(5 years, 8 months ago)
Lords ChamberRead Hansard Text Read Debate Ministerial Extracts
Lord Scriven
That this House takes note of the ability of local authorities across the United Kingdom to deliver essential services to their communities.
Lord Scriven (LD)
My Lords, I start by drawing the attention of the House to my interests, as laid out in the register, as vice-president of the Local Government Association and as an elected member of Sheffield City Council. We have the luxury of three hours for this debate, which is good on such an important issue, and I have the added luxury of 15 minutes. I promise noble Lords that I will not take that long but will leave wiggle room for others who might wish to expand on what they wish to say. I thank the many people who have helped us get ready for this debate: we had a wonderful briefing note from the Library and many organisations have sent us briefings, including SOLACE, the Local Government Association, trade unions and third sector and charity organisations. I also thank noble Lords who are going to speak in the debate for putting down their names. I hope that they will contribute to this debate and give food for thought for Ministers in terms of how local government can go forward from the situation in which it now finds itself.
I am very pleased to be leading this debate because to me it is a vital issue that affects every village, every town, every city and every region: local government has a positive power to change people’s lives. Just think of the older person who is becoming vulnerable and possibly losing their independence. With good public health, good housing services and good social services, that person can continue to lead an independent life with dignity. Just think of the young man who might be on a crossroads between violence and going forward to have a fulfilling life. With good youth services, and education services, that young person can be supported to make the correct decision and have a successful life.
Local government can facilitate enterprise and business locally with good business development services, planning and support services provided by local authorities. They can help to create vibrant, successful and sustainable communities: libraries, parks, clean air, shared spaces and bringing people together to give them opportunities to achieve. That is the vision that I think most people have of a good local service: bottom up and delivering for people—not just a service provider of last resort but a local democratic hub that facilitates and brings opportunities for people and businesses to succeed.
I will mention my own journey in Sheffield in the local authority, first as a back-bench councillor helping individual constituents, then as leader of the opposition, many times clashing with the then chief executive, the noble Lord, Lord Kerslake—I am not sure whether he will raise that—then as chair of scrutiny, holding the executive to account, and then having the great pleasure of leading that great city and that great council. I was then put on early retirement when I lost my seat and am now back again as a local councillor. I saw the power that local authorities can have to affect individuals and communities and make a real difference to people’s ability to succeed in their life.
That is what the situation should do, but we must look at what it has now become in many cases. Sadly, in some cases local authorities have not just become the provider of last resort but are struggling to be even that—we only have to look at Northamptonshire, Somerset, Norfolk and Lancashire County Councils, and the National Audit Office warning that reserves are running out. In some cases, they are not just unable to provide the opportunities that I talked about but are unable to provide the very statutory services that they are there to provide in an emergency as a safety net.
In 2010, as leader of Sheffield City Council, I was not in total opposition to some financial reductions. At the time, I did see wiggle room and that changes could be made. I must say, it has now gone too far and is damaging not just institutions but the very people in those communities whom local authorities are there to serve. Some local authorities are finding it nearly impossible to keep their head above water, and are struggling to provide the minimum statutory services. This is not good for local communities; it is not good for democracy; and it is not good for either the people or the country.
The Local Government Association predicts a £3.1 billion shortfall by 2019-20, rising to £8 billion by 2024-25. Adult social care will see a £1.3 billion shortfall, predicted to be £3.6 billion by 2024-25. Children’s care—some of the most vulnerable young people in our country—will see a £949 million shortfall, predicted to be £3.1 billion in 2024-25. Homelessness support is predicted to have a £110 million shortfall in 2019-20, looking to rise to £241 million by 2024-25. SOLACE, which I thank for its briefing, has said that one in three councils in the country has had to make a reduction in the minimal statutory service offer. Two-thirds of social care authorities have drawn down reserves since 2016—if they keep doing so at the same rate, the reserves in the system will last only three years. We are talking about being at the bone, and in some cases going into the bone.
This is coupled with rising demand and need: 1.27 million homes for those in greatest housing need; 1.17 million homes for young families who cannot afford to buy; 690,000 homes for older private renters struggling with high housing costs beyond retirement. One thousand new children’s cases are on the desks of social workers every day. Looked-after children’s demand is up 11% over the last few years. The demand for homelessness services is up by 34%. The need for care of the over-65 year-olds is up by 14%. The areas in which councils can make a huge impact—helping create economic growth and vibrancy—are the ones that have been hardest hit, because in many cases they are not statutory. Transport services are down by 37%. Housing services are down by 46%. Planning services are down by 53%.
I must tell the Minister that back in Sheffield and across communities north, south, east and west, the situation is becoming untenable and unsustainable. Warm words from the Dispatch Box that reserves are there will not help young men needing youth services. It will not help elderly mums needing social care services. It will not help families going into homelessness to get a roof over their head. It will not help local businesses get the support they need to create enterprise and jobs in their area.
It is time to stop the short-term sticking plasters, and to start thinking about what is needed strategically. We need a much more long-term and strategic partnership of equals between Whitehall and local government if the latter is going to return to its true role in communities—unleashing the opportunities of businesses and people across the country. This must start with more direct cash to local authorities’ budgets to deal with the higher demand. It must be able to concentrate on the here and now in basic services. The £8 billion gap will not be closed by council tax and business rate changes.
We must accept that the council tax model is not fit for purpose and needs change. We need to look at other forms of wider tax revenue-wielding powers that local government has, and look at money that is held by Whitehall which should be devolved by design and right down to local authorities, not held with strings by Whitehall while it tells them how and what to spend it on.
The new fairer—or rather very unfair—funding formula must not be driven by political dogma but must be based on need, including a deep and central place for deprivation at its very heart. It cannot just be on a per capita basis. You cannot solve the economic and social problems of the UK if you leave the left behind even further behind.
The jiggery-pokery of social care precepts and referendums on council tax show why Whitehall has got this wrong. Financial freedoms to raise what is needed locally should be the norm, with local people deciding through the ballot box whether a local authority is doing the right thing and charging the right amount, not an official or Minister sat in Whitehall. This must be backed up by a strong and fair tax distribution system from the centre—again, driven by deprivation and need.
We need a social care funding solution which deals with the issue of an ageing population. We cannot leave it to short-termism or in the “too difficult” tray. The dignity and independence of too many of our older people rely on that—and we all have a vested interest to make sure that that happens.
We clearly need a proper, open and transparent discussion about social care funding, including looking at models such as those of Japan and Germany to see how this can be done. We also need to have clear, open and transparent five-year funding deals for local government, with no extra strings attached, which will allow local government to plan with some stability for its local area. As I said, we need to move away from the strings-attached Whitehall model of funding that stifles local innovation and undermines local democracy and accountability.
We also need a new partnership between local and central government on housing. The housing crisis is a national disgrace. The new homes bonus needs to be stable, not short term. We also need to build a large number of social homes—3 million, according to the latest report by Shelter, produced just a few days ago. This will not be done just by raising the borrowing limit for local authorities. A new style of partnership is needed between local and central government and the private sector which delivers good, stable, well-designed and environmentally friendly housing. This cannot be done with a silo approach and different departments working in different ways.
Local authorities also need to be involved much more in Brexit planning. We feel as if we are on the edge, completely ignored, yet we will have to deal with some of the major issues that a no-deal Brexit will potentially cause, and some of the social and economic problems that it will cause for local people—and the £35 million mentioned by the Secretary of State is not enough to deal with the problems.
In the long run, rather than devolution to local areas by consent, we need devolution by design: a new system of federal government in the UK where we have devolution, with power and money nearest to the people at a local level so that they can design local solutions. The power of Whitehall should be about key strategic issues. We need to move to a much more bottom-up, democratic way of allocating resources and governing the country and rise to the challenge of improving local economies and dealing with social or cultural advancement.
After all, it is only back to the future. We can see from previous generations how local authorities can and do shape areas, improve people’s lives and create a system and a framework for enterprise and local businesses to flourish, deliver vibrant local areas and offer opportunities and hope to local people and businesses. We must stop talking about local authorities in silos and stop talking about them being just the provider of last resort. We should fund them properly and give them the powers and the space to create great communities.
Lord Patten (Con)
My Lords, I did not have the long and distinguished career in local government that the noble Lord, Lord Scriven, obviously had, but I did spend a period in the chamber of Oxford City Council. I learned a lot from those experiences, such as the excellence of many local government executives. When cutting my teeth as a local councillor, I also learned a lot from those who are now in your Lordships’ House, such as the noble Lords, Lord Hunt of Kings Heath and Lord Liddle; I am pleased to see the latter in his place. Indeed, they cut their teeth on me with some inspired heckling over the years—all forgiven, but never forgotten, I assure them.
I should also make a declaration of interest: not in the conventional sense but rather, a declaration of residence or work—and as a consumer of local authority experiences—in three different places. First, I work in the City of London, which is an extraordinary place. You would not invent the governance of the City in a month of Sundays, but in an amazing and largely non-partisan way, it works. There are the streets that you could almost eat the apocryphal breakfast or lunch off, and it delivers very good services both within the City and to its outliers in a broadly non-partisan way, which is good.
Secondly, I award a mark, with some temerity, to the City of Westminster down the road, where I first moved when I went to another place and have lived ever since with my wife, who also works in London. It is clear that the City of Westminster behaved pretty disgracefully in the past, mucking about with the sale of council houses, which was a shaming event. But it has served its time, worked its way out of the situation and now, extraordinarily—it is hard to work out quite how—manages to deliver level council tax demands with a very high level of services, including the street cleaning that I mentioned. It is funny how you judge local authorities by the things that first hit you in the face, and street cleaning is obviously one.
Thirdly and lastly, we have long lived in the West Country, in the area of that Liberal bastion, South Somerset District Council, which was turned into a Lib Dem stronghold thanks to the magic political touch of the late and highly respected Paddy Ashdown. It still is, despite our best attempts. A non-partisan evaluation of the South Somerset area would include the worry locally about scary suggestions that we will have our wheelie bins collected only every three weeks. I think that is probably a wheelie bin too far for many of us. Although the council is building more in the local area, which I support and have supported publicly—no nimby here; we must build more houses—it has sometimes lacked understanding of the need to provide new housing estates built for sale with shops and all the rest. It has not really attempted to soften the edges of housing estates with better landscaping that reduces complaints from local people and makes high-quality building more acceptable and welcome in their area.
None of those issues will be solved just by more money. We need imaginative leadership from high-quality men and women in local authorities—such as the noble Lord, Lord Kerslake, I am sure, in his day, in Sheffield. Sometimes they are there; sometimes they are not. There are problems with the quality of some who work in local authorities, despite the reasonable remuneration and pensions on offer. How adequate is their training? I do not know the answer to that; perhaps the noble Lord, Lord Scriven, and other noble Lords can help us by explaining what the training is really like.
One way forward may be to do what many charities do: hire people leaving professions and businesses who have the high energy levels for one more big job, particularly given that people are being expected to work into their late 60s and 70s. There is no magic in good management; it is pretty transferable from one place to another. Perhaps such a transfer to the world of local government would add to efficiency. It is not all about money; ability capital is just as important.
Please do not think it unnecessarily combative of me to say how surprised I was when, in his largely non-partisan speech, the noble Lord, Lord Scriven—and perhaps other noble Lords—seemed to airbrush from history the fact that back in 2010, the Liberal Democrats and the Conservatives were in what I thought was a very welcome coalition. We did some good, between us. This cannot be airbrushed: I must take responsibility for what we have and have not done, as must the Liberal party—particularly Mr Nick Clegg, who has now fled to the west coast of the United States of America.
There is a linguistic problem in that, as I understand it, “essential” does not exist in the local authority dictionary: something is either “mandatory” or “discretionary”. Using those words leads to a conceptual cop-out. Anything can be represented as an essential service if local people and councillors say that it is, and that they should have this, that and the other. We must be very careful in our use of language.
Like talented people, money helps local authorities a lot, but once one has beaten a path through the dense thickets of local authority finance, which I have heard gloriously described with masterful understatement as a “somewhat complex subject”, money must be found from somewhere—but where? We know that in Europe at the moment, we are in low-growth mode: this week, the IMF told us that Germany and France are unlikely to grow faster than the UK in the next two years. Indeed, just as the City of London accelerates despite the current political shot and shell, official labour market data published on Tuesday by the Office for National Statistics shows the highest employment rate ever, with more people in work. That means more tax for the Treasury to spend in local areas.
