Local Government Finance

Lord Kennedy of Southwark Excerpts

Thursday 13th July 2017 Lords Chamber

Moved by

[Lord Kennedy of Southwark]

That this House takes note of local government finance and arrangements beyond 2020.

[Lord Kennedy of Southwark (Lab)]

My Lords, in moving this Motion, I bring to the attention of the House my usual declarations of interest—namely, that I am an elected councillor in the London Borough of Lewisham and a vice-president of the Local Government Association.

I am delighted that a number of Members with expertise in local government and finance are speaking in this debate, as this is an important issue that we need to keep raising and shining a light on.

I have served on two local authorities. Presently, I am a member of Lewisham Borough Council, and many years ago I was a member of Southwark Council, the borough where I grew up.

Throughout my working life, as a full-time official for the Labour Party, I have had dealings with councillors in a variety of local government settings, including larger parish, district, county and unitary authorities, and seen a variety of different methods of governance, both as a controlling majority group, part of a coalition and in the role of an opposition group. Councillors of all parties generally do a difficult job very well, and are supported by dedicated professional staff delivering important services—everything from preschool and nursery provision through to social care towards the end of life, and the more general services such as keeping the streets clean and the street lights working properly.

Local government is ever present in people’s lives. It is the part of the state that they see most frequently, and the council has a leading role in understanding the issues that local people have and in delivering solutions for them. Councils need stability and as much certainty as possible to do their job. I accept that that is not always easy, but where they can, the Government need to help local authorities and not make things more difficult for them. I hope that in responding to the debate the noble Lord, Lord Young of Cookham, can give more certainty. Where he cannot, will he at least agree to take back the concerns raised in the debate and initiate discussions within government, the department and with the Local Government Association to as quickly as possible bring more certainty and stability on the issues raised.

I have a number of general points to make and some specific points in respect of London. Local government is not clear where it is heading beyond 2020. In the last Parliament, discussions and work took place to develop a new system by which local government as a whole would retain 100% of its business rates by the financial year 2019-20. With the calling of the general election, the Local Government Finance Bill was lost, understandably. The Bill set out a framework for local government in England to keep all of the £26 billion it raises locally in business rates, and it is fair to say that there was some surprise that there was no mention of this in the Queen’s Speech that was recently unveiled. Certainly my party had some issues with the scheme, such as how we were going to introduce fairness without making things worse for those councils that do not have the income base to replace the money they received through central government grants. But everyone was surprised that this key piece of legislation does not appear to have made it even to the starting line this time, in a Session of Parliament that is supposed to last two years. Perhaps the noble Lord, Lord Young of Cookham, could shed some light on what has happened to the Bill? Is it is on the back burner, has it been scrapped never to be seen again, or will it resurface at some point in the future? In addition to finding out what has happened, it would be useful if we were given the reasons why that is the case.

Recently, there has been lots of debate and discussion in many forums about austerity, including the Cabinet, which we know from what we see and read in the media. There have been lots of briefings from various Ministers both on and off the record. What cannot be in doubt is that local government has taken a huge hit in the spending decisions made by the Government in recent years, despite delivering some of the services that people rely on the most.

The Local Government Association pointed out recently that funding lost from central government since 2015 and projected further losses will mean that, by 2020, local government will have lost 75p of every £1 it had to spend of core central government grant. That will equate to a £5.8 billion funding gap by the end of the decade, with an estimated additional £1.3 billion required to stabilise adult social care. That gives a total of £7.1 billion as a funding gap—a staggering amount that will result in significant reductions in services that people, sometimes the most vulnerable in our communities, have to rely on.

In addition, the department’s own figures show that funding to local government will have fallen 63% in real terms up to the financial year 2019-20, but overall public spending will have increased by 4% in real terms over the same period. So we have further savings along with increased demand for services, which is particularly stark in London. It would be useful if the noble Lord, Lord Young of Cookham, could update us on the fair funding review which the Government have committed to. If we do move to another system of funding local government, we want to ensure that it is fair and addresses all the needs, as it is often areas with huge social needs that are not going to have the business rate base to replace the funding they lose.

London has unique pressures. It is a growing city with huge challenges that need to be addressed. Adult social care is a problem widely acknowledged but with no sustainable solution identified. In London, the elderly population is expected to rise by 70% between now and 2039. I am in that group of statistics, as are, I suspect, many of your Lordships who are not yet retired and live in London. A long-term solution to adult social care needs to be found, but as the Prime Minister found out during the election, solutions that are not carefully worked out are not going to be accepted and will prove impossible to deliver.

Children’s social care is another pressure point, with the growing requirements of the new Ofsted inspection framework. In London, the overspending is twice that of adult social care, and with London’s young population set to continue to rise, this demand is only going to increase.

We all acknowledge that there is a housing crisis. The Housing White Paper was a missed opportunity and we have seen very little from the Government when measured against all the hype and expectation that was generated beforehand. Government policies leaving people without recourse to public funds add significantly to overspending pressure on local authorities, as does homelessness and the requirements of the Homelessness Reduction Act 2017. The Government do not appear ready to provide the level of funding necessary to make this legislation work. The 1% rent reduction on social housing is also making the situation worse.

As I outlined earlier, we need to see stability in local government funding. The Government need to be clear on their plans for 100% business rate retention. If the 2020 plan is no longer on the agenda, what is?

Many in this Chamber and elsewhere have raised the fact that we have not had a revaluation of council tax. Governments of all persuasions have time and again decided to sidestep that issue. The Government need to take a proper look at council tax: is it fit for purpose, is it the right vehicle for local government and does it deliver what is needed? Is the hypothecated precept for social care the right mechanism or just a sticking plaster that is not going to do the job?

The borrowing cap on the housing revenue account should be removed to help address the housing crisis. We need to build more council homes on proper social rents.

On a whole variety of services, local government levies fees and charges for delivering services. The fees are often at rates set by the Government, with no local discretion. If we even got to the point at which there was full cost recovery, it would be progress. I recall our debates in this House on planning fees. Although there was some proposed uplift, local authorities are still not going to be recovering anything like the costs they expend, and that situation is the same across other services.

