Devolution in England
Debate between Andy Sawford and Clive Betts
Andy Sawford
I am not surprised that the right hon. Gentleman wants to tempt me down that path. What I am setting out today is a very radical plan for devolution of £30 billion of funding. Of course we recognise that there is a case for fiscal devolution, and we will allow local authorities and combined authorities to retain 100% of business rates. That is a welcome step forward in fiscal devolution, with which the right hon. Gentleman’s party is yet to catch up.
A Labour Government will introduce a proper recognition of needs into the funding formula—we are committed to that. How can it be right for the 10 poorest authorities to be hit hardest, while some authorities such as Wokingham have seen their budgets increase? The right hon. Member for Wokingham (Mr Redwood) will doubtless have different conversations with his local authority, which has benefited from a budget increase, from those of many other hon. Members whose areas have faced huge cuts.
We will take steps to allocate resources much more fairly across local government. Over the medium term, we will give councils greater ability to make long-term plans by introducing multi-year funding settlements. This is supported by local government: we have heard those calls; we support them and we will act. We will devolve power down to local councils and communities—devolving decision making on transport investment and on bus regulation, for example. If those powers are good enough for people in London to exercise at a more local level, they are good enough for the rest of the country.
The public will know that Labour has a strong track-record of devolving power. We passed the Scotland Act 1998 and the Government of Wales Act 2006, and only a future Labour Government will be committed to an English devolution Act that will reverse a century of centralisation. Members have talked about the great early years of some of our cities, which provided pioneering solutions to the problems they faced in the 19th century, but also about how those powers subsequently drifted back to the centre. We intend to reverse that.
Our devolution Act will secure devolution for local communities in England, transferring £30 billion over five years and passing down power and resources for transport, skills, employment support, housing and business support. That is three times as much money as the current Government have said they will devolve in the next Parliament. We will also devolve business rates to city and county regions and combined authorities so that they retain 100% of the additional money that is raised, which constitutes an important fiscal devolution.
The current Government’s talk of devolution relates to limited powers for a small number of larger cities. I agree with those who have called for devolution throughout the country, to all the villages, towns and cities that we represent and that want an opportunity to take more powers and funding so that they can make decisions locally. For all the rhetoric about empowering northern cities, it is worth reminding ourselves that areas such as Liverpool and Manchester—some of the most deprived areas with some of the greatest needs—have faced the biggest cuts in the country. There is nothing empowering or localist about taking with one hand and giving far less back with the other. As was pointed out by my hon. Friend the Member for Wigan, we need to involve people in this devolution, because they currently feel that decisions are made too far away from them. It is important for communities to be involved as we hand over power and resources.
We will join up commissioning between councils and the NHS through health and wellbeing boards to provide “whole person care” by means of a care budget for people with long-term conditions such as disability and frailty. I shall say something about the Manchester proposals in a moment. We will devolve commissioning for employment and skills so that those services are properly joined up. My hon. Friend the Member for Wigan said she felt that the public had been cut out of the conversation in her area, and that consent was needed for this devolution. She was absolutely right. We want to ensure that, as authorities come forward and explain how they will work together to take their new powers and make the most of them, they engage the public in that conversation.
I was extremely disappointed when my local county council announced its intention to explore a partnership with two neighbouring county councils. That did not make much sense to me, but I was more worried by the fact that neither the districts nor the public had been engaged. That is no way in which to build public consent for a radical devolution of power.
We have heard from some Members who represent county areas. I agree with their criticism that the Government have no plan for devolution to counties and county regions. They seem to have a blind spot when it comes to huge areas of the country. If we are given the opportunity to change the position, we will do so. We will offer economic devolution to every part of England.
The Government’s announcement that they will devolve the NHS budget to local authorities in Manchester is particularly topical, and many Members have been exercised about it today. After five years of making savage cuts in council budgets and five years of fragmenting and privatising, the Chancellor of the Exchequer has waited until five weeks before the end of the current Parliament to endorse—in many respects—Labour’s plan to integrate the NHS and social care. Moreover, as we heard from my hon. Friend the Member for Wigan and other Members, he has rushed into it without a proper consultation. The Government are really not doing this in the right way.