Of course money is vital, but where should it come from? Out of whose pockets and how? Through extra taxation or a higher amount? If so, how much? The Liberal party needs to be open about both its chequered past in this area during the coalition, and what it proposes to spend and where it will come from in future. We need to be efficient and realistic in the use of both our money and our language. After all, there is no universal declaration of local authority rights, of which we must be well aware.
Lord Beecham (Lab)
My Lords, I refer to my local government interests in the register. In my 52 years as a Newcastle City councillor, I have lived through difficult times for local government. In all that time, I cannot recall so many Conservative councils criticising a Conservative Government for their failure to fund adequately the provision of local services, as is now the case.
The failure to update the council tax system, which is now 27 years old, and to take into account the widening gap between authorities like mine—and others in the north-east—and those in the more prosperous parts of England in the amount that council tax yields has exacerbated the problem. It is ludicrous to leave unchanged a system that allows council tax on a band H property near where I live, on the market for £4 million, to be only three times the amount payable by residents in the council ward I represent in a band A property worth £40,000. I concede immediately that the Labour Government should have addressed this issue, as I argued at the time, but it is all the more essential to do so when the pressure on budgets becomes ever more heavy and government cuts bite ever more deeply.
It is sobering to recall that, between 2010 and 2017, homelessness nationally rose by just under 40%, the number of looked-after children by just under 11% and the number of people aged over 65 requiring care by 14.3%. Cuts to environmental services, culture, highways, transport, housing and planning services range from 14.65% to a staggering 52.8%. Meanwhile, the failure adequately to fund the NHS and the police service has added to the problems facing individuals, communities and the councils which seek to serve them. Moreover, we all know that GP practices are under great pressure.
I remind the House that, for five years, the Lib Dems were party to the damage inflicted on individuals and communities not only by the cuts to which I have alluded but by a range of other policies. These include the abysmal impact of universal credit, with 40,000 new council residents affected by so-called welfare reforms; the bedroom tax, which in Newcastle siphons off £2 million a year from 3,000 residents and the local economy; the dismantling of regional offices of government which have facilitated an understanding in Whitehall—in fairness, they had been established by a previous Conservative Government, but now of course they are no longer there—so that the diverse needs of different parts of the country are not addressed; and the failure to invest in improving highways and rail services in the north-east.
As the Public Accounts Committee reported last July, between 2011 and 2017, government funding of local authorities fell by 49.1% in real terms. In Newcastle, that translates into cuts that currently stand at £270 million a year, rising over the next four years to £327 million, with £16.9 million required in the upcoming 2019-20 budget. The loss is already £1,000 per head of population and £2,550 per household, rising to £3,000 per household by 2022. These figures come after raising council tax next year by the permitted amount of £5.2 million and business rates by £1.8 million or 1.7%.
Yet we have to cope with a rising demand for support services. In Newcastle, some 12,000 children aged under 16 live in low-income families—25.4% of their age group compared with a national average of 16.8%. Those are the 2011 census figures; they will be significantly worse by now. The highest level of poverty is to be found in households with children aged from birth to four years old. Many of these families and others rely on food banks for sustenance. The country’s busiest food bank is located in the ward I represent. In Newcastle, we have just under 5,000 people receiving ongoing and long-term support, 3,300 of them aged over 65, with 2,000 receiving short-term support from the council’s reablement service. Last year saw an increase of 36% in adults receiving safeguarding. However, the pressure on staff is tremendous and we struggle to maintain the extent and quality of the services we supply.
Some 44 years ago, as chairman of the social services committee, I inaugurated the city’s welfare rights service. Last year, it helped 19,000 residents to secure £30 million-worth of unclaimed benefits and supplied 6,500 with debt advice. It is a costly service for the council but at least for the moment we are continuing to provide it. I hope that that remains possible, but this is not a service required by statute, and without a change in government policy, there must be a risk as to its future and thereby to the people who desperately need support.
Depressing as this litany of problems and needs is, the damage to local government and the people it serves does not end there. Let us consider the impact of right to buy, which has led to a huge extension of private rented sector and high-rent properties without councils being able to use the proceeds to build genuinely affordable properties to replace them. The Government are belatedly planning some support for new social housing, but their concept of affordability is still connected to an inflated private sector market at the national level which bears little relation to the economy of regions like the north-east. In any event, the numbers are too few.
The sector has also faced pressure to outsource services, just as has been required of the probation service and the Prison Service, with disastrous results as we have frequently discussed in this Chamber. The role of local councils in education has been drastically reduced, with all manner of organisations replacing them, many deemed by Ofsted to be failing the children consigned to them. In one case in Newcastle, they simply closed down and abandoned a brand new building. Talking about young people, we have to recall that the coalition Government also did away with the important Sure Start programme. In addition to this litany of problems, we have a police service that is undermanned and overstretched, like so many others, with a significant reduction in neighbourhood policing reducing teams covering two or three council wards to single individuals.
This debate will exemplify the parlous state of local government today. I sympathise with Liberal Democrat Members of this House whose communities are suffering from government policies that I and other Members have criticised, no doubt to be amplified by other speakers. But I have to remind them that much of the damage to local councils and their residents or employees emanates directly from the coalition Government of which they were a part. An apology would be welcome.
In fairness, their former partners appear to be threatening to make matters worse. The Government are now consulting on a new formula for their funding of local government. This would remove deprivation from the formula covering waste disposal, public transport, libraries, leisure, homelessness and recreation, and replace it with a simple population basis, restricting the deprivation factor to adult social care, children’s services, public health, highways maintenance, flood defence and fire and rescue services. It is quite clearly a cynical attempt to divert financial support from urban areas to Conservative-controlled areas. Can the Minister say whether, and if so when, this House will have an opportunity to discuss any of these proposed changes? Above all, at a time when the Government proclaim that austerity is over—for too many people a questionable assertion—can they at least pledge to provide the funding required to provide services of the extent and quality that is desperately needed?
Baroness Thornhill (LD)
My Lords, I draw the House’s attention to my interest as a vice-president of the Local Government Association. The situation that local government finds itself in is unprecedented. Over my 16 years as the elected Mayor of Watford—the noble Lord, Lord Beecham, may be interested to hear that this covered several Governments, including the last Labour Government—I lived, battled and struggled with these changes.
We are now in an era of increased demand, in particular for services for the elderly, children with special needs, those in social care and homeless families. Yet councils have fewer resources than ever to deal with these demands, and some are at breaking point. This situation—where think tanks, eminent charities, unions and the Local Government Association all agree that the current situation is unsustainable—is the culmination of well over a decade of year-on-year cuts. These need reversing. Local authorities need a significant injection of cash now.
While the impact on these services has been gradual but significant, it has been different in different types of councils, in different areas and in different parts of the country, which is why it took so long to get a collective national agreement that local government is underfunded and at crisis point. As emphasised by the noble Lord, Lord Patten, the narrative until very recently, heavily peddled by some Secretaries of State, was that there was plenty of money sloshing around local authorities, reserves were high, they had plenty of capital assets and they were juicy pips that needed a good squeeze. In truth, local government surpassed itself in trying to cope with reduced funding, often finding innovative and enterprising ways to generate income and protect services. As in any sphere of public administration, not all councils were perfect, but each pet peeve of a Minister, an MP or the TaxPayers’ Alliance made a headline that served to reinforce this negative view of local government as an easy target for austerity cuts. By absorbing a lot of the early cuts through innovation and good practice, we found that, instead of receiving due recognition from the Government, we had simply fed a narrative that we could be cut still further.
Back in Watford, we discovered that you could only go so far with efficiency savings. Sharing services, doing more with less, streamlining services and taking out duplication were the stock phrases that we all absorbed. But there comes a point when there is really nowhere for councils to go but to cut services that are relied on by very vulnerable people.
I sincerely hope that it is now irrefutable that local government cuts have impacted on the poorest people in the poorest places. They are also those people least able to both cope and protest about it. It is not only the welfare and benefit cuts but the luncheon club not operating or the reduced days that the library is open, the community centre offering fewer activities and the youth services that are slashed. Often the precise impact of cuts is underestimated because the real problem can be the compound effect of cuts by different councils in two-tier areas, of local charities and of partners in the same area all scaling back their provision because of the loss of grants from the local authority or funding from health and well-being boards, which are all cutting back. It seems that nobody is holding the ring for the cumulative impact on a neighbourhood except councils—and we, for too long, were not listened to.
Even street cleaning and bin collections impact most on the poorest areas. While we and other councils bent over backwards to prevent the front line being cut, that was unsustainable. The front line is being impacted more and more. Our staff are up against it. Staff reductions have meant that there is just no slack in the system. District councils are feeling it the most. Services that prided themselves on being proactive, such as environmental health and enforcement services, have been pushed into reactive mode, fearful of yet more work coming down the tracks and feeling overwhelmed and unable to respond.
On the recent Homelessness Reduction Act, for example, every councillor I knew applauded the Government’s intentions, but also dreaded not having the resources to do the job properly. I applaud those thousands of staff who with expanding workloads even worked unpaid overtime, with new roles, more responsibilities and far less funding, and still served their communities well. Yet a recent Unison survey showed that their morale is low and their confidence level in being able to deliver for their most vulnerable residents is dropping.
Many services report that there is a worrying increase in the impact of funding cuts on the mental health of their residents. Our housing partners will say that nowadays what was once exceptional behaviour is becoming commonplace and that the resources to deal with it are just not there. Access to services is more limited, there are longer waiting lists and the entry bar for help gets set higher. With the health service, running red is now the new normal. Even police services admit that they are now pushing back on mental health-related issues that they used to take in their stride. Is that really what we want?
As for prevention, upstream work, which we all know works and will ultimately save us money, is being squeezed out. It is a short-sighted, costly mistake. We are being pushed into sacrificing long-term solutions and sustainability for short-term expediency. For many, just legally setting next year’s budget is as far as they can look.
The Government are holding out for the holy grail of the business rate retention to give a major investment of cash to local authorities—but will it? Councils are already collecting an increasing amount of business rates for central government, while their revenue support grant continues to be cut. Surely it is time to redirect this money back to local authorities and local communities. With the rumours coming out regarding the fairer funding formula, which appears to be taking deprivation out of the formula in favour of “rurality”, will we see a further increase of the least-deprived areas getting the most money? The staggering 2015 survey by the Joseph Rowntree Foundation showed that that was the case. More recently, the IFS concurred that the most deprived local authorities had seen cuts of £220 a head compared with cuts of £40 a head in the least deprived areas.
I remain uncharacteristically pessimistic about the future without a radical overhaul of local authority funding. Which tax has to have a referendum before it can raise more money? The answer is none except council tax—and if a similar measure is required the following year, it needs a second referendum. This capping, plus years of central government diktat making councils keep council tax rises low, has contributed to the state we are in. It is surely time to end this.
Finally, and very worryingly, two recent reports from the APPG on children in social care highlighted how financial cutbacks have meant that local authorities can now intervene only when problems reach crisis point and children’s lives are potentially at risk. Early intervention work no longer happens, and social workers are overwhelmed by large case loads, high turnover and poor supervision. These problems for the future are stacking up now. Our children are the future, and they deserve better.
Lord Kerslake (CB)
My Lords, I thank the noble Lord, Lord Scriven, for initiating this debate. On this occasion, I agree with pretty much everything he said in his very strong speech. I should also declare my interests as president of the Local Government Association and chair of Peabody, Be First and the Centre for Public Scrutiny. My other interests are as listed in the register.
When we look at what has happened to local government over the past eight years of austerity, two dominant stories emerge. The first is of a sector that has faced up to the challenge of spending reductions unmatched in any other part of the public sector. The LGA talks of councils losing 60 pence in every £1 in government grant over the 10 years from 2010 to 2020. Even if we take account of changes such as business rates retention, we still see a reduction in effective spending power of more than one-quarter and nearer one-third. This is the reality of what has happened.
Despite this extraordinary, unprecedented reduction, local government has kept the show on the road. Indeed, only one council has required government intervention due its financial difficulties. Financial planning has, by necessity, got better, and most councils now have a good medium-term financial plan in place. Effective scrutiny in the best-run councils has made a difference by providing constructive challenge. I would be very surprised if this year any council is unable to set a balanced budget for the year ahead. This is to the immense credit of local government.
The second story, though, is of a decline in local services and in public satisfaction with local government. We cannot disguise this. The National Audit Office’s report Financial Sustainability of Local Authorities 2018 shows that, between 2010-11 and 2016-17, local authorities cut cultural and highways services by more than one-third. They did this in good part to protect the statutory adult and children’s care services, but even these are now facing real and increasing pressure.
