Local Government Finance Bill

Baroness Hollis of Heigham Excerpts

Monday 16th July 2012 Grand Committee

[Baroness Hollis of Heigham]

Local authorities’ experiences are very different around the country. For example, if you are a smaller council and you are a district authority, which has to have two stages of consultation, you cannot make the deadline work. The latest information I had from Norfolk was that one local authority had a different supplier from the other six. The other six had their supplier coming through with their package only in the third to fourth week in June. They will probably have to spend four to five weeks cutting and slicing the stats to see what the implications will be for different permutations of the discount scheme, which will take them until the end of July. August, to some extent, is a fairly dead month. Once they have come up with the scheme, possibly in early September, it then has to go to consultation with the precepting authority, the county council, which will take perhaps a month, given that it has a committee cycle of six weeks or sometimes longer. That comes back to the district council, which has to amend its scheme. By this time it is the middle of October.

After the scheme is amended, which may take until the end of October, it goes out for consultation perhaps in November. Three months’ consultation takes it into February. It is a pity that it has to go into the financial estimates in December. In other words, it cannot be done if the district council is squeezed, through no fault of its own, on the one hand by software suppliers not producing the package until late June and on the other by having to have two rounds of consultation—perfectly reasonably—with the county council above all as well as 12 weeks with the public. I do not see how the deadline can be met.

[Lord Palmer of Childs Hill]

I do not have to take my name off the top of this amendment because it was never there. However, I share the natural anxieties of the noble Lord, Lord Jenkin, whose name is to one of these amendments.

The argument put forward in these amendments is to put off till tomorrow what should be done today. There is never a good time to do this. Putting it off will not solve this or help in any way. The argument put forward by noble Lords is that we need a greater lead-in time. The Olympics had a great lead-in time for security but there was still a mess at the end. There may be a mess at the end of this and there may be a mess at the end of the Olympics, but greater lead-in times do not necessarily solve problems.

As other noble Lords have said, local authorities have put in a lot of work. As the noble Baroness, Lady Hollis, says, some are further advanced than others. A district council is, by nature, a smaller authority than a London borough, so size should make it easier to deal with IT, benefits and the like. However, you still need a scheme, although the amount of money involved may be vastly different. I worked with a district council and I am still a London borough councillor, and it is different. The answer to the noble Baroness, Lady Hollis, who makes a very valid point, must be that we need to find a way in which those district councils and other councils that are not that far advanced can be assisted. That is why the Local Government Association, London Councils, neighbouring councils such as Norfolk council, which the noble Baroness, Lady Hollis, described, and the regional authorities have to help those councils through the experience of others. A small district authority should not have to reinvent the wheel.

[Baroness Hollis of Heigham]

The problem is that in a district council—a billing authority—you have two rounds of consultation to go through. There is the precepting authority. Then you amend your scheme. Then you go out to the public for three months. Then you amend your scheme again before it is accepted. That, as much as the software, is the problem. I entirely take the noble Lord’s point about co-operation.

[Lord Palmer of Childs Hill]

I agree with the noble Baroness, Lady Hollis, that there have to be different consultations. An authority may have a £500 million revenue expenditure, as Barnet authority has, but you have to focus your mind within that authority and, even if there are two or three levels of consultation, it has to be done. There is a short time in which to do it, but there is time.

The noble Lord, Lord Tope, talked about there being a difficult time over the next few months. I agree. Central government and local government, the Olympics and all sorts of organisations are having a difficult time, but local authorities have a history of rising to the occasion. I believe that they are doing that and that they will continue to do so. Therefore, I am against postponement.

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[Baroness Hollis of Heigham]

I am sure that other councils may have had their software packages back in May, but from the county about which I have a little knowledge, I understand that the majority of councils use the same software supplier and it did not come through until nearly the end of June. That means that the proper consultation could not be gone through until councils had already decided on the scheme. That is the dilemma. Both factors were operating: the late supply of software through no fault of their own, and the fact that as a billing authority and not a unitary authority they in effect have two rounds of consultation. Again, that is perfectly proper, but you have a pincer movement on the timetable.

[Earl Attlee]

My Lords, I will carry on for a moment.