It is a perfect storm. Local government has no certainty how it is going to be funded post 2019-20. Whatever the funding mechanism, there are huge issues regarding fair funding; there are greater pressures on and more demands for services, especially for those that are vulnerable, in early years and in social care; people are trapped with no recourse to public funds and turning to the local authority as they have nowhere else to turn; there is a housing crisis and a desperate need for more homes to be built at social rents; the housing revenue account is under pressure from enforced rent reductions; and there is no sign that the Government are going to let councils build more homes. I could go on and on. It is shocking: this is a terrible state of affairs that the Government must urgently address.

However, urgency seems to be in short supply at the moment from the Government. No one could suggest that in either House there has been an energetic start from the Government in this Parliament. I know that they have problems, but those are entirely of the Prime Minister’s own making. Local government and the residents it serves need certainty, action and direction. There are big issues to be solved and local government often speaks with one voice on these matters with little to divide the parties. Local government is asking to be allowed to do the job that it is capable of doing through a funding mechanism that is fair. It wants action from the Government to allow it to get on with the job. It is time for the Government to respond positively to the call being made by local government for certainty and stability, and to be given the tools to do the job.

--- Later in debate ---

[Lord Kennedy of Southwark]

My Lords, I thank all noble Lords who have spoken in the debate. Listening to it, I was struck by the amount of agreement on all sides.

The noble Lord, Lord Shipley, made an important point about collaborative work and the need for clarity in the patchwork that has been created. We have discussed many times the issue of council tax. The noble Lord, Lord Marlesford, who is not in his place this afternoon, has talked about that issue many times and presented a Private Member’s Bill in the previous Parliament looking at council tax bands.

My noble friend Lord Desai talked about the problems we have caused ourselves by not having a revaluation. As we have heard, council tax was introduced as a fix to get the Government out of the poll tax disaster, and many noble Lords referred to it. I did not realise that the Minister had opposed the introduction of the poll tax. I congratulate him on doing so—well done.

My noble friend Lady Donaghy made a powerful point about the crisis in social care. I know the area to which my noble friend referred, as I went to school in Peckham and Camberwell and lived in Walworth. I was a Southwark councillor for many years. The noble Lord, Lord Young of Cookham, mentioned aldermen. I was appointed an honorary alderman by Southwark council many years ago after I left the authority. When I was a councillor there, we had a category of housing called “hard to let”, which included the Pullens Estate in my ward. No such category now exists because there are no more homes that are hard to let—every home is snapped up the moment it becomes available.

The noble Lord, Lord Greaves, commented on austerity and how to move forward. His points in respect of parks were also well made.

The noble Lord, Lord Young of Cookham, has an open invitation to visit Lewisham any time he wants. I would be delighted to show him what a great place it is, particularly if he comes to Crofton Park, which I represent. In issuing that invitation, I hope that I will cause him none of the problems that he had when he went to Pendle, because there have been a few issues there in the past.

My noble friend Lord Smith of Leigh has vast experience of local government as the leader of Wigan Council and as a member of the Greater Manchester Combined Authority. The spending cuts have had a real effect on people’s lives, and my noble friend highlighted many other issues, such as council tax. He made an important point about the effect of the cuts in different authorities, and that, for me, highlights how important the fair funding review will be.

The noble Baroness, Lady Pinnock, raised a number of interesting points, including on VAT, road tax and other taxes. I did not mention it in my opening contribution, but the London Finance Commission has reported under both the previous mayor, Boris Johnson, and the present mayor, Sadiq Khan, and has looked at those very issues. I think I am right in saying that both mayors have been supportive of the commission’s reports, but perhaps further work needs to be done. This may be an issue that needs to be looked at in the future.

I thank everyone who has spoken in this debate. Again, I make the point that on most of the issues raised today local government speaks with one voice, and that is one of the more positive things to have happened in local government in recent years. Things were very different when I was a Southwark councillor in the 1980s. However, things have moved on, which pleases us all. Any disagreements today tend to be much more between central and local government; as I said, local government often speaks with one voice.

The response from the noble Lord, Lord Young of Cookham, particularly in respect of local government finance, was interesting. Discussions need to take place urgently on how local government is to be funded in future years, particularly beyond 2019-20. It does not appear that the previous proposals, if implemented, will be achieved in the same timescale—these things always seem to slip.

In conclusion, I thank the noble Lord, Lord Young of Cookham, for his detailed response to the debate, which he delivered with his usual courtesy. I appreciate it very much, and I thank all those who have spoken.

Motion agreed.

Boundary Reviews 2018

Lord Kennedy of Southwark Excerpts

Monday 26th June 2017 Lords Chamber

Asked by

[Lord Kennedy of Southwark]

To ask Her Majesty’s Government whether they intend to introduce legislation amending the provisions relating to the 2018 Boundary Reviews.

[Lord Young of Cookham (Con)]

My Lords, following laws already passed by Parliament, the independent Boundary Commissions are consulting on their proposals to deliver boundary changes. They will submit their final proposals to Parliament in autumn 2018, ensuring fair and equal representation for the voting public across the UK. We have no plans to change this process.

[Lord Kennedy of Southwark (Lab)]

My Lords, millions of people have registered to vote who are not taken into account in the present parliamentary boundary review. Will the noble Lord commit the Government to including these people? Would he comment on the general opinion that the present boundary review is dead in the water because the DUP does not want it and that any review approved by Parliament will be on the basis of there being 650 seats in the House of Commons? If that is the Government’s real intention, they should say so quickly and stop wasting any more public money on a review that will not be approved.

[Lord Young of Cookham]

My Lords, the country has already fought two general elections on out-of-date boundaries for reasons that are familiar to the noble Lord. If we followed the noble Lord’s suggestion and started again with a new register, there is a risk of a third general election on boundaries which were set in place in 2000. That would be an affront to democracy.

General Election: Voting Rights

Lord Kennedy of Southwark Excerpts

Tuesday 25th April 2017 Lords Chamber

[Lord Kennedy of Southwark (Lab)]

My Lords, I refer noble Lords to my entry in the Register of Lords’ Interests. Can the noble Lord tell the House what additional resources the Government are providing to enable local government to register more citizens to vote? What representations are they making to the Residential Landlords Association and the Association of Residential Letting Agents to encourage them to bring it to the attention of their tenants that they could be eligible to vote—because tenants in the private sector are one of the most underrepresented groups at elections?

