Why I Wrote to Eric Pickles
Andrew Adonis
1 September 2011
New models of governance and public services
If we get the mayoral offer right, we can transform the way our cities are governed.
Over the last year I have travelled around England’s greatest cities talking to more than sixty five business and voluntary sector leaders, local authority chief executives, journalists and councillors. The picture of city governance I have bought back is decidedly mixed; ranging from ambitious and strategic leadership to chaos and stagnation. Everywhere there was room for improvement. This week I sent a letter to Eric Pickles setting out why I support his plan to hold referenda on the introduction of directly elected mayors but proposing amendments that would significantly strengthen the Localism Bill that is currently before Parliament.
There are three main reasons why mayors would drive progress in our cities.
First, mayors offer greater visibility and accountability. A poll from the New Local Government Network published in 2004, just 18 months after the first wave of local authority mayors were elected, found that on average 57% of people could identify their mayor, compared to only 25% who could identify their leader. Piles of correspondence addressed directly to city mayors are testimony to the fact that the electorate in mayoral authorities know who they should go to when they have a grievance or concern.
Second, mayors can provide stronger city-wide leadership. Mayors are elected by voters across the city and receive many more votes than for the average council leader. This gives mayors the mandate they need to convene all those who can contribute to a city’s development – both within and outside the council. Nowhere is this more crucial than in relation to the growth. Institute for Government and Centre for Cities research has shown that England’s cities need to rise above ward-level interests (seen at its worst in destructive NIMBYism) to help Britain to recover from recession.
Third, mayors offer greater stability for local government. I was amazed to learn on my visit to Bristol that the city has now had seven leaders in the last ten years: no way to run the capital of the southwest.
Ultimately, it will be the electorate that decides whether to adopt the mayoral model but current drafting of the Localism Bill is not yet configured in a way that allows a fair choice for voters.
First, the Government is yet to fully outline what voters will be choosing between. Under the Localism Bill, the Secretary of State can delegate any number of powers to local mayors but this hardly provides certainty. At a minimum, the Localism Bill must state that all city mayors will be given planning powers comparable to those of the Mayor of London, as well as a clear (if not deciding) role in local transport, policing and economic development plans.In every city I went to, the consensus was that a ‘yes’ vote would be more likely if the mayors were given substantial additional powers so failing to prescribe the model more fully biases the vote in favour of those who oppose change.
Second, voters are naturally cautious about change. In my open letter to the Secretary of State, I propose holding the referenda in two waves, with Leeds, Bristol and Birmingham going first in 2012, and the remaining eight in 2013. This would have the advantage of allowing referenda to take place first in largest cities and those with the weakest governance. It is in these cities that the debate on mayors is already most advanced and where the example of London has made most impact. The debate in the other cities is at present less advanced and will benefit from the experience of the earlier referenda.
Third, the Localism Bill does not do enough to reassure voters that there will be appropriate checks and balances on mayoral power. Our visits to the cities where referenda will be held revealed concerns that mayoral government put too much power in the hands of one person.
My letter therefore also contains our recommendations on how to strengthen the overview and scrutiny process to ensure the mayor is robustly held to account for their decision by elected councillors.
These changes may seem quite technical but they are immensely important.
The coalition government now has what may be a once in a generation opportunity to give real power to our cities.
The fact that the Minister for Decentralisation has now become Minister for Cities reflects neatly the importance of these reforms. If the government is to achieve its aim of ‘decentralising Britain’ then their policy on city government will largely determine whether they succeed, or fail.
This article originally appeared in Local Government Chronicle
Read Andrew Adonis’ letter to communities minister Eric Pickles
Social impact bonds launched by government to help poor
Ministers want to break the cycle of poverty and deprivation in families
Private investors are being asked to fund a new government drive to help families blighted by crime and poverty.
Ministers want philanthropists, charities and other groups to put cash into "social impact bonds".It is hoped a trial of the scheme in Westminster and Hammersmith and Fulham in London, as well as Birmingham and Leicestershire, could raise up to £40m.
It aims to help break the cycle of deprivation, without costing the taxpayer any more money.
The government has put the annual bill for assisting the UK's most deprived families at more than £4bn a year, representing an average of nearly £100,000 per family.
They are often affected by multiple issues, such as poor education and drug or alcohol addiction, and ministers are concerned the current focus on treating the problems of individuals creates a costly cycle of deprivation which they find almost impossible to break.