A key issue on which Members have commented is motive, which is what makes many of them suspicious. A Government who have, for instance, forced the part-privatisation of ambulance services on people in Greater Manchester are not a Government to be trusted with our NHS, and we question their motive when they make an announcement like this just before an election. Local leaders in Greater Manchester—who have worked with this Government and, in the interests of the people whom they serve, will work with the next—have said that they want an opportunity to develop NHS and social care integration. The leader of Manchester county council, for instance, played a big role in Labour’s local government innovation taskforce, which has championed ideas about the proper integration of health and social care.
The people of Greater Manchester want to be able to get on with the job of developing whole person care. However, before any final deal is signed, important questions about the new arrangements need to be answered. For instance, how much money is on offer, and will it be enough? Members have rightly speculated on the possibility that this is another example of the Government’s devolving the axe by handing over any responsibility for ensuring that a proper NHS and social care service can be provided in an area, and allowing local leaders to take the blame when that service does not meet public expectations.
We must all be vigilant in the face of the danger that the Government are trying to devolve an NHS funding crisis that they have themselves created, not least through their cuts in social care. Labour will offer a better deal. We will offer the NHS and councils more money, raised through our new mansion tax That will allow them to build an NHS that starts in people’s homes, looking after them there and ending the culture of 15-minute care visits. There will be money for the extra nurses, GPs, home care workers and midwives whom we need. Rather than creating new bureaucracies—that is a worrying aspect of the new structure—we will move quickly to devolve more power to councils and councillors.
Democratic accountability is very important, and local leaders must be seen to be in the lead, but we must also think about what additional means of holding people to account may work in different parts of the country. We believe that local public accounts committees could provide a way of including civil society. As other Members have said, we want to engage the public directly, but we can also engage them through civil society organisations.
Mr Betts
I agree with my hon. Friend that many questions about the deal in Greater Manchester need to be asked and answered, and locally elected Members of Parliament should be involved in that process. Is it not crucial, however, that if we are to join up health and social care, there should be accountability to local elected politicians for the spending of the money? Is that important issue not embedded in the whole process?
Andy Sawford
I entirely agree. There is an opportunity here. NHS England and the Department of Health at Richmond house are not necessarily providing the strongest form of accountability to the public when things go wrong. Any Labour plan for real devolution will be intended to create a much stronger feeling that those who provide local public services are accountable. That applies especially to our NHS, which we value so much, and which we need to protect from five more years of a Government who want to underfund, break up and privatise it.
Under this Government, people in cities and towns throughout our country are feeling the pain of the longest cost of living crisis in a century. That is why we need a Labour Government to spread power and prosperity across England, so that the economic recovery benefits all working people and not just a wealthy few.
Local Government Finance
Debate between Andy Sawford and Clive Betts(10 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
Andy Sawford
My hon. Friend makes the point powerfully. The reduction in spending power of areas with higher needs and lower resources, and the increase in spending power in the wealthiest areas, will not just close the funding difference between such areas, but in time reverse it. That is already happening.
Andy Sawford
Of course I will give way to the Chair of the Select Committee on Communities and Local Government.
Mr Betts
My hon. Friend has made a very important point. I come back to the comments the Minister made in his appearance before the Select Committee on 27 January. I asked whether the principle of the grant settlement, which equalises differences in needs and differences in resources between authorities, had been effectively eroded. The Minister said yes, there had been a big shift away from the begging bowl structure of the past to an incentive-based structure for the future.
Andy Sawford
My hon. Friend makes the point powerfully, with all of his experience as Chair of the Select Committee.