[Lord Young of Cookham]

The noble Lord is quite right that a number of groups are unregistered in the current regime. Over recent years, the Government have devoted resources to trying to increase registration of those groups, particularly students. We have also made it much easier for people to register to vote: you can vote online in about three minutes. A number of initiatives are also being taken by the Electoral Commission, focused on some of the groups that the noble Lord rightly mentioned, to encourage them to vote. Over forthcoming weeks, the Electoral Commission will of course have an additional campaign as part of its responsibility of informing people how and where to register to vote.

Electoral Registration Pilot Scheme (England) (Amendment) Order 2017

Lord Kennedy of Southwark Excerpts

Thursday 30th March 2017 Lords Chamber

That is a simple statement of fact but I often hear somewhat different statements coming from the ministerial Benches, implying that the electoral registration process is not compulsory. It is true that it is not compulsory to register to vote but we had great and controversial debates in 2013 to ensure that certain principles of compulsion—that someone can be fined if they do not complete the household inquiry form and be subject to civil penalties if they then do not comply with the ERO’s further requirement to provide their details—are made known. Since it is clear within this statement that there is an element of compulsion, I ask the Minister to ensure that in the future the Cabinet Office will make it plainer to people that there is a requirement to comply with the process and, in particular, that the forms sent out by the 450 different EROs across the country asking people to register make plain that they are compulsory. We fought in Parliament four years ago to maintain the principle, which was introduced many decades ago—the fines were increased substantially in the period when Mrs Thatcher was Prime Minister—that people should understand that it is a civil obligation to register to vote as well as being a benefit to themselves. That element of compulsion must properly be made known if we are to do things such as reduce the cost of conducting the annual canvass.

[Lord Kennedy of Southwark (Lab)]

My Lords, first, I make my usual declaration that I am a councillor in the London Borough of Lewisham and a vice-president of the Local Government Association. The four statutory instruments we are debating today are ones that I accept, as far as they go. I broadly welcome the process outlined by the Minister. Certainly, the entitlement to vote and the accuracy and completeness of the register are the most important things we are debating here. That underpins all this. I have some wider comments and one or two questions for the Minister but generally I welcome the orders and regulations and I am very happy that we are exploring new methods of getting people registered to vote.

On matters concerning elections and electoral registration, it is always desirable to get agreement among the interested parties on the way forward. I accept that that is not always possible but it is a desirable aim nevertheless. Changes should be implemented carefully, should be thought about, should seek to improve voters’ engagement in the electoral process and should command wide confidence. In that sense, pilots are a useful tool to see how certain measures will play out in practice, followed by proper evaluation and informed policy decisions. Can the Minister tell the House why the decision was made to extend these pilots for another year? I cannot believe that the Government have made this decision in isolation. But it is not clear from the papers why they have done so.

There is no mention of the political parties being consulted on the regulations. Will the Minister confirm that neither the Electoral Commission nor the Cabinet Office team that meets the political parties on a regular basis have brought these regulations anywhere near them? Of course, the Parliamentary Parties Panel is a statutory panel set up under PPERA. If that is the case, does the Minister agree that that is regrettable and should be rectified quickly? The political parties use the electoral register for their campaigning, they understand the registration process, and they have a legitimate voice that needs to be heard in any discussions on these matters.

I refer the Minister to page 3 of the Explanatory Memorandum to the Electoral Registration Pilot Scheme (England and Wales) Order 2017; he mentioned it in his introduction. Referring to the annual canvass, paragraph 7.1 in the section headed “Policy background” says:

“In its current form under IER, it is proving to be an unsustainable cost burden for local authorities to administer”.


I thought that was an interesting comment. I must say, it is not the biggest issue that comes up when we discuss finance and budgets and unacceptable cost burdens at Lewisham Council. The noble Lord, Lord Rennard, may have let the cat out of the bag by telling us that these issues were discussed in the coalition Government in 2013. Of course, members of that coalition wanted to bring forward these proposals then.

I had a look at what the Local Government Association was saying and I could not find any mention at all of the unacceptable cost burdens of the annual canvass—not a thing—in its campaigns, press releases or anything else. I then had a look at London Councils and again there was no mention in any of its campaigns or media releases about these unacceptable cost burdens and the problems being caused for local authorities. Both organisations are well known to Members of this House. They are expert at getting their views across to us when they have issues they want to raise with us. But I have had absolutely nothing—not a letter, not an email, not a text message, not a phone call—from these bodies that represent local government.

Of course, there are many issues that these two bodies are interested in: the housing crisis, the social care crisis, education funding, public health budgets, business rates, pavement parking, homelessness and the lack of funding for that, bus funding, and many other issues—the list goes on and on. Many of these issues are putting local authorities in a difficult situation and putting pressure on budgets, but the Government are not the slightest bit interested in dealing with them. I also had a look at SOLACE and the AEA. Again, they are silent on these issues and do not appear to be campaigning on them at the moment.

It really is a bit rich for the Government to hide behind the suggestion that there are all these concerns from elsewhere in local government. The Government do not have a good record here. They sped up IER, against the advice of the Electoral Commission. They reduced the transition period for IER by one year. They threw out the consensus on that point. They moved ahead with reducing the number of seats in the House of Commons by 50. They removed voters from the electoral roll, against the advice of the commission, and of course that helped them in their redistribution of parliamentary seats and limited the scope of electors to get involved in local inquiries. At the same time, we all know that they made a record number of appointments to your Lordships’ House. Their claims about cutting costs just do not hold water.

Democracy costs money. We should cherish it and pay for it. We need an efficient, well-run, properly resourced electoral registration service in every part of the United Kingdom. In comparison with other services, the costs involved are not huge and the Government should be seeing how they can use every avenue of the state to get and keep people registered to vote. They should be learning from other parts of the United Kingdom. How does the Electoral Management Board in Scotland work in getting people registered to vote, compared with what happens here in England and Wales?

Pilots are good to see how we can efficiently and expertly register people to vote. There is nothing presently in force that stops EROs making any innovation, and many EROs do an excellent job of innovating to get people registered to vote. We should be looking at the incentives to get people on the rolls. What are schools, colleges and universities doing? What can we learn from the schools issue in Northern Ireland? Many noble Lords from all sides of the House have raised that and so far the Government have not been interested at all in bringing it into play in England. We should look also at what we can learn from other parts of the world.

I worry that the real agenda is just to cut the need to send out a prepaid envelope and a form and to avoid knocking on the door, with very little else under that. I am happy that we have new procedures and new ideas. We have to be absolutely sure that we are not making it any harder to get people registered to vote. I am not confident that so far the Government have done that.

