Steve Richards: Every party wants local decision-making, but none of them is clear how to do it

The attempt to find answers caused more rows between Blair and Brown than any other issue
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In unison, and with a greater intensity than ever before, our leaders proclaim their fervent wish to give power to the people. From parts of the Labour Party, via the Liberal Democrats and to the right of the Conservatives, the fashion is to call for a smaller state and to let loose the stifled genius of the people.

In Nick Clegg's first major speech as the new leader of the Liberal Democrats, he leapt ahead in the race by declaring that "the state must back off and allow the genius of grassroots innovation, diversity and experimentation to take off". Specifically, Clegg advocated what he calls Free Schools and to give people far more control over the NHS.

The Conservatives have expressed similar aspirations, and Gordon Brown also makes the empowerment of people a defining theme.

On one level, there is no surprise in this. After all, no political leader would get very far by declaring that he wished to take power away from people. But when I hear or read about these romantic visions of local genius flourishing across the country I pose a simple question: How?

Let us return to Clegg's speech, a substantial debut that gets to the heart of the matter, even if he was seeking to get to the heart of it in a different way than this column. The new party leader also stated that the state must intervene to allocate money on a fair basis in health and education and to "guarantee equality of access in schools as well as overseeing core standards and entitlements".

In the context of the speech, this was a mere intake of breath before the grander vision was unveiled, the one in which genius at a local level would be allowed to flourish.

But if we pause for a moment at the intake of breath, Clegg was acknowledging implicitly that the state should continue to have a pivotal role. First, he argued that the state had to allocate cash on a fair basis. Such allocations are always contentious. What is fair? How high should the level be? These are questions that should spark debates about the level of public spending and how it should be distributed.

As far as Clegg is concerned he has a precise answer. He wants an additional £3bn to be spent on schools in poorer areas, an admirable policy that would mean kids from low-income families getting the same level of expenditure as affluent children who attend private schools. But such an additional outlay of spending from taxpayers' money is bound to mean that the Government takes an interest in how the cash is spent. If Clegg were a Chancellor, he would be acting irresponsibly to hand over the cash and say: "Spend it how you want to."

To their credit, the Conservatives are also exploring ways of investing more cash in poorer areas, mechanisms that would attract the best teachers to some of the deprived areas. But if the money comes from the centre would they, and should they, allow a free-for-all at a local level? To which body would their schools be accountable? The Conservatives look to ways in which the schools are more accountable to the parents, again a worthy objective, but the mechanisms to bring this about are by no means straightforward or clear. For the Liberal Democrats, Clegg speaks of "local government strategic oversight", but what does that mean?

In his speech, Clegg also acknowledged that the state must play a central role in guaranteeing equality of access and overseeing core standards. Again, this is a pivotal role and one that for all appearances of consensus is highly contentious. How to stop schools selecting pupils by stealth? Will there not be a nod and a wink that one school in a local area specialises in getting kids into Oxbridge and the pushy parents will go for it?

Clegg's guarantee of equality and his desire to oversee core standards cannot be a mere preamble, but the beginning of a debate about the means over how such objectives should be brought about. What do we define as core standards? How do we guarantee equality of access? How do we ensure a better quality of teaching and a supply of good teachers so that pupils benefit from the core standards?

The same complications apply to the politics of the NHS. Clegg states that the NHS must remain free at the point of use, accessible to all. That means central government will be responsible for raising the cash and deciding on the limits. Ministers will take the political hit if taxpayers' money is wasted or if the NHS lacks the necessary resources.

The current Government is rightly in trouble now for wasting so much money on GPs' pay increases without getting anything in return. There cannot be an "independent" NHS, as the Conservatives are partially arguing, or one that is entirely accountable locally, when all the cash is raised centrally. The dynamic could be changed with the introduction of co-payments and possibly by patient vouchers, but no party is advocating such moves.

The restless attempts to unleash local innovation start from the correct assumptions. Standards of public services in Britain are abysmal and the multi-layered agencies responsible for delivering them can be stifling. But it is a big leap from that correct starting point to call for a localised free-for-all in which the state stands back and local government is by-passed too. Anyway, a look at the small print suggests that no one is advocating this in reality.

What is worrying is that in the populist rush apparently to give power to the people, a serious debate about the role of the state is conveniently by-passed. It is simply taken as read that the state will raise the cash and be the instrument for maintaining core standards and equality of access, even though core standards are poor and there has never been equality of access, at least in terms of schools.

There are big debates needed over how such objectives can be achieved and they should not be ignored by a sweeping declaration that the state must stand back.

Political leaders are asking a too simplistic question: How do we set the people free? The question they must agonise over is subtly different: How do we achieve local innovation and accountability when central government raises the money and has responsibility for overall standards?

No one asks the question because there are no easy answers. The attempt to find answers caused more rows between Tony Blair and Gordon Brown than any other issue. Clegg's speech gives the impression that he has answers, but his solutions only raise further questions. They are the same questions raised by the Conservatives in their genuine, but vaguely defined, desire to empower people. The role of the state is the key battleground in British politics and yet, in public at least, is rarely discussed.