Homelessness

Baroness Taylor of Stevenage Excerpts

Tuesday 21st January 2025 Lords Chamber

[Baroness Kennedy of Cradley (Lab)]

My Lords, I beg leave to ask the Question standing in my name on the Order Paper, and in doing so declare my interest as a trustee of the Nationwide Foundation.

[The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government (Baroness Taylor of Stevenage) (Lab)]

My Lords, we are facing a homelessness crisis in every part of the country, with record levels that have become nothing short of a national disgrace. This Government acknowledge the devastating impact that homelessness has on so many lives. The current situation did not happen overnight; it is the result of long-standing neglect. We are addressing these failures head on with an injection of cash—allocating an extra £233 million to councils directly for homelessness, taking total funding to £1 billion next year—and through the long-term approach of working with mayors and councils across the country. The Government have set up an interministerial group chaired by the Deputy Prime Minister to develop a long-term strategy to put us back on track to ending homelessness.

[Baroness Kennedy of Cradley (Lab)]

My Lords, today marks 1,000 days since Royal Ascent was given to repeal the Vagrancy Act. Repealing this outdated law, which punishes people experiencing homelessness and pushes them further away from support, had overwhelming support from every party and every section of your Lordships’ House. Despite this, the last Government, and to date this Government, have not yet commenced repeal, citing concerns over the need for replacement powers, even though the latest report from MHCLG shows that this Act is being used less and less by police forces and that nearly half of them do not use it at all. I ask my noble friend one simple question: when are the Government going to commence the repeal of the Vagrancy Act?

[Baroness Taylor of Stevenage (Lab)]

I thank my noble friend for her campaigning around homelessness and on this issue. The Government view the Vagrancy Act 1824 as antiquated, cruel and no longer fit for purpose. No one should be criminalised for sleeping rough on the streets. I share her passion for ensuring it is confined to history, where it belongs. We want to ensure we avoid criminalising those who are most vulnerable, while ensuring that police and local authorities have the tools they need to make sure communities feel safe. As we move towards our steps on the Vagrancy Act, we are working closely with the Home Office and local partners. I was pleased that my honourable friend Minister Ali was able to announce yesterday an additional £20 million to deal with severe winter pressures, taking the total to £30 million.

[Lord Bird (CB)]

Are the Government going to address the fact that we have never learned to turn the tap off? We have more and more people falling into homelessness from different sectors of society—people are having problems all over the place, as the noble Baroness said. My concern is this: we are always going on about the emergency, but where in the background are this Government or the next working on reducing homelessness by turning the tap off and getting rid of the inheritance of poverty, which is what produces most homelessness?

[Baroness Taylor of Stevenage (Lab)]

The noble Lord is quite right in what he says. He will know that we have set a target of building 1.5 million homes over the course of the Parliament, which in the long term is the answer to tackling this issue. In the short term, we need to tackle the issue of many children spending years in temporary accommodation, when they need space to play and develop, at the same time increasing the funding to tackle the long-term causes of homelessness and poverty, which, as he rightly says, sit at the heart of this. The Renters’ Rights Bill, which is coming before this House very shortly, will tackle some of the causes of homelessness.

[Lord Jamieson (Con)]

My Lords, I declare my interest as a councillor in Central Bedfordshire. As the Minister has identified, the primary cause of homelessness is a lack of homes. London has nearly 70,000 families living in temporary accommodation—over half the total in England. Of those, almost half—33,000—live out-of-borough compared with one in seven for the rest of the country. Does the Minister agree that this is largely down to London having failed to build the homes that its residents need? What will this Government do to get London building?

[Baroness Taylor of Stevenage (Lab)]

The noble Lord will be aware that new targets have been set for building homes across the country, and in London no less. Local authorities use out-of-area placements to provide temporary accommodation, as he rightly mentioned. We are enabling more funding to go into London so that we can reduce the level of temporary homelessness accommodation. However, the long-term solution is to get more houses built, which is why we have increased the housebuilding target for London.

[The Lord Bishop of Lichfield]

My Lords, according to data from the Ministry of Justice, the proportion of all prison leavers who were released homeless in 2023-24 was 13%. Considering that people are 50% more likely to re-offend if they are homeless, what steps are the Government taking to reduce rates of homelessness among prison leavers?

[Baroness Taylor of Stevenage (Lab)]

The right reverend Prelate is right to highlight homelessness for ex-offenders. Since 2021, more than £33 million has been awarded to local authorities to support nearly 6,000 ex-offenders into their own private rented accommodation. The number of individuals still enrolled on the programme and sustaining tenancies is nearly 3,000. The funding provided allows schemes to offer a range of support. It is very important that, alongside housing, we get that support, consisting of rental deposits, landlord incentives, and dedicated support staff with landlord liaison and tenancy support officers. That complements the MoJ’s community accommodation service. The right reverend Prelate is right that housing is key to preventing re-offending.

[Baroness Thornhill (LD)]

My Lords, worryingly, the total spend on homelessness is unknown, largely due to a loophole in what we call exempt accommodation, which I am sure the Minister is aware of. The usage of this is not tracked, and it is now evident that it attracts some of the worst providers. Can the Minister assure us that this Government will get to grips with this unquantified and uncontrolled spending, and with those who are exploiting some of the most vulnerable people in society and the public purse?

[Baroness Taylor of Stevenage (Lab)]

The noble Baroness is quite right. It is outrageous that people choose to exploit the individuals concerned in this situation and the councils that have to fund their accommodation. We are doing everything we can to discover the extent of this and to tackle it head on. We recognise the increasing costs of that temporary accommodation and the pressure that it places on council budgets. As well as the homelessness prevention grant, councils are expected to draw from their wider local government finance, as the noble Baroness is aware. The overall local government settlement made extra provision for that, as well as the additional homelessness funding. It is totally unacceptable for homeless people to be exploited. We continue to track that down everywhere we can.

[Baroness Hughes of Stretford (Lab)]

Does my noble friend agree that we have a crisis now with the number of children and young people trapped in bed and breakfast accommodation, in totally unsuitable conditions, which will have an important and deleterious effect on their well-being? On the strategy she outlined, can she say more about the priority that the Government are giving to reducing the number of children and young people trapped in homelessness and to taking them out of that temporary system?

[Baroness Taylor of Stevenage (Lab)]

My noble friend is quite right. There is a short-term and very long-term effect on young people who get trapped in temporary accommodation. Councils must make sure that temporary accommodation is suitable for the needs of the household. Households can request a review of their accommodation if they feel it is unsuitable and it an applicant is not satisfied with how the council has handled their case. We have launched emergency accommodation reduction pilots, backed with £5 million, to work with the 20 local authorities that have the highest use of bed and breakfast accommodation for homeless families. Through the Renters’ Rights Bill, we will be applying the decent homes standard to the private rented sector; this includes a clause to bring temporary accommodation into the scope of the decent homes standard.

[Lord Best (CB)]

My Lords, the Minister may have seen the Sunday Times article by Martina Lees with the headline:

“Our grotty B&B bedroom costs taxpayers £2,383 a month”.


Can the Minister update us on the local authority housing fund, which enables the purchase of rundown properties for use on a temporary basis for temporary accommodation, which will save an enormous amount of money? In the long-term, with ownership by the council or a housing association, those properties can be used for years to come, providing vastly better value for money than the £283 a month for really grotty accommodation in the private sector.

[Baroness Taylor of Stevenage (Lab)]

The noble Lord is correct to flag up that issue, and I thank him for his work on housing and homelessness. The funding that the Government have introduced—the £450 million third round of the local authority housing fund—will support local authorities to get better quality temporary accommodation for homeless families. The third round is expected to deliver over 2,000 homes by 2026; funding will then be provided over the next two years, and will include revenue funding to support councils to deliver that fund. We are putting our money where our mouth is, but trying to resolve a problem that has occurred over many years is taking a great deal of effort. We will continue to strive to make sure that we put an end to the chronic homelessness we have seen in this country. It is time that we made sure everyone has a decent home to live in.

Local Government Reorganisation

Baroness Taylor of Stevenage Excerpts

Thursday 16th January 2025 Lords Chamber

[Baroness Scott of Bybrook (Con)]

My Lords, what local residents want from their local council are good quality services at a reasonable cost, however it is organised. When the Conservatives took control of Harlow Council in 2021, they cut council tax, and have kept it frozen ever since. Under this Government’s new local government funding formula, Harlow will lose approximately 30% of its grant funding next year. Why is the Government’s new formula punishing councils that are keeping taxes down and providing better value for money for taxpayers in their area?

[The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government (Baroness Taylor of Stevenage) (Lab)]

I find it astonishing to hear the party opposite challenging us on funding issues in local government, when it has punished the whole of local government for 14 years in this respect. I agree with the noble Baroness about what the public want from their local government services. They are not worried about the overheads of additional councils; they want to see good public services at local level and good value for money. That is what the devolution and local government reorganisation programme is all about.

The review of the funding formula will happen as we go into the spending review in the spring, and is there to make sure that funding is directed where the need is greatest. That will be what we set out to do. It is what we said we would do in our manifesto, and we will continue to do so. Let us not take any lessons in that from the party that has starved local government and brought it to its knees over 14 years.

[Lord Wallace of Saltaire (LD)]

My Lords, the Liberal Democrats do not accept the assumptions behind Labour’s following the Conservative imposition of directly elected mayors and larger councils across England. It is easier to impose yet another reorganisation than to address tax reforms, public service limitations and trust in democracy. Distant mayors cannot revive local democracy, and cancelling elections will deepen public mistrust. Given that this reorganisation is intended to save money, have the Government factored in the costs, such as redundancy payments, movements of staff and buildings, etcetera? What plans do the Government have to strengthen the role of really local town and parish councils, in which it will still be possible for ordinary voters to get to know their local representatives and for representatives to know their voters?

[Baroness Taylor of Stevenage (Lab)]

I disagree with the noble Lord. I believe that creating councils that can deliver good public services at local level is vital. We have seen from the areas that already have mayors that they have been able to take a strategic approach to delivering vital strategic assets that drive the local economy in their area, which will improve the lives of their residents. On the question he raised about funding, PricewaterhouseCoopers estimated that there would be a one-off reorganisation cost of around £400 million, but that there would be billions of pounds-worth of savings to the public purse over subsequent years, which could be reinvested in delivering the services that people are looking for.

[Lord Grocott (Lab)]

As my noble friend knows, the White Paper suggests that the optimum size for a unitary authority is a population of about 500,000. Can I get her assurance that those unitary authorities that are working effectively and efficiently, and providing good local services, and which may be short of 500,000 in their population, will not be unnecessarily disrupted? Furthermore, over the years I have seen so many different optimum sizes being recommended for the provision of local government services. Will she place in the Library the basis of the calculation that the Government have made that leads them to the conclusion that 500,000 is the right figure?

[Baroness Taylor of Stevenage (Lab)]

I thank my noble friend for his important question. It gives me an opportunity to clarify some of the misunderstanding around the number that has been given. It was in our manifesto that we would pursue a devolution agenda, and for many months after the Government were elected we were pushed to give an optimum number for the size of a council. Of course, when we did so, everyone said, “Not that number; that’s not the right number.” There is some flexibility around it. The important thing in the whole of this process is that the size, geography and demography of the units created make sense for people. We can be flexible around the numbers, but the number of 500,000 was intended to set out what we feel would be around the right size for the economies of scale and to deliver effective services at local level in a way that gives value for money.

[Lord Mawson (CB)]

My Lords, can the Minister please inform the House of any work the Government have done on what the practical implications might be of this local government reorganisation on their encouraging plans to build 1.5 million homes during this Parliament? Will this reorganisation help speed up the delivery of these homes or, in practice, slow the whole process down? Can the Minister give us a clue as to how this will work in practice as public sector staff look for new jobs?

