Clive Betts
Main Page: Clive Betts (Labour - Sheffield South East)Devolution in England
Clive Betts Excerpts
Mr Clive Betts (Sheffield South East) (Lab)
It is a great pleasure to introduce this debate on the report of the Communities and Local Government Committee entitled “Devolution in England: the case for local government”—which rather gives away the Committee’s findings and recommendations. I thank Professor Alan Harding from Liverpool university and Sean Nolan, an ex-local authority treasurer, who, as our specialist advisers, helped us through a great deal of technicality in trying to come to terms with the recommendations we made. I also thank Steve Habberley, our Committee specialist, whose hard work and diligence helped us through a very challenging report on which to reach conclusions.
The Committee decided on its inquiry not because of any specific Government legislation, but because of the widespread and welcome interest across all parties in localism, decentralisation and devolution. Despite recent reforms, the reality is that the United Kingdom, particularly England, remains one of the most centralised western democracies in terms of its arrangements both for expenditure and for tax raising, and that is still a matter of concern. Indeed, figures produced by the Mayor of London show that local authorities in London have to get 75% of their funding from central Government. In Tokyo the figure is only 7%, and in Madrid, New York and Berlin it ranges from 25% to 40%. In other words, all those capital cities get more than half their money from locally raised taxes, while in London only a quarter of it comes from such taxes.
Henry Smith (Crawley) (Con)
The hon. Gentleman is correct about the importance of devolution to cities in England, but the counties make up about 50% of its population and about 85% of its land area. Does he agree that there is a very strong case for devolution to county government, which has a strategic and very strong democratic record?
Mr Betts
Absolutely. The essence of our recommendations is that there should be a framework—a pathway—by which all areas of the country could achieve devolved powers. Some will probably go more quickly than others, but there is no reason for there to be a barrier to all areas joining in. That is very much in the spirit of the work of the Local Government Finance Commission, which has just been published by the Local Government Association and the Chartered Institute of Public Finance and Accountancy. It has slightly different arrangements, although the essence is that, while some authorities will go quicker than others, they will all get there eventually.
Andrew Gwynne (Denton and Reddish) (Lab)
I am a firm believer in the decentralisation of power, but does my hon. Friend recognise that decentralisation is not an end in itself and that we need to have accountability alongside it? Does he share my concerns that, under the Greater Manchester proposals, nobody in Greater Manchester other than the council leaders has been asked about what model of decentralisation they would like to see?
Mr Betts
We looked at that issue and it is clear that there have to be proper governance arrangements if local authorities are to have not just large amounts of extra spending to control, but greater tax-raising powers, as we also recommend. We looked specifically at the combined authorities, which is the issue my hon. Friend refers to, and we have said that different government arrangements might be suitable in different areas. A directly elected mayor might be appropriate in some areas and a strengthened Public Accounts Committee could scrutinise the work of the executive of the combined authorities. In other areas an indirectly elected mayor might be appropriate, as is the case in Bologna and other places in the world. There are different models available, but no single one is necessarily the right one for every area. We should not say that devolution cannot happen until an area has a particular model of governance in place, but it is clearly right that they should get a proper model in place.
Mr Graham Allen (Nottingham North) (Lab)
I support the remarks of my fellow Select Committee Chair. We have to make a start, particularly given that our country has been so massively over-centralised in Whitehall. It may be a halting start or it may take different forms, but the letter crafted by the Mayor of London, the leader of Greater Manchester, and by Liberal Democrats, Conservatives, Labour members and parish councils that appeared in The Times before Christmas called for devolution at all levels to be comparable—not identical—to that achieved in Scotland. Does my hon. Friend think there is something in the water in England that means that somehow we are incapable of devolving effectively over the long term in England?
Mr Betts
That is an interesting question. I do not think there is anything in the water of members of the Communities and Local Government Committee that would prevent that. Members on the two Front Benches probably have slightly different water that affects the way they think on certain issues. I will come back to that in due course.
Sir Alan Beith
I pay tribute to the hon. Gentleman’s commitment on this issue, particularly to the devolution of tax-raising powers. Does he recognise that the accountability problem, which has been raised, is a real one? For example, in the north-east, one party currently has the leadership in every authority, so there is a lack of representation of the minorities, whether Conservative or Liberal Democrat, across the region in bodies holding accountability for what is done with the money.
