Neighbourhood Services: Government Support

Lord Adonis Excerpts

Thursday 24th October 2019 Lords Chamber

[Lord Adonis (Lab)]

My Lords, it is a pleasure to follow the noble Baroness. Her remarks about community bus services, having new request bus services and refashioning libraries as community hubs, and co-locating other community services, were extremely well made. It is vital that we deal with underfunding, but it is also important that we get the best value from the resources, the infrastructure and the funding that is currently available, and redesigning services along the lines that she was discussing in relation to Lincolnshire, which she knows well, is a point well made.

I have a gentle criticism of the noble Lord, Lord Greaves. He said that there were problems, “even in the south-east”. Can I inform my noble friend that there are many problems in the south-east, and most of the issues that he talked about apply equally to London and the south-east as other parts of the country? It is a very bad idea for us to be setting the north against the south, as if somehow the south is a land of milk and honey and the north is all starved. These problems are fairly common across the north and the south, and many of the issues which the noble Baroness referred to about redesigning services are equally important in the south-east.

Recently I visited the wonderful new library and community centre run by Oasis, a brilliant charity run by the outstanding community leader the Reverend Steve Chalke in Waterloo, in the London Borough of Lambeth. He has turned a library that was threatened with closure into a community centre. It also has a school and a debt advice service. The police station next door, sadly, is being closed, and Oasis is hoping to bring that into the community hub, too. There is a community centre and a café there. It is a vibrant community service that has enabled the local authority, working in partnership, to keep open a service that would have been closed even without the cuts which the noble Lord, Lord Greaves, referred to. What we need to do—this is part of the role that noble Lords in this House can play—is showcase successful models of delivery, even though politically some of us would like to see fundamental changes in national policy, so that we can make the best of what we have got and utilise our still-rich panoply of local community institutions and infrastructure to provide still-better services.

I of course agree with the substance of what the noble Lord, Lord Greaves, says. We need to join up the big picture here. Part of the reason why we are going through this Brexit crisis, and a massive crisis of confidence in our political institutions and our Government, is because the services on which people depend, all of those neighbourhood services, street collections, libraries, schools, housing—which I will have more to say on—have been seriously cut back in recent years, and people make a connection between the two. They think that the fact that they are getting such a raw deal in terms of their local services is part of the reason why they should lack confidence in their national Government. Alas, three and a half years ago the only question they were asked in a referendum was: “Do you want to leave the European Union?” They are now taking it out on politicians, particularly in communities more distant from London, such as Lincolnshire and parts of the north, that voted to leave.

It is very clear to me that, if we are going to deal with the massive crisis that we face as a country, we have to end austerity and fundamentally invest in our local communities—particularly poorer communities—and stop Brexit. We need to do the two together. It is a somewhat sad commentary on our failure in Parliament to put these together that this debate is so poorly attended, with so few of your Lordships taking part—because we must crack this issue of investment in local services. I am delighted to see that my noble friend Lord Kennedy is replying to the debate. He is a distinguished local councillor. Of the few of us who are here today, many are distinguished leaders of or have played parts in local authorities. Unless we can get this right, we are not going to crack the bigger problem of our whole relationship with Europe and our membership of the European Union.

I want to address the issue of housing. The speech by the noble Lord, Lord Greaves, was interesting and revealing. He talked about improving housing administration and the quality of local authority housing stock, but I suggest that that prospectus is not bold enough for the future.

[Lord Greaves]

I apologise for intervening, but we have plenty of time today. I was talking not about local authority housing but about private sector landlord housing in areas of poor housing.

[Lord Adonis]

The point is the same, my Lords. If we are to tackle this housing crisis, what is needed is a bold new programme led by district councils and lower-tier authorities—because they are housing authorities—of building new council housing. They should work in partnership with housing associations to improve dramatically the stock of social housing and affordable housing, which is a significant part of the social crisis that the country faces.

One of the biggest changes in public policy over the past 40 years has been that the provision of social and affordable housing, which was regarded as a core function of the state until the 1980s, has totally ceased to be. We need to be self-critical in this: I do not think that the Government of which I was a part did nearly enough. We thought that market-based solutions would meet needs for lower-cost housing; they manifestly have not.

