Council Tax
Debate between Baroness Hollis of Heigham and Baroness Hanham
Baroness Hanham
My Lords, my department and the Government have made it clear that they have no intention of rebanding council tax.
Baroness Hollis of Heigham
My Lords, because the Government have cut the funding for council tax benefit for local authorities by 10%, local authorities are having to charge people on benefit who have never paid council tax before. As a result, chief executives are estimating that up to 75% of those new payers will not pay. As it costs £10 to collect £2.50 a week, we are going to create a culture of non-compliance just like there was with the poll tax. Will the Minister please think again? It is a very foolish policy indeed.
Baroness Hanham
My Lords, the matter is implemented now and the noble Baroness will be as aware as I am that the councils were all offered a transitional grant at the outset if they set a council tax support scheme which was not more than 8.5% from zero. A number of local authorities have done that. Nearly 200 took advantage of that transitional grant and if others had they would not be in the position which I think the noble Baroness is trying to describe.
Housing: New Housebuilding
Debate between Baroness Hollis of Heigham and Baroness Hanham
Baroness Hanham
My Lords, the noble Lord will know that, by and large, housing is now provided by registered social landlords—housing associations—and that any money is passed to them. He will also know that the new homes bonus, which is made available to local authorities once they have completed extra housing, also helps. Under the new homes bonus scheme, some 400,000 properties have already been added.
Baroness Hollis of Heigham
My Lords, following the question of the noble Lord, Lord Bichard, about housing for the elderly, does the Minister agree with us that, as a result of the bedroom tax, pensioners who would like to downsize will not be able to because those of working age who do not want to downsize are being forced to do so?
Baroness Hanham
My Lords, I do not accept what the noble Baroness says. Pensioners are not affected by what she is pleased to call the bedroom tax, but which by everybody else’s standards is called the spare room subsidy measure—I thought that would trip lightly off my lips and would help the noble Baroness enormously. Pensioners living in houses will not be affected by these regulations.
Council Tax: Support Schemes
Debate between Baroness Hollis of Heigham and Baroness Hanham
Baroness Hollis of Heigham
My Lords, do the Government really understand the implications of asking people who have been on benefit and who have never so far paid council tax having to find between 20% and 30% of their council tax bill for the first time? Is the Minister also aware that, as a result, many local authorities are expecting that they will not be able to collect 70% of the monies outstanding from people who have hitherto paid nothing at all? Does she not agree that this is “poll tax mark two”?
Baroness Hanham
My Lords, I do not agree with the noble Baroness, Lady Hollis, that this is poll tax mark anything. This is a change to the council tax benefit scheme for individuals based on their individual requirements. Local authorities have plenty of support in what they are doing. They are perfectly able to make their own budgets fit to help with the 10% reduction and, as I have already said, if they have brought their council tax scheme within the transitional relief scheme, they also have transitional relief to help with that.
Local Government Finance Bill
Debate between Baroness Hollis of Heigham and Baroness Hanham
Baroness Hanham
My Lords, I apologise to the noble Lord, Lord McKenzie, for trying to leap in ahead of him. He will have to be quicker getting to his feet and I will have to be slower getting to mine.
I thank the noble Lord, Lord McKenzie, and the three other main contributors to this debate for tabling this amendment, which has been raised before and relates to the monitoring and evaluation of the reforms that we are talking about here—council tax support. However, the amendment would go wider than that, as the noble Lords, Lord Shipley and Lord McKenzie, said, and seek formal review across all the welfare programmes.
This amendment seeks to require the Secretary of State to undertake a formal review of council tax support three years after its implementation, and the noble Baroness, Lady Hollis, was considering whether it should be brought within universal credit. The noble Lord, Lord Shipley, made it clear that he wants the provision to go much wider than that.
We have had several discussions on this issue during the passage of the Bill. I will say again what I have said before: namely, that in the first instance it is for councils to keep these schemes under review. The Bill requires each billing authority to do just that, each financial year, and to consider whether or not to revise or, indeed, replace its scheme, which a local authority is entitled to do. Local authorities are closest to their local communities and therefore are closest to those who need the council tax support. Therefore, they will be in the best position to decide how they set their council tax in future, bearing in mind the needs of their population.
I am not convinced that a major independent review as a set stage is required or, indeed, that it would be particularly helpful for local councils. Therefore, noble Lords will not be surprised when I say that I cannot accept the amendment. However, I recognise that it is right and proper for the Government to keep the framework in which councils operate under review. I can confirm that we will take steps to do this. We are already considering with local government what minimal data we will require from councils to enable us to keep this policy under review. I have no doubt at all that local councils will keep us informed of how it is progressing.
There were rather snide or slightly underappreciative comments about the transition scheme announced last week. As we discussed, the transition scheme has been set up to ease in these changes and to ensure that there are incentives and support for councils to help deliver the Government’s objectives.
Furthermore, as we have debated at each stage of the Bill’s passage, the Government do not believe that council tax support should be part of universal credit. Indeed, it was deliberately separated from it. Therefore, I cannot accept the requirement to consider the integration of council tax support with universal credit, nor am I in a position to accept on behalf of the Government a wide review across welfare provision.
However, the noble Baroness is right to remind us of the importance of monitoring and evaluating policy. The Government do that, particularly where there are major policy changes. The Government will continue to keep this policy under review and make adjustments as they see fit to ensure their objectives are delivered. That seems to me the proper way of doing it. It is far too long to sit and wait for a review in two or three years’ time if something needs to be amended or changed. The Government need to be advised of what is happening and amend something where they can if that is necessary. I assure the House that that is what will happen and that the measure will be kept under permanent review. Therefore, I hope that the noble Baroness will withdraw her amendment.
Baroness Hollis of Heigham
My Lords, I thank very much other noble Lords who have spoken—the noble Lords, Lord Shipley and Lord Best, my noble friend Lord McKenzie, and of course the Minister for her reply. However, points came up in the argument that I did not feel the Minister addressed. The noble Lord, Lord Shipley, who was absolutely spot-on, made the point that because this issue interlocks with welfare reform, it needs a broader approach than the Minister seemed to suggest in her reply. My friend the noble Lord, Lord Best, says he is worried that one possible outcome could be chaos or, equally, we could find that the variations that come our way are acceptable and appropriate, but he remains worried about the implications of this change for the poorest people in our community. As in the Welfare Reform Act, when he successfully persuaded the Minister and the whole House that we needed to monitor the legislation in an independent way, the House backed him, agreed with him and supported his amendment.
We need to know the effects on local authorities, on some of the poorest people in our communities, on work incentives, and on the Conservative Government’s flagship welfare reform—universal credit, which I support. We have to have such a review. The Minister said that individual councils would be keeping the schemes under review; of course they will. This is no substitute for an individual and independent review across the whole field of welfare reform—in so far as this is a part of welfare reform—and council tax benefit. We need that review, otherwise the reviews that the noble Lord, Lord Freud, has agreed to will be incomplete and partial, and no one will be able to put the pieces of the jigsaw together. As I have said, they affect some of the most vulnerable people in our society—disabled people, families with children in poverty, carers and some of the most fragile and frail.
It is because the amendment is very modest and because this is the only way that we are going to get coherent government policy to ensure, as I and everyone else wish to, that support for welfare reform is effective, especially for those who need it above all, that having failed to persuade the noble Baroness of the desirability of the amendment, I hope perhaps we can persuade the House.
Baroness Hollis of Heigham
The noble Baroness says that she already has the guidance. The guidance spells out the equality duties and so on under legislation. However, it does not actually cover some groups of people; for example, carers are not part of the groups covered under the legislation. Nor does the guidance easily translate the vocabulary of rights and discrimination, which is what the Equality Act is about, into the need for financial support. If the Minister proposes to reissue that document, could she add an addendum on the implications of that document on this piece of legislation?
Baroness Hanham
The document makes it quite clear that councils have a responsibility, if nothing else, under the Equality Act to ensure that they treat everyone fairly. I think that would take account of what the noble Baroness has said.