We often talk about services such as libraries, leisure service and the street scene as discretionary services, but they form an essential part the quality of life of our places, and in the end—this is the key point—they are the services that people think they are paying their council tax for, so we have an enormous mismatch that is getting bigger. Those two local government stories of effective financial management and sharply declining services, despite efficiencies, go hand in hand. At root, they result from a failure to develop a sustainable model for local government finance.
I have argued for some time that delivering the first five years of austerity did not automatically mean that local government could deliver a second five years of austerity. You could not run the same record twice. In fact, the growing pressures on adult and children’s care alone, which make up more than half of local government spending, told us that that was impossible. We could see it; we did not need to look in the crystal ball. We are now seeing the consequences of that undeliverable plan which was put in place.
To their credit, the Government have belatedly recognised that pressure and have put in a further £l billion of short-term funding for the settlement next year, and we should recognise that. However, it is just that—it is short term and one-off. We urgently need a longer-term plan to put local government on a sound footing. You can have a broad base of services and a broad set of funding sources, and you can have a narrow range of services and a narrow range of funding sources, but what does not work is a broad range of services and a narrow range of funding. It is very simple. If we do not sort this out, we will see both effective financial management and services put at risk in the future.
The plan for a sustainable financial system must be a central and core part of the forthcoming spending review. If people ask whether local government is that important, the answer is that it accounts for over a fifth of public spending and deserves central billing in the discussions about the spending review. A key part of that review must of course be the long-awaited Green Paper on adult social care. I say “long awaited” because I think that its publication is now likely to be almost a year late.
Unless there is a fundamental rethink of local government as a whole, I will have real concerns about a number of things that the Government are doing, particularly the fair funding review. I shall set out three of those concerns. First, I have never met a council that thinks that its funding under the formula is fair. This review will open up division at a time when local government needs to work together collaboratively, as we heard earlier. Secondly, it is hard to see how any meaningful redistribution can be made without significantly increased resources. Without them, you damp the system enormously, in which case the question is: why are you doing it in the first place? Thirdly, like other noble Lords, I am seriously concerned at the suggestion that has recently been reported in the Guardian that funding will be redirected away from deprived inner-city areas by removing or reducing the poverty weighting. That, to me, would simply create an instability in one part of local government to help another. It is not the answer. It seems that, without a holistic approach to both the level and the sources of funding for local government, we are heading for real trouble here. I would welcome the Minister’s reassurance on this issue.
Finally, what on earth has happened to devolution? I ask myself whether it is another Brexit casualty. This was brought home to me recently in the work that I am doing as chair of the UK2070 Commission, which is looking at the spatial disparities in this country. If you go on to our new website, you will see a brilliant article by Professor Philip McCann of Sheffield University that demonstrates pretty conclusively that, with the possible exception of Slovakia, the UK is the most geographically unequal country in western Europe—I emphasise: not just a bit but the most. It is also one of the most centralised. The OECD has proved to my satisfaction that there is a clear connection between centralisation and inequality. We need a strong, well-funded local government not just because it delivers vital services but because it plays an essential role in creating a fairer and more prosperous Britain.
Baroness Thomas of Winchester (LD)
My Lords, I shall concentrate on the provision of social care but, before that, I want to mention something that I would call an essential service but which turns out to be discretionary. Here I shall lower the tone of the debate so I hope noble Lords will not mind; I am talking about the provision of public conveniences, lavatories, toilets or loos throughout the country. Those that are left are now often maintained by town or parish councils, but for how long? In 2010, there were over 5,000 public toilets; now, there are 4,486. Is it right that fast-food chains, supermarkets and coffee shops have now virtually taken the place of public toilets? What happens when these places are closed, when managers are reluctant to let everyone use their facilities or when there are no accessible toilets? We should not forget the silent number of people trapped in their homes because of continence problems.
I turn now to social care. As the noble Lord, Lord Kerslake, said, we are no nearer to seeing the Government’s Green Paper; as late as October, we were told it would be with us by the end of the year. The funding issue is a fiendishly difficult problem because social care encompasses so much and is so little understood. We need a different term; I agree with the noble Lord, Lord Patten, about language. The word “social”, according to the dictionary, means,
“marked by friendly companionship with others”.
But, in local government terms, it has a much sterner face to cover the state’s obligation to help care for children, including those with mild or severe learning difficulties, as well as disabled and elderly adults. It may have to cover playschemes for disabled children, personal assistants, aids and equipment, care at home and residential care.
Not only are we all living longer, but there is now a better survival rate for people with serious health conditions. I believe that the dictionary definition of the word “social” is one reason why so many people think the service is free for council tax payers rather than means-tested, or partly means-tested. Anyone who thinks the answer for even quite severely disabled people is NHS continuing care should think again as it is very difficult to get. As for delays in hospital discharges, these are still causing a problem due to care packages having to be negotiated or re-negotiated. Can the Minister say how the Government have evaluated the impact of health and well-being boards in tackling the increasing number of these delays?
My next question is: where will councils or outsourced companies find enough carers or personal assistants after Brexit? There is increasing worry among people with neuromuscular conditions, for example, about the long-term status in the UK of personal assistants from EU countries, particularly if there is no deal. PAs provide invaluable support to enable disabled people to go about their daily routine, as well as in the working environment through, for example, the Access to Work scheme. A Skills for Care report in 2017 estimated that around 95,000 workers in England’s adult social care sector are from EU countries, and that excludes personal assistants. What steps are the Government taking to incentivise all care workers from EU countries to stay in the UK? There are already about 7 million unpaid carers in the UK, with this figure rising, so we cannot rely on any more. Many family carers are facing serious mental health problems of their own, as the Guardian pointed out last week.
As for funding, the movement for independent living for disabled people has been giving the matter a lot of thought. I am particularly grateful for a discussion paper written by Gerry Zarb at the SPECTRUM Centre for Independent Living, who makes the point that people simply do not rate the provision of social care as anywhere near as important as health, which is why the Government find it so difficult to contemplate solutions that cost money. It is not universally understood that they are both inextricably entwined.
We need to know exactly what value the Government place on the whole social care system. The shortfall in funding is thought to be over £2 billion just to meet existing demand, and we know demand is going to increase each year, but disabled people of working age who may or may not have paid work must not be overlooked. It is sometimes said that the importance of appropriate care for this group of disabled people is that they can potentially become part of the taxpaying workforce, but there cannot be deserving or undeserving disabled people. I hope the Green Paper will make that clear by saying that every disabled person—employed, self-employed, unemployed or retired—should be able to live a life of dignity and respect. Many disabled people active in the independent living movement are keen to help with the whole process of designing, commissioning and delivering support, with co-produced solutions and partnerships between public bodies and service users. I hope that offer is taken up.
The Lord Bishop of Worcester
My Lords, I rise with a heavy heart to raise questions concerning the ability of local councils to deliver essential services to their communities. I welcome the prospect of increased short-term government funding but, without that being increased and continued or there being rises in council tax, whatever the rights and wrongs of that, I question whether it will be sufficient to enable councils to meet rising demand, especially in social care. That issue is of immense concern, but others have spoken eloquently about it.
I want to take your Lordships to Worcester—what better destination could there be?—to consider not social care but another service that is under pressure as the county council struggles to make ends meet: the archive service. A proposal has recently been made to cut £405,000 from a £700,000 budget that is already down from £1.2 million in 2010. That proposal is being considered at the moment and causing immense concern. This is the sort of cutting to the bone and into the bone to which the noble Lord, Lord Scriven, referred. The Worcestershire Archive and Archaeology Service—I declare an interest, though not a financial one—cares for our diocesan archives, including items of great public significance such as Shakespeare’s marriage bonds. The service is located in the wonderful award-winning Hive, unique as a joint university/city library, which was voted in 2017 by the Archives and Records Association as the record-keeping service of the year. It was found as being,
“determined to maintain a quality service to the wider community in the county despite acute financial pressures”,
with tribute paid to the,
“range and depth of activities and success in placing itself at the heart”,
of cultural life. The irony is that, while devastating the service, the proposed £405,000 cut would amount to a saving of only 69p per resident per annum, equivalent to only 0.18% of the council’s social care expenditure. I suppose the proposal is indicative of how desperate the council feels.
Some might consider an archive service not to be an essential service, whether it be mandatory or discretionary. I beg to differ. It matters, as the British Archaeology News Resource put it, because of the possible,
“irretrievable loss of hundreds of years of dedication and expertise”.
The history of a place is not in the cold, dead stones or the reams of paper in an archive; it is in the people who care for them, know the records intimately and pass on that passion and knowledge to others. It is in the people who bring stones and those manuscripts to life. Lose them and you lose the history. Now, more than ever, we need the lessons of history.
I have great respect for our county councillors and I very much hope they will reject these proposed cuts, which would be a false economy and represent a major reputational as well as cultural loss. Cultural and heritage services are an essential part of our civilised society, of which we can be justly proud. I raise the matter in this debate as just one example of the desperate measures some councils are considering to make only very small cuts in overall budget, and the resultant threat to the delivery of essential services.
Lord Liddle (Lab)
My Lords, I declare my interest as a Cumbria County councillor. I well remember my political apprenticeship on Oxford City Council in the 1970s and those enjoyable debates with the noble Lord, Lord Patten. I also remember an unhappier time in the 1980s when I was a member of Lambeth Council. The events there did a lot of long-term damage to the reputation of local government. I am now delighted to be a member of Cumbria County Council in the native community I grew up in, where, if I might say so, the Labour group that I attend reminds me so much of the Labour Party I dearly love.
The central thrust of my argument is that, with the public spending review coming up this year, it is essential that the Government set up an independent inquiry into the structure and future financing of local government in England. Although he is no longer in his place, I recommend that the Government invite the noble Lord, Lord Kerslake, to chair such an inquiry. These are centrally important issues. I think Ministers will accept that the Government have no bandwidth to address them themselves in the coming months because of Brexit, but they have to be looked at. What better means of doing that than by having a quick but independent look at these questions?
I will argue why this is essential from my experience in Cumbria. Cumbria is not like Newcastle, about which my noble friend Lord Beecham, with his wonderful record of service there, spoke so eloquently. It is a mixed place: half of it is rural market towns, relatively affluent, and attractive to incomers and tourists, but the other half is very industrial or post-industrial, with pockets of deep deprivation and a lot of places that feel left behind, as we say nowadays. One of the extraordinary things about Cumbria is that, if you contrast the ward on the west coast in Workington with the ward in the east of the county near Penrith, you will find that there is almost a 20-year difference in life expectancy. That is shocking.
Our authority’s spending this year—its net revenue budget, taking out direct schools grant and all the rest—is about £380 million. This year, we have to make £39 million-worth of savings, bringing the total savings we have had to make since 2010 to £200 million. Half of the authority’s spend goes on what is called the people directorate: the care of children and adults. There are still immense strains on adult social care, but the crisis of the moment is around looked-after children, for which we set a budget this year of £43 million —we now think that we will have to spend £54 million. While we are cutting £39 million, we are coming under intense pressure on looked-after children. That is in part because of a rise in numbers and in part because of a rise in the cost of placing people in residential accommodation.
For the future, I see very little happy prospect without some uplift in government grant. On present projections, we are required to make some further £50 million in savings over the next three years, unless public spending projections change. I simply do not know where this will come from. We are looking rather desperately at trying to cut the cost of social care placements for people with very special needs.
There is one opportunity to save a lot of money in Cumbria, but it is in the Secretary of State’s hands. We could have a local government reorganisation, which would create a unitary authority. It is estimated that that would produce savings of £25 million. An application from the county council to this effect has gone to the Secretary of State, Mr Brokenshire, and I hope he is looking at it seriously. It is a difficult problem for the district councils and the MPs because people do not like this change. But in the financial situation we face, it would be irresponsible for the Government not to permit this to go ahead.
For the longer term, we need a change in government policy on the financing of local government or else we will face the total evisceration of local services. I think about all the grants in the area that I represent and all the local organisations that will have to close: the library will have to close and we will not be able to keep supporting our baths and our theatre club. David Cameron used to speak of the big society. It is the big society that is suffering most from this deep austerity.
I recognise that there are many claims on future public spending, but I hope there is consensus—I would like to hear this from the Minister—that local government has borne a disproportionate share of austerity and that this now needs to be corrected in the coming public spending settlement. Of course, if we want to have decent services, we will have to pay a bit more tax, not just at the top but one that everybody can afford. Social care is a real test of this. We cannot address the question of social care without a willingness to pay, and I think that there would be such a public willingness to pay.