[Baroness Taylor of Stevenage (Lab)]

The intention is that this will help with the delivery of both growth and new homes. The intention, as set out quite clearly in the White Paper, is for mayors to have powers over strategic planning—not the local planning that local authorities currently do—so that they can work with the constituent councils in their areas to set out plans for housing. The noble Lord referred to issues of planning. We have put in a significant sum of money to improve the capacity for planning authorities as we take forward the programme of delivering 1.5 million homes.

[Lord Jamieson (Con)]

My Lords, I declare an interest as a councillor in Central Bedfordshire Council. On Monday, in Grand Committee, the Minister stated that

“we move into a picture where we have all unitary authorities”.—[Official Report, 13/1/25; col. GC 200.]

Can she confirm that it is the Government’s intention to oblige all county and district areas to unitise?

[Baroness Taylor of Stevenage (Lab)]

The process of local government reorganisation will do that. We want to move at a pace that is right for the local authorities concerned. That is why we have set out a four-track approach, depending on where people are with their readiness to go forward. We believe that unitary councils can lead to better outcomes for residents, save significant money which can be reinvested in public services, and improve accountability, enabling politicians to focus on delivering for their residents. Generally speaking, as I said earlier, residents do not care about structures; they just want good public services, delivered at value for money.

[The Lord Bishop of St Albans]

My Lords, it looks as if the provisional local government finance settlement for 2025-26 will disadvantage rural areas, with the removal of the rural services delivery grant making the situation even worse. What steps are being taken to ensure that the needs of rural communities are being considered in the devolution process and that the strategic policy approaches developed by the combined authorities meet the specific needs of service delivery in our rural communities?

[Baroness Taylor of Stevenage (Lab)]

I thank the right reverend Prelate for his question and for his continued interest in rural communities. We believe that part of the process of devolution will mean that the people who are taking the decisions for rural communities will be people who have skin in the game in those rural areas; that is very important. Places with a significant rural population will, on average, receive an increase of around 5% in their core spending power next year, which is a real-terms increase. The rural service delivery grant does not properly account for need, and a large number of predominantly rural councils receive nothing from it. That is clearly not right, and a sign that we need to allocate funding more effectively. We are keen to hear about rural councils, as well as others, as we go through the spending review, so that we can work on what would work best for them in the new funding system.

[Baroness Grender (LD)]

My Lords, no doubt the Minister will be aware of the eye-watering debts of over £2 billion left to the people of Woking by their former Conservative council. What is the level of risk to other local authorities if they are merged with Woking? What analysis have the Government undertaken of chronic failures of financial management, such as Woking, and the likely impact on reorganisations if the Government fail to find a way to resolve a debt of this nature?

[Baroness Taylor of Stevenage (Lab)]

The noble Baroness is quite right to point out that there are councils that may be in scope for this programme which have significant debt. We are working through a programme with those councils—Woking is one of them and Thurrock is another. It should not be for people outside those areas to pick up that debt. This is not helped by the fact that our Government have inherited a broken local audit system. For the financial year 2022-23, just 1% of audited accounts were published by the original deadline. That is not good enough. We are working on fixing that, and we will be working through a process with the councils concerned.

Combined Authorities (Borrowing) and East Midlands Combined County Authority (Borrowing and Functions) (Amendment) Regulations 2025

Baroness Taylor of Stevenage Excerpts

Wednesday 15th January 2025 Lords Chamber

Moved by

[Baroness Taylor of Stevenage]

That the draft Regulations laid before the House on 19 November 2024 be approved. Considered in Grand Committee on 13 January.

Motion agreed.

Political Parties: Funding

Baroness Taylor of Stevenage Excerpts

Wednesday 15th January 2025 Lords Chamber

[Lord Blunkett]

To ask His Majesty’s Government what steps they are taking to prevent political parties, and activities to promote political parties, from receiving funding from outside of the United Kingdom, and whether they plan to grant additional powers to the Electoral Commission in this regard.

[The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government (Baroness Taylor of Stevenage) (Lab)]

My Lords, the Government committed in their manifesto to

“protect democracy by strengthening the rules around donations to political parties”.

Foreign money has no place in our elections and the rules already provide clear safeguards against foreign interference. We are considering changes which will help further protect our system from such risks and are engaging with the Electoral Commission as we do so. We welcome the views of and evidence from stakeholders. Details of our proposals will be brought forward in due course.

[Lord Blunkett (Lab)]

I very much welcome the Answer from my noble friend but does she agree that true patriots and those who believe in the sovereignty of our democratic system in the UK will want to see off those—whether they are malign state actors or multibillionaires—who seek to interfere in our democracy? Is it not now that we must act to safeguard our future?

[Baroness Taylor of Stevenage (Lab)]

I agree with my noble friend and assure him that the Government take the threat posed by disinformation and foreign actors interfering in our democratic processes very seriously. It is, and always will be, an absolute priority to protect the UK against foreign interference. While it is clear that foreign donations to political parties are not permitted, the Government recognise the risk posed by malign actors who seek to interfere with and undermine our democratic processes. That is why we will take all necessary steps to ensure that effective controls are in place to safeguard our democracy. I assure noble Lords that we share the sense of urgency, and as soon as we have developed our proposals we will inform Parliament.

[Lord Leigh of Hurley (Con)]

My Lords, the Labour Front Bench tabled amendments to the Elections Bill in 2022 that would have granted many foreign nationals the right to vote in both local and parliamentary elections; indeed, the IPPR is suggesting this again. How would Labour be able to restrict such donations? What assessment has been made of the potential influx of foreign donations from Russia, China and Iran as a consequence of the Labour Government in Wales and the Scottish Government allowing their foreign citizens to be on the electoral roll?

[Baroness Taylor of Stevenage (Lab)]

My Lords, the law is already clear that accepting or facilitating foreign campaign donations is illegal. Only those with a legitimate interest in UK electoral events can donate to candidates or political parties. Donations from individuals not on the electoral register are not permitted and strict rules are in place to make sure that foreign money is prohibited from entering through proxy donors, providing a safeguard against impermissible donations by the back door. We are looking at ways to make this even stronger. It is an offence to attempt to evade those rules on donations.

[Lord Rennard (LD)]

My Lords, does the Minister accept that there can be problems with very large donations to political parties, whether they may originate from abroad or be clearly from within the UK, and that the only way to prevent undue influence on political parties is to ban company donations and have a sensible cap on the size of all other donations? Does she then agree that political parties would still be able to campaign effectively if existing public funding was redistributed—for example, from the £100 million spent by the Government in the last two general elections on distributing candidates’ election addresses—and given to the parties to spend as they saw fit?

[Baroness Taylor of Stevenage (Lab)]

I take it that that was a question about a cap on donations. That is not a current priority for the Government, but strengthening the rules around donations really is. Political parties play a vital role in our democracy, and it is important that they are able to fundraise effectively and communicate with the electorate as a very important part of our process. By law, it is the responsibility of political parties to take all reasonable steps to verify their donors and whether they are permissible. We will take necessary steps to ensure that those requirements are tightened and stuck to.

[Baroness Scott of Bybrook (Con)]

My Lords, during the Lords stages of the National Security Bill, the last Conservative Government and Conservative Ministers pledged to enhance data-sharing powers to allow public bodies to share data with political parties. That is what we need; it is not about the honest ones who come through but knowing who is coming through a tenuous route, so that political parties are assisted in their due diligence. Can the Minister tell me the status of those plans to provide more information to political parties?

[Baroness Taylor of Stevenage (Lab)]

As I explained in my earlier Answer, we are reviewing all matters related to electoral donations. Those will be taken into account as we go through the process of developing any new legislation, including the issue raised by the noble Baroness.

[Lord Dodds of Duncairn (DUP)]

The Minister keeps referring to the fact that foreign donations are not allowed to parties in the United Kingdom but, of course, that is not correct because donations can come from the Irish Republic. In there lies a severe problem, in that funds from the United States, for instance, can be channelled via the Irish Republic into political parties in the United Kingdom with representation in these Houses, so will the Minister and the Government look at that issue?

[Baroness Taylor of Stevenage (Lab)]

The noble Lord raises an important point. Political parties registered in Northern Ireland can also accept donations from Irish sources, such as Irish companies that meet prescribed conditions. Allowing Irish donations to Northern Ireland parties recognises the special place of Ireland in the political life and culture of Northern Ireland. The rules are consistent with the principles set out in the Good Friday agreement. Irish donations are subject to the same scrutiny by the Electoral Commission as donations from any other permissible donor and if there are any complaints about that, they must be referred to the Electoral Commission.

[Baroness Hayter of Kentish Town (Lab)]

My Lords, the last Government extended voting to people who had been out of this country for more than 15 years. That in itself was not very problematic but it meant that they all became permitted donors. People who had not lived in this country for 40 or 50 years could become permitted donors and give money, with absolutely no ability to check on its source. Can my noble friend assure me that when this is looked at, that aspect introduced by the last Government will also be properly scrutinised?

[Baroness Taylor of Stevenage (Lab)]

My noble friend raises a very important issue. Political parties can accept donations only from registered electors but of course that now includes overseas electors. They are subject to the same counter-fraud measures as domestic electors, including having their identity confirmed as part of the registration process, but that very important issue will be looked at as we all look at all matters relating to elections.

[Lord Hayward (Con)]

My Lords, I welcome the response that the Minister gave to the noble Lord, Lord Blunkett, about a full consultation. However, she will be aware that the restrictions on election expenditure were set in the days when one could communicate with the electorate only through leaflets and the like. There are now many different ways of doing so, many of which are very cheap or low-cost. Will the Minister include in the review that she mentioned to the noble Lord, Lord Blunkett, some assessment of the restrictions on expenditure in general for elections at whatever level?

[Baroness Taylor of Stevenage (Lab)]

I am grateful for that question. There is no doubt that the system of campaigning has changed very dramatically, particularly in the last few years with the advent of social media. However, in my experience of campaigning—which spans a number of decades—political parties have adapted their campaigning but have not let go of their traditional methods. So although social media can be a very effective and efficient way of campaigning, we do still rely on some of the traditional methods. But, of course, that will be looked at as part of the review we are undertaking.

[Baroness Winterton of Doncaster (Lab)]

My Lords, voter registration is at shockingly low levels. Can my noble friend the Minister update the House on implementing automatic voter registration, as was also recommended by the Electoral Commission?

[Baroness Taylor of Stevenage (Lab)]

I agree with my noble friend that there are a large number of people still unregistered. When one goes out campaigning it is very clear that there are people who are not registered to vote who probably should be. We all need to address this and look at whatever way we can of making sure that everybody who is entitled to vote is not only registered to vote but takes part in our democracy. That is a very important part of our process, and we will do all we can to increase both voter registration and participation in elections.

[Lord Wallace of Saltaire (LD)]

My Lords, the Intelligence and Security Committee’s Russia report hinted at the very considerable extent of Russian money flowing into British politics, both to some political parties and, of course, during the Brexit campaign. Will the Government consider whether the redacted parts of that report should now be published to inform the public fully?

[Baroness Taylor of Stevenage (Lab)]

I am happy to look at that. We are very aware that this is a real issue, and we continue to be concerned about it. We will continue to take whatever steps we can to avoid foreign interference in our elections.

Combined Authorities (Borrowing) and East Midlands Combined County Authority (Borrowing and Functions) (Amendment) Regulations 2025

Baroness Taylor of Stevenage Excerpts

Monday 13th January 2025 Grand Committee

Moved by

[Baroness Taylor of Stevenage]

That the Grand Committee do consider the Combined Authorities (Borrowing) and East Midlands Combined County Authority (Borrowing and Functions) (Amendment) Regulations 2025.

[The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government (Baroness Taylor of Stevenage) (Lab)]

My Lords, these regulations were laid before this House on 19 November 2024. The other place debated them on 8 January 2025. The regulations relate to the York and North Yorkshire Combined Authority, the East Midlands Combined County Authority and the North East Mayoral Combined Authority. Via Section 1 of the Local Government Act 2003, they will enable these authorities to borrow money for use against their relevant functions.

