Steve Richards: Cuts, control and accountability

As long as the cash is centrally raised for health, police, and local government, the centre must be held to account on how it is spent

The Coalition likes to hail its commitment to redistributing power. The commitment is utterly genuine and deeply felt, except when it is not. Exchanges during yesterday's Prime Minister's Questions highlighted a defining, irresolvable internal tension. In responses to various questions about the provision of services, David Cameron proclaimed with defiant pride that his Government was in favour of localism, devolving powers to local authorities or other community-based organisations. He did so with a degree of justification. In some cases, this is precisely what the Government is trying to do.

Then there was a change of gear, when an MP protested about the cuts that councils were imposing on charities and other voluntary organisations. Cameron agreed with the protestation and was adamant that councils should focus on inefficiencies and waste first, rather than looking to cut services. Again he makes a valid point. A lot of town halls are never knowingly under-staffed and at the highest level are far too generously paid. But the heartfelt exhortation contradicts the spirit of localism that erratically informs other government measures.

The contradiction is unavoidable and will be tested further as the cuts impact grimly on services. The cuts are the consequence of decisions made at the centre. Some of them are being imposed locally. The centre is bound to retain interest, in most cases a passionate interest, in what happens when it has taken such a fundamental and contentious decision in relation to the need for sweeping cuts to overall spending. The intensity of interest will lead to tensions within the Coalition, not so much between the two parties, but between ardent localists from both and the Treasury, which does most of the financial string-pulling from the centre.

The contradictory rhythms take many forms. Ministers proclaim that this week's publication on the internet of local crime figures will empower residents. I welcome the innovation and other attempts by the Coalition to make elusive information more available, but I am not sure what power citizens acquire as a result. If they discover that crime is high in their areas, can they demand the recruitment of more police? Obviously not, as police numbers are being cut – a decision taken centrally by the Treasury as it moved last autumn with an impatient speed to meet its overall spending targets.

Ministers argue that the election of police commissioners in combination with the newly available local crime figures will be a potent form of empowerment and accountability. To some extent they might prove to be so, but whoever is elected will be constrained by those centrally determined budgets. Oliver Letwin, who has been wrestling with these dilemmas for years, tells me that an elected chief could seek a mandate on the basis of raising a local levy to provide more money for his or her force, but I doubt if any candidate will dare to do so, not least in poorer areas where crime rates are higher. Poorer areas are more dependent than affluent ones on spending decisions taken by the centre.

That the police oppose the publication of local crime information is a reason why in a minor way it might have a positive impact. In some cases, the publication of information makes the more complacent providers of public services with guaranteed incomes a little more alert. There is no guarantee such alertness will follow. The BBC published the salaries and bonuses of its top managers for years. Annually there was an outcry and, until recently when the Government applied more overt pressure, the managers continued to take the money and put up with the opprobrium. The bankers are doing the same with their bonuses – they will take the money, thank you very much. A hammer from the centre rather than a gentle nudge is sometimes the only way to bring about change.

And yet if one accepts as I do, and the Coalition seems to do, that more information is one way of holding providers to account, its reforms in the NHS will have precisely the opposite impact. Vital information will disappear from public view and scrutiny.

For the first time this week, MPs debated the details of the NHS reforms. The debate was illuminating, not because it was especially good but because it was notably weak. The exchanges reminded me of the early debates on the poll tax, when Conservative MPs sought to mount a vague defence and the Opposition had not fully formed its arguments against.

I am not suggesting that the reforms are the equivalent of the poll tax, but there are some interesting parallels. Although the poll tax was included in the Conservatives' 1987 manifesto, it was not the subject of a single question during the election campaign. Nobody noticed. Similarly, it is wrong to suggest that the Conservatives hid their plans for the NHS. They published most of the details several months before the election. Again, few took note of the implications.

Now most Tory MPs in the debate defended the proposals not on the basis of the substance but on the grounds that they build on Tony Blair's plans. Labour had no clear response to this. Only David Miliband got to the heart of the general argument, pointing out that it is precisely because the NHS is already being subjected to more reform than any health service in the western world, some of the changes proving to be effective, that there is no good cause for piling far more on top.

There was, though, one single substantial argument made by Labour MPs that recurred frequently almost as an aside. Several speakers pointed out that contracts with an expanding private sector would not be available for public scrutiny. Those involved will claim commercial confidentiality. As a result, measures aimed supposedly at empowering patients will leave them and the taxpayer in the dark. While localism battles it out with centralism, here is another contradiction. Light is shone on crime while it is taken away in relation to how money is spent on health.

Not surprisingly, patients are most bothered about being cured. If patients are in agony there is a limit to their interest in debates about empowerment, localism and the role of the state. The taxpayer will be much more interested. Most of us are taxpayers. Thankfully few of us are patients. As long as the cash is centrally raised for health, the police, and to some extent for local government, the centre must be held to account as to how the money is spent.

At the heart of the stormiest rows in British politics for the past three decades is a dry, innocent-sounding mechanism: Who is accountable to whom? The wretchedly awkward question and the related need to keep track of taxpayers' money raised and distributed centrally were the source of most disputes between Blair and Brown. When Tony Benn posed the question in relation to Labour in the early 1980s it nearly led to the collapse of his party.

The Government's reforms are well intentioned and seek a genuinely radical redistribution of power as a means of improving public services. But they cannot escape the impossible conundrum. They desperately need to control public spending and yet seek to hand over control. In their attempts to do both on so many different fronts at the same time they are heading for big, explosive trouble.

s.richards@independent.co.uk; twitter.com/steverichards14