Just to be clear, all billing authorities required to bring forward a scheme must consult with their precepting authorities and with the public. That is as much the case for London boroughs or unitary councils as for district councils. Taken together, Amendments 72, 78, 79, 85 and 88A would delay the start for localised council tax reduction schemes by a year, pushing back introduction from 2013 to 2014. I am sure that noble Lords only intended to test the Government’s policy and, like my noble friend Lord Tope, welcome the debate.

Let us be absolutely clear. The saving scored in the spending review has to be found, as pointed out by my noble friends Lord Jenkin of Roding and Lord Tope. This is a key element of our deficit reduction plan that we must meet. Delaying the implementation of localised council tax reduction schemes would come with a cost.

The noble Lord, Lord McKenzie, skilfully queried what we would use these cost savings for. He talked about refuse bins. However, he will be aware that my right honourable friend the Secretary of State for Transport has announced a major programme of investment in our railway system. We can either spend money on council tax benefit or take a little cut on that and a little cut elsewhere, then put it all together in order to spend money on developing our infrastructure and promoting growth in the United Kingdom.

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[Earl Attlee]

We have published the default scheme now.

[Baroness Hollis of Heigham]

Today?

[Earl Attlee]

Today, yes. I remind noble Lords that, in respect of the difficulties of devising schemes, we have provided £30 million for local authorities.

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[Baroness Hollis of Heigham]

Is the Minister saying that, in the default scheme, UC will be counted as income? He has had the advantage of seeing the regulations. We have not seen them so I just wanted some information. Is he assuming that UC will be included?

[Earl Attlee]

My Lords, the answer to that question is, I understand, yes. My answer to the noble Lord, Lord McKenzie of Luton, is that clearly the arrangements for data sharing will have to be in place by 1 April, otherwise it will not work. We are working to ensure that the data-sharing arrangements are in place at the appropriate moment. Universal credit will come in next October.

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[Lord McKenzie of Luton]

Perhaps I may press the Minister on that point because it was originally understood that in October next year all new claimants would be claimants for universal credit. There seems to have been some change to that and this issue is obviously important because local authorities have to assess the volume of claims that they will deal with. Can the Minister confirm that the arrangement is that all new claimants coming through from October 2013 will go straight into universal credit and not into JSA, ESA or income support?

[Baroness Hollis of Heigham]

The legacy cases will spend two, three or perhaps four years coming across.

[Earl Attlee]

The noble Lord asked some complex questions. The noble Baroness mentioned legacy claims. It will be best if I write in detail on all those points, including the noble Baroness’s point about legacy claims.

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We are left in a position in which the public, disabled people and their carers will be told, presumably, that their councils can decide whether or not they continue to have the benefits that are currently available—whether having a property altered to accommodate the disabled person's needs means the reduction of a council tax band, although you cannot go lower than band A.

[Baroness Hollis of Heigham]

There is a considerable reduction.

[Lord Beecham]

In all events, it is fairly modest, but that will also disappear unless it is retained. If it is retained we come back in a vicious circle to the fact that it will be retained essentially at the expense of the working poor, whom, I say with due respect to the noble Baroness, Lady Hanham, we constantly hear that this whole scheme is designed to incentivise. That mantra is wearing a little thin. It is absurd to imagine that the whole burden can simply be borne by those people. It may have to be, if the Government require councils to do it or if councillors feel obliged to do it, because it is unlikely that they would be able to fund any move towards meeting the needs of this or any other group.

However, it is clear that authorities should consider the impact of the scheme on disabled people in their areas. I would like to know whether the Government have conducted any kind of analysis and tried any kind of modelling, with or without the assistance of individual local authorities on how this might work in practice. If they have not, frankly, that would be disgraceful. They may have and, in that case, I commend them. But there is no evidence in the impact analysis that anything like that has happened. In a matter of this significance, for this group in particular but not only for this group, that is simply not good enough.

At all events, these amendments at least focus some attention on the issues. They have the disadvantage of not supplying the answer in terms of the financial resources to meet those needs—and again one would have to go back to the Government. When it suits the Government, money can be found. As I implied in the question to the Minister, who is not departmentally responsible for these matters although he is something of a transport buff, money has been found to fund the deferment of the increase in fuel duty. There may or may not be good reasons for doing that—perhaps there are, but it was found. Apparently, the somewhat hapless Treasury Secretary believes that there was significant under-spending across government from which that money was drawn. Perhaps some of that money might have been used to moderate the impact of these provisions. Again, there was the other obsession of the Secretary of State about weekly bin collections, for which £250 million was offered. I gather that not much of it has been accepted, so there may be a saving there. As my noble friend pointed out earlier this afternoon, that money might be used either for the purposes of delay, which does not seem to be likely to commend itself to Ministers, or at least to help meet the needs of the very groups which they will apparently be advising local government to protect as far as possible.

