Localisation agenda
The government have been very strong on their vision of a localised policy environment supporting prosperous and cohesive communities. This vision has been developed over the last few years, and culminated in the Strong and Prosperous Communities white paper of October 2006.
The main themes that the government is pursing are reducing central government control, creating a framework for strong local leaders, devolving power to local people, and ensuring services are more joined up. Central to this policy is the expansion of Local Area Agreements and greater powers and accountability for local authorities. Local authorities now have the duty to progress the well-being of their communities
Gordon Brown has been keen to pick up on the theme of engagement in localisation. He sees localisation as part of his new politics, though this could mean a greater emphasis on ‘voice’ rather than delivery.
The role of social enterprise
Many social enterprises are well positioned to contribute to the government localisation agenda given their key characteristics of:
- greater community participation in – and engagement with – public services, moving toward models of co-production
- experience and independence to innovate
- organisational focus on users, with knowledge and expertise of complex personal needs and hard-to-reach groups
- providing employment and income, contributing to overall economic output
- ability to be flexible and provide a joined-up service delivery
- management of community owned assets
Social enterprise can also deliver wider benefits to society and the economy by:
- enhancing the design, governance and evaluation of public services
- building the skills, motivation and confidence of employees and volunteers – especially young and disadvantaged groups
- building the trust of users and the social capital of communities, contributing to improved social outcomes, greater community cohesion and increased economic development
Barriers
However social enterprises continue to face a number of barriers including:
- Local authorities not understand social enterprise and combing social enterprise with voluntary and community groups.
- Social enterprise is confined to the economic dimension.
- The emphasis on managing the partnership with the third sector through the Compact, which may not be the best forum for social enterprise.
- Commissioning barriers at a local level, commissioners failing to understand wider social benefits social enterprise, and contract sizes which are prohibitive for community organisations.
- Organisations lack the capacity of resources to become actively involved in Local Strategic Partnerships.
Strong and Prosperous Communities
In October 2006 the Government published Strong and Prosperous Communities a white paper which set out the future of local government in England.
The key themes from the white paper were:
- A stronger role for local authorities as strategic local leaders and place-shapers.
- A rebalancing of the central-local relationship.
- More accountable and responsive services to local people.
The report aims to encourage a greater involvement of communities. It suggests an increased role for people to be consulted and involved in the running of services, and able to hold local authorities to account for poor service.
Much of this will be achieved through the extension of the Local Area Agreements (LAA), which will provide the targets for the Local Strategic Partnerships (LSP). The partnership also encourages a greater role for partners, such as third sector organisations to shape the service targets, and as such play a role in the delivery.
The white paper also outlines a simplification of National Performance Framework. The number of national performance indicators will be reduced to 200, and there will be 35 targets for each locality through the LAA.
The white paper’s emphasis on local flexibility means however, that it is not appropriate for central government to impose additional social enterprises or third sector targets on local bodies, in areas such as public service delivery.
Local Strategic Partnerships
The local strategic partnership (LSP) design is aimed providing a framework for working together to improve the quality of life in a particular locality. The Government sees them as the main mechanism for the coordination of delivery of better local services. They bring together multi-agency partnerships to establish local priorities, and encourage joined-up services.
It is likely that an increasing expenditure of funds will take place through the LSP’s, as the government views them as a key part of their community well being strategy.
At the moment it seems that on the whole social enterprises are not engaged with their LSP’s. Round three of the local area agreements, has seen encouragement for further social enterprise representation, as government guidance has specified. Yet there is a lack of involvement of social enterprises beyond this.
Social enterprises are still seen as respondents rather than fully involved partners. As such they are underrepresented at the decision making end of the process. Social enterprises may often be excluded because they view LSP’s as a bureaucracy, and poor use of their time.
Local Area Agreements
The local area agreement (LAA) is a form of contract between central and local government that is designed to devolve greater power over public services to local communities. They are negotiated between the regional Government Offices and ‘top-tier’ local authorities.
They were initially piloted in 2004, and have since been expanded and by April 2007 every local authority in England had an LAA. Currently the pooled budget within the 2007-2008 period is just over £1 billion. However the amount of public expenditure covered by the agreements is expected to reach around £5 billion in the next three years.
From April 2008 LAAs will drive the pattern of all local public spending, with targets which are chosen to reflect local priorities for outcomes. The most significant change that LAA will bring into practice is that previously ring fenced budgets will be pooled to be spent on local priorities.
