Lord Hesletine - Local Government City Renaissance

Local Leadership - Submission to the Shadow Cabinet -Cities Taskforce - some key points

1. Local Leadership of our English Cities has become emasculated and hollowed out by successive overcentralising Governments. It lacks the power to address the problems of poverty, low skills levels and physical decay present in many of our once-great Cities.

2. Excessive power has been granted to unelected Quangos – who often sit at regional level – including Regional Development Agencies, Learning and Skills Councils, English Partnerships and the Housing Corporation. They now disburse over £10 billion per year in regeneration funding. This poses severe problems:
a. There is almost no democratic accountability
b. They are bureaucratic and confusing: there are more than 50 different funding streams
c. It is not clear who is “in charge” which leads to inertia and buck-passing

3. Instead of regional Quangos, Local Government should be leading the renaissance of our Cities

4. In order for Local Government to fulfil this role in the Cities, it needs to be able to:
a. Consistently attract the very best people into Leadership roles
b. Have the full range of powers that they need
c. Cover geographical areas that make sense
d. Be freed from the suffocating regime of central targets (currently over 1,200) and heavily hypothecated funding from the centre

5. The Government’s own Task Force under Lord Rogers recognised these problems. However, the November 2006 White Paper is timid and does not propose meaningful reform

6. Conservatives should propose a programme of reform that will allow Local Government to lead City renaissance:
a. The wholesale transfer of powers, responsibility and funding from the Quangos to Local Government (or the Regional Government Office on behalf of Central Government for the small number of truly regional functions). This will mean that RDAs, LSCs, Regional Assemblies, English Partnerships and the Housing Corporation will cease to exist as regional bodies and instead become agents of Local Government
b. Directly elected Executive mayors for Top-Tier Authorities, serving full four year terms. This will improve accountability, allow clear leadership and improve the prospects of attracting people of appropriate calibre
c. The creation of Pan-City Executive Mayors of Birmingham, Newcastle, Manchester and Liverpool (the pan-City area is unlikely to cover all existing Mets in these areas, e.g. Coventry may not be treated as part of Birmingham). The Executive Mayor would take powers almost entirely from the Quangos, not from the existing Metropolitan Districts
d. The Executive Mayors would have power over Strategic Planning (from Regional Assemblies), Regeneration and Development (from RDAs), Vocational Training (from LSCs), Highways (from the Highways Agency), Transport Planning, Passenger Transport, Fire, Waste Disposal and Police
e. The Government’s micromanaging target regime, the Comprehensive Performance Assessment (CPA), and its expensive attendant bureaucracy should be abolished. Data should be made available to the public who can then make their own mind up about the efficiency of Local Governmant
f. It is vital that Local Government has more control over its own finances if it is to play a true leadership role. At present, around 75% of Local Government funding comes by way of heavily hypothecated central grant
g. Local Government should therefore be allowed to retain the business rates which they collect from businesses in new developments in their first five years. This will allow Local Government to benefit directly from economic development in their area – and so incentivise them to encourage business
h. Capital Funding currently flowing through the Quangos (£10.5 billon) should instead be allocated directly to Local Government:
i. Partly by formula
ii. Partly by a competitive bidding process for projects
i. Local Government should be allowed to issue its own Bonds. These should not be underwritten by the national Government and therefore should not form part of the National Debt