Baroness Hollis of Heigham
My Lords, I support my noble friend. He is absolutely right. When we raised the issue of whether changes in the scheme following the transitional grant would require going out to consultation, the Minister seemed to indicate that they would not. Some of us were worried about judicial review. Since then, she has written a letter to my noble friend Lord McKenzie in which she says that individual councils must take their own legal advice on the matter. That suggests to me that the department is no longer as clear as it at first was that local authorities might not be exposed to judicial review if they were substantially to change their scheme from, say, a 30% minimum down to virtually nil or 5% as a result of the transitional grant without going out to further consultation. Given that, I hope that, as a result of the move that the noble Baroness has herself made between the earlier stages of Committee and Report and her subsequent correspondence, she will give some consideration to how best she can meet my noble friend’s concerns.
Baroness Hanham
My Lords, in responding to the noble Baroness, Lady Hollis, I have always made it clear that local authorities are, or have been, out to consultation. I think that those consultations are due to close very shortly and may in many cases already have closed. There is no requirement on the Government, and we are not going to make any regulations, on consultation. I have made it clear, and I do so again now, that if a local authority thinks that the changes that it is going to make as a result of the transitional grant are so significant that it changes its scheme so much, then it must decide whether it thinks that it needs, for its own protection, to go out to further consultation. It will seek its own advice about that. I cannot answer the noble Baroness any more clearly than I already have.
Baroness Hollis of Heigham
I am just wondering whether the noble Baroness can give an example of what would constitute a significant change triggering possibly going out to consultation.
Local Government Finance Bill
Debate between Baroness Hollis of Heigham and Baroness Hanham
Lord Best
My Lords, I have put my name to this amendment as well. As a long-time campaigner on the famous bedroom tax, I am very supportive of this amendment, which I think affects only between 2,000 and 3,000 households. For them, however, it would be very important and to have a double whammy would be disastrous for that group. I support the amendment.
Baroness Hanham
My Lords, we discussed this in Committee and, while I appreciate and understand the intention behind the amendment, the trouble is that this would reopen debates that I know have already been had on what is now the Welfare Reform Act. The Government do not plan to revisit what is in that Act. Blanket exemptions for specific groups, including for disabled people and those living in adapted accommodation, were extensively discussed then. I appreciate that the noble Baroness has now reduced this exemption to thousands of people rather than tens of thousands, but the fact of the matter is that it reopens something which I do not think we can reopen here.
Blanket exemptions can also be an inefficient and complex way of targeting resources, so the Government favour discretionary housing payments to help meet any shortfalls between a person’s rent and a housing benefit award. Noble Lords will recall that we announced that an additional £30 million would be added to the discretionary housing payments fund from 2013-14. This is aimed specifically at two groups: disabled people living in significantly adapted accommodation and foster carers. Local councils make the decisions on them on their individual circumstances. However, I assure the House and the noble Baroness that the Government have no intention of changing the long-standing council tax disabled band reduction scheme and that anyone in receipt of a reduction will not lose it as a result of the underoccupation measure. As I say, I cannot support this amendment and I hope that the noble Baroness will feel able to withdraw it.
Baroness Hollis of Heigham
My Lords, I am extremely disappointed by the Minister’s reply. She has made two points: first, basically, that we cannot reopen something that has already been discussed. Forgive me, but that is precisely the point of the Report stage on this Bill. We are opening up issues on housing, particularly disabled persons’ right to housing support. After all, council tax benefit is part of the housing support that families receive. They pay rent and council tax, and in the past those two have been brigaded. To say that while DCLG recognises their need and reduces their council tax bands, the department’s colleagues a few stones’ throw away are perfectly able to penalise them for the very same discount that they are receiving from DCLG is really quite shocking.
The Minister said, secondly, that they could go to discretionary housing payments. By my calculations, that money has already been spent about three times over, given the number of families who will be capped and the like. I know that we are running very late for all sorts of reasons. I would dearly like to test the opinion of the House but I may leave this to Third Reading. I beg leave to withdraw the amendment.
Local Government Finance Bill
Debate between Baroness Hollis of Heigham and Baroness Hanham(12 years, 1 month ago)
Lords ChamberRead Full debate Read Hansard Text
Baroness Hanham
The noble Lord is absolutely right. I apologise. I thought it sounded a bit funny when I said it.
Local Government Finance Bill
Debate between Baroness Hollis of Heigham and Baroness Hanham
Lord McKenzie of Luton
My Lords, we speak in support of my noble friend’s amendment, which is a probing amendment, as she explained. I dug out some of the requirements for getting the benefit of the disabled band reduction scheme. It talks about,
“an additional bathroom or kitchen … a room (other than a bathroom, kitchen or toilet) required to meet the needs of the disabled person, and used predominantly by them … extra space inside the property to allow for the use of a wheelchair”.
It says:
“The room or the wheelchair must also be of major importance to the disabled person's well-being, due to the extent of their disability”.
I hope that that is still available in the system. Is there the potential for an inconsistency in government policy between supporting as we do the disabled band reduction scheme and the consequences of potential deemed under-occupation of social housing, which could lead to the withdrawal of housing benefit?
Baroness Hanham
My Lords, with regard to the very last point, the noble Lord has a very neat habit of putting one last question to which nobody has a clue about the answer—and I have to tell him that he has done it again. If I may, we will write, because it involves an interaction between two bits of legislation. I do not think that I am equipped, and my team behind me look a bit blank. So perhaps I could write on that particular aspect, but I hope to be reassuring on the rest.
Amendment 93A seeks to ensure that any changes made by the Bill will not impact upon the disabled band reduction scheme. The scheme offers a reduced council tax bill, where a disabled person lives in a larger house than they would have needed if not disabled or where the living area for normal use has been reduced. The Council Tax (Reductions for Disabilities) Regulations 1992 set out the qualifying criteria for a reduction under this scheme. No part of the Bill has an impact upon the scheme, nor will any of the subsequent regulations that will be made. The Government regard this scheme as an important form of support to disabled people and have absolutely no wish to make any changes to it. Given that there is no question of any change, I invite the noble Baroness to withdraw this amendment.
Baroness Hollis of Heigham
I thank the Minister and my noble friend. I am very glad to hear that, and I am grateful that the Minister was able to give us the reassurance that we sought. With the permission of the Committee, I beg leave to withdraw the amendment.
Baroness Hollis of Heigham
My Lords, I thank the Minister for her courteous reply and my noble friends and others for their support, qualified as it may be.
At the heart of this, which the Minister did not touch on, is that the current bands are based on 1991 valuations and that, since then, there has not been even growth. If there had been, nothing would have changed, because we would be in a zero-sum game, but because of uneven growth, in the south-east and London in particular, property values have raced away in comparison to others. There has been a huge increase in unearned wealth, including that of my house, compared to other places, which in no sense is making an appropriate and proper contribution to the local economy through the council tax levy. It is because of that growth of unevenness that the consensus around the Room—with the obvious exception of the Minister, who might agree in her heart that this is the right thing to do—is that council tax bands no longer fairly reflect property values in this country. The noble Lord, Lord Shipley, the noble Baroness, Lady Meacher, and others made this point, and they were absolutely right.
The Minister’s reply was twofold—Scylla and Charybdis, if you like—that on the one hand it is not possible to do a full revaluation; and on the other that you cannot possibly do a partial revaluation. I agree that the first, although desirable, is a major undertaking and would need a lot of preparation, but unless we are going to have 1991 valuations in 2091, at some point there will have to be a revaluation. The truth is that the more frequently you do it, the less acute are the losers and winners in the equation. My Government were equally to blame—no Government want to tackle it. But the point is that it is, bluntly, cowardice to walk away from this issue knowing that you could be bequeathing an even larger problem to the generation following you, as housing property values continue to develop in different proportions to their bands.
The Minister is worried about full revaluation. In an argument against full revaluation, she said that in Wales there were large movements with properties going up several bands. The point here is not the shock at properties going up several bands—is it not right that they should have done? Is that not right when the value of that property can be such that the owners of a property have enjoyed to some extent a more repressed contribution to council tax than they should have made if their property had been fully valued from day one? I believe that to be the case. If they are not paying their full share, other people have to pay more. It falls particularly on properties in the lower bands A and B; if you do not have enough higher band levies, it means that the band D reduces and properties below band D have to pay more to get the levy in.