NAO Report on third sector involvement in LAA
In June 2007 the National Audit Office released a report on the extent to which third sector organisations were able to engage with LAAs.
It criticised the lack of government guidance that had been issued to local authorities on working with third sector organisations and suggested up till now the focus has been on representation of communities. There should be far more explicit emphasis on the public service delivery role of third sector providers.
The report found that only two of the nine Government Offices had produced guidance emphasising third sector service delivery as part of the LAA process. It also noted that real step change in the delivery pf public services unlikely because there is no requirement on local authorities or LSPs to monitor the amount of public funding flowing to third sector organisations, either in general or in relation to the LAA.
Comprehensive Area Assessment
The Comprehensive Area Assessment (CAA) is the new performance indicator framework being developed for local authorities and their LAA. The CAA, is the successor the five star rating system the Comprehensive Performance Assessment (CPA). It will be less target specific than the previous CPA and aim to identify the broader well being of the area. The CAA supports the identification of capacity and leadership risks in an area while also providing an independent assessment of the quality of partnership working.
CLG are working with the Audit Commission to develop proposals for Comprehensive Area Assessments that judge the effectiveness of local partnership working, including the involvement of the third sector.
Sustainable Communities Strategy
Whilst the LAAs last for a three year period, there is also the need for a mechanism that defines what the agreed longer term priorities for an area are. This takes place with the Sustainable Communities strategy (SCS) which is agreed by the LSP.
Recent government policy will place an increasing importance on this document to inform the creation on the LAA priorities, and to create the ‘story’ of the local authority.
Guidance on ‘second generation’ LAA
The CLG has recently published guidance, based on 17 ‘dry-runs’, for producing the next LAAs, which will give local authorities more freedom to deliver, and local communities a greater say.
The key messages that have come out is the need to involve a wide range of partners, including the third sector to create a ‘story’ describing the uniqueness of the locality, by which the 35 priorities can agreed. The guidance suggests that the ‘community and voluntary sector’ plays a crucial role in providing the baseline of needs, and reflecting local perspectives. It suggests that local authorities new place making role, actively encourages third sector participation to ensure the LAAs effectiveness.
The guidance also recognises that the best agreements are those that are produced when partners start talking to each other at an early stage. It articulates that strong link must be made between the LAA and SCS, thus increasing the SCSs importance in local policy and funding. Linked to this is the promotion in the use of cross-cutting priorities.
The Government Offices are identified as an important negotiator in the framing of these 2nd generation LAAs, and it will be to important to ensure that these agencies are social enterprise aware.
The guidance does recognise the difficulties that some organisations will have in taking part, due to their resources etc, and suggests the possibility of incentivising engagement.
‘Place Shaping’
Although the final report was published in March 2007 the Lyons inquiry and its interim recommendations have influenced the white paper, with the idea of a wider and strategic role for local government termed ‘place-shaping’.
The report argued that the importance of the local in modern society and economics, place remains relevant and local authorities have a key role to play in developing a local distinctive identity, even though this will lead to some a degree of variation between different parts of the country. It also recognises that local authorities with their purchasing power and long-term perspective have the potential to shape service markets.
The report recommended that clearer accountability over which tier is responsible for what and that local government is given greater flexibility, both over finances and to enable local government to manage local services in response to local needs.
The report also put forward that is: “Full recognition of the convening role of local government should take account of the complex relationship which local government has with other sectors, including particularly the third sector which is a key partner in service design and delivery”
Commissioning Environment
Social enterprises also have to negotiate local authority commissioning. Central government has a role in encouraging good commissioning practice by local public bodies, however, and in ensuring that a ‘level playing-field’ exists for all potential suppliers of public services, including social enterprises.
Regional Centres of Excellence Procurement Programme
The Regional Centres of Excellence are set of programme set up to reduce the difference in costs being paid by local authorities. It aims to ensure that all contracts spending in each authority secures value for money. The national programme proposes the development of procurement hubs to concentrate and strengthen expertise for councils at local, regional and national levels.
The North East regional centre of excellence is currently developing a template for social clauses in key service areas to enable joined up outcomes to be recognised within the procurement process.
