Local Government Finances

Baroness Eaton Excerpts

Thursday 21st March 2024 Lords Chamber

[Baroness Eaton (Con)]

My Lords, I declare my interest as a vice-president of the Local Government Association. I congratulate the noble Lord, Lord Shipley, on securing this incredibly important debate today on local government finance.

Local authorities across the nation—small and large, rural and urban—continue to deliver the very best for the communities they serve. We saw this during the coronavirus pandemic, when local authorities rose to the challenge of distributing millions of pounds-worth of grants and loans to keep businesses afloat. Upon the Kremlin’s barbaric and illegal invasion of Ukraine, it was local government that stood up to the test of supporting well over 100,000 people who were settled into this country through the Homes for Ukraine scheme.

Further to this, I hope the House will note that local government has far more trust among the public than government departments in Whitehall. Research from the Association for Public Service Excellence confirms that three times as many people trust their local councils over national government.

It is, of course, Conservative-led councils that continue to deliver more for less across England. A fine example of this is Fenland District Council, in Cambridgeshire, which has yet again cut council tax precepts for the next financial year.

The recent uplift in the local government finance settlement, published earlier this year, was welcomed by councils. In particular, the work of Ministers in DLUHC to secure an additional £500 million towards easing the pressures in adult social care should not go unnoticed. However, if local government is going to be trusted to deliver more and better on behalf of the state, the state in turn needs to award local government with the package of fiscal devolution it deserves and needs to get on with the job for our communities.

Home ownership in our country is becoming an ever-increasing topic of discussion, not just in this place but outside. Local government can turbocharge housing delivery and increase home ownership, but it needs fiscal powers from the Government to support it in doing so.

On fiscal devolution, what quick and easy wins could the Government award to councils? First, the backlog in dealing with planning applications has never really recovered post-Covid. In addition to the pandemic, the retention of staff in local government planning continues to be a challenge, as councils compete with the private sector and major infrastructure projects such as HS2.

To address this capacity gap, the Government should consider devolving the powers of planning fees directly to councils with responsibility for planning, as the noble Lord, Lord Shipley, said. While the recent increase in planning fees from the Government is welcomed, based upon figures from the 2020-21 financial year, 305 out of 343 were operating on deficits which totalled together £245 million. The ability to set planning fees internally by councils, based upon local need and demand, will help speed up the planning applications process and get spades into the ground.

While private home ownership is vital, we should not dismiss the benefits of social housing in supporting our more vulnerable communities in eventually getting on to the housing ladder. Councils have a great track record of building more social housing, yet with more fiscal devolution, local government can do an even better job at increasing social housing supply.

The Government confirmed that, with respect to the retention of right-to-buy receipts, councils would be able to keep 100% of their retentions for the 2022-23 and 2023-24 financial years. As reported in the Financial Times last week, the 100% retention of right-to-buy receipts has delivered an additional £200 million into delivering more social housing. It is therefore disappointing that, in the recent Budget Statement from the Chancellor, there was no indication of whether this initiative would be extended. I would be grateful if my noble friend the Minister could provide some details on this in her contribution to the debate.

Building more social housing is not just a massive win for our local communities, it is a financial win for government. For councils to build the next generation of social housing, they must have the fiscal powers necessary to get spades into the ground. The Government absolutely should commit to the 100% retention of right to buy receipts if they are genuinely serious about increasing housing supply in our nation.

On a completely different subject, I want to now talk about roads and highways. Many local authorities want to get back to basics and ensure that the state of our roads is vastly improved. As many local councillors—and, I am sure, Members in the other place—will testify, potholes continue to be one of the dominant subjects that constituents raise on the doorstep. My view on this is very simple: local government needs to have certainty around its funding, and multiyear financial settlements with respect to highways funding can be the answer to many of the issues we face on our roads today. National Highways is responsible for 4,500 miles of roads in England—just 2% of the road length in England—yet, unlike local government, it receives five-yearly funding allocations from the Department for Transport. Local government should be brought on a par with National Highways and treated as an equal, with multiyear financial funding settlements.

Another issue causing no end of misery, to our rural communities in particular, is fly-tipping. I am pleased that the Government through the National Fly-Tipping Prevention Group have committed £2.2 million in grant funding so that councils can reduce fly-tipping incidents through the installation of CCTV. In addition, local government has been leading the transformation agenda in catching fly-tippers. For example, Buckinghamshire Council has proactively used artificial intelligence to catch fly-tippers in key hotspots and reduce this awful crime. That said, many local councils anecdotally report that the fines they receive from catching fly-tippers simply do not cover the costs they incur in collecting fly-tipped waste. Very simply, I hope the Government will consider giving the powers necessary to local authorities to set their own fine levels, dependent again on local need.

In conclusion, I hope that my noble friend on the Front Bench will consider the four examples of fiscal devolution I have highlighted that could be extended to local government and once again I congratulate the noble Lord, Lord Shipley, on securing the debate.