My noble friend Lord Blunkett raised some very important points. The noble Lord, Lord Hayward, spoke about the two local authorities. I do not know that case but if that is the situation, it is regrettable. All the councils that have been invited to be part of the pilot should be part of it when it takes place next year. He made a very important point about savings. I am happy to make savings but, again, the important point in all this is the accuracy and completeness of the register. That must be paramount for all of us. The noble Lord, Lord Rennard, made some important points about automatic registration. Again, young people and students are a very important group and we must make sure that we get them registered. I know that many councils and EROs have worked closely with universities and colleges. We need to ensure that that happens as well.

I am happy to agree the orders and regulations before us today, although I worry about the Government’s real intention behind these matters.

[Lord Young of Cookham]

My Lords, I am grateful to all noble Lords who have taken part in this debate and for their broad welcome for the initiatives that are in the orders before the House.

In response to the noble Lord, Lord Kennedy, I am grateful for his welcome for what we are doing, but there were some uncharacteristically partisan comments in his speech. On the size of the House of Lords, I just say, as somebody who was Leader of the House of Commons at the time, that if his great party had supported the programme Motion on the House of Lords Reform Bill, the House of Lords would be a lot smaller than it is now. His party bears some responsibility for the failure to get the numbers down to a more manageable level. I will put that on one side because I know the noble Lord did not mean to stimulate an aggressive partisan debate on these non-controversial orders.

I will try to respond to the issues that were raised. The noble Lord, Lord Blunkett, raised the issue of privacy. Of course I confirm that the protection of personal data is important. As I think I said, the Cabinet Office carried out a privacy impact assessment which took into account privacy impact assessments commissioned from all the participating local authorities. The provisions before us do not have any significant further impact on an individual’s privacy than the current legislative requirements concerning registration. They simply support the EROs in carrying out their legal duty to take all the necessary steps to maintain registers of electors in their area. As I said, we have consulted the Information Commissioner’s Office on this order and it does not consider that the proposed measures raise any new or significant data protection or privacy issues. The noble Lord also raised some issues about the Digital Economy Bill and I would like to accept his generous offer to pursue those in writing.

--- Later in debate ---

The noble Lord, Lord Kennedy, asked whether the panel had been consulted. Did he mean the parliamentary panel of Members of both Houses which liaises with the Electoral Commission?

[Lord Kennedy of Southwark]

No, I am sorry. I meant the political parties panel in PPERA which is drawn from officials.

[Lord Young of Cookham]

I will make inquiries and deal with the important questions that the noble Lord has raised about the level of consultation, and of course he is entitled to a reply on that.

I think I have dealt with nearly all the issues that have been raised. If I have not, I will write. We have had direct advice from a range of those in local government—the chief executive of Trafford, the electoral registration officer for Grampian and others—about this initiative. I again thank noble Lords for the time they have spent scrutinising these instruments, which will enable EROs in England, Wales and Scotland to pilot innovative approaches to conducting the annual canvass and also allow EROs in Scotland to make use of email invitations to register and single occupancy provisions. I beg to move.

[Lord Kennedy of Southwark]

Before the noble Lord sits down, the point I was trying to get across is that I am very happy that we have pilots. There is no issue about that. However, when we make changes—and stopping the annual canvass, stopping people knocking on doors and stopping letters going out are very big changes—we cannot assume that everybody is e-enabled. Each change has to be carried out very carefully; otherwise we make mistakes, things go wrong and people lose their right to vote. That cannot be the case. The heart of this is that the Government must take a long period and absolute care when they pilot changes. The decision to reduce the time for confirmation was a mistake. If we had taken a longer time, we might not have needed these measures now. That is the point I am trying to make.

[Lord Young of Cookham]

I am grateful to the noble Lord. As I said, we are not stopping the annual canvass. The annual canvass remains. I will just end on this. The initiative for this has come not so much from the Government as from the EROs. They take their responsibilities very seriously and want to have the maximum number of people registered. They still retain all the powers they have at the moment, as well as the powers they have in the pilots, to continue to knock on doors and send all the forms. I personally have confidence that the EROs will use the powers they have, and which we are giving them today, not just to maintain the current accuracy of the register: I think we will end up with a better register if we go ahead with these pilots and extend the lessons that we have learned.

Electoral Fraud

Lord Kennedy of Southwark Excerpts

Wednesday 29th March 2017 Lords Chamber

[Lord Young of Cookham]

I am grateful to the noble Baroness for her question. On her final point, there is already guidance stating that postal votes should not be harvested by campaigners or activists. We are considering whether we should introduce a ban on handling of postal votes by specified people or groups, which would tackle the inappropriate conduct that she referred to.

The Pickles review considered postal voting and came up with a number of recommendations, one of which is that the offence prescribed for when people vote in person—namely, that it should be in secret and there should be no undue influence—should also be applied to people who vote by post, which it does not at the moment. We are considering how that might best be done. There were other recommendations about postal voting, one of which was that it should not last for ever: it should be renewed every three years. We understand the concern and a number of measures are in train to address it.

[Lord Kennedy of Southwark (Lab)]

My Lords, what discussions have taken place between the parties, the Electoral Commission and the police in the 18 areas identified by the review carried out by Sir Eric Pickles with regard to the measures that should be in place for the local elections where those specified areas have local elections this May, prior to the ID pilot scheme coming into force in May 2018?

[Lord Young of Cookham]

I am grateful to the noble Lord for that question. The Electoral Commission is concentrating resources on those local authorities where there is seen to be an undue risk of fraud. It is in touch with the single point of contact, which is a police contact in that area, to ensure that it has all the necessary information and, where appropriate, it holds additional training courses. Resources are being applied to the 18 areas identified as at risk by the Electoral Commission to minimise the risk of fraud.

Elections and Referendums: Spending Rules

Lord Kennedy of Southwark Excerpts

Wednesday 29th March 2017 Lords Chamber

[Lord Young of Cookham]

I am grateful to my noble friend. He is right to say that there are a number of reports—the report from Sir Eric Pickles on fraud in local elections, the report from my noble friend Lord Hodgson on third-party campaigning, and the interim report of the Law Commission—which have an impact on the legislation on elections. As I said a few moments ago, it makes sense to stand back, look at all the recommendations and, in consultation with the Electoral Commission and all the political parties, see how best to take this forward in order to restore public confidence in the democratic system.

