Local Democracy, Economic Development and Construction Bill [HL]

My Lords, I welcome the Minister’s and the Government’s concern in the Bill to give a stronger voice to local people in determining the future of their communities. I believe that the Minister’s wishes, expressed in her response to the gracious Speech last week, to, "““provide real help for people in tough times; to support strong … communities; to continue to plan for the long term by creating more sustainable communities; and to prepare people and businesses so that they are best positioned to take advantage when the upturn comes””," are genuine desires of both her and this Government. I also agree that: "““There is a direct link to be made between the connection people feel to their communities and how far they feel that they can influence change and impress their views and concerns on local government for a thriving, confident economy. People are more resilient when they feel they belong and can play a full part in communities that are strong and sustainable””.—[Official Report; 10/12/08; cols. 399-400.]" That is all correct, in my view. As a general statement, who can disagree? The difficulty comes when we get into the detail and what this all means in practice. Can we believe that all our local councillors have the experience to be our local leaders? That might be true in some places but not everywhere. Some local leaders who are well respected and have achieved much are not members of local councils; they have not chosen that route. I worry, as does the noble Baroness, Lady Warsi, that, when notice of this Bill was first given, more emphasis was placed on community empowerment but some elements of that have been dropped. This is a real shame, at a time when we need to empower local leaders, who can deliver real change on the ground. Why have we watered down the Bill? It would be helpful to know. In my response to the gracious Speech last week, I described some of the work of social entrepreneurs—local leaders whose serious track record in building strong, sustainable communities is not even referred to in the Bill. The Bill assumes that the public sector will lead us all and do it all for us. I do not believe it. Social entrepreneurs and the social enterprise movement have achieved a great deal and have demonstrated real delivery on the ground. Responses to the social entrepreneurial approach have changed over the years. At first, politicians thought it a great idea but bemoaned the lack of examples. When Community Action Network—which I co-founded and thus must declare as an interest—and others started to uncover examples in communities across the country, some politicians were pleased to see them but remained sceptical about their usefulness. Now that there are many good examples of success in delivering results for people, some politicians worry about democratic accountability. You can’t win. That does not mean that the social entrepreneur should be discounted. Quite the opposite: it demonstrates a need for all our politicians now to develop a political framework that legitimises this approach and brings it more seriously into the mix. The Bill does not do this. Service delivery needs clearly accountable leadership. We need to find ways of encouraging this and giving legitimate authority to the Jamie Olivers of this world. Equally, I could mention John Bird, founder of The Big Issue, or Tim Smit of the Eden Project, and there are many others who are less well known. They are people with a track record of leadership and delivery in local communities and they are very accountable. We also need to invest in future generations of these people. They should not still be forced to face into the wind, as we have had to do for so long in Bromley-by-Bow while the council sorts it all out for us. These entrepreneurs have earned the right to have the wind put into their sails. People make the assumption that simply involving more people in the representative decision-making process is a good thing because it is ““more democratic””. As a new life Peer, I have heard this argument a lot during debates about the future of your Lordships’ House. I have listened to all three main parties in this House arguing for a 100 per cent elected representative Chamber in this House believing that greater representation will mean a more lively democracy. This has not been our experience on the streets of Bromley-by-Bow. Local people do not feel represented; they often do not feel or see the practical results of that representation and so do not feel empowered. They feel disillusioned with the democratic process. People are practical; they want to see a connection between what they do and what happens on the ground, then they get interested and committed. At both central and local government level, New Labour has rightly taken steps to strengthen the power of elected leaders and enhance their ability to act decisively. There are many examples of this, but perhaps the clearest is the agenda for modernising local government, replacing old-style council committees with a leader and cabinet model, in some cases with the direct election of executive mayors. This new thinking, whilst not perfect, has really begun to move the public sector on in east London. When I first arrived there 25 years ago, the London boroughs of Tower Hamlets, Newham and Hackney were basket cases. They are not so today. Yet the Government’s modernisation of Whitehall and town hall politics is strangely at odds with the approach taken by a whole plethora of neighbourhood-based regeneration schemes, most notably the Neighbourhood Renewal Unit, whose work in overseeing the Government's neighbourhood renewal strategy is, as its website said, ““a continual, two-way process”” between Whitehall and local government and communities, rather than being about Whitehall telling local government and communities how they should run things. At the same time as one part of government has been removing committees from town halls, another has created a massive committee infrastructure in disadvantaged neighbourhoods across the country. This all seems confused. I would suggest that the time has come for politicians to put real energy into creating a political framework in which the work of leaders such as Jamie Oliver, and the Tim Smits of this world, who have not chosen the representative route, can be given greater legitimacy. Many of them are well respected leaders in their own communities and in their own right, are not local councillors, and have a serious track record of delivery and success. It would be helpful if this Bill could send out absolutely clear messages that this kind of leadership must not be diluted by bureaucracy and a culture of