Spending power in Leeds will be lower than Wokingham’s in 2014-15, and will fall every year despite higher service pressures. Spending power for my hon. Friend’s own authority of Sheffield and for Newcastle, which has also been mentioned, will broadly match Wokingham’s in 2015-16 and then fall below it in future years despite higher service pressures. The spending pressures that councils face are very different. Newcastle has 101 looked-after children per 10,000 people, whereas Wokingham has 24. Homelessness and supported housing costs are £145 per dwelling in Newcastle and £48 in Wokingham. Statutory concessionary travel costs are £85 per dwelling in Newcastle and £14 in Wokingham. Where is the fairness in a funding system that does not recognise such large differences in need?
The revenue support grant element, which recognises need, will shrink from £15.2 billion in 2013-14 to £9.3 billion by 2015-16. Modelling shows that it could be gone altogether by the end of the next Parliament. The Institute for Fiscal Studies, which the Government are fond of quoting, is clear in its analysis that the poorest areas are feeling the squeeze. Minority communities are particularly affected, too. Of the 30 areas in England with the highest black and minority ethnic populations, 29 face cuts above national average and eight face cuts of double the national average. The Department’s own impact assessment raises concerns about the effect of cuts on BME communities and about services to the very young, the elderly and the disabled. It says it is not possible to make a substantial assessment. I have to ask the Minister why not, given the scale of these cuts? Why has his Department not conducted a full impact assessment, as it was urged to do by the Public Accounts Committee?
Local Audit and Accountability Bill [Lords]
Debate between Andy Sawford and Clive Betts
Andy Sawford
Clause 39, to which the three amendments relate, includes provisions on local authority publicity that the Opposition strongly believe, and have consistently argued, are unnecessary, undemocratic and wholly disproportionate. The amendment, and the clause itself, covers all council publicity from newspapers to posters and even social media. We are gravely concerned that the Secretary of State is, in effect, through clause 39 making himself the censor-in-chief of local government communications.
Much attention has been paid to the Government’s gagging law, which attempts to silence civil society. It is less widely known that, through clause 39, the Government are trying to silence elected local councils. These new powers make the Secretary of State censor-in-chief of local government at the same time as evidence is emerging that his Department is encouraging councils to print pro-Government propaganda through the circulation of the very loaded pro-Government suggestive press releases that we have seen appear around the country.
Clause 39 will give the Secretary of State the power to dictate when and how councils can publish communications to local citizens. Of even more concern to us is the fact that the Secretary of State is taking a power of censorship to direct what issues and information councils can talk about and even what language and phraseology they can use. Ministers have made it clear that their intention is to prevent councils from sharing information or commenting on the impact of Government policy if they disapprove of the message.
In Committee, the examples given by the Minister and his Back Benchers included not allowing elected leaders of a local authority to publish a comment on the effect of central Government funding changes—so furious are the Government that councils are letting their residents know the scale of the cuts they are facing. Under these new powers, the Secretary of State could force councils to use pro-government terminology such as the benign-sounding “spare room subsidy” rather than the “bedroom tax”, which betrays how unpopular and unfair the policy is to many of the poorest and most vulnerable people—including many disabled people—in our communities. Legal advice to the Local Government Association says that these censorship laws would prevent councils from publishing information on issues such as HS2 or health service reconfigurations.
The Government argue that the power is needed because local authorities are breaching the current voluntary code on local authority publicity. Yet they have managed to find only one example of a breach; Tower Hamlets’ publication “East End Life”, which seems to the Opposition clearly to flout the code. It is absolutely shocking that the Government have failed to take any action, using the powers they already have, in more than three years since they became aware of the level of concern, including that reported by Labour councillors in Tower Hamlets. We agree with the Secretary of State that that publication is a problem, but we ask again why the Government have taken no action—no action at all. In fact, the Minister attempted to explain to me in an answer to a parliamentary question that it is because the Secretary of State has not done anything that he now believes that he needs to give himself these dictatorial powers. It is so extraordinary that one might assume that if councils knew the full extent of these plans, they would resist them.