Presently, the York and North Yorkshire Combined Authority and the North East Mayoral Combined Authority are already able to borrow against their transport functions, and the York and North Yorkshire Combined Authority is able to borrow against its police and fire authority functions. The East Midlands, as a combined county authority, is unable to borrow against any of its functions.

The regulations before us will enable the York and North Yorkshire Combined Authority, the North East Mayoral Combined Authority and the East Midlands Combined County Authority to make use of borrowing powers for purposes relevant to their current and future functions. This will bring all three authorities in line with existing combined authorities and fulfil commitments made in their original devolution agreements.

On consent, I bring it to the Committee’s attention that all three authorities and their respective constituent councils have given consent to the conferral of borrowing powers. Similarly, the three authorities have agreed their respective debt caps with HM Treasury for 2024-25.

The regulations will also confer the East Midlands Combined County Authority’s constituent councils’ general power of competence for economic development and regeneration upon the combined county authority. The power will be held concurrently with the East Midlands constituent councils; the East Midlands Combined County Authority will be able to exercise the general power of competence only in relation to economic development and regeneration. The conferral of this power will fulfil the East Midlands’ original devolution agreement and enable the combined county authority to support local businesses and charities, as well as strengthening the area’s visitor economy.

As the conferral of the general power of competence for economic development and regeneration upon the East Midlands constitutes a new power, Section 48 of the Levelling-up and Regeneration Act 2023 applies. I can confirm that the requirements under Section 48 have been met, and that the East Midlands Combined County Authority and its constituent councils have consented to this conferral.

I come to the final part of these regulations, which will make amendments to the East Midlands Combined County Authority Regulations. Specifically, these are by: first, amending a typographical error so that the combined county authority is the local housing authority for housing needs, laundry facilities, shops, recreation grounds and housing purposes, and with respect to buildings acquired for housing purposes; secondly, enabling the mayor of the combined county authority to arrange for a committee of the combined county authority to exercise mayoral functions; thirdly, allowing non-constituent members of the combined county authority to have voting rights in an authority committee; and, finally, clarifying the voting arrangements for the combined county authority, including the requirement for a two-thirds majority to pass its mayoral budget. These amendments have been discussed with the East Midlands and its constituent members, with the councils and the combined county authority consenting to the amendments being made.

These regulations, which are supported by the authorities and their constituent councils, are a necessary step in fulfilling the original devolution agreements that had been reached. Devolution across England is fundamental to achieving the change that the public expect and deserve: growth; the more joined-up delivery of public services; and policies being done with communities, not to them. I commend the draft regulations to the Committee.

[Baroness Pinnock (LD)]

My Lords, these are important changes to the devolution in the three mayoral authorities referenced by the Minister. In general, I and my party support devolution, of course, but we remain concerned about the mayoral system being adopted across England because of the way in which it concentrates too much authority and decision-making in the hands of one person. So, it is a “yes” to devolution, but mayoral authority may need some adjustment to make it more democratic, particularly as it is happening in this statutory instrument, with more powers being extended to mayoral authorities—hence budgets becoming enlarged, sometimes substantially. It seems to me that, if there is more capital borrowing, there will be a requirement to fund that borrowing, and there will therefore be an increase in the mayoral precept. My first question for the Minister is this: will there be a cap on either capital borrowing or mayoral precepts so that we understand the extent of the borrowing and the cost to the taxpayer?

--- Later in debate ---

[Baroness Scott of Bybrook (Con)]

My Lords, this SI is a key step in advancing the devolution agenda, continuing the work set out in the Levelling-up and Regeneration Act 2023 under the previous Conservative Government. As we have heard, it extends the borrowing power to the York and North Yorkshire Combined Authority, the North East Mayoral Combined Authority and the East Midlands Combined County Authority, empowering them to invest in critical areas, such as housing, regeneration, transport, education and health. This is part of a broader effort to decentralise power from Westminster and empower local authorities to shape their own futures, which His Majesty’s Official Opposition support.

In terms of economic development and regeneration, the regulations grant the EMCCA the general power of competence to support local businesses, tourism and other sectors. This is a notable shift, allowing the EMCCA and its constituent councils to carry out more comprehensive projects, including potentially accessing grants from central government, but we must ensure that, while these powers enable growth and development, there is robust accountability in place to ensure that resources are used effectively and in the best interests of those local communities.

A public consultation was conducted regarding the proposed changes, particularly focusing on the economic development and regeneration powers of the EMCCA. While the feedback was largely positive, with no significant objections, it is important to note that support for these new powers was not overwhelming. The absence of major concerns from stakeholders, including the House of Lords Secondary Legislation Scrutiny Committee and the Joint Committee on Statutory Instruments, suggests broad acceptance, although this should not be construed as unanimous approval.

I have a number of questions for the Minister. While the regulations aim to empower local authorities, several questions need to be answered to ensure these powers are used effectively and responsibly. On effective devolution, the work of the Levelling-up and Regeneration Act promoted decentralisation, but how much autonomy will local authorities truly have under these regulations and at what point will central government oversight become excessive? On oversight, without a statutory review clause noted, how will the Government ensure accountability for these new borrowing powers? Are there safeguards in place to ensure that borrowing is managed prudently? Finally, on regional equity, could the new powers create disparities in regional development, potentially leaving smaller regions behind? How will the Government ensure that these powers, to be granted to certain areas, do not exclude or disproportionately benefit specific regions at the expense of others?

[Baroness Taylor of Stevenage (Lab)]

My Lords, I thank both noble Baronesses for their participation and broad support for this SI. I will address some of the questions raised. The noble Baroness, Lady Pinnock, asked about the powers of mayors; I simply point to the success of existing mayoralties, delivering real things for their communities that have made a huge difference—in transport, skills and, in some places, health economies—in the areas where people live. Of course, you can only really do that if you are part of the community that you are representing, and the Government’s push for devolution is to help those local areas with skin in the game to have the powers and funding they need to drive their areas forward, particularly for growth but also for the conditions for the people in their areas.

We now have the Council of the Nations and Regions, which is a very important body for driving forward growth in our regions and nations. It is very important that every part of the UK has a seat around that table. That was the thinking behind the English devolution White Paper—it is still out for consultation, so we will see what comes back from that.

On capital borrowing, it will be the responsibility of mayors to drive growth in their areas, but I realise that borrowing will have to be paid back. Debt caps have been agreed with the Treasury. There has been an extensive process to agree them, and it has been done on the basis of what is affordable for those areas within their current envelopes.

The noble Baroness spoke about powers in relation to housing and planning. The English devolution White Paper set out strategic and investment powers, and possibly development corporations that mayors will have powers over. Planning powers on a day-to-day basis will stay with the constituent local authorities, which is right and proper because they are the people on the ground.

The noble Baroness also spoke about local government funding. The last person in the world who would underestimate issues in local government funding is me. I lived with them on a daily basis for many years. There have been substantial steps forward in funding for local government. In spite of a very difficult financial settlement this year, our Secretary of State has achieved significant additional funding for local government. Off the top of my head, I think the figure is £3.7 billion altogether for local government, and I am sure that officials will wave at me if I am wrong. We know that will not solve all the problems. We have to increase growth in the country to improve that situation more substantially. I have just been given a great big written note which I am supposed to read, while I talk at the same time, but that is not possible, so I will answer off the top of my head and, if I do not answer all noble Lords’ questions, I will respond later in writing.

On the Levelling-up and Regeneration Act and non-constituent members, the noble Baroness is quite right that we had substantial debates about them during the passage of the Bill. For one type of authority, there are not voting rights, but for the other type of authority, there are voting rights. As we move into the full picture of devolution, there will be further consideration of that. It is right that in mayoral combined authorities the upper tiers will take the decisions. How they decide to involve their constituent members will be broadly up to them. I have heard some really creative ideas, such as having key committees chaired by the constituent councils. As we move into a picture where we have all unitary authorities, I think we will continue to look at that and review it.

I thank the noble Baroness, Lady Scott. The three of us are part of the LURB club who sat through many hours debating the Bill. I agree with her about what a key step this is and that the East Midlands Combined County Authority will need to undertake the more comprehensive projects that were set out in its devolution agreement, and it needs these powers to do that. Of course we need robust accountability for all of them.

There was some consideration of consultation, but extensive consultation had already taken place on this so, having looked extensively at what had been done before, it was felt that there was no need for further consultation. I take the noble Baroness’s point that support was not overwhelming, but there was enough support for us to feel comfortable that we could go ahead.

The question about autonomy is important. The way that we have set out the picture in the English devolution White Paper is that, the more established an authority becomes, the more autonomy it will have. It is perhaps the opposite way from what the noble Baroness suggested. Central government oversight will not overwhelm those authorities once they are established. Look at some of our more established mayoral authorities: Greater Manchester is always the standard example and it has extensive powers and funding to lead the way for growth, transport, skills and so on. We want to see that with the more established authorities. The more established they are, the more they prove themselves in terms of accountability of all kinds, especially financial, and the more powers they will get.

On accountability and safeguards for borrowing, that is why debt caps have been set with the Treasury. They have been looked at very carefully. The White Paper also sets out a wider process of accountability which may, depending on what comes back from the consultation, include something like local public accounts committees to have oversight at local level of what is going on within mayoral combined authorities.

I hope that answers all the questions but, if not, I will go through Hansard and make sure that we respond.

[Baroness Scott of Bybrook (Con)]

I asked how we would ensure regional equity.

[Baroness Taylor of Stevenage (Lab)]

I thank the noble Baroness and apologise for missing that. She will have seen that one of the adjustments we have made to the local government finance settlement that came out just before Christmas was to slightly reshape the spending to meet need. There will be more news on that and more discussion about it as we go into the spending review in the spring.

That is an important point because having a champion for a local area on its own will not be enough. We need to make sure that we are addressing the key disparities, and there are some enormous disparities that we heard much about during the passage of the levelling up Bill in health, employment, standards of living, housing, and so on. The devolution aspect of this project means that local areas have far more autonomy to make the changes that will make a difference to them. The spending review will take all that into account and, I hope, reshape the way that the distribution of finance is done so that we make it more equitable generally. If there are further contributions to the spending review as we go through it, I will be pleased to hear them.

These regulations deliver on the commitment made in the devolution deals agreed with York and North Yorkshire Combined Authority, the East Midlands Combined County Authority and the North East Mayoral Combined Authority to provide them with borrowing powers against their functions. The conferral of borrowing powers will provide all three authorities with the opportunity to further invest in their services and functions to the benefit of those who live and work across their geographies. In short, I believe the regulations and the powers that it confers will make a significant contribution to the future economic development and regeneration of York and North Yorkshire, the east Midlands and the north-east by providing those three authorities and all the people who look after them with the tools to shape their futures, driving growth and higher living standards across their geographies. I commend the draft regulations to the Committee.

Motion agreed.

National Insurance: Employer Contributions

Baroness Taylor of Stevenage Excerpts

Thursday 9th January 2025 Lords Chamber

[Baroness Humphreys (LD)]

My Lords, I beg leave to ask the Question standing in my name on the Order Paper and, in so doing, refer your Lordships to my registered interests.

[The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government (Baroness Taylor of Stevenage) (Lab)]

My Lords, I thank the noble Baroness for her Question. The devolved Governments will receive funding through the Barnett formula in the usual way in 2025-26. The Welsh Government have confirmed that they will use this funding to help local government in meeting increases in national insurance contribution costs. The Government have also announced £515 million of support for local government in England to manage the impact of changes to employer NICs. The Government have no direct role in funding parish and town councils.

[Baroness Humphreys (LD)]

I thank the Minister for that Answer. I welcome the Government’s announcement of the £515 million NICs compensation package as part of the provisional local government finance settlement, but I am disappointed that they have confirmed that compensation to local government bodies will not extend to town, community and parish councils. Could she explain why it is fair that some elected bodies are given financial support and others are not?

[Baroness Taylor of Stevenage (Lab)]

As I explained, the Government have no responsibility for funding town and parish councils. The Welsh Government’s budget is growing in real terms in 2025-26. In fact, the settlement is the largest in real terms for any Welsh Government since devolution. Currently, the Welsh Government also receive an additional 5% transitional factor as part of the Barnett formula, while they are funded above their independently assessed relative need compared to England to 115%. If they wish to provide further support to town and parish councils, they are able to do so.

