Local Government Finance

Baroness Donaghy Excerpts

Thursday 13th July 2017 Lords Chamber

[Baroness Donaghy (Lab)]

My Lords, I thank my noble friend Lord Kennedy for initiating this debate. His commitment to local government is well known. He is known as “Mr Local Government” down our way.

With so many local government experts in this debate, my contribution should be taken as one from a lay member. I am not a vice-president of the Local Government Association, nor have I been a councillor or even a candidate for a local council. I was an unpaid branch officer in a trade union for more than 30 years, which provided all the joy I needed.

I have worked with hundreds of local government staff who were members of NALGO and then of UNISON. I witnessed their pride in their job and their community, which led me in turn to see the importance of local government to society. I will start with a question to the Minister—it has already been asked, but it is incredibly important: what has happened to the missing local government finance Bill? His Secretary of State said nothing about it in his speech to the Local Government Association conference. Where is the introduction of 100% business rate retention, or the bit which allowed tax relief on new ultra-fast broadband lines? I understand that the telecoms infrastructure Bill will deliver the tax relief instead, backdated to April—the Minister is nodding. Which legislation will deal with business rates retention? I ask only because the Secretary of State said how important that legislation was in February. He said that the reforms offered,

“a bold and innovative response to the twin challenges of promoting economic growth and securing more self-sufficient and sustainable local government. They will help determine the role, purpose and means of delivery for local government in the years ahead”.—[Official Report, Commons, 20/2/17; col. 27WS.]

That is all pretty important, yet the Secretary of State can make a speech to the LGA conference without mentioning it. Usually the saying is: “It’s like the play without Hamlet”; in this case, it was Hamlet without the play. What information can the Minister give to the House on this subject?

I live near Camberwell Green, one of the busiest crossroads in London. On the edge of the green is a purpose-built residential home, which also facilitated nursing care. I know the building because my mother stayed there before she died, more than 10 years ago. The building was bought and sold a couple of times and now lies empty with a “To Let” sign outside. I cannot begin to describe the desperate need of some families in south London for residential and nursing care for their loved ones, or even for a halfway house or respite care unit. This building is a shocking monument to our failure as a country to deal with social care. If we had well-resourced local government, this is the kind of service that it could and should provide.

Southwark’s children will lose the equivalent of £1,000 per pupil in the education cuts. We have a serious problem with air pollution: the level of nitrogen dioxide is more than one and a half times the accepted limit on the Peckham Road, which is where I wait for my bus every morning to come here.

Southwark Council has been magnificent in checking all the high-rise blocks in its area and assisting Kensington and Chelsea Council after the Grenfell Tower tragedy. Its experience with the Lakanal House tragedy, already referred to by the noble Lord, Lord Shipley, made it well aware of some of the dangers. We still remember that it was Sir Eric Pickles, then DCLG Secretary of State, who refused a public inquiry into that very serious issue eight years ago. How many lessons might have been learned had that been taken more seriously?

We have one of the highest incidences of knife crime in the UK in my area, and never has the need for community police work and council resources been greater. Local government finance is about the fabric of our society, as has already been said. If central funding to local councils is cut by 77% by 2020, as the Government intend, people will suffer—not the haves, but the have-nots: those with the worst housing, the greatest personal debt, the most insecure jobs and the most need. Doling money out from the centre, such as with the infrastructure fund for building new homes, is no substitute for vibrant local government. The Secretary of State should not blame councils for faults in central government, as he did at the LGA conference. He should reflect the pride that people from all parties feel when they serve the local community. Having spent several hours this week and last helping to select our three candidates for our local ward, I am staggered by their energy and commitment. It is a reflection of the pride in municipal government which all parties support but which I feel this Government do not.

Council tax has increased by 15.8% in the past 10 years, compared with increases of 58.7% for gas, 50.5% for electricity and 34.2% for water, all of them privately owned. While the increase in utility bills is shocking, I suspect that local councils would have been grateful for even half of those increased sums.

We all know about the desperate shortage of affordable homes, with young people today being half as likely to be on the housing ladder as they were 20 years ago. The Local Government Association has reminded the Government that in the 1970s local government built 40% of the 250,000 new homes then constructed. The LGA has put forward sensible proposals, including,

“allowing the Housing Revenue Account borrowing cap to be lifted”—

that has already been mentioned by my noble friend Lord Kennedy and the noble Lord, Lord Shipley—and,

“building a new wave of different affordable housing options linked to a new definition of affordable housing as being of a cost that is 30 per cent of household income or less”.

These are all things which noble Lords on this side of the House have called for.

However, it is in the area of homelessness and its prevention where councils have a vital role. The level of homelessness has increased by 44% in the past six years. According to the LGA:

“Councils are currently housing 75,740 families including 118,960 children in temporary accommodation, at a net cost that has tripled in the last three years”.


If the Government were to adopt even half the LGA’s proposals to tackle homelessness, it would make a real difference.

Finally, if the Minister is unable to say what plans the Government have to legislate in the area of financing local government, can he at least tell us how the Government intend to alleviate the parlous financial condition of local authorities, which are doing their best to serve their communities?