Through several freedom of information requests, I discovered that the Department has not communicated with local authorities about the plans since May 2010. No councils have answered letters or e-mails in respect of their local publications on this subject. This is all being done behind local authorities’ backs.
At the same time as the Secretary of State is censoring councils and preventing them from saying things he does not like, he is seeking to use them as a propaganda arm of the central state. I have discovered that, through these press releases, the Government are seeking to trumpet their policies when it suits them to use councils in that way at the same time as they seek to silence them when council communications are inconvenient. The Secretary of State preaches localism rhetoric, but the truth is—we know this, and local government knows it, too—that he does not really like local democracy. Starved of funds and subject to diktats even on issues like when to collect the bins, local authorities are now subject to censorship. It is clear that the Secretary of State’s warnings of cigar-chomping commies looking to take over government were remarkably prescient.
The hon. Member for Mid Dorset and North Poole (Annette Brooke), who I see in her place, described these censorship laws as
“a sledgehammer to crack a nut”.—[Official Report, 28 October 2013; Vol. 569, c. 704.]
Liberal Democrat-run Cambridge city council says that the clause is “disproportionate and unnecessary”. It says it is
“quite at odds with the principles of localism”.
I asked the Secretary of State in a parliamentary question of 16 December to publish or place in the Library all the responses his Department received to the consultation it ran on local media. The Minister replied:
“I have placed in the Library of the House, a copy of the Government’s response to the consultation on ‘Protecting the Independent Press…’ which outlines the divergent views of councils and representatives of independent newspapers.”—[Official Report, 16 December 2013; Vol. 572, c. 444W.]
Because the Minister would not provide the information, I took the trouble of making a freedom of information request to local authorities themselves about their responses to the consultation on the publicity code. I then discovered that it was not only Cambridge city council that said it disagreed with the clause. Watford borough council, led by the widely respected elected local mayor, Dorothy Thornhill—she is not of my party, but she is someone I have worked with who has a good reputation around local government—says:
“These changes are a threat to local democracy. They could inhibit local elected members from representing their residents. Placing the ultimate decision-making powers in the hands of a Secretary of State is contrary to the localist agenda of the Government, and it is heavy-handed.”
It is not just Liberal Democrat councils either, because Conservative councils, too, are opposed. North Yorkshire county council says in its response:
“The proposed legislation is disproportionate”.
Tory-run North Somerset says:
“With regard to the proposed restrictions on the publication of council newspapers, we object strongly.”
Baroness Eaton said in the other place:
“This clause is unnecessary as there is no evidence that council publications are competing unfairly with local newspapers…the proposed measures in the Bill centralise powers to the Secretary of State and allow central government to interfere with matters that should rightly be decided at local level”.
Lord Tope, commenting on the lack of evidence to support the proposals on local authority publicity, said:
“All we have had from the Government is rather silly and misleading statements from the Secretary of State about ‘town hall Pravdas’”.—[Official Report, House of Lords, 22 May 2013; Vol. 745, c. 898-902.]
The Local Government Association, a cross-party but Conservative-led body, says:
“The powers are too wide ranging and do not allow councils any local discretion about how to engage with their residents. This is unnecessary and could allow the Secretary of State to interfere with the work of an elected council.”
The National Association of Local Councils, which has no political axe to grind, says these powers are “anti-localist”, fly in the face of localism and are
“a threat to local democratic accountability”.
Finally, let me cite the very considered words of the right hon. Member for Hazel Grove (Sir Andrew Stunell), the former Local Government Minister in the coalition Government. In Committee he said:
“Every Bill has high spots and not-so-high spots, and Clause 39 is one of those not-so-high spots.”––[Official Report, Local Audit and Accountability Public Bill Committee, 19 November 2013; c. 301.]