[Lord Popat (Con)]

My Lords, no other country in the world taxes companies to employ people. We do that through our national insurance contributions, which are now going up from 13.8% to 15%. That will hit all our SMEs hard, which are the backbone of our economy. What will the Government do to support our SMEs to compensate for this additional cost—this evil tax—that we are talking about?

[Baroness Taylor of Stevenage (Lab)]

I have heard a great deal from that side of the House about NICs. If we had not had to fill a £22 billion black hole, we would not have had to do it in the first place. None of us on this side of the House would have made that choice unless we had to. We recognise the need to protect small businesses and charities, which is why we have more than doubled the employment allowance to £10,500 and expanded it to all eligible employers. The OBR expects 250,000 employers to gain from the changes to the employment allowance and 840,000 to see no change at all. That is more than half of all businesses, including charities.

[Baroness Scott of Bybrook (Con)]

Is the Minister aware that the OBR has said recently that it assumes that most of the Government’s increases in national insurance costs will be passed directly on to workers and consumers? Do this Government still claim to serve the working people of this country, or will they now come clean and admit that they are raising taxes on ordinary working people?

[Baroness Taylor of Stevenage (Lab)]

The denial of responsibility from that side of the House is quite astonishing. Public services were broken by neglect from the party opposite for 14 years. I am surprised that they do not see the irony in complaining about the measures we are having to take to sort out that mess, including our commitment to an additional £680 million for social care, further funding for local government and a real-terms boost for local government funding. I would rather hear some other ideas from that side of the House than complaints about what we are doing.

[Lord Watts (Lab)]

Following the Minister’s response, does she agree that the last Government left a massive deficit in the Budget and that, while they do not like the national insurance increases, they have no suggestions whatever on how to bridge the massive gap that they left us?

[Baroness Taylor of Stevenage (Lab)]

I agree with my noble friend. When we start to get some alternatives from the other side of the House, I might be more prepared to listen to their arguments about not putting NICs up.

[Baroness Scott of Needham Market (LD)]

My Lords, I declare an interest as president of the National Association of Local Councils. The Government’s new burdens doctrine has been in place since 2011 and is specifically designed to compensate authorities for this sort of situation. I have reread the guidance today and it specifically mentions town and parish councils, so can the noble Baroness explain why the Government are not following their own guidance in this case? Will she perhaps meet me and representatives of the sector to discuss it?

[Baroness Taylor of Stevenage (Lab)]

I am always very happy to meet colleagues from NALC and have done so several times in the past, as the noble Baroness knows. The issue here is that parish and town councils have not traditionally been funded in the same way. It is for upper tier councils to decide. We have provided additional funding for upper tier councils. The local government funding settlement saw a 3.7% real-terms increase in funding. If upper tier councils choose to provide that funding, they are able to do so, but local councils also have the ability to precept, as she will know.

[The Earl of Clancarty (CB)]

My Lords, in the arts, already struggling theatres and museums are among those affected by these changes. What consideration has been given to mitigate this effect in the arts sector as a whole?

[Baroness Taylor of Stevenage (Lab)]

The noble Earl raises a key point. We have looked very carefully at charities and the voluntary sector. Many arts organisations have charitable status and there has been significant support in the tax incentives for charities. In fact, charities receive a better tax incentive in this country than in most other European countries. I know that it is not ideal and, as I say, it is not a decision we wanted to take. Unfortunately, the financial situation left to us by the last Government meant that we had to take it.

[Lord Forsyth of Drumlean (Con)]

My Lords, in Monday’s debate on national insurance, a number of noble Lords raised the issue of special needs transport conducted by local authorities which is contracted out. In his response, the Minister said that £515 million—the figure the noble Baroness has just cited—had been set aside for local government. But that is for local government employees and will not provide support for the additional costs being incurred to provide special needs transport. This is an important area, so will the Minister perhaps look at this again?

[Baroness Taylor of Stevenage (Lab)]

I agree with the noble Lord that special needs transport has been a significant burden on local government in recent years, and with little help from the last Government. However, in the Budget, the Government announced £2 billion of new grant funding for local government in 2025-26. That includes the £515 million to which he referred to help with national insurance contributions. That £2 billion covers special educational needs home-to-school transport. I am not saying that will totally solve the problem. We have a spending review in the spring where I hope we will be able to look at that even further.

[Lord Scriven (LD)]

My Lords, the new burdens approach says that councils should be fully funded. The Minister keeps referring to the £515 million uplift, yet the Nuffield Trust has pointed out that the NICs increases will cost local authorities £900 million. Where is the extra £400 million coming from, and why has it not been handed over by the Government as part of the new burdens approach?

--- Later in debate ---

[Baroness Taylor of Stevenage (Lab)]

I have seen the figures from the Nuffield Trust. The Government have provided additional funding for local government, as the noble Lord is aware. I have cited the figure before but will do so again: there is £3.7 billion of additional funding for local government. As I have said several times in this debate, we wanted to do more. Unfortunately, we have to be fiscally responsible, and this Government will continue to be so.

[Lord Bird (CB)]

I must just point out a difference between business and charities, and the help for both. I am an employer of a little social enterprise group. We pay tax. We do not get the breaks or all sorts of other things that charities get. It is hitting us, so we will have to review whether we can employ so many people because of this new employment tax. Can the Minister encourage and include social enterprises—social businesses—in her mix to support them?

[Baroness Taylor of Stevenage (Lab)]

The noble Lord makes a very good point about social enterprise. I am a great champion of social enterprises. They do magnificent work in our country. I set out the basis on which the Government are providing support to SMEs under this regime. Those organisations will benefit from the way we have completely exempted many businesses from having to pay NICs and many others will remain the same as they were before. I hope that will help social enterprises but I am happy to discuss that further with him if he wishes to.

National Policy Planning Framework: Housing

Baroness Taylor of Stevenage Excerpts

Monday 6th January 2025 Lords Chamber

[Baroness Grender]

To ask His Majesty’s Government what steps they have taken to compare the need for affordable housing with the need for council and social housing as part of the National Planning Policy Framework.

[The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government (Baroness Taylor of Stevenage) (Lab)]

My Lords, I add my tribute to Baroness Randerson and offer my condolences to her family and friends. Her wisdom and experience were greats asset to this House, and she will be missed.

Our Government are committed to delivering the biggest increase in social and affordable housing in a generation; I hope we have shown that through our movement. Our revised National Planning Policy Framework reflects the commitment to building a greater share of genuinely affordable homes and prioritising the building of new social rent homes in particular. It is, though, for local authorities to judge the right mix of affordable homes for ownership and for rent that will meet the needs of their communities.

[Baroness Grender (LD)]

My Lords, while the NPPF is welcome, does the Minister share the widespread concern that the technical term “affordable” does not mean affordable to those in acute need? Research by the National Housing Federation and the charity Crisis shows that at least 90,000 social homes a year are required to end homelessness. Will the Minister consider expressly requiring local planning authorities to reflect that acute need within their plans? It includes those who are on housing registers in need of supported housing, rough sleepers and the homeless.

[Baroness Taylor of Stevenage (Lab)]

I agree with the noble Baroness that the terms “affordable housing” and “social housing” have sometimes been conflated, with unfortunate consequences. To make clear the priority that we attach to delivering homes for social rent, we are amending the definition of affordable housing. It will be carved out as a separate category, distinct from social housing for rent. I hope that that gives the noble Baroness a sign of our intention. We will expect local authorities to assess the need in their areas, including in all the categories that she mentioned, and to make provision to meet that need in their local plans.

[Lord Young of Cookham (Con)]

Has the Minister seen reports that more than 17,000 affordable homes have been made available by developers under Section 106, but no single housing association has been able to take them up? Against that background, would it not make sense for the developers to sell those homes to first-time buyers and discharge their Section 106 obligation by making a financial contribution to the local authority, which could then build some social houses?

[Baroness Taylor of Stevenage (Lab)]

It is possible for builders to change the provision if they need to, but that has to be in exceptional circumstances, because the need for social housing is so acute. The Government have set up a new clearing service for those Section 106 homes via Homes England. That was launched on 12 December, and we hope that it will enable us to match up registered providers with the social homes available under Section 106.

[Lord Hain (Lab)]

My Lords, in endorsing the condolences expressed to Baroness Randerson’s family and friends, I remind the House that she was also a stalwart champion of Wales, with a long record of public service that should be recognised.

Can my noble friend the Minister confirm that the 2010-15 Tory-Lib Dem coalition Government spent £10 on building new homes for every £100 on housing benefit? That was virtually a reversal of 40 years ago, when every £100 we spent on building homes was matched by £20 on benefit. Is that not another reason for building many more council houses and for public investment in social housing?

[Baroness Taylor of Stevenage (Lab)]

I echo my noble friend’s points about Baroness Randerson’s work in Wales. He makes a valid point: a good reason for building social housing is that it saves expenditure on DWP funds. In my own area, a private rented property costs around £1,200 a month; a social rented property is about £600 a month. Even those with my maths skills can work out that that would be a saving. That is why it is so urgent that we get on with building the social homes that we need. There are social reasons for doing so, but also very good financial reasons.

[Baroness Watkins of Tavistock (CB)]

My Lords, can the Minister assure the House that consideration will be given to ensuring that supported housing at social rents, particularly for older citizens, will be emphasised in the review? In the spirit of joined-up government, will the results be provided to inform the Casey review on social care, because the two are inextricably linked?

[Baroness Taylor of Stevenage (Lab)]

The noble Baroness is quite right to raise the topic of housing for older people and for those with particular needs. For example, we laid regulations to exempt all former members of the regular Armed Forces and victims of domestic abuse from any local connection tests. We are actively working on issues around older people’s housing; in fact, I met Anchor this morning to discuss that very topic. We will bring forward further policies in the spring to look at the need for older people’s housing and how to make better provision for it in the planning process.

[Lord Carlile of Berriew (CB)]

My Lords, in my time as leader of the Welsh Liberal Party I had the advantage of a close relationship with and enormous support from the late Baroness Randerson. I was shocked to hear of her passing when I was told yesterday, and I personally, like many others, will miss her greatly. She was a great public servant.

On the Government’s commendable ambition to build a very large number of houses, I remind the Minister that this ambition will be matched by an extraordinary visual effect on our townscape and landscape in general for hundreds of years. Can the Government try to ensure that the design of these houses to be built is of a high quality which reflects well on our age? Well-designed houses cost no more than badly-designed houses.

[Baroness Taylor of Stevenage (Lab)]

I could not agree with the noble Lord more; this is an important issue. I am not apologising for the ambitious targets we have—we certainly need the housing. However, I am also passionate not only about delivering well-designed homes—we are currently working on the future homes standard and will publish that shortly—but about those homes being situated in communities that really work for people. That was part of what the revisions to the National Planning Policy Framework were about, but it is also incumbent on all local authorities, as they pass their local plans, to make sure that they enable that too.

[The Lord Bishop of Southwark]

My Lords, many in the House will wish the Government well in their ambitious commitment to housebuilding, but in terms of the National Planning Policy Framework, will the Minister outline how the social objectives of the framework are guaranteed and monitored, specifically

“accessible services and open spaces that reflect current and future needs and support communities’ health, social and cultural well-being”?

As regards well-being, will the Minister further consider restoring mandatory space standards for the construction size of British homes?

[Baroness Taylor of Stevenage (Lab)]

The right reverend Prelate raises a very interesting point about space standards. Coming from a new town, I remember the standards that were introduced when my town was built. On the issues around the National Planning Policy Framework and the social aspects of it, as the Planning Inspectorate goes through the process of assessing local plans—it is important to remember that fewer local authorities do not have them than those that do—it takes account of the social aspects of the plans as well as of the straightforward housing numbers. That is part of the work of my department, and we will be looking at that closely. The social aspects of the planning framework are equally as important as the technical aspects.