The Government need to be honest about this. If they are not going to provide resources, they should acknowledge that local authorities will find it extremely difficult to do so. They should not be raising expectations that it will be done easily, if at all. That would be a shabby way in which to proceed, and I know that the noble Earl, Lord Attlee, and the noble Baroness, Lady Hanham, are not politicians of that stamp—absolutely not. But those with greater responsibility than, unfortunately, lies within their powers, need to demonstrate that that is not a course that they wish to pursue.

[Earl Attlee]

My Lords, I thank the noble Baroness, Lady Sherlock, for the explanation of her amendments. Noble Lords have asked a number of questions about specific groups and local authorities’ responsibilities in relation to those groups. I want to be clear that the legal requirements that established those duties, which your Lordships have already considered as part of legislation, will remain. As accountable public bodies, local authorities will need to continue to take account of all relevant duties. I am grateful to noble Lords for bringing some of those duties to the attention of the Committee.

The noble Lord, Lord Deben, asked me some interesting questions about the organisation of the machinery of government. I am confident that I know how to exercise that machinery but it is rather above my pay grade to try to change it by addressing the issues that he raises. The noble Lord used the term “above my pay grade” after I had drafted my speaking notes on his contribution.

The noble Lord, Lord Beecham, talked largely about financial issues. It is important to remember that, across local government spending, this is only a 0.4% reduction in the budget.

[Baroness Hollis of Heigham]

Is that on top of 30% cuts already?

[Earl Attlee]

The 0.4% refers to these specific reductions.

The noble Lord, Lord Beecham, tested us on the overall government policy. I am fully signed up to all government policy, as the noble Lord will know.

Amendment 76 would require local authorities to have regard to the impact of their scheme on disabled people in their area. This is an important consideration and local authorities already have responsibilities in relation to disabled people. These include their responsibilities under the public sector equality duty in Section 149 of the Equality Act 2010 which requires authorities, in the exercise of their functions, to have due regard to equality between people who share a relevant protected characteristic and people who do not share it. Equality legislation explicitly recognises that disabled people’s needs may be different from those of non-disabled people. Therefore, public bodies should take account of disabled people’s disabilities when making decisions about policies or services. This might mean making reasonable adjustments, or in some cases treating disabled people more favourably than non-disabled people to meet their needs.

The Department for Communities and Local Government has already published guidance reminding local authorities of the statutory framework in which they operate and their existing responsibilities to people in vulnerable situations, including responsibilities under the equality duty. Therefore, I do not believe that an additional duty to have regard to the needs of disabled people is needed, especially when local authorities have an already established and understood framework of responsibilities.

Amendment 76A would require local authorities to have regard to the impact of its scheme on carers in the area. I was asked several questions about carers, including whether we would change existing relief for them. There are no plans to make any changes to the existing relief. I was also asked how the default scheme takes carers into account. The default scheme preserves the current CTB regime as far as possible. CTB makes provision for carers through a specific income disregard.

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[Earl Attlee]

My Lords, it is clear that I am going to have to write to noble Lords on a lot of these points.

[Baroness Hollis of Heigham]

I understand that the Minister will have to write. Could he pick up the point about one of the problems being that different presumptions and rules are associated with the range of benefits that we currently have when couples straddle the pension age, and will he say what is proposed for universal credit? As I am sure the Minister will know, if one of you is below pension age, both of you will be treated as though you are below pension age. That is not the situation now. There are in effect two sets of schemes, according to whether you are a newcomer into UC or a legacy claimant, and cutting across that will be a CTB discount scheme, which is supposed to embrace both. Perhaps the Minister can take on the issue of this complexity when he writes.

[Earl Attlee]

It may help the Committee if I explain why I am experiencing such difficulties. The proposed amendment talks about disability in very general terms. If noble Lords table an amendment that deals specifically with their concern, I can address that concern specifically, but I am struggling to answer these very technical questions, which are too detailed for me to answer at the Dispatch Box. If I had a more detailed amendment, I could do so.