I spent, for my sins, a large part of last night reading the third volume of Charles Moore’s biography of Margaret Thatcher, which I recommend to your Lordships—indeed, some of those whom I see here in the House today feature in it. It is an important contribution to political history. One of the most remarkable things about it is that council housing, which used to be one of the biggest political issues in the 1960s and 1970s, does not feature at all in that volume—it covers the years from 1987 to the end of Lady Thatcher’s career—except in one passing reference to council house sales, which was the only council house policy that Margaret Thatcher had in her 11 and a half years in Downing Street.

The facts are now the facts: the average home in England this year costs eight times more to buy than the average salary; the average share of income that young families spend on housing has trebled over the past 50 years; because of the shortage of social and affordable housing, the number of people living in the private rented sector has doubled in the past 20 years, and private renters spend on average 41%—nearly half—of their household income on rent. Surprise, surprise, a majority, 57%, of private renters are now struggling to pay housing costs, and one in three low-earning renters has to borrow money to pay their rent. Some 800,000 people who are renting cannot afford to save even £10 a month; 27% of private renters receive housing benefit or the housing element of universal credit, which is approximately 1.3 million households nationwide. Meanwhile, the Government spend £21 billion a year on housing benefit because of the very high level of rents, which they have jacked up by removing subsidy and not building more social homes. Last year, only 6,463 new social homes were built nationwide. There are about 1.5 million fewer social homes today than there were in 1980.

I do not want to do death by statistics, but I think that your Lordships get the picture. What has essentially happened in the last generation is that we totally stopped building new social homes publicly. Housing associations filled the gap to a very modest extent, but not nearly sufficiently. We have had significant population growth in that time, alongside the cessation of social home building; a substantial proportion of the country cannot get near the affordable housing ladder, let alone buy housing; and we have a private rented sector in which Rachmanite, disgraceful, slum-type conditions are increasingly common, with local authorities having neither the power nor the resources to deal with them.

What should be the policy? It is very clear to me, because to all big questions there is usually a simple and correct answer—there is often a simple and wrong answer, too. The simple and correct answer to this crisis is for local authorities to start building social housing again. They should do this in partnership with housing associations, but they should be the prime movers because they are the public authorities—and they should build social housing at the level at which they did in the 1960s and 1970s, to deal with the chronic housing crisis.

At the moment there is precious little movement towards this. It is true that councils are building houses again in a very modest way, compared to the period from the mid-1980s until a few years ago when they were building none at all. But it is very modest; it is scratching the surface, and we now need a revolution in policy. To give some idea, the London Borough of Lambeth, for which I was looking at the statistics recently, is building fewer than 100 new social homes a year; it needs to build 1,000-plus to deal with this issue. So we need about a tenfold increase in the rate of new building at the moment. To put that in context, in just that one London borough, Lambeth—I am sorry to keep referring to London and the south-east, which may offend the noble Lord, Lord Greaves, but there are big problems there, too—the council house waiting list is 28,000. That is in a London borough that is able to build fewer than 100 new homes a year. We need to move these two figures much, much closer to each other.

The noble Viscount, who always does his best to reply to our debates, will I hope be able to give us some facts, and I would like to put a few questions to him. The situation that we are in now, which I have seen very often in public policy, is that everyone admits there is a problem—I do not think that anyone who follows me in this debate will say that there is not a big problem—but the difficulty that we face is that the policies do not remotely match the scale of the problem that most people have identified. At the moment, the noble Viscount and his party are in government, so this is a charge which faces them as to what they are doing about it. They have accepted that there needs to be new social housebuilding, but they are doing precious little about it.

I have three specific questions about policy. First, if there is to be significant new housebuilding led by local authorities, it can come from only one of two sources: either grant funding from central government and/or the capacity of local authorities themselves to borrow in advance of the receipts that they will get from then renting out the social housing. Of course, it was a combination of the two that produced the scale of council and social housebuilding in the 1960s and 1970s. The Government have introduced two policies in this respect. They have restored some grant funding to local authorities in respect of housing, but the amount is pitifully small and typically provides only for less than one-third of the cost of new social units. So what is the Government’s policy going forward? Are they going to significantly increase grant funding in respect of new social housing provided by local authorities and, if so—since I am told that unless that grant funding is in excess of 50%, it is very difficult to get building at volume—will the Government be prepared to look at increasing the grant funding to 50% of the cost of providing new social housing?