My argument is this. Yes, local government has coped remarkably and has had to continue to innovate boldly in its provision of services. Services have to change; they cannot be preserved in aspic. We have to be innovative, but national government has to help local government in this situation. As mentioned by the noble Lord, Lord Kerslake, we have to have a long-term plan for structure, finance, how we handle business rates and what the Government want local government to be able to achieve. We need an urgent independent look at this at this time of wider national crisis that makes it so difficult for us to concentrate on these questions.
Baroness Randerson (LD)
My Lords, I am slightly intimidated to be standing here between my two noble friends, given their distinguished record in local government. After 18 years as a local councillor in Cardiff, I rose to the dizzying heights of the leader of the opposition group of only nine councillors. My first job in local government was on the transport committee of Cardiff Council—and I am still talking about buses today.
In 2017-18, local authorities in England spent £3.9 billion on highways and transport. That is a surprisingly low figure compared with, for example, the £32 billion spent on education or even the £11 billion spent on police. The key point is that that figure has fallen by 37.1% in real terms since 2011, compared with a fall of only 3.2% in respect of children’s social care, for example. The reason for that disparity is that local authorities have more flexibility in spending on highways and buses than on providing children with social care, given their legal obligation to do so. But the withdrawal of funding for buses has a knock-on effect on local authorities’ core legal education and social care obligations, such as the provision of school buses.
The withdrawal of funding also has a knock-on effect on local economies and town centres. As bus services have declined, towns have become more congested; air quality has declined, impacting on health; and many people—especially in rural areas—have become isolated, which has its own social and health impacts. It also affects social mobility, as the investigation carried out by the Government’s Social Mobility Commission discovered. It is a false economy to cut bus services, but individual councils often feel forced into such economies. However, it is important to note that some local authorities still provide good transport services.
My purpose today is to point to the way to doing this better, and to ask Government to reconsider their strategic decision to abandon our rural areas, in particular, to the myth of salvation by Uber. We simply cannot go on as we are if we hope to save our bus services, because the statistics show that the situation has become critical. Since 2011, there has been a net reduction of £172 million in local authorities’ spending on supported buses services alone—a 46% decrease. Since then, 3,088 bus services have been reduced, altered or withdrawn altogether. This year alone, funding has decreased by 9%, and 64% of local authorities either reduced spending or spent nothing at all on supported bus services. Local authorities as varied as Luton, Cumbria, Middlesbrough, Bristol, Stoke-on-Trent and Oxfordshire—and many more—spent nothing. Many services continue to run on a commercial basis, but it is the supported bus services—those that run in the evening, on weekends and to rural and suburban areas where there is no other public transport—that provide the lifeline.
The cuts have come from a number of sources, including the reduction in the Government’s bus service operators’ grant and the general reduction in funding to local authorities, which has squeezed them generally. We have heard from many noble Lords this morning about that. The Government’s continued underfunding of the true costs of running the free travel scheme for pensioners is also a cut, in effect, as it impacts on local bus services. In rural areas, pensioners are usually the main bus users, which therefore makes rural services very difficult to run profitably on a commercial basis. There are honourable exceptions to these cuts, and some local authorities have recognised the social and economic importance of buses. Others have devised imaginative schemes, using smaller vehicles to match the more limited demand in sparsely populated areas. Going Forward Buses, for example, operates minibuses in rural Oxfordshire and west Berkshire on a number of routes. They accept free bus passes, stop at normal stops and, if safe, stop on demand. It is a community interest company and gets no subsidy, although it does welcome donations from passengers.
I have a number of suggestions for the future. Sections 19 and 20 of the Transport Act 1985 set out the arrangements and conditions applying to the operation of small buses. At that time, it was thought necessary to provide commercial bus operators with some protection from competition from small operators, which had less onerous regulations to follow. Many commercial operators have now withdrawn from rural areas, and a weekly shopping bus is no substitute for a regular service giving access to work, training or other activities. A free bus pass is of no value where there are no buses. It is time that this part of the 1985 Act was revisited, in order to make it easier to combine volunteer drivers with paid drivers to provide proper bus services. Will the Minister consider how this might be progressed?
Campaign for Better Transport recommends a number of measures. We need a long-term national investment strategy for buses—we have one for trains, but far more people use buses—and a long-term view. Local authorities need to take a long hard look at the new bus services Act which, although far from perfect, does allow them to create proper partnerships with bus companies. Local authorities need to bring together all their available transport funding, rather than separating it out into schools, social services and so on. They need to partner with the NHS; there is the potential for integrated contracts. The Government must allow more flexible funding models, incorporating community transport initiatives and social enterprises, and provide some kick-start funding.
The Department for Transport presides over chaos and resists taking responsibility for so much of our transport services. Many of the problems are genuinely complex, long term and difficult to solve. But the bus problem could be solved in one calendar year if the Government were prepared to change their political philosophy on this one.
The Earl of Listowel (CB)
My Lords, I too thank the noble Lord, Lord Scriven, for securing this timely and important debate.
Listening to the wise words and experience of your Lordships, three points arise in my mind. First, while this is the area of perhaps the most severe cuts in recent years, other areas have had huge cuts as well. I think particularly of the Prison Service and the fact that so many prisoners have to spend 23 hours in their cells because there are not enough prison officers to take them to useful activities and exercise. I have been reading today about the courts. I know less about this but apparently the computer system has failed throughout the system and this is attributed to the lack of funding over several years.
The Government have a huge task ahead of them. We have been hearing about the concern for those left behind—the just-managing families. I commend the Government for meeting those words with investment, particularly in housing, which I warmly welcome. But of course I am now going to ask for more money. I have to do that.
The second point is that it seems that the political system in this country is becoming more extreme. Perhaps I am wrong, but it seems that we are moving from spend, spend, spend to cut, cut, cut—from one extreme to another. I hope that your Lordships might look to Germany and see how it has achieved more continuity in policy. It is a prosperous country which also cares for the vulnerable, and where there is a wide dispersion of power across the nation—not one central city which dominates the nation.
My third and final point is that Germany is a prosperous nation but it has higher levels of tax. In particular, it taxes the wealthy more. I have an interest in this, I suppose, as a landowner. We cannot expect local taxpayers to pay so much for the welfare of vulnerable children, for instance, who are very far from their own kind. It has to come down to the general taxpayer.
I declare my interest as a vice-chair of the Local Government Association. I urge the Minister with all my heart to listen to the concerns raised around the House about funding for essential services for children and families. The noble Baroness, Lady Randerson, raised these issues very powerfully and several other noble Lords have raised them too. It is heartbreaking to see the good progress made in accommodating children and young people leaving care being reversed due to lack of funds. Ten years ago a third of children were leaving care at 16 or 17, often going into unsuitable accommodation. Much good progress has been made in addressing that. But a fortnight ago an article in the Observer highlighted that this kind of thing was happening again, and contained an account from a young woman who had been placed in a hostel. Others were being placed in bed and breakfasts. I had hoped that her familiar story—feeling very unsafe among all those men coming out of prison or recovering from substance misuse—was a thing of the past.
Barnardo’s, the National Children’s Bureau, Action for Children and the Children’s Society have called for the Government—and I agree with and support strongly their call—to put in place an interim funding arrangement in order to stabilise the crisis in early intervention services and prevent more children and families reaching breaking point. They have asked the Government to address the £3 billion shortfall in children’s social care funding and to put children at the heart of the forthcoming spending review. I believe that local authorities predict a £3 billion shortfall by 2025.
There is a terrible irony in the Government’s welcome recognition of the importance of perinatal mental health, secure attachment for babies and infants and the vital early years of children’s lives, which comes at the same time as the underfunding of essential local authority services to support these just-managing families and their children. As the charities and others have told us, tens of thousands of children have to be referred to children’s services multiple times before receiving the support they need—often reaching crisis point. I warmly welcome the inter-ministerial group led by the Leader of the other place, the right honourable Andrea Leadsom MP, which is examining support for early family relationships. Ms Leadsom, the right honourable Iain Duncan Smith and senior MPs from all parties—Frank Field and Graham Allen, for instance —have led and promoted work on early intervention and support for families.
The coalition Government successfully rebuilt the profession of health visiting. Health visitors visit families at the very earliest stage after the birth and play a crucial role in early intervention. Responsibility for health visitors moved from the DoH to local authorities three or so years ago. Now health visitors are again in serious decline.
The right honourable Norman Lamb MP chaired a Science and Technology Select Committee report looking at successful interventions in the early years. One of the chief findings was the essential role that health visitors played in effective early intervention. The APPG for Children has produced successive reports on the functioning of local authority children’s services. The noble Baroness, Lady Randerson, referred to them. Officers, of which I am one, were grateful for Children’s Minister Zahawi’s contribution to the evidence for our latest report, published last autumn. We appreciate his recognition that funding for children’s services needs urgent consideration. One of our main findings was the decline in early intervention for vulnerable families. There is no duty on local authorities to intervene early. Without such an early intervention duty, intervention has been stripped away. In evidence, we heard of the crucial contribution that the troubled families initiative has made to sustain at least some services and we are most grateful that this funding stream has been maintained by the Government. I would like to say a little more on early intervention if there is time, but there probably is not.
As vice-chair of the APPG for Looked After Children, Young People and Care Leavers, I am very aware of the rising numbers of children arriving into local authority care. Several of your Lordships have referred to this. The previous President of the Family Division warned that the burden on the public family courts was becoming intolerable.
There is so much that could be done to make better futures for our vulnerable children and families. We have an ageing population. Every child is precious to us. I urge the Government to look most closely at the funding of children and family social services, and I look forward to the Minister’s response.
Lord Addington (LD)
My Lords, when I put my name down to speak in this debate, I had a little debate with myself about what I should speak about. I considered talking about the support for local sporting facilities—an important factor that leads into health plans and so on and, going forward, support for local clubs—but I thought I would have another look at one of the bigger spending commitments: the support for those who have special educational needs within the education system.
Just before Christmas, we got an announcement of extra money there, which is always welcome. But the reason why it was needed is that there seems to be a chronic underfunding in this department which has led to a culture of parents having to take local authorities to court to get what they are entitled to under the law. If ever there was one little thing that says, “Something isn’t working”, it is having to go to court to get it to function. There cannot really be any debate about that. When you look at the figures of the outcomes of tribunal and appeals, the best statistic that local authorities end up with here is a 12% success rate: 88% of parents winning appeals is the worst figure I have found—for most, the figure is around nine in 10. So something is going wrong here.
We were earlier told to take some responsibility for the things we have done here. Regarding the Children and Families Act 2014, yes, I was there and I took part in it. The framework which is set out there is one of the things on which these legal actions have been taken. That Act stated that local authorities have a responsibility for delivering support to those with special educational needs, and it got rid of the old statement system and replaced it with the education, health and care plans. We have this new responsibility that is supposed to reach into other groups, and it extends that help into further education to the age of 25. Those who have a disability or special educational need should be able to be supported until the age of 25. That was great, wonderful—it had all-party support, with very little disagreement—and was a good thing.
However, that requires resources. It requires resources because this is a growing group, not only because of the number of people who live through traumatic childhood illnesses and survive into later life but because we are getting much better at identifying those who have hidden needs. Now comes the time to remind the House once again of my interest with regard to dyslexia. It is a subject on which I have waxed long and often to noble Lords, but it is basically a hidden disability. I am dyslexic; it is not immediately apparent. The same could be said of numerous other conditions: attention deficit disorder, dyspraxia—the list goes on. Such hidden needs have been found. There are also groups whom we think we can now educate where we did not used to; they require help.
So a growing cohort is coming through, but they are accessing their help through the courts. That means of course that those on free school meals and with special educational needs are not getting their help and have some of the lowest pass rates. The tiger parent is not there. Two dyslexic parents with a dyslexic child are not going to wade through lots of legal documents and get the help they need; it just does not happen. People are having to fight the system to get help for their children, which means that only a few are being well served by it. That is probably because we do not have enough courage to recognise that it saves in the medium term to support people quickly. The various funding streams for interventions in the schools system, with academies and free schools also in there, are—let us face it—not straightforward, but they are there, and there is always a duty. We have got ourselves into a situation where only those who are well-off, well resourced and determined to access the right things are getting help with the frequency they need.