The Minister went on to say that, given that a full revaluation is not possible, neither would it be possible to revalue only within band H. I agree that it is not the most desirable outcome, but I assure her that I have talked to three separate valuers on this, none of them as far as I know connected to each other, and they all assured me that it was entirely possible because they do it now. The point that I was trying to make was that, particularly if it was phased in over three years, the extra workload in reviewing band H properties would not be so great. We know where they are; there are only 60 in the entire city of Norwich. You could go round them in a week, so we are not talking about a major increment in workload here. If you spread the process over three years it would mean revaluing 20 properties a year in addition to the properties that are valued each year because they are new-build and those revalued each year to go up or down because of alterations made to them or to the environment. So as an addition to the workload it is relatively modest, though not insignificant. As a practical possibility they are doing this now with properties scattered across all the bands all the time. If they can do it to see whether a property in band D should go to band F or one in band F should go down to band E, and they can do it now with properties scattered across the full range of bands, they can certainly do it with the discrete number of band H properties that there are in most local authorities. So I simply do not accept the Minister’s statement that it could not be done.
Baroness Hanham
This is fine as regards revaluations, but it takes no account at all of the people in the properties. Can you just imagine the number of appeals that there would be against this form of rebanding? The noble Baroness speaks as if it is just a matter of getting a revaluer to come and say, “We charged that last year, and this will be all right this year”, and it will go up and down. You cannot do that, because people who live in the properties are not going to allow a movement to take place if they do not think it is satisfactory.
Baroness Hollis of Heigham
I perfectly accept that there may well be appeals to valuations. There are appeals now, which is often why individual properties are revalued. That is a perfectly proper element of the process. But the Minister cannot persuade me that people in band H properties, worth £22 million on average in Kensington Palace Gardens, and on average—with equal numbers below and above—worth around £800,000 in Virginia Water, and so on, are going to be financially so embarrassed by their council tax going up by an additional two-ninths over what they pay, given the valuation of those properties. We are not talking about pensioners who are eligible for council tax discount on band C possibly going up to band D. We are talking about the very top and about people who have property worth millions, who will have an income commensurate with it. I am arguing that they should pay their way fairly because otherwise to a degree they are free-riding on the council tax levies of those who live in lower banded property.
As for the Minister’s point about the money and where it would go, I do not have a view about that. It would be a matter for consultation. It could stay within the individual borough, if that was thought appropriate; it could be used for redistribution across London, going from the wealthier boroughs to the Hackneys or Tower Hamlets. Or it could, as I would prefer, be taken account of in the equivalent of the equalisation and revenue support grants that go to local government. That would be the fairest way; in that way, some of the gain would go to places like Wigan or Hartlepool, which are severely hit by the current system because they have to levy much higher increments on bands A and B as a result.
I will not take this any further now. However, in answer to the first argument which the noble Baroness raised—that we cannot have revaluation across the board—I think that at some point some Government will have to have the courage to have those discussions and engage with local government. The longer you put it off, the worse the problem will be. As for the noble Baroness’s second argument—that it cannot be done on a partial basis—that is simply untrue according to the evidence available to me, although the Minister will have been advised differently. Her third argument is that it will come as an unfair and unreasonable shock to those who are occupying properties worth £5 million, £10 million or £15 million that they might pay a further two-ninths a year on their band D council-tax bill of perhaps £600. I do not think that that is a valid argument. None the less, with the support of the Committee, and with my grateful thanks for the discussion that we have had, I beg leave to withdraw the amendment.
Lord McKenzie of Luton
My Lords, we have just heard a compelling and comprehensive case from and on behalf of my noble friends, with which I wholly agree. As my noble friend Lady Sherlock said, it does not cost any money and it would provide some protection for some of the most vulnerable members of our community. If we could unite around this issue, it would be a good way in which to conclude our Committee deliberations.
The proposal concerning local connection rules is at the very least something that the Government should accept. They are prepared to give central direction to protect pensioners whom they see as vulnerable when it comes to council tax support schemes, so why do we not have some central guidance to protect those fleeing domestic violence, those leaving care, the homeless and those leaving institutional care? My noble friend Lady Sherlock quoted assurances received from Ministers during the passage of the Welfare Reform Bill to the effect that funding for what was the Social Fund, now transferred to local authorities will be part of a special revenue grant accompanied by a detailed settlement letter. Can the Minister deal specifically with the inquiry made by my noble friend on that point? We know that there will be a revenue support grant for the first couple of years of the business rate retention scheme, but the position after this is a little opaque. In any event, can the Minister confirm that the funding in question will be provided by central government in addition to the central share of the business rate, on top of the central share?
We know that councils will try to do the right thing for those who most need their support, but life has been made incredibly difficult for them by prior cuts, the cuts in this Bill and more cuts to come. In all the near impossible judgments that councils will have to make, we can provide just a small voice for those who might otherwise not be heard. I support my noble friend’s amendment.
Baroness Hanham
My Lords, this has been a short but interesting debate. I thank the noble Baroness for raising this on behalf of the noble Baroness, Lady Lister, and I should say how delighted we are about her honorary degree. I hope that it is in something associated with what we are doing here—but, if not, it is none the less a great achievement.
Amendment 97 relates to the Social Fund. As the noble Baroness said, this is provided for in the Welfare Reform Act, for which the Department for Work and Pensions is responsible. It states that:
“Any grant paid to local authorities under section 70 of the Welfare Reform Act 2012 … shall be expended by the local authority only for said purposes”,
and that:
“Any such grants will be made under the guidance of the Secretary of State with regard to the application of any ‘local connection rules’ … so that any such rule does not apply to”,
various categories of vulnerable people.
Proposed new subsection (1) of the amendment may be based on a confusion, as Section 70 of the Welfare Reform Act 2012 relates to the winding up of the Social Fund and transfer of money into the consolidated fund, rather than the transfer of money to local authorities. However, I believe that the intention behind the amendment is to guarantee that grants allocated to local authorities for local welfare provision, following the abolition of community care grants and crisis loans from April 2013, are used for the purpose intended.
I reassure the Committee that the settlement letter to which the noble Baroness referred will accompany that funding. I am not yet sure when that letter is due, but I will make inquiries and let her know. The settlement letter will set out what the funding is to be used for, the underlying principles and the outcome that must be achieved—although not the method that should be used to achieve it. It will state that the funding is to concentrate resources on those facing the greatest difficulty in managing their income and to enable a more flexible response to unavoidable need.
Baroness Hollis of Heigham
How will social workers who have never dealt with those families know? There may be a million people in the area. How will they know which of the 100, 200 or 300 families might need and be entitled to help under what used to be the Social Fund?
Baroness Hanham
My Lords, that is something that the settlement letter will make clear and local authorities will have to make clear to their social workers how they are to administer it. That comes with any legislation: people have to take up the baton and carry out what is asked of them.
Baroness Hollis of Heigham
So the Minister accepts that, in addition to child protection work, social care and all the rest of it, there is to be a new tranche of social work activity at a time when they are very hard pressed to do what they currently have to. They will have to be the gateway or the monitor of the cash handouts under the Social Fund.
Baroness Hanham
My Lords, the applications will be made to the local authority, which will presumably decide whether they are warranted or not.
The letter will make explicit that the funding is make new provision for when community care grants and general living expenses—crisis loans—are abolished. It will explain what community care grants are awarded for and why the crisis loans were awarded. Without curtailing the freedom of local authorities to tailor provision, the settlement letter will ensure that the money intended for vulnerable people goes to them. In addition, the Department for Work and Pensions plans to conduct a review in 2014-15 of a cross-section of local authorities to ask them to report on how they have used the funding for the new local provision. That will be aided by the fact that the funding is through a separate, identifiable grant.
I assure noble Lords that the Government are committed to ensuring that the funding goes to help the most vulnerable. That is why we have put the provisions in place. I therefore urge noble Lords to conclude that the amendment is not required to meet that aim.