committee that imagines everyone should be consulted about everything. In return, such leaders would be expected to take personal responsibility for both their successes and failures. If the Bill were to open that box—and I fear it will not—and put this discussion on the map, it might have an important contribution to make towards both local economic development and greater community and individual empowerment. The practical experience of the social entrepreneur is starting to influence behaviour in the public sector. There are examples of local authorities coming to similar conclusions to us. The London Borough of Newham has also been grappling with the issue of local leadership, shifting its emphasis from neighbourhood committees to active community teams made up of volunteers and linked to the borough's Olympic volunteering programme. These teams work with local councillors to help shape and strengthen their communities, for example through free events, which are used to help the council and community lead councillors to identify and address the priorities in each area, and to help inform future service priorities, such as crime and anti-social behaviour services, sports facilities and parks. This has echoes of the way in which Barack Obama, the President-elect of the United States, has mobilised his very large number of volunteers, whom he hopes to use as he moves into the White House. He recognises that it is not just what government can do that counts. This approach is encouraging a broad range of people to help shape their neighbourhoods through practical activity, rather than perpetuating talking shops with the usual suspects. In the process, volunteers develop skills that help them in employment and other areas of their lives. I encourage the Government to look closely at Newham's approach. There are clues here as to how, in practice, you actually begin to empower local government. LOCOG would also do well to study Newham's approach, as it recruits and trains its volunteers for the 2012 Games.. It is a shame that what I am suggesting here is not reflected at all in the Bill, but I thought that it might be helpful if I brought it to the attention of your Lordships’ House and made some tentative suggestions about how the Government might at least begin to welcome these entrepreneurial leaders into their structures and into the fold. The Bill could make a major contribution towards practical community empowerment if it took the first tentative steps towards both recognising and involving these practical people in the process. My practical thoughts on what these steps might be are as follows. The Bill could publicly recognise that local people, businesses and social entrepreneurs should be involved in the local delivery of local services, where they wish it. Encouraging them simply to comment on how the state talks and delivers does not go far enough. One of the ways in which the Government could help small businesses in the coming recession and increase social cohesion, tackle worklessness and create community empowerment is by promoting a broader local economic mix. The state is too large a proportion of the local community, particularly in regeneration areas. It wastes money, creates dependency and costs taxpayers a great deal. The Bill makes no reference to partnership and to encouraging and promoting local procurement from SMEs and there is nothing about engaging with business and entrepreneurs in the setting-up and running of economic prosperity boards. The assumption seems to be to leave it to the state. I ask the Minister whether it would be possible at this late stage to include in the Bill some of this thinking. I make some specific suggestions. In Chapter 2, about petitions, could the Bill encourage local people, businesses, members of the voluntary community services and social entrepreneurs to present petitions to run any service which is currently run by one of the statutory partners? Could we introduce a presumption that, if such organisations can deliver to the same cost and at least the same quality, they should be entitled to deliver that service? This could include measurement of value of other community benefits; for example, social cohesion, employing local people and so on. Government could use the proposed audit function to provide an objective analysis on the benefit that would bring, otherwise the statutory body will simply justify itself. Perhaps the Government could pilot this first in the economic prosperity board areas? Part 6 of the Bill could suggest that everyone who sits on the economic prosperity boards is there because of specific expertise they have and not just because they represent particular committees. We all know from hard-won experience that representative committees of this kind simply do not work. If those boards are truly to be about economic prosperity, then a majority of the board must be made up of local entrepreneurs, with focus on smaller rather than larger businesses. Without that experience around the table, those boards will produce a great deal of paper and many expensive strategy documents but little prosperity. Could we allow local social entrepreneurs, or members of the voluntary community sector, or other local partnerships to petition to set up an economic prosperity board? If not, why not? In Part 2, Chapter 2, the Bill suggests that there is also a strong audit function, which is necessary. Could the Bill give a specific role to audit on how well public bodies are using their purchasing power to support local businesses and social enterprise? To do that, of course, one would need some of those employed in the audit function to have actual experience of small businesses or social enterprise, not just the statutory sector. I have used this speech to further set out the case for the role of social enterprise and the part played by the social entrepreneur. I would like to know whether the Minister is interested in any of my suggestions, which are designed to empower local communities in practical ways at a time of financial hardship. Last week, during his summing-up in response to the gracious Speech, the noble Lord, Lord Hunt, suggested he would like a meeting. Perhaps we could meet before Committee stage to see whether any of these points can be taken on board. Earlier today, I hosted a very helpful visit of the Secretary of State from DCLG to east London to explore deepening the role of social entrepreneurs and social enterprise in the Olympic legacy. Both she and the Minister are deeply concerned about those issues. I welcome the opportunity to discuss these matters in your Lordships’ House. New ways of working are emerging; we all need to engage with them for the sake of our democracy.