In respect of borrowing, the situation is more urgent. What we are seeing at the moment is a serious regression in policy on the part of the Government. One of the most welcome things that Theresa May did in her time as Prime Minister was announce an end to the borrowing cap in respect of local authorities building new housing. This was a deeply felt restraint on local authorities that had applied for the best part of a generation. Even though they could borrow cheaply from the Public Works Loan Board—which was the way that local authorities borrowed—and were able to service debt from rents to build new social housing, they were banned from undertaking the borrowing. Theresa May lifted that borrowing cap, which was extremely welcome, but earlier this month the Government announced unilaterally, with no consultation—smuggled out in a Statement on one of those many days when there were many other Brexit-related announcements so that almost no one noticed—that the borrowing rate from the Public Works Loan Board was going to be increase overnight from 1.81% to 2.82%.

We should let that sink for a moment: an increase of nearly 50% overnight in the borrowing rate levied on local authorities in the only place that they can borrow— except at the going market rates, which of course would make all of this totally unaffordable. The word on the street, which I put to the noble Viscount so that he can deal with it when he replies, is that the reason this was done is that the Treasury, which never wanted the borrowing cap lifted in the first place, is now trying to sabotage the whole principle of public borrowing by local authorities by massively increasing the interest rate, hoping that no one will notice.

I was, until the Brexit crisis came along, chairing the National Infrastructure Commission, so I know only too well how the Treasury works in these matters. That interpretation of what is happening seems to me to be extremely plausible. Can the noble Viscount tell the House why the borrowing rate from the Public Works Loan Board for local authorities wanting to borrow to build new housing has been increased from 1.81% to 2.82%? Is this a fixed policy? Finally, because I am always trying to be constructive—and I know the noble Viscount is, too—will he consider reviewing that policy? Will he meet me and other noble Lords who are concerned about this issue to discuss public borrowing by local authorities to build new social housing and how it can be done on an affordable basis?

[Lord Marlesford (Con)]

Is the noble Lord satisfied that there is space in Lambeth to provide housing for 28,000 more people? It is all very well to say that we have to provide housing for people who need it, but if you are talking about a particular area they want to live in, there has to be the space for the housing.

[Lord Adonis]

Yes, I am satisfied, and I would be very glad to do a walking tour of the London Borough of Lambeth to explain to the noble Lord how it can be done, starting with the huge issue of the redevelopment of Waterloo station. It desperately needs redeveloping; Waterloo is the biggest terminus in Europe and if it were redeveloped it could provide huge opportunities for new social housing. If the noble Lord is up for it, we will do it and we will work out how we can provide that housing—and I would like the Minister to come along, too, because then something might actually happen.

--- Later in debate ---

[The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government and Wales Office (Viscount Younger of Leckie) (Con)]

My Lords, I thank the noble Lord, Lord Greaves, for securing this debate and all noble Lords for their remarks. This is my first debate in my new role, although I have covered the department in the past as a Whip. I am, however, only too aware of the experience of the noble Lord in local government. If there is a verb “to Pendle”, the noble Lord could be described as a “much-Pendled” Peer. I am also aware of the experience and knowledge of the noble Lord, Lord Kennedy, in this sector and the length of time that he has spent in his role on the Front Bench.

All types of local authorities play a central role in supporting communities, including the most vulnerable, across the country, and district councils are at the heart of delivering many of the key services that matter to communities. We have heard a lot about that today. We are grateful for the transformative changes they have championed and for their continued commitment to providing the day-to-day services that their residents rely on. The Government make it a priority to visit councils—including, I understand, Pendle this month—in order to see the issues and opportunities at first hand.

