Local Government Finances

Baroness Hamwee Excerpts

Thursday 21st March 2024 Lords Chamber

[Baroness Hamwee (LD)]

My Lords, I readily accept that I am past my sell-by date, but there are times when speaking from your own experience just feels right. I was a London borough councillor from 1978 to 1998—a much shorter time than other noble Lords have chalked up. Over 20 years and five elections, the turnout in my ward was never below 60%.

That was then. Not everything was peachy. Householders paid rates; my noble friend mentioned business rates as well. I represented a newly built council estate—those really were the days—on the borough boundary. The rates on the large houses on the other side of the boundary—the other side of the road, indeed —were much lower because of the big differences in government grants to the two authorities. I gather that the reserves which the other authority was able to build up during the many years it was so favoured now have a similar effect on council tax.

The 60% turnout did not seem unusual; if anything, I would have hoped for more, given the effort that went into keeping in touch with local residents. We were able to consult about the level of tax rates—x% more would enable the expansion of such a service, x% less would mean this or that reduction; y% would allow for reduction here and expansion there. Referendums are not the equivalent and there is an understandable reluctance, I think, to spend scarce cash on an expensive exercise.

How different it is now. The whole budget, not just the bottom line, is so divorced from local decisions about tax that taxation and representation are largely detached. This is the particular reason I wanted to speak today. What has been happening and continues to happen regarding finances puts local democracy in jeopardy. There is almost no local discretion and, I suspect, no bandwidth to think strategically. Councillors have ambitions for their local communities; they have them for various different communities, such as users of this park, travellers to that school, supporters of a certain football club and the passengers on the 8.23 to Waterloo.

It has always required agility and resilience, because politics is about balancing priorities and should be about being able to take preventive action. How soul destroying to have to keep saying, “We can’t, there’s no money”; spotting a need but knowing that there is no point in pursuing it, and knowing that local residents have decreasing confidence or trust in their local authority.

An unproductive, unedifying blame game does not foster good relationships. Residents—voters—must feel more detached: abandoned, even. In this situation, can local government attract the best candidates across a range of experiences and representatives of their local communities? There is a lot to be said about staff, too, but I will stick to my main point, save to say that the problems of recruitment and retention affect council services and contribute to the overall worrying picture. In addition, charities—the third sector—to which we have so long looked are not in a position to fill the gaps. I am now told that it is very rare to find people who work in local business among councillors. No doubt there are various reasons for this, but those informal links were so valuable.

As I have said, there is so little local discretion and so much is mandatory, the how as well as the what: how you do it, as well as what you do. Recently there has been an announcement about low-traffic neighbourhoods. Central government has said how local authorities should approach these but not said how they should pay for them or given them any more to pay for them.

My noble friend mentioned planning fees. He probably does not know that I was the chair of my local planning authority when we decided to charge all of £25 to businesses for advice on proposed developments. We were taken to court and we lost.

Local authorities are increasingly dependent on what they can raise locally, but this is increasingly restricted. I travel to Westminster on a road that has a yellow box junction which, because of the sets of traffic lights on either side of it, often traps traffic. It may be an urban myth but it is said to be the most profitable yellow box in London. I understand that the local authority does so well out of infringements in that yellow box that it is one of the very few that still offers free domiciliary care.

I would be frustrated now—to take one example which, judging from the speakers’ list, may get quite an airing today—if I were a member of a local authority which was cutting all spending on arts and culture, which I regard as essential and not an optional add-on. If I were not a councillor, in this context, would I want to stand? In fact, I would feel quite anxious at the prospect, at a time when councils are selling off the family silver—indeed, heading towards fire sales—and spending capital receipts on revenue. Those are receipts from assets paid for by the public and they will be lost from public use.

I am well aware that my references to local government finance are a bit simplistic and, at any rate, broad-brush, but my central point is absolutely serious. Our communities are not short of issues to get involved in, but I would guess that most noble Lords would argue that single-issue politics are rather different from the democracy which comes with responsibility and should come with power.

On these Benches, and around the House, we value local democracy. I came here in 1991, because my then party leader was able to make a single nomination and wanted our single new Peer to have had experience in local government and to make the point about its importance. I stood again in 1994 because the local mandate was the only democratic mandate I was able to seek. I am sure I am not the only speaker to have done that—in fact, I know that. My local community was very important to me. Would I want to do the same in 2024?