Mr Betts
I hear what the right hon. Gentleman says and I think the issue of accountability is important, but it can be dealt with in a number of ways. Instinctively, my view is that these things should be decided at a local level, and areas may come to different views about how accountability should be exercised. I do not think that it is up to us to prescribe one model for how that should happen.
Robert Neill (Bromley and Chislehurst) (Con)
Will the hon. Gentleman give way?
Mr Redwood
I am grateful to the Chairman of the Select Committee. When the members of his Committee looked at the big devolution of powers, including that of income tax to Scotland, did they ask themselves how England would settle such issues? Is there not a need for income tax to be settled at England level, just as there is not power in Scotland?
Mr Betts
There are two aspects to that intervention. The first is that we did not look at income tax, although we said at the end of the report that, in terms of fiscal devolution, there is a case for considering income tax and VAT further. That is an issue for the future, but we recognise that it has to be addressed. The second issue probably strays into the area of English votes on English laws, which the Committee did not go into, but there is a case for devolution within England to more local areas irrespective of how Parliament addresses the other issue.
Robert Neill
The hon. Gentleman is making an important and powerful point. He is right to say that although accountability is critical, we should not get too hung up on issues of party political control. When, as the Minister, I signed off the Greater Manchester combined authority, it struck me that both Conservative-controlled Trafford and Liberal Democrat-led Stockport were able to live within the system that was set up. It is important to get the structure of devolution in place before we worry about other matters.
Mr Betts
The hon. Gentleman is absolutely right. Indeed, the Committee visited Manchester as part of the inquiry, and it found exactly the arrangements that he has described.
We also went to look at the arrangements in Lyon in France. Interestingly, it has attempted, with the development of the grande métropole, to pull authorities together into almost a combined authority arrangement. It currently has an indirectly elected mayor and it will eventually move to a directly elected mayor, so it will have two different governance arrangements in the same area within a short period. There are therefore clearly alternatives.
The report was agreed unanimously—it is a cross-party report—and it was very much written with the next Parliament in mind. The Government made a response, as they should to a Select Committee report. I would say to the Minister that responses are supposed to be made within eight weeks, not eight months. The response was rather a long time in coming, as though the Government could not quite get their collective view together about what should be done.
It was very good to hear the comment that the
“Government welcomes this report’s contribution to the ongoing public debate on the scope for devolution and decentralisation within England.”
That is welcome, at least as a contribution to the debate, but there were not many welcomes in the Government response to the Select Committee’s specific recommendations. I have obviously also read the briefing from those on the Opposition Front Bench. I would say to both Government and Opposition Front Benchers that they do not seem fully to have bought in to the level of change that the Select Committee has recommended and which I think we need. I am sure we will have an ongoing debate with them both over a period of time.
The report was written before the Scottish referendum, but it anticipated that more taxation and spending powers would be given to Scotland and Wales. Very simply, I think that what is right for Scotland and Wales is right for England, and we followed that very simple rule. The report was also written after the London Finance Commission report, which was supported by the Mayor and the London boroughs, as well as the eight Core Cities. All those bodies and the Local Government Association have welcomed our report. Indeed, the Mayor said that Ministers “could not ignore” the “excellent” findings, as it would
“provide England’s cities with the means, incentives and crucially the stability of funding to deliver much needed jobs, growth and infrastructure”.
The Mayor of London is clearly with us, and he is pushing Ministers a little bit further than they are currently inclined to go.
We have had subsequent reports from the Institute for Public Policy Research, ResPublica, the City Growth Commission, and we now have the Independent Commission on Local Government Finance from the Local Government Association and the Chartered Institute of Public Finance and Accountancy. All have come to a similar direction of travel on devolution, perhaps with slight differences concerning how it should be done. We came to the conclusion that in England we should not be creating new bodies or regions, for example, and that we should base devolution on local authorities and combinations of local authorities—the Government have at least welcomed that fundamental recommendation.
