District Councils

Lord Shipley Excerpts

Thursday 19th October 2017 Lords Chamber

[Lord Shipley (LD)]

My Lords, I remind the House that I am a vice-president of the Local Government Association. I am grateful to the noble Lord, Lord Beecham, for reminding us that some of the things the Liberal Democrats did in the period of the 2010-15 coalition Government were very much in the interests of local communities. Indeed, he accuses us of being an accessory to the cuts of 2010-15, but it all depends on what is being counted. The noble Lord can sometimes be selective in his facts, missing out certain things that are relevant. What is relevant is that the National Health Service was protected locally by that Government, as were our schools’ budgets. In addition, the pupil premium was introduced by that Government, which enabled a lot more money to go into schools in disadvantaged parts of the country. That Government also introduced several years of council tax support to keep council tax bills down for individual council tax payers.

It is the case, not just in local government, that cuts were made that were higher than we would have liked. There are other parts of public spending where cuts were made because of the crisis produced by the banking collapse and the failure of the Labour Government in those years to address some of its consequences adequately. As the noble Lord will also be aware, the Government have been running an annual deficit ever since 2008, causing the country’s debt as a whole to continue to rise. However, let us not engage any further in tit-for-tat.

I was reminded by my noble friend Lady Maddock of the situation in the north-east of England, where we have only unitary councils. I have personally been very supportive, where there is local demand, of introducing unitary councils, as long as two factors are in play: that communities are generally supportive of the geographical size of their unitary council; and that town and parish councils are properly empowered to provide a focus for the explanation of local need to the unitary council, but also for the provision of some services. I find myself agreeing in very large measure with what my noble friend said; she covered a number of the practical problems that can be caused in a large unitary, such as Northumberland, extremely well.

My noble friend Lord Greaves said that district councils were the Cinderellas of local government, that they were in the front line of cuts and that the fabric of local services was being eroded. The Minister should look carefully at the evidence base for this, because I have come to the conclusion that it is true. That is because district councils do not spend a lot of money—I am grateful to the Library brief for providing the information. Local government spends in total some £94.5 billion and district councils spend just £3.1 billion of that—approaching 3.5% of the total.

For a sector of local government to have to cover so many of the services that my noble friend Lord Greaves described seems a tall order on total spending of that kind, yet district councils provide some 60% of local government services in their areas—that is going by the defined number of services that local government provides overall. There is a mismatch between the amount of money they spend and the number of services they are required to provide, which explains why, in some district council areas, the cuts imposed have a greater impact on some services, particularly on housing support.

District councils tend to provide universal neighbourhood services rather than individual services. Individual services in adult social care, for example, are provided by another tier of government. As my noble friend Lord Greaves said, the provision of such local services is gradually reduced to the point where only the basics are done.

However, another factor about district councils should be borne in mind. I concede that there are district councils in urban councils, but district councils tend to cover the more rural parts of the country, where populations are lower and services may lie a considerable distance from where people live, increasing household costs. It is not just a function of council tax levels; it is also a function of how far away a service is that somebody wants.

It is incumbent on all district councils to make themselves as efficient as possible. Sharing services, particularly back-office services, matters. There are some examples of where that is done very effectively. There are areas where becoming a unitary council may be an obvious step to take, underpinned by strong parish and town councils. However, that may not be the right approach for all areas, as I would be the first to concede. There is a big problem about money, in both relative and absolute terms. I read in the District Councils’ Network brief that two-thirds of district councils will face negative revenue support grant by 2019-20, but they share with other councils uncertainties around business rates, about their powers to raise council tax and about reduced spending power generally—as the National Audit Office has made clear in recent studies. District councils claim that they have been affected by worse settlements than other councils in terms of their core spending power. All I ask the Minister to do is look carefully at that and at whether further clarification can be secured.

We have heard today about the 2% prevention precept proposed by the District Councils’ Network. It is a very interesting suggestion.

Years ago, I helped to introduce a business improvement district in Newcastle-upon-Tyne, which had to be voted on by all the businesses within the area of that district. It works only if people understand what they are paying additional tax for but, when they do, it can be a huge success—as it has been, I believe, in our case. There is a 2% precept for adult social care, as we have been reminded, but another idea that the Minister should look at very carefully is how a 2% prevention precept might work. It would need a clearly defined set of outcomes against which success can be assessed. One example might be in housing support services and, in particular, in tackling homelessness, because the spending reductions that have occurred in housing support services in district councils are at almost 50% in the last few years.

As we have heard, district councils can do more on housing, affordable homes and social homes for rent. I am aware that quite a number of district councils have not been replacing homes that they sell. One reason is that they need adequate fiscal freedoms to allow them to do so, by using right-to-buy receipts, lifting the borrowing cap for the housing revenue account and through generally greater certainties on government policy. Some of this will, I presume, be clearer when the Government’s Green Paper is published. Overall, I hope the Minister will reflect carefully on what is being said. There may be an opportunity in the Budget, or in the settlement itself, to ease things in respect of those services that the general public see as universal, which are used by very large numbers of people but which are, at the moment, suffering unfairly and taking away public services that people value.