Localism

The Prime Minister chaired a meeting of COBRA this morning (23 May) on the death of a serving soldier in Woolwich.

The fatal incident in south east London took place on 22 May.

The meeting, attended by senior figures in government and the Metropolitan Police, included an operational update from the police and agencies into the ongoing investigation and an update from the Ministry of Defence on security.

Following COBRA, the PM gave a statement outside Downing Street, where he outlined that “there is absolutely no justification for these acts” and that “confronting extremism is a job for us all”.

David Cameron thanked the police and security services, saluting their “incredible heroism,” and said they “will not rest until we know every single detail of what happened”.

He added:

This was not just an attack on Britain, and on the British way of life, it was also a betrayal of Islam and of the Muslim communities who give so much to this country. There is nothing in Islam that justifies this truly dreadful act.

He praised cub pack leader, Ingrid Loyau-Kennett, who confronted one of the suspects.

Concluding his statement the PM said:

One of the best ways of defeating terrorism is to go about our normal lives and that is what we shall all do.

Read the Prime Minister’s full statement on the Woolwich incident

Get the latest

Thursday 23 May

• Woolwich attack victim confirmed as serving soldier
• Drummer Lee Rigby killed in Woolwich incident

Wednesday 22 May

• Home Secretary Theresa May’s statement on Woolwich incident
• Metropolitan Police Commissioner, Bernard Hogan-Howe’s statement on Woolwich incident

What is COBRA?

The aim of COBRA is to provide effective decision-making and rapid coordination of the central government response to incidents, drawing on the resources of other government departments, including the security and intelligence agencies, the police and other relevant organisations.

The last time COBRA met was during the Algeria hostage crisis in January 2013.

Housing Minister Mark Prisk today (22 May 2013) announced a £32 million injection of funding for the new town of Sherford, near Plymouth, that will bring forward the delivery of 5,500 new homes and help create 5,000 local jobs.

Despite plans for the new community being adopted in 2007 with widespread local support, progress has stalled.

After years of delays the government’s intervention will now kick-start construction of new homes and a host of community facilities for the South Hams district, including 4 schools, a new town hall, a sports centre and community park.

Business boost for Devon

The development will deliver a powerful boost to the local economy. Over the next 15 years the development will generate £1 billion of construction investment and inject a further £2 billion into the local area.

Today’s announcement is the latest allocation of funding, earmarked by the Chancellor in last year’s Autumn Statement, for the delivery of at least 50,000 new homes in large, locally-supported housing programmes.

The investment in Sherford will bring the total number of homes unlocked through the programme to 41,000. This intervention builds on the deals made for a 6,300-home site at Cranbrook near Exeter, a 6,000-home site at Fairfield near Milton Keynes, and a site for over 22,000 homes at the Eastern Quarry development near Ebbsfleet in Kent. A further £234,000 of funding for the Cranbrook development was also announced today, to help local partners deliver the project.

Mr Prisk said the large sites programme shows the government is making strong progress to boost housebuilding.

Housing Minister Mark Prisk said:

This government is determined to get Britain building again. That’s why we have carefully selected large, planned housing schemes that already have the support of local people, but need help to move forward.

Sherford is the fourth site to receive support, and brings the total number of homes unlocked through the large sites programme to 41,000. Our intervention will also create thousands of jobs and inject billions of pounds of investment into the local economy.

We have set aside considerable funding to assist large housing programmes like Sherford, and over the coming months we will continue looking at other schemes that would benefit from our support - that means more investment, more jobs for our young people and more affordable homes for families across the country.

The funding programme for planned, large-scale sites, administered by the Homes and Communities Agency, is being targeted at schemes that could deliver real benefits to their communities, but are struggling to move forward.

Further reaction to the funding support for Sherford

Home and Communities Agency Executive Director for the South and South West Colin Molton said:

The new community of Sherford is an incredibly important project, because it will go a long way towards meeting the significant need for new homes in Devon and Plymouth and provide a major boost for the economy.

It is a complex development, which has taken years to bring to this stage. It is fantastic news that investment has been approved which will support the development of the sustainable new community of Sherford. I look forward to seeing work start on the project soon.

Red Tree Partner James Koe added:

A great deal of determination, commitment and, of course, funding is required to deliver a project on this scale and with this ambition. Red Tree has always held firm to the principles of good design and responsible development embedded in the vision for Sherford.

With the added delivery capability of some of the most able house builders in the country in Taylor Wimpey, Bovis Homes and Linden Homes and the explicit support of the government in providing this funding we can all now start the process of delivering on these ambitions.

The funding is the vital catalyst to the commencement of the development and this is exciting news for Sherford and for the local economy.