Baroness Hanham
Directing local authorities to use funding in a particular way would go against one of the fundamental principles of this reform. The policy gives local authorities the freedom to deliver for the public rather than central government and to do what is right for people in their area. We think it important to resist any attempts to curtail those freedoms or dampen down local innovation, so I urge that the proposed new subsection (1) in the amendment be rejected.
I turn to proposed new subsection (2). It is intended to ensure that certain particularly vulnerable groups are not rendered ineligible for support on the basis of a test for local residence or connections. The Department for Work and Pensions has discussed that issue with local authorities—who, of course, are already familiar with it. It is not an issue limited to the Social Fund, as local authorities already deal with boundary issues in the delivery of other services, such as housing the homeless.
Baroness Hollis of Heigham
My Lords, that pertains to district councils. The Government are assuming that they are dealing with unitary authorities that therefore have a body of experience, but half the country is in a two-tier structure and they are asking social workers to do what they have never done, whereas all the expertise is at district level. It would be much more sensible if the money had been aligned and it was for district councils to allow for the discretionary housing payment.
Baroness Hanham
The noble Baroness makes her point. I cannot comment any further on that.
Local authorities already have many duties to provide assistance to vulnerable people under existing legislation and frequently co-operate with other local authorities in doing so. For example, there are differences in what they will be asked to do. A London local authority might be dealing with a large transient population, while a local authority on the south coast of England might be dealing with an older population. That is one of the reasons why each local authority will need to have flexibility to design its own scheme to meet its appropriate requirements.
Furthermore, we will encourage local authorities to link support across boundaries. This already happens in places such as Wandsworth, Hammersmith and Fulham, and Kensington and Chelsea, which already work together to provide joint services. This is done across the country where they may not link up in quite the same way as this group, but they are already working together. The groups referred to in proposed new subsection (2), including young homeless people, those fleeing domestic violence, young people leaving care and people returning to the community from institutional or residential care, already receive assistance from local authorities and central government. Local authorities have, for example, a number of existing responsibilities in relation to the provision of emergency and longer-term accommodation. They have particular responsibilities in respect of those with a priority need, such as those who are vulnerable because of age, mental illness or disability and those with dependent children.
Section 199 of the Housing Act 1996 sets out what constitutes a local connection in relation to people who are homeless. There is also statutory guidance for local authorities from the Department for Communities and Local Government to which local authorities must have regard. The effect is that people initially receive help from the local authority to which they apply whether or not they have a local connection. However, those with a local connection to another area may be referred there, unless they are at risk of violence if they return. A local authority which houses someone would be in a good position to provide help through the new local provision, for example, with furnishing the accommodation that it arranges. I gather that the noble Baroness, Lady Hollis, does not agree with that.
Baroness Hollis of Heigham
My Lords, the Minister makes my point for me. How much easier it would be if housing and social services were aligned.
Baroness Hanham
This is an example of how the new local provision will allow local authorities to deliver a more comprehensive service as they can use the new provision alongside already existing support. As regards young people leaving local authority care, local authorities have a duty to safeguard and promote the welfare of a child, and have duties until the child is 21. Local authorities also have duties to support disabled people or those who are destitute. They must make arrangements for promoting the welfare of those with a disability or mental disorder, including the welfare needs of people leaving hospital, having received in-patient care for a mental disorder.
The National Health Service and Community Care Act 1990 requires local authorities to prepare a plan for the provision of community care services in consultation with relevant bodies and to assess the needs of people who may be in need. Local authorities are therefore already required by multiple legislative duties to provide support to the most vulnerable. I think that one would accept that they have a moral duty to do so. They will be able to use this experience to deliver the new local provision, so there is no need for local connection eligibility rules to be published. They already have duties to the most vulnerable and are familiar with dealing with boundary issues. I also remind the Committee that the new local provision is not the only support that will be available. There will also be a national payments-on-account scheme to replace budgeting loans and crisis loans for alignment. This will cover need that arises as a result of the benefit system, such as a change in circumstances or a delay in receiving benefit. It will also enable those on the lowest incomes to access interest-free advances of their universal credit as budgeting advances.
In conclusion, the safeguards to which I have referred will ensure that money intended for vulnerable people goes to them. The most discretionary support will be better tailored so that they receive what they need when it is delivered locally. The new local provision and the national provision of payments on account will complement each other. Taken as a whole they will provide more effective and better targeted support. I hope that with that long explanation the noble Baroness will withdraw her amendment.
Local Government Finance Bill
Debate between Baroness Hollis of Heigham and Baroness Hanham(12 years, 4 months ago)
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Baroness Hollis of Heigham
My Lords, that is absolutely true, even more so in two-tier authorities where 75% of the expenditure that falls on local residents is through the county council precept. The precepting authority does not have to do the same as the billing authority, which has to devise the discount scheme.
I understand the noble Lord, Lord Greaves, on the postcode lottery, because I would defend local decision-making as far as possible. The point here is that what a local authority has in terms of resources will depend on the accident of the demography of its particular locality. If only 30% of its population are pensioners, it will have to find a lower degree of cut on people’s working age than if 60% of its population are pensioners. That is an accident of demography. Equally, when anybody seeks help with their council tax discount, it will be determined not by their own efforts, their willingness to vote or the resources of the local authority, but by how many pensioners and other vulnerable people are ahead of them in the queue. That is not localism; it is rationing by queue, with central government having already determined that certain constraints, such as the number of pensioners, shall be imposed on the system. In that sense it is random—you need not call it a postcode lottery, but it is one. The size of cut that your locality will face is accidental, and it will not necessarily bear a resemblance to your particular need. Even though it may be identical in the neighbouring authority, it will experience a different income because the demographics will be different. That is not reasonable.
I suggest to the noble Lord and the Minister that if there were no proposition to find £500 million of cuts, there would be no such scheme about localising council tax benefit before us today. This is not localism; it is the exporting of cuts to localities by central government and then dressing it up in the fancy clothes of localisation issues, even though people’s needs have not originated by virtue of the locality and the random demography of that patch will determine who gets what. That is not localism. It is exporting cuts without any constraints, which will be experienced differentially by vulnerable people who happen to have been unlucky in the lottery of living in one authority rather than another. I regard that as deeply unfair.
As my noble friend Lord Smith said about where the cuts will fall, it is not about centralism versus localism but about the centre exporting its cuts. The noble Lord, Lord Best, may speak to his amendments on a subsequent day in Committee. The noble Lord, Lord Shipley, was absolutely right. Given this distinctiveness between local authorities, there will be judicial reviews. Mencap will run them if CPAG does not, according to how they are treated. They will probably have a very good case.
The Minister said that local authorities should, in her words, develop schemes that are relevant to their authorities. That challenges the core of my argument. She assumes that vulnerability and poverty are so peculiar and distinctive to a particular local authority as to justify separate local schemes. I simply do not accept that for one moment. Whether you are autistic, have a disability, are a carer with an elderly mum or are a child in poverty, it is not generated by your locality although it may be experienced in your locality. Given that it is not distinctive to your locality, it is not relevant to your local authority. Therefore, there should be a national scheme.
I leave the Minister with two questions. Who will she exclude from the scheme? We know that pensioners are automatically covered. Unfortunately, we have not had the pleasure of seeing the guidance because it did not come out on Friday but on the very day when we are sitting. Therefore, we cannot cross-refer to it, which is shame. The Minister says that vulnerable people will apparently be protected. The working poor will also need to be protected, so who is not? That is 100%. Who is not protected? Who does the Minister think should see their council tax benefit cut, given that pensioners, vulnerable people and the working poor and their incentives are protected?
Secondly, if there was no £500 million cut, does the Minister think that any local authority in the land would seek to establish its own distinctive council tax scheme and to pull it out of universal credit? She knows that would not happen. I have put two questions to her. She is welcome to respond to me—to tell me what is wrong with council tax benefit, who is already covered but should be excluded and whether, if we did not need £500 million of cuts, any local authority would touch this scheme with a barge pole. I think everyone in this Room today knows the answer to all those questions. They are not answers that enforce the Minister’s argument.
