It’s great to be back at another packed LGA conference. Today we have, at most, eleven months before the next general election.
There is no doubt that whoever wins that election is going to face the most difficult set of public finances any government has seen for forty years.
I don’t want to give you a speech full of figures, but let me just give you a few. According to some estimates we will borrow almost 14 per cent of our national income next year. That’s twice as much as when Denis Healey went to the IMF in 1976. One pound out of every four pounds that the Government spends is borrowed. Right now we are borrowing more in a month than governments used to worry about borrowing in a whole year.
We cannot go on like this. The economy is still in a deep and difficult recession. Yes, we’re hopeful for growth later this year – and there are some brighter signs.
But we’ve still got banks that aren’t lending…unemployment rising fast…and insolvencies going through the roof. So I think at this conference – when we are well and truly in an age of austerity – it is pretty clear what you deserve to hear. And that’s what you can expect from me if my Party wins that election…what I would expect of you…and what we should attempt to achieve together.
Let me take each in turn.
HONESTY AND LEADERSHIP
So, what can you expect from me? The first thing you are entitled to is some political leadership. That means a straightforward, candid assessment of the situation we face. It’s not leadership to deny that our public finances are in crisis. It’s not leadership to say spending on public services is going to rise when it isn’t. It’s not leadership to put off a spending review by saying there are a lot of uncertainties to take into account…when the only certainty is that our country is living way beyond its means, is saddled with a massive debt crisis, and desperately needs a strategy to get us out of the hole we are in.
What Britain needs is leadership that is clear about the depth of the problem we face…and honest about the fact that public spending needs to be reduced. I passionately believe our country will be able to cope with and come through the tough times ahead…but only if – and I mean only if - we tell people the truth about what’s happening.
We need to explain that we are all in this together … that everyone will need to play their part … and that everyone will pay their fair share.
So what does this mean for local government? When it comes to what to expect from me, there is good news and bad news.
The good news is that I want to give you a lot more power. The bad news is that there won’t be a lot more money. I’m not going to hide that from you – you’re smart people and you know the score. But before you get too depressed …. let me expand on the good news – and that’s much more power for local government.
MORE LOCAL POWER
For the last three years I have stood up here before the LGA and basically given the same speech – about the Conservative commitment to devolving power downwards and outwards, and our specific plans for doing just that.
You’ll be pleased to hear I’m not going to give that speech all over again today … but I do want to confirm a few things. All those layers of bureaucracy that are a straitjacket on everything you do…
…the process targets, the Comprehensive Area Assessments, the regional strategies and plans… we’re going to scrap them and let you get on with the job.
All that ring-fencing that makes you budget with one hand behind your back...we’re going to phase it out to allow for real local discretion on spending. All those quangos, like the Standards Board, that has just become a forum for pointless and vexatious complaints …we will scrap them.
In place of the old centrally-controlled regime we’ll have councils empowered to exercise their own judgement. One change that will have an incredibly big effect is our plan to give you, in the legal jargon, a general power of competence. This means that councils can do literally whatever they like as long as it’s legal.
So if there is a valuable local service that’s in financial difficulty and you can find a way of saving it – you will be able to just do it, rather than endlessly ponder whether there is a legal basis to take action. We’re going to give you much greater control over your budgets too, with the power to levy business rate discounts if you feel it would boost growth……and the right to retain the benefits of that growth.
Housing and planning powers are going to be stripped from regional government and given to local, democratically-elected government…and what’s more you’ll have the power to form local enterprise partnerships so that you can abolish the regional development agencies and reclaim more money for economic development.
But now for something we won’t be doing. Under a Conservative Government there will be no more of the endless, pointless, top-down, soul-sapping reorganisations that have disrupted local government for the last decade.
Now you could be forgiven for feeling a sense of déjà vu at this point. Not just because I’ve said this before…but because for decades politicians from all parties have stood before audiences like this and promised to hand over the baton of local power.
Yet, when the crunch came …. it never happened. So it’s completely understandable if you think ‘well he might say that now, but that’s what all politicians in opposition do…then they shelve decentralisation as soon as they get into Downing Street.’
But there are two very important reasons why you can be reassured that I mean it. The first is that the whole philosophy of the modern Conservative Party is about decentralisation – trusting people and giving them more power and control over their lives.
It runs right through everything we do, decide, plan and propose...and a key part of that vision is local government.
The second reason you can be sure I mean it is because the extra power I want to give you is directly related to what I want in return …. and that is your help in getting more for less … which is an absolute necessity in the age of austerity. And that brings me to part two of the speech: what I expect from you.
THE TASK FOR LOCAL GOVERNMENT
Just as I believe in devolving power from central government to local government, I want you to devolve power down from local government to local communities. This is already happening. The greater freedom being given to schools.
The handing of power and budgets to neighbourhoods. The trust that councils are giving to local voluntary bodies and social enterprises. But let’s be frank. This could go further and faster.
The next big thing I expect from you is this. When it comes to the subject of local government re-organisation - I’m not going to reorganise your structures from above – but in return I want you to save money through reorganisation, partnership and joint working from below.