I have had the pleasure of working with the right hon. Gentleman in a previous role so I know that that is a typically understated remark from him. He then went on to challenge the Minister for assurances about the proportionality of any intervention, and the ability of councils to make representations with regard to how they are exercising discretion. However, far from giving reassurances, the Minister—and many of his hon. Friends, some of whom I see in the Chamber today—made us more rather than less concerned. Their political motivation was absolutely clear: they were frankly shameless about revealing that clause 39 was about silencing councils if they communicated with citizens about anything that the Government did not like.
The Secretary of State claims that the clause is needed to protect the press from unfair competition from advertising, but the recommended code of practice for local authority publicity contains no provisions relating to advertising. It is clear that the Secretary of State’s argument is a diversion from the real aim of censoring councils and their locally elected councillors. The National Union of Journalists disagrees with the Government’s contention that local authority publications are damaging to the press. Its general secretary has said that there is “no case at all” for the current Secretary of State
“and future Secretaries of State to be given extra statutory powers to decide when”
and how local authorities can communicate, adding:
“We do not believe that this element of guidance reflects the needs of many communities”.
The Minister will no doubt tell us that the Government ran a consultation in April 2013. That consultation was a classic example of things that cause the public at times to be very sceptical abut public sector consultations. It was, in fact, very much a “nonsultation”. Its outcome was so evidently predetermined, even by the loaded title “Protecting the independent press from unfair competition” and by the way in which it was launched. The Government, as if to confirm that impression—as if they had no regard to whether the public, or indeed local authorities, would consider that they had given any proper thought to the consultation—published their response within two days of the end of the consultation.
We have challenged the Government to give practical examples. As I have said, we acknowledged the issue about Tower Hamlets, on which they should have acted. Baroness Hannam said in the House of Lords that she had evidence involving other local authorities, yet she said—extraordinarily—that it would not be “helpful” to identity them. Asked to give examples, she said:
“I shall not say which local authorities…are breaching the code. I have them. I could do it, but I think it is…not helpful.”—[Official Report, House of Lords, 15 July 2013; Vol. 747, c. 604.]
In Committee, the Minister said:
“the fact is that there are examples out there.”––[Official Report, Local Audit and Accountability Public Bill Committee, 19 November 2013; c. 304.]
He then vaguely referred to four councils—Plymouth, Lambeth, High Peak and Nottingham, all of them Labour-run—which had had the temerity to inform the public of the unfair scale of the cuts imposed on them by central Government. Can Ministers not see that the kind of censorship that they are seeking to impose through clause 39 is not democratic, not British, and not worthy of the values that our Parliament should uphold? The motivation is petty, but the consequences will be very serious indeed.
Let me tell the House about the effect in my area. The Minister has suggested that a council publication in my constituency, the Nene Valley News, is competing unfairly with local papers. His ill-informed statements show why we should not trust the Government with these powers. The truth is that there is no newspaper for the Nene Valley News to compete with across much of east Northamptonshire—and now the only communications lifeline on which many people in the small towns and villages of my constituency can rely is being cut off. Those are people in areas with poor broadband access, and the demographic is such that, proportionally, there are fewer people in those areas than in some of the larger towns in the county who use social media widely, or even have access to the internet.
Mr Betts
Three years ago, the Select Committee conducted an inquiry into the whole issue of local authority publications, and found absolutely no evidence of any impact on commercial newspapers. Indeed, one of our findings was that many local authority publications were published on the presses of commercial papers, thus providing them with important additional income.
Andy Sawford
My hon. Friend, who chairs the Select Committee, is right. I think that there is often a complementarity between the newspapers, news sheets and magazines published by councils and other local papers. There is often a considerable spin-off in the form of the relationship between the communications that councils promote through their papers about local events and community organisations, and how vibrant local newspapers are able to become in terms of, for example, the advertising revenue that they can create in relation to such community events and activities.
