Neighbourhood Services: Government Support
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The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government and Wales Office (Viscount Younger of Leckie) (Con)
My Lords, I thank the noble Lord, Lord Greaves, for securing this debate and all noble Lords for their remarks. This is my first debate in my new role, although I have covered the department in the past as a Whip. I am, however, only too aware of the experience of the noble Lord in local government. If there is a verb “to Pendle”, the noble Lord could be described as a “much-Pendled” Peer. I am also aware of the experience and knowledge of the noble Lord, Lord Kennedy, in this sector and the length of time that he has spent in his role on the Front Bench.
All types of local authorities play a central role in supporting communities, including the most vulnerable, across the country, and district councils are at the heart of delivering many of the key services that matter to communities. We have heard a lot about that today. We are grateful for the transformative changes they have championed and for their continued commitment to providing the day-to-day services that their residents rely on. The Government make it a priority to visit councils—including, I understand, Pendle this month—in order to see the issues and opportunities at first hand.
I want to be clear that it is not only upper-tier authorities that are a priority for this Government: we want all authorities, regardless of size, to know that their concerns are being heard. However, while we seek to understand and address the daily issues faced by councils, it is right that we step back and ask ourselves some strategic questions. What is the best model to serve local needs, especially for the most vulnerable groups? How do different authorities best work with their communities to meet the needs and priorities of local areas, which will no doubt differ across the country? The noble Lord, Lord Goddard, alluded to this in his remarks. What is the right balance between state intervention and support and the power of local democracy for local decision-making and authorities?
These are big questions and we must raise them. Indeed, it is not only me asking questions about the role of local government; the sector itself, including the Local Government Association, is constantly challenging itself to do better for all the people it serves. As my noble friend Lady Redfern said, there have been tough times. There continue to be challenging issues to address, but authorities are being innovative.
Social care services are essential to protect our most vulnerable. This is a priority for this Government. The Prime Minister has been entirely clear on this matter and I am keen today to dedicate some time to how we are supporting district councils and the universal services which neighbourhoods rely on. I will also be reflecting later on the important issues of empowerment and community—which I feel strongly about and which was a major theme in the speech of the noble Lord, Lord Greaves.
I turn first to the spending round. This Government understand their responsibility to make sure that local authorities are adequately funded. I was pleased—as I am sure were all noble Lords—with the positive outcome of the spending round. Core spending power, the measurement we use for local government funding, is expected to grow by £2.9 billion for England, which is an estimated 4.3% real-terms rise. I know that the Secretary of State was delighted to have secured the largest year-on-year increase in spending power since 2010—a package which will allow councils to,
“provide more support for areas such as adult and children’s social care and make sure that we are supporting the most vulnerable people in our local communities”.
Beyond social care, we are protecting vital front-line services by increasing the biggest elements of core settlement funding in line with inflation, and we are consulting on a 2% core council tax principle for all councils next year. I take account of the remarks made by the noble Lord, Lord Greaves, on that issue. This significant result is a testament to what happens when we work together with the sector. I am grateful to councils up and down the country which fed into our preparations. The LGA has said that we provided local authorities with,
“much of the funding certainty and stability they need for next year”.
I shall address the point raised by the noble Lords, Lord Greaves and Lord Kennedy, on the new homes bonus. The Government have previously noted that 2019-20 was the final year of new homes bonus funding as agreed in the spending review 2015, and that any funding beyond 2019-20 would need to be agreed as part of the next spending review. I understand that the new homes bonus represents an important part of district council budgets and can form a large percentage of core spending power. We have listened to requests from local authorities to honour previously announced legacy payments totalling £624 million. As part of the roll-forward settlement, the Government are minded to make a new round of allocations for 2020-21, and I would welcome views on our proposals.
The noble Lord, Lord Adonis, raised a point on the Public Works Loan Board. I am not particularly familiar with it, but I hope I can reassure him that the Treasury recently increased the margin that applies to new loans from the PWLB by 100 basis points on top of the usual lending terms. The Government also successfully legislated to increase the lending limit of the PWLB from £85 billion to £95 billion to reflect their commitment to ensuring that local authorities can continue to access the financing that they need to support their capital plans. Since this change took effect, my department has been engaging with the sector to understand the potential impact that it could have on its capital plans and strategies, especially with regard to housing and regeneration.
Lord Adonis
The Minister has not addressed my point about the substantial increase in the interest rate. I am not expecting him to be able to do so across the House, but will he write to me about it? Would he be prepared to meet me and other noble Lords to discuss this issue, which I understand is central to the ability of local authorities to borrow to build new housing?