By working closely with other councils, you can cut budgets without cutting services. Again, this is already happening up and down the country – including in my back yard. West Oxfordshire District Council now shares its Chief Executive with Cotswold District Council, cutting a great swathe from the monthly salary bill. But, so far, I think we have only scratched the surface of what is possible.
But, you know, the most important thing I’m expecting from you in return for all that new power is new ideas; new activism; a new dynamism in local government. Thirty years after Margaret Thatcher released a wave of initiative in the private sector I want to see an equal surge of local entrepreneurialism in our public service.
MORE FOR LESS TOGETHER
And that brings me to part three of the speech: what it is that we need to do together.
We need to demonstrate that we can provide good local and national services at a time when funding is incredibly tight. I do not for one moment pretend that this will be easy …. that tough choices will not have to be made … of course they will.But we must begin by fighting the completely outdated notion that having limited finances just means painful cuts to frontline services.
Imagine if some of our biggest business brands followed the logic of our government. These businesses spend their entire time trying to reduce costs in order to provide better value and a better service.
Imagine if they just adopted the idle and outdated logic of Gordon Brown and said that every cost reduction must inevitably lead to a cut in front line services.Think of the commercials they would have to run on the logic of what the government tells us.
“Good food costs more at Sainsbury’s”.
“At Tesco every little bit doesn’t so much as help – in fact it’d be a 10 per cent cut in the quality of the food”.
Asda wouldn’t boast “permanently low prices – but “permanently more and more cuts in quality and service”.
It is ridiculous to carry on this way.My point is that getting more for less isn’t some pie-in-the-sky political promise…it’s something that businesses up and down the country do day-in, day-out. They are constantly finding creative ways to get more for less – not by cutting corners and scaring off return trade… but by thinking smart, innovating, pushing functions together where they’re duplicated, buying wholesale where they can, recycling, cutting out waste.
ASDA do it by hiring older workers, people that other companies might have wrongly written off, but who actually who are shown to take less sick days and provide better customer service. Toyota do it by re-thinking from scratch whether they need every single component in their cars.One team found ways to eliminate six components from a car while keeping its quality – but cutting the cost by almost half.
The profits of these companies show how successfully it can be done if you put your mind to it. So together we’ve got to kill the lie that getting more for less means swingeing cuts and show that instead it means real improvements.
That’s linked in to the second thing we’ve got to do together – and that’s finding innovative ways of working efficiently. Today we’re living in a post-bureaucratic age, where more people have access to more information in more ways than ever before. This gives us incredible potential for savings.
You’ve already shown that you can deliver great value for money.
Local government is officially the most efficient part of the public sector – with councils achieving well in excess of the sector’s spending review targets, beating central government savings by a country mile. Now I’m asking you to work with us to smash that record, find even more savings, innovate and help bring us through this debt crisis.
The last thing I want to say is this.
I really do believe that transparency is one of the absolute keys to delivering this.The expenses saga has been incredibly painful in Westminster – for all parties. But it has taught us some important lessons. I think that the most simple lesson – and the most important one - is this. Once you make information public, in real time, about expenses, MPs both change their behaviour – and claim less.
We need to learn this lesson all the way through the public sector, including in local government. Publishing information about spending, including down to items of just £25,000 as we propose to do nationally, will be painful. Locally I would like us to go further. Windsor and Maidenhead have published every item of spending of £500 or more on line. This will lead to lots of tough questions.
It will give information to oppositions, not just administrations.
But it is right.
I understand if you’re not initially as enthusiastic about this as I am. But think what it’s going to do for the reputation of politics. It’s frustrating when people assume you spend half your budgets on pet schemes and half of the rest on waste – this is your chance to shake of those suspicions. And transparency is going to be a great tool in the work of getting more for less.
It’s working that way in London today. Since Boris Johnson insisted on a £1000 threshold for transparency on spending, the GLA has saved over £100million. Imagine what might happen in your council. Because as well as the financial discipline imposed by all those armchair auditors, you’d have local suppliers looking online and seeing if they can offer you a better deal.
And the best thing about transparency is that it doesn’t need massive outlay of costs. I believe we’re just beginning to tap the potential of the post-bureaucratic age. Along with you I want to bring in a new era of Google government. This ambition is why I’ve said local authorities will need to publish more information on the pay, perks and pensions of those who work in the town hall. It’s why we’ll require all police forces to publish crime maps online, so that people can hold them to account at regular beat meetings.
In the post-bureaucratic age we can get citizens involved in the whole debate about what is spent, excite our politics and improve our administration. We must do it.
I know I’ve come here today and given you quite a tough message. More powers, yes. But less money. And more transparency. Nowhere for bad government to hide. But beyond the trials before us I do have a positive vision for a different country, with thriving local government right at its heart. A few years into the next Conservative Government I want to see more city mayors…more local initiatives…more communities controlling their own budgets…more citizens holding politicians to account.
Yes – this new settlement between central government, local government and local people will be forged against a backdrop of austerity…but rather than entering into this challenge by pretending there will be more money and an easy ride after the election…we will enter into it with an honest assessment of how things are…a determination to bring us through this…and optimism for a better future. And I really believe that together we can do it.