Liberalism and Localism

A keynote speech by Rt. Hon Charles Kennedy MP Leader of the Liberal Democrats

Thursday 8th December 2005

Introduction

Welcome. It has become politically fashionable now to champion localism. Think tanks, like the IPPR, are looking at the failure of centralism to improve quality, satisfaction or choice in public services – and are looking at new forms of decentralised governance.

Labour, of course, has to have a brand - ‘New Localism’ they call it. But Labour is trapped in a centralist mind set. Their central management target system is an exercise in empire-building. That’s why Labour’s ‘new’ localism is a sham. They may introduce new local quangos – but that doesn’t mean that they will be anymore responsive than other unelected quangos. And if they’re not elected, there’s nothing local people can do to change that. Localism without democracy is just tyranny on a local scale.

Of course Liberal Democrats are the traditional exponents of localism. Localism is inextricably linked to our core values. The Labour emphasis has been on the primacy of the state; The Conservative emphasis on the primacy of the market. It is the Liberal Democrats who continue to place the emphasis on the primacy of the citizen.

I will argue today that we need a new democratic settlement in this country between Government and the citizen: One which devolves power so that local people can have a say in their local services. But one that devolves responsibility too, so that parents, pupils and patients are full partners in their education and health care. We Liberal Democrats intend to encourage an ‘active citizenship’, so that people are in control of their own lives.

The Problem

It has become an accepted maxim of campaigning that all politics is local. But though the things people care about certainly are local, their power to change them certainly isn’t. How can you affect the decisions of the board of your local primary care trust? How many people even know their local primary care trust exists? And yet these are the bodies that make the big decisions on local health care. In the NHS, there is no democratic accountability below the Secretary of State for Health.

Britain as a whole elects just over 21,000 local representatives to govern us at a local level. But they are outnumbered almost three times over by 60,000 people appointed to run the 5,000 or so quangos that dominate our experience of public services. Many public services are delivered locally, but no-one an ordinary citizen can vote for has very much power to change them.

Britain is one of the most centralised countries in the democratic world. In Britain almost 95% of all taxation is raised by central Government. The EU average is a little over a half. Local authorities may nominally run many services but they depend on central government for three quarters of their funding.

But that money comes laced with central government management targets backed by a battery of caps and ring-fencing. That means every year services are cut or expanded not because of local needs, but because of Whitehall whim. This year is no different.

The Government announced on Monday an extra £300m or for local authorities. But many councils will still see their grants increase by less than inflation. And the only way they can find the additional resources they need to deliver services is by raising the unfair council tax. Even with the current injection of funds, Council Tax rises for the new financial year are still expected to be twice the level of inflation.

This Labour Government doesn’t have the political courage to take decisions on local finance reform. They asked Michael Lyons in his review of Local Government Finance to design a new finance system. But Lyons has now been sitting for over a year, and the Government has put off publishing his conclusions until the end of 2006 – 2 and a half years after he began his task.

If you want to devolve power, as the Liberal Democrats do, you have to give councils the freedom to raise and spend their own money. That is why, apart from being much fairer, a local income tax remains the best option for Local Government reform. The Liberal Democrat Tax Commission, which will report next September, is also looking at decentralising taxes and shifting the burden of taxation from national to local.

The Government will have increased public spending by over 40% in real terms by the end of the current planning period since 1997. And it has micromanaged the delivery of this money. But public services have remained largely unresponsive. Reform appears stalled.

The fundamental problem is that the very people who can make a difference between success and failure - those who actually work at the front-line - are increasingly undermined and constrained by the obsession with centralised targets. When national targets and priorities are set by people with no direct understanding of local difficulties it throws up changes in procedure at local level that are not in the interests of giving quality service but only to meet the target imposed.

The Liberal tradition

The Liberal Democrats want to see a Britain where services are run, paid for, managed and accountable locally.