Why not local authorities? Greater Manchester has a larger gross value added than Wales, and London has a larger GVA than Scotland, Wales and Northern Ireland put together. Those are large economic entities, and there is no problem about devolving powers to them. We came to the conclusion that devolution was beneficial for growth, a way of delivering better public services that are better related to local need, and a possible way of re-energising the democratic process. People feel that we in Westminster are somewhat out of touch with what happens in their daily lives, and there is more chance of reconnecting politicians and the democratic process with people if decisions are taken at a more local level.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
Is my hon. Friend concerned about how the Government have pushed through this undemocratic process in terms of what has happened in Greater Manchester and the NHS, because it seems to be completely at odds with the process of increasing democratic involvement?
Mr Betts
I hope that colleagues will discuss with their colleagues in local government in Greater Manchester how that process can be made truly accountable and how social care and health can be joined up—I think that aspiration goes across the House. I have been concerned that the debate could lead to social care being transferred to the health service, and local accountability being lost as part of that process. I therefore welcome what the Government have done to put health commissioning into the arena for local councillors to commission along with social care, as that is an interesting step forward. A lot of detail is required to ensure that that is done properly and with true local accountability, but the principle of putting that measure into the local arena, rather than centralising it to NHS England, is probably correct.
Lisa Nandy (Wigan) (Lab)
I share my hon. Friend’s views about the benefits of devolution to people and communities, but what is happening in Greater Manchester looks to me like a levelling up of power, not a levelling down. Health and social care is currently rolled together at local level with local accountability, but the deal imposed on Greater Manchester takes those decisions to a regional level, and at worst takes away a national framework. It enables the centre to hold its hands up and say, “It’s not our problem”, and takes away accountability from local people and councillors to make decisions about their local areas.
Mr Betts
Without going into the details of Greater Manchester, which I do not know all the aspects of, this seems to be a debate between the combined authority, and the collective of leaders there, and individual local councils about further localisation. In my view, devolution does not simply stop with the transfer of power from central Government to a local authority or combination of authorities; it is about how combined authorities enable devolution within their areas to existing local councils, and how those local councils ensure that devolution goes out of the town hall door and into local communities. We cannot be too prescriptive of those stages in this debate, but I understand the concern about losing national frameworks. The idea that everything in the national health service works similarly across the country is not true. Indeed, the words “postcode lottery” did not come from local government but from the NHS because things have been done differently in different parts of the country. More accountability through mechanisms that will potentially be set up is the way forward. I hear the concerns, but they are a debate for Members to have with their colleagues in councils in Greater Manchester.
The Committee defined fiscal devolution as:
“handing to local authorities the power to raise money through a range of existing and new taxes and charges; some responsibility for setting those taxes; and the facility to borrow.”
We contrasted that with decentralisation transferring powers over service delivery and spending to local authorities. We welcomed these developments, but said that greater control over local spending did not constitute devolution. In that sense, we are disappointed with the Government’s response, which seems to equate fiscal devolution with a desire to raise taxes everywhere. The two are not the same. Fiscal devolution is about making tax-raising decisions at a different level, not necessarily about raising taxes through those decisions. I think the Government missed that point.
I hope the Minister agrees with the Prime Minister, when he said the other day:
“Today’s agreement paves the way for a referendum, that could deliver an assembly that’s not just a spending body but is actually responsible for raising more of its revenue too. And to me that is responsible devolution, that is real devolution and I think that is vital for Wales”.
It is vital, too, for Manchester, London and the other major cities that we are going to devolve powers to. The Prime Minister has made a really important point. It means that those who spend taxpayers’ money must be made more responsible for raising it. That is an absolutely fundamental point. Devolution is not simply about handing money out from the centre and allowing more say in how it is spent at local level. It is about holding local politicians to account not just for spending the money, but raising it in the first place. That is fundamental. If the Government resist that, they will stop the general flow of movement throughout the House and the country that requires genuine devolution that is more than simply decentralisation of spending powers to take place.
Graham Stringer (Blackley and Broughton) (Lab)
My hon. Friend has produced an excellent report. On the relationship between taxes and responsibility, does he agree that one of the problems in Scotland, which has allowed the Scottish National party to have fantasies that it can spend more and more money, is that the Scottish Parliament was set up with the ability to spend money but not to raise taxes? That is the exact opposite of what the plantation people had in north America, where their cry was “No taxation without representation”. In Scotland, we have had representation and tax without taxation, which has been a democratic disaster.