I would like to say a few more words about carers. Carers provide a vital role in society, and I expect that local authorities will want to consider what provision to make for this important group. Currently council tax benefit makes provision for people who are carers through a specific income disregard and a premium towards their applicable amount. Local authorities will be free to do so under localised council tax support.

The Department for Communities and Local Government is working with the Department for Work and Pensions to ensure that local authorities will continue to receive data on current benefits and universal credit. This could include data that would help local authorities to identify carers so that they are able to provide support in the future if they choose to do so under the terms of their schemes.

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[Lord McKenzie of Luton]

My Lords, I thank the Minister for his reply. I must say that I am a bit taken aback. I thought that it would be pretty much routine to accept the recommendations of the Delegated Powers and Regulatory Reform Committee. I thought that the reasoning was a bit spurious. It is welcome that regulations have been published now and welcome that we will, I hope, have some chance to debate them when we get to Report, although debating at that stage is not necessarily the iterative process that we could have in Committee.

[Baroness Hollis of Heigham]

Can my noble friend recall any other instance in the past 10 years or so when recommendations from the Delegated Powers Committee suggesting that we go for an affirmative rather than negative procedure have not been followed by the Government?

[Lord McKenzie of Luton]

I cannot. I can remember one occasion as a Minister when I was minded not to take the advice, but Ministers always did if it was pressed upon them. I am truly shocked by what the Minister says. We have other business to debate tonight so I am not going to prolong the thing, but this is something to which we will come back on Report because I do not think that the answer is satisfactory. I beg leave to withdraw the amendment.

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Moved by

[Baroness Hollis of Heigham]

79A: After Clause 9, insert the following new Clause—
“Council tax discount: vulnerability
The Secretary of State shall issue guidance to all local authorities determining who shall be considered vulnerable for the purposes of eligibility for council tax discount.”

[Baroness Hollis of Heigham]

I was hoping that we would get to this amendment tonight, so we decided that it was not wise to spend time debating Clause 9 stand part.

The amendment would require the Secretary of State to issue guidance as to who is vulnerable. After the sequence of amendments and discussions that we have had, I think that we need that. At the same time, I want to raise the deeper issue behind it, and I assure the Minister that this is in no sense a technical issue but an issue about policy. I therefore look forward to his reply. On his complaint that we sometimes raise things that are technical, that is of course what Grand Committee is for compared, with Report or Second Reading. If we cannot explore the technicalities here, where can we? I take it a little amiss to be reproved for asking about things that are technical and that cannot therefore be answered in this Committee.

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[Lord Deben]

My Lords, I am so often in agreement with the noble Baroness, Lady Hollis, that I hesitate to intervene, but this is entirely the wrong way round and I deeply disagree with her. This is a very important aspect of what we are doing because the problem with localism is that everyone who has ever been concerned with centralism will find on every occasion that it will be better done by those clever people at the centre. What was behind the noble Baroness’s comments was to say, “The vulnerable will be protected only if we at the centre make sure that no one has any input on this at all in case they might make a different measure and balance, given their available resources”.

I must say that I really wonder what I would say if I had been a local councillor and had heard her comments about what was likely to happen if the local council had made these decisions. The noble Baroness represented a Labour council that decided that in local terms it would bilk the Government’s policy on the sale of council houses. It said, “We have a right to do this”. My noble friend was the one who had to stop the council doing that because it was a government policy, but the council took its own view. It was against the law. It actually broke the law in order to uphold localism as it saw it.

[Baroness Hollis of Heigham]

No we did not.

[Lord Deben]

I have to say that it is not unreasonable—

[Baroness Hollis of Heigham]

My Lords, we did not break the law. I actually won the first round for judicial review. It was only when subsequently it was clear that it would cost the local authority a lot of money if we went to appeal—against Lord Denning—that I decided that we would negotiate. What then happened was that the regional officer was sent in to run the sale of council housing for us and, after six weeks—I was deposed as housing chair—he came knocking at my door saying, “Could we discuss this?” He was hidden behind a huge bouquet of flowers. I said “Of course, of course”. He said, “No one will work with me because when I’m gone, you will still be there”. I said, “Oh, dear me”. We negotiated and six weeks later, he went off to Africa as a chaplain and we went back to where we were.

