Citizens deserve a say in the decisions that affect their lives, from how their local services are run to where public money is spent. Localism has reached a crossroads – and its future depends on the outcome of the next election, says John Denham MP

All of the main political parties claim to speak the language of localism, but there are fundamental differences in their approach. Just a few weeks ago, shadow chief secretary Philip Hammond said that the Conservatives would be “unashamedly top down” in dictating cuts to local services if they took office. One of their main decentralising policies is to force cities to have referenda on mayors, regardless of local support for the idea. That limited perspective reflects a grim vision of the future where there is no room for improvement – nothing but cuts and lower standards of service.

Money is going to be tight, of course, but that is no reason for lowering our sights. It simply means that it is even more important that we make the right choices to tackle the challenges we face. The question is, how do we deliver high-quality public services at a time of tight public expenditure and an ever-increasing demand for value for money? That challenge can only be met by effective, strong and accountable local government.

Over the past decade, there has been a steady and sustained transfer of power to councils. We have cut red tape, reduced ringfencing of money and given councils greater financial stability. We have reduced the number of targets that councils have to report back on, rationalised the way they are inspected and given them new powers to promote the social, economic and environmental wellbeing of their area.

We have also enabled councils to shape more of the issues that matter locally. When I was secretary of state for Innovation, Universities and Skills, I transferred responsibility for more than half a billion pounds of funding for young people’s education, informal adult learning and English as a second language. We have given councils a greater role in meeting local housing needs – with more flexibility to fund housing and a revitalised role in building it. Forty-seven councils have already benefited from a share of £127m, which will finance the first significant council house building programme in more than two decades. We have made a major announcement about the future of social care in the UK, transferring about £450m a year from health to local government – the biggest shift in funding since 1948.

The essential principle of local government is the right of citizens to influence the decisions that affect their lives, either directly or indirectly – by electing a strong local council to act on their behalf, for instance. The unique democratic mandate of councils and councillors means that they must have an essential role in making sure that local services meet the needs of local communities. Citizens should be able to elect councillors who can report back on public services in their area. And through their council, citizens should be able to challenge how, for example, health and education services are being delivered. That would encourage a more open debate about how services can best be provided and public money spent.

I have consulted on the best way to achieve this and am currently working on a response. In the meantime, we have five significant developments in the pipeline that will help transform the way in which public services are delivered locally.

The first is the idea of ‘total place’. This brings all public services together, led by councillors, to look at how all public money is being spent in a particular area and how it could be done better. This cuts out waste, overlap and duplication, leading to better services at lower cost, targeted at the areas where people need them most. Investing more in services for the youngest children, for example, can cut out the need for more expensive and intensive support later on. When you think about the sheer scale of the money involved – £7.5bn in Birmingham alone – you can see the potential for major savings.   

Second, to make this work, councils must have the power to scrutinise all public service spending in their area. People often feel that they lack the power or knowledge to challenge the police or transport bosses. Extending scrutiny powers and giving councillors responsibility for overseeing public spending would help councils to fight their corner and challenge unelected bureaucrats on their behalf.

Third, the fact that public spending will undoubtedly be tight in future brings opportunities for a fresh approach to commissioning services – setting out the outcomes to be achieved rather than prescribing the exact service to be delivered. That will encourage imaginative and innovative approaches – and is the exact opposite of focusing solely on the cheapest way to deliver bog-standard services.

Fourth, councils should be able to develop new roles in response to new challenges. For example, councils could play a significant leadership role in the transition to a low-carbon economy. I also want to help them become more involved in commercial activities to raise new income to reinvest, and I want to increase competition to give consumers a better deal.

Finally, we need to open up local government to greater scrutiny from outside. Giving more information, and therefore power, to users, providers and would-be providers will help drive further improvements. Data can be reused in different and more imaginative ways. The costs and outcomes for different services can be more easily compared. And people will have the tools to demand action on issues that matter. Making public data more easily and readily accessible will help make councils accountable leaders and modern democratic institutions.

This is a very different vision from that of the Conservative opposition – both in practice and in principle. In the short term, we have different views of the role local government should play in the downturn. For example, David Cameron has this year called for my department’s budget to be cut by more than £1bn. We, on the other hand, have increased investment in housing by about £1.5bn because we believe that the public sector needs to invest while the private sector is sluggish. The Conservatives would localise power while abandoning any concept of, or commitment to, standards of service. Instead, they would make the postcode lottery the founding principle of Conservatism in local government. They are committed to letting councils do whatever they want – which sounds good in theory, but in practice gives the green light for Barnet’s Ryanair council, where citizens have to pay twice to get decent services.

In our vision, powerful local government will ensure that citizens receive their entitlements to a consistently good standard of service. The aim is to move away from a system based on central direction and targets to one where citizens have enforceable rights and means of redress where these are not delivered. Wherever they live, people will have their needs assessed and met appropriately, although the way in which services are delivered may vary locally – between rural and inner-city settings, for example. This will enable us to promote innovation in approaches to service delivery, while also guaranteeing universal entitlements to a certain standard.

So beneath the surface, while all parties seem to favour localism, there are some sharp choices – as sharp as any others in politics – to be made at the next election. My vision is for strong and accountable local government that delivers better, more innovative services and increases value for money. It means a radically different role for councils in future.

Continuing the debate

The Spring Journal will feature a Liberal Democrat politician’s perspective on localism and related issues.