[Baroness Scott of Bybrook (Con)]

My Lords, first, I offer our condolences from these Benches to the friends and family of Baroness Randerson. She will be very much missed in this House.

Affordable homes should be built where they are most needed, meaning near jobs and existing infrastructure such as public transport networks, schools and doctors. With that in mind, can the Minister tell us why London’s mandatory housing target has decreased while some rural constituencies have seen increases in hundreds of per cent? Will the Government reconsider their targets to build more affordable homes in London, where there is the highest need for them?

[Baroness Taylor of Stevenage (Lab)]

The new methodology has been carefully considered. It strikes a balance between meeting the scale of need right across the country and focusing additional growth on places facing the biggest affordability pressures by more than doubling the affordability multiplier, which is in the method. It produces a figure for London of nearly 88,000—more than double recent delivery—and London has the biggest proposed percentage increase against existing delivery of any region in the country by a significant margin.

Provisional Local Government Finance Settlement

Baroness Taylor of Stevenage Excerpts

Thursday 19th December 2024 Lords Chamber

[Baroness Pidgeon (LD)]

I thank the Minister for the opportunity to discuss the provisional local government finance settlement. It is always an early Christmas present for finance departments in councils up and down the country.

Local government was brought to its knees under the last Government, with funding cuts happening at the same time as further responsibilities were given to our hard-working local government workforce. From the Liberal Democrat Benches, we welcome the move set out in the Statement for multiyear settlements—something my party has long called for.

The Statement suggests that funding previously allocated to rural local authorities under the rural services delivery grant will be repurposed under a need and demand basis. This is despite the grant providing rural local authorities with £100 million for the rollout of essential public services, including emergency services and the provision of social care in the last year.

From these Benches, we are concerned that this new system of allocation will not recognise—as has just been discussed—that the sparse and isolated nature of rural areas drives higher costs for the delivery of essential services, creates challenges in the recruitment of staff for key services, and of course requires local authorities to provide a greater public subsidy for the provision of services such as public transport.

Deprivation in rural areas would also likely be hidden through the use of this measure because it occurs over a wider geographical area. Using deprivation as an indicator of demand for services also does not consider local authorities with a higher number of elderly or vulnerable residents and the additional demands these residents place on services, as the noble Lord just outlined in his response.

I urge the Government to provide rural councils with a funding settlement which reflects the impact of the rurality and sparsity of the areas they serve, through the application of the fair funding formula. With additional pressure on councils to deliver further scrutiny in planning decisions, deliver further housebuilding and accept additional NICs changes, it is essential that they are funded robustly to achieve these aims. Can the Minister say what plans the Government have to ensure that local authorities in rural areas have the support that they need? These authorities face unique challenges and their funding settlement needs to reflect this.

We are also concerned about the funding of certain services such as special educational needs and indeed special educational needs transport. What assurances can the Minister give that the new funding settlement will allow local authorities to deliver special educational needs services at the level needed, as well as child and adult social care?

From these Benches we welcome the consultation on wider local authority funding reform, but we urge the Government to move as fast as possible with this, as 2026-27 feels a long time away and, the more time passes, the more the contents of this Statement will feel rather like a sticking plaster. Can the Minister say anything more today about the timescale of the consultation and whether genuine fiscal devolution will be considered, so we are not looking just at how the government funding is divided up but at powers to enable local authorities to raise funding to invest in services and infrastructure for their local communities, rather than always being reliant on the Government of the day?

Finally, given that we are on the final sitting day before the Christmas break, I take this opportunity to wish the entire local government workforce a very happy Christmas, and of course I extend that to all noble Lords as well.

[The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government (Baroness Taylor of Stevenage) (Lab)]

My Lords, I am very grateful to the noble Lord, Lord Jamieson, and the noble Baroness, Lady Pidgeon, for their questions and comments, and I really welcome this opportunity to update the House on our plans to get local government finances on to a surer footing, both next year and beyond.

Our Labour Government were elected to deliver real change, and this must include change for local government. Local government delivers over 800 services to local people every day. Councils are the front line of public services, from waste collection to adult care provision, economic growth and housing. Yet we know that they are facing challenges as demand increases for critical services such as homelessness, social care and SEND, as mentioned by the noble Baroness. The Government cannot deliver our priorities alone. We have to reset and rebuild the relationship with an empowered local government—we spoke about that earlier today.

Yesterday, Minister McMahon set out the Government’s plans to get local Government back on track, both in 2025-26 and longer term, as the noble Baroness mentioned, to lay the foundations for long-overdue funding reform. We must move away from expensive acute crisis response and invest in the key longer-term preventive services, and the Government are committed to ensuring that taxpayers’ money goes where it is needed most.

Taken together, the additional funding made available at the settlement and the Budget delivers over £5 billion of new funding for local services over and above the local council tax, and in the provisional local government finance settlement we have an additional £2 billion in grant funding—a £700-million increase from the £1.3 billion announced at the policy statement.

This £700 million increase includes over £200 million extra funding for social care. It also includes £515 million which will be made available at the final settlement to support councils with the increase in employer national insurance contributions. I will come back to that in a moment.

Financial year 2025-26 will also see a new one-off and highly targeted recovery grant, already mentioned by the noble Lord and the noble Baroness. That is for those authorities with high deprivation but a low council tax base. This will be funded in part through repurposing the rural services delivery grant and the services grant and laying the groundwork for broader reform in the future. I will come back to rural authorities. We will provide funding certainty. No authority will see a reduction in core spending power after accounting for council tax flexibilities.

The noble Lord, Lord Jamieson, spoke about funding not keeping pace with the demands in local government. We are very well aware of the difficulties in funding that local government has experienced. This Government have done more to help with that than any of the work that the party opposite did in the last few years; I know that from personal experience. If he wants to criticise the 5% increase in council tax, I point out that it is exactly in line with what his Government had in place before us. We know council tax is a burden for people—we properly understand that—but we have to help local government with funding, and not allowing it to increase council tax would not help at all.

In terms of national insurance charges and the Government’s funding to help with them, we have chosen to make that £515 million of additional funding not ring-fenced, so the Government are enabling councils to choose how to distribute it, including how to meet the increased cost of externally commissioned services. We hope that the additional £3.7 billion funding available in the settlement for social care authorities will help with that. It will be clear to local authorities that specific funding for national insurance contributions being provided will not meet the overall cost to local government of the change to employer NICs, particularly given the expected increase in the cost of commissioned services, but that is why we have left that money un-ring-fenced: to try and help with the issue of funding. The overall increase in funding should help local authorities to meet the cost as they go forward.

The decision around national insurance contributions is a Treasury decision; it is not made in MHCLG, so I am afraid I cannot help the noble Lord on the responsibility for that. The national minimum wage increase is all part of the picture of making sure that no local authority has a reduction in cost funding, but it is really important that people who work in local government, as everywhere else, and particularly the brilliant teams that work in social care and across social care employment, have the right wages for the very valuable and important work that they do. The national minimum wage is the basic element of that. We welcome the opportunity to give them that increase, which they so much deserve.

The noble Lord mentioned kicking the can down the road on SEND. We have been in government for five months, so it is probably not us who have been doing that; it might have been somebody else. As part of the 30 October Budget, the Government announced an additional £2.3 billion for mainstream schools and young people with high needs for 2025-26, compared to 2024-25. That means that overall core school funding will total almost £63.9 billion next year, after accounting for technical adjustments.

The children with special educational needs and disabilities have been failed, with poor outcomes and parents struggling to get their children the support they need and deserve. I mentioned this morning the absolute outrage of parents having to take their own councils to court to get services that those children were legally entitled to. That happened in my own county of Hertfordshire, which is why it had such a disastrous Ofsted report on SEND. This Government’s ambition is that all children and young people with SEND or in alternative provision receive the right support to succeed in their education as they move into adult life. Any gap in SEND provision for children leaves a lasting effect on their life opportunities. The Government will strengthen accountability on mainstream settings to be inclusive, including through Ofsted, support the mainstream workforce to increase their SEND expertise and encourage schools to set up resourced provision or SEND units to increase capacity in mainstream schools. We are getting a grip on this, but it had been left—kicked as a can down the road—for a very long time, and it is going to take a while to get it back.

The noble Lord, Lord Jamieson, and the noble Baroness mentioned the issue of rural services. The Government really recognise the importance of our rural communities, and we want to support them. The funding reforms that we have announced are very much part of a comprehensive reform, and the Government are absolutely committed to tackling the issues that matter so much to those rural communities. Places with a significant rural population will, on average, receive around a 5% increase in their core spending power next year, which is a real-terms increase, and we are proposing to continue to apply area cost adjustment to account for relative cost differences between local authorities, including differences between rural and urban areas. The Government propose continuing to assess the same factors as the 2024 area cost adjustment, which seeks, for example, to account for increased costs as a result of travel times, and we will ensure the approach is informed by the latest data and evidence. We are inviting views from local government and the public on this approach and whether we should account for any other factors which could affect cost, as well as any evidence for including those. There will be an extensive consultation for this as we go into the spending review in in the new year.

Part of the doctrine of new burdens is that they are funded. On the new homes bonus, mentioned by the noble Lord, Lord Jamieson, there will be a new round of payments in 2025-26. In line with recent years, these will not attract legacy payments. New homes bonus allocations will continue to be made in the usual way, applying the same calculation process.

I hope I covered all the noble Baroness’s issues on rural and sparse populations. On the funding reform timescale that she mentioned, we have to do some consultation on this, but it is the intention to do that work in advance of the spending review in spring. Having waited several years now for fairer funding reform in local government, I am very pleased that we are able to bring that forward as quickly as we have. We must reform the way that councils are funded to ensure that local government can deliver for all people in the long term, including the most vulnerable. Fixing local government is a long-term challenge, and I hope that I have set out as clearly as possible the steps we have already taken to get local government back on its feet through this year’s settlement and in the future.

On the announcement issue, it used to drive me mad when I was a council leader that this announcement comes out on 18 or 19 December, and your poor officers are struggling to get the work ready. We could not do much about it this year, but I hope we will do better next year. I thank noble Lords very much.

[Lord Fuller (Con)]

My Lords, I have sat on the Local Government Association’s resources panel for at least the last dozen years—it might be more—so I am fairly well acquainted with some of these things. Local government already had a mountain to climb, but, if I may dwell for a moment on the national insurance increase, I regret to say that that has made it even worse. I am grateful to the Minister for identifying that the £515 million grant for NIC is not to be ring-fenced, but not making it ring-fenced does not make it go any further. The LGA has already calculated that the costs of the NIC will be £637 million and of contractors will be £1.13 billion. The shortfall is £1.3 billion. How does she account for that shortage, and what should be cut? The noble Baroness mentioned the new homes bonus. Does she agree that that will not say much about the incentives to build homes? Finally, the noble Baroness mentioned funding reform. Will she commit to the no-detriment principle in the previously envisaged transition methods, whereby no council will be worse off during the transition than it is today?

[Baroness Taylor of Stevenage (Lab)]

I thank the noble Lord. One of the reasons why we have set up the English devolution programme is to get a more effective and efficient way of managing local government. We will not solve overnight the funding problems that have accumulated over 14 years. It will take a while to do that, but in this settlement we have ensured an increase for most local authorities and no local authority will get less funding than before. We will invite views on reforming the new homes bonus as part of the local authority funding reform consultation that will be published alongside the settlement. Although the Government proposed that next year will be the final year of the NHB, we will look at it so that councils can do their financial planning around it and we will consider it as part of the spending review. I cannot commit to no detriment at this stage because we have not even started the consultation on the spending review yet, but no authority received a worse settlement in this year’s settlement than it had before.