[Lord Deben]

As we are going down memory lane, I will just remind the noble Baroness that no other local council thought what her council thought about the law. Everyone else accepted that the law was as it was, and indeed it was the law of the land. I am not blaming her for it; I was cheering her on. In those days, she did think that localism mattered, even in a matter so clearly a national policy. My problem with everything she has said is that I have heard it again and again, but normally from officials. Normally it is central government civil servants who sit there and say, “Better not, Minister. If you allow people down there to make decisions, you never know what might happen”. I would say this to her: you have got to start somewhere. Why can we not start here? After all, council tax is a local tax. It is ludicrous to say that the tax is local but the arrangements for the tax rebate should be national. I find that unacceptable and therefore I hope very much that the Ministers will not read out a concession or a helpful comment. I want the Ministers to be tough about this and say, “This is a matter for local authorities”. If local people don’t like it and think the local authority has not been generous enough or has not used the extra funds from something it is able to control—I hope that local authorities will be controlling more and more because I believe in localism—those local people have in their hands the ability to change the authority. This is exactly what has destroyed local government over the years, and my party has been as guilty of it as others. We are always frightened about giving local councillors the real decisions about things.

I do not want to go too much into the detail, but I can also argue that not all reasons for local council tax rebates are central and national. I can cite a lot of examples where the pressures and the concerns about vulnerability are different in some parts of the country from others. Rural areas have different demands with regard to vulnerability from close-knit communities. I merely say that one could go through a list of those.

I come now to the thing that really made me stand up. It was the use of the phrase “postcode lottery” by the noble Baroness. It is a Daily Mail argument that she should never use.

[Baroness Hollis of Heigham]

But it is true.

[Lord Deben]

We want postcode decisions, not a postcode lottery. We want local authorities to make their own decisions about their own communities and their own priorities. What has been wrong in this society for too long is the use of this ridiculous argument.

The noble Baroness says, “You may be on the wrong side of the line”. Well, frankly, that depends on what you think is the wrong side of the line. It may be that in a particular locality, scarce resources are used in a different way from the neighbouring locality. That does not mean to say that you are on the wrong side of the line, it means that you are on the wrong side of the line as defined by the noble Baroness. That is the trouble. Central government has always believed that defining these lines is the business of central government and never of anyone else.

When I was Secretary of State for the Environment I remember addressing a local government conference. When I said that I believed we should do nothing in Brussels that we could not do in Westminster, but what we had to do in Brussels we should do well, and we should never do anything in Westminster that we could do in county hall, but that anything we do in Westminster should be done well, I was cheered. When I went on to say that we should nothing in county hall that we could not do in district council offices, I was cheered again. But when I said that we should do nothing in district council offices that we could not do in the parish council, I was booed. Why was that? It was because everybody believes in subsidiarity—up to there. The moment you talk about subsidiarity below them, all hell breaks loose. The world will fall apart and vulnerable people will be totally stamped on—because we are the only people who know.

That was a very good example of “the man in Whitehall knows best”. It was always the purpose of centralists to claim that no one else could make decisions. I have been longing to say this about the postcode lottery and the moment has come, because it is exactly that which we are fighting against. I must say to my noble friend the Minister that, if she gives way on this, she will be taking away the fundamental element of proper localism; that is, you risk local people making decisions that are different from those that you would make. That is the challenge of localism. The noble Baroness has given us the opportunity to take the most difficult example and say, “No, here we stand”.

[Baroness Hollis of Heigham]

How then would the noble Lord explain why council tax benefit was originally included in universal credit and the White Paper, why all the planning assumptions were based on that and why it was only subsequently extracted in a deal between departments? How does this have anything to do with localism as a principle?

[Lord Deben]

It is because the Government have not gone far enough yet; that is the whole point. I would have a different structure, but the noble Baroness must not ask me to answer for the Government. I am lucky enough to be formerly a Minister and to be able to say one or two things which need to be said. I disagree with the noble Baroness, but she will find on other occasions that I am stalwart in support of some of the things that she says which this Government do not agree with. However, on this occasion, I beg my noble friend to stand firm.

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This has been a very long debate. I have enjoyed it, but I hope that some of the following amendments will not be quite so lengthy. If I have not replied to any specific point, I will ensure that I do so subsequently.

