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ITEM CA9
CABINET
- 19 DECEMBER 2006
LOCAL GOVERNMENT
WHITE PAPER: STRUCTURAL ISSUES
Report by
Assistant Chief Executive and Chief Executive
Introduction
- The Government
published its White Paper ‘Strong & Prosperous Communities’ on 26
October 2006 and a new local government bill will be published shortly
to enact the White Paper proposals. Alongside the White Paper there
is an "Invitation to Councils to make proposals for future unitary structures
and to pioneer, as pathfinders, new two tier models". Bids for unitary
status or pathfinders have to be submitted by 25 Jan 2007.
- The White Paper
covers a wide range of issues covering governance, partnership, performance,
and community engagement. A summary of the main elements of the White
Paper is contained in Annex 1 (download
as .doc file). The White Paper excludes coverage of proposals
for the future funding of local government because these issues are
being examined by the Lyons Inquiry. However it now clear that Sir Michael
Lyons will not report, as planned, in December.
Unitary Bids
- The timetable
for dealing with unitary proposals is set out in Annex 2 (download
as .doc file).
- A unitary bid
can be made by one or more councils for the area of the council(s) in
question, but any bid must make proposals for the whole county area.
So, if Oxford City bids, it must also define the impact and arrangements
for the rest of the County.
- The criteria for
bidding are:
- Affordability
– the change must be met from within the existing resource envelope
and represent value for money. The rules on affordability require
transitional/set up costs to be recovered from reduced operational
costs over a period of up to 5 years. Revenue reserves can be used
to offset costs but this should not be done in a way which affects
the Council’s ability to meet future needs.
- Broad Support
– bidders will be required to illustrate that their proposal has broad
support amongst partners and stakeholders. It is clear that other
local authorities won’t have any right of veto but any bids will need
to show support from the community, other statutory agencies (police,
health etc), and the voluntary sector
- Strategic
leadership – New governance arrangements will need to demonstrate
strong, effective and accountable strategic leadership. The leadership
criteria are described in Annex 2
- Neighbourhood
Empowerment – Bids will need to include arrangements for devolving
power to local communities. Details are set out in Annex 2.
- Value for
Money – Bids will need to indicate how service delivery will be
organised to offer efficient and customer responsive services, maximising
collaboration and technology.
- Currently only
Oxford City Council is known to be planning a bid for unitary status.
Our initial cost calculations suggest that the City will be unable to
meet the cost criteria defined by the Department for Communities &
Local Government (DCLG). The fuller cost estimates for unitary options
are set out below. These figures are being audited independently.
Transitional Ongoing Payback
1
Unitary Council £26.8m -£14.5m 1.8 years
2
unitary councils (doughnut) £43.7m +£2.6m never
3
unitary councils (City, North & South) £53.8m +£18.5m never
Unitary
City + 2 tier rest £20.9m +£9.5m never
-------------------------------------------------------------------------------------------------------
Breakdown
of costs for a unitary City + 2 tier for the rest of the County
Unitary
Oxford £12.1m +£8.0m never
2
tier rest £8.8m +£1.5m never
- The County Council
needs to decide whether it wishes to support any of the unitary options.
On the basis of the initial cost assessment it appears that the one
unitary council option is the only financially viable model. This option
could produce ongoing annual savings of £14.5m after transitional costs
have been repaid. However any reorganisation will be disruptive to service
delivery during the transitional period, and in the short term, partnership
with key partners could be damaged. It should also be borne in mind
that the Government have indicated that only 8 new unitary councils
are likely to be created so the extensive work and costs involved in
bidding could be abortive effort.
- The alternative
to structural change is to collaborate with district councils and other
partners to improve customer service and value for money within the
existing local government framework. This would involve sharing back
office functions (HR, Finance, etc) and joining up operations at the
customer interface to provide a seamless service to the public. There
have been initial discussion with district council leaders and there
is interest in pursuing this option. However it should not be assumed
that this is an easy or cost free option. To achieve significant savings
and service improvement there would need to be radical changes across
all local councils and a willingness to engage from all of the parties
involved.
- Improving the
two/three tier system could be achieved by voluntary local arrangements
or under the umbrella of a government pathfinder project. Pathfinders
are designed to encourage pioneering which provides:
- Seamless
service - unified service delivery with service users having no
need to understand whether the county, district or indeed other service
provider is responsible
- Strong leadership
for place shaping
- Effective
accountability - so that people know who is responsible for what
decisions
- Shared back
office services and integrated service delivery mechanisms
- Pathfinders need
to cover the whole county and have the support of all local authorities
in the area. The criteria and timetable will be the same as for unitary
bids. So far, interest in pathfinders has been limited. It is not thought
feasible to devise a high quality and radical scheme and secure universal
sign-up within the government’s time scale.
Partnership Aspects
- The White Paper
recognises that further improvement in public services requires effective
local partnership and community engagement. In consequence there is
great emphasis placed on new provisions for a Sustainable Communities
Strategy (SCS) and the Local Area Agreement (LAA). The major changes
planned include:
- Sustainable
Communities Strategy – A new duty on local authorities to develop
and implement a SCS which plans for the long term needs of the area.
The SCS will need to reflect the Local Development Framework and include
a focus on place shaping of communities. To deliver this effectively,
the County Council and the five district councils will need to ensure
that countywide and district Local Strategic Partnerships (LSPs) work
cohesively together. Elected members are encouraged to take a leading
role in their LSP, in the Public Service Board (PSB) and in the thematic
partnerships in the wider LSP such as the Children and Young People’s
Partnership, the Safer Communities Partnership and others. Elected
members will also be responsible for scrutinising the work of local
strategic partnerships and this suggests a whole new, external role
for County Council scrutiny.