[Baroness Bennett of Manor Castle (GP)]

My Lords, we all know that 14 years of austerity have left local government on its knees and, in many cases, reduced local government to little more than an agent of the Westminster Government. Huge percentages—almost all spending—are forced to go on statutory measures: that is, what is decided here in Westminster, not what is decided in local communities. Can the Minister tell me, either as a percentage or as a figure, how much extra money will be available in this financial settlement to local councils to spend on the non-statutory elements of their duties, such as protecting local green spaces, supporting and funding local libraries and looking after the local public realm rather than having to make expensive bids for pots of money to be able to improve it? How much non-discretionary money will be in this settlement?

[Baroness Taylor of Stevenage (Lab)]

The noble Baroness makes a very good point. I pay tribute to my colleagues in local government, who do an amazing job of continuing to deliver some non-statutory services in spite of the incredible financial pressures they have been under. For example, we still managed to keep a theatre open in my area. That happens all across the country, so all credit to local government for the work it does on this. The noble Baroness mentioned constant rounds of bidding for pots of funding. We think that is wasteful and unnecessary. It just sets authorities up against one another in competing for pots of funding. We will do our very best to get rid of that approach. As we develop the spending review proposals, we will build what local authorities need for the future into core funding.

[Lord Jackson of Peterborough (Con)]

My Lords, because the Minister is a very experienced and knowledgeable former local authority leader, she will know, in all fairness, that Covid, inflation, energy costs and demographic change were also issues that the previous Government had to face. Her Government will have to face some of them as well. On the specific pots of money to be bid for, I ask her to alight on the issue of planners. Is there any possibility that the Government might look to provide bespoke funding to enable local authorities to recruit and retain planners so that they can build the houses that are necessary, particularly for young working people, and that they can take forward very important regeneration projects in their local areas?

[Baroness Taylor of Stevenage (Lab)]

I thank the noble Lord for his kind comments. I do understand that a few issues arose in recent years, but an awful lot of money seemed to be wasted during Covid that might have been better spent delivering local services. On funding for planning, we announced alongside the NPPF announcement that additional funding is available to support local authorities’ capacity for planners. We recognise that, with an absolutely key mission on growth, the planning capacity in local authorities needs to be strengthened. Our colleagues in the Department for Education are working on skills and repurposing the apprenticeship levy into a skills and growth levy, and there is some direct funding support for local authorities. We hope that will attract around 300 new planners. I know you cannot go and pick them off trees, but that will help to support the planning that will need to be done to support the growth we need in our country.

[Lord Sentamu (CB)]

I declare my interest as chair of the Living Wage Commission, which recommended, along with the Resolution Foundation, what a living wage should be in London and the rest of the country. As it was voluntary, a lot of companies in the FT 100 decided to pay it. Then one day, George Osborne called it the national living wage, but it was simply an enhancement of the minimum wage. In his first Budget, the right honourable Jeremy Hunt raised the minimum wage to a living wage, and this Government have also adopted that sort of living wage. When she was answering, the Minister called it the minimum wage. I suggest that we use the correct language. It is no longer the minimum wage because the living wage is compulsory. It is no longer voluntary.

[Baroness Taylor of Stevenage (Lab)]

I thank the noble and right reverend Lord for the important work he has done on this. I hope the Government have demonstrated in these early days, by bringing forward a new Employment Rights Bill, that not just what people are paid but the way they are treated at work are of primary importance to us. I apologise if I said the national minimum wage; I should have said the national living wage. In local government, we have always welcomed it, and we celebrate the work our workforce does; they do an amazing job in difficult circumstances. The noble Lord, Lord Jackson, mentioned Covid. I want to reflect on that period and how comforting it was to residents across the country to see local government teams still going out and doing their job in spite of the very difficult circumstances they were in. They should be properly paid for what they do and have proper working conditions. I welcome the findings of the Living Wage Commission.

[Lord Porter of Spalding (Con)]

I draw the attention of the House to my interest, as set out in the register, as a vice-president of the Local Government Association.

I have nothing but sympathy for the Minister. She is having to do a very difficult job in very difficult circumstances, and to put a shine on something that we know is not worthy of being shined at the moment. I wish her good luck in her attempt to resolve the local government funding settlement battles she will face over the next couple of years. The same Treasury people who made the decisions last year will almost certainly be making the decisions next year, so the reality is that she will not have a bigger cake to cut. If she is going to choose to divide that cake slightly differently, she will have to make sure that she at least says sorry to the people who are going to lose.

It is quite obvious that stopping the rural services delivery grant in this settlement is £110 million of essential money for a lot of councils. On the back of it, people will almost certainly be getting “at risk” notices in the new year, until the Government come up with some sort of compensation for taking that money away, if nothing else. When you go to the new homes bonus the year after next, a lot of people will be put at risk because many small, underpaid councils rely on that payment to pay staff wages.

--- Later in debate ---

[Baroness Taylor of Stevenage (Lab)]

I thank the noble Lord, Lord Porter. He has a great deal of experience in this area, as I know only too well. The funding reforms are part of a comprehensive set of reforms for public services to fix the foundations of local government. We are working with the sector on that, and the principle of giving forward notice and certainty and allowing time for councils to plan for the future is now baked into the way we are doing this.

In 2025-26 we will begin targeting additional funding to places with the greatest need and demand for services. We have used deprivation as a proxy for that, for those areas that have less ability to raise income locally. That is the new recovery grant that I spoke of. Broader redistribution will follow from 2026-27 to provide long-term certainty and enable local government to focus on its priorities.

We are inviting views from the local government sector through the local authority funding reform objectives and principles consultation, which is open from today until 12 February. It seeks views on all aspects of local authority funding reform, including aspects of rurality, the new homes bonus and anything else that people want to send views in on. I hope people will contribute to that, because we will have a better spending review the more input we get.

I thank all noble Lords who have participated in this and all those who have spoken to me outside the Chamber about local government finance. It is always a pleasure to work with so many experienced noble Lords who have years of experience in local government, and local government finance in particular, so I welcome that. I extend my good wishes to all the officers and councillors across the country, as well as to all noble Peers. I wish them all a very happy Christmas. I am sure we will be back to do more arguing after a bit of rest at Christmas, but for now, a peaceful and happy Christmas to all.

English Devolution

Baroness Taylor of Stevenage Excerpts

Thursday 19th December 2024 Lords Chamber

[Lord Wallace of Saltaire (LD)]

My Lords, I note that the Statement says:

“We will deliver a new constitutional settlement for England”.


That is a very ambitious claim. What we have in the White Paper is a great disappointment by comparison. There is a deep confusion between what is “local” and what is “regional”, which are used interchangeably and loosely throughout the White Paper. We are promised “regional Mayors” who will, we are told, also be “vital local leaders”. They will take part in the Council of the Nations and Regions alongside Scottish, Welsh and Northern Ireland Ministers; they will also sit on a separate Mayoral Council with the Deputy Prime Minister. There is no link with Parliament here, I note, nor any link to Gordon Brown’s proposal to reform the Lords as a second Chamber to give us a role in representing the nations and regions in UK-wide debates. This looks to the Liberal Democrats like a plan designed in the Treasury both to save money, by shrinking local democratic institutions, and to convert elected mayors into agents of central government, spending funds that they hope to obtain by negotiations with the Treasury—the integrated settlements—without taking into account the importance of embedding democratic government in local and regional networks.

Chapter 4.1 of the White Paper begins:

“England is made up of thousands of communities—towns, cities and villages”.


It then proposes to squeeze those thousands of local communities into somewhere between 30 and 40 combined authorities, with fewer than 100 unitary authorities beneath them, each containing between 500,000 and 1 million people. That is not a unitary system; it is a new two-tier system in which strategic decisions will be taken by the upper mayoral tier—in effect, by one elected person. Local democracy rests on the relationship between voters in their communities and the councillors who represent them. It is the bedrock of democratic politics and of political parties, which draw their campaigners, their members and, often, their recruits into national politics from these local activities. But here is a proposal to cut further the number of elections and elected councillors and to remove them to a much greater distance from those they try to represent, with 15,000 voters or more in each ward.

England’s voters tell pollsters that they deeply mistrust Westminster politics and trust their local representatives more. This measure risks deepening public mistrust of democracy further and weakening political parties; it asks voters to identify with one elected mayor overseeing some millions of people and quite possibly elected on little over a quarter of the votes cast. I remind the Minister that, in July’s election, five parties won more than 10% of the national vote in England. First past the post risks producing some remarkably unrepresentative mayors elected on perhaps 27% or 28% of the vote.

We will need to strengthen the really local tier—the town and parish councils—to compensate for this shift of power upward. I could not find any discussion of parish and town councils in the White Paper. Did I miss some passing references? No other democratic state in Europe, North America or Australasia has such a thin framework of local and regional government. England will remain the most highly centralised state in the democratic world.

Chapter 4 declares:

“There is clearly an appetite for reorganisation in parts of England”.


We are given no evidence of such an appetite among the public. We have had multiple reorganisations in the past 50 years. Now we are going to have another one, which will cost additional money—as all reorganisations do—and disrupt services during the transition. Has the Treasury budgeted for the costs of transition? It then goes on to propose that there should be new rules on remote attendance and proxy voting for councillors at meetings. This is not surprising, given the size of some of our new councils. In the new North Yorkshire Council, it takes some councillors 90 minutes or more to drive to council meetings, so remote attendance and proxy voting are necessary. That is not local government or local democracy, however.

Lastly, in chapter 5 we are told:

“Established Mayoral Strategic Authorities will be held to account for the outcomes associated with their Integrated Settlement”


by “reporting to central government”. That is mayors acting as agents of central government, not responding to local and regional issues. The Government seem to want to rush through this reorganisation without waiting for local consultation or the agreement of other parties. This is not the best way to deliver a long-lasting constitutional settlement for England at a time when trust in our local democracy is lower than it has been for a very long time.

[The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government (Baroness Taylor of Stevenage) (Lab)]

My Lords, I thank all noble Lords who attended the drop-in session on the White Paper yesterday.

The English devolution White Paper sets out what I will not apologise for being an ambitious new framework for English devolution, moving power out of Westminster and back to those who know their areas best as part of our plan for change. We want to see all of England access this devolved power by forming strategic authorities that can make the key decisions to drive economic growth, with a clear preference for mayors. We will do this with areas and will launch a devolution priority programme for those that want to be on the fast track to mayoral devolution. We will legislate for a ministerial directive for areas that are not able to agree, so that no part of England misses out on that programme.

We have created a new devolution framework to be put into statute through the English devolution Bill, which will give areas a range of new powers across planning, infrastructure, transport, skills, business and energy, with consistent voting arrangements to allow effective decision-making.

We will also clearly set out the criteria by which all mayoral strategic authorities will be able to access further powers, including integrated settlements, to allow greater flexibility of funding by becoming established mayoral strategic authorities. This framework will grow over time, including through suggestions from strategic authorities to be discussed at the Mayoral Council.

We recognise that devolving power requires us to fix the foundations of local government so that we can empower communities at all levels. We will give communities a new community right to buy for valued community assets.

As councils are the foundation of our state, we will fix their foundations through fairer funding and multiyear financial settlements to give councils the certainty they need. We will also end the destructive “Whitehall knows best” mindset that micromanages their decisions and replace it with the principle of constitutional autonomy and partnership—so devolution by default.

It is important that councils are the right size and shape to serve the people they represent, with simpler structures that people can understand. That is why we will facilitate a bold programme of local government reorganisation for two-tier areas and for smaller, failing, unitary councils. We will invite proposals for reorganisation from all these areas and phase delivery—a point made by the noble Baroness and the noble Lord—taking into account where reorganisation can unlock devolution, where areas are keen to move quickly, or where it can help address wider failings. We will work closely with areas to deliver an ambitious first wave of reorganisation in Parliament.

Before I answer the specific questions, I would like to say that I am not going to take any lessons from the party opposite about the management of councils. When we came into power, many councils were going bust and issuing Section 114 notices, with a growing queue behind them of councils struggling with their finances. The lack of fiscal discipline in the audit regime left a backlog of 1,000 audits and £100 million that the previous Government could not account for. How has that helped democracy and local accountability? There was also a deepening crisis in adult social care. Parents were having to take their own councils to court to get the special needs provision their children were entitled to. There was a homelessness emergency that has seen the utter scandal of 150,000 children living in temporary accommodation, and councils having to use up to 40% of their net revenue budget to fund it. I am taking no lessons about the stewardship of public finances or efficiency of local service delivery.