I want to be clear that it is not only upper-tier authorities that are a priority for this Government: we want all authorities, regardless of size, to know that their concerns are being heard. However, while we seek to understand and address the daily issues faced by councils, it is right that we step back and ask ourselves some strategic questions. What is the best model to serve local needs, especially for the most vulnerable groups? How do different authorities best work with their communities to meet the needs and priorities of local areas, which will no doubt differ across the country? The noble Lord, Lord Goddard, alluded to this in his remarks. What is the right balance between state intervention and support and the power of local democracy for local decision-making and authorities?

These are big questions and we must raise them. Indeed, it is not only me asking questions about the role of local government; the sector itself, including the Local Government Association, is constantly challenging itself to do better for all the people it serves. As my noble friend Lady Redfern said, there have been tough times. There continue to be challenging issues to address, but authorities are being innovative.

Social care services are essential to protect our most vulnerable. This is a priority for this Government. The Prime Minister has been entirely clear on this matter and I am keen today to dedicate some time to how we are supporting district councils and the universal services which neighbourhoods rely on. I will also be reflecting later on the important issues of empowerment and community—which I feel strongly about and which was a major theme in the speech of the noble Lord, Lord Greaves.

I turn first to the spending round. This Government understand their responsibility to make sure that local authorities are adequately funded. I was pleased—as I am sure were all noble Lords—with the positive outcome of the spending round. Core spending power, the measurement we use for local government funding, is expected to grow by £2.9 billion for England, which is an estimated 4.3% real-terms rise. I know that the Secretary of State was delighted to have secured the largest year-on-year increase in spending power since 2010—a package which will allow councils to,

“provide more support for areas such as adult and children’s social care and make sure that we are supporting the most vulnerable people in our local communities”.

Beyond social care, we are protecting vital front-line services by increasing the biggest elements of core settlement funding in line with inflation, and we are consulting on a 2% core council tax principle for all councils next year. I take account of the remarks made by the noble Lord, Lord Greaves, on that issue. This significant result is a testament to what happens when we work together with the sector. I am grateful to councils up and down the country which fed into our preparations. The LGA has said that we provided local authorities with,

“much of the funding certainty and stability they need for next year”.

I shall address the point raised by the noble Lords, Lord Greaves and Lord Kennedy, on the new homes bonus. The Government have previously noted that 2019-20 was the final year of new homes bonus funding as agreed in the spending review 2015, and that any funding beyond 2019-20 would need to be agreed as part of the next spending review. I understand that the new homes bonus represents an important part of district council budgets and can form a large percentage of core spending power. We have listened to requests from local authorities to honour previously announced legacy payments totalling £624 million. As part of the roll-forward settlement, the Government are minded to make a new round of allocations for 2020-21, and I would welcome views on our proposals.

The noble Lord, Lord Adonis, raised a point on the Public Works Loan Board. I am not particularly familiar with it, but I hope I can reassure him that the Treasury recently increased the margin that applies to new loans from the PWLB by 100 basis points on top of the usual lending terms. The Government also successfully legislated to increase the lending limit of the PWLB from £85 billion to £95 billion to reflect their commitment to ensuring that local authorities can continue to access the financing that they need to support their capital plans. Since this change took effect, my department has been engaging with the sector to understand the potential impact that it could have on its capital plans and strategies, especially with regard to housing and regeneration.

[Lord Adonis]

The Minister has not addressed my point about the substantial increase in the interest rate. I am not expecting him to be able to do so across the House, but will he write to me about it? Would he be prepared to meet me and other noble Lords to discuss this issue, which I understand is central to the ability of local authorities to borrow to build new housing?

[Viscount Younger of Leckie]

I was coming on to address some of the other points on the subject of housing. I will come to the noble Lord’s point in a moment. He raised a number of questions and I want to be sure that he receives full answers.

The Government remain committed to business rates retention, which is yielding strong results, including for district councils. We are aiming to increase the level of retention from 50% to 75% from 2021 to give councils greater flexibility over their funding and to reward authorities for generating economic growth.

