................................................................................ ON THE RECORD JOHN REDWOOD INTERVIEW RECORDED FROM TRANSMISSION BBC-1 DATE: 7.3.93 ................................................................................ JONATHAN DIMBLEBY: Minister, the Prime Minister talks about an end to the wrangling and the wrestling, calls for renaissance in local government, he's got his work cut out, judging by the critics. What does he mean by it? JOHN REDWOOD MP: Well he means exactly what he says, that we wish to see good local government providing high quality services at a sensible price and having considerable powers and responsibilities within their local communities. I strongly believe in local democracy, your film is a travesty of what is going on, a large number of new powers have been added to local government, year by year. We see them as important regulators, as important leaders, people who set the tone in their local community, as well as service providers and enablers. DIMBLEBY: Just on the point of it being a travesty, the leader of the Association of County Councils - who's not unknown as a leading Tory - says that what is happening is obnoxious because you're removing powers, so he's speaking a travesty of the truth as well. REDWOOD: What happens every year is that local government comes to see ministers in good time before we settle the money, to tell us what they want, and every year in recent years, they've come along and said they need more money, not less, because they point out we've asked them to do a lot more things. In the current year, for example, we're adding care in the community starting in April. But we've added a whole series of things, in planning, in environmental areas, in regulatory functions, to local government, and that's important. We think they can do those best, close to their local citizens, using local democratic means. DIMBLEBY: I want to explore the implications of that for local democracy a little more closely. Would you agree first of all, with Bill Dixon-Smith, that effectively, power is where financial authority lies. Ultimate power lies with the piper who has the power to call the tune. REDWOOD: I think a lot of power lies with money, which is why we give councils a block grant. We give them a huge sum of money in each case, and say use that and use it for whatever range of services you wish. Of course they have to meet their statutory requirements, they have to educate the number of children in their area, but beyond that they can decide, they can decide whether they want more on parks, more on recreation, or more on better education, we don't tell them, they decide. DIMBLEBY: But isn't this precisely where the erosion of power lies. So greatly have the statutory obligations of local authorities increased, now what, around eighty per cent of the budget is taken up by statutory obligation, that the room for discretion is sharply reduced. REDWOOD: Well a fifth is still a lot of discretion in the sums of money we're talking about. Local Government is going to spend eighteen hundred pounds for every adult across the country, next year. That's a huge amount of money, that's more than families are spending on the mortgage or the family car, for the two adult household, and a lot of that does come from central government and it comes as a block grant. And what is interesting around the country, is just how good some of the good local councils are that they're doing an excellent job, which you don't show on your film. But go and look at those councils setting zero Council Taxes in the case of districts, or two or three hundred pounds for the full range of services, as in the case of Wellingborough, with the county. Go and ask them how they do it, they do it by using their discretion. DIMBLEBY: You say go and ask them, the leader of the Association of County Councils may be be held to represent those Tory councils. He's the one who's saying that you are denying him proper freedom, it's not us saying it, it's him. So you mean tell him to get his facts right and go and see those people. REDWOOD: No, no. Bill agrees with a great deal that the government is doing and you are misconstruing exactly what Bill said. DIMBLEBY: He said it pretty clearly, didn't he. REDWOOD: There are a lot of councils around the country... DIMBLEBY: You heard him say it on the film, didn't you? REDWOOD: There are a lot of councils around the country who find the grant more than adequate, who are budgeting well within the limits we set and who are providing excellent services. And part of the renaissance of local governent is having its minister and the Prime Minister being proud of it, and I am very proud of what a lot of councils around this