Mr Betts
That has been true so far, but the positions in Scotland and in Wales are going to change. They will have more tax-raising powers and will be held to account. Otherwise, we will have a body that simply spends and gives out the largess, but is not held accountable for raising the money in the first place.
The Committee tried to deal with some difficult issues. We recognise that we may not have got absolutely all the details right. We felt, on balance, that there was a very clear case that devolution would encourage greater growth, particularly in cities. That applies to counties as well, but there are very clear figures for cities. Unlike other countries where the GVA of their major cities tends to be above the national average, with the exception of London and Bristol, the GVAs of the major cities in this country are actually below the national average. There is a fundamental problem there. Devolution does not necessarily guarantee more growth, but it removes some of the current restrictions on decisions being taken at a local level that can make growth take place.
George Hollingbery (Meon Valley) (Con)
I am grateful to the Chair of the Select Committee with whom I served for some time, although I did not take part in this report. One problem of devolution as he describes it, particularly on the issue of GVA in cities, is potentially the buoyancy and predictability of taxation and revenues. I would have thought that if this was done too rapidly and without some sort of mechanism from central Government to iron out fluctuations, there could be some very severe problems.
Mr Betts
I was going to come on to equalisation. Some areas have a greater ability to create and get the benefits of growth than others. This was a difficult issue, and we looked at it. I see the former Minister the hon. Member for Bromley and Chislehurst (Robert Neill) in his place. We thought that what had been done with the business rate retention scheme, or at least the partial retention scheme, was actually quite a good model: a starting point where a certain amount of tax is collected and transferred to a local authority in exchange for the grant that is currently given. The extra receipts that come in through growth would be kept in that area. Some receipts might in future be disproportionate, perhaps because of a very large increase in rateable values that are not directly linked to the efforts of an authority, so there should be a resetting arrangement every so often to take account of that.
We thought that was quite a careful way of doing it. We have probably gone further, in that we recommend that the totality of business rates be kept at local level and there should be a right within a group of authorities, a combined authority or the Greater London authority to set business rates as well—and obviously the element of any increase in the business rate level should not be taken back by central Government. It is a complicated issue, but we thought that the Government had basically got it right in their business rate retention scheme, which could be used as a model for the totality of business rates, or for stamp duty or capital gains tax, bearing in mind the fact that stamp duty is much more a London issue and therefore slightly more complicated. We recommend the idea in principle, but we recognise that it needs to be looked at in the way the hon. Member for Bromley and Chislehurst mentioned.
We tried to deal with equalisation. We suggested that an independent body be set up to deal with problems of resetting and other issues where there might be a conflict between central and local government. The Government dismissed that and thought that they could do all those things. We thought it would probably be useful to have a body like the Office for Budget Responsibility in the local government sphere.
In principle, we are recommending that a framework be set out for how more powers could be devolved, with local authorities setting out their governance arrangements, how they will be fiscally responsible and the sort of strategy they have for using any powers that are devolved to them. We recognised that progress would probably be made more quickly in some areas than in others and that initially the GLA and the combined authorities would probably be best placed to take on those powers. We see them very quickly taking on place-based budgets, strategic planning and housing, and the sorts of health arrangements proposed for Greater Manchester—I will be careful to go back to that with my hon. Friend the Member for Wigan (Lisa Nandy) present. Indeed, the Government intend to introduce primary legislation to allow those sorts of powers to be taken by the combined authorities. We also recommended the devolution of 100% of business rates, setting the multiplier on business rates, stamp duty and capital gains tax, and flexibility with council tax bands as well.
Although all local authorities could go there, we thought there were some changes that could immediately be made to the powers available to all local authorities, including the complete freedom to set council tax. It is quite staggering that the one tax that local authorities have got—the one that is supposedly theirs—is one for which any increase by more than the Secretary of State thinks is appropriate has to be put to a referendum. There is no other tax in this country for which we have to have a referendum to increase it. Those sorts of freedoms could be given straight away. We thought there could be further freedoms by pushing the commissioning of the Work programme down to all local authorities and that controls over fees and charges could be freed up. Why should the Secretary of State fix fees and charges? They should be fixed at a more local level.