[Baroness Hollis of Heigham]

My Lords, this is not a formality: I thank everyone who has taken part. In a way, the Committee caught alight on this, and it is good that that was on such an important issue.

The noble Baroness, Lady Browning, was right when she said that there was an issue about precepting and billing authorities, which the Minister referred to at the end: the knowledge is on one side and the billing authority is constructing the discount scheme on the other. The lesson that I suggest to the Minister that we take from that is a different one: that you should certainly consult and should have time to consult. She should therefore think again about her response and that of her colleague, the noble Earl, Lord Attlee, to my noble friend’s amendment about the ability to delay, because I assure her that it just will not be possible to get the schemes in alignment and, having done that, to move them out to public consultation all within the financial cycle, ready for introduction in April. That will not work. The Minister, as well as the noble Baroness, Lady Browning, has made our point for us in spades. I hope that as a result she will be able to review the Government's position on the amendment in due course.

I have the greatest admiration for the noble Lord, Lord Deben; on many issues we have been side by side and he was the Minister who, above all, stopped planning in local authorities being subject to the free market, a legacy bequeathed by his colleague Nicholas Ridley, a former Secretary of State for the Environment, which allowed many of us to protect our historic buildings, streets and centres. The noble Lord is in the book of the almost very good in most local authorities, and I am sure that he would want to keep that reputation intact.

No one doubts that planning is a local decision. Obviously there are inspectors and so on, but none the less it is local. However, when you have a number of elderly folk who need care and support and the local authority—rightly, in my view—makes a decision about whether it is more appropriate in its area to go for residential care or, possibly because it is a rural area, to go for extended domiciliary services, it is right and proper that one local authority should differ from another according to the geography and nature of the locality. The noble Lord and I have no differences about that; I was not in local government for 25 years to knock localism. That is why I bothered with it, as do many people in this Room today.

However, it is not a matter of centralism versus localism when you come to the individual entitlement to income. It is simply a different category. In planning, the planning authority is acting as umpire between local residents and car drivers. In residential care, it is a case of deciding how a particular type of need is best met, and many flowers may bloom. However, individual entitlement to income is a basic human right and not part of the proper territory of debate between centralism and localism. This is not about the clever people in the centre knowing best, to copy the noble Lord’s words—that really is an absurd statement—but neither do local people know best. Will the noble Lord argue equally that, because joblessness rises in a locality, unemployment benefit should be locally determined? I await his reply.

[Lord Deben]

Unemployment benefit does not relate to a local tax. We are talking about a local tax, and in a locality it would be sensible for a local council, for example, to say that the way to deal with child poverty in this area is to spend the money on providing the means for them to be fed because it had discovered that by doing it in another way the children did not get the food because the parents used it elsewhere. That is a perfectly reasonable thing for people to decide.

[Baroness Hollis of Heigham]

We could have another argument about whether to have cash or benefits in kind, but the point about income is that it is a national entitlement. We have accepted that for unemployment benefit, I think. Even though the lack of a job may arise because of the peculiar distinctiveness of the locality, we do not then say that, as a result, that should determine the level of unemployment benefit. Equally in housing, rents and policy are determined locally. Is the noble Baroness going to argue that housing benefit should also be a local benefit as opposed to a national one? I do not think so. The main argument that he has used is that because council tax is levied locally, council tax benefit should be structured locally. That takes no account of the fact that half the country is in two-tier authorities where they have no control over what the precepting authority may levy on the billing authority, yet the billing authority takes the problem, cost and moral responsibility for the discount scheme that runs. As a former MP for an area with a rural district council in Suffolk, the noble Lord will know that as well as anyone. His argument does not run in two-tier authorities—it cannot, because the council tax is not generated by the billing authority that is constructing the discount scheme, and any toughness in the scheme to impress on people what their value for money is does not relate to that particular billing authority.

[Lord Deben]

They do have control over it—they have an election. If they do not like what the county council has done they can vote against it. If the noble Baroness is really saying that the only system that people can understand is a single-tier system, she is making a mistake that is very much wider than this. Many people know which do what, and, if they do not like what one of them does, they vote against them in the local election, as we all know.

[Lord Beecham]

Does my noble friend agree that although there is a significant reduction in the amount of central government support for the benefit, it is still approximately 90% government funded? So it is going towards a council tax, but the funding is still essentially central. Unfortunately, some more of it will fall on the locality as a result of what the Government are doing, but the greater part is still centrally funded.