Baroness Hanham
I have answered the questions that the noble Baroness has asked me today if not on previous days. I am sure we will return to them. We have had an extremely wide debate today, although we are not over our time. I repeat that local authorities know very well who their local people who need help and support are. That is a very localist issue. The noble Baroness may not agree with me but those are my words on the subject. She gave me the opportunity to say so.
Baroness Hollis of Heigham
My Lords, I simply disagree. According to the knowledge of the local authority—or not as the case may be—individuals may see their entitlement to income support decreased. However, the time is late; I beg leave to withdraw the amendment.
Local Government Finance Bill
Debate between Baroness Hollis of Heigham and Baroness Hanham(12 years, 4 months ago)
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Baroness Hanham
That was an interesting, if unexpected, debate. When it started, I was very touched by the fact that I had a little note that said, “The purpose of Amendment 15 is not entirely clear”. My reply may not be totally applicable either, but somewhere along the line we have clearly raised really important points. We are going to have to look again at the amendment, but in the mean time, I will tell the Committee what we thought it was about, and if it does not quite tie up, we will sort it out, I am sure, between now and the next stage.
I am advised that the amendment in its current form could not stand as it would insert an amendment into Schedule 8 which, as a result of this Bill, will cease to apply for any purpose in England. That is the first problem. Even without this technical deficiency, we have a bit of a problem. We fully respect the noble Lord’s views that under the rates retention scheme authorities should be able to benefit from rental growth as well as physical growth. Westminster has been touched on by several speakers, but for authorities such as Westminster or, potentially, for my ex-authority Kensington and Chelsea, the potential for physical growth is much more limited than for others as there are very constrained sites with developments all through.
The efforts of local authorities to make their areas more attractive to business are not quite as limited as some would like to pretend. Efforts that have resulted in a steady increase in rental values and hence rateable values will arguably go unrewarded under the rates retention scheme. The duty of government is to legislate for a rates retention scheme that is workable for the whole of local government, not just for some authorities. For that reason, we could not devise a scheme that allowed local authorities to keep any part of the growth in rateable values. To explain why, I need to explain to the Committee how the revaluation works, although I hesitate to do that because the noble Earl, Lord Lytton, will understand this far more than I do. Perhaps for the benefit of the Committee we should go through it.
Every five years, the Valuation Office Agency undertakes the revaluation of non-domestic properties and, as a result, the aggregate rateable value of all English non-domestic properties either—amazingly—increases or decreases. In setting the multiplier for the first year following the revaluation, the Government take account of the overall increase or decrease in order to ensure that overall the same amount of tax is raised from business after revaluation as from before. For example, if the aggregate rateable value were to double, the multiplier would have to halve. In that way, it simply redistributes the tax burden between businesses on the basis of their up-to-date property values.
In the new world of rates retention, the system is set up at the outset so that through the means of tariffs and top-ups there is an initial redistribution of resources. That protects the position of those authorities that are relatively resource poor. But if, as I explained, we collect no more money from businesses following the revaluation than we did before, it follows that there is no additional money in the rates retention system. If therefore some authorities are to be allowed to keep additional resources, by the same token, some will have to receive less. Therefore, because of the uneven distribution of the rates base, this would not just mean a cut in funding for those authorities that have seen their rateable value fall. So an authority could see a funding fall, even if its rateable value had risen, if that price was by less than the national average. That could not be fair. In fact the only way to ensure that all authorities see their rateable value rise and see some income benefit is to break the multiplier link and raise the overall burden on business, and the Government are not prepared to do that.
For those reasons, I cannot accept the amendments that seek to allow any part of an increase in rateable values to be retained by local authorities. I hope that that explanation, somewhere along the line, meets the basis of the amendment. If it does not, perhaps we could discuss it between now and the next stage. I am not sure at all that it covers any of the matters raised by the noble Earl, Lord Lytton. Having looked at Hansard, we may need to come back to that. While it was a very relevant aspect to commercial improvements, I am not sure that it necessarily fits in with the amendment, but it may do. I will happily say that if the amendment is to be pursued and if the noble Earl feels that the reply is not adequate or there is something more that needs to be done, we should discuss it between now and the next Sitting and then we might be able to get us both together to decide what we are trying to achieve.
Baroness Hollis of Heigham
I was intrigued by the Minister’s answer. I fully understand her point about the multiplier effect and all the rest of it, but I did not understand her bald statement that the Government were not willing to allow local authorities to retain any growth et cetera under that formula, if you were to break the link. Why can the Minister not make a distinction, which most of us would expect to operate, between an increase in the value of commercial property—the amount per square foot as affected which runs across a city, which I absolutely accept has to be recalibrated given the equalisation formula—with the additional increase that comes through the efforts of local authorities for either the growth of a particular business or new business coming in? Those are two different sets of flows of money. The Minister did not distinguish between the two. The point about encouraging local authorities in this way was precisely to put a new emphasis and new attractiveness on the second of these.
Housing
Debate between Baroness Hollis of Heigham and Baroness Hanham(12 years, 6 months ago)
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Baroness Hanham
My Lords, I agree very much with my noble friend. The Government are doing just that. Public sector land is being freed up as we speak. As I am sure the noble Lord knows, there is a plan across all departments to free up any spare land, including Ministry of Defence land. There are also now policies to ensure that, where planning permission has already been given but the plans have not been implemented, there will be greater encouragement to those people to ensure that the land is developed. We all recognise that there is a great demand for housing. We very much appreciate the problems that first-time buyers are suffering, and the delivery of more houses—on which we are determined—should help.
Baroness Hollis of Heigham
My Lords, is the Minister aware of the effect of housing supply on jobs? As my noble friend Lord McKenzie rightly said, each new house built generates two and a half years-worth of job—one year for the construction and one and a half years for the supply of materials, the furnishings, the carpets and the rest. Not only will an enhanced housing programme meet desperate housing need, it will also meet desperate unemployment, particularly among young people who wish to be apprentices.
Baroness Hanham
My Lords, I do not think that anybody will disagree with what the noble Baroness said. There is no doubt that the construction industry provides jobs and training for young people and, as she has said, it has many offshoots as a result. It is therefore in everybody’s interests that we manage to ensure that the housing market is boosted, and the Government are firmly behind that.
Housing
Debate between Baroness Hollis of Heigham and Baroness Hanham
Baroness Hanham
My Lords, I happily endorse what the noble Lord has said about the actions of tenants’ and residents’ associations. The improvements in estates are a result of such interest being taken.
The new tenancy arrangements will of course be available to housing associations for the variation in tenure. That will not be a diktat. The tenure and affordable rents will be governed by what is required by those obtaining that accommodation. If their situation subsequently changes, discussions will take place as to whether it is correct for them to continue to use social housing, or whether they should be housed in other ways.
Baroness Hollis of Heigham
My Lords, on social housing, is it not the case that if you cannot find a job your HB is cut after 12 months, your rent arrears mount up, you are evicted and you become homeless? Equally, however, if you find a job with an adequate income, you are also likely to lose your home and be encouraged to move into a different form of tenure. So, fail to get a job and you are out; get a job and you are out. Is that decent?
Local Government Bill [HL]
Debate between Baroness Hollis of Heigham and Baroness Hanham
Baroness Hollis of Heigham
My Lords, because no amendments have been tabled at Third Reading, I hope that the House will allow one or two of us to say a few words on Bill do now pass.
For those not familiar with the Bill, John Denham, the former Secretary of State, legislated for unitary status for Norwich and Exeter in spring 2009. The Liberal Democrat party, which ran Norwich from 2002 to 2006, started our move towards unitary status with full Labour support. In Exeter, I believe that all three city parties warmly supported it. However, because the Boundary Committee, incompetently throughout its time, produced its final report six months late—in December 2009 instead of July 2009—the Secretary of State regrettably and inevitably ran out of time for further consultation.