[Lord Kennedy of Southwark (Lab)]

Recently, during the consideration of the Bill of the noble Lord, Lord Tyler, the Minister told the House about the willingness of the Government to look at areas where agreement can be reached and incremental changes agreed. Can the Minister update us further in this regard, and will he look at involving those Members of the House who can bring valuable experience to those discussions?

[Lord Young of Cookham]

Again, I am grateful to the noble Lord, who took part in that debate on 10 March on the Private Member’s Bill of the noble Lord, Lord Tyler. At the end of that debate, I indicated that the Government were anxious to see if there was a consensus on some of the measures that might be brought forward. I indicated that the Minister for the Constitution, Chris Skidmore, was anxious to meet noble Lords who took part in that debate to see whether we can take incremental reforms forward on a cross-party basis.

Non-Domestic Rating (Rates Retention) and (Levy and Safety Net) (Amendment) Regulations 2017

Lord Kennedy of Southwark Excerpts

Monday 20th March 2017 Lords Chamber

[Baroness Pinnock (LD)]

My Lords, I draw the attention of the House to my entry in the register of interests as a councillor in the borough of Kirklees and as a vice-president of the Local Government Association.

I wish to draw the House’s attention to the significant number of factors that are changing in the system of a 100% business rate retention and the consequences of those changes. We welcome the move to more locally raised funding for local services because it brings with it less reliance on the variation in perception of local government by different national government Ministers. Such a substantial change brings considerable uncertainty, and as local authorities are already grappling with substantial funding changes, this adds to the risks of councils being able to budget to meet local needs. The fact that the move to 100% retention coincides with the significant and overdue business rates revaluation has added to the complexity of what is being considered and how it will work out in practice. Consequently, there is an expectation that there will be a large number of business rate appeals, to which the noble Lord, Lord Beecham, and my noble friend Lord Shipley have already drawn attention. While it is to be welcomed that the Government have established a central fund for payment where appeals are successful rather than the existing system of a 50:50 share with local authorities, it must be fully funded, otherwise it will fall into disrepute.

A 100% business rates retention scheme brings with it both winners and losers. An analysis by the House of Commons Select Committee last year estimated that the winners are more likely to be in all the regions to the south of Birmingham, with the northern regions and the Midlands being net losers. Although government estimates are that local government as a whole will gain by between £10.5 billion and £12.5 billion a year, many local authorities will not gain and will rely on the system of tariffs, top-ups and the new levy system to allow equalisation.

This redistribution through tariffs and top-ups will be absolutely critical if local authorities that are currently not in a position to raise sufficient funding are to be able to meet local needs. This must be done on the basis of an individual council’s needs and not on a regional, sub-regional or combined authority basis as there can be wide variations even between adjacent local authorities, again as the House of Commons committee report of 2016 demonstrated. The safety net is a critical factor and the detail of how this will operate is fundamental to enabling local authorities to deliver essential public services.

The other crucial factor in these considerations is the frequency of the so-called resets—the length of time between business rate revaluations. Obviously businesses, wanting certainty, would want a longer period, but local authorities, reliant on income from business rates and with fluctuation in need, will want a more frequent reset. It will be interesting to hear from the Minister about the lengths of time between resets that the Government are considering. It will also be interesting to hear what action the Government propose to take if, for instance, a large retailing business closes within a local authority and it therefore loses the income from that company’s business rates. Would there be compensation for what could be a significant loss of income?

In addition to these variables, the Government are proposing that local authorities should have new responsibilities as a result of the increase in funding that will be gained by them from the 100% retention scheme. I am relieved that the attendance allowance scheme has now been excluded from the suggestions that the Government originally made, but I hope—perhaps the Minister will be able to give some reassurance—that they will not use the opportunity of local authorities gaining from additional funding to pass on more responsibilities than the funding available. That would be quite a cynical move and would just add to the cuts in local authority funding.

The Government have yet to spell out the arrangements for sharing business rates in two-tier authorities. Perhaps the Minister can throw some light on how that will happen. I would also like to hear from the Government about the central list of major public utilities whose business rates are centrally gathered. It would be nice to know which is on that list, what business rates in total they bring in, and how the money will be redistributed. I have not been able to find a list. I am sure there is one, but it is a little list that I have not been able to find.

A final uncertainty in this major reform of local government finance is the fair funding review, which I hope will live up to its name. The assessment of need referred to by my noble friend Lord Shipley is the fundamental building block for providing local councils and the people they serve with an assurance that councils will be able to meet their basic needs.

The Government are making substantial changes to local government finance at the same time as large cuts are being made to local government funding. This brings with it risks and uncertainty as well as an inability to plan for the long term. We seek assurances from the Government that these changes will not, first, result in even more significant cuts to funding for those councils that will struggle to increase business rate income in the short and medium term. Secondly, can the Minister give an assurance that there will be a fair equalisation mechanism? Thirdly, will he take into account the significant changes in income or, as I have referred to, between the reset periods? Fourthly, will the fair funding review enable all local authorities to meet the needs of the people they represent?

Finally, I look forward to the Government providing information about the one-liner I spotted today in the Local Government Finance Bill:

“The Government will amend the related approach to the setting of council tax referendum principles”.


I have thrown that in in the hope that the Minister will have some information on it.

[Lord Kennedy of Southwark (Lab)]

My Lords, in debating these regulations I refer noble Lords to my entry on the register of interests. I declare that I am a local councillor in the London borough of Lewisham and a vice-president of the Local Government Association.

The first set of regulations, as we have heard, governs the payments to and from authorities and to the Government, while the second set governs the operation of the levy and the safety net for 2017-18, taking into account the revaluation and the 2017-18 business rates pilots. The amendments make provision for the following: allowing the pilot authorities, including in Greater Manchester, Liverpool City Region, West Midlands and West of England and Cornwall, not to pay a central share. There is to be a reduced central share in London to allow for the fact that the GLA will now receive Transport for London investment funding through business rates rather than a grant. The West of England Combined Authority is to receive 5% of business rates as well. There are changes to the baseline funding level for all authorities in line with the 2017 revaluation and the rise in RPI. Changes are made to the levy rates to reflect revaluation and the fact that the levy will not be payable for authorities in the pilot areas.