It is at the heart of the philosophy of liberalism to believe that power should be spread. It is at the heart of liberalism to encourage debate, difference and experimentation. And it is at the heart of liberalism to offer wide opportunities for people to experience political involvement and political power.

That means that Liberal Democrats – distinct from the other parties – believe power should be held locally unless there are overwhelming reasons for it to be centralised. Local government should be where power begins, not where it ends.

Labour’s aggressive centralism is undermining personal responsibility, not only that of the professionals delivering services but also that of the users. Ultimately, nothing that professionals do to make us well, educate us or tackle crime will work without the active involvement of those they are trying to serve.

The Liberal Democrat approach is about more than devolving power, it’s about devolving responsibility too. Nobody any longer believes that politicians acting in Westminster can solve all their problems.

People recognise that if we as a country are to succeed, the politicians can only achieve things with the active help of each citizen. So Liberal Democrat localism is about crafting a new contract between the public and politicians. We Liberal Democrats believe in active citizenship. This means making patients, parents and pupils full partners in their health care or in their education.

I want to talk a bit about how localism can work in health and education – but let me first take heed of some of the arguments of the centralisers.

Those who argue for the centralist model of government cite economies of scale. They warn that local government workers might not be good enough or clever enough to manage things – they don’t trust local people to deliver. And they say centralisation is the only way to ensure equality, because only national systems treat everyone the same.

Let’s deal with these three one by one.

There is a widespread belief that central control of large units is somehow more efficient. There are indeed economies of scale for larger organisations. But we have seen how decisions and targets set down in Whitehall can often translate into local inefficiencies – look at the negative effect when it has come to fighting hospital infections. It is in fact the bloated central Government machine which is highly inefficient at delivering for local people.

What about the capability of councillors and council officers? If real power was transferred to local government, it would attract an even better calibre of officer and politician, and a better quality of journalists ready and willing to scrutinise. Sadly, the frustrations of working for a council, where your every ambition is thwarted by central government diktat, drive many of the best away.

And look at the track record of management by central Government – the horrendous mismanagement of tax credits leaving thousands of poor families in debt; The shambles of the Child Support Agency; Computer system after computer system delivered years late, millions over budget, and not fit for purpose. Mistakes are inevitable, but mistakes made locally are outweighed by the huge mistakes made centrally and imposed on all of us.

What about equality? Can local democracy deliver a fair society?

The problem with postcode lotteries isn’t the postcode part, it’s the lottery. No service will ever be identical in every area – even when delivered under national criteria stipulated by a secretary of state – nor should it be. There is nothing inherently wrong with services being different in different areas – if that difference is justified by local circumstance, and local choice – and if that difference provides local people with the quality services they require. But local differences in services should be a function of properly constituted local democracy.

As an example take dentistry. We’ve seen the fiasco of hundreds of people queuing for a dentist, up and down the country. But national elections are fought on national issues and despite Labour’s manifest failure to sort out dentistry in the UK; the Government will not fall on this one issue.

But what about in a local NHS? Dentistry will never decide a national election, but it could decide a local election. And wouldn’t local politicians who failed so miserably get voted out?

If we devolve power and responsibility, services may differ at the local level, but they won’t be a lottery. They would be responsive and controlled by local people for local people.

So what is it that the Liberal Democrats would do differently? Let’s look at health and education.

Education

First, education.

Education reforms will of course dominate much of the political debate over the next few months. The Government’s White Paper is the catalyst for that debate. And it is a debate the Liberal Democrats welcome. Because where we want an end to Whitehall diktat over schools, Labour seems intent on increasing it.

This is perhaps best shown by the proposal for yet another Whitehall Tsar – the Schools Commissioner. The Schools Commissioner will join the growing array of Whitehall education controls that range from the Schools Adjudicator to the Qualifications and Curriculum Authority, from Ofsted to the Department for Education itself. This White Paper sets out a blueprint, not for freeing schools, but for nationalizing them.

The Prime Minister talks about local authorities as commissioners of education – but without financial independence, they will merely be administrators, transferring money through their bank account from DfES to the school.

