Ministry of Housing, Communities & Local Government
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Denham – biggest single transfer of power in a generation

Denham – biggest single transfer of power in a generation

News Release issued by the COI News Distribution Service on 21 July 2009

Communities Secretary John Denham today heralded the biggest single transfer of power to local government in a generation.


Fundamental reforms being proposed by Government in the Strengthening Local Democracy Consultation will result in a radical strengthening of local democracy by giving citizens a much bigger role in shaping the places in which they live and the public services they use.

A combination of the radical new measures being proposed today, together with recent reforms amount to the biggest shift in power for a generation and will mean that councillors, as elected representatives acting on behalf of local people, would

- be given enhanced scrutiny power and take a lead role in ending bureaucracy, ending duplication, increasing value for money and personalising services.

- have local influence and accountability over more than £100bn of public money a year that is currently spent on key local public services but sits outside elected councillors’ control.

- be able to maximise their financial freedoms through: crucial changes to council house financing with proposals being separately consulted on today to enable councils to keep all their rental income and gain the freedom to manage their housing to meet local needs; secure the long-term economic prosperity of their communities with a new discretionary power to raise a supplement on the business rate and retain their funds to support local projects aimed at economic development. In addition responsibility for commissioning education and training provision for 16-19 year olds (funding worth around £7 billion a year) is to be transferred from the Learning and Skills Council (LSC) to local authorities from next year (2010).

- have the opportunity to go further on reducing carbon emissions than the Government’s national climate change targets. This will not only help in delivering the Low Carbon Transition Plan and Low Carbon Industrial Strategy for green jobs launched last week, but also empower authorities and enable them to demonstrate their commitment to and drive in tackling climate change. The Government wants a debate on whether the idea of local carbon budgets could work for local authorities and what this might mean, building on their current responsibilities for planning, transport, building control and waste management.

The proposals, out for consultation today, will result in a significant change that will put the citizen at the centre and position councillors to act as their champion for getting value for money, personalised services and minimum entitlements across the public services.

The changes are intended to strengthen the link between taking action and getting results, re-energise local democracy, re-establish the citizen at the heart of local democracy and the town hall at the heart of that democratic process.

John Denham said:

“Local democracy starts with the citizen. The changes being outlined today are not about strengthening councils for their own sake – rather to strengthen the rights of citizens through their elected representatives - and make sure local government can really fight the corner for local people.

“Recent reforms have strengthened Government’s commitment to delivering minimum standards of public service for every single person. That commitment means that individuals will be able to exert real control over public services in a way that they never have before.

“If services are not up to the mark or not delivering for them, local people will be able to hold them to account.

"This marks a fundamental shift in the way that we drive improvements in services and this must and will be matched by a shift in power of a kind not seen for a generation.

"In future when people go to vote they will know that they are electing someone who can act on their behalf in relation to every aspect of public spending in the community and someone who can secure for them the very best public services. That means rebalancing the current system to put the citizen first and put them - through their councillors - more firmly in the driving seat."

The proposals being set out today will include:

Increased scrutiny - Councils would become a local point of accountability for citizens to call on to scrutinise public spending decisions. Greater influence over all the money coming into their area would mean that councils could scrutinise more than £100bn a year from other deliverers of public services and so look across the piece at where all money is being spent and question what it is delivering.

Under the proposed changes town halls would become the setting for select committee style sessions at which councillors could grill anyone charged with spending public money – not only police chiefs, health bosses but also representatives from Job Centre Plus and the Environment Agency - and demand action where they are coming up short. Other services provided by organisations outside the public sector such as utility companies whose actions equally affect people's quality of life would also be subject to a new level of council scrutiny.

Putting the citizen first - People's needs - whether education, health or social care related - can be complex and often don’t start and end with one service or organisation. This needs to be reflected in the way that services work – more joined up provision, more pooled budgets, more focus on what is being achieved rather than the process for delivery.
People would not be passed from pillar to post to get the service they need. It would be the council who would sort out barriers, problems and failures, not a burden on the concerned resident who is trying to get help.

Expanded role delivering on new challenges - local councils play a crucial part in making the shift to a low carbon economy, and many of them are already at the forefront of efforts to secure reductions in carbon emissions. Today’s consultation looks at whether local authorities could go further than their current responsibilities - coordinating funding streams, offering innovative financing to support low carbon activity or agreeing local carbon budgets in exchange for government support or freedoms and flexibilities.

Freedom to manage council housing - Following a joint CLG and HM Treasury review of council house financing, steps will be taken to give councils much greater independence and freedom to manage their own housing resources. Proposals out for consultation today seek to dismantle the current Housing Revenue Account subsidy system and replace this with a local system of self-financing for all councils. As a result they will be able to keep all their rental income and be free to manage the housing needs in their areas, including taking forward the improvements achieved through the Decent Homes programme. In return for this freedom, councils will need to demonstrate increased local responsibility and accountability for long term planning, better asset management and efficient and effective service delivery for their tenants.

The founding principle of local government is that citizens have the right to influence the decisions that affect their lives and their communities. Sometimes they may exercise this right through personalised services. Sometimes, they may exercise this right by influencing local services – for example, in having a direct say over how their neighbourhood is policed. And sometimes, it will be through lobbying their council.

But the key way in which local citizens are able to exercise that right is their ability to elect a strong local council which can lead and shape their area.

The consultation being published explores how best to ensure that councils are fully equipped with the power they need to act decisively and effectively on behalf of their citizens. The resulting radical shift in power will be a crucial part of reforming democracy in this country.

Notes to Editors

The Consultation: Strengthening Local Democracy can be found at http://www.communities.gov.uk/publications/localgovernment/localdemocracyconsultation

Contacts:

Communities Local Government
NDS.CLG@coi.gsi.gov.uk

Jane Houghton
Phone: 020 7944 3288 Out of Hours 020 7944 5945
press.office@communities.gsi.gov.uk

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