Mr Allen
My hon. Friend will know that the report from the Select Committee on Political and Constitutional Reform, which I chair, is tagged to today’s debate. We talk about the democratic aspect of this issue, which may reassure some of our hon. Friends and other hon. Members in the Chamber. Does he accept that although we might get a benign Government who wish to push power away from Whitehall, there may be Governments who want to take it back? Does he accept what I hope is the strong case made by my Committee that there needs to be some entrenchment of the independence and rights of local government? Otherwise, that possibility could come true in time.
Mr Betts
Yes, and I congratulate my hon. Friend and his Select Committee on the work they have done; indeed, we have worked together on a number of these aspects. He is absolutely right: there ought to be some fundamental commitment to the rights of local authorities to have these devolved powers. The worry is that everyone feels that this is a great thing now, but in five years’ time it could be reversed. There needs to be a degree of certainty about the direction of travel we are moving in.
Bob Stewart
Once these powers have been devolved, what happens if a local authority started behaving in a mad, mad way? Would national Government have any oversight in that instance, or is there none?
Mr Betts
It is possible for a Secretary of State to have reserve powers to intervene in extremis, as indeed the Secretary of State has powers to do now. [Interruption.] I hear a little whisper from my hon. Friend the Member for Nottingham North (Mr Allen) about what happens when the central Government behave in a completely irresponsible way—who can deal with them? At the local level, the local electorate can take a view.
Robert Neill
It might be worth bearing in mind the fact—for the benefit of my hon. Friend the Member for Beckenham (Bob Stewart)—that even with significantly greater devolution, the local authority would still have to behave within the principles of public law, acting in Wednesbury reasonableness terms, and be subject to judicial review if it behaved wholly irrationally.
Mr Betts
I am sure lawyers will not be out of business any time soon on this matter The hon. Gentleman is absolutely right. In our recommendations on extra borrowing powers as part of a devolution package—including the housing revenue account and using tax increment financing more actively as local authorities have complete control over business rates—we make it clear that all the borrowing has to be done within the prudential borrowing rules. That is absolutely clear.
There is one other major issue: the control total for total managed expenditure that central Government use. The Government have already had to accept that if the Scottish Parliament decides to raise more money and spend it, that has to come outside the total. If Scotland can vary it, there cannot be a total managed expenditure that is absolutely fixed, because it cannot be cut elsewhere to compensate for Scotland’s increase. The principle has been accepted, and the Treasury has to relax more about allowing local authorities to raise money for investment purposes at local level outside the controlled total.
Finally, let us return to what the Prime Minister said about devolution in Wales:
“That means those who spend taxpayers’ money must be more responsible for raising it.”
That is a fundamental point. It is why fiscal devolution, as well as spending devolution, is essential. As the Select Committee said:
“The point has been reached for the Government (and policy makers in other political parties) to make it clear whether they are committed in principle to large-scale and more comprehensive fiscal devolution in England.”
We as a Select Committee are, and we believe that all those on the Front Benches should be, too.
Graham Stringer (Blackley and Broughton) (Lab)
I would like to start by disagreeing with my hon. Friend the Member for Denton and Reddish (Andrew Gwynne), who said in an intervention on the Chair of the Select Committee, my hon. Friend the Member for Sheffield South East (Mr Betts), that decentralisation was not an aim in itself. If democracy and local democracy is an objective—and I believe it is—then decentralisation is an objective. To allow local people to vote for people to take decisions that affect them directly, and for the people who are elected to raise local taxes to pay for those services, is a clear objective. There is absolutely no guarantee, in any system of national or local democracy, that this will lead to efficient services or economic growth, but at the heart of the matter is the principle that we should be able to vote for the people who take decisions using public money raised through taxes. I therefore believe that that is an objective.
I am not on the Select Committee, but I have read the report and I have been left with two conflicting emotions. First, I found the report depressing, although not because it is not a good report; it is a good report and it goes into a lot of detail. I was elected—as I suspect my hon. Friend the Member for Sheffield South East was—to a local authority more than a third of century ago. At that time, local authorities had complete control over the level of the business rate and over their other rates, and they could set levels of expenditure. It is a measure of how far we have moved that we now think it an advance to have a share of the local business rate. That is a depressing thought. On the other hand, I am optimistic about some of the Government’s proposals and some of the activities in our major cities and counties where agreement to devolve powers has been reached. There seems to be a movement to reverse many decades of centralisation.