I have no issues with these regulations as they stand, but I have a few general observations and questions for the Minister. As we move to a system whereby local authorities keep their business rates, the Government need to ensure that the implementation is fair and provides councils with the resources they need to deliver services. Some areas will be able to generate large sums of money from their business rates while others, despite working on and growing their local economies, will struggle to generate sufficient business rate income to meet the demands placed on them. We have heard about the schemes in place to equalise that—the noble Baroness, Lady Pinnock, referred to them. Can the noble Lord comment on ensuring that the scheme to take account of imbalances has a very local focus rather than the focus being at the regional and combined authority level? I agree strongly with the comments of the noble Baroness in that respect. Can the Minister give local authorities some comfort by saying that the Government are aware of this issue and will be responding to it?

Can the Minister also comment on the trend of the Government to place more and more obligations on local authorities but not to provide the funds to meet them? It is a worrying trend that we have seen developing. I would certainly want to see extra business rates income being used to relieve existing funding pressures before we get to the additional responsibilities to be funded through business rates retention.

Can the Minister also say something in respect of business rates appeals, a point raised by other noble Lords in their contributions, and the risks associated with them for local government? My noble friend Lord Beecham and the noble Lord, Lord Shipley, both referred to this issue. I contend that local authorities holding £2.5 billion in case they need to refund money due to successful appeals is not the most efficient way to proceed.

Barnsley, Doncaster, Rotherham and Sheffield Combined Authority (Election of Mayor) (Amendment) Order 2017

Lord Kennedy of Southwark Excerpts

Thursday 16th March 2017 Lords Chamber

Time will tell. We will have elected mayoral elections in May—for this authority, May 2018. Let us look at the turnout. Will it be greater than turnouts for the police and crime commissioners, which were abysmal, many of them falling below 20%? The commissioners have had little impact on the link between residents and policing. Time will tell whether this devolution model will succeed. What will succeed is devolution—the issue is with this model. I understand why areas are accepting it—because it is what is on offer—but I hope that the Government will have a flexible approach to reviewing its success as we see whether voters support elected mayors and whether they achieve consensus throughout the regions for which they are elected.

[Lord Kennedy of Southwark (Lab)]

My Lords, I first draw the attention of the House to my entry in the register of Members’ interests and declare that I am an elected councillor and a vice-president of the Local Government Association.

This is one of a number of statutory instruments that we have been considering over the past few weeks in your Lordships’ House. I should first say that I welcome further devolution, although I have concerns with all these deals about the level of funding provided. This order puts the election for the mayor back by one year. There is also an issue about the patchwork nature of the deals and, as many other noble Lords have said today, about the lack of any coherent framework for devolution in England. That is something that we should all be concerned about. In some areas, the devolution deal seems to have progressed well and important powers and functions have been devolved to the combined authority. In other areas, this has not been the case. In county areas in particular, a directly elected mayor perhaps does not feel right. My noble friend Lady Hollis referred to this as a particular concern. There is certainly a question over how these mayors fit in to the vision of future devolution in England. The Government have still been unable to explain their obsession with directly elected mayors—perhaps the noble Lord, Lord Young of Cookham, will do so now.

I lived and worked in the east Midlands for many years, I know Lincolnshire very well and I entirely agree with the comments of the noble Lord, Lord Cormack. It is a rural county and I just do not see how a mayor would work there at all. The Government should recognise that each area is different.

We need a coherent framework for devolution. The Government should set out what they mean by it so that there can be a proper debate and discussion in England about what it will be. Years ago we used to have things called Green Papers, which would come along and set out the Government’s thinking on where they would like to go and invite that sort of dialogue to get local government and people engaged. That is certainly something that the Government should do. I am also aware that there have been a few changes in the department in recent days. I do not know whether that will have any effect on what will happen, but certainly the Government need to think long and hard about the whole question of mayors and why we have to have mayors in an area if that area does not want one.

As I said, huge changes have taken place in recent years. We have police and crime commissioners, which were referred to, who can now take over the fire service. We have the combined authority models, with or without directly elected mayors. This is not very joined up or coherent. In my view, it is not the best way to move forward.

There is a problem here. A contradiction arises with the drawing of quite artificial boundaries in the spirit of trying to put together a combined authority when they do not necessarily mirror community identities. There has of course been the legal action from Derbyshire referred to by a number of noble Lords. Councillor Anne Western is someone I know very well. I regard her as a friend. She is a very competent leader of the county council. I have known her and worked with her for many years. There is no question that she is pro devolution and believes in the devolution of powers from Westminster to communities. Equally, I agree that the consultation was not organised very well. I agree with the comments of my noble friend Lord Blunkett. I do not particularly agree with the comments of the noble Lord, Lord Scriven; I think that some of them were designed for the front page of the Sheffield Star. We need to look carefully at where we are going with these devolution deals.

We need a proper framework. The Government need to come forward with one now. This is not the only place where we have problems. Other parts of the country have problems with these deals. The Government need to set out what they see for the future and how they are going to get there. That would certainly help the situation we have here today.

[Lord Young of Cookham]

My Lords, I am grateful to all those who taken part in this debate—some of which went slightly broader than the date of the election of the mayor. I was at this Dispatch Box yesterday having a rather uncomfortable time in connection with a manifesto commitment. Now my noble friend Lord Cormack invites me to break another one. The manifesto commitment is that we will devolve a wide range of powers and budgets to major cities that choose to have an elected mayor. That is the link. I am invited by a number of noble Lords to break that link. I hope that they understand that I am unable so to do. It is entirely a matter for the local area to decide whether it wants to go down this road. This is a choice that it did not have before. It can have a devolution deal and if it wants to it can put a proposal to the Government and then we can make progress. The Government have been absolutely clear that there must be an elected mayor to ensure that there is sufficient accountability, which we believe only an elected mayor can deliver.

[Lord Kennedy of Southwark]

I am sorry to interrupt the noble Lord but I think that is a little unfair. At one point he said that it is up to people in a local area to decide, but then that if they want one thing they have to have another. It is not the case that they can decide. Look at bus powers, for example. The Government are not just leaving it to the local people or a council to decide at all; they are setting conditions.

[Lord Young of Cookham]

With great respect, I disagree with the noble Lord. They have a choice, which they did not have before. They can either stay put, which is what used to happen, or they can have a devolution deal as offered by the Government, but with an elected mayor. That is a real choice. If they do not want to have an elected mayor, for all the reasons that we have heard, they can stay where they are—but at least they have a choice, which they did not have before.