We then have the problem of groups with very high needs. Those groups seem to be most commonly in the courts. I have with me a list of shame in a briefing from the National Autistic Society. Glancing down it, I see Bristol, Surrey, Hackney, east Surrey and North Yorkshire. Long legal cases have been brought against local authorities in those areas for not fulfilling their legal duty. I do not think that local council authorities sit down at night and say, “How can we not fulfil the needs of these people?” It is a matter of funding and prioritising. The cost of fighting over funding decisions has reached an absurd level. I was told that it costs about £16,000 to fight against a parent at an appeal. Looking at dyslexia, which I know best, four level 7 assessors and support staff could be trained for that money and probably be able to deal with dozens of dyslexics coming through every year. We have got ourselves into a ridiculous situation where county councils and local authorities are sitting down and saying, “We will resist you because we are frightened of what’s happening”, as opposed to investing in the system.
Something has got to change. We can argue about it for ever, but we have certainly got to a very bad place. Nobody wanted to be here; nobody expected to be here. Unless we do something soon, we will end up with an ingrained system that excludes the worst-off, ignores huge chunks of the population who do not have the right backing and ends up in a very costly legal system where all we do is make sure that certain firms of solicitors do very nicely thank you.
Lord Bird (CB)
My Lords, it is a great honour to speak to the Motion in the name of the noble Lord, Lord Scriven. I have no local authority credentials other than that I have been a road sweeper for the Royal Borough of Kensington and Chelsea and a dustman, and among other things I was the meals-on-wheels driver for a very big round supported by the borough of Westminster. Therefore, I do not come to your Lordships with wonderful arguments, understanding and insights as to how we need to change the way in which we fund our local authorities, but I can talk about some things. Before doing so, I want to say that I was always well treated when I lived in Sheffield as I hid from the London police in the early 1970s. I love to go back to Sheffield to look at all those places where I was made to feel at home—thank you very much indeed.
When 800 local authority libraries have been removed from the world since 2010, and when you understand that we in the House of Lords spend 2.4% of our budget on the Library but the average local authority spends under 1%, you must ask why it is so important for this House. Why are the Government not saying that we are spending too much on our Library? It is because they know that it is essential to the running of things; they know that libraries create what I love to call mental wealth, which means well-being, opportunity and all the other things that bring people out of the mire.
Whenever we talk about a local authority, we are talking about how we deal with the people who have failed in life—we have heard that this morning and we will hear it more today. How do we deal with those who are homeless or those who suffer domestic violence as was used on my mother, at a time when unfortunately there was nobody in the borough of Westminster to help us? All those who are caught out end up on the doorstep of local authorities.
I am old enough, along with a few others among us, to remember those days when it was not the local authority’s responsibility to look after our old. Back in the 1960s, it was not the local responsibility, although some people were looked after. Something has happened. Local authorities have had to pick up a lot of the grief that is happening in other parts of society. For instance, the National Health Service is so overwhelmed that it cannot process people and they end up on the need register. On one occasion, when we did a survey of Big Issue vendors, we found that 87% of them—I am not saying that the same is true now; this was about eight years ago—had passed through local authority care and come out at the end as vendors, it having cost more than £1 million. I said at the time in an address to the right honourable David Cameron, “Isn’t it interesting that it cost about a quarter of a million pounds to produce you, but more than £1 million to produce a Big Issue vendor?”
I am concerned that local authorities are increasingly called on by the community. We need to rebuild the community and take the weight off the local authority. But it is not an alternative. We know well that, in the days of the 2010 coalition, an attempt was made to use the idea of the big society as a cover for local cuts. Lots of people in many parts of the country made the point then that it was a terrible soft-shoe shuffle. We have to find a way to take the weight off local authorities, but at the same time we have to admit that, with cuts of 49%, austerity has hit local authorities and stopped them being able to provide libraries or for people who have been caught out in emergencies. If those people are not caught in the early stages of emergency, the emergency becomes heavier, deeper, wider and longer. Therefore, you will never save the money that you need to save. That is why I and many others, in this country and around the world, have always said that you need a shedload of money for austerity. Most of us cannot afford austerity: it is too expensive.
I want to give noble Lords a quick outline of some of the stuff I have been doing—I have not been sitting idle in the three and a half years that I have been here. I have been beavering away in a number of communities and looking at ways to work with them and with local authorities. At the end of November, we had a big conference in Northampton. We did not choose to work there because the “something” hit the fan; we chose Northampton and then afterwards the “something” hit the fan, if you know what I mean. We went there with a particular purpose: we wanted to know how we could support the local authority or local government. How could we support all those people who are working away in the community? We came up with a concept we called “social echo”. We looked at estate agents, housing associations, the local authority and the library, and we looked for ways in which we could stitch their work together to take the weight off the local authority and off those profoundly important charities such as the Hope day centre, which works very well with people caught in homelessness and long-term unemployment. We are trying to stich the community together.
I recommend that every authority in this country should look carefully at how to reinvent the local community and take some of the pressure off local government. At the same time, I castigate everybody who says that there is not enough money for local authorities. You may not have the money now, but you are going to need to spend it later on. As I said in this House a few years ago when we were talking about libraries, if we want to close our libraries down, let us close them down; let us build higher fences around our properties and more prisons. In the end, if you do not make the investment at the right stage, you will have to make it at some other stage.
I have to declare an interest. I am a product of the generosity of the taxpayer, who had to put a shedload of money into me because, in the first instance, they did not spend an awful lot on me.
Baroness Janke (LD)
It is always a great pleasure to follow the noble Lord, Lord Bird, with his very many direct experiences of local government. I declare my interest as a vice-president of the Local Government Association. I very much share his views about the importance of local authorities to vulnerable people, people who have suffered, people who just cannot manage—yet cuts to local government have hugely increased over a period of an unprecedented increase in poverty.
There is evidence of that all around us. The number of rough sleepers has increased by 15% over the last year and by 169% over the last eight years. Some 4.1 million children are living in poverty. Some 24% of refuges for victims of domestic violence have closed. We have elderly and vulnerable people frightened for their futures as they read about the number of homes shrinking due to lack of council funding. Libraries have closed as funding has been cut by £12 million in the last two years. I have to say that in my community there is a general feeling that there is nothing for many people and that they and their families are not valued. Even with several jobs, many parents find it difficult to provide for their families’ basic needs. All this comes as we see major cuts and changes to the benefits system in the form of universal credit.
Local councils, with their range of services, are by far the most able to deliver universal support for people moving on to universal credit, yet the Government have not provided the funding needed: instead, they have commissioned the CAB to deliver this. Of course, CAB is a marvellous organisation, but the pressures on its services at the moment are enormous and we are often told that many of the people on our streets are there as a result of their inability to access their benefits. The noble Lord, Lord Kerslake, told us that the UK is one of the most centralised and geographically unequal countries, and he gave evidence of this. Certainly, in my time as leader of my council I felt the frustration of 80% of local government funding coming directly from the Treasury. Many people asked me, “Why on earth should we vote for you? All you do is administer the Government’s cuts”. It certainly is a very good question.
If we look at other countries, we can easily see that the UK has one of the most centralised systems in the world. There is plenty of evidence that the whole system needs to be overhauled. We have seen how the constitution, in its informal form, has broken down in Westminster, and if we look across the country we can see that it is breaking down there as well. Many people say to me that there is a view that we have two countries: one is called London and the other is called the rest of the country. That is not to say that there are not a host of problems in London, but they are different from those elsewhere. As one of the most successful world cities, London attracts large numbers of the most wealthy in the world. It certainly receives far more in capital investment than any other English city, yet the struggle for the less well-off to meet the cost of living in the capital is intense. Other cities desperate for investment—for example, in transport—must queue up at the Department for Transport to be told that they have to wait their turn.
As for investment in the local economy, such devolution as has taken place requires legions of lawyers wrangling with government officials for sums of money that would cause derision in any international context. Indeed, as a leader of a UK city I met leaders of other cities, particularly in Europe, and their mayors and leaders were absolutely astounded at the few powers afforded to leaders in local government here. While being tightly controlled by central government, local authorities do not even have confidence in their woefully London-centric and very often incompetent masters when it comes to delivering on local needs. How much potential to achieve higher growth, greater productivity, more well-paid jobs and high levels of investment is there in our UK cities? There is massive potential.
The evidence is everywhere—in the City Growth Commission’s report; in the report of the inquiry chaired by noble Lord, Lord Kerslake, and commissioned by the APPG on devolution; in the ResPublica report, Restoring Britain’s City States; in reports by the non-metropolitan commission, the Local Government Association and many others. All of them demonstrate the potential for innovation, enterprise, inward investment and growth in our regions if they are freed from the dead hand of central government and given real powers.
A Core Cities report cites the potential to add £70 billion to £90 billion to GDP if cities and regions are given the powers to do so. In my view, there is a need for a new constitutional settlement that defines the relationship between local and national government. Again, we are told that local government controls a fifth of national spending, yet the relationship, responsibilities, rights and accountabilities are nowhere clearly defined in any one document.
The success of strong, devolved local powers can be seen particularly in our European neighbours, who have local tax-raising powers and the means of raising capital and investing in public infrastructure. Local government must also have these strategic powers. It must have the powers to raise long-term capital; economic strategies must be decided locally; and training for skills must be evaluated locally, with funding allocated according to local needs. If local government is to be effective, it needs to be transparent and accountable to the people who pay for it.
The local needs of support for the vulnerable, for social care and the civic fabric are a matter for the local electorate, not for the command and control of Whitehall. Those of us who do not live in London appreciate the differences between regions—we heard from the noble Lord, Lord Liddle, on Cumbria, and from colleagues in Cornwall and Yorkshire. Their needs, priorities, strengths and weaknesses, and their wealth of experience should be reflected in their local government.
Following the upheaval of Brexit, more and more people will demand not just to take back control from Europe but to take back local control—to demand that their local needs are met and to see to it that there is fair funding and fair investment for their part of the UK. They will hold their leaders accountable, both locally and nationally, and it is our job to take those ambitions and aspirations seriously and move forward.
Lord Best (CB)
My Lords, I am grateful to the noble Lord, Lord Scriven, for initiating this debate and for his excellent opening speech. I declare my interests as a vice-president of the Local Government Association, of the Town and Country Planning Association and of the Chartered Trading Standards Institute.
My contribution concerns the essential housing services provided by local authorities and the related planning and development services. Our helpful Library briefing for this debate notes that these services have been subject to the largest reductions in expenditure over the period 2010-11 to 2016-17, as set out in the National Audit Office report last year. Spending on housing and related services is down by roughly 50% over that period, and yet, on the housing side, the requirement for local authority input to the provision of decent, truly affordable accommodation has grown significantly. This shows up, not least, in the rise in the number of those assessed as homeless and entitled to temporary accommodation, which is up by over 33% over this six-year period.
I commend the Government’s actions in several respects in supporting local government housing services. The rough sleepers strategy to help the street homeless contains important building blocks for tackling the desperate situation we see all around us, and resources for initiatives like Housing First are very welcome. The Government’s commitment to halving homelessness by 2022, and ending it by 2027, will require more central government support—particularly for the preventive work heralded by the Homelessness Reduction Act, which I had the pleasure of taking through your Lordships’ House in 2017.
In time, prevention pays dividends, as we have seen in Wales, and will be more than helpful to council budgets in reducing the wasteful costs of temporary accommodation. However, serious investment is going to be needed in the short term to stop more people becoming homeless. I note the impact on housing provision of underresourced planning departments, and of drastically diminished support for trading standards officers and environmental health officers, who are expected to enforce key aspects of housing legislation. But I want to concentrate today on the present and future role of councils in directly providing new homes for their local communities.
The excellent announcement last October that local authorities will be able to borrow on their housing revenue accounts, freely within prudential constraints, opens up some exciting possibilities. As we all know, there is a desperate shortage of accommodation to rent at so-called social rents, and the continuing impact of right to buy on council housing means an ever-decreasing stock of these homes. It clearly makes little sense for a council landlord to sell properties to the occupiers at big discounts, only for the council to be forced by the need to fulfil their housing obligations into reacquiring the same homes for vastly more than they received when they sold them. Ealing Council, for example, reports spending £107 million to buy back 516 right-to-buy council properties, for which it had received only £16 million when it sold them. Just as silly is for councils to find themselves renting back the council homes they sold, at three times the previous council rent, in order to house their homeless families. In London, some 40% of properties sold under the right to buy are now in the hands of private landlords.
