People power without profit

Sussex MEP Chris Huhne has chaired a special working party, which has developed the party's new policy paper on the issue.

The paper, to be presented at the party conference in Brighton, which starts on Monday, raises the option of not-for-profit Public Benefit Organisations (PBOs).

These new groups would be equipped with new powers of borrowing and raising funds beyond those currently available to councils.

In Brighton and Hove, this could mean leisure services, the waste contract and even the management of the council housing stock being run in an entirely new and radical way.

Mr Huhne said the PBOs would be, in many ways, like housing associations, which are responsible for building most of the social homes in Britain today.

The policy would allow organisations providing services to choose the ways and means of running them.

In some cases, new PBOs could seek to run services such as waste collections, leisure services or the repair of street lights.

Mr Huhne said there was a divide at present between providing services by public or private organisations.

The new PBOs would offer a viable third way.

They could run anything from a hospital in Brighton to language teaching for pupils. The drive to set them up would be locally inspired.

However, he said special legislation would be needed to set them up and provide for their assets being kept public should any of them fail.

The policy paper proposes National Insurance be earmarked as a guaranteed NHS contribution, while funding the retirement pension through general taxation.

It aims to give local, regional and national authorities real power over public services by allowing regional variations in national taxes to fund public services.

It also proposes to return business rates to local control and allow devolved and local authorities greater flexibility to borrow for capital investment.

The Lib Dems want to ensure greater public accountability over locally delivered services by letting local people make decisions on the NHS.

Councils would then take on the commissioning role of primary care trusts.

Elected regional governments in England would take responsibility for strategic health planning from the Department of Health.

Mr Huhne said publicly-funded health traditionally tended to get squeezed and this was a way to ensure this did not happen.

He said: "At the moment there is nothing between the person receiving treatment in the accident and emergency department in Brighton and the minister of health. No other country is as centralised as we are."

Both in health and education, ministers were too far away to have a clue about local services or the variations in them.

Instead, the Government set thousands of targets covering everything from cleaning carpets to educational achievements. Some were impossible to attain and many took no account of local factors.

Mr Huhne and his team had looked all over Europe to find the best ways of running public services in different countries.

He said Lib Dems were already committed to decentralisation and had already shown, through their control of many local authorities, they could run good local services. This would reinforce their hands.

Councillor Paul Elgood, leader of the Lib Dem group on Brighton and Hove City Council, said: "Here we are providing a new way of delivering core services.

"Firstly, we would drastically increase local accountability over current services, such as the primary care trust.

Secondly, in areas where service delivery is failing, we would allow PBOs to take control.

"There are many challenges facing cities such as Brighton and Hove and the age-old solution of local authority control may not always be the best way to ensure high standards.

"If a PBO took over the running of our leisure operations, this could increase investment and help to develop what has always been too far down the council priorities.

"We think the best way to run these key public services is by fully engaging and involving local people.

"In certain cases, this would also give them the chance to be involved in the running of local services for the first time."

However, the proposals have already come under attack from Conservatives.

Councillor Brian Oxley, leader of the Tory group on Brighton and Hove City Council, said: "A local income tax would mean a massive increase in local bureaucracy and could mean the creation of new local authority tax inspectors.

"On average across England, replacing the average council tax of £804 would mean five per cent on the basic rate of income tax.

"Wealth creators would soon leave high-taxed areas, damaging local firms.

"Ordinary families and pensioners on fixed incomes would be hit the hardest."

He also claimed the proposals would leave people with less power rather than more.

He said: "Nationally, the Liberal Democrats may talk about localism but their plans for a new tier of regional politicians would mean local communities being stripped of their say on local planning, transport and housing.

"Politicians and bureaucrats, representing an enormous government region, could impose sprawling housing estates, rail freight lines, bypasses, motorways and new airport runways on local neighbourhoods irrespective of the views of local people."