Local Government Finances

Baroness Pinnock Excerpts

Thursday 21st March 2024 Lords Chamber

[Baroness Pinnock (LD)]

My Lords, I thank my noble friend Lord Shipley for securing this debate, and for his excellent and analytical introduction, and all noble Lords for the many local examples that they have shared and for their eloquent contributions. I have relevant interests as a councillor for nearly 40 years and as a vice-president of the Local Government Association.

The words “local government” were once synonymous with pride of place and pride of people. Councils were duly elected and took action to improve that place, be it through housing improvements, creating parks or ensuring public health reforms. It is a sentiment that the right reverend Prelate the Bishop of Manchester also expressed. The demise of the once great vision of what elected bodies could achieve for their place has been gradual. The question is whether we are reaching an endgame in that vision. My noble friends Lady Scott of Needham Market and Lady Hamwee have exposed and expressed that as a real threat.

Local government is shorthand for the provision and delivery of services that make a tangible difference to the lives of individuals, families and communities, be they in villages, towns or cities. That is why this debate is so important. Cutting funds to councils means real reductions in services that provide basic support to people in need, blocking opportunities for young people and leaving the place that people call home in a state of decline.

The challenge for the Minister is to demonstrate that the Government understand that local government is not about the delivery of disparate services defined only by central government. Local government, at its best, is far greater than the sum of its parts. It is local government that is the key to preventing difficulties becoming crises. For example, closing swimming pools and leisure centres as well as reducing youth provision will mean that young people have fewer places to go and fewer interests to enjoy, and the consequence can be a rise in anti-social behaviour.

My noble friend Lord Shipley has rightly focused on sources of income for local government. That is something that we really need to think about in this debate. A SIGOMA briefing stated—and I thought that this was really telling—that there has been a move away from providing local government funding based on need to one based on local tax-raising ability, so that councils in more affluent areas are able to raise far more through council tax than councils in more deprived areas. Can the Minister confirm that that is the case and that government claims of increasing core spending power include a requirement for councils to raise council tax by the limit set by the Government?

All that adds up to not very much in the sense of levelling up, which sounds ever more a hollow promise, as many noble Lords have said. Does the Minister agree that the social care precept is a new tax, introduced by the Government to help fund social care? That tax adds a further 2% on council tax bills in the higher-tier authorities and unitary councils and 2% more on the bills of hard-pressed council tax payers. In my own council, that means, for the average council tax payer, an additional £200-plus per year. As we all know, council tax is regressive, so is that a fair way of raising more funding for social care services?

As my noble friend Lord Shipley has rightly pointed out, 69% of local councils’ total spend is on adult and children’s social care, leaving 31% for everything else: highways, leisure, parks, libraries, culture, the arts—we could go on. I remind the Minister that my noble friend also said that the Government seem to be knowingly letting things get worse, in terms of the consequences of cuts to all the other services. We are still waiting for the fair funding review.

Of course, there are other forms of income for local government. The Government have been pushing for councils to use their reserves, but this is such a short-term and short-sighted approach to local government funding. As reserves can be used only once, this props up a budget for one year only and leaves an even bigger gap the following year. It is not sustainable for the Department for Levelling Up, Housing and Communities to push councils to use their reserves, especially because, as we have been reminded, the OBR has assessed that local government is facing further significant cuts to its funding as the proportion of GDP will fall by 3% over the next few years.

My noble friend Lady Hamwee contrasted being a local councillor 30 years ago with how local government is now—so constrained by government that it is in straitjacket. There is, as she says, little local discretion now available to local councils. That means, of course, that local councils are not able to respond effectively to real local need, because if there is no discretion, there can be no response.

Quite rightly, we have a real focus on arts, culture and libraries. The noble Baroness, Lady Bull, the noble Earl, Lord Clancarty, the noble Lord, Lord Freyberg, and my noble friends Lord Foster and Lady Miller all raised the vital role that culture, the arts and libraries play in the life of a place, and their economic importance in attracting business and investment. There are also the life chances they open up and the opportunities they provide for enhancing life and well-being. The tragedy is that these are the areas of local government funding that have had huge cuts, and there is no sense of the Government recognising the impact of the cuts, and no sense that the cuts will be replaced, except by these odd little pots of money that can be applied for and go somewhere—but, in the scheme of things, go nowhere. My noble friend Lady Miller had the telling statistic that more people go to libraries every year than watch football—I am up for that, as a statistic.

My noble friend Lady Scott of Needham Market pointed to the value of parish and town councils, and the enormous work they are doing. I know that my colleagues in Somerset Council, which is struggling with huge cuts to services, has sought a bigger and better partnership with its local parish councils to make up the difference.

To conclude, there is a crisis in local government. As we have heard, one in five councils are anticipating effective bankruptcy. Selling off council assets permanently reduces councils’ ability to serve local residents. Local councils matter. As we have heard, people are passionate about what local councils at their best can do. That is why the gradual decline of local government matters. We on these Benches value what councils can do; we will support and enhance them. The question to the Government is, will they?