I have argued, unsuccessfully, for amendments to several housing Bills both to give councils discretion over the levels of discount they give to tenant purchasers and also to allow all of the sales proceeds to be retained by councils rather having than a big chunk go to HM Treasury. But while current generous right-to-buy arrangements continue as now, in many areas building new homes to solve affordable housing problems will be like trying to fill the bath with the plug out. These are battles yet to be won.
But, with the caps and ceilings removed from their borrowing capacity, should local authorities now embark upon ambitious programmes of new council house building? Some councils are geared up for expansion and are ready, willing and able to go. However, even for the authorities that have neither transferred responsibility of their stock to another body nor delegated housing functions to an arm’s-length management organisation, their capacity to become a significant developer of new homes is likely to be very limited. After so many years of undertaking little or no council house building, naturally most councils do not have a skilled professional staff to take on programmes of new building. I fear the only way to get back into this business relatively quickly would be for authorities to lure the necessary people out of the housing associations to become council employees—no doubt at higher salaries. This sounds inflationary and unhelpful.
Meanwhile, the housing associations that wish to expand face constraints of their own. If they are to produce genuinely affordable accommodation, their much-depleted levels of grant need to be higher, but they also need to have enough borrowing capacity. I suspect, post Brexit, a housing downturn is quite likely. That will mean many housing associations that have been expecting to sell quite a large number of the homes they build—in order to achieve profits that can cross-subsidise their affordable homes—will be switching their market sales properties into market lettings. This will mean that, without getting their money back from sales, they must increase their long-term borrowing correspondingly. But since there are limits on how much each housing association can borrow from the banks and institutional lenders, this is going to put a brake on their development plans.
Here is where I would hope the perfect partnerships could emerge, particularly where an authority owns some suitable land. Rather than the council teaming up with one of the volume house builders—I know how tempting that is for cash-strapped local authorities keen to receive lots of new homes bonuses from social development—is there any reason why councils cannot use their new-found borrowing capacity to onlend to the housing associations that are already geared up to do a lot more without the lending constraints imposed by the private lenders?
There is no doubt that times have been tough for local authorities keen to deliver essential housing services for their local populations, and recent announcements of extra government support are very welcome. Some local authorities will now be borrowing more to build a new generation of council housing. Many other authorities, I strongly suggest, could now be forging powerful, positive partnerships with housing associations in their areas. It would be great if the always-helpful Minister could confirm that councils can use their all-important new borrowing opportunities to enable their partner housing associations to achieve, with them, thousands of truly affordable, high-quality new homes for their local communities.
Lord Wallace of Saltaire (LD)
My Lords, I want to take up the theme my noble friend Lady Thomas of Winchester began with. Bradford Council, looking to cut as many non-statutory and non-essential services as possible, has just closed almost all its remaining public toilets. This is both an important local issue and a historical issue for Saltaire. Saltaire was built partly to improve public sanitation, moving Titus Salt’s works and workforce out of the cholera and typhoid-infected city of Bradford and housing them in terraces with back alleys wide enough for donkey carts to empty their toilets regularly. In the 1850s, that was state-of-the-art public hygiene. Now that the village has become a world heritage site, we welcome busloads of visitors, both schoolchildren on educational visits and retired sightseers. The first thing they ask when they get off the bus is, of course, where the toilets are. They are closed, until some local voluntary society can find the money and the staff to reopen them. So Saltaire has come full circle: we are back with an acute problem of public hygiene, and a council that says that the local shops will just have to offer visitors their facilities; private provision for a core public need—and yes, there is no disabled access.
I say to the noble Lord, Lord Bird, that in a local community like Saltaire, which is increasingly professional and prosperous, there is some prospect that local activity on a voluntary basis can supply some of this need. However, four to five miles down the road, deprived and depressed communities in the centre of Bradford need help. That has to be public help, because people who are just about managing do not have the spare capacity and the self-confidence to take up things which are left by public services.
I do not entirely blame Bradford Council, in spite of the threat this poses to our local shops and the business rates the council draws from them. Like other councils across Yorkshire, Bradford has lost nearly half its central government funding in the past 10 years, and is expected to lose more within the next two to three years. Adult social care costs are rising as the local population ages, and the need for children’s social care is rising as school budgets are also squeezed, and as families on marginal incomes fail to cope. As elsewhere, libraries, museums, open spaces and road repairs have all been cut. The current forecast is that the council will nevertheless run a deficit of over £60 million in the next two years. Next door, Leeds estimates that it will have a financing gap of £100 million by 2020-21.
I blame the Conservative Government and its predecessors, through the coalition to Labour under Blair and Brown, and back to Major and Thatcher, for the financial crisis that local government is now in. I remind the noble Lord, Lord Beecham, that the 13 years of Labour government before 2010 were not a golden age for local authorities and local authority funding either. Margaret Thatcher was deeply unsympathetic to local democracy and local government. The fiasco of the poll tax left behind an unreformed council tax system as the primary source of local revenue, topped up by central grants which were shaped by party-political considerations more than local need. I remember the years in which we paid higher taxes on our house in Labour-run Bradford than in the larger house we had in Conservative-run Wandsworth. I fear that, under the new funding formula, we may return to something like that.
As several Members have said, England has become the most centralised state in the democratic world. The Government have been offering devolution packages, with some extra funding, to city regions—although tied to what Ministers in Government think matters, not what local representatives prefer—but the devolution process also now seems to be stuck. As the noble Lord, Lord Kerslake, and other noble Lords said, England is also the most geographically unequal country in Europe, which is evidence that no recent Government—I stress that again to the noble Lord, Lord Beecham—have invested sufficient priority in fiscal redistribution or in regional regeneration.
The weakening of local government has contributed to popular alienation from government as such, from which the country now suffers. Looked at from the former council estates of north Bradford, government is remote and hostile: local police are thinner on the ground, local services have shrunk, parks and playing fields have been neglected or closed, and public transport has been privatised and is infrequent and expensive. No wonder so many people in places like that voted “sod off” to political elites in the referendum two years ago; the political system seems to have abandoned them, and they see Westminster politics as a party game in London. I say to the noble Lord, Lord Liddle, that merging local authorities into larger units will further weaken local community and local accountability, and we ought to realise the political and psychological cost of that.
Some within the Government clearly do not see the provision of public services through local government as a necessary or essential activity. Continuing cuts year by year, which in real terms will have reduced central government funding for local authorities by 60% by 2019-20, without any attempt to reform and widen local sources of revenue, will cripple and demoralise local authorities and their workforces. I suppose it is sadly appropriate that the first councils to go effectively bankrupt are Conservative-led. Perhaps that explains why no Conservative Members of this House who have local government experience are speaking in this debate.
Lord Wallace of Saltaire
Yes—distant experience.
There is a transatlantic anti-state ideology behind this long-term shrinkage in public provision. I recall during the coalition a conversation with the then Deputy Prime Minister Nick Clegg, in which he said that we had to support some reductions in government provision to bring the proportion of government spending within GDP back to 40%. But since 2015 the trend has continued downwards, with both Philip Hammond and Boris Johnson still promising further tax cuts to come, without spelling out what that will mean for education, social care, policy, prisons and probation, roads and public transport. The TaxPayers’ Alliance, the Institute of Economic Affairs and their fellow travellers still argue that no state should raise more than 35% of GDP in tax. You can do quite a lot with 5% of GDP.
For most people politics is local, and public services are judged by what they provide to the local community. Non-statutory local services also matter. They contribute to the strength of local communities and the quality of local life. Edmund Burke cherished local communities and local self-government as the core of a thriving society. Harold Macmillan’s Conservative Government also cherished local government. Margaret Thatcher’s legacy is a centralised English Government who mistrust local democracy and squeeze local funding. In the long run, that is a danger to democracy as such.
Baroness Pinnock (LD)
I thank the many noble Lords who have taken part today, contributing to such a wide-ranging and excellent debate on the vital nature of the services on which local people and communities depend. I draw Members’ attention to my entry in the register of interests, which records that I am a vice-president of the Local Government Association and have been a councillor on Kirklees Council since 1987. It is not surprising that the debate today has focused on funding of local government and its services. However, I want to start by thinking about the services and their delivery which touch the lives of individuals from cradle to grave.
Children’s services take responsibility for children who are neglected, abused, or who have no family to call their own. The growing demands on children’s services are well documented, and many noble Lords have drawn the attention of your Lordships’ House to the large shortfall in funding and the growing demands on children’s services; my noble friends Lord Scriven and Lady Thornhill, the noble Lord, Lord Beecham, and the noble Earl, Lord Listowel, have all talked in different ways about the crisis in children’s services and about how the Government must address it. Youth services too have taken a battering during the years of cuts to local government, and it is therefore no surprise that anti-social behaviour and youth offending is rising. Again, the noble Earl, Lord Listowel, drew attention to that.
Local authorities ensure the provision of basic universal services such as waste collection and disposal. The noble Lord, Lord Patten, in the only contribution from the Conservative Benches, drew attention to the importance of street cleaning as a measure of how well regarded a local place is and therefore how important it is. My noble friend Lady Randerson spoke eloquently and expertly on the topic of transport: enabling safe travel, either by subsidised bus services or on roads safe for all, whether they be drivers, cyclists or pedestrians.
Basic human needs are met through provision for and regulation of housing. The noble Lord, Lord Best, who is an expert on the matter, gave us eight minutes of erudition on the topic. There is commitment from local authorities to ensure provision of services for frail elderly people and a growing number of adults with lifelong disability—either physical or learning disabilities or mental health needs. We have heard from several noble Lords on this topic: my noble friend Lord Scriven—about funding problems and some solutions—my noble friend Lady Thomas and the noble Lord, Lord Liddle. Adult social care is in crisis, with the Government sadly having failed to publish their long-awaited Green Paper. As many have pointed out, the gap between the funding available and that required is very large and getting wider by the year.
I move on to libraries. I thank the noble Lord, Lord Bird, for again bringing them to our attention. Libraries, parks, play areas, sports pitches, swimming pools, food inspectors, environmental protection, museums, cultural events and much more besides are important provision by local authorities. When the noble Baroness, Lady Thomas, raised the issue, I was thinking that in my borough of Kirklees we have no public toilets, which is an astonishing and dreadful state of affairs. The final event in our lives is also provided by local authorities, who have responsibility for crematoria and burials.
As this debate has demonstrated, local authorities provide a wide array of disparate services. Whitehall and the Government need to make up their mind whether this wide range of services is a necessary or even essential part of local government. Naturally, the future funding of local government will be based on that decision.
Let me help. Consider a child growing up in a dysfunctional family. Proactive support from locally provided services through children’s centres, family support services, targeted young people’s services and access to subsidised sport and leisure facilities together have helped both the child and the family. There is less anti-social behaviour locally, fewer children excluded from school and more young people making the most of their abilities.
Think about an older person: retired, on their own with family moved far away. The local library has been closed, the local authority sport centre has become more market-driven and the subsidised rates for indoor bowling and dance classes are priced beyond what they can afford. The local park, which was once a place for a gentle walk, has had its upkeep reduced, so it has become much less attractive for a single person.
Both of those are generalised accounts of real incidents that I have come across as a councillor. I have recounted them to illustrate the blindingly obvious fact to all those in local government that the range of services provided are an interlocking web of essential services that make a real difference to the lives of people in every community. Services that enable individuals to make the most of their lives and help prevent more serious incidents of ill health or criminal behaviour, for example, save significant public funding in the longer term.
The totality of locally provided public services is much bigger than the sum of its parts. Responsive and responsible local leaders enable their communities to flourish. The array of services knits together to create a place where people are safe, community cohesion is a positive force for good, businesses want to invest, town and village centres are vibrant, and volunteers are well supported in the services they provide.
The biggest challenges we face as a country depend on locally provided and delivered services. Climate change and air quality rely on local authorities making radical change to their place. The future of social care absolutely depends on local authorities and the local NHS working co-operatively and independently to meet needs effectively. Meeting the desperate need for good-quality housing in the end relies on local authorities planning and providing for their place, their communities and the people they serve.
That, of course, leads me to funding. The noble Lord, Lord Beecham, has criticised the Liberal Democrats for supporting cuts to local government funding. Unfortunately, he forgot that the Labour Chancellor at the time argued for £3 billion of cuts to local government. All parties have to take responsibility for insufficiently funding local government, and all parties need to work together to find a solution.
Many noble Lords have drawn attention to the serious state of funding of local services, and I thank them for what they have said on the topic, particularly the noble Lord, Lord Kerslake, and my noble friends Lord Scriven and Lady Thornhill. The noble Lord, Lord Beecham, has drawn attention to the review of the council tax system, which has to be carried out. Everyone has contributed to point out the fact that funding of local government is broken and needs to be mended.