country are doing, they are seeking value for money, they are setting realistic taxes and they're doing a first class job in leading their local communitites. DIMBLEBY: Fine, now just let me pursue this thought with you a little bit further. You talk about a fifth of the money being under your own control is still quite a lot of money. What it means is, when you also have capping, that it's that discretionary area that you actually have to tap, because you have to spend the money on the statutory obligations, so you lose the power to decide how many libraries you have, whether or not you keep the old people's home open, we saw one in Doncaster that's got to close. Whether or not you do a whole range of services outside the statutory obligation. REDWOOD: No, that's not true. Well managed councils have a great deal of choice and discretion, why don't you go and ask some of the councils who are in difficulties how much money they've borrowed over recent years, and how many mistakes they've made in their financial controls, or in the way they've spent their money. The big difference between the councils setting zero Council Taxes now, and the districts setting two hundred plus pounds of Council Tax for a typical house, lies in their attitude in the past towards borrowing and expansion of services. Whether they've done it recklessly or sensibly. DIMBLEBY: Is high borrowing something that's a cardinal sin in the mind of this government. REDWOOD: Well we are very modest borrowers as a
nation compared with countries abroad. DIMBLEBY: ...thirty seven billion, forty billion, fifty billion. REDWOOD: If you look at the stock of debt it is very modest compared with the continental countries, and there is at the moment a cyclical problem which means we're borrowing at quite high levels, but we all want to see that down, and I'm sure you do as well. DIMBLEBY: ...(both talking at once).....your borrowing is good, their borrowing is bad. REDWOOD: No, it is very important to keep control of total borrowings, and the government will bring down the amount of borrowing over the cycle. Only a few years ago we were repaying debt which is why our total stock of national borrowings is not unacceptably high at the moment. Some councils have gone on borrowing year after year after year, they've never had good years in which they've repaid borrowings. Thos who have repaid all their borrowings, this year, are expanding services, hiring more people, because they're not having to pay all the interest on the debt. DIMBLEBY: Now given what you're saying, and you have statutory obligations, you have capping, now whether that is for better for worse, it has to be true, does it not, that the power of the elected councillors is reduced by the limits on their range, either to raise money, or how they spend it? REDWOOD: But most find that the existing controls still leave them with a great deal of choice. It does matter how you run things. We just say that there has to be an absolute maximum because the sums involved now are so huge and because the tax powers are very considerable, we do think we need to impose an absolute maximum. But if you look at what government's been doing, over the last couple of years, it has increased the amount of money going to local government by ten thousand million pounds, that is a colossal increase in expenditure. DIMBLEBY: But that's not, with respect, quite the point, the point is whether or not the more money is going to meet statutory obligations, whether or not capping is good or bad, it involves willy-nilly, it involves a reduction in the independent power of the local authority. You retort to that by saying, well they like it really. They're saying, in the words of Bill Dixon-Smith, "it's obnoxious". REDWOOD: I didn't say they like it really, I said that if they're well run, it isn't a problem, and there are many other ways of achieving what they want to do. DIMBLEBY: At the beginning of...sorry.. REDWOOD: I'd rather live in an uncapped world, but I do think... DIMBLEBY: Because that's where freedom lies, isn't it? REDWOOD: Because that's..but where we have very large sums of money, it is important that the Government expresses an overall view of total public spending and how much tax people can be expected to pay. DIMBLEBY: Now, you've talked about borrowing and responsible Local Authorities. In order to preserve YOU from angry Councillors in Dorset that started off this film, ringing up and saying "we've got a crisis with our schooling, and you're accusing us of borrowing too much as a way of explaining it" you would like to say to them "Yes, I acknowledge you've NEVER borrowed", because that is the case. REDWOOD: But I'd like to look at Hampshire - another Conservative Council. DIMBLEBY: What do you say to Dorset, because Dorset will be watching this? REDWOOD: I'm just telling you something about Hampshire which they might find interesting. Hampshire have been repaying their borrowings. Hampshire don't get a great deal of grant by national average standards, but this year they are setting the lowest Council Tax as from April and they are hiring nine hundred extra people, including a lot of teachers and care workers who will improve the quality and range of services in Hampshire. It can be done. It's about good management; it's about value for money; it's about contracting out; it's about concentrating expenditure on front-line services rather than bureaucracy. DIMBLEBY: A school report from John Redwood to Dorset - "Could do better". REDWOOD: I'm not saying that about Dorset. I'm just saying that there are many Councils around the country - of which Hampshire is a prime example - that are under Conservative control that are finding the controls quite easy to live with and are doing a first-class job. DIMBLEBY: Now, given that you want this renaissance which you say a better relationship between Central and Local Government, leaving aside the restriction of freedom imposed for good, you say (they're not so happy with it through capping