Community anchor organisations
Community anchor organisations have recently received a lot of interest from the CLG. They suggest they can be a vital part of bringing together everyone in a local area, giving a home and support to a whole range of people and groups - whether it's workshops for developing adult skills, a young mothers' association, refugee organisations, or lesbian and gay youth groups.
They appear to be very much in the social enterprise model of sustainability, bringing together a range of services, and also providing strengthened links between local communities. Therefore encouraging the community cohesion agenda.
The government plans to announce increased financial support for community anchor organisations shortly.
Comprehensive Spending Reviews
The sub-regional and third sector reviews, also bring together a number of the policy commitments that have an affect on the local agenda.
Third Sector Review
In order to ensure the third sector is represented on Local Strategic Partnerships (LSPs), their thematic partnerships and in developing Local Area Agreements (LAAs). Local Strategic Partnerships will bring together the third sector with the public and private sectors to coordinate the contribution that each can make to improve localities. The Sustainable Communities Strategies which is produced by LSPs will provide a framework to promote a strong and healthy local third sector.
The review recognises the need for Local Authorities to continue to build their partnerships with local third sector organisations, embedding third sector representation into local decision making arenas. The Office of the Third Sector and CLG are exploring how best the contribution of third sector organisations at a local level can be reflected in this new performance framework for Local Authorities.
The Government is planning to develop a new local survey of the third sector. The survey will aim to give an indication of both the overall health of the sector in different areas and the quality of relationships with local statutory agencies. The design will take place in 2007 and be carried out 2008 – 2009.
Review of Sub-National Economic and Social Regeneration
A key theme of the review and current government policy is that in order to respond to changing social and economic circumstances, local bodies need to be able to react quickly and flexibly. It suggests economic growth will increasingly depend on enterprise and innovation and the ability of places to build on their indigenous assets.
The report outlines the next steps for further devolution of power to the regions and local authorities. The next emphasis will be on reducing the disparities between the six poorest performing regions, and bringing the poorest up to the national average.
The RDAs’ tasking framework will be replaced with a simplified outcome and growth-focused framework defined by a single over-arching growth objective.
Local authority powers will be focused, simplified and strengthened and there will be a new duty for local authorities to carry out an assessment of the economic challenges in these areas. Local bodies’ decision making will be strengthened by being clearer about roles and responsibilities, and defined accountability.
Against the agenda of localisation, the government will also encourage further use of the Multi Areas Agreements, and to allow authorities to work together on collective targets.
Future Policy Development
In the recent government proposal on constitutional reform, Governance of Britain, two potentially relevant proposals were made that empower local decision making. The government put forward that it would explore how local communities could take apply for devolved budgets; and that they would be work to introduce widespread local real-time public service provider data, to increase accountability to citizens.
RECENT SPEECHES ON LOCALISATION:
Hazel Blears – Speech at LGA Conference 2007
Looked at how the government where acting to move forward the localisation debate, and put the white paper into action. She talked of creating “a new and more mature relationship between central and local government”
Mrs Blears reiterated the move away from central target to both local definition and measurement. She also commented on the benefit of asset transfer and is potential to strengthen local democracy.
She also announced further developments on local participatory budgets launching ten pilot projects across the country that give communities a direct say in budgets.
Hazel Blears – DTA Conference, September 2007
This speech again highlighted that the government sees localisation as a ‘reinvention of the way we govern’. It strongly emphasised the theme of voice and encouraging democratic participation.
It outlined that the Governments wish to see a greater role for people and communities to set out the vision for an area. This feeds into local authority place shaping.
Mrs Blears made a strong commitment on asset transfer, in which she said she did not want to see it as a flash in the pan experience. That the organisations need to develop enterprise and strong partnership links to “thrive under [their] own steam”. This presents an excellent opportunity for social enterprise.
The speech also once again outlined participatory budgets, which could potentially provide locally focused finance that could support social enterprise.
Gordon Brown – NCVO – September 2007
Since becoming Prime Minister Gordon Brown has been keen to support the localisation debate, which he sees with tying into the idea of a new form of politics. His priority seems to revolve around increased engagement with citizens, allowing them greater ability to hold levels of government accountable.
“The challenge of reviving local democracy can only be met if we build new forms of citizen involvement to encourage them in our local services and in new ways of holding people who run our services to account.”
He also spoke of a renewed focus on the devolution of powers and responsibilities to local government and the building great accountability services to their communities.
Social Enterprise Coalition (SEC) - September 2007
