consistent polling data from Ipsos MORI shows that the number of people who want to have a say in local decisions is quite high (around 60%), compared with only 1 in 10 who are interested in actually running services[1]. So the change of emphasis is perhaps somewhat surprising.

There are also questions about the Duty’s relevance to Big Society and localism. Surely citizen voice and community empowerment are central themes within the government’s agenda…isn’t that the point of the D2I? Perhaps this is a sign that when push comes to shove a laissez faire approach to regulation trumps community empowerment in policy?

Another question that ought to be asked is whether there is any evidence to show that the D2I is a significant (and costly) bureaucratic burden on public bodies. If it hasn’t greatly affected the way councils work, surely it can’t have been particularly burdensome then, can it? And if that’s the case, then why repeal it? I am unaware any evidence of significant costs associated with implementing the Duty to Involve (but if any exists I would be interested to see it). Given that localism and Big Society will mean even more engagement with local people, how can it make sense to remove the statutory basis for involvement? I do not accept the suggestion that the statutory guidance was overly prescriptive. It sought to set out the expectations that central government had on standards of community participation by public bodies. Scrapping the guidance means we risk every single local area feeling they have to ‘reinvent’ this for themselves.

It was suggested to me privately that the decision to scrap the Duty to Involve is merely a ‘sweetener’ to local authorities in return for ‘imposing’ the Community Rights on them. If that’s the case I fear that in an attempt to offer something to everyone, we’ve ended up with nothing for anyone.

 

 

Toby Blume
Chief Executive
 
Urban Forum

Twitter: http://twitter.com/tobyblume/ 

Facebook: http://tiny.cc/UFonFB

 

The sound of one hand clapping

The government’s rhetoric on the Big Society, and its legislative sibling the Localism Bill, suggest a desire to transform our social and political architecture. Local areas are to be (at least on paper) far more control to determine local priorities and deliver improved outcomes and citizens are being asked to play a far greater role in what happens in their communities.

 

However this ambition to establish a new settlement between central and local government and to redesign the relationship between citizens and the state appears to be limited to social and political reform. There is little to suggest that the Coalition government has the same radical vision for reforming our economic landscape, despite Eric Pickles’ statement that “a recovering economy needs local remedies [1]”. 

I quite agree. It seems absurd to think that you can hope to achieve social and political reform without giving local areas control over their economies too. To me this seems a bit like clapping with one hand. How else can civil society, the public sector and the private sector seek to stimulate enterprise (social and commercial) and address local needs? The fact is that our economic architecture is hopelessly outdated to respond to the challenges we face and the opportunities that Big Society and localism might bring. Everyone seems to be agreed that we cannot simply do ‘the same but less’, and that we need to change – so why does there seem to be so little appetite for radical economic reform?

 

How can we expect true localism and the Big Society to flourish without giving local communities control over the levers to determine economic policy?

A senior government advisor recently admitted to me that economic policy was currently under-developed in the Big Society narrative. He suggested that no one had yet ‘done the heavy lifting’ required to flesh out the theoretical and practical implications of Big Society on our economy. Whilst I don’t fully accept this – numerous thinkers and practitioners have explored these issues and suggest a range of possible solutions – I think that it’s pertinent that this is the view of at least some of those in government. One needs look no further than the work of the new economics foundation[2], Phillip Blond[3], Centre for Local Economic Strategies[4], our own thinking at Urban Forum[5] and indeed earlier work by Ivan Illich[6] and E.F. Schumacher[7], to find precisely the sort of heavy lifting that’s needed.

 

The government would no doubt point to Local Enterprise Partnerships (LEPs) and the Regional Growth Fund and their plans to give local authorities control of business rates revenue as evidence of economic reform. However this amounts to no more than tinkering at the edges of our economic architecture, when what’s needed is something far more ambitious and transformative. The development of new Local Enterprise Partnerships (LEPs) has bordered on a farce and gives me little confidence that they will foster new approaches to economic development and build a local enterprise culture.

 

Banks provide a good illustration of how ill-equipped our economic policy is to respond to the challenges of Big Society and localism. Banks are supposed to deploy ‘surplus’ capital to where it is needed and, for many years that’s what they did. The growth of global banking institutions now provides little real connection to localities and we have lost the value of a bank manager who knows his customers and can provide access to loans without the need for complex and inefficient formulaic risk-pricing models. We need local banks, connected to their communities, which understand the local economy (and the people seeking finance). Regulation can either create conditions for local provision to flourish, or it can encourage mergers and acquisitions that inhibit local provision. This is not about an interventionist approach versus a laissez-fair approach. It is about supporting a locally-focused economic policy instead of a global one.

 

Small steps are being taken, but we need to be much more ambitious

There are signs of small steps in the right direction, such as; giving councils control of business rates, planning reform to give neighbourhoods greater control over development, changes to feed-in tariffs for renewable energy production and the Localism Bill’s community rights. The introduction of a general power of competence will also enable the most forward thinking areas to make progress. But there are more fundamental barriers to true economic localism. The review of local government finance should be an opportunity to rethink things, but I fear a lack of appetite within central government will curtail any truly ambitious thinking.