That Bill passed and a transitional authority was put in place for both cities, which I emphasise abided by the law at every step of the way. Last May’s elections were therefore suspended. Norwich and Exeter have behaved impeccably throughout. In the general election, Mr Pickles made it clear that he would overturn the Bill immediately because Norwich belonged to Norfolk and Exeter belonged to Devon even though they were self-contained, chartered, self-governing boroughs 600 years before there was even a concept of a county council. The Bill was truncated because the courts also ruled that there was incomplete consultation because the Boundary Committee’s report came in six months late and that the city council seats left open should be filled by by-elections—these occurred this summer on 9 September—since this matter was last before your Lordships’ House on Report. I know that those noble Lords who are still here will be anxious to know the results of those by-elections and what they say about this whole story.
In Exeter the Labour Party won three seats and is now in control. Thank you, Mr Pickles. In Norwich the Labour Party increased its majority; the Liberal Democrats lost a seat, as did the leader of the Tory city group, Mr Noble, who had been the parliamentary candidate just four months before—so much for all those remarks from the opposition Benches that the proposals did not have community support. In at least three wards in Norwich the Lib Dem candidate struggled to beat the UKIP candidate for fourth and fifth places respectively. Not pretty. The party that ran Norwich from 2002 to 2006 can now meet in a phone box and may be wiped off the map in the next couple of rounds of local elections.
On those poll results, if projected, the Lib Dem local MP for Norwich South and the Tory MP for Norwich North would lose their seats. From a joint population of around 270,000, some 25 to 30 per cent of the electorate voted on a single issue—unitary status. They knew what they were voting for and made their views clear. I take no issue with the noble Baroness, Lady Hanham. I think that it is a bad Bill. She may have different views from mine on it, but she has responsibility for her department to carry it through and I well understand its obligations. But no such obligations fall on the Lib Dems. The Lib Dem council started the process towards unitary status and Lib Dem councillors have remained stalwart behind it throughout. They are decent, honourable people.
The Lib Dem MP, Simon Wright, supported it and his wife was a Liberal Democrat councillor who was very much in favour of it. Delegations to the Lib Dem leadership in London were led to believe that, given Lib Dem commitment to localism, they would have full support for becoming unitary. What was said to them in private was shamefully reversed in public. I refer to the noble Lords, Lord Tope and Lord Rennard, pressed I do not doubt by Norman Lamb in the other place, who incidentally said in Parliament that he wants to keep Norwich in the county, so that Liberal and Labour Norwich city councillors can fight the Tory county councillors locally more effectively—the very same Tories with whom he is in coalition nationally, if we can imagine such a twisted position.
Those three senior Lib Dems denied their local Lib Dem colleagues and their Norwich Lib Dem MP their support. Not only that, they ensured defeat. Local Lib Dems are appalled; they used words such as “treachery” in the press; they have made savage denouncements; and the electorate are well aware that the London Liberal Democrats have effectively destroyed the local Lib Dem party as well as, more importantly, the ability of Norwich and Exeter to generate the economic growth and jobs that this recession badly needs. Any trust that Lib Dems had in Norwich and that local Lib Dems had built up has been wiped away. The Lib Dem party has always been a party built up from local government. When the coalition segments, you may find that you have nothing left on which to rebuild your party, because this episode will not be forgiven.
This Bill is shameful. It is a delay, not a defeat, because it will come back. It is not a defeat except for the standing—and, frankly, if I may say so, the honour—of the Lib Dem party in local government.
Local Government Bill [HL]
Debate between Baroness Hollis of Heigham and Baroness Hanham
Baroness Hanham
My Lords, I thank the noble Baroness, Lady Shephard, for her contribution, because she has summed up very clearly what the attitude ought to be about this. It is not government business to try to ensure that counties and districts get on together; nor is it government business to ensure that just one or two authorities are required to provide financial information. Public information is public information; if it cannot be obtained under normal freedom of information rules, there are ways of making sure that you get it. What worries me about how the noble Baroness, Lady Hollis, has put this forward is that she seems to be suggesting that there are such desperate animosities between the city and the county that it is absolutely impossible for this to work. I do not believe that in democratic government it is impossible for authorities to work together in a common cause.
The noble Baroness also said that I have said that savings must come now rather than through a reorganisation. Indeed I have, and that is not confined to Norfolk and Norwich. It is going to be a general view and a general situation across the country that serious savings will have to come. If we are talking about £6 million a year—I think those are the savings that it was suggested would be made—within that confine, the amount that has to be provided may be within those regions and it may not. Yet savings will surely have to be made in co-operation with Norfolk to ensure the preservation of services and the local community.
I am not going to accept the amendment. As I said on another amendment, the Government do not have any role in this. I hope only that people will hear what we say: that there will be have to be good co-operation at all levels of government over the coming months and years to ensure that, one way or another, we scramble out of this terrible financial situation in which the previous Government left us.
Baroness Hollis of Heigham
My Lords, we have had two contributions from the noble Baroness, Lady Shephard, and the Minister, who both make the same point—that government cannot legislate for local authorities to get on with each other. I completely agree, but that is not what this amendment does. They have answered a wider point about city and county relationships but not addressed the substance of the amendment, which asks for disaggregated financial information so that the city has the same information as the county has about the network of services that the county provides within the city—and, if the county wishes it, vice versa. That is all.
No one is legislating for good will. That is impossible—of course it is—but I am not even calling for that. I am calling for the financial information that local authorities and their citizens are entitled to have in order to review and provide effective delivery of services. If we do not have information, we cannot make the savings that we want. I agree with almost everything that the noble Baroness, Lady Shephard, said, but it was beside the point. I agree with most of what the Minister said—except that she will not accept the amendment—but that was beside the point. The amendment says that the county must provide this information. What does the Minister suggest? FOI. I suppose that we could down 150 requests for freedom of information to drag out of the county information that should be brought to light for the city. That is what we are talking about—financial information. It is right that you cannot legislate for goodwill partnerships, but how can we build effective value for money and make the savings that the Minister insists can be made this way, rather than by reorganisation, if we do not have that information? Can I please be told how we can do it? We cannot. We have had no answer from the Minister or the noble Baroness, Lady Shephard, although I agree with every word that she said. Therefore, I want to test the opinion of the House.
Local Government Bill [HL]
Debate between Baroness Hollis of Heigham and Baroness Hanham
Baroness Hollis of Heigham
My Lords, is the noble Baroness also going to tell the House about her own impact analysis of the savings of £39.4 million that would occur during the same six years? Offset against the £40 million, there would be a net cost of £300,000 per authority.
Baroness Hanham
My Lords, I am not going to go any further into the impact assessment; it is there for noble Lords to read. Our view was that, although there ultimately would be savings, they would not come about for at least another six years.
Baroness Hanham
It looks as though it would be about six years before the savings came about. There have indeed been references to ongoing savings of £6.5 million being forgone in 2015 and 2016. We have never said that those savings would arise from the unitary solution, but we believe that savings on a greater scale are possible from sensible collaboration between the county and the cities—something that every other authority is beginning to have to do. All across the country, local authorities are having to begin to co-operate with each other. They are having to make reductions in costs and they are not spending money on restructuring.
I do not see any point at all in bringing forward such a report, as it would have no virtue. If it were brought forth in three or four years’ time, I am not sure whether it would have the slightest effect on the coalition Government, if they were still here, and I do not think that it would be of benefit to anyone other than perhaps the proponents of unitary status in both these areas.
The noble Lord, Lord McKenzie, asked about Mr Justice Ouseley’s transcript. It is not available, as I believe the noble Lord knows. I do not know whether he was trying to put me on the spot but I do not have it. He does not have it and my understanding is that no one has it, although I am sure that it will be available at some stage. However, it is absolutely clear that his judgment quashed the orders in their entirety. That is the message that we have and that is where we are at the moment.
In all this, we do not want to lose sight of the fact that the path started on by the previous Government was unwise, illegal and totally flawed. If anyone now tried to shore up and perpetuate the proposals, that would be very unwise and would not get anywhere.
