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20 June 2001

Joint Press Notice issued by the Department of Transport, Local Government and the Regions and HM Treasury

£300 MILLION BOOST FOR LOCAL GOVERNMENT TO DELIVER BETTER QUALITY SERVICES

The Government today announced a £300 million boost over the next two years for local authorities signing up to local Public Service Agreements to deliver better quality public services to local people. 

The funding, announced by Stephen Byers, Secretary of State for Transport, Local Government and the Regions, and Andrew Smith, Chief Secretary to the Treasury, will deliver better schools, better care for older people and vulnerable groups, help reduce crime and make our towns, cities and villages better places in which to live.

Chairing his first Central Local Partnership meeting between government ministers and local authority leaders in London today, Stephen Byers said:

"I am pleased that we are able to announce today a £300 million boost for local authority services. This is the clearest possible demonstration of the Government’s commitment to finance better public services from schools to social services and improving the quality of life. Driving up the quality of public services will be at the heart of the relationship between Central and Local Government over the next five years."

Andrew Smith, Chief Secretary to the Treasury, told the meeting:

"Local PSAs, and the flexibility to increase borrowing that these unsupported credit approvals bring, are a central element of the Government’s strategy to deliver better public services in every locality. Today’s announcement responds positively to the success of the pilot phase for local PSAs and to requests from local government to extend this in the roll-out. A new feature, added since local PSAs were piloted, is incentives to encourage closer working between county and district councils."

Welcoming the announcement, Chairman of the LGA, Sir Jeremy Beecham said:

"We welcome these extra resources for local PSAs as strong evidence of the Government’s continuing commitment to this joint initiative and because they will increase the ability of local authorities to deliver better local services for local people."

"The extension of unsupported credit approvals will give authorities more flexibility to put investment where it is needed, in advance of the more radical reform of the capital finance system which the LGA and the Government are working together to deliver."

Already, during the Pilot phase for Local PSAs the availability of up to £50 million of UCAs has helped Local Authorities to commit to raised targets: examples of projects supported include:

• Birmingham using £2.5m of UCA on recycling projects enabling them to more than treble the rate of recycling by 2004 a significant increase on their statutory target to double recycling by that date.

• Kent using £1.5m of UCA to turn some of their residential homes in to rehabilitation centres allowing many older people to regain their independence after a hospital stay.

• Sheffield using £2m of their UCA on extending IT networks to schools.
  
  
  NOTES FOR EDITORS

1.      The Central Local Partnership was established in June 1997 by Deputy Prime Minister John Prescott. It takes place between three or four times a year and is attended by Cabinet and other key Ministers, and leading members of the Local Government Association. It is a forum where major, particularly

2.      The Government announced in the Spending Review 2000 that it intended to offer local authorities the opportunity to enter into local Public Service Agreements (PSAs). (DETR news release 502 of 28 July 2000 refers). The concept was developed in close partnership with the Local Government Association.

3.      Local PSAs are a means by which local authorities can build upon best value and commit themselves to delivering even better outcomes for local people than they would otherwise expect to achieve. Each local PSA focuses on about 12 key outcomes which reflect a mix of national and local priorities. In return, central Government Departments are offering to agree freedoms and flexibilities in statutory and administrative processes, and rewards for success, which will help authorities to deliver these enhanced outcomes.

4.      The Pilot phase of the local initiative was completed earlier this year, with 20 pilot authorities entering into PSA agreements. These were: Birmingham City Council, Blackburn-with-Darwen Borough Council, Cambridgeshire County Council, London Borough of Camden, Coventry City Council, Derbyshire County Council, Kent County Council, London Borough of Lewisham, Middlesbrough Council, Milton Keynes Council, Newcastle City Council, London Borough of Newham, Norfolk County Council, London Borough of Richmond-upon-Thames, Sheffield City Council, Stockton-on-Tees Borough Council, Sunderland City Council, Surrey County Council, Tameside Metropolitan Borough Council andWarwickshire County Council.

5.      The Chancellor announced in the Budget, and the Manifesto confirmed, that Local PSAs would be offered to all top tier authorities – over the next two years.  Informal indications have so far been received from around 90 authorities that they will wish to take part, and more are expected to indicate their interest in due course.

6.      The extension of the scheme will be on a similar basis to the initial pilot, though taking account of the lessons learned in that pilot.  A revised prospectus will be issued in July. One change already decided is to provide additional incentives to promote closer working between county and district councils. Reward payments for achieving targets will now reflect the combined budgets of both the counties and districts where joint proposals are agreed.

7.      Unsupported Credit Approvals (UCAs) give local authorities additional flexibility to borrow to invest in capital. Debt repayments are not supported by central government so local authorities will need to demonstrate that they can afford extra borrowing. Greater flexibility to borrow is in line with the proposals on capital finance in the local Government Finance Green Paper.  In the pilot PSA round £40 million of UCAs were taken up by: Birmingham City Council, Blackburn-with-Darwen Borough Council, Coventry City Council, Derbyshire County Council, Kent County Council Newcastle City Council, Norfolk County Council, London Borough of Richmond-upon-Thames, Sheffield City Council, Stockton-on-Tees Borough Council, Surrey County Council, Tameside Metropolitan Borough Council and Warwickshire County Council

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