Local Government Finances

Baroness Bennett of Manor Castle Excerpts

Thursday 21st March 2024 Lords Chamber

[Baroness Bennett of Manor Castle (GP)]

My Lords, it is a pleasure to follow the noble Baroness, Lady Scott of Needham Market, and to agree with her about the importance of parish and town councils. In travelling around the country, as I often do, I see so many of them stepping up to the plate where the larger-scale authorities—the principal authorities—are simply not able to continue as they do not have the funds. That is crucial. Keeping public toilets open, managing areas of grassland, and even keeping tourist centres open are the kinds of things I have seen.

Like other noble Lords, I begin by thanking the noble Lord, Lord Shipley, for securing this crucial debate. There is hardly anything more central to the declining quality of life in the UK—the broken Britain that we talked about when we were debating the Budget—than how much local government is struggling. I declare my interest as a vice-president of the Local Government Association and of the National Association of Local Councils.

In April, we are coming up to about 75% of councils making the maximum increase that the Government allow, according to the County Councils Network. That means a £99 increase for a band D average property, with bills going to more than £2,000 a year. At the extreme, things are absolutely desperate. The obvious example is Birmingham City Council, which is looking at a council tax hike of 21% over two years as it struggles to find savings of £300 million. This is in a context where councils and councillors are acutely aware of how the cost of living crisis is affecting so many of their residents, but we are in TINA land: there is no alternative. For councils to keep meeting even their statutory requirements—requirements that are put on them by Westminster, about which they have no choice—they have to put those increases in.

I suspect that, if one were to search this debate, “one in five” would be the phrase that comes up most often. I make no apologies for repeating the phrase, because one in five councils is at risk of going broke. That is 20% of councils in the country. This is an absolute crisis, yet our media is so focused on what happens here in Westminster, particularly in the other place. A media that focuses on London will fail to grasp the scale of the crisis around the country, and I am afraid I do not think the Government have truly grasped the scale of the crisis either.

I referred to the rise in council tax, but the proportion of money that councils get from council tax has risen from 40% in 2009-10 to 60 % now. Where else do councils get money from? Often, they can charge for certain services, such as leisure centres and parking, and they can generate income from the sales of property and from certain types of waste removal. But think about those services, and put them at the intersection of the cost of living crisis: yes, they can increase the cost of the local swimming pool or the gym, but that means that more and more people will not be able to access them.

We can think about the issue of sales of property. We have seen, since the election of Margaret Thatcher, the sale of 50% of what was publicly owned land—a large amount of that being council land. Once it is sold, it is not coming back. You close the library; you sell the building and the land. When times get better, you cannot bring them back—it is gone. That library is so much a part of central meeting places. Even as technology changes and IT comes in, it is a public space that could have been dedicated to public purposes in the future, but we have simply lost those spaces. Communities do not have places to gather any more.

It is also worth highlighting—I do not think anyone has picked this up yet—that we have seen austerity right across central government, cuts to Civil Service workers’ pay, and to the real level of benefits. That increases poverty and ill health, which puts more pressure on councils to provide services such as social care. This is literally a downward spiral in which we are trapped.

The list in the Library briefing is worth looking at; this picks up points from the noble Baroness, Lady Bull, and others. We have seen the following spending cuts from 2010-11 to 2019-20: cultural and related services cut by 37%; planning and development services by 37%; non-school education—we keep talking about the need for skills—down by 32%; housing services by 25%; highways and transport services by 24%, which picks up the point raised by the noble Baroness, Lady Eaton, about potholes and the general state of the roads; and environmental and regulatory services down 10%, just at the point where we are starting to realise what an incredibly parlous state our natural world is in and that it desperately needs to be boosted, in its own right but also to improve public health.

Many noble Lords will have received the briefing by the National Council for Voluntary Organisations, which raises the important point that we think about the cuts to council services and how much is lost—the libraries, the theatres, et cetera—but funding that local councils have given to charities and community groups has also been slashed, and that again is cutting away at the basic standard of quality of life in our communities. Almost three-quarters of organisations are not receiving enough funding to meet the demand for the services they offer. Nearly two out of five organisations have reduced the number of people whom they support. When you think about the Covid pandemic—several noble Lords have referred to the loneliness pandemic—and an ageing population, we are reducing the number of people being supported when it is clear that the need is increasing.

I come, briefly, to two final points—first, that council tax and business rates is a broken, wildly out-of-date system. The Green Party has long held, and continues to call strongly, for a land value tax, which would be levied on the annual value of land itself, excluding any structures or improvement. It follows good taxation practice, it would be cheap to collect and difficult to evade, and it would discourage the use of land for speculation. At the moment, land is an ideal speculative investment, and we can, I am sure, all point to examples where land is not used well, because someone is just sitting on it and waiting for its value to rise.

The noble Baroness, Lady Hamwee, talked about elections. Of course it would be lovely to have democratic elections with a single transferable vote system or similar, as there is in Scotland for local councils. It would be great to have local communities fully represented in the House of Commons. But what is interesting and worth noting is that there is a big shake-up happening in local councils: we increasingly see groups of different parties coming together to run councils, which is an exciting development.