There is one thought that lies behind a lot of the Government’s thinking and behind the thinking of other Members, even though it might not be expressed. It is that central Government somehow do things better than local government. I have never seen any evidence of that. Let us consider the waste of money on the NHS computer. I do not have the exact figures, but I believe that about £12 billion has been wasted—a mere £12 billion. That would probably be sufficient to fund the Government grants to run Manchester and Birmingham for about a decade, and that is just one example of a failed computer programme. It is extraordinary that central Government can sit there and think that they are more effective than local government. There is no evidence whatever for that.
Mr Betts
Thinking slightly cynically, may I ask my hon. Friend whether he thinks that Treasury Ministers and shadow Treasury Ministers are interested in pushing more spending powers down to local level because they think that they can get better value out of that arrangement and that if there is more austerity to come, local government would probably manage it better?
Graham Stringer
Sometimes that is absolutely true. It is sometimes the objective of central Government to pass on the responsibility for “difficult decisions”, which can often be code for “cuts”.
In the light of the great achievements of cities such as Sheffield, Birmingham, Manchester and Newcastle—the cities that this country’s wealth was built on—we have taken that money and power and centralised it. This has led to an increase in the north-south divide. London has such a booming economy because of its geography and because of the City of London, but also because the expenditure in local government has been centralised, and about 90%—we can argue about the final decimal point—of the expenditure on transport has been spent in London and the south-east and not in the other regions. That in itself leads to economic growth. There is also an increased intensity of investment in hospitals and science in the golden triangle of Oxford, Cambridge and London.
On that basis, I very much welcomed the statement about the devolution to Manchester, the powerhouse of the north and the combined authorities, which would give control over the skills budget and over transport, allow the re-regulation of buses in Greater Manchester, give control over the housing budget and allow a look at the social care budget, so that local people would take decisions locally. A lot of the criticism, including from my hon. Friend the Member for Wigan (Lisa Nandy), is that nobody has been consulted about a mayor for that process, but let us look at what the combined authority was faced with. All those local authorities—Labour, Lib Dem-led and Conservative-controlled—believed that more decisions should be taken locally, which, incidentally, would also lead to more efficient services. The Government’s position is that they are willing to hand over control of that money but that because a lot of those services, particularly transport and skills, are provided at a county level, there should be an elected mayor. One could either recreate the Greater Manchester county council, which used to deal with many of those services, or have an elected mayor, and the Government prefer an elected mayor. The position facing the leaders of the 10 authorities was: do we accept this—and we wanted this kind of thing when I was leader of Manchester city council, a long time ago —accept what is offered by the Government and plug the hole of the democratic deficit, or do we not?
Andy Sawford
I am not surprised that the right hon. Gentleman wants to tempt me down that path. What I am setting out today is a very radical plan for devolution of £30 billion of funding. Of course we recognise that there is a case for fiscal devolution, and we will allow local authorities and combined authorities to retain 100% of business rates. That is a welcome step forward in fiscal devolution, with which the right hon. Gentleman’s party is yet to catch up.
A Labour Government will introduce a proper recognition of needs into the funding formula—we are committed to that. How can it be right for the 10 poorest authorities to be hit hardest, while some authorities such as Wokingham have seen their budgets increase? The right hon. Member for Wokingham (Mr Redwood) will doubtless have different conversations with his local authority, which has benefited from a budget increase, from those of many other hon. Members whose areas have faced huge cuts.
We will take steps to allocate resources much more fairly across local government. Over the medium term, we will give councils greater ability to make long-term plans by introducing multi-year funding settlements. This is supported by local government: we have heard those calls; we support them and we will act. We will devolve power down to local councils and communities—devolving decision making on transport investment and on bus regulation, for example. If those powers are good enough for people in London to exercise at a more local level, they are good enough for the rest of the country.
The public will know that Labour has a strong track-record of devolving power. We passed the Scotland Act 1998 and the Government of Wales Act 2006, and only a future Labour Government will be committed to an English devolution Act that will reverse a century of centralisation. Members have talked about the great early years of some of our cities, which provided pioneering solutions to the problems they faced in the 19th century, but also about how those powers subsequently drifted back to the centre. We intend to reverse that.
