Newsmaker: Central reservations - Sir Michael Lyons, Leader ofinquiry into the future of local government

Mathew Little

- Opposes ministerial prescription on relations with the voluntary sector.

There once was a kinder, gentler age when AA men saluted at the side of the road, old maids bicycled to communion through autumnal mists and the voluntary sector and local councils weren't at each other's throats.

"When I was a kid growing up in West Ham," Sir Michael Lyons recalls wistfully, "I was surrounded by buildings and institutions that had emerged out of voluntary and co-operative endeavour. And there was a closer relationship with what was being done in local government, which had grown out of that voluntary effort."

Today, the former local authority chief executive charged by ministers with leading a review of the future of local government regrets that this rapport has been replaced by antagonism. The souring of the relationship puzzles him. The values that drive both sectors are similar and it is often the voluntary sector that provides the personnel for the elected councillors.

So where did it all go wrong? Lyons suggests that a dominant third party was to blame. Local councils became preoccupied with obeying the whims of central government and forgot how to engage with their communities. They became paternalistic, defensive and unwilling to look for bright ideas outside the council chamber.

"I know of outstanding people who became councillors to continue what they started in the voluntary sector, only to find that they had no freedom to do anything," says Lyons, who in the 1980s spent three years as a Labour councillor in Birmingham. "Some got frustrated and left. Others got frustrated, stayed and shared their frustrations with everyone around them."

But Lyons, who mused on the breakdown of the relationship at the Prime Minister's Three Sector Summit last week, is convinced that the mindset that caused the problem cannot fix it. An advocate of freeing local authorities from endless centrally imposed targets so they can 'place shape' their communities, he pours scorn on the idea that councils can be coerced into treating charities better by Whitehall diktat.

"When people in the voluntary sector, who have become frustrated with local government, say to ministers 'for goodness' sake sort these folk out, bring in performance indicators', what they are doing is driving another nail into the coffin of flexibility and local choice," he says.

"I understand the frustration. Local government needs to change its style of behaviour to make better use of the skills of the voluntary sector. But anything that is centrally driven doesn't have that effect - instead, it reduces confidence, increases uniformity and causes greater rigidity."

The implication is that charities should not expect local authority malfeasants to be pulled into line by Whitehall mandarins. Lyons has no problem with government advocating good practice and is prepared to allow a "smaller but clearer set of national imperatives", but he says that if a local authority refuses to fund full cost recovery, it is a matter for it and its local voluntary sector alone.

"There is evidence that people take the advice they receive seriously," he says. Such words might seem laughable to those who have seen numerous government reports on full cost recovery come and go without any improvement on the ground, but Lyons is convinced that a better relationship will develop between charities and town halls without the intervention of a full cost recovery 'tsar'.

He is clear that the antagonism that has grown up between local government and the voluntary sector is in neither's interest. "A future of local choice and vitality depends on these sectors working well together," he says. "The question is, why shouldn't they?"

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