Plymouth City Council Leader Tudor Evans said:

This is tremendous news. This heralds the start of a project that will bring much-needed new homes and new jobs to Plymouth.

Sherford has been on the horizon for a long time and goes back to the 1990s. It’s 1 of the 3 areas identified in our growth agenda for development and I’m delighted that the Homes and Communities Agency are awarding funding for thousands of homes and a new community to help this city fulfil its potential.

There is much to do, but it’s great news to finally get off the starting blocks. We’ve all been in training for a long time for this.

He added:

For every home built, 1 and a half permanent jobs are created. This is not just good news for the construction industry, it’s good for the wider supply chains and the businesses and shops that will all begin to see new customers as this new community begins to take shape.

South Hams MP, Gary Streeter:

The government intervention to unlock the Sherford deadlock is most welcome. At the moment, our children and grandchildren in the South Hams, Plympton and Plymstock cannot afford to remain living in this area. These quality homes will provide much needed homes for them, especially the affordable ones.

Councillor John Tucker, Leader of South Hams District Council, said:

This is welcome news as we have worked very hard with the local community and the developers for some time now to plan for a high quality new development.

We now hope that the government loan to the developers will kick start the scheme and lead to much needed homes in the South Hams and jobs for local people.

Further information

The community of Sherford will be a new market town built in the South Hams in Devon, between Dartmoor and the south Devon coast.

It includes:

• 5,500 new and affordable homes
• 83,000 square metres of offices, retail units and other employment space
• 3 primary schools and a secondary school
• community facilities which would include a new town hall, youth centre, health centre, library, sports centre with swimming pool sports pitches and a 200 hectare community park

The investment from the Homes and Communities Agency would be used to support:

• new roads and transport infrastructure which would unlock an area used to deliver the first new homes
• the provision of utilities (gas water and electricity) to support the first new homes stringent ecological measures to protect wildlife and plants, including new areas for species of bat, replacement of hedgerows and ongoing monitoring by environmental specialists

The Department for Communities and Local Government ran a consultation exercise between 21 December 2012 and 15 February 2013 seeking views on the review group’s recommendations contained in the report of the review of planning practice guidance led by Lord Taylor of Goss Moor.

The review has examined all current guidance material and has recommended rationalising advice and making it easier to use. Existing guidance is unwieldy in its current form and the review has recommended that it be shorter but retain key elements, and be more accessible to be useful to everyone using the planning system.

We accept that the existing guidance suite needs reform and consolidation. In light of the positive response to this consultation, we are carefully considering the implementation of the review group’s recommendations. As set out in the Budget, we will publish significantly reduced planning guidance, providing much needed simplicity and clarity in line with Lord Taylor’s recommendations. We accept the majority of the report’s recommendations, with the exception of those on signposting best practice material produced by the sector and the immediate cancellation of out-of-date guidance.

The government’s response to both this consultation and the Taylor review has been placed in the Library of the House and is available on the department’s website.

Introduction

Thank you very much Joanne [Segars, Chief Executive, NAPF] for that kind introduction and for inviting me to open the conference.

You asked me to speak about the new local government pension scheme (LGPS) that we will be introducing next April and I will of course do so. These reforms will reduce the cost of the LGPS to employers and taxpayers. But we also need to think more fundamentally about the way the LGPS is structured. The LGPS has an enviable record on scheme administration and many of you can be proud of what you are achieving. Nevertheless, the scheme has changed little since 1974. Is it still fit for purpose and can it deliver value for money for scheme members, employers and taxpayers?

LGPS reform

Six months ago I spoke at your local authority forum and set out the case for reform and our programme for bringing forward the new LGPS in April 2014. Much has happened since then. In December, we launched the first consultation on the main elements of the new scheme. Almost 150 responses were received which we took on board in a second consultation at the end of March. We received about 30 responses, which suggests to me that we got things pretty much spot on first time around.

The journey from a final salary defined benefit scheme to a new career average scheme, with all the required protections under the Public Service Pensions Act, was never going to be an easy one. There is still a great deal of work to do, including another consultation very shortly on draft administration and governance regulations. But despite the complexities and challenging timetable, we remain on track to deliver the key elements of the new scheme on time.

A great number of you in the audience will have helped to get us where we are today. We are in a good place because of your help and co-operation and I know that I can rely on you all to ensure that the new scheme is a success from the start.

Efficiency and cost effectiveness

Introducing the new scheme is a clear priority for us all, but since becoming Local Government Minister, I have also been clear that looking at other ways of achieving better value for money for taxpayers is equally, if not more important. After all, you are responsible for vast sums of money. You spend about £8 billion a year on pension benefits, while fund management and scheme administration costs alone are almost £500 million a year.

