Caroline Spelman

The Tories have detailed plans to save £2.3 billion by scrapping John Prescott's department.

The Office of the Deputy Prime Minister would be replaced by a smaller Department for Local Government under Conservative proposals unveiled on Monday.

The plans, which also include a further £4.43 billion of savings in the funding of councils, form the latest instalment of the party's James review of government spending.

Company troubleshooter David James has been scrutinising potential efficiency gains for the Opposition and is set to release his final findings next week.

The ODPM was created for Prescott following the 2001 general election when it took control of housing, regeneration and social exclusion policy.

It took over local government and regional policy in the May 2002 reshuffle when that responsibility was hived off from the Department for Transport.

However the ministry has attracted criticism for being designed to fit the deputy prime minister's interests and status within government rather than meeting strategic needs.

The Tories proposed stripping it down to its core local government function, scrapping its focus on regeneration and social communities.

The party claimed theses could be achieved by encouraging property ownership through the right-to-buy council home scheme.

James also pointed to potential savings of £1 billion by ending "burdensome regulation and inspections" currently imposed by the ODPM and a further £1.4 billion by cutting office expenditure in town halls by 20 per cent.

And the Conservatives claimed the taxpayer could benefit by £2.38 billion from better investment in e-procurement.

Cuts claims

Shadow local government secretary Caroline Spelman said the quality of decision making would be improved by the devolution of control over councils,

"The ODPM costs a lot of money and wastes a lot of money," she said.

The Tories would "reverse the culture of Whitehall targets and central government control. Local decisions should be taken by local councillors held to account by local people".

However local government minister Nick Raynsford said "these Tory proposals are not about efficiencies, they are about cuts to front-line services that will hit hard working families and communities".

"They say they will abolish the department, but then admit they will replace it with another department," he said.
 
"They say that they will abolish the Comprehensive Performance Assessment and Best Value – a system which actually helps save money and achieve efficiencies – but then they admit that they will replace it with another system of inspection.
 
"On top of these proposed new cuts the Tories are already committed to huge cuts to the local government budget, while at the same time they acknowledge that real terms' growth is required to protect services.
 
"What we can be sure of is the devastating effects these proposals will have on our communities – it will mean cuts to local services and increases in council tax."