Viscount Younger of Leckie
I was coming on to address some of the other points on the subject of housing. I will come to the noble Lord’s point in a moment. He raised a number of questions and I want to be sure that he receives full answers.
The Government remain committed to business rates retention, which is yielding strong results, including for district councils. We are aiming to increase the level of retention from 50% to 75% from 2021 to give councils greater flexibility over their funding and to reward authorities for generating economic growth.
I now move on to the important issue of relative needs and resources. The noble Lord, Lord Goddard, warned against an easy formula of salami-slicing as opposed to better targeting. That is a very good point. The Government understand that demographic pressures have affected local areas in different ways, as has the cost of providing particular services. Councils told us that they wanted a simpler, up-to-date funding formula based on the best available evidence, and that is exactly what we are working to deliver. We are working closely with local government representatives to consider the drivers of local authorities’ costs, the resources available to them to fund services and how to account for them in a way that draws a more transparent and understandable link between local circumstances and local authority funding. This is a thorough, evidence-based review of the costs faced by all authorities. We have confirmed that we now aim to implement the review in 2021-22 so that the sector has the certainty that it needs to plan for 2020-21. It is important that we get direct feedback from local authorities, and we are grateful for the trusted links that we have across the sector. The more that we can consult, the more likely it is that we can get it right.
In looking ahead to the upcoming local government finance settlement, we have set out our proposals in a technical consultation which will close on 31 October. It sets out the package for local government in more detail and responds to the calls from the sector for certainty and stability. We will listen closely to the views and contributions from representatives of local government and aim to publish a response in the provisional local government finance settlement in early December.
I shall now address a number of questions that were raised. The noble Lord, Lord Greaves, mentioned the critical services on which all communities rely. He mentioned street cleaning, recycling, community services, libraries, housing and many others. I, too, recognise the critical role that all local authorities play in delivering these services. The noble Baroness, Lady Pinnock, is right that parish councils play an important part in local services. I reassure her that we want them to grow and expand and that we are doing our best in our communities brief to do that. Councils have managed reductions in funding and people’s satisfaction with waste collection and libraries has largely held up. Satisfaction levels are high—but that does not mean that we are complacent.
The noble Lord, Lord Greaves, spoke about provision of park and community services. We continue to support parks and community spaces. In fact, I am looking at this area particularly strongly at the moment to see what more can be done. In 2018-19, we invested £15 million in an innovative parks programme, and we will launch a new £1.35 million programme to support the next round of pocket parks very soon. Working with our partner, Pub is the Hub, we have funded almost 200 pub diversification projects, introducing new services that are of value to the community. The noble Lord spoke about waste management and climate change. He was right to raise these important global issues. Like the whole of government, my department supports the objectives of the Environment Bill. Local authorities, as local leaders, experts, place shapers and convenors of local communities, are empowered to play a fundamental role in delivering the environmental action needed in their areas.
My noble friend Lady Redfern, the noble Lord, Lord Adonis, and the noble Baroness, Lady Pinnock, referred to libraries. I thank them for that. I have spoken on libraries in the past. I recognise the work of staff and volunteers. I know that the Department for Digital, Culture, Media and Sport is working closely with the noble Lord, Lord Bird, to look at the future of libraries in the 21st century. I understand that it is called the libraries task force. Many innovative approaches are being taken across the country, for example in Warrington, to bring services together in communities. My noble friend Lady Redfern and the noble Lord, Lord Kennedy, spoke about libraries having to innovate, and they are right.
Councils across the country are transforming not just how they work but their role in leading local places, strengthening local infrastructure and reinventing localities. Many areas are achieving fantastic results, such as district councils in former coalfield areas collaborating on First Art.
The noble Lords, Lord Adonis and Lord Kennedy, spoke about social housing. I shall make a few remarks about housing; there is a lot more I could say, but I am not sure I shall have time. I am delighted to accept the invitation to visit. I think there were probably two visits, one with the noble Lord, Lord Kennedy, and one with the noble Lord, Lord Adonis. We have announced a comprehensive package of reform, which will support our ambition to raise housing supply by 300,000 per year by the mid-2020s. We are driving the delivery of affordable housing through measures such as the £9 billion affordable homes programme, abolishing HRA borrowing caps and setting a long-term rent deal for social landlords from 2020. This Government have seen housing supply increase by 1.3 million since 2010. We have also backed schemes such as Help to Buy and Right to Buy, which have supported more than 566,000 households to purchase a home.
The noble Lord, Lord Adonis, raised a number of questions. I shall look at Hansard to make sure that his questions receive detailed answers.