Our devolution Act will secure devolution for local communities in England, transferring £30 billion over five years and passing down power and resources for transport, skills, employment support, housing and business support. That is three times as much money as the current Government have said they will devolve in the next Parliament. We will also devolve business rates to city and county regions and combined authorities so that they retain 100% of the additional money that is raised, which constitutes an important fiscal devolution.
The current Government’s talk of devolution relates to limited powers for a small number of larger cities. I agree with those who have called for devolution throughout the country, to all the villages, towns and cities that we represent and that want an opportunity to take more powers and funding so that they can make decisions locally. For all the rhetoric about empowering northern cities, it is worth reminding ourselves that areas such as Liverpool and Manchester—some of the most deprived areas with some of the greatest needs—have faced the biggest cuts in the country. There is nothing empowering or localist about taking with one hand and giving far less back with the other. As was pointed out by my hon. Friend the Member for Wigan, we need to involve people in this devolution, because they currently feel that decisions are made too far away from them. It is important for communities to be involved as we hand over power and resources.
We will join up commissioning between councils and the NHS through health and wellbeing boards to provide “whole person care” by means of a care budget for people with long-term conditions such as disability and frailty. I shall say something about the Manchester proposals in a moment. We will devolve commissioning for employment and skills so that those services are properly joined up. My hon. Friend the Member for Wigan said she felt that the public had been cut out of the conversation in her area, and that consent was needed for this devolution. She was absolutely right. We want to ensure that, as authorities come forward and explain how they will work together to take their new powers and make the most of them, they engage the public in that conversation.
I was extremely disappointed when my local county council announced its intention to explore a partnership with two neighbouring county councils. That did not make much sense to me, but I was more worried by the fact that neither the districts nor the public had been engaged. That is no way in which to build public consent for a radical devolution of power.
We have heard from some Members who represent county areas. I agree with their criticism that the Government have no plan for devolution to counties and county regions. They seem to have a blind spot when it comes to huge areas of the country. If we are given the opportunity to change the position, we will do so. We will offer economic devolution to every part of England.
The Government’s announcement that they will devolve the NHS budget to local authorities in Manchester is particularly topical, and many Members have been exercised about it today. After five years of making savage cuts in council budgets and five years of fragmenting and privatising, the Chancellor of the Exchequer has waited until five weeks before the end of the current Parliament to endorse—in many respects—Labour’s plan to integrate the NHS and social care. Moreover, as we heard from my hon. Friend the Member for Wigan and other Members, he has rushed into it without a proper consultation. The Government are really not doing this in the right way.
A key issue on which Members have commented is motive, which is what makes many of them suspicious. A Government who have, for instance, forced the part-privatisation of ambulance services on people in Greater Manchester are not a Government to be trusted with our NHS, and we question their motive when they make an announcement like this just before an election. Local leaders in Greater Manchester—who have worked with this Government and, in the interests of the people whom they serve, will work with the next—have said that they want an opportunity to develop NHS and social care integration. The leader of Manchester county council, for instance, played a big role in Labour’s local government innovation taskforce, which has championed ideas about the proper integration of health and social care.
The people of Greater Manchester want to be able to get on with the job of developing whole person care. However, before any final deal is signed, important questions about the new arrangements need to be answered. For instance, how much money is on offer, and will it be enough? Members have rightly speculated on the possibility that this is another example of the Government’s devolving the axe by handing over any responsibility for ensuring that a proper NHS and social care service can be provided in an area, and allowing local leaders to take the blame when that service does not meet public expectations.
We must all be vigilant in the face of the danger that the Government are trying to devolve an NHS funding crisis that they have themselves created, not least through their cuts in social care. Labour will offer a better deal. We will offer the NHS and councils more money, raised through our new mansion tax That will allow them to build an NHS that starts in people’s homes, looking after them there and ending the culture of 15-minute care visits. There will be money for the extra nurses, GPs, home care workers and midwives whom we need. Rather than creating new bureaucracies—that is a worrying aspect of the new structure—we will move quickly to devolve more power to councils and councillors.
Democratic accountability is very important, and local leaders must be seen to be in the lead, but we must also think about what additional means of holding people to account may work in different parts of the country. We believe that local public accounts committees could provide a way of including civil society. As other Members have said, we want to engage the public directly, but we can also engage them through civil society organisations.