 

The Lib Dems’ election manifesto included a number of proposals that would have helped stimulate local economies and provided the foundation for economic localism. Local Income Tax and Regional Stock Exchanges are just two that would help reform our economic architecture to support local enterprise.

 

Bank reform is urgently needed as I have been saying for some time[8], but it is by no means a panacea. We need to look at ways to value and protect independent retail on our high streets, to better regulate global finance and the power of corporations, as well as looking at ways to simplify our tax system (which is not a euphemism for dismantling it). We need to find ways to factor in the externalities of private enterprise – so the profits are pocketed by individuals and institutions and the burden of paying for the negative impacts borne by the state. In short, must find ways to address state and market failure, with a more sophisticated appreciation of the true cost and value of things.

I do not claim to have all the answers – even the few solutions I’ve suggested are ideas I have appropriated from others – but I believe strongly that until we have the stomach for radical economic reform we will be chewing on the gristle of Big Society.

 

Toby Blume

Chief Executive 
Urban Forum

Twitter: http://twitter.com/tobyblume/ 

Breathing space and playing the long game

I didn’t hear Communities Secretary Eric Pickles’ speech at NCVO’s annual conference yesterday (though I was following it on twitter), but I did arrive soon afterwards for a drink and a natter with the assembled ranks of the VCS. The Secretary of State had earlier announced that he felt it was reasonable that local authorities did not disproportionately cut funding to voluntary and community groups and that he would consider using legislation to prevent it.

The reaction to his speech was not particularly positive and the impression I got was that most people were deeply sceptical and unimpressed with what they saw as just ‘warm words’ without action. This is entirely understandable given the daily pain of news about further cuts to the sector we are receiving. It is legitimate to point out that had the Secretary of State not frontloaded the cuts to local government (so that the deepest cuts happen in 2011-12,) the situation would not have been so bad.

Nonetheless I was surprised by the rubbishing I heard, characterised by one prominent sector leader disparagingly referring to the ‘Pickles Doctrine of Reasonableness’. These are pretty dark days for the sector and I for one am desperate to grab on to the bright spots of opportunity that might offer some hope of improvement in the future.

Whether the example of councils like Thurrock and Wolverhampton (who have fully protected their funding for the not-for-profit sector) can be followed more consistently, I don’t know. I know of a number of local authorities that are deeply committed to protecting as best they can, their funding for the VCS, but are still having to make cuts. Nor do I believe that every penny that flows through to charities is spent in the interests of those most in need.  I even have to admit that I do not hold out a great deal of hope that things will change significantly in the short term as a result of Eric Pickles’ speech.

The one thing I think central government could to do to convince sceptics in the VCS and local government of their sincerity on this issue is to demonstrate leadership by example. We need to see Departments across Whitehall lining up to prove that they value the sector and that they too will ensure that the cuts in their funding will not be out of proportion with their own budget cuts. If we see that, perhaps more people will be prepared to take them at their word.

But for me the really interesting part of his speech was when he said that where Councils expected funding or support to need to be cut;

“It is reasonable to expect that they (Councils) … give local groups a chance to make their case and suggest alternative ways of redesigning or reshaping the service.”

That is where I think we ought to be looking for opportunities.  The chance, in effect, to get creative and explore whether there are ways to reconfigure or redesign the way things are done. That seems to me to play to the VCS’s strengths – creativity, innovation, efficiency, joining things up and finding ways to address needs and problems. I heard Locality’s Chief Executive, Steve Wyler, call for something very much along this lines recently – a right to reshape – and I thought then it sounded like a good idea.

It’s essential that we don’t solely focus on the here and now and the considerable challenges we all face in the short term. There is a long-game to play too and we must not let the opportunities slip away. I accept that this comes too late to save many organisations and jobs which are already gone or going. However that doesn’t mean it’s a bad idea.

I believe that legislation along these lines – as part of the package of community rights being introduced through the Localism Bill – could significantly strengthen not just the VCS but the public sector too. It could mean that, before any cuts were made, we’d have a chance to get people together to explore, openly and honestly, how savings might be made, how improvements could release other funds, or how the aim might be achieved in a different way. At the very least it might buy some breathing space.

Of course there are plenty of ‘ifs and buts’ and much would depend on the detail, but that’s my point. We will miss out on informing the detail if we’re too quick to reject the idea out of hand.

Whether or not this represents a change of heart or of policy for the Secretary of State, I don’t know. Nonetheless, I do recognise that Eric Pickles is attempting to offer the sector something and, if our collective response is to dismiss it, we may not get a second invitation.

I believe it would need a legislative underpinning and can only see this working through the Localism Bill. However to get this idea onto the statute books we will first need to recognise its potential and then make our voices heard loudly and clearly. Localism means central government devolving powers, but it does retain control of the framework within which decisions take place. A community right to review or redesign would be a positive step in my opinion and one we should lobby hard for.

 

Toby Blume

Chief Executive 

Urban Forum 

 

Twitter: http://twitter.com/tobyblume/ 

Facebook: http://tiny.cc/UFonFB