I turn to the specific questions. It is not taking away local powers to give a range of new powers from Westminster to local areas so that decisions can be taken locally. I have already outlined what some of those areas will be. Making sure that decisions on health, transport, skills, workforce and so on can be taken at a local level is an increase in local powers, not a reduction.

The noble Baroness asked about the mayoral tier and whether that would waste money. Of course, she spoke about Labour-run mayoral precepts. I suppose if your principle is to deliver worse services with more cost, we could look at the previous Government’s management of funding. In a Statement later today, I will make a number of announcements about local government funding, making sure that local government is funded properly to deliver the services it is charged with delivering.

The noble Baroness also said that no councils should be bullied or blackmailed into doing this. This programme has been driven by local government; the demands have come from local government ever since we started the devolution programme. It is local councils that will work together with partners in their areas to pull together the programmes. This is a locally driven programme.

The noble Baroness made some points about the green belt and the grey belt. I am afraid that the assumption she made is just wrong. There is a specific proposal to protect those areas of green belt that are nationally protected areas or have sites of special scientific interest. There is a specific proposal about brownfield first. A sequential approach to the use of land is set out in the National Planning Policy Framework.

The noble Baroness raised the new calculation on housing targets. When the previous Government withdrew the requirement for mandatory housing targets, we immediately saw a reduction in supply. We have made a new calculation based on affordability and housing need. Everywhere needs to contribute to the delivery of housing. It is really important that that happens. The new assessments are fairer from that point of view.

The noble Baroness asked about time to consider the proposals. The letter that went out—the noble Lord, Lord Jamieson, has asked some questions about this letter too—clearly set out the programme. Councils and areas that want to go faster can submit proposals, but there will be more time, for those who feel they need it, to take the time they need.

On consultation with residents, it will be a legal requirement to have a consultation and the department will undertake that consultation through MHCLG resources.

Turning to the noble Lord’s questions, I am not apologising for the ambition of this plan. I think it is an ambitious plan. It is certainly not a plan from the Treasury; it has come from local government. But it is true to say that it is the problems in local government funding that mean we have to consider more efficient and effective ways of delivering service.

I understand the noble Lord’s points about local representation. When surveyed, only 23% of people felt they could have any influence over decision-making in their local areas. That is not good enough. We need to improve that rate. Whatever the system is now, it is not giving people a feeling that they can influence decisions in their area.

When you look at some of the activity of our mayors, they can use their mandate for change to make difficult decisions and drive growth in their areas, as Oliver Coppard has done in taking the Supertram back into public ownership in South Yorkshire. Mayors provide coherent leadership for their place. We have seen this already, with mayors such as Tracy Brabin leading trade missions to drive growth in their region. We want every part of England to take its place on the Council of the Nations and Regions and to have strong, effective partnerships with councils and other partners to deliver the missions we have set out to transform the country.

There is some wording about town and parish councils in the White Paper. If the noble Lord wants to contribute more on that topic, we would be pleased to hear that. I have been talking to the National Association of Local Councils and its officers about how we use them in this new system, and how the parish and town councils respond. There will be a vital role for them. There will be a vital role for front-line councillors as conveners of their neighbourhood areas in order to drive this programme forward. Mayors will certainly not be agents of central government. I know some of them quite well and it is a long stretch to describe them as such. They work very hard for their local areas and deliver really well.

I thank noble Lords for their comments today. As the former Secretary of State for Wales, Ron Davies, said about devolution to another of the United Kingdom’s countries, devolution is

“a process, not an event”.

We have a way to go yet. This devolution offer is the floor, not the ceiling, of the Government’s ambition. We want to continue to deepen devolution across England, developing policy with regions, including through the Mayoral Council. The White Paper is very explicit about engaging with the sector, seeking proposals from areas for devolution and local government reorganisation in their area, and engaging with mayors and councils on policies for the English devolution Bill, which we intend to lay in this Session. We welcome your Lordships’ input on how, but the aim is clear: a devolution revolution that helps us rebuild the country, deliver growth and change the politics of our country.

--- Later in debate ---

[Baroness Taylor of Stevenage (Lab)]

I thank my noble friend for his support for the overall programme. London already has a devolution arrangement, but I am assured by colleagues that we will look at the GLA and how it works. I am sure that we will take account of his comments about the City of London in that programme.

[Lord Porter of Spalding (Con)]

I bring Members’ attention to my registered interests, and I thank the Minister for the briefing yesterday. Can she confirm, now that we are in a public session, that the intention for 500,000 as a guide size for reorganisation is not a hard and fast rule but that some bids with a population under 500,000 will be allowed? Can she confirm that authorities already in the unitary system with populations of less than 500,000—all the councils in this country, bar 11, will be in scope—are also in scope for the reorganisation conversation? This is not an attack just on the Conservative-majority controlled two-tier areas; this is for the whole of the local government sector to be a representative size of approximately 500,000. That means that most of the boroughs of London are in scope and not excluded. Finally, I have a word of advice. If the Government are going to try to stick to a 500,000 unit, I tell them to forget about the number and the size of the council when they go to Rutland, because the Government have previously had some very bad experience of trying to remove Rutland.

[Baroness Taylor of Stevenage (Lab)]

I am grateful to the noble Lord for his advice on Rutland. I am happy to confirm that. On the 500,000 number, it is very strange: ever since July, people have been saying repeatedly that we need a guideline number, but when we give a guideline number, they say, “No, not that number. That is not the right number”. I hope that was not how the Conservatives did the accounting, because that would be a problem.

The 500,000 figure is intended as a guideline; it is what works best for local areas. I imagine that some sort of de minimis size will be incorporated in the Minister’s thinking as we go through this programme. We feel that 500,000 is around the right size to get the effectiveness and efficiency of delivery and the scale of managing the strategic requirements in a local area; that is why we have said 500,000. We are looking for councils to come forward with their own proposals about how this works for their local areas. On the other question, this is intended to cover all areas of England, so they are all welcome to come forward with proposals—including Rutland.

[Baroness Armstrong of Hill Top (Lab)]

My Lords, I am grateful to the Minister for this Statement and I congratulate her and the Government on entering what are very difficult areas, as I remember well. One thing that has happened in the last 14 years—I know some noble Lords on the other Benches approved of this—was the abolition of the Audit Commission. Whatever people’s view about that, it has left nothing to give guidance and understanding to the combined authorities about audit. I hope that the Government will introduce something that gives clear guidance and authority to the audit process in these areas. Local people have the right to know that money invested there is being spent well and according to best value. Had we had that, I believe that the mayoral authority in Tees Valley may not have had the real problems that it has had, where we have ended up with 90% of the money that is invested, or of the contracts that are given there, being invested in two men who now live in Dubai. That is not best value for the public or what anybody intended in setting these issues up. I hope the Government will take hold of how we audit combined authorities.

[Baroness Taylor of Stevenage (Lab)]

My noble friend makes a good point. It is impossible to overstate the importance of having an accountable and transparent process for local government. I mentioned in my opening remarks that it is an absolute scandal that we have found ourselves in the position we have in relation to local government audit, with 1,000 audits outstanding—that is just not good enough. Accountability is absolutely vital. As well as a complete review of local government audit systems, and making sure that we have an audit service for all of local government that is fit for purpose, we will consult on something for mayoral combined areas. I do not know what it will be called, but it will be the equivalent of a local public accounts committee. We think that the work of the Public Accounts Committee in Parliament is helpful and useful, and we will consult with local government on whether a local public accounts committee, along similar lines, would be useful.

[Lord Lansley (Con)]

My Lords, I remind the House of my declared interest as chair of the Cambridgeshire Development Forum. The Minister will know that I share her enthusiasm for strategic planning, but will she acknowledge that it may be some time before strategic authorities are established, or indeed before some strategic authorities have the necessary capability for strategic planning? In order to maintain momentum, will the Government issue guidance that will enable local planning authorities to go ahead with spatial strategies at a sub-regional level as quickly as possible?

[Baroness Taylor of Stevenage (Lab)]

I thank the noble Lord for that comment. It is important that we get development moving as quickly as possible. The New Towns Taskforce will make recommendations to government on the best delivery approach when it reports in July next year. The appropriate delivery vehicle will always be place-specific, and we expect development corporations to be used in most cases. Mayors, local authorities and government can establish development corporations, and we look forward to engaging local partners to understand what will be the best delivery approach for them to support future growth. If these need to come forward sooner rather than later, we will work with local areas to make sure that we facilitate that as best as possible.

[Lord Inglewood (Non-Afl)]

My Lords, if I understand the Minister right and the policy, there is to be no financial disincentive for authorities that do not wish to go in this direction. That being the case, will any other inducements and/or sweeteners be offered in order to try to take this forward? If not, what incentive is there for an area that does not have a mayor to do this?

[Baroness Taylor of Stevenage (Lab)]

My Lords, there are two absolutely key incentives to this programme of going forward with a mayor. Mayors will get new powers, devolved from Westminster, in a number of areas of competence. With the patience of the House, I will repeat those again: transport and local infrastructure; skills and employment support; housing and strategic planning; economic development and regeneration; environment and climate change; health, well-being and public service reform; and public safety. We are already setting out integrated budgets for the more established mayoral authorities to enable them to do that. There is a huge incentive to do that, as well as a seat around the table of the Council of the Nations and Regions. I hope local areas will see that as a positive opportunity. If they want to take more time to get there, that is fine, but it will be a great opportunity for our local regions.

[Baroness Thornhill (LD)]

My Lords, I have the dubious distinction of holding a job as a directly elected mayor for 16 years, in the role that my party wished would never exist, so we have had an interesting debate. I absolutely understand some of the positives of the mayoral model—she would say that, wouldn’t she?—but I also appreciate the issues about democratic deficit. When Tony Blair imagined and brought into being directly elected mayors, he saw that the democratic deficit and the electoral process worked against a mayor having a real broad consensus in an area to be the chosen person. So he rightly ditched first past the post and brought in what we would consider to be an inferior PR: the alternative vote system. As we know, that was abolished by the previous Government—and one can only think about the reasons they might have had to do that. Genuinely, if you want a super-mayor with superpowers to really command authority and respect over an area, people must feel that their vote counts. At least in an AV model, the vast majority of people actually get their first or second choice candidate to win. Under first past the post, the winner, as we all know, can actually receive fewer votes than the rest of the field put together, which cannot be right if you are devolving that amount of power.

[Baroness Taylor of Stevenage (Lab)]

The noble Baroness provided a wonderful role model for mayors going forward. Some of the innovations that she introduced during her time as Mayor of Watford are legendary, so I thank her for that service.

Mayors can use their mandate for change to take the difficult decisions needed. As the noble Baroness will be aware, they have both standing and soft power to convene local partners and tackle shared problems directly, exercising devolved powers and attracting inward investment. They have a platform for tackling obstacles to growth that might need a regional approach. Mayors are accountable to their citizens, as she rightly points out, and have the profile to stand up for them on a national stage and to partner with and challenge central government where needed—and of course it is needed sometimes.

As for the electoral system for mayors, we are not proposing to change that just now.

[Baroness Winterton of Doncaster (Lab)]

My Lords, my noble friend the Minister will be aware, I hope, that as a former Minister for Yorkshire and the Humber I am a huge supporter of devolution and I welcome the White Paper. However, I also know that, for devolution to work, it needs strong support through organisations such as the sadly abolished regional development agencies. To avoid what she called micromanagement, can she assure me that there will be proper support from the Civil Service, perhaps even by moving civil servants out of London to the regions to deliver the devolution settlement?