I shall pick up on what the noble Earl, Lord Listowel, said about homelessness. It is an issue that we take incredibly seriously in the department under my honourable friend Luke Hall. I thank the noble Earl for his contribution, and I was saddened by the stories he shared with us. He is right that funding is needed alongside community support. That is why, alongside the additional £2.9 billion for local government, this Government are committing over £1.2 billion to tackle homelessness and rough sleeping, and a flexible homelessness support grant of £670 million. The Chancellor also announced an increase in the level of funding for public health grant so that local authorities can continue to invest in prevention, which, as I am sure the noble Earl agrees, is most important.
I now turn to the communities section of my remarks —an area I regard as very important. The Government are committed to continuing to build strong communities where people feel proud of their neighbourhoods and are actively involved in local decision-making. As my noble friend Lady Redfern said, local government, including the district councils that provide important neighbourhood services, is a vital partner in supporting communities across the country. We also want communities themselves to take an active role in changing their area for the better, because there is much power and potential in our communities. Across the country we see examples of local people coming together and leading change, from community clean-ups and community groups running valued front-line services, to volunteers in libraries, mentioned by my noble friend Lady Redfern. The Government want to continue to unlock that potential and help create an environment where all our communities feel empowered.
That mission is at the heart of the Government’s approach to communities, and, in case there was any doubt, I can say that I am involving myself with great enthusiasm in this area. As the noble Lords, Lord Goddard and Lord Kennedy, said, it is a question of collaboration and integral working to achieve more. As we have discovered, when organisations work together, they are better placed to apply for specific new funding.
This summer my department published a new communities framework, setting out a vision of how we can strengthen our communities with four areas of focus. The first is building trust and local pride. High levels of trust and social capital are a crucial building block for a thriving integrated community and for our nation’s well-being and economic prosperity. We want people to feel a sense of pride and connectedness in where they live and to build strong local relationships. That is why my department is supporting work to overcome barriers to integration and help bring people together. That work includes the Near Neighbours scheme, which has supported over 1,600 local community projects, bringing together people from different backgrounds to tackle local issues; programmes to help people improve their English skills, which I believe was mentioned this afternoon, so that they can become part of community life—some people who have been in this country for decades have not addressed that, so we have high hopes—and the Integration Area programme, which is working with five local councils to overcome integration challenges and share their learning, with an additional £10 million announced for the second wave of areas in 2020.
Secondly, I want to focus on active citizenship and giving communities control over local decision-making. This Government are focused on pushing power down and enabling decisions that affect local people to be made at the local level. We will continue to support the community rights and powers established under the Localism Act, such as neighbourhood planning, which enables communities to develop a shared vision for their area for the future.
The third area is shared community spaces. In our busy world, it is becoming increasingly challenging to connect with one another, but shared spaces such as our parks, which were referred to this afternoon, community centres, pubs and libraries provide the vital community infrastructure that brings people together. We have provided additional funding for our parks, which I mentioned earlier, with a new £1.35 million programme, working with our partner Pub is the Hub, which I also mentioned earlier.
The fourth area is shared economic prosperity, with no community left behind. We know that some communities have not shared in the wider economic growth experienced in the UK. The Government are committed to building strong communities that help create a thriving and inclusive economy, and to ensuring that prosperity is shared.
The noble Lord, Lord Greaves, spoke about towns and high streets. He will know about this but we have committed to a £3.6 billion towns fund, and local people will have a say in how that money is spent. He spoke about competition but it is right that there is a competitive approach. Towns are being invited to approach us and to put in, in effect, business plans setting out how they can reinvigorate their high streets. We want to work closely with them to make sure that funding is directed to the right place. I hope he will forgive me when I say that, in this area, I think competition is a good thing.
Through our support for those four areas of work—trust and local pride, active citizenship, community spaces and shared prosperity—the Government will continue to work to empower communities.
I recently visited Walsall, which is one of our integration areas, and met several community groups and organisations doing amazing work to support local people. I met groups running English classes to enable people to increase their confidence, make the most of the opportunities available, and play a full and active role in the local community. I also heard about the Places of Welcome scheme, which tackles loneliness and social isolation by providing places where people can go simply to see a friendly face or have a cup of tea and connect with others. This is an example of what can be achieved when local government works in partnership with local actors to build stronger and more integrated communities. It is one thing that I will definitely continue to press ahead with.
In conclusion, I assure noble Lords that this Government are committed to providing local government with the funding it needs and to ensuring that the funding is both flexible and proportionate to an area’s demographic needs. The noble Earl, Lord Listowel, spoke about homelessness and I want to write to him on that specific point.