Liverpool City Region Combined Authority (Functions and Amendment) Order 2017

Lord Kennedy of Southwark Excerpts

Thursday 16th March 2017 Lords Chamber

[Baroness Pinnock (LD)]

I agree with what the noble Lord, Lord Deben, has just said about the need for spatial planning across the whole country, and I remind your Lordships that it was the current Government who abolished regional spatial planning to the disadvantage of many local councils. However, I will address my comments to the two orders in front of us today.

I turn, first, to the Liverpool City Region. Following the remarks of the noble Lord, Lord Alton, it struck me that we ought to develop a new collective noun for mayors, and I have a couple of suggestions. Should it be “a charm of mayors”, as with goldfinches; “an obstinacy of mayors”, as with, I understand, buffalos; a “gaggle”, as with geese, or—perhaps not—a “murder”, as with crows? However, as has already been pointed out, there will be too many people in an area with the title of mayor and people will be confused.

Most residents think of a mayor as the civic mayor, and we ought to have come up with a different title for the ones whom we are proposing should be elected for the combined authorities. The difficulty that Liverpool may suffer from is having elected individuals with large egos—it already has one with a very large ego. The consequence will either be energetic co-operation or a dysfunctional system. I hope that the Government are thinking very carefully about how elected mayors will be able to co-operate effectively for the benefit of local people and for the regeneration and economic development of their areas.

We discussed some of the functions at Tees Valley two or three weeks ago in your Lordships’ House, and today I want to draw attention to the comments of the Secondary Legislation Scrutiny Committee. It draws to your Lordships’ attention that it was very clear that residents in the Tees Valley, when consulted, opposed by a clear majority having an elected mayor. The committee’s report says that,

“many people have in effect answered a question, ‘Do you want an elected Mayor for the Tees Valley?’, with the vast majority opposing it”.

Despite that, their views have been ignored. It is dangerous for local democracy to pose a question, get a response and then ignore it completely and do the opposite. They should not have asked the question if they did not want to respect the answer.

This is a very unsatisfactory way to proceed. The consequences are that Tees Valley will have an elected mayor, but that elected mayor will have to work extremely hard to gain the trust and confidence of local residents who, as we heard, opposed the measure. Huge effort will be needed and it may drag on the ability of the mayor to enable the development of economic regeneration and transport facilities, because that effort and energy will need to go into convincing local people that this is the right way to proceed. With those comments, I wish both areas a successful devolution, but have considerable concerns about the models that have been adopted.

[Lord Kennedy of Southwark (Lab)]

My Lords, turning first to the Liverpool order, I certainly support the arrangements before the House today. Like the noble Baroness, Lady Pinnock, I obviously wish the Liverpool and the Tees Valley combined authorities every success in the future. But I want to put on record that this is no giveaway for Merseyside local authorities from the Government—nothing could be further from the truth. As we have seen, local councils have suffered huge public sector spending cuts in recent years and Merseyside has not escaped that. Cuts to police and fire services, primary and secondary schools, Sure Start and so on far overshadow the comparatively small investment that the Government are making today. That investment will not deliver the Government’s vision for the northern powerhouse, although we seem to hear that phrase less and less from the Government. The foundations for devolution are being cut away by the Government every year, which is not helpful. It just makes the challenges faced by local government that bit harder. Having said that, I welcome the arrangements before us for devolution.

As I said in a previous debate, however, I am concerned about the whole question of patchwork. I accept that there can be difference, but I still think the Government should set out a framework. We have a messy patchwork, which does not bring the best things forward. We should set out what we want from devolution for England and how we see the country going forward. I certainly recall that in a debate last week on Cambridgeshire, the noble Lord, Lord Tebbit, referred to four tiers of local government in that part of the country. It is all a bit of a mess. We are not clear where the Government are coming from. I think the noble Lord, Lord Lansley, mentioned that in the debate as well. This is all a mess and we need some clarity from the Government about where they want to go in terms of devolution.

There has been a distinct lack of public engagement in the order for the combined authority for Tees Valley. It is important to engage the public in devolution discussions particularly where we propose to have mayoral elections. We want to get the agreement of the public because we will ask them to go out and vote for these people at some point in the future. It would be nice if the public engaged with that and agreed that they wanted this form of government. I think about 2,000 people responded to the local authority’s consultation but only 11 members of the public responded to the Government’s consultation, which from a population of 670,000 seems a derisory figure—0.001%, which is poor by any stretch of the imagination. Of those 11, seven had a negative view of the Government’s proposals. The Government should take account of consultation but also ensure that the consultation is done in a way that engages people and enables them to give their views to us.

As I said, it is necessary for the Government to set out clearly where they are going in England with devolution, and they are just not doing that. That is why we have these problems in understanding what is going on with devolution. However, I certainly wish Liverpool and Tees Valley every success in the future.

[Lord Young of Cookham]

My Lords, I am grateful to all those who have taken part in this debate and I shall try to respond to the issues that have been raised. In response to the noble Lord, Lord Alton, we will keep this issue under review. Under the devolution deals, the Government of course stay in touch, and an evaluation of progress is made every five years. As this is a relatively new innovation, we will be particularly interested in seeing how it pans out. The noble Lord reminded me of my time as a junior Minister with Michael Heseltine in the 1980s after the White Paper into the riots, and he is right to point to the transformation that was undertaken in partnership with the local council and local MPs. As a result, substantial investment was made in the city. I am grateful for what he said about that.

My noble friend Lord Deben made a thoughtful comment in which he suggested, I think, that central government should seek to mirror centrally the sort of structure that is being developed locally. I have some sympathy with that. Against that, however, one of the signals we have been getting in central government is a plea for stability and certainty rather than further reform. One has to try to balance a move towards the sort of approach my noble friend has advocated with the plea for stability against a background of several planning Bills which have gone through the House. I say to my noble friend that the White Paper on housing is quite clear that neighbouring authorities should work together constructively. We are also going to look at the NPPF so that authorities must prepare a statement of common ground to work together. I will certainly feed in what he has said as we do that work on the NPPF.