[Baroness Taylor of Stevenage (Lab)]

I thank my noble friend and she is quite right. I remember very well the regional development agencies, back in the day. Some of the departments in government already have a regional presence. My own department has offices in each of the regions, and we intend to extend that and offer a widespread programme of secondments to regions. I think it will be of real benefit to the Civil Service to be working in our regions and then bringing that back to central government, or the other way round: working in central government and going out to the regions. I look forward to seeing how that programme develops. My noble friend is right to say that it will be very important to see that the offices in our regions are fit and well equipped to serve the mayors and combined authorities.

[Lord Jamieson (Con)]

My Lords, we are the most centralised country in the OECD. Can the Minister enlighten the House on the real powers and fiscal devolution that this will lead to? In particular, what is the Government’s target for the proportion of taxation that is devolved? Secondly, I appreciate the Minister’s comment on the letter. However, it is causing confusion to a number of councils, which have been told that they need to submit a letter by 10 January. Many believe that, if they do not, they will miss out on devolution and it will be imposed on them. What is the deadline, what is expected of those who do submit and what does it mean for those who do not meet the deadline? Can this be clarified to councils?

[Baroness Taylor of Stevenage (Lab)]

I am grateful to the noble Lord for his questions. This is about real devolution of powers and funding, and there are real benefits there to those who take up the offer. The earlier they start to get established, the more powers they will be able to take on. That is a really important step for councils to take.

In terms of the letter, I have looked closely at it and it is asking for expressions of interest only by 10 January. For those who want to move quickly, we will ask them to submit their proposals by May—that is, full proposals for reorganisation and devolution. For those who want to move more slowly, they can do that at their own pace. We would hope to get proposals across the board by autumn this year.

[The Earl of Devon (CB)]

My Lords, as a feudal hereditary being thrown out of Westminster, I am quite excited at the prospect of devolution. I have been Earl of Devon for 10 years and, in that role, have tried to understand how local government works across Devon. It is complicated and very difficult, with eight district councils, two unitaries, a county council, et cetera. I was with Exeter City Council on Monday as the announcement was being made, and people there were incredibly uncertain as to the implications for the city council and their plans going forward. Lots of people across the region are confused about the implications of this.

There is so much work to be done at local government level, not least the 1.5 million new homes—and later we are going to debate economic development. I am concerned that, with yet another change in local government, and another step in devolution, people simply will not understand where they have recourse and how it works. I still do not understand it, and I wonder what effort the Government will make to inform people, educate them and make sure that local people really feel that they understand what is happening.

[Baroness Taylor of Stevenage (Lab)]

I thank the noble Earl. I have already started a series of meetings with councils in local areas to understand where they are with this programme. I am happy to meet with any of them, so, if he wants to encourage his colleagues in Devon to meet me, I would be more than happy to do so. I shall take back to the department the comments that the noble Lord, Lord Jamieson, and the noble Earl have made about the letter, and see whether we feel that any further clarification should be made.

Of course, there will be a programme of communication with the public, but the point about this is that it is a White Paper, so it is for consultation. If there are points in it that need clarification, I urge people to get in touch with the department, because we want to get people’s responses to this and, if there are elements that need clarifying before people feel that they can respond, we are happy to do our best to clarify those—so I do urge people to contact myself or the department.

[Lord Grantchester (Lab)]

My Lords, in this age of black holes, will mayors’ offices be adequately resourced to fulfil their potential? The newly elected mayor for Warrington and Cheshire is warmly encouraged by business locally, ensuring greater accountability and focus from local leadership on local growth plans. Previously, mayors have been targeted mostly on urban areas. The ambition from Warrington and Cheshire, with a higher proportion of rural communities, is to reach out to market towns and include prosperity across the rural economy. Can my noble friend the Minister assure us that the wider concerns of subregions in the countryside will be adequately addressed by a well-funded devolution process? For example, transport solutions beyond town boundaries need to be integrated with rural areas, with planning powers suitable for the needs of rural communities.

[Baroness Taylor of Stevenage (Lab)]

I thank my noble friend. I warmly welcome the extension of mayoral arrangements into parts of our country outside metropolitan areas. I thank my noble friend and all those in Cheshire and Warrington—I met some of them earlier this week and I met them with him a couple of weeks ago—for the spirit of co-operation that has got them where they are in this process. We believe that there are huge benefits to urban and rural areas in having more powers and funding devolved to enable decisions to be made locally about what will work best for their citizens and to drive their local economies.

I can confirm the Government’s commitment to ensure that new powers are matched with real devolution of funding. On the proposed integrated settlements, we will start with Manchester, Liverpool, the north-east, South Yorkshire, the West Midlands and West Yorkshire combined authorities. All of them will receive consolidated budgets so that mayors do not have to slalom between the complex funding pots to deliver the right solutions for their communities. I look forward to this exciting programme of devolution and to continuing to work with noble Lords on the White Paper as we go forward.

Housing: Permitted Development Rights

Baroness Taylor of Stevenage Excerpts

Wednesday 18th December 2024 Lords Chamber

[Lord Crisp]

To ask His Majesty’s Government what is their policy on creating additional housing units through permitted development rights.

[The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government (Baroness Taylor of Stevenage) (Lab)]

I thank the noble Lord, Lord Crisp, for his Question and for all the work he has done on healthy homes. Under nationally set permitted development rights, a wide range of commercial and other buildings are able to change use without the need for a planning application. The Government acknowledge the concerns that exist about the quality of residential units created through permitted development rights, particularly office-to-residential conversions. We will continue to keep permitted development rights under review, and we are grateful to the National Housing Federation and the TCPA for highlighting some of the issues arising from poor-quality PD schemes.

[Lord Crisp (CB)]

I thank the noble Baroness for that response and for the fact that this is being kept under review. I was also pleased to hear from a government spokesman last week that there is to be

“no trade-off between supply and quality”

in respect of housing. However, as the noble Baroness said, PDR has a poor record. Some very good conversions are made but a large number suffer from safety and other problems. I want to ask two questions. How will the noble Baroness ensure that that poor track record is not just continued into the future? Also, in reviewing it, will she meet some of the people who have already done so and come to conclusions about it to ensure that there is indeed no trade-off between housing supply and quality?

[Baroness Taylor of Stevenage (Lab)]

My Lords, the Government’s aim in the delivery of the 1.5 million homes is to deliver good quality, well-designed, sustainable homes and places that everyone can be proud of. I have already met both the TCPA and the National Housing Federation, which have been campaigning on this. I am very aware of some of the poor practice that has occurred, and we will continue to advocate for the principles of good design, as set out in the National Design Guide and the National Model Design Code. As I say, we keep permitted development under review.

[Lord Young of Cookham (Con)]

My Lords, it must make sense to use redundant buildings to provide good-quality accommodation for those in need, but is there not a loophole in the current fire safety regulations? These apply when a commercial building is converted into flats but not when industrial buildings or storage units are. Should we not use the Renters’ Rights Bill to close this loophole?

[Baroness Taylor of Stevenage (Lab)]

My Lords, the Planning Gateway One fire safety requirements apply to applications for planning permission for relevant buildings. To apply some of the principles to permitted development, there was a prior approval on fire safety impacts in 2021 that applies to class MA: commercial, business and services to residential. It is not, however, as detailed as the requirements for a planning application. For example, it does not require the completion of a fire safety form. We need to continue to look at these issues and to make sure that permitted development is completely safe from fire.

[Baroness Ritchie of Downpatrick (Lab)]

My Lords, I congratulate the Government and my noble friend the Minister on the ambitious housing targets to meet housing need. What assessment has been made of mixed funding models using private, public, and banking and hedge fund sources to construct those houses in order to provide for the great housing need throughout the country?

[Baroness Taylor of Stevenage (Lab)]

My noble friend makes an excellent point about funding for affordable housing. Even in a very tight budget round, the Government have allocated an additional £500 million towards affordable housing, which brings the total up to around £3 billion altogether. But we need to consider all sources of funding. I spoke to a housing investment forum in the City of London just a few weeks ago, and there is great interest in this area; and of course, we still need to look at pension funds further for local investment to drive the housing market.

[Baroness Thornhill (LD)]

My Lords, surely it is the Government’s mission to create decent homes and not the slums of the future, and I am at a loss to know why the Government are procrastinating on this. Surely it is time to insist on full planning permission for the larger schemes, or at least to revert to the regulations that were in place before 2012.

[Baroness Taylor of Stevenage (Lab)]

I take the noble Baroness’s point; we need to keep this continually under review. Some of the permitted development homes have been of fair quality and have provided homes for people. But we need to continue to press that all new homes delivered through permitted development rights must provide adequate light, meet nationally described space standards and be decent, fit and safe for the people who live in them. We will continue to do that. Where there are bigger schemes, equally, they must meet those requirements.

[Lord Ravensdale (CB)]

My Lords, I declare my interest as listed in the register. Running through the creation of additional housing are upcoming policy decisions on regulating embodied carbon. Can the Minister update the House on the research under way in her department, when it will report and when the associated consultation will be published?

[Baroness Taylor of Stevenage (Lab)]

I am grateful to the noble Lord, and for his time in meeting with me to discuss embodied carbon. We have been talking to the construction industry and to developers across the board, and there are some complex issues involved. I know the noble Lord is doing work with stakeholders as well, and I look forward to working with him further in the new year. I believe we have a meeting scheduled for early in 2025 to discuss this further.

[Lord Jamieson (Con)]

My Lords, I declare my interest as a councillor in central Bedfordshire. To deliver the housing this country needs, we need to ensure that planning permissions and allocations are being built out in a timely manner. Yesterday, I asked the Minister whether the Government will provide local councils with adequate powers to ensure that allocated and permissioned sites actually get built, and she responded that there is a whole section on sanctions in the report. Can the Minister tell me which section that is in the NPPF, as I could find in it no meaningful additional tools being provided to councils to ensure build-out?

[Baroness Taylor of Stevenage (Lab)]

I thank the noble Lord and apologise for misleading him yesterday: it is not in the NPPF but in the accompanying notes. There are powers that local government can use, including completion orders and so on, to encourage developers to build out when necessary. I will provide him with a detailed written response about all the powers that are available to local government to do that.

[The Lord Bishop of St Albans]

My Lords, can the Minister tell us what steps her department is taking to ensure that enough of the homes being built under the PDR are affordable for local people in rural areas?

[Baroness Taylor of Stevenage (Lab)]

I thank the right reverend Prelate for that question. PDR tends to apply where there are brownfield sites to be developed because they are conversions, usually, from existing buildings. There has been a change to introduce that principle for agricultural buildings as well. I will try to get back to him with a specific answer on whether the department knows how much take-up there has been of that provision. We have made provision in the new national planning policy framework for ensuring that planning policies and decisions are responsive to local circumstances in rural areas and support housing developments that reflect local needs. That is a more general requirement. I will get back to him on whether the agricultural permitted development has had any traction.

[Lord Taylor of Goss Moor (LD)]

My Lords, I refer the Minister to the issue of rural businesses—shops, in many villages, that are a vital part of the vibrancy of those communities and services—which are being converted through PDR without permission and against the will of local communities. Shops are not protected beyond one within a kilometre.

[Baroness Taylor of Stevenage (Lab)]

It is very important that we focus on the facilities in local areas, but this is a commercial market and where shops are not able to achieve the market they need, permitted development regulations will occur. In reviewing the PDRs, that is one of the issues we need to focus on—whether any further protections are necessary, particularly for assets such as rural assets.

[Lord Blunkett (Lab)]

Referring back to the original Question asked by the noble Lord, Lord Crisp, can my noble friend confirm that the code will include noise insulation as well as other measures that are crucial to good health, on the grounds that noise nuisance can be deeply detrimental to the well-being of individuals and lead to much anti-social behaviour?

[Baroness Taylor of Stevenage (Lab)]

There are a wide range of issues that we need to think about in terms of permitted development, and noise nuisance is one of them. All new homes are required to meet current building regulations, including on fire safety, irrespective of the route to planning permission. However, some building regulations differ or do not apply where homes are delivered through material change of use rather than new build. That applies whether homes are delivered through permitted development or following an application for planning permission. All these issues—noise, fire safety and so on—need to be considered in the light of permitted development regulations.