There are plenty of examples where local pension funds are already working together to share services, to establish local or national call-off contracts and in some cases, to pool pension fund assets. This is all good news, but I am equally aware that there are just as many authorities that are sitting on the sidelines waiting to be told what to do.

Many people associated with the LGPS, including a fair few in the audience today, have been to see me with their ideas. Most of them have said that if there are to be fewer funds, theirs should remain because it’s the best.

All of them have raised some important points. For example, most agree that we need to see the costs of administering funds and the fees paid to fund managers reduced. To achieve this, we need a better understanding of the factors driving these costs. In particular, I want to understand why the administration and fund management costs of similar fund authorities can vary so markedly.

Data

We need better data to help answer the question about what makes a good, strongly performing fund. It is all too simple to look at funding levels and on that basis, say that fund x is better than fund y. But I think we all know that the position is far more complex than that. Funding levels alone do not determine performance.

We need a more sophisticated model that takes account of other factors such as discount rate, investment returns, cash flow, recovery periods and perhaps, most importantly, the funding strategy statement and statement of investment principles adopted by individual funds. Only then will we be able to compare the performance of individual funds on a level playing field.

A common complaint I hear is that there is no single LGPS annual report. This is something we must address. Pension fund authorities are already required to publish their own pension fund reports and I have no wish to change that arrangement. But academics, trades unions and others tell me they are fed up with having to obtain and then collate 89 different reports to end up with the national picture. I have therefore asked my officials to open discussions with scheme stakeholders to agree the format and content of an annual scheme report to sit alongside individual fund reports.

Investments

The scheme is becoming increasingly mature and it is no secret that some funds are close to becoming cash-negative. We therefore need to see even better and more consistent returns on the £150 billion worth of investments in the scheme.

I therefore want to undertake a root and branch review of the LGPS investment regulations. Some have suggested that the funds should be better directed to support growth, particularly local growth. We have already taken steps to allow fund authorities to increase their exposure to limited liability partnerships, but I accept that we may need to go further.

In particular, I want to know if there are any other obstacles in the regulations that prevent you from maximizing your returns. I am not suggesting that we should dispense altogether with the requirement for you to assess the risks associated with your investments. After all, this is taxpayers’ money you are investing and we must continue to get the right balance between risk and reward.

Funding deficits

My other priority is to tackle the equally important issue of fund deficits. We can’t bury our heads in the sand and just keep pushing these significant costs on to future generations of employers and taxpayers.

I want to develop a clear strategy that will both address the historical deficits that have built up over past decades and ensure that future funding levels remain at a level which are fair and affordable. I don’t underestimate the challenge I have set myself but this is not a problem I can choose to ignore. With your help, I want to find a better way to manage deficits. For example, is their a case for moving away from the concept of long term solvency as a funding target and moving towards a model that looks at cash flows and a fund’s capacity to meet pension payments over the short and medium terms?

Fund mergers

I now want to say something about fund mergers. There is probably no other issue on the LGPS radar that attracts such diverse and forthright views. I recognise the tensions out there, and no doubt in the room today, but I am clear that we must explore every option that might give employers and taxpayers a better deal.

Opinion is clearly divided on the issue of whether “big is better”, but for me, the real question is whether “small is worse”. There is compelling evidence from around the world to suggest that the scheme could benefit from a smaller number of optimal funds. But some of you contend that small funds can perform on a par with larger ones. Both sides are equally convinced of their case.

Local Government Association/Department for Communities and Local Government roundtable

All of these issues were raised at a very useful roundtable meeting at the department last week, and I am grateful to the LGA for making that happen.

I was unable to stay for the whole meeting, but I am reliably informed that the discussion was lively and wide-ranging. I expected no less. Among the many different views expressed by trade unionists, academics, politicians and practitioners, a number of common themes emerged.

There was clear agreement that doing nothing was not an option. We can and will put in place a new regulatory framework for April 2014, but this needs to work within a structure that is efficient, cost effective and offers the best value for money. Concerns were raised about the pace of any change and I respect that view. Having the new scheme in place by April next year has to be our number one priority, but at the same time, we cannot afford to just keep talking about structural reform. We need clear objectives and a clear strategy to achieve change.

I was also pleased to learn that a clear consensus had emerged on the need for more focused and better scheme data. Different parties had different ideas about what those needs are, and various attendees said that they would be prepared to lend their experience and expertise in helping to develop a new dataset that better meets today’s needs. I see this as an essential first step in the process to reform the structure of the LGPS.