I now move on to the important issue of relative needs and resources. The noble Lord, Lord Goddard, warned against an easy formula of salami-slicing as opposed to better targeting. That is a very good point. The Government understand that demographic pressures have affected local areas in different ways, as has the cost of providing particular services. Councils told us that they wanted a simpler, up-to-date funding formula based on the best available evidence, and that is exactly what we are working to deliver. We are working closely with local government representatives to consider the drivers of local authorities’ costs, the resources available to them to fund services and how to account for them in a way that draws a more transparent and understandable link between local circumstances and local authority funding. This is a thorough, evidence-based review of the costs faced by all authorities. We have confirmed that we now aim to implement the review in 2021-22 so that the sector has the certainty that it needs to plan for 2020-21. It is important that we get direct feedback from local authorities, and we are grateful for the trusted links that we have across the sector. The more that we can consult, the more likely it is that we can get it right.

In looking ahead to the upcoming local government finance settlement, we have set out our proposals in a technical consultation which will close on 31 October. It sets out the package for local government in more detail and responds to the calls from the sector for certainty and stability. We will listen closely to the views and contributions from representatives of local government and aim to publish a response in the provisional local government finance settlement in early December.

I shall now address a number of questions that were raised. The noble Lord, Lord Greaves, mentioned the critical services on which all communities rely. He mentioned street cleaning, recycling, community services, libraries, housing and many others. I, too, recognise the critical role that all local authorities play in delivering these services. The noble Baroness, Lady Pinnock, is right that parish councils play an important part in local services. I reassure her that we want them to grow and expand and that we are doing our best in our communities brief to do that. Councils have managed reductions in funding and people’s satisfaction with waste collection and libraries has largely held up. Satisfaction levels are high—but that does not mean that we are complacent.

The noble Lord, Lord Greaves, spoke about provision of park and community services. We continue to support parks and community spaces. In fact, I am looking at this area particularly strongly at the moment to see what more can be done. In 2018-19, we invested £15 million in an innovative parks programme, and we will launch a new £1.35 million programme to support the next round of pocket parks very soon. Working with our partner, Pub is the Hub, we have funded almost 200 pub diversification projects, introducing new services that are of value to the community. The noble Lord spoke about waste management and climate change. He was right to raise these important global issues. Like the whole of government, my department supports the objectives of the Environment Bill. Local authorities, as local leaders, experts, place shapers and convenors of local communities, are empowered to play a fundamental role in delivering the environmental action needed in their areas.

My noble friend Lady Redfern, the noble Lord, Lord Adonis, and the noble Baroness, Lady Pinnock, referred to libraries. I thank them for that. I have spoken on libraries in the past. I recognise the work of staff and volunteers. I know that the Department for Digital, Culture, Media and Sport is working closely with the noble Lord, Lord Bird, to look at the future of libraries in the 21st century. I understand that it is called the libraries task force. Many innovative approaches are being taken across the country, for example in Warrington, to bring services together in communities. My noble friend Lady Redfern and the noble Lord, Lord Kennedy, spoke about libraries having to innovate, and they are right.

Councils across the country are transforming not just how they work but their role in leading local places, strengthening local infrastructure and reinventing localities. Many areas are achieving fantastic results, such as district councils in former coalfield areas collaborating on First Art.

The noble Lords, Lord Adonis and Lord Kennedy, spoke about social housing. I shall make a few remarks about housing; there is a lot more I could say, but I am not sure I shall have time. I am delighted to accept the invitation to visit. I think there were probably two visits, one with the noble Lord, Lord Kennedy, and one with the noble Lord, Lord Adonis. We have announced a comprehensive package of reform, which will support our ambition to raise housing supply by 300,000 per year by the mid-2020s. We are driving the delivery of affordable housing through measures such as the £9 billion affordable homes programme, abolishing HRA borrowing caps and setting a long-term rent deal for social landlords from 2020. This Government have seen housing supply increase by 1.3 million since 2010. We have also backed schemes such as Help to Buy and Right to Buy, which have supported more than 566,000 households to purchase a home.

The noble Lord, Lord Adonis, raised a number of questions. I shall look at Hansard to make sure that his questions receive detailed answers.

