Nolan tells ministers to go easy on local bodies

CHRIS BLACKHURST

Westminster Correspondent

Ministers were told yesterday to stop interfering in the day-to-day running of 4,500 local spending bodies, to allow them a degree of autonomy while at the same time ensuring they behave properly and are accountable.

The advice came from Lord Nolan who was presenting the second report by his Committee on Standards in Public Life.

Lord Nolan, the committee chairman, also announced that its next inquiry would either be into local government, thought to include the merits of surcharging as a penalty, or the utility regulators. Either investigation, given last week's Westminster City Council report and the surcharging of its former Tory leader Dame Shirley Porter, and this week's new pricing formula from Ofgas, the gas industry regulator, will take Nolan into areas of political controversy.

Yesterday's report was the committee's second after the opening assault last year on MPs' outside earnings and lobbying. After last year's furore, the committee deliberately steered away from a less explosive area and also decided to choose a subject that was more locally oriented.

Nevertheless, the Nolan Committee had some strong words for the Government, saying it "needs to interfere less in matters of detail". Ministers said Nolan "should concentrate on ensuring good local accountability, prompt and effective regulation, and full public-sector audit". Governing bodies of universities and further education colleges, training and enterprise councils, grant- maintained schools and housing associations all need tighter regulating, the committee said.

These local public bodies consume nearly pounds 16bn of taxpayers' money each year and are managed by 70,000 board members. While the committee gave them "a broadly clean bill of health" the 130-page report highlighted some of the problems with what has become one of the fastest-growing areas of public service.

More needs to be done, the committee said, "to ensure that they all achieve the best standards on appointments procedures, openness, codes of conduct, training, whistleblowing and local accountability."

In his letter to the Prime Minister, submitting his report, Lord Nolan wrote of "a tension between the management- driven and output-related approach . . . and the need for organisations providing public services to involve, respond to, and reflect the concerns of the communities which they serve".

The report stresses that if such bodies are to benefit fully from their autonomous status "it is no use replacing detailed local control with detailed central control". It says the Government should lay down clear policy guidelines and operating boundaries.

The committee also calls for the bodies to establish codes of practice on "whistleblowing" so that staff can voice concerns about malpractice without fear of recrimination. They must be able to either tell their colleagues confidentially, or, if necessary go to an outside organisation, again in confidence.

This last recommendation is a fillip for Public Concern At Work, the national charity set up to protect and encourage whistleblowers. Its evidence to the committee receives a ringing endorsement.

In all, the report contains 50 recommendations, covering two broad propositions: the Government or local authority must remain responsible for protecting the taxpayer's interests; and Government and Parliament must ensure local people have some say in their activities.

Key recommendations are:

Unpaid voluntary service by board members;

Reduction in detailed monitoring and interference but more explicit regulation;

Terms of office to last four years and nobody, except in exceptional circumstances, being appointed for a third term;

Development of independent complaints procedures;

Provision of external assistance to resolve internal disputes;

Setting up of codes of practice on whistleblowing.

The committee warns it will review the progress of its recommendations and will produce an update report next year.