Crossing boundaries

A local area agreement (LAA) is a three-year contract between a local authority and central government. The intention is to create a formal agreement between the two parties and a range of public sector partners on the priorities needed to improve local performance. It also contributes to priorities set out by government, with extra funding to meet them.

Fundamental changes to LAAs, announced in last year’s local government white paper, are being negotiated and new agreements could become effective as of June 2008. If implemented, each will contain up to 35 local improvement targets drawn from a set of 198 national indicators. LAAs are being put on a statutory footing for the first time, with the provisions contained in the Local Government and Public Involvement in Health Act 2007.

This reformed relationship between central and local government could provide local authorities and partners with the flexibility and capacity to deliver the best solutions for their areas. These boundaries had never been crossed under the old LAA system, which focused primarily on national performance frameworks.

New vs old

Currently, the targets which form the LAA are negotiated between the local strategic partnership (LSP) and the regional government office. With a local authority as the lead partner, the LSP consists of all the key players which deliver services to the area. The lead local authority negotiates the LAA on behalf of its LSP and is the body accountable to government for the funding it receives.

The proposed changes in the act will provide fundamentally different arrangements for LAAs. These will include new obligations for local authorities to consult with a wide range of bodies, including those partner authorities which are entering into the LAA, as well as government agencies such as the Environment Agency. The plan is for the secretary of state to direct that all councils are to be involved in a LAA over time. This means that the authorities in an area will have to put forward proposals to the secretary of state who will then decide whether to implement the proposals or recommend that they be amended.

The LAA is set to become one of the key delivery plans for the sustainable community strategy and will also be linked to the local development framework. The white paper sets out proposals to integrate the consultation requirements of both. The strategy will ensure that the LSP through the lead authority will be in a good position to negotiate its LAA and make sure there is a strong local focus to any targets.

General principle, different targets

Local authorities will gain more freedom to fund initiatives; this will avoid divisions and reduce ring-fencing of budgets

The government has now committed to 198 national performance indicators. These will represent all the services local authorities are responsible for and will provide the basis for the selection of local improvement targets agreed between the council and its partners to seek to improve the economic, social and environmental well-being of the area. LAAs will then adopt 35 local area improvement targets, which are relevant locally, and will focus on areas of poor performance. The targets will then be negotiated with the regional government office and will be judged against when applying for further funding.

The themes on which old LAAs were originally based, and that have funding targeted to them, were: children and young people; safer and stronger communities; healthier communities and older people; and economic development and enterprise. Under the new system, these themes will be removed, and funding streams consolidated into a single pot with no conditions on how the money is spent. This will mean that issues such as regeneration and service provision will for the first time be looked at from a purely local priority perspective. Current trends and local issues can be brought to the forefront of the agreement and as a result will be targeted much more effectively. This will allow for a far more locally nuanced system.

Towards multi-area agreements

If the proposed changes go ahead, there is the potential for local authorities to join together across more boundaries, to have even bigger local area agreements, and create multi-area agreements. About 13 pilots were recently announced which largely related to major infrastructure such as transport and key policy issues such as housing.

Will it be a smooth crossing?

The proposed LAAs involve partnership relations, based on one contract. The aligned funding that will come from many different organisations in one area, alongside extra government money and existing money of partner organisations, will need to be spent on joint resources, and it will need to be channelled towards the same project, as opposed to the limited system of pooling it. Aligned funding is far more achievable than pooled funding, where there are limited rights and parties cannot make decisions about how to spend the money.

This should mean fewer constraints and, with a number of different themes in the new LAA, the system will become far more outcome-based. Local authorities will gain much more freedom to fund different initiatives; this will avoid divisions and reduce ring-fencing of budgets.

One of the main aims of the proposed LAAs is to tackle local issues. This should allow the LAA more scope to promote regeneration in the future, as the economic prosperity of the area is brought to the forefront, as one of the most important concerns of the LSP. However, the future is unclear, and until the negotiation process between local areas and government is tested to the full it will remain so.