The Minister has claimed that the advertising in the Nene Valley News is the problem. First, it is not included in the code; secondly, I would gladly facilitate a meeting between the Minister and the local small businesses and traders who use the low-cost space in the Nene Valley News, and who are now extremely worried about how they will get business. I quoted one individual at length in Committee, but for brevity I shall merely say now that he concluded his remarks to me on this matter by saying, “Aren’t the Tories supposed to be a party that likes business?” He is very sceptical about the motivation for, and is concerned about the effect of, this crass, uninformed and undemocratic clause.
Business Rates
Debate between Andy Sawford and Clive Betts
Mr Clive Betts (Sheffield South East) (Lab)
This is an important debate because business rates are clearly an important cost—and a rising percentage cost—for many businesses, particularly small businesses, in the country. Business rates have gone up faster than turnover during times of economic difficulty. They are important for local councils because they comprise more than 50% of their revenue. If the Minister had until the end of the debate to explain the whole system to us, he would still need more time for the details. There is the retention of rates by local authorities, the provision of resources to the Exchequer which are then redistributed to local authorities, the set aside that the Treasury can keep, and the safety nets and the levies that go on to authorities that are in different positions. It is an incredibly complicated system.
One welcome thing that the Minister mentioned is a review of the appeal system. It is completely unacceptable that it can take up to 18 months or longer for appeals to be held. First, for the businesses themselves, they do not know how they will be placed when they are waiting for their appeal to be determined. Secondly, for the local authorities, an appeal casts doubts over their income stream. One thing the Minister could do before the review is announced and then carried out is to ensure that next year the element of hold-back for local authorities is removed. Ministers could take on board any uncertainties about the valuations and how they will work out through the appeal system, rather than leaving the problem for the local authorities to bear.
Andy Sawford (Corby) (Lab/Co-op)
My hon. Friend is raising an incredibly important point. There were 173,000 appeals this financial year still waiting to be dealt with at the Valuation Office Agency, and 170,000 at the Valuation Tribunal Service. The review should be very quick, otherwise businesses will go under.
Mr Betts
It has to be quick, and it will need more resources being put into it as well. The Minister cannot do this at nil cost. It will be interesting to see how this develops. Hopefully, as my hon. Friend says, it will develop very quickly.
In the longer term, we need a complete review of the business rates system. We need to look at the way in which valuations are carried out. The Local Government Association has called for that review, and I thoroughly support it. It should form part of a wider review of local government finance, and the Select Committee, which I chair, will now be carrying out a review of fiscal devolution to cities on the back of the London Finance Commission, which the Mayor of London has commissioned and which Labour and Tory London boroughs and the core cities have supported. I will not come to a view about whether its proposals are right, but it is interesting that there is now a call for a wider look at the whole basis of property tax in this country and the extent to which it can be devolved down to local authorities.
Were the Chancellor to make any changes tomorrow to business rates for next year—and we hope there will not be a commitment to increase business rates by RPI, as has been the case for the past few years—any reduction must not come at the expense of local councils, which are very hard pressed at this time of austerity and restraint on their spending. Any commitment must be made clear. We need to know the impact of lower business rates not just on councils as a whole but on each individual council in the country— I ask the Minister to put the details in the Library—once the levies and safety nets are taken into account. That must be made explicitly clear for their benefit.
Business rates are a real problem for firms up and down the country. The percentage of their turnover paid in business rates has increased, and that is putting real pressure on small businesses in particular. If the Government recognise that, and recognise the need for action, why are they so mealy-mouthed as to say, “No increase in line with RPI—we will simply reduce that increase to 2%”? If there is a problem, which the Chancellor might recognise tomorrow, why not go that bit further and at least freeze business rates or, even better, take up the suggestion of my hon. Friend the Member for Chesterfield (Toby Perkins) and cut them? If there is a problem, why not address it properly? If there is not, why go for a 2% increase? The Government have a fundamental question to answer on this issue.
The Government must also deal with the disproportionate impact of business rate increases. Firms in different parts of the country are suffering in different ways. In parts of the country where demand has not recovered, where growth has not increased and where there is poverty and deprivation, businesses are suffering more. A revaluation would have addressed precisely that.