The varying ability of local authorities to raise funding and their reliance on council tax and business rates is fine in theory, but has to be tempered in practice by an acknowledgement by the Government that authority areas are not equally able to raise sufficient funds to meet the same level of local needs. It is of great concern that media reports indicate that the Government are considering a significant reduction in the weighting in the fair funding regime for a deprivation score. As others have said, this will result in poorer areas having even less funding available than now. These are the very same local authorities that have already suffered the largest cut in their funding. For example, the five West Yorkshire authorities, serving more than 2 million people, have had their funding reduced by £1 billion every year, with further cuts to come. This is neither sustainable nor desirable. Local authorities are the place makers, the emergency responders, the life enhancers, the glue that unites healthy, safe, vibrant communities. Investment in local services is an investment in individuals, communities and the nation, which is why I wholeheartedly support the Motion in the name of my noble friend Lord Scriven.
Lord Kennedy of Southwark (Lab Co-op)
My Lords, like other noble Lords, I congratulate the noble Lord, Lord Scriven, on securing this most timely debate. I welcome our debating these issues again, which are of such importance to communities. I draw attention to my relevant interests in the register as a vice-president of the Local Government Association. I am grateful to various organisations for providing us with some excellent briefing materials.
Local authorities understand their communities. They deliver essential services every day: everything from refuse collection to housing, fire and rescue services, trading standards and social services, including individual care packages for people. However, as we debate in this Chamber time and again, they are under severe pressure to deliver what is expected of them with the resources they are provided with. I had the privilege of serving on two local authorities, both in London: most recently, on Lewisham Borough Council and, in the 1980s and 1990s, on the council in Southwark, where I grew up. I held a number of positions on Southwark Council: deputy council leader; chair of the finance committee; deputy chief whip; and chair of the highways committee. I have seen and experienced the power of local authorities to make a real difference to their communities. I want to place on record my thanks to councillors, of all political parties and none, for their work and to the staff working in local authorities, who seek to deliver services with considerably reduced resources. I very much concur with the comments made by the noble Lord, Lord Kerslake, in that respect.
The money from central government that has been taken away is of immense proportion. By next year, local authorities will have lost nearly 60p in every pound of central government funding. This leaves an overall funding gap of over £3.1 billion for 2019-20, which is estimated to rise to £8 billion by 2024-25. This pressure places local authorities in very difficult situations. The noble Lord, Lord Kerslake, made some good points about financial stability for local government. It is important that the noble Lord, Lord Bourne of Aberystwyth, responds fully to those points because, as we have heard, councils are now in real difficulty. Indeed, we heard about the case in Northampton, where they are completely collapsing.
Coping with rising demand for key statutory services, such as social care, conflicts with other services relied on by communities, such as street cleaning, cutting the grass, looking after parks or keeping the street lights on. Other pressures, such as where people have no recourse to public funds and present themselves for help and assistance, are placing huge strain on some local authorities. We all know examples of local authorities turning off the street lights at night, not cutting the grass in the local park or asking the community to look after their local green space. In many areas, large parts of the library service have been handed over to the local community to run. We are very lucky that so many members of our communities are prepared to help on a voluntary basis, but we should not operate our services in that way.
The noble Lord, Lord Wallace of Saltaire, highlighted the capacity of communities to replace the local authority delivery of services. That may be possible in Saltaire, but it would not be so easy in other parts of Bradford, where people would struggle; I think that was the point the noble Lord was making. Digressing slightly, the noble Lord also mentioned the TaxPayers’ Alliance and the Institute of Economic Affairs. I often listen to those two organisations giving us the benefit of their advice, but I would be more interested in what they have to say if I knew who funded them. Perhaps we would all be more interested if we lifted the veil of secrecy. That is a matter for them, but perhaps we will find out one day who is behind them. Only time will tell.
Local authorities are having to look carefully at the services they provide. There is no question that discretionary services are under threat in many areas, as statutory services have been protected as far as possible at their expense. The noble Lord, Lord Scriven, referred to the loss of discretionary services and those services that people think they are paying their council tax for. In recent years, we have seen the Government allow councils to increase council tax specifically for social care on top of any other increases they may want to levy. Council tax is a regressive tax: there has been no revaluation of the property bands, as my noble friend Lord Beecham mentioned. It is a wholly unsatisfactory way of collecting money to run council services. We must find a better way of raising local funds for services.
I agree with the noble Lord, Lord Scriven: we need to deliver a proper devolution settlement in England to provide more responsive services. As I have said in this House many times before, the metro mayor patchwork model is odd and is not devolution in any sense at all. We need a situation where funds and powers are properly devolved to a devolved body. The metro mayor model is not the model to deliver that.
On the specific services provided by local authorities, the noble Baroness, Lady Thornhill, rightly highlighted the cumulative impact of spending reductions from a number of different agencies in the public sector, and in the voluntary sector through reductions in grant funding. I agree with her very powerful points about local government funding in general. If the fair funding review takes out or reduces in any way the indicators of deprivation in funding, that would be a disgrace—it would be an unfair funding review, which would make the most vulnerable people in our society suffer even more. We cannot have that.
Adult social care was mentioned many times in the debate. It is an area where demand will increase in future. Medical advances mean that we are all living longer, which is very welcome, but people are living longer with complex care needs. If those are not addressed, people’s quality of life will be dramatically reduced. We cannot have an NHS that responds to all the demands placed on it unless we sort out adult social care. So far, we have seen only a sticking-plaster response from the Government. Can the noble Lord, Lord Bourne of Aberystwyth, tell us where we are with the adult social care Green Paper? We need properly funded adult social care services. The Government got their fingers burned with their ill-thought-out proposals in the 2017 general election, which the Prime Minister had no need to call and is paying the price for at the moment. Adult social care is one area where, given the issues that every Government and every local authority need to tackle and which every community and family will face, it should be possible to agree long-term solutions on funding and service delivery. For me, that includes treating staff with respect. There are dreadful stories of how staff are treated totally unacceptably by some companies in the social care sector.
Children’s services face a funding gap of nearly £1 billion, which is estimated to reach £3.1 billion in 2024-25. Here, again, local authorities are dealing with vulnerable people: children at risk of neglect or being neglected and children at risk of abuse or being abused. I was shocked to read in the Local Government Association briefing note that, every day, social workers open case files for more than 1,000 children, half of which involve suspected abuse or neglect. In the past 10 years, the number of child protection inquires has increased by 158% and the number of children on child protection plans has increased by 84%. Those are truly shocking and shameful figures. The noble Earl, Lord Listowel, spoke with great authority on matters concerning children, young people and families. Early intervention strategies are so important in helping young people to lead better lives and make a better contribution to society. We all win when that is done: the young person, the community and society as a whole.
The noble Lord, Lord Bird, posed important questions about the role of local authorities, the pressure on the NHS and how we can address the issues in today’s debate that concern us all.
The noble Baroness, Lady Randerson, made an excellent contribution focusing largely on bus services. I agree with almost every single word of what she said. The problems with bus services have to be sorted out. As the noble Baroness said, they could be dealt with in one year if the Government changed their political position.
Homelessness is a subject that we have discussed many times before, and here again there is a funding gap of £110 million in 2019-20 which is estimated to rise to £421 million by 2024-25. There is also a human side to the numbers. We live and work in one of the richest countries and richest cities on the planet, and yet last year a homeless man died outside an entrance to the Palace. If you walk from any of the mainline stations such as Charing Cross, Waterloo and Victoria to get to the Palace, you will see homeless people sitting in doorways. Almost every evening you can see hundreds of homeless people waiting opposite Charing Cross station for soup and bread. I am sure that the noble Lord, Lord Bourne, will mention the Homelessness Reduction Act 2017 when he responds to the debate. We all supported the Act, but where we differ is that so far the Government have not provided the funding to enable it to deliver the good work it could do and the changes that it could make.
The noble Lord, Lord Patten, was right to say that we need to build more housing, but as he said, it has to be quality housing built to the best design and environmental standards possible. I often fear that we have not learned the lessons of the 1960s and 1970s in what we are building. One of the most disappointing things is the lack of social housing being built and the lack of money being spent by the Government to bring properties up to decent standards, along with the “affordable rent model”, which in many parts of the country is totally unaffordable. The noble Lord, Lord Best, pointed out that housing has suffered the largest reductions in spending over recent years and that we have serious problems to address. I thought that the points made by the noble Lord about the right to buy were compelling. The original intention of the policy was to enable more people to become home owners, which is perfectly laudable. However, that has long since been lost and instead it has quickly created the problems highlighted by the noble Lord in his contribution.
I note that the Labour Party, the Liberal Democrats and the Conservatives have all been in government in recent years. No matter how much we love our respective parties—and I love the Labour Party very much—we can all say that we have not always got things right. Perhaps only the right reverend Prelate and noble Lords on the Front Benches may be able to get away scot free, but the rest of us must take our fair share of the blame for when we got things wrong. However, we have also got things right. What we should be aiming for is to deal with the many issues of the day that we should agree on: I have mentioned social care, the housing crisis and the scandal of homelessness, the risks to children through neglect or abuse, dealing with criminal landlords and the vital work of trading standards. Given what has to be done, a considerable increase in funding has to be part of the solution.
I concur with the remarks of my noble friend Lord Liddle. I was a member of Southwark Council at about the same time my noble friend was a member of Lambeth Council—I was born in Lambeth, so I have great affection for the borough. I think that we faced similar problems at the time, although we now have a much better situation. I hope all noble Lords will agree that the relationships between local government and national government and those between councils are much better now than they were in the 1980s and 1990s. That is due to my noble friend Lord Beecham, the noble Baroness, Lady Eaton, the noble Lord, Lord Porter of Spalding, and many others who have worked to make that happen. They deserve much credit for that. That work is also being done with London Councils, which is much better than the old London Boroughs Association which was full of Tory councils and the Association of London Authorities which was full of Labour councils. London Councils gives a united voice to London; it is a better and more responsive way to work with government, which I think will be much better for us all.
In conclusion, I thank the noble Lord, Lord Scriven, very much for bringing forward this Motion for debate. I am sure that we will discuss the issues again and again. I also look forward to the response of the noble Lord, Lord Bourne.
The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)
My Lords, I am most grateful for all the valuable contributions to this debate. It has been frank and honest and, obviously, it has given us much to consider and ponder. I will ensure that any particular points of detail, or indeed anything else that I have missed, are covered in a letter to noble Lords. I am sure that it is understood that this debate has covered many different areas of governmental activity, and quite correctly I would not want to mislead. I will also ensure that the debate is brought to the attention of all government Ministers because it has touched on so many subjects. I want in particular to thank the noble Lord, Lord Scriven, for introducing the debate so effectively and enabling us to discuss these very important issues.
I certainly concur with what has been said about the vital importance of local government at all levels, as the noble Lord said in opening the debate. That work is important not just for local government; it is vital for everyone living in our communities. We all benefit from the considerable work that is done by councils. I should like to thank all those who work for our councils and, indeed, councillors of all political persuasions and none.
I also agree with the comments that have been made, most recently by the noble Lord, Lord Kennedy, that in so far as there is blame to apportion—and I am sure that that is the case—no party can walk away from this scot free. Only the right reverend Prelate can leave with his head held high, not having been steeped in the blood of any mistakes which have been made. It is best that we are candid about this, so I will say no more on that. However, it is an important point to make.
I shall first cover matters of local government finance and council tax and then say a little about the structure of local government. Finally, I will deal with the many issues relating to local services which have been raised.
First, I understand what has been said about local government finance over the years. All the political parties have been in government during a time when incredible pressure has been put on to local government—that is undoubtedly the case—and, again, at all levels. I would also agree with what the noble Lord, Lord Kerslake, said about how we should be grateful to local councils for doing what they have done, given the pressures that are there. He is right to point out that our thanks are due to local authorities for what they have done.
I shall make a couple of points which I do not think have been articulated in the debate. Whatever one thinks about local government, the last settlement was a step in the right direction. The chairman of the Local Government Association, my noble friend Lord Porter, who is not in his place at present, welcomed the settlement as a good one. Newcastle will see a 1.36% increase in core spending power and an increase in real spending power. Bristol, the area of the noble Baroness, Lady Janke, gets 2.24%. Lewisham will receive a 2.74% rise, Kirklees will receive 1.75%, while Watford, not doing quite as well, will see an increase of 0.8%. I am not saying that this will solve the problem, but in the spirit of being open-minded and fair, we should acknowledge that it is a step in the direction that the noble Lord, Lord Beecham, for example, is keen for us to pursue, and correctly so.