Mr Betts
I agree with my hon. Friend that many questions about the deal in Greater Manchester need to be asked and answered, and locally elected Members of Parliament should be involved in that process. Is it not crucial, however, that if we are to join up health and social care, there should be accountability to local elected politicians for the spending of the money? Is that important issue not embedded in the whole process?
Andy Sawford
I entirely agree. There is an opportunity here. NHS England and the Department of Health at Richmond house are not necessarily providing the strongest form of accountability to the public when things go wrong. Any Labour plan for real devolution will be intended to create a much stronger feeling that those who provide local public services are accountable. That applies especially to our NHS, which we value so much, and which we need to protect from five more years of a Government who want to underfund, break up and privatise it.
Under this Government, people in cities and towns throughout our country are feeling the pain of the longest cost of living crisis in a century. That is why we need a Labour Government to spread power and prosperity across England, so that the economic recovery benefits all working people and not just a wealthy few.
Kris Hopkins
That is certainly not my intention. My intention is to see every part of the country grow. The Chancellor has gone out there and supported the northern powerhouse, and we have gone to every corner of this country to make sure that this works. At the end of the day, however, growth will be locally led and individual areas will need to be supported in this process, but many will seize the opportunity to grow their local economies.
We have heard some good contributions from Members and I want to comment on them.
Mr Betts
I read out a quote by the Prime Minister, which I presume the Minister agrees with, about proposals for increased fiscal devolution in Wales. So far, he has not talked about fiscal devolution at all. The Prime Minister said:
“That means those who spend taxpayers’ money must be more responsible for raising it. This is devolution with a purpose”.
Does the Minister agree with that in principle, and if so, if it applies to Wales, why does it not apply to Manchester, London or Sheffield?
Kris Hopkins
It applies to England at this moment. We have given local authorities the ability to raise money, to drive their local economies and to build more houses and be rewarded for doing so. The decisions associated with that expenditure are now being taken at local level.
The tone of the debate has been really good, despite one or two glitches in some contributions. On the whole, people realise the enormous power that local government has and the massive contribution that it makes to society and to delivering public services. The report produced by the hon. Member for Sheffield South East recognises that the movement towards more decentralisation and ensuring that people at local level are more accountable is the way forward. That is certainly the desire of this Government.
My hon. Friend the Member for Folkestone and Hythe (Damian Collins) talked about a northern powerhouse, and about his desire to see his county step up and seize the opportunity for more devolved powers. He was right to say that. In contrast, the hon. Member for Corby (Andy Sawford) seemed to believe that it was up to central Government to come up with a plan for a local area. It is not about that. It is about groups of local authorities having the confidence to follow what they see as the route to economic growth. It is about their making those choices and coming to us. Our door is open to the authorities that make those choices.
My hon. Friend was right to recognise that the move from the better care fund towards more integration in our social care is extremely important. There is an issue with demographics, given the enormous growth in our elderly populace, and we have a responsibility to ensure that we deliver quality services efficiently. He also talked about waste, and about community housing policy. Those are two key areas in which local authorities can make decisions.
The hon. Member for Blackley and Broughton (Graham Stringer) brings an enormous amount of knowledge and expertise to the House and I congratulate him on his 30 years of public service. He has faith in local government; in fact, he has more faith in local government than he does in central Government. I, too, have huge confidence that local government can deliver what is needed. He mentioned the use on the radio of the term “grubby hands”. I, too, thought that that was appalling. People working in local government give up a huge amount of their time to make a contribution, and they do so out of choice. I applaud the work of many local authority leaders and councillors, and I think that the BBC should apologise for that comment.
The hon. Gentleman was right to observe that the health deal was negotiated—and will be negotiated further—with local leaders. I have confidence that the democratic process will win, and that people will seize these opportunities. The hon. Member for Wigan (Lisa Nandy) has pointed to a lack of involvement by local people in that process, but the councillor who is the leader of Wigan is a local person, and those 10 people came together in a pragmatic way—as my hon. Friend the Member for Bromley and Chislehurst (Robert Neill) said—and made a choice about this. We will also put in place primary legislation to ensure that there is a directly elected representative. The journey in Manchester has not happened just in the past four weeks. It is not something that has appeared just before the general election. It has been going on for a decade-plus.