Local Government: Reinvigorating Local Democracy

Lord Shipley Excerpts

Thursday 15th June 2023 Lords Chamber

Moved by

[Lord Shipley]

That this House takes note of the state of local government in England and the case for the reinvigoration of local democracy.

[Lord Shipley (LD)]

My Lords, I remind the House that I am a vice-president of the Local Government Association, although I should add that the LGA has had no role in what I will say. I thank all those who will speak in this debate, the title of which reflects my serious concerns about the Government’s increasing desire to centralise local service delivery across England out of Whitehall.

I have been asked several times why it is the Cabinet Office, through the noble Lord, Lord Evans, that will respond, rather than the Whitehall department responsible for local government. Well, there no longer is a department with the words “local government” in its title. What was the Department for Communities and Local Government, or the Ministry of Housing, Communities and Local Government, is now the Department for Levelling Up, Housing and Communities.

This matters, because the absence of the title “local government” implies that service delivery by local government can increasingly be managed out of a range of departments across Whitehall, but you cannot run local services for 56 million people across England out of London. Local government exists to lead delivery of many public services, and to represent the interests of those areas in the availability and quality of those services. It is a fundamental foundation stone of the public’s engagement with public services, in which locally elected councillors have representative duties extending beyond their own council, such as in the health service and transport.

We have experienced in recent years a centralising policy and greater fiscal controls. I can remember the days, when I was a young councillor, when local government had absolute power over the level of the rates and business rates—no more. I regret that increasing fiscal centralisation. It is as though Whitehall, not in control of the nations, sees its role as increasingly running England out of London as opposed to managing policy development across the United Kingdom.

The question must be asked as to why Scotland and Wales have devolved powers supported by a block grant when Yorkshire and several other English regions with a bigger population than either of them do not have those powers or those resources. We should note that the Barnett formula skews public spending. In the year 2021-22, the formula allocated, in terms of UK identifiable expenditure per capita on services, £11,549 across England, £13,881 to Scotland, £13,401 to Wales, and £14,062 to Northern Ireland. England gets substantially less than the others. Within England, the east Midlands receives less per capita than any other English region at only £10,528. I find these figures very hard to understand—and let me assure your Lordships that I have tried.

The state of local government is of concern to me. The Government say that they are committed to continue devolving power to local government. However, what they have actually done is create a complex patchwork of structures based on 317 local councils, 62 unitaries, 32 London boroughs, 36 metropolitan districts, 21 county councils, 164 district councils and 9,000 town or parish councils, with 16 elected local authority mayors plus 11 mayoral combined authorities. It is a complex picture and the relative powers are opaque.

This is made even worse by the proposals in the Levelling-up and Regeneration Bill. I point Members to Clause 74, on alternative mayoral titles for local authorities in England. This relates to combined counties. The elected person does not have to be called a mayor; they can be called a county commissioner, county governor, elected leader, governor or any other

“title that the authority considers more appropriate than the alternative titles mentioned”.

This tells me that the Government do not really know they want and there is no real plan. That worries me.

I am sure that the Minister will argue that the Government have signed six devolution deals in the past year and point to the welcome creation of the first statutory subnational transport body in the north of England, which is good. He will, I guess, also point to the creation of metro mayors and the recent trailblazer deals with Greater Manchester and the West Midlands, which are welcome and very important. However, progress on devolution is too slow, and anyway, these are subregional strategic bodies; they do not actually run local government services.

It is good that the West Midlands has more power over transport, skills and housing, with a single pot of funding rather than one-off funds from bidding. Andy Street, the mayor of the West Midlands, described the trailblazer deal as

“the beginning of the end of the begging bowl”.

That is true in one sense, but I wonder whether it will really prove to be true. There are no extra fiscal powers for the West Midlands other than the retention of business rates for a 10-year period.

We need to reinvigorate local government in England, and we must reverse the increasing preference of Ministers and Whitehall for running more and more out of London. For example, during the Covid pandemic we saw all the problems of centralised test and trace. More recently—just a few days ago—I discovered that regional schools commissioners reporting to the DfE are now known as regional directors. In the recent Schools Bill, we saw an attempt to get academies run directly by Whitehall and Ministers; thankfully, that has now been withdrawn. Amazingly, a few weeks ago it was trailed in the press that there are going to be regional directors for levelling up. How they are going to operate, given that there is a local government structure across England, I really do not know.

Let me share a specific, current example of what I perceive to be the problem: regional care co-operatives working directly for Ministers. Three weeks ago, the Public Services Committee, of which I am a member, commented on the Government’s implementation strategy for children’s social care. The chair, the noble Baroness, Lady Morris of Yardley, said in a press release:

“Without increasing the supply of places for children to live, we are sceptical that regional care cooperatives can empower local authorities to better manage the care market. A regional approach to commissioning also risks cutting smaller providers, including non-profits, out of the market—further limiting options for local authorities and regional care cooperatives. Moving commissioning and planning to a regional level could reduce local autonomy, leaving directors of children’s services less able to deliver the type of services their area needs. It also risks marginalising the voice of young people in decision-making about their own care—something young people with care experience told the committee was already a serious issue”.


