Ruth Henig raised the issue of ring-fenced expenditure in policing, which had previously covered 3 areas - it was now up to 28. She agreed that performance management was important and recognized the need for greater efficiency but there were also some significant pressures arising from the work that police services and their partners were being asked to undertake, for example on anti-social behaviour.

　

 Ruth Coleman said that the public had a tendency to think in terms of % figures rather than money so a % rise of 10% would appear larger than its absolute value. If the public wanted increased spending then there needed to be proper consideration of the scope to raise funds more directly. There were ongoing pressures from previous initiatives such as waste and recycling which now needed to be sustained. It was important to avoid last minute changes and surprises, which made planning much more difficult.

　

 Hazel Blears said that the Home Office was looking hard at ring fencing and the way that the crime fighting fund is operated. There was also a lot to do on workforce and on the wider family of those involved in addressing anti-social behaviour such as neighbourhood wardens.

　

 Nick Raynsford said that he recognized the need to look closely at pressures and new burdens. He would follow up the points raised in licensing and on search fees. However, productivity was not improving as strongly in some services and some authorities as was needed. This was of fundamental importance to being able to keep council tax down and improve services. The balance of funding review was important and it would be looking at the scope for other forms of revenue raising.

　

 Peter Chalke said that all of the political groups were intending to find common ground on propositions from the LGA on the balance of funding review. He was clear that although many BVPIs showed positive improvements productivity was not as strong when account was taken of the additional level of funding. Improving productivity further would be a key theme over the next 2-3 years.

　

 Chris Clarke asked whether data on productivity would be shared.

　

 Nick Raynsford replied that it would on an on-going basis.

　

 Paul Boateng urged Ministerial colleagues to be as forthcoming as possible during the Gershon efficiency review on ring fencing. HMT and ODPM would continue to make common cause to reduce its extent.

　

 Alun Michael expressed the concern that smaller services were liable to be squeezed out e.g. access to the countryside.

　

 The Deputy Prime Minister said that both Central and Local Government understood that the current situation could not continue - there were rising expectations and rising costs but the blame culture had to be avoided. Council Tax revaluation was going to be a big issue. There had been significant improvements in performance but the effect of focusing support on some services did have implications for other services and there remained a real challenge to improve productivity. Encouraging greater participation by communities was a real challenge - and councils are the main bodies that could make that work effectively. To make progress there needed to be greater understanding of the drivers of changes in costs and that might need to be reflected in an expanded remit for the balance of funding review. Central Government would also need to learn to trust Local Government more and allow more flexibility about how things are done in different areas.

　

 Peter Chalke said that currently 60% of his council's budget was predetermined due to the education and police requirements - so a major shift would be needed.

　

 Jeremy Beecham said that function and finance did have to be addressed together. There might need to be greater clarity about the way that the role of local government is framed. Accountability and engagement with communities were critical but more transparency was required over finance. There might be need for a Central/Local Concordat so decisions could be taken at the most effective level. This would have implications for the financial framework. He thanked ODPM and HMT for their support on ring fencing but remained unsure as to whether all Departments were equally committed.

　

 Sandy Bruce-Lockhart restated the need to explain to the public the cost pressures leading to Council Tax increases such as teachers pay rises.

　

　

 Nick Raynsford said that getting pay and workforce issues right was fundamental to delivering better and more cost effective public services. Although there had been a joint approach there had been recent press comment suggesting that this was an "attack" by central government on the local government workforce.

　

 The key messages were leadership development, solving recruitment and retention problems and developing more flexible working practices. There were also important messages about performance related pay and the pay levels of Chief Executives, equality and diversity and developing the skill base of lower paid staff.

　

 The strategy will be updated in light of the report of the Pay Commission, expected in early November. Implementation will require better joint working across Whitehall, for example DfES, DH and others working with ODPM and the LGA on issues of common interest like leadership and recruitment, pooling ideas and budgets. Implementing the strategy will be discussed at 4 regional seminars, after which ODPM and LGA, together with other government departments, will need to finalise an implementation plan to go back to Cabinet Office in January.

　

 It would also be important to engage the trade unions positively. There would be much in the strategy that they would welcome (emphasis on training, skill escalators, equal pay etc) but also some potentially difficult areas around flexible working and local pay variations. In the words of the CLP Paper consideration needed to be given to how to move forward to "rethink the adversarial relationship between the employer and trades unions and replace it with a broader dialogue".

　

 Harry Jones agreed that a great deal of progress had been made. The Pay Commission had been helpful and it was vital that discussions continued or the delivery of better public services could be held up.

　

 Paul Boateng said that the joint work on this area was very positive since any additional resources had to be linked to service improvements - and pay should be used to improve recruitment, skills etc. It might also be necessary to look at more local flexibility.

　

 Jeremy Beecham confirmed the need for a Work Force Strategy. PRBs could effectively pre-empt Settlements. It might be possible to consider skills and training targets within LPSAs.

　

 Chris Pond said that tax credits were important in terms of alternatives to large wage increases - they affected income levels rather than wage levels. Job Plus also had a huge reservoir of skills that could work with local government.