I should also say what the Chancellor and others have said: we have come to the end of austerity. I do not want to go over the history and look at the reasons for taking that action. It was needed; at least two political parties—and I think possibly three—accepted that there was a need for austerity. However, we are coming to the end of it, and that needs to be said as well.
I have referred to the cash increase, and I will touch briefly on the 50% business rates retention scheme that is due to come forward in 2021. As is currently the case where pilots are being run, that should lead to an increase in spending power for those councils.
Much has been said about the consultation on the fair funding formula, which of course sets the objective that this should be brought forward in 2021. We are still looking a little way ahead, although it is getting closer by the day. Noble Lords know that this is a consultation, so there will be ample opportunity to express views. The noble Lord, Lord Liddle, asked when the consultation is to come to an end. It is important to know when that will be, and I think that it is 21 February. There is an opportunity for people to participate in that consultation. Obviously, we will look at and consider the responses in detail. The importance of deprivation is expressly recognised in four areas in the consultation—adult social care; children and young people’s services; fire; and public health—although that is without prejudice to people to mention other issues in the consultation, if they feel that it is important that they are considered elsewhere.
Mention was also made of council tax and the local referendum restricting increases. The noble Lord, Lord Scriven, touched on this and said how important it was that we recognise that there is the power of the ballot box to restrict increases. He was thinking of council elections, which is presumably why this has not been tested by local councils—they know what the outcome would be. We are not stopping local increases but saying that a referendum should be called if local increases are beyond this. All three political parties have lived with this system, so I hear what is said but I would caution that it is there for reasons.
I have noted a couple of other stray but important issues. The noble Lord, Lord Kerslake, talked about dissatisfaction with local services increasing. I see that too. Complaints about services arise from time to time, but the latest survey taken—I have no reason to doubt it—shows that satisfaction remains relatively high, with nearly four out of five people, 78%, saying that they are very satisfied with the level of local services. I just wanted to put that in perspective. Yes, we should be concerned and wherever there is any concern with a local service we should look at it, but the level of satisfaction remains very high. If a political party got 80% satisfaction, I think we would all say, “Whoopee!” —though I cannot remember the last time that happened.
On local government structure and reform, there has been much talk—the noble Lord, Lord Scriven, raised it first of all—on devolution. The noble Lord, Lord Kennedy, talked about the patchwork of devolution. He did not seem to approve of the metro mayors, but to my knowledge he has voted in favour of every order that has come before the House on this. That does not mean he does not think we could do better, but I suggest that it shows he thought it was at least a step in the right direction. I am open to challenge on that.
The noble Baroness, Lady Janke, also talked about centralisation. We are a centralised country—that is perfectly true—but on the metro mayors we have tested opinion and proceeded where it is in favour. As I recall, the most recent exercise on regional devolution—in the north-east, admittedly some time ago—did not exactly find overwhelming support, so I once again caution a little trepidation at putting much more than a toe in the water on this. That said, we seek to redress the balance—with what admittedly is a magnet of activity to the south—with the northern powerhouse, the Midlands engine and the metro mayor system.
Mention was made of unitarisation, and in a very fair contribution the noble Lord, Lord Liddle, said this is a way of councils saving money and also potentially responding to local feeling. It might not be about just money, and in the process one of the considerations will be local support. The noble Lord, Lord Wallace of Saltaire, also discussed this but without the same approbation.
I turn to a general point on services before I look at the particulars. The noble Lord, Lord Kerslake, touched on working innovatively, which we should always be doing even if there are not significant cost pressures. I pay tribute to what local authorities have been doing in this regard. Pendle is an example. The noble Lord, Lord Greaves, is not in his place, but I am sure he would take great pride in the back-office systems and processes review that has led to significant savings and a significant increase in efficiency.
I turn to housing. I thank noble Lords for their approbation of the raising of the housing revenue account borrowing cap, which has been widely welcomed. That is absolutely right and a step in the right direction. The noble Lord, Lord Best, whom I thank very much for his contribution and for all that he does in this area, asked for a response on lifting the cap in relation to housing associations. It is not a straightforward matter, but I will get a detailed response to the noble Lord and ensure that that is in the letter copied to all noble Lords. I thank him very much for that contribution.
In this regard, mention was made of the Homelessness Reduction Act. The noble Lord, Lord Kennedy, also mentioned it briefly. All parties supported this. We can all take credit for this measure and thank the noble Lord, Lord Best, for piloting it through this House and Bob Blackman for piloting it through the other House. To my knowledge, we are funding the extra burdens, but if there are specific issues that the noble Lord, Lord Kennedy, would like me to look at, I am happy to look at them.
Having talked about innovation, I once again say that Birmingham City Council is a housing exemplar. It has done some very good things in mixed-tenure schemes, including affordable and social rent, as has Ashford Borough Council, and that is important.
Social housing was mentioned specifically. I know that £9 billion was committed in the spending review period as recently as autumn 2018.
Rough sleepers was also mentioned in different ways. Extra funding was announced last year, because this is very serious. I understand what noble Lords are saying: this is very evident on our own doorstep. But I would not want noble Lords to think it is just our own doorstep. That may be where we see it most obviously—we certainly should not forget that—but it is much more serious and widespread than that. We are tackling it.
Lord Wallace of Saltaire
I apologise terribly for this. I have a question the Minister might like to return to. I read the other day that the subsidy to private landlords paid in housing benefits has risen by some £10 billion in the last 10 years, which, noble Lords might like to know, is rather more than we transfer to the EU. I would love to have the figures, both for the total amount transferred to private landlords in housing benefits and for the increase in recent years. If we are talking about some £9 billion for the extra social housing account, that is rather smaller than this public subsidy for private landlords, which is clearly now getting out of control.
Lord Bourne of Aberystwyth
I will certainly make sure the noble Lord gets a response on those points in the letter.
The point I was making was specifically in relation to rough sleeping, which is a serious issue throughout western Europe. The only country that has seen a reduction of any significance is Finland, and we have been seeking advice from it on what it is doing on this. I will cover that in the letter, with more specifics about the funding from the centre going into helping with what is a very serious problem that affects individuals. We certainly should not forget that.
I thank the noble Lord, Lord Best, for his welcome of some of the things we have been doing on housing. I acknowledge that we have not kept him happy on all these issues, but I remain very keen to discuss these issues with the noble Lord. I know how expert he is in these areas.
I turn to education. The noble Lord, Lord Addington, spoke on this, particularly in relation to special needs. I understand his commitment to this area and the background and expertise he brings on dyslexia and in other areas. On 16 December, we committed an additional £250 million, which the noble Lord mentioned. That is extra funding on top of the £6 billion already provided for the high-needs budget this year. It is an important area and we take it seriously, and I am pleased we committed that extra money.
I turn to social care, which most noble Lords raised. I am told and can authoritatively confirm that the social care Green Paper is expected soon—noble Lords will not be surprised. After this, we will apply additional pressure to say that we really should be seeing this. It is an important area.
The noble Lord, Lord Liddle—again, very fairly—talked about the bandwidth and of other issues of importance not getting the attention they would normally have while we are dealing with these Brexit issues. I absolutely accept that; it is a point well made.
Many noble Lords—the noble Lords, Lord Kerslake and Lord Best, the noble Baroness, Lady Thomas, and others—talked about this important area. It certainly is important. Delayed transfers of care are down, and that is part of dealing with this problem. But as we have noted, there is an ageing population. As the noble Lord, Lord Scriven, said, we all have a personal interest in addressing this; we certainly have a community interest, and I welcome the wide recognition of this. When that social care Green Paper is presented to us, we will have the opportunity to go through that and to discuss this in some depth.
Meanwhile, some local authorities are doing innovative things, such as Essex County Council’s Community Agents Essex, Hampshire County Council’s telecare partnership, and the early help partnership of Lambeth Borough Council—one of the many councils that the noble Lord, Lord Kennedy, is connected with. Many innovative things are happening.
The noble Earl, Lord Listowel, and the noble Baroness, Lady Pinnock, touched on children’s services, as did others. North Lincolnshire Council is doing innovative things in supporting care leavers to secure and sustain their tenancies and making sure that families are safe and supported. I welcome what the noble Earl said about the troubled families programme providing assistance.
Noble Lords also touched on domestic abuse, and they will be aware that there has, again, been some delay in presenting the way forward. But we are keen to progress that. It is something that the Prime Minister herself is very keen on, and I look forward to that happening.
Children’s services and social care services are key areas and have attracted extra finance, but I accept that it would be far better if we did not do this on an ad hoc basis each year but looked at it in the round and had a more developed system. I hope that that can happen once we have the social care Green Paper.
Public health services were touched on. Again, I acknowledge their importance. I note that good things are being done in Newcastle and Kirklees.
On transport and bus services, I thank the noble Baroness, Lady Randerson, and congratulate her on becoming chancellor of Cardiff University, which is extremely good news for all of us. I know that the noble Baroness is well deserving of that role. She talked about her role as a councillor, but she was also in the Cabinet of the National Assembly so will understand the importance of these issues and have experience from Wales. I take particularly seriously what was a very constructive contribution with some concrete ideas of what we could do. I would welcome the ability to pass those on to noble Lords and Ministers in other departments so that they can be discussed, particularly the nexus between the voluntary sector and the established sector, if I can call it that. I know that post buses have been used on occasion in this regard as well. There were some useful suggestions there.
The noble Lord, Lord Bird, focused on public libraries, as did others. I welcome what he said. There has been some innovative work in Warrington with community hubs. I have also seen that elsewhere. Lambeth brings together different community services in the same building, the Oasis Centre near Waterloo. It was a point well made, and it is certainly important. I noted what the noble Lord said about his commitment to Sheffield. Indeed, we spent some time together in Sheffield, although I hasten to add not in his nefarious malfeasance days, but much more recently when we looked at what was being done on homelessness, social services and social enterprise.
The right reverend Prelate the Bishop of Worcester mentioned the Worcestershire Archive and Archaeology Service. If the right reverend Prelate is able to give some details, I can put officials in touch to see if other funding streams could help. I note that there is a co-service with the University of Worcester, which is something to look at for the “Faithful City”.
Waste services are vitally important. Car parking was not touched on. Public parks were mentioned, and as a department we put money into pocket parks, which are a great development—I saw one recently in Redcar, which was great.
I will deal with public toilets very quickly. It is an important issue, so I welcomed what the noble Baroness, Lady Thomas, and the noble Lord, Lord Wallace of Saltaire, and others said. When I got off the train at Saltaire, they were not my first thought: my first thought was to find the Hockneys in the gallery in Saltaire, which is a great place. But I noted what the noble Lord was saying about this issue. In the Autumn Budget, the Government announced 100% business rate relief for stand-alone public toilets, and we are compensating for lost income where there are privately run toilets, which the local authority is effectively subsidising. I will provide full details in the write-round.
I thank noble Lords for what was a wide-ranging and, from the Government’s point of view, useful debate on local government. It is vital to us, we have great people working there and great councillors, many of whom come to this House, so I do not need convincing about that. But I take it seriously, as do the Government. We will forward a copy of the debate to all government departments, and I will write to noble Lords on points that I have not been able to deal with in more detail.
Lord Scriven
I thank noble Lords who took part in this thoughtful, powerful and useful debate today. It showed the impact that local government has on people’s lives. Whether it be loos, transport, libraries, social care, housing or in some cases even Shakespeare’s memory, all are important.
I hope that the Government and all noble Lords will take away from the debate four issues, and I shall make one personal reflection. The first is that the situation cannot go on like this: it is critical. But despite that, some amazing staff and councillors are doing great things to improve people’s lives and their local areas.
Secondly, the council tax system has run its course. I totally agree with the noble Lord, Lord Liddle. There is now a need for a cross-party and independent review of how we fund not just local government but local areas.
Thirdly, local authorities must stop being seen as just a provider of critical services and must be funded and empowered to be able to facilitate vibrant and sustainable communities.
Fourthly, if we are going to be a country where no one gets left behind, a fair funding system needs be just that. It needs to be fair and have deprivation and need at its heart.
Lastly, I now agree far more with the noble Lord, Lord Kerslake, than when I was leader of the opposition in Sheffield and he was chief executive, and that would be a good point at which to sit down.