'New partnership' It is hoped the use of social impact bonds, where investors get paid a return for successful projects, can intensively tackle several problems in a family setting.
Continue reading the main story
HOW WOULD BONDS WORK?
- Philanthopists and social enterprises will be asked to provide advance funding to support schemes commissioned and delivered by public bodies, such as prisons and local councils
- They would be remunerated by the taxpayer on the basis of the scheme's results, in line with targets agreed in advance
- The "return on investment" - the amount repaid on top of the initial outlay - could range from 2% to 13% depending on how well the schemes perform
- Benefactors will get nothing back if targets are missed
- The first pilot was launched a year ago with four more planned by next Spring
Announcing the trial, expected to
be up and running next year, Civil Society Minister Nick Hurd said it
would focus on delivering concrete, measurable outcomes.
"We must not be afraid to do things differently to end the
pointless cycle of crime and deprivation which wrecks communities and
drains state services," he said."Social impact bonds could open serious resources to tackle social problems in new and innovative ways."
Mr Hurd went on: "We want to restore a stronger sense of responsibility across our society and to give people working on the front line the power and resource they need to do their jobs properly.
"Social impact bonds could be one of many Big Society innovations that will build the new partnerships between the state, communities, businesses and charities and focus resources where they are needed."
Sir Ronald Cohen, co-founder of Social Finance - a company which helped develop the bonds - said the scheme could "revolutionise" the way UK charities deal with social issues.
Click to play
Civil Society Minister Nick Hurd: "It will be very rigorously focussed on hard outcomes"
An initial evaluation of the scheme, published in May, found there was demand from the voluntary sector for the idea and it had helped to generate new sources of funding. But it also warned that the contractual relationships underpinning the scheme were "complex".
Citing the scheme as an example, Sir Ronald said not-for-profit organisations with expertise in the justice system would be funded through investments rather than grants.
"If they achieve a reduction of more than 7.5% in the rate of reoffending by these prisoners for a period of six to eight years, then the government pays the capital back," he said.
"Below that, the capital is lost, and above that the capital gets a yield of 2.5% to 13%."
'Questions to answer' For Labour, shadow Cabinet Office minister Tessa Jowell welcomed the thinking behind the initiative but said much more detail was needed on how it would work.
Continue reading the main story
Rival gangs the Burger Bar Boys and the Johnson Crew became notorious after the murders of teenagers Letisha Shakespeare and Charlene Ellis, in 2003.
Members indulged in petty street crime at first, but, as they moved into the city's growing drugs market, gang violence and gun crime flared up, causing misery for many families.
The Be Birmingham group put the cost of investigating a murder or attempted murder at £1.4m.
Since then, Birmingham City Council has been working to tackle the problem, and it hopes social impact bonds will help ensure the next generation is steered away from joining gangs at a young age.
Case study: The cost of crime
In Birmingham, one of the trial areas announced by the government, an investigation uncovered two crime families in the city had cost taxpayers £37m over four decades.Rival gangs the Burger Bar Boys and the Johnson Crew became notorious after the murders of teenagers Letisha Shakespeare and Charlene Ellis, in 2003.
Members indulged in petty street crime at first, but, as they moved into the city's growing drugs market, gang violence and gun crime flared up, causing misery for many families.
The Be Birmingham group put the cost of investigating a murder or attempted murder at £1.4m.
Since then, Birmingham City Council has been working to tackle the problem, and it hopes social impact bonds will help ensure the next generation is steered away from joining gangs at a young age.
"The devil is in the detail," she said.
"What criteria will be applied to financial backers? How will
the government ensure they are serious about tackling these problems
long term? "What indicators will be used to judge the success of these projects and how will the government ensure the payments by results model does not just allow providers to cherry-pick members of the target group who are the easiest to help?"
Prime Minister David Cameron set a target to "turn around" up to 120,000 families with multiple problems by the end of the current parliament, a goal critics have warned could be hard to achieve.
Westminster Council said it welcomed the chance to speak to potential financiers about supporting its family intervention programme.
"The kind of outcomes they would be thinking about would be avoiding public care for children because what we know it is very expensive and we do not always have the best results," Natasha Bishop, the council's head of family recovery, said.
"They would also be looking at getting children who have been out of school back into school, pushing up attainment and children not becoming young offenders or reducing their offending."