This ring fencing comes as the Government is trying to make councils join up their services for children by linking child social services with education. It simply doesn’t make sense to say this “commissioning” role should not include the key roles of control over admissions and strategic planning.

We want local authorities to be real commissioners – procuring education from diverse providers but with the financial clout to decide what they want to commission.

That way schools can be encouraged to work together – recognising that they exist in a community, not a desert. So schools are not fighting each other to poach children just to improve their position in the league tables, but are supporting each other to improve standards across that community.

But the reform agenda will fail if it is all about structures and not about standards.

For example, we want to maximise real choice in education. That must begin with the curriculum – especially for the 14 to 19 age range, where young adults are making decisions about the education they want to pursue. This is about taking forward the Tomlinson’s proposals to reform GCSEs and A-levels, to widen and broaden the curriculum, stretching our brightest, whilst keeping the less able more interested.

Our education team under Ed Davey is working on proposals to put Tomlinson into practice, focusing on putting pupil choice at the heart of future learning. This is taking forward what I spoke about earlier. I t is about devolving responsibility – pupils with the help of their parents taking control of their learning – empowering them, motivating them, encouraging them to work harder for the goals they have set themselves.

Health

In the health service, as I have already said, the localism that the Government is promoting relies on the unelected quangocracy.

But the current debate about the future of the NHS ignores localism and focuses on two distinct positions. Some argue that the NHS needs to be forced to conform to the rigours of market discipline; Others that the problem with the NHS is under funding alone and that more money is the answer.

Unsurprisingly, neither of these positions stands up to scrutiny. I argue that devolving power and responsibility to local people should be central to the health care debate. It provides a real chance for real change so that the people who use the NHS are able to influence its direction.

The Government’s version of introducing the rigours of market competition in the NHS isn’t a free market at all. New providers have been offered favourable prices to undertake NHS work, and are paid more than their so-called ‘competitors’ in the NHS. In the NHS markets can also have a tendency to reinforce existing inequalities.

When patients are turned into consumers who, shop around for the best deal, there will be winners - the well educated, the articulate and the mobile. It is the vulnerable and the marginalised who will be the losers.

The pure market approach to public health does not work. But there is a way another way to introduce competition in the NHS - political competition.

There is a strong argument that accountability and activity in the NHS should be radically decentralised so that local people know what’s going on in their local health service, and elect local politicians according to their proposals for improving it.

Under such a model accountability would be the driver of improvement. Because if one party running that local health service fails, others with better ideas will be elected to replace them. Local NHS’s could still work together where it made sense – delivering specialist services, or to cut procurement costs – but they would be accountable directly to local people, not upwards to the secretary of state.

This model already works in Denmark, and could work here. I have asked Steve Webb and our Health team to explore how a local and democratic NHS can work in this country.

In addition to devolving power to local voters, we want to devolve control and responsibility to the patient. We believe that people should be seen as full partners in their care.

That is why we have proposed regular health “MoTs” tailored to individual patients’ needs, with wider access to screening and blood pressure and cholesterol tests. The National Institute of Clinical Excellence should develop this model of the health MoT programme incorporating evidence- based screening.

But we should also institute a system of Personal Care Plans, particularly for patients with long-term illnesses where they are a full partner in deciding their course of treatment and what social care help they will need.

Conclusion

By pushing a localist agenda, the Liberal Democrats have something unique to say about our public services. Neither of the other parties is brave enough to embrace localism wholeheartedly. We are.

We are conducting a full audit of government activities to establish what powers should be taken away from central government and transferred to local government. Our tax commission is looking at ways to reshape the tax system to give councils the financial freedom they need.

Our vision is different. It’s of diverse, locally provided, locally funded and locally accountable services. It is about devolving both power and responsibility. It’s about drawing up a new democratic contract with local people so they can take control of their lives.

It’s a wholly different approach to public service reform. I believe this is the only way to reinvigorate democracy and deliver the services people want.

ENDS