and through the constraints of statutory spending), how can you have a renaissance when in a whole area of their powers and responsibilities you've been...and in a couple of central areas you've been hacking off the limbs of their powers. Education, for example. REDWOOD: You're not responding to my point that every year the range of their activities and duties has increased and they have come to Central Government seeking more money, quite understandably, to meet those requirements. Now, I make no apology for the fact that we are so democratic that we say to parents "if you wish your school to be more independent of the Local Education Authority, you can vote to do so". But that isn't strengthening central control, that is giving individuals on the ground more say over their own lives, and good luck to them if they wish to take it away from the LEA. If they don't, they don't have to. DIMBLEBY: Now, that's you see, that's a very interesting point, because that's the pitch that is often made by Ministers. But on this very programme last week the Secretary of State for Education, John Patten, conceded that in the process of creating grand maintained schools power (and he conceded it was enormous power) was taken from Local Authorities to the hub (his terms, Kenneth Baker's term) the hub of Local Government from where, in due course, it will go out down the spokes to the rim. Now, the point surely is that you have decided that where there have to be great residual powers they should lie at the centre, rather than with the Local Authorities. That is a HUGE reduction in the democratic power of elected Councillors. REDWOOD: No, it's a great extension in the powers of individual constituents and citizens around the country to make a choice. We're not saying their school has to become grant maintained. We're saying "do they wish to?". They can decide. They can vote on it. What more democratic procedure can you have than that. (Both talking at the same time) ...if people want to opt out of Government altogether and run their own institutions, along with a certain amount of public funding and..... DIMBLEBY: But inside the LEA's at the moment, the self-Government exists in schools. That's what you have created, but the LEA's have residual powers of determining how many schools, how many surplus places, and so on. That power is being removed to the centre. Now I don't want to get into the argument about whether it's a good thing or a bad thing itself, but you have to appreciate that that is a sharp reduction in power and a transfer of power from the Local Authority to Central Government. It's self-evident. REDWOOD: But that is coming about as a change because we've given people the right to decide on whether their school is better controlled by its own independent Board of Governors, within a general State system, or whether it should be more answerable to the LEA. That is a strengthening of democracy. The other changes follow from that particular change. Now I welcome that change because I think it is a good idea to give individuals much more say over their own lives and over the institutions that affect them, and the nearer that it can be to the local community the better. We're trying to get decision-taking down to local communities and to individuals, which I would have thought our critics should have welcomed. DIMBLEBY: Yes. Financial power shifts in that process from the Local Authority to the centre. The power of decision in that area (you say for better) moves upwards and downwards. It certainly doesn't remain with the Local Authorities, so their feeling about that - jolly cross because it's a reduction of what... I mean, most of their budget is spend on education. Now if you move on from that to the police; if you bring in changes which are being discussed now to reduce the power of Local Authorities over the police, it's yet another key area where power is taken away. REDWOOD: The Home Secretary said he thinks it is a service that requires a strong local input and so we'll have to wait and see his full proposals, but he may surprise you. He may even have suggestions on London which currently houses centralised police service which moves in the other direction - that's something he'll obviously think about during the course of his review, but I'm very heartened by the way in which the Home Secretary has laid considerable emphasis on the local importance of this service. I want to see Local Council Leaders, Councillors, Magistrates and others leading local communities in the drive against crime. A very important task, a big task where they can make a big difference in their local areas. DIMBLEBY: Meanwhile, I put it to you that the Prime Minister is going to have his work cut out on everything that you've said to me so far, to persuade them that he's not asking them to be merely an agency of Central Government. Yes, Prime Minister, you are doing that; No, Prime Minister, we aren't having your renaissance, will be their reply. REDWOOD: Well, I'm not in that business of cutting down on their powers and duties. I'm in the business of strengthening good Local Government. I think they have a vital role in leading their local communities and I think a lot of them know I'm on their side and I'm out to encourage all that is best in English Local Government. DIMBLEBY: John Redwood, Minister. Thank you. ...oooOooo...