- Local Area
Agreement – The County Council will have a duty to negotiate a
new LAA with local partners and with Government. In essence, the LAA
will be the delivery mechanism for the SCS but Government will wish
to see national targets appropriately reflected in the LAA. In consequence,
there will be 35 targets for improved performance in addition to the
existing 18 statutory DfES targets. Targets are likely to cover community
safety, health & well being, vulnerable people, children, young
people & families, economic development, housing & planning,
climate change, and efficiency improvement. Considerably more central
government funding is expected to be allocated through the LAA (a
seven fold increase has been mentioned nationally) to encourage partners
jointly to agree priorities and to align their activities. The funding
will arrive in a single allocation but we will be expected to reflect
national targets and expectations in allocating resources.
- Health &
Well Being Partnership – there will be new statutory requirements
for a health & well being partnership to oversee the NHS/social
care/public health. Locally we have already made a joint OCC/PCT appointment
of a Director of Public Health and plans are in hand to develop a
new partnership structure.
- These aspects
of the White Paper place significant additional responsibilities on
the County Council and will be enforced through legislation and the
new Comprehensive Area Assessment (CAA) which will replace CPA in 2008.
Further details of the changes required for LSP and PSB arrangements,
appears as a separate report on the agenda.
Performance Framework
- The Comprehensive
Performance Assessment process will be replaced in 2008. The County
Council‘s last assessment under the current regime is scheduled for
December 2007 and we are on course to secure top rating (4 star). However,
under the new CAA regime, the County Council will be judged on its effectiveness
in leading and co-ordination local partnership activity and in particular
on the delivery of the new LAA and on its efforts to address the needs
of individual communities. Work is in hand to develop new arrangements
and the Cabinet will need to engage closely in these activities.
- Recently the Chancellor
of the Exchequer increased the efficiency target for local government
to 3% per annum: the Comprehensive Spending Review in 2007 is likely
to increase the level of efficiencies required. DCLG have indicated
that efficiency savings projected in unitary bids will be used as a
benchmark for efficiency savings across all local authorities. To meet
a significantly higher efficiency target during a period of major cost
pressures (increasing social care needs for the growing number of over
85s and for those with learning disabilities), the County council and
its partners will need to examine radical changes to service delivery.
- It has been calculated
that, currently, Government measures local government through 1,200
indicators. There is a promise to reduce this total to 200 including
those used for LAA purposes. The intention is also to align the targets
for other public sector organisations to support the partnership agenda.
- Audit and inspection
is also to be reshaped with fewer inspectorates and risk based inspections.
The intention is to focus inspection on those authorities/services which
are regarded as poor.
- Overall these
intentions are to be welcomed but Government will find it difficult
to deliver on these expectations.
Governance Arrangements
- There are a range
of changes planned as the detail in Annex 1 illustrates. In essence
these provisions are aimed at encouraging community interest and involvement
in local government whilst strengthening local government leadership
and accountability. There will be an opportunity to explore these proposals
at the Members’ Seminar scheduled for 14 December, however the key points
are:
- Directly
elected mayor/Cabinet or indirectly elected Leader & Cabinet –
the White Paper contains three alternative models for selecting
the executive/leader. Proposals will be included in the local government
bill. As with the introduction of the Executive arrangements required
by the Local Government Act 2000, all authorities will be required
to select a model and to take into account local opinion. However,
there will be no requirement to hold a referendum.
- Stronger
role for the leader – To provide clearer accountability and continuity,
leaders will be appointed for a 4 year term although a Council’s Constitution
will need to provide for a change of Leader within that period.
- Scrutiny
– The scrutiny role will be strengthened and extended to cover
a wider range of public agencies and there will be a ‘Community Call
for Action’ to allow local people to access the scrutiny system. There
will be safeguards against abuse, frivolous and vexatious use. Again,
this will be included in the forthcoming local government bill. It
is clear that some reshaping of our scrutiny arrangements will be
needed.
- Consult and
engage – There will be a duty on the County Council to consult
and engage the community and in particular to involve hard to reach
groups. We will be reviewing our arrangements when we have further
guidance from Government
- Ethical Standards
– In future there will be an expectation of member conduct issues
being resolved locally rather than through the National Standards
Board. There will also be revisions to the Code of Conduct. Proposals
to achieve this will be included in the local government bill.
- Electoral
Divisions – there will be an opportunity to return to single member
divisions.
Conclusions
- The immediate
attention is inevitably focused on the debate about unitary structures.
Nonetheless there are other important issues raised in the White Paper,
notably the significant changes planned for partnership and the performance
framework, for which early action is required.
- In view of the
far ranging implications of structural changes to local government,
it is suggested that the Cabinet should make a recommendation on unitary
structures/ improved two tier for consideration at the Council meeting
9 January. There will be significant work required to develop either
a unitary bid or to develop an improved two/three tier model. It will
therefore be necessary to initiate this work after the Cabinet meeting.
RECOMMENDATIONS
- The Cabinet
is RECOMMENDED to:
- determine
its recommendation to the County Council on unitary bidding
and/or improved two/three tier working; and,
- invite
the Chief Executive to report further to the Cabinet at its
meeting on 16 January 2007.
STEPHEN
CAPALDI
Assistant Chief
Executive
JOANNA
SIMONS
Assistant Chief
Executive
Background Papers: Government White Paper: Strong & Prosperous
Communities.
Contact
Officer: Stephen Capaldi, Assistant Chief Executive, Tel: (01865) 815
466
December
2006
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