[Baroness Hollis of Heigham]

My Lords, that is absolutely true, even more so in two-tier authorities where 75% of the expenditure that falls on local residents is through the county council precept. The precepting authority does not have to do the same as the billing authority, which has to devise the discount scheme.

I understand the noble Lord, Lord Greaves, on the postcode lottery, because I would defend local decision-making as far as possible. The point here is that what a local authority has in terms of resources will depend on the accident of the demography of its particular locality. If only 30% of its population are pensioners, it will have to find a lower degree of cut on people’s working age than if 60% of its population are pensioners. That is an accident of demography. Equally, when anybody seeks help with their council tax discount, it will be determined not by their own efforts, their willingness to vote or the resources of the local authority, but by how many pensioners and other vulnerable people are ahead of them in the queue. That is not localism; it is rationing by queue, with central government having already determined that certain constraints, such as the number of pensioners, shall be imposed on the system. In that sense it is random—you need not call it a postcode lottery, but it is one. The size of cut that your locality will face is accidental, and it will not necessarily bear a resemblance to your particular need. Even though it may be identical in the neighbouring authority, it will experience a different income because the demographics will be different. That is not reasonable.

I suggest to the noble Lord and the Minister that if there were no proposition to find £500 million of cuts, there would be no such scheme about localising council tax benefit before us today. This is not localism; it is the exporting of cuts to localities by central government and then dressing it up in the fancy clothes of localisation issues, even though people’s needs have not originated by virtue of the locality and the random demography of that patch will determine who gets what. That is not localism. It is exporting cuts without any constraints, which will be experienced differentially by vulnerable people who happen to have been unlucky in the lottery of living in one authority rather than another. I regard that as deeply unfair.

As my noble friend Lord Smith said about where the cuts will fall, it is not about centralism versus localism but about the centre exporting its cuts. The noble Lord, Lord Best, may speak to his amendments on a subsequent day in Committee. The noble Lord, Lord Shipley, was absolutely right. Given this distinctiveness between local authorities, there will be judicial reviews. Mencap will run them if CPAG does not, according to how they are treated. They will probably have a very good case.

The Minister said that local authorities should, in her words, develop schemes that are relevant to their authorities. That challenges the core of my argument. She assumes that vulnerability and poverty are so peculiar and distinctive to a particular local authority as to justify separate local schemes. I simply do not accept that for one moment. Whether you are autistic, have a disability, are a carer with an elderly mum or are a child in poverty, it is not generated by your locality although it may be experienced in your locality. Given that it is not distinctive to your locality, it is not relevant to your local authority. Therefore, there should be a national scheme.

I leave the Minister with two questions. Who will she exclude from the scheme? We know that pensioners are automatically covered. Unfortunately, we have not had the pleasure of seeing the guidance because it did not come out on Friday but on the very day when we are sitting. Therefore, we cannot cross-refer to it, which is shame. The Minister says that vulnerable people will apparently be protected. The working poor will also need to be protected, so who is not? That is 100%. Who is not protected? Who does the Minister think should see their council tax benefit cut, given that pensioners, vulnerable people and the working poor and their incentives are protected?

Secondly, if there was no £500 million cut, does the Minister think that any local authority in the land would seek to establish its own distinctive council tax scheme and to pull it out of universal credit? She knows that would not happen. I have put two questions to her. She is welcome to respond to me—to tell me what is wrong with council tax benefit, who is already covered but should be excluded and whether, if we did not need £500 million of cuts, any local authority would touch this scheme with a barge pole. I think everyone in this Room today knows the answer to all those questions. They are not answers that enforce the Minister’s argument.

[Baroness Hanham]

I have answered the questions that the noble Baroness has asked me today if not on previous days. I am sure we will return to them. We have had an extremely wide debate today, although we are not over our time. I repeat that local authorities know very well who their local people who need help and support are. That is a very localist issue. The noble Baroness may not agree with me but those are my words on the subject. She gave me the opportunity to say so.

[Baroness Hollis of Heigham]

My Lords, I simply disagree. According to the knowledge of the local authority—or not as the case may be—individuals may see their entitlement to income support decreased. However, the time is late; I beg leave to withdraw the amendment.

Amendment 79A withdrawn.