Baroness Hanham
My Lords, we have strayed a long way from where we started. We have had a constitutional debate or a debate on the constitution. I have been called spiteful by the noble Baroness opposite, which I regret—
Baroness Hollis of Heigham
I repeat that it was not personal. I said that the Bill was spiteful.
Baroness Hanham
There was spite and it was associated with me. None the less, there we are.
This was about the constitution. The noble Lord, Lord Howarth, was trying to make a great deal out of the fact that the judge made a decision and should not have done. As I understand it, these were draft orders, which were put through this House and had to be signed off by the Secretary of State, who is then judicially reviewable under those circumstances. The noble Lord may want to go and have the constitution changed and do all that, but that is not in our power. The fact that, as he said, Parliament had a good debate on it and came to a view on a number of amendments was not the end of the story. Its end was when the Secretary of State’s decision was challenged. The noble and learned Baroness, Lady Butler-Sloss, with her experience, put it much better than I could: there is nothing to prevent a decision from being made at any level of the High Court. It was not this Parliament and not a Member of Parliament that went for judicial review; it was those cities that were being affected. I do not think that we can spend an awful lot of time wandering around on the constitutional issues. That may be a debate for another day, if somebody wants to see them changed, but we cannot do that.
As I said, the appeal was brought by Norwich and Exeter. The fact of the matter is that they lost, because the previous Government were seen not to have performed correctly against their own criteria. The noble Baroness drew our attention to the fact that the judge said that, if the Secretary of State had taken a different course of action and had undertaken a second consultation, as it would have been, on the other aspects that he was now going to take into account away from the original criteria—he was going to add other criteria—that would have been a different matter. He did not, so the situation remained as it was when the judicial review was undertaken—the decision had been taken by the Secretary of State on the back of a flawed consultation and flawed criteria.
There is no argument about that and no argument about the fact that these orders were debated, that the debates were controversial and that the Opposition at the time said that they did not support the orders. In fact, they made it clear that, if the orders were brought forward and they were in government, they would not support them. There has been absolutely nothing about this that anybody could have been in any doubt about—once this Government were formed, the orders would be set aside. This Bill was brought forward days after the election. Its purpose is to reflect precisely what happened in the High Court, which is to stop these unitaries going ahead. There have been two arms to this—the judicial arm and the government arm—which both came to the same conclusion. In reality, most of this Bill, which we are spending an awful lot of time on, is virtually obsolete because of the court’s decision, but we need to take it through its formalities to ensure that it is completed.
The noble Baroness made a big point about the savings, but I draw attention to the fact that the cost of restructuring, even if it was £50,000 a year at the end of six or 10 years, would be of the order of £40 million. That is a lot of money at this stage of our great financial crisis to do something that was by and large not welcomed—
Baroness Hollis of Heigham
Can the Minister talk about the net costs as opposed to the gross costs, which she persists in presenting to the Committee?
Baroness Hanham
I refer to gross costs because that is what we are talking about.
Baroness Hollis of Heigham
But we should be talking about the net costs. It is not fair to talk about costs without talking about the offsetting savings. Nobody in any balance sheet would do that. I respectfully urge the Minister to give the Committee a clear indication of net costs, not gross costs—or, if she is going to talk about gross costs, also to talk about the savings.
Baroness Hanham
My Lords, I have made it clear that the gross costs are those that would have to be paid at the moment to set up the structural changes. I agree that there would be savings, but they are a long way down the road and they might never be achieved. It is the capital sum now—
Baroness Hanham
As I have said, the position is that the gross cost would be £40 million and the gross savings would be £6 million a year. If you tide that over seven or eight years and there is a consistent £6 million saving a year, I think that after eight years you would get up to the figures that the noble Baroness was talking about. I think that we will leave that.
Baroness Hollis of Heigham
The Minister’s statement is inconsistent with her letter of 8 July. I will write to her to that effect. I expect that she has her letter with her today. She says—these are her words, not mine—that over the transition period costs incurred in the implementation of the two unitary cities would be around £40 million while over the same period the savings would be in the order of £39.4 million. Forty million pounds, £39 million—those were the Minister’s figures to me.
Baroness Hanham
My Lords, I think that I just said that. The savings would be about £6 million. However, savings can also be made by organising services in a different way and by co-ordination and co-operation between the various tiers of government. I am sure that that is what the local authorities will want to do now, rather than spending any more time on this matter. I cannot offer any further advice on this.
Baroness Hollis of Heigham
My Lords, perhaps I may comment on what the noble Earl has said. I ask the indulgence of the House, but it is Committee stage—it is not Report stage procedure—and there is ample opportunity for discussion.
On the elections, the noble Earl is of course right. However, the point was that if the orders had not been quashed by the High Court, and had the Bill not followed as the result of a general election, this tranche of councillors would have stood for election or re-election next May, when the other year’s worth would have done, too. There would have been two years’ worth of elections in the one year, so again no additional costs would have fallen.
Either, as we had expected and hoped, there would have been elections associated with the general election, in which case there would have been no additional costs, or there would have been elections after 12 months, in which case there would have been no additional costs because elections would have taken place in any event. The additional costs that we are talking about occur because these by-elections are being called in the middle of the electoral year.
Baroness Hanham
My Lords, we had quite a round robin of a debate on this amendment. I agree with my noble friends that it did not seem to lend itself to anything very much around which the debate centred.
It has been said that some things are a bit rich, but I actually do believe that it is a bit rich to try to lay at the door of the department the fact that the Secretary of State made a decision against advice from the Permanent Secretary of the department and did not follow the procedures that he himself had set down. It seems to me to be quite rich to start saying that that is all to be laid at the door of the DCLG.
This was a political move towards the election and it was clear that the decision was taken by the Secretary of State for compelling reasons, which were never quite laid out. Some of it was to do with Total Place, but there was not a great deal of information about that at the time. Total Place was an extra that was put in on the combining of budgets.
This is now a matter for the authorities. They now have to hold elections and if they do not know when to do so, they must seek their own legal advice. They must also bear the cost of what has happened. This is what would happen normally. Any UK council would have to bear them for any by-election. I understand that we have received no representations about it from the authorities and that they are taking their own legal advice.
The amendment does not seem to get us anywhere. It has been the base for a long wander around this whole issue, trying to lay the blame where the blame is not due. This situation has arisen, as I have said ad nauseam, because the Secretary of State did not follow advice or his own criteria. As a result, we have ended up with what other people have described as a total mess. It is still there, my Lords.
Baroness Hanham
My Lords, I thank my noble friends Lord Rennard and Lord Cathcart for virtually winding up this debate for me, because they have said more or less all that I wanted to say. There are two main issues here. First, in order to produce the sort of report that is being asked for before the Act starts would mean more delay. Frankly, I think that there has been enough delay and chivvying around with these orders. As I said earlier, this is the end. We must stop this now and let everyone get on with working normally. The amendment would only delay that.
The second issue is that it is not up to Parliament to sort out how local authorities collaborate with each other. It is certainly up to Parliament to say that there is an expectation that local authorities will work together—that counties will work with their districts and districts will work with their parishes. They are going to have to do so because, as the noble Lord, Lord McKenzie, said, there is going to be far less money. If services are to be provided to a standard and in a way that all local authorities will want, there will have to be close relationships between all levels of authority.
I do not see that these amendments are for Parliament. The first one would certainly delay the issue, which would be an enormous mistake. We have many examples of where there is excellent co-operation in services in terms of procurement, transparency, social services, children’s services and waste collection. I have a long list of every single responsibility in local authority services of where co-operation is taking place, but I shall not weary the Committee with it. All of us know that there are good collaborative arrangements.
I think that Norwich’s miseries have had a good airing today. A lot of information has been given about how things take place and I am sure that that will be noted. I have no doubt at all that Norfolk and Norwich will read Hansard avidly and so will note the noble Baroness’s concerns about the difficulties and how things stand. I was going to say that I do not support these amendments. Indeed, I do not think that Amendment 6 in particular has anything to do with Parliament, so I hope very much that the noble Baroness will withdraw her amendment.