The point was also made that we need to find a better way of managing pension liabilities to ensure that all future pension payments can be met. It was suggested that a few funds are already cash negative and eating into their assets in order to pay pensions. I think we can all agree that this is not making the best use of fund assets.

It is perhaps no surprise that the issue of fund mergers loomed large in the discussion. The arguments for and against fund mergers were, as ever, well made.

The way forward

So what is the way forward? What is clear to me is that things need to change. We need more transparency, better data, fewer unnecessary overheads and stronger, more consistent investment performance.

What we do not have at this point is agreement on the best way of achieving these goals.

But I am determined that we make progress and make it as quickly as reasonably possible. I can therefore announce this morning, that we will consult later in the year on a number of broad principles for change. This will be your opportunity to tell us what reforms could be made to both help improve your investment performance and reduce your fund management costs.

The consultation will not set out some pre-determined solution to what is undoubtedly a complex and contentious issue. I am neither ruling anything in nor ruling anything out at this stage. However, the clear message from me this morning is that I am not wedded to the existing number of 89 funds in England and Wales. If it takes a smaller number of funds to improve the efficiency and cost-effectiveness of the scheme, I shall not shy away from pursuing that goal.

I have talked a fair amount about the need for robust data to inform decisions. I am therefore working with the LGA and others to launch a call for evidence, which will both inform our consultation and help all involved formulate their views in response to the consultation.

You will be aware that work is well underway to establish a shadow national pensions board for the LGPS. I have met with the LGA and local government trades unions on several occasions to discuss the sort of work that I would like the board to undertake.

I hope I have left them in no doubt that I see work on structural reform of the LGPS, as well as pension liabilities and fund deficits, being one of their first priorities. I have also impressed on them the need for the shadow board to work alongside other representative groups, all of whom must have a say in how we take forward this key element of the reform process.

There is of course the temptation to put all of this to one side and put all our efforts into getting the new scheme in place for April. I appreciate the valuable contribution you are all making to that end, but I believe that I must press forward.

I want good scheme regulations working within a reformed structure that is cost effective and affordable to those who pay the scheme’s costs. I am open to the idea that change itself may have to wait until after the new scheme has been introduced, but I am determined to get you thinking now about what changes we need and how they can be achieved.

Conclusion

By the time we meet again next year, the new LGPS scheme will be up and running. On the equally important matter of structural reform, I fully anticipate that we will have a clear way forward to which we are all committed.

An independent report by Sir Ken Knight published today (17 May 2013) highlights the scope for the fire and rescue services to find millions in savings whilst safeguarding emergency operations and protecting public safety.

In the last decade there has been a 40% reduction in call outs and incidents, and accidental deaths from fires in the home have reached an all time low yet expenditure and fire-fighter numbers have remained broadly the same.

Sir Ken found that services continue to spend according to the budget they are given rather than to the risks they have to manage. Huge variations exist between how the 46 different fire authorities operate, with the cost per head of providing a service almost double in some areas to that of others. This does not seem to be related to whether they are large or small, rural or urban, deprived or affluent. The report states that if those authorities spending above the average found ways to reduce their spending to the national average, then the money saved or reinvested could amount to nearly £200 million per year.

The report identified that the 46 fire and rescue authorities across England each had their own management structures, senior leaders and operational differences. This often leads to widespread duplication of the design, commissioning and evaluation of fire-specific products and demonstrates the potential for much closer co-operation and reconfiguration of services.

In conducting the review, Sir Ken also found that fire and rescue authorities had high levels of capital reserves. Between 2008 to 2012 total reserves held by stand-alone fire and rescue authorities increased from just over £200 million to more than £400 million. This highlights the potential for investing in spend-to-save type projects.

In December the Fire Minister asked Sir Ken Knight - with over 4 decades of experience as a firefighter, including as a fire chief of 3 fire services, and a former London Fire Commissioner - to carry out an independent review into the ways in which fire and rescue authorities may deliver further efficiencies and operational improvements without reducing the quality of front-line services to the public.

Sir Ken Knight said:

As a firefighter for over 40 years I know the fire and rescue service in and out. I know firefighters care deeply about public safety and do the best possible job. I’ve seen their capacity to adapt, even in the most trying of circumstances, but my report highlights that there is much more that can be done by the service leaders to make the service as effective and efficient as possible.

My starting point was to maintain the quality of the service and to protect the safety of the public and firefighters. As I carried out this review I spoke with many services and found that there is wide spread variation in the running costs and management decisions. This presents a real opportunity to get to grips with what is happening and to save public money.

