Rt Hon Nick Raynsford Speech Diversity & Excellence

DIVERSITY AND EXCELLENCE
Speech by Rt Hon Nick Raynsford to the SOLACE annual
conference, Edinburgh

The theme of conference, Diversity and Innovation, is a potentially very interesting one. There is, however, a risk of blandness - like motherhood and apple pie it is difficult to disagree with. I suspect few speakers at the conference will challenge the benefits of 'diversity and innovation'. I have been invited here today to speak on the themes of diversity and excellence. I'll be referring to diversity, innovation and excellence in the course of my speech.

However, when you scratch the surface some potentially awkward issues begin to emerge. Indeed, as with most serious themes, the concept of diversity, innovation and excellence raise a number of challenging issues. So I believe they merit a rigorous appraisal. Lets look at them in turn.

Diversity is open to many different interpretations.
At one level it could be interpreted as an argument for localism. We know that different localities have very different characteristics. Against that background, championing diversity could be seen to be the same as affirming local distinctiveness. Who could object to that? Not all directions being explored are necessarily welcome or productive, but the very fact of the emphasis on localism is, I believe, all for the good.

But diversity could also imply inequality, with widely differing standards applying in different localities, reflecting, for example, wide variations in wealth, economic advantage, quality of life, mortality or other factors.

I only need to start naming the implications to make everyone aware that we are now in much more difficult territory. I don't think anyone can argue for celebrating a diversity that results in residents in one locality dying on average perhaps 10 years earlier than in another?

Then again people interpret the word diversity in different terms. All communities are made up of diverse elements - there are differences of ethnicity, gender, age and many others. It is important that we seek to represent the diverse interests of each area, but not to use diversity as an excuse for perpetrating inequalities and disadvantage.

Indeed, one of the key purposes of our grant distribution mechanism is to offset the disadvantages that flow from unequal distribution of resources. So we seek to reduce the adverse consequence of economic diversity by giving greater support to those areas with greater problems and least resources.

This brings us face-to-face with the key challenge for central/local relations in government and service delivery.

Put simply, the government's objective is to encourage local initiative and innovation to improve local service delivery and deliver effective community leadership, while at the same time ensuring that everyone enjoys minimum acceptable standards of service wherever they live, and that standards of service are improved and continue to improve everywhere.

There are two key concepts here:

The first is 'minimum standards'. Sometimes described as 'floor' standards, they reflect the sense of equity among the British electorate. We want to ensure that everyone gets decent provisions. There are pressures on central government to ensure that standards don't fall below that floor anywhere.

The second is 'continuous improvement'. How do we best achieve this? We see it as one of the key challenges. That's why we introduced CPA. I understand the nervousness felt by many in local government, not least chief execs, about CPA. But I want to reassure you that this is not a crude naming and shaming exercise. It is about helping all of you to achieve real improvements in performance.

We can learn from the experience of CPAs for counties, mets, unitaries and London. We have seen many positive experiences; self-appraisal and peer reviews have been widely welcomed. There has been a great deal of learning and sharing of knowledge that is being applied, to the benefit of all councils. Successful councils have loaned key staff - including Chief Executives - to less successful ones in a spirit of mutual support. Recognising that the reputation of local government as a whole is of importance to all who work in it.

Similarly with district councils, we are at early stages. But we are committed to working with you to make it a really positive experience that will benefit your residents.

I don't intend to go into detail about the process, but I would like to say a few words about two key elements:

Freedoms and flexibilities
Capacity building

Freedoms and flexibilities
We are serious about his agenda. Don't be misled by the propaganda.

For those who say government is not committed let me list the freedoms delivered to date:

Introduced the wellbeing power which, it is now clear, is being increasingly used by local authorities to facilitate new innovative activity
Streamlined Performance Indicators. Reduction by around half in numbers of national BVPIs
Reducing plan-making obligations. Over the next three years we are reducing by some 75 per cent plan requirements on local authorities
Removing consent regimes. We are in the process, through, RRO's, of removing some 84 consent regimes, including requirements to seek secretary-of-state approval for disposal of land at less than best value
Reducing the burden of inspection: Overall level of inspection is down by around a third this year. Plus new freedoms and flexibilities in the local government act:
Borrowing regime is a hugely important new freedom, effective from next April
Powers to trade
Charges for discretionary services
New opportunities for partnerships with business - BIDS
New scope to benefit from local investment - growth incentives to come in 2005
Ability to retain income from fines (eg, dog fouling)
Freedom to introduce discounts on council tax, and to reduce discounts on second homes and empty homes - and without reference to central government.
Plus additional freedoms for excellent authorities:
o Inspection reductions
o Dramatic reduction in ring fencing
o One plan only
o Innovations forum. Scope for piloting new more radical freedoms.

Despite all of this, some people have tried to suggest that government is luke-warm about the freedoms and flexibilities agenda.

Indeed recently, they have used the issue of capping to suggest that we are going back on commitments.

Let's be blunt about this. We are clear and committed about the need to extend freedoms and flexibilities to local authorities. We are delivering. We have a track record - what I have described and we intend to do more. Where in the last 25 years have you experienced such a commitment to extend freedoms to local authorities?

But with freedoms come responsibility. The public are clearly very concerned about unreasonably large council tax increases in some areas. Thirteen per cent average council tax increases in 2003/04 is simply unsustainable. It is not the case that this is the product of government cutting funding to local authorities. As you know, every authority got an above-inflation increase in grant in 2003/4 and this is a 25 per cent in real terms increase in grant since 1997

Yes, I accept there are pressures, and I also accept that the public expect to see improvements in service , but this doesn't mean inexorably rising budgets.