The Government have to test much better. When they come up with proposals such as this, they have to explain why they really are going to make things better. In this case, I fear that what will happen is that a few very large contracts will be let and the real problem, which is the number of places for children, will not change. I suggest that Whitehall should concentrate on what only it can do: its priorities have to be things such as the Passport Office, the DVLA and the queues in our courts.

Whitehall also needs to look carefully at the role of audit. It may be mentioned that several councils have run up extraordinary debts in recent years. They may have been trying to offset general funding cuts, but the fact is that they have been able run up these debts. It raises questions about whether we need to re-establish something like the Audit Commission because we need to give the public confidence that their money is safe. Given the recent experiences with some councils’ mismanagement, and concerns about the audit and scrutiny of one of our mayoral development corporations, I think that most of these problems would never have arisen had there been an Audit Commission. Whitehall and, it appears, the Public Works Loan Board did not pick up the problems, so I am regretting the abolition of the Audit Commission. At the time, some 10 or 11 years ago, I thought that it was probably right, given the potential for the National Audit Office to take part of the role. I felt that the Audit Commission had developed mission creep, seeing itself a bit like Ofsted. We live and learn, but something needs to be done on audit.

Will the Government please do something about the bidding culture, which Ministers seem to like? The National Audit Office issued a report 15 months ago on supporting local economic growth. It found that

“multiple funding pots and overlapping timescales, combined with competitive funding, create uncertainty for local leaders. Local authorities wishing to make broad-based investments across skills, infrastructure, business and innovation must submit winning bids across several funds or find alternative sources of funding.”

The National Audit Office was equally critical of low-traffic neighbourhoods, with which there has been a great deal of trouble. One of the reasons that this is happening is because there are deadlines to bid and to spend. As a consequence, public consultation can be very poor, and that has been pointed out by the NAO. Too often, decision-making is not transparent: councils bidding have to pay large sums to consultants, who can be expensive, and they end up not getting the money.

This debate is also about the state of local government, which has suffered huge cuts in financial support and increasing financial burdens, particularly in adult social care, leading to worrying reductions in standards of neighbourhood services used by the general public such as libraries, youth services and leisure centres. Council tax—which the general public think is paying for all these services, when it is only an element of the tax income—is a regressive tax, which is higher than it would have been because of a deliberate decision by the Government to load part of the social care bill onto it, and increasingly so.

There is some evidence that local cuts have been a barrier to growth. I believe in the theory that councils should be able to increase or decrease tax—council tax and business rates—as they wish, but I accept that the time may not be right for that to happen at the moment, and it is essential to maintain a degree of redistribution. On Monday, we shall look at the future of business rates. I look forward to saying some more at that point.

I am very concerned to ensure that the capacity of local authorities to do what they need to do is there. Local authorities are in a partnership with Whitehall in terms of levelling up, but they lack the essential experience to drive transformative projects of scale. I have concluded that one way of addressing that would be for civil servants in Whitehall to go to work, maybe on an exchange basis, with some of the combined authorities or local authorities to bring their experience to bear.

I also suggest to Ministers that they need to look carefully at ways in which some of the functions held by Whitehall departments could be reallocated to local government. In particular, I have long felt that the 630 jobcentres—which Gordon Brown cited in his speech a few weeks ago—should be under local authority control. You would divide the benefit, tax and pension side of DWP from the work-related side. We need to get more civil servants out of London to increase the capacity of council officers.

In conclusion, I want to see a statutory cross-party commission on the future governance of England as recommended recently by the House of Commons Public Administration and Constitutional Affairs Committee. It is very disappointing that the response by the Government was negative. We need a guaranteed constitutional status for local government, and we need a fiscal understanding of what the powers of local government should be in the future. I beg to move.

--- Later in debate ---

[Lord Shipley (LD)]

My Lords, I would like to thank the Minister for his reply, and all those who have taken part in this debate. In one sense, it has been a trip down memory lane, as we compare our own experiences and how much those have changed over the last two or three decades. It has been important for me, because it has demonstrated how much can change in a relatively short period.

I hope that there will be a constitutional commission of some kind. If there is, today’s debate, recorded in Hansard, could form the basis of its first paper. Quite soon there will be a general election. Political parties are writing manifestoes. The only way to effect change in this constitutional area is through cross-party working. That has been generally agreed across the Chamber, but it is important. As I keep saying, you cannot run 56 million people in England out of London.

I thank everyone for taking part. The noble Baroness, Lady Hayman, reminded us about local audit. There is an issue about what Oflog’s role will be. We might want to pursue over the next two or three weeks the timing of Oflog and its exact terms of reference. I had not thought that its work would be similar to that of the Audit Commission, but I was thinking of the problems that have arisen which are very short term—of stopping things from going wrong as they are about to go wrong, rather than of something a year or two after the event, when you are reviewing an audit.

Motion agreed.