Government and the 46 fire and rescue authorities should use it to decide how to transform the service to reflect the modern and safer world we live in today.

Further information

Terms of Reference

To review the ways in which fire and rescue authorities may deliver further efficiencies and operational improvements without reducing the quality of front-line services to the public. The review will examine options for savings both within and beyond the current Spending Review period, including through:

• firefighter training
• flexible staffing and crewing arrangements
• the use of Retained Firefighters
• procurement
• shared services
• collaboration with emergency services and other organisations on service delivery and estates
• sickness management
• sharing of senior staff
• locally led mergers and operational collaborations
• new fire-fighting technology
• preventative approaches
• working with local businesses

In conducting this review Sir Ken:

• talked to key organisations in the fire sector, including the Local Government Association, the Chief Fire Officers’ Association, the Fire Brigades Union, the Fire Sector Federation, individual fire and rescue authorities and others who Sir Ken deemed relevant
• undertook 15 visits to a range of fire and rescue authorities, including those covering urban and rural areas, and those constituted as Metropolitan, county and combined authorities
• utilised analytical support from government;

The review took into account the findings of previous reviews and reports and their recommendations, including the 2002 Independent Review of the Fire Service (the Bain Report); the Audit Commission’s 2008 Community Safety National Report, Rising to the Challenge; the 2010 Fire Futures review, and the 2011 to 2012 Independent Review of Police Officer and Staff Remuneration and Conditions (the Winsor Reports).

Biography - Sir Ken Knight

Sir Ken commenced his fire service career in Surrey Fire Brigade as a firefighter in 1966 and subsequently, served in a number of UK fire brigades. At a principal officer level, he served as Assistant Chief Officer in London, Chief Fire Officer of Devon and the Chief Fire Officer of Dorset and West Midlands Fire Services before returning to London in 2003 as London’s Fire Commissioner until his current appointment.

Until January this year, Sir Ken was the government’s Chief Fire and Rescue Adviser for England (since 2007), advising government on fire policy matters and, providing advice during any major and catastrophic emergencies.

As well as providing assurance to government regarding the fire safety arrangements and operational response by fire and rescue services for the 2012 Olympics he also produced reports on the widespread flooding in 2007 and the Camberwell Fire in 2009 in which 6 people died.

He has also completed a review of the fire and rescue services in the Republic of Ireland, Bermuda and Gibraltar and undertook a review of the national fire safety and civil defence arrangements in the Kurdish region of Iraq at the request of the Kurdish Regional Government.

Sir Ken is a Companion of the Chartered Management Institute and a Fellow of the Institution of Fire Engineers. He is also a founder Trustee of the UK Firefighters Memorial Trust.

Her Majesty the Queen awarded Sir Ken the Queens’ Fire Service Medal in 1991 and the CBE in 2001. He was appointed as Her Majesty’s Deputy representative Lieutenant for Richmond upon Thames in 2007. Sir Ken was knighted in the Queen’s Birthday Honours in 2006 in recognition of his outstanding contribution to the Fire and Rescue Service.

Communities Secretary Eric Pickles is throwing his support behind Local Newspaper Week with a new law that will enshrine free press and help independent local newspapers thrive.

In a letter to the Newspaper Society, praising them for their campaign to highlight the contribution of the local newspaper industry, Mr Pickles says that when “local news flourishes, local democracy succeeds” and so he will be stopping councils from publishing regular “Pravda-style” free-sheets which, threaten local newspapers and waste taxpayers’ money printing up “town hall propaganda”.

Free press vital

Mr Pickles said he believes the 1,100 local newspapers across the country are important for preserving a healthy democracy by holding local authorities and politicians to account through informing readers of council activities. Local papers are read by over 30 million people every week and are viewed as one of the most trustworthy forms of media.

Publicity law necessary

Legislation proposed in the Local Audit and Accountability Bill will bring a new code of recommended practice on local authority publicity onto a statutory, rather than voluntary, footing limiting publication to 4 times a year, obliging councils to be cost effective and objective in any publicity material they publish.

Some councils have deliberately disregarded the current code and continue to publish free papers in direct competition to local newspapers. The new legislation will prevent this waste of tax payers’ money and misuse of council resources.

Mr Pickles said:

The spread of the town hall ‘Pravda’ is manifestly unfair because they offer cut price local news, but mixed in with council propaganda that pours taxpayers money down the drain.

These free-sheets are often confused for the real thing by residents. I want our news to be told and sold under the masthead of an independent and free press, not through a knock-off Rolex imitation.

Further information

Where a council ignores the statutory code, the government or a concerned member of the public could seek a court order to enforce it. Disregard for that would result in contempt of court.