I shall pick up on what the noble Earl, Lord Listowel, said about homelessness. It is an issue that we take incredibly seriously in the department under my honourable friend Luke Hall. I thank the noble Earl for his contribution, and I was saddened by the stories he shared with us. He is right that funding is needed alongside community support. That is why, alongside the additional £2.9 billion for local government, this Government are committing over £1.2 billion to tackle homelessness and rough sleeping, and a flexible homelessness support grant of £670 million. The Chancellor also announced an increase in the level of funding for public health grant so that local authorities can continue to invest in prevention, which, as I am sure the noble Earl agrees, is most important.

I now turn to the communities section of my remarks —an area I regard as very important. The Government are committed to continuing to build strong communities where people feel proud of their neighbourhoods and are actively involved in local decision-making. As my noble friend Lady Redfern said, local government, including the district councils that provide important neighbourhood services, is a vital partner in supporting communities across the country. We also want communities themselves to take an active role in changing their area for the better, because there is much power and potential in our communities. Across the country we see examples of local people coming together and leading change, from community clean-ups and community groups running valued front-line services, to volunteers in libraries, mentioned by my noble friend Lady Redfern. The Government want to continue to unlock that potential and help create an environment where all our communities feel empowered.

That mission is at the heart of the Government’s approach to communities, and, in case there was any doubt, I can say that I am involving myself with great enthusiasm in this area. As the noble Lords, Lord Goddard and Lord Kennedy, said, it is a question of collaboration and integral working to achieve more. As we have discovered, when organisations work together, they are better placed to apply for specific new funding.

This summer my department published a new communities framework, setting out a vision of how we can strengthen our communities with four areas of focus. The first is building trust and local pride. High levels of trust and social capital are a crucial building block for a thriving integrated community and for our nation’s well-being and economic prosperity. We want people to feel a sense of pride and connectedness in where they live and to build strong local relationships. That is why my department is supporting work to overcome barriers to integration and help bring people together. That work includes the Near Neighbours scheme, which has supported over 1,600 local community projects, bringing together people from different backgrounds to tackle local issues; programmes to help people improve their English skills, which I believe was mentioned this afternoon, so that they can become part of community life—some people who have been in this country for decades have not addressed that, so we have high hopes—and the Integration Area programme, which is working with five local councils to overcome integration challenges and share their learning, with an additional £10 million announced for the second wave of areas in 2020.

Secondly, I want to focus on active citizenship and giving communities control over local decision-making. This Government are focused on pushing power down and enabling decisions that affect local people to be made at the local level. We will continue to support the community rights and powers established under the Localism Act, such as neighbourhood planning, which enables communities to develop a shared vision for their area for the future.

The third area is shared community spaces. In our busy world, it is becoming increasingly challenging to connect with one another, but shared spaces such as our parks, which were referred to this afternoon, community centres, pubs and libraries provide the vital community infrastructure that brings people together. We have provided additional funding for our parks, which I mentioned earlier, with a new £1.35 million programme, working with our partner Pub is the Hub, which I also mentioned earlier.

The fourth area is shared economic prosperity, with no community left behind. We know that some communities have not shared in the wider economic growth experienced in the UK. The Government are committed to building strong communities that help create a thriving and inclusive economy, and to ensuring that prosperity is shared.

The noble Lord, Lord Greaves, spoke about towns and high streets. He will know about this but we have committed to a £3.6 billion towns fund, and local people will have a say in how that money is spent. He spoke about competition but it is right that there is a competitive approach. Towns are being invited to approach us and to put in, in effect, business plans setting out how they can reinvigorate their high streets. We want to work closely with them to make sure that funding is directed to the right place. I hope he will forgive me when I say that, in this area, I think competition is a good thing.

Through our support for those four areas of work—trust and local pride, active citizenship, community spaces and shared prosperity—the Government will continue to work to empower communities.

I recently visited Walsall, which is one of our integration areas, and met several community groups and organisations doing amazing work to support local people. I met groups running English classes to enable people to increase their confidence, make the most of the opportunities available, and play a full and active role in the local community. I also heard about the Places of Welcome scheme, which tackles loneliness and social isolation by providing places where people can go simply to see a friendly face or have a