Matthew Barrett: Lord Heseltine's most worthwhile recommendation was the creation of more unitary authorities

By Matthew Barrett
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Lord Heseltine's recent report ("No Stone Unturned") into growth was correctly welcomed from a distance. That is to say that Lord Heseltine was given a wide remit to examine many different areas of government as he saw fit. His report wasn't merely a proxy for a Minister or Secretary of State's views. Lord Heseltine is his own man.

That being so, there was, as Andrew Lilico identified, a lot of corporatism. Lord Heseltine relies far too much on unelected representatives of the private sector (often from "trade associations") working with government bodies to produce favourable outcomes, and has too much faith in Local Enterprise Partnerships. He also recommends that civil servants should be tasked with picking how best to organise local economies. He also relies far too much on blurring the lines between private and public sector. For example, one of his 89 recommendations states that:

"At the earliest opportunity civil servants based across the country should be brigaded into Local Growth Teams, structured around clusters of LEPs, primarily tasked with joining up government and local partners in the areas of their responsibilities to facilitate, identify and realise economic opportunities."

There is also the amusingly sinister sounding Recommendation 30:

"Government departments should offer all major sectors of the economy the opportunity to form a relationship with government."

Excepting the corporatist approach of some recommendations, there are good ideas to be found - for example, on increasing private sector involvement in delivering public services (without attempting to merge the two), on getting the public sector to assess how much regulations cost the economy, and on increasing financial education in schools.

Perhaps the most potentially transformative recommendations, however, concern the organisation of local government. Recommendation 11 says:

"All two-tier English local authorities outside London should pursue a path towards unitary status. The Government should encourage this and work with authorities to clarify the process and enable it to happen."

To complement simplified local government areas, Lord Heseltine wants to move all councils in England to the same four year electoral cycle, rather than the current hotchpotch of electing half, a third, or the whole council at a time. This would enable councils to plan ahead and be more strategic in their thinking rather than having to play politics in order to get re-elected every two years.

To be sure, scrapping district or borough councils to make way for unitary authorities is controversial in some circumstances, and can be disruptive initially. However, the cases of long-term savings Lord Heseltine cites are undeniably positive. Cornwall's unitary authority replaced seven local councils, and the transition cost £39.5m. However, the savings are £15m a year. Similarly Wiltshire's unitary authority cost £18m initially, but will have saved £68m between 2009 and next year. Back office costs as a percentage of the budget are down. Procurement costs are down. Confusion over service provision for local residents has been reduced. The council is better able to support the local economy and help growth.

The case for more unitaries is well-founded, and should be looked at by Westminster, on cost and efficiency grounds alone. But there are more advantages. Ask MPs what percentage of requests for assistance from constituents actually concern the actions or responsibilities of the local council rather than Whitehall departments or debates in Westminster, and you will hear a common story. Far too many Britons blame their MP for the bin collections, and other such council matters. Perhaps this partially helps explain low council election turnout figures.

Perhaps if, instead of electing (as a minority of civic-minded Britons do), for example, town, borough and county councillors to carry out different functions people don't understand the different between, unitary authority councils could be held responsible for all the local government policies and functions in the unitary area. That would make local government more accountable, more accessible and easier to understand for the ordinary voter. I note with interest that turnout in unitary authority areas is higher than in local elections as a whole.

Making local government areas big enough to be efficient and cost-effective and responsive to local needs is clearly a good idea. But unitaries can also form the basis of the next big conservative localist agenda: the proper devolution of public services to the lowest practicable level. Devolution of as many services as possible to unitary authorities is surely the best way to improve the efficiency and responsiveness of public services to the needs of the people they cater for. It would also strip Westminster politicians of the ability to neglect services in some parts of the country - whether inner city or rural - and allow lavish local spending in others.

Devolving the provision of public services must go hand in hand with taxation. At present, Westminster collects the vast majority of taxes in Britain, and then gives it to local government to spend. This is a massively skewed, outdated and unsustainable model of spending, which offers no accountability and perverse incentives for local politicians to promise projects requiring higher spending, and then blame Westminster's budgets when the council is unable to deliver said higher spending.

Eric Pickles and his colleagues in Cabinet and the DCLG will find a number of Lord Heseltine's 89 recommendations of interest. But the most important one that Conservatives should take heed of is Lord Heseltine's support for the creation of a local authority system able to deliver current local public services efficiently and accountably. More unitary authorities could provide the atmosphere for more devolution of serious, heavy-duty local services from Westminster, and the fundamental re-balancing of the British state, from central government to the local authority.