Baroness Hollis of Heigham
My Lords, I thank all noble Lords for contributing to the debate. Perhaps I may run briefly through the comments by individual contributors. The noble and learned Baroness, Lady Butler-Sloss, said that she represented the views of a senior county councillor in Devon. I am sure that is the case, but forgive me for noting that, as county councillors, they would say that, wouldn’t they? Of course they would say that the arrangements are fine. I have met senior—
Baroness Hollis of Heigham
My Lords, no one has asked the Committee to make a judgment on this, so I think that the noble Viscount is being just a little premature.
The point of the amendment is to test the validity and the viability of the noble Baroness’s assertion, which has been reinforced by a number of noble Lords during the debate, that constructive partnership arrangements are a viable alternative to unitary status. We were promised that in 1994-95, but despite those promises it did not happen. Norfolk County Council has already promised some of this to the Boundary Committee, but so far it has not happened. For these arrangements to work, we must have the information, but so far the council has refused. The noble Baroness says in all conviction, I am sure, that these alternative partnership arrangements are a viable option in place of unitary councils, but how is she going to advise us to make it stick? What advice can she give Norwich when Norfolk refuses to give it the information that it needs to make those partnership arrangements work? Will she please tell me? I will give way to the noble Baroness, because I have run out of remedies.
Baroness Hanham
As I said, there has been a barrage of questions about Norwich today. Councils will be required, first, to be transparent and, secondly, to co-operate and co-ordinate with other parts of local government. Parliament will not be able to do anything if, as the noble Baroness suggests, there is a block between Norwich and Norfolk. However, I do not believe that that can be the situation. My advice is to get in touch with Norfolk and make sure that you all work together and co-operate. This is not a matter for Parliament.
Baroness Hollis of Heigham
Will the noble Baroness support us when we seek from the county council the information the city needs in order to build these partnership arrangements?
Baroness Hanham
The noble Baroness asks the question again. This is entirely a matter between Norwich and Norfolk County Council and arrangements should be made at that end. There is not a role for the Government in this unless there is complete obduracy—and I rather doubt that that will be the case after this debate has been read and understood.
Local Government Bill [HL]
Debate between Baroness Hollis of Heigham and Baroness Hanham
Baroness Hanham
My Lords, I thank all those who have taken part in this debate for their contributions. I have been struck by the fact that we have been discussing different issues. The winding up of the noble Lord, Lord Rosser, has confirmed to me either that we are discussing different issues or that there is some determination to see that those issues are not the same.
We are discussing the decision by the previous Government to agree to applications by two councils for unitary status. Those were made late on in the Parliament. The applications were considered by the Government on at least three occasions. On two of those, Ministers said that the criteria—the criteria that have been quoted around the House today—were not met and that therefore they would not proceed. However, a sort of magical moment took place just before the election. Quite suddenly, a third decision was made, saying that all was well. The Government said that they did not mind that the criteria had not been met and that there were now compelling reasons—not stated—for why the councils should be allowed to go forward for unitary status.
This is not an argument about the value or the virtue of unitary government: it is about the mismanagement and mishandling of two applications for unitary government. That is why we are here today. We are here today because there was much opposition to what was going on. There was opposition not only on the basis of unitary authorities being formed, but on the basis of how the decision was being made. So concerned was this House, that the orders put forward were voted down on a Motion tabled by the noble and learned Baroness, Lady Butler-Sloss. The issue was taken up by the political parties before the election, and my party said that in the light of the orders being agreed we would stop them going ahead.
That was a manifesto commitment. When the coalition Government was formed, we agreed that it would be fulfilled. As the noble Lord, Lord Tope, has so carefully reminded us, it was abundantly clear that the Liberal Party was also against this, witnessed in the fatal Motion that he moved to stop these orders. Let us settle down and be sure what we are talking about here. We are talking about why the previous Government made their decision and the background against which it was made.
My Government are not against unitary authorities—plenty of them are working extremely well. There may be some that are not so good, but the existence of such authorities is recognised. However, we are against them being invoked and formed when the criteria that every other authority has had to satisfy have not been met.
There was also the issue of the last-minute compelling reasons, which were never laid out. Here, the noble Lord, Lord Rosser, finds himself in a very difficult position. He has got around the situation about as well as he could have done, but it is not comfortable. He was chairman of the Merits Committee when it produced one of the most withering reports that I have read on the process for these unitary authorities. The report drew attention to the compelling reasons and asked what they were. It never, as far as I know, had a reply and nor did anyone else. It drew attention to the fact that the criteria were not being met. It drew the House’s attention to the fact that these orders were progressing and being put forward on a false basis. I am sorry for the noble Lord, Lord Rosser, and believe that he took a very brave stand when he was chairman of the Merits Committee because he spoke strongly against his own Government. However, I think that today he has failed to back up that brave stand. We are therefore moving forward on the basis of the criteria not being met.
Baroness Hollis of Heigham
My Lords, before she went on to the issue of the Merits Committee, the noble Baroness was clear that she in particular, and the Government and the coalition more generally, were not opposed to unitary authorities as such. Her main criticism was of the process by which decisions were arrived at by the previous Secretary of State. Given that, as my noble friend Lord McKenzie said, Part 1 of the 2007 Act, which, as I understand it, permits future bids for unitary status to come forward, has not been repealed, may I have an assurance from the noble Baroness today, in the light of what she has just said, that any future bids from Norwich, Ipswich or Exeter will be properly considered in the light of that Act. If she says no, the Bill is hybrid.
Baroness Hanham
My Lords, if the noble Baroness had continued to sit for a bit longer, she would have heard me get to her point. It is correct that the Bill does not repeal the Local Government and Public Involvement in Health Act 2007, but it would also be fair to say that the Government have no plans to issue further invitations for unitary authorities and, if there were applications, they would be viewed against the serious economic situation we are in at the moment and consideration would be given to whether they offered any value for money whatever, which these applications have proved not to have. I should have thought that any local government worth its salt would think twice about putting forward an application under those circumstances.
Baroness Hanham
My Lords, that was the bit I had forgotten. Clause 2 moves the elections from 2010 to 2011. If it is quashed, we go back to 2010 being the defining moment for the elections. In that case, by-elections would have to take place within the next six weeks, and it may be decided that it would be more helpful to move them on.
I have been asked a number of questions. I have probably answered those asked by the noble Lord, Lord McKenzie, but I shall make one point. I am not surprised that the noble Baroness, Lady Hollis, made a very passionate speech, as it is clear that this is something that she feels very strongly about. However, I am just a little bit perturbed by the fact that she said that once the judgment appeared to be taken against the councils, that was the reason why they did not pursue or give evidence to the Examiners on hybridity. This action to challenge hybridity caused a lot of difficulties and trouble and brought into question the decision of the Public Bill Office of this House. It was a well argued trap the last time—
Baroness Hollis of Heigham
It was not a trap. It took place in the full presence of the House at prime time. A trap is something that happens as an ambush late at night. It was very clear to a number of people, including former MPs who are much more experienced in matters such as this, that there was an arguable case that the Bill was hybrid. The Speaker of the House of Commons had ruled that if there was any possibility that a Bill was hybrid, it should be referred. That was the decision. It was a very low hurdle, and the House agreed that that low-hurdle test had been met. There was very substantial support from the Cross Benches. There was no trap. If the Government had wanted to avoid that situation, they might have been better advised to have produced a more watertight Bill.
Baroness Hanham
Trap or not, we ended up with an examination to which no further evidence was given. The two memorials were laid. They were withdrawn, but because they had been there, they were considered. Effectively, the hearing took place without the arguments that had been put forward by the noble Baroness. We are where we are. We know the Bill is not hybrid. We are proceeding with it and will carry it through as far as we can to the end.
The noble Baroness also asked questions about the impact assessment. We should not forget that the unitary proposals for Exeter and Norwich failed to meet the affordability criterion and that the previous Government accepted that. The independent financial consultants supported that view. In short, the proposals were not value for money. The impact assessment reflects that, as it can be interpreted.
I thought that I might have one or two further questions to answer, but I believe that I have finished what I need to say. I am grateful for the contributions made by Members of the House. I beg to move.