The public also expects to see continuous improvement in products they buy from the private sector, such as cars, hi-fi systems, computers, holidays etc. And they expect prices to remain competitive. Indeed, they often expect them to reduce in real terms. They expect providers to achieve efficiency savings so as to deliver better quality and value for money. We need to apply similar principles in local government.

We can't just operate on an incremental basis - adding new services, and therefore costs, but never questioning the scope for achieving economies on existing spending patterns.

This is where the pursuit of excellence comes in. We need to continuously search for better and more cost-effective ways to do things.

One of the things that makes me happiest about my job is the evidence of real creativity in local government -exploring new ways of delivering services. But what makes me most frustrated is the lack of evidence of real progress in driving down costs.

I see a great deal of information about local government performance. This tells me about improvements in service being achieved - yes. But it also tells me that we aren't doing so well in containing costs. Once extra money going in has been discounted, the figures indicate there is little net gain. In other words, no real improvements in productivity and value for money. This I believe is the greatest challenge for the next few years: how to use the undoubted skills and ingenuity within local government to deliver a real step change in productivity and value for money; not just to convince your residents that you really are offering the high quality, and value-for-money services that they expect, but that you are continually making improvements to drive up standards and drive down costs.

To achieve this you clearly have to have a commitment to excellence and have effective performance management systems in place. You also, I believe, have to be thinking, not just managerially but also politically about the people you are there to serve. Too often the political and the managerial perspectives are seen as in conflict. Indeed, I recently found myself, perhaps unusually, in dispute with SOLACE about how best to handle difficulties in one particular local authority.

I believe, passionately, that one of the great strengths of local government, and indeed one of the great strengths of the British system of government, is the combination of managerial professionalism and political sensitivity. It doesn't always work that way. We sometimes find ourselves confronting problems that flow from managerial incompetence and political stupidity. But if we work at these issues, and I will say a bit about capacity building in a moment, I am confident that we can ensure that the virtues of our system will prevail.

In the case of achieving excellence, I am convinced that this comes from a combination of high quality management and inspired political leadership - leadership which is in touch with the needs, aspirations and diverse concerns of the locality, and which ensures that the council is in touch, listening and responding.

A user-perspective on service delivery is essential. You are all now engaged in the fieldwork for the national survey of customer satisfaction. The results should be available by February. It will be very interesting to see how perceptions have changed since the last survey three years ago. The smaller sample surveys carried out by MORI and others suggest that satisfaction may not be rising despite all of our efforts. If that is the case, I suggest that a lack of attention to diversity may be part of the explanation.

The evidence we have shows that minority groups are less satisfied with council services than the population as a whole - presumably because services are not responding appropriately to their needs. We may find that better awareness of minorities is part of the answer to improving satisfaction overall.

Having said this, I am also well aware - as we explore the implications of diversity - that there is a huge difference between the circumstances, and the challenges facing different authorities. It is very appropriate, therefore, that you have put this theme before us in your presidential year.

We recognise those differences, and indeed in framing the CPA framework for districts, the Audit Commission and we, have endeavoured to reflect them in a practical and sensible way. This is not a question of 'making allowances'. If you are pursuing excellence, there is no question of making allowances. Rigorous standards must apply. But those standards must be relevant and reflect the circumstances in which different authorities operate. A 'one size fits all' approach is not the right way to respond to the diversity of life, nor is it the right way to pursue excellence.

Capacity building
Similarly in terms of capacity-building programmes, we are working closely with the Local Government Association and the IDeA to give practical support to a range of authorities; we have specifically identified the needs of district councils as a specific stream in the programme.

Capacity building is designed to ensure that appropriate advice, help and support is available to local government to ensure that CPA does achieve its objective, which is to raise standards. Improvement and the pursuit of excellence are the name of the game.

Through the capacity-building programme - working jointly with the LGA - we are looking to provide a boost to councils who are working hard to improve:

We have through the IDeA established a 'peer clearing house' to bring together experienced managers with those who are looking to improve their service performance
We are expanding the EO national graduate development programme, drawing more talent into local government
With the IDeA, the EO and 4Ps we are establishing 'centres for excellence in procurement', providing essential advice and support for councils who lack the capacity themselves in this area.
We have, I am pleased to say, been very heartened by the response of the overwhelming majority of local authorities, who found themselves, perhaps reluctantly, engaging with us after the publication of the first phase of CPA results last winter. There has been a welcome absence, in almost all cases, of denial and of recrimination. Instead, there has been a real wish to engage constructively in improvement planning, and there have already, I am delighted to say, been some impressive achievements.

I hope that we will see a similar response as the CPA results roll out for district councils over the next year.

Finally, I want to come briefly to local government finance.

Now, I accept that the whole framework for local government finance can equally benefit from improvement, which is why we set up the 'Balance of Funding Review'.

But the review isn't a magic bullet that will at a stroke transform your prospects. It cannot, and should not, be a substitute for getting better value from the money we raise from national or local taxpayers. We recognise we can make improvements in how the money is raised. But part of the deal must be that local government engage forcefully to reduce costs, improve value and raise satisfaction. And we don't have to wait for the outcome of the review - local government is, and should, be getting on with it now.

So in conclusion my message is that this is an immensely exciting but also challenging time for local government.

The public wants - indeed expects local government to achieve continuous improvements in the quality of service delivered and the leadership offered to local communities.

The government wants to work with local government to deliver this demanding agenda. Diversity and excellence are important objectives, but only if the pursuit of diversity and excellence really does deliver a better future to the people we are all here to serve.

[BIOG]
The Rt Hon Nick Raynsford was appointed Minister for Local Government on 11 June 2001 and was made a privy councillor in the 2001 New Year's Honours. He is currently responsible for local government, regional government, the fire and rescue service, and civil resilience. Mr Raynsford was Shadow Minister for Housing and Construction from 1994 and Frontbench spokesperson for London from 1993.