In response to the noble Baroness, Lady Pinnock, and to some extent the noble Lord, Lord Kennedy, I should point out that there is some tension between the reported views of local residents, which both noble Lords referred to, and the views of the locally elected councillors. Of course, that reaches us only if the locally elected councillors have decided that this is the way they want to go. The Government’s view is that it is legitimate to look to the locally elected representatives to come to a strategic view of where the authority wants to go rather than to a whole series of local opinion polls. I do not know whether the noble Baroness is a vice-president of the LGA—most people who speak in these debates seem to be. A long time ago, back in the 1980s, I was a vice-president of the AMA, but I think I was expelled when I abolished the Greater London Council. However, I think that the view of the LGA would be that it is perfectly legitimate to look to locally elected councils to reflect views.

I turn to the issue of having lots of mayors in one place. In London we have a Lord Mayor of London and a mayor, Sadiq Khan, and some boroughs have locally elected mayors. I think that people understand what is going on and while we could try to find a new name for mayors—the chain gang, or whatever you call them—if this is the way local authorities want to go, it would be a very brave central government that forbade them to do so, even though in some areas this does result in parish, district, county and combined authorities.

These draft orders confer further new functions on to the Liverpool City Region Combined Authority and the Tees Valley Combined Authority, some of which are to be exercised by their respective mayors. The first ones are to be elected in May this year. I commend this order to the House.

Political Parties (Funding and Expenditure) Bill [HL]

Lord Kennedy of Southwark Excerpts

2nd reading (Hansard): House of Lords
Friday 10th March 2017 Lords Chamber

[Lord Kennedy of Southwark (Lab)]

My Lords, first, I congratulate the noble Lord, Lord Tyler, on securing a Second Reading for his Private Member’s Bill today, although with it being so late in the Session, as he alluded to, I suspect it will make no further progress, which is a matter of regret. I have repeatedly brought this issue to the attention of the Government and asked them to look at revisions to the procedures which would enable the Grand Committee to be used for Committee stages of some Private Members’ Bills, to enable quicker progress to be made than the snail’s pace at which they often move. Many of those Bills are sensible and it would be beneficial if they reached the statute book.

The noble Lord’s Bill addresses a number of issues that have been on the table for quite some time, and we have been unable to make any progress on them. These are important issues where updating the law would be beneficial. I do not necessarily agree with all the clauses of the Bill but it is moving in the right direction. The noble Lord made an important point in respect of referendums, and I am pleased that the noble Lord, Lord Fraser of Corriegarth, brought the SNP in, as all parties have now had issues aired in this debate.

I am sure the noble Lord, Lord Young of Cookham, is going to say that the Government cannot impose consensus on political parties but that they are open to debate and dialogue. That is fine as far as it goes, but equally the Government are drawn from a political party, so they have more interest in this matter than that statement would imply. I very much agree with the noble Lord, Lord Tyler, that parties should get round the table to seek agreement on all these matters.

Prior to the election of the Labour Government in 1997 there was in effect no legislation in respect of donations to political parties, the regulation of political parties or the regulation of national campaign expenditure. The Labour Government asked the Committee on Standards in Public Life to look into these areas, and out of that we got back what became the Political Parties, Elections and Referendums Act, now known as PPERA. Other legislation followed over the Government’s term of office to deal with a variety of issues including loans to political parties, postal voting and individual electoral registration.

Seeking agreement among the parties was, and should be, a high priority, and for me that is the way to proceed. Since then that has not always been the case, and you only have to look at the decision to speed up IER after 2010, the reduction in the number of parliamentary seats by 50 and the curtailing of the boundary review inquiry process. At the same time, the increase in the number of Members of this House by the previous Prime Minister compared to the number of appointments his predecessors made, be they Labour or Conservative Prime Ministers, raised a few eyebrows to say the least.

The noble Lord, Lord Bew, was right when he spoke about the need for action and reviews with respect to the funding of political parties. The noble Lord, Lord Rennard, made similar points. It is important that any changes that take place do not unfairly penalise or give advantage to a political party. The history of my own party, the Labour Party, is based in the trade union movement. It was formed on 27 February 1900 in Farringdon Road, and elected its first two MPs that same year. We know of Keir Hardie, but the other MP’s name, Richard Bell, has disappeared into history. He was elected for Derby, and there has been a Labour MP in Derby ever since. But a first mention of Labour in terms of a candidate came in 1870, when a man called George Odger stood as the Liberal-Labour candidate in the Southwark by-election. He was described as an:

“English radical agitator of humble origins”—


someone I would have liked if I had had a chance to meet him.

Political parties and candidates for election should start from as level a playing field as possible, with any unfair bias in the law eliminated. That is not to say that a party or candidate may not have advantages. They may have a better candidate or more fertile ground from which they are seeking election. They may have run a better campaign or raised more money, or they may have more party workers.

The Bill itself builds on PPERA and states clearly what a registered political party is. I have no objection in principle to setting a limit on the size of donations that can be made to a political party, though I would probably want to explore the figures and dates in the Bill to see if they are the correct ones. I welcome the proposals to treat affiliation fees as individual donations, subject to satisfying certain conditions. I have no problem with exploring changes to the way that political parties receive public funding, and if we are going to implement any sort of change in respect of donations then serious consideration is going to have to be given to increasing the amount of public funding and to changing the way in which that funding is made. However, I am a bit nervous about any mention of the words “registered supporters”, and I am sure noble Lords will be fully aware why that is the case. In respect of expenditure for party-political purposes, that whole area needs to be revised and the sooner that happens the better.

Clause 23 concerns the functions of the Electoral Commission. I am of the view that the Committee on Standards in Public Life, led by the noble Lord, Lord Bew, should be invited by the Government to take a detailed look at the commission and its functions. It has been in existence since 2000 and been reviewed only once in that period. I think the time has come for that review to be done again. The noble Lord, Lord True, made important points in this respect. I say this as a former member of the Electoral Commission. There are many good commissioners there and excellent staff, and I have huge respect for them. They work as hard as they can to deal with the issues within—and this is the important point—the powers that Parliament has given them. So I very much support a review of its functions and hope that something can be done to get this under way sooner rather than later.

The noble Lord, Lord Bew, also made compelling points about the fact that donations to political parties in Northern Ireland are still secret. That needs serious review. Now is the time to make those donations public. We also need a consolidation Act to get the law in quite a specialised area into one place so that it is easier to understand for practitioners, candidates, party workers and the general public.

I will leave my remarks there. I thank the noble Lord, Lord Tyler, for enabling us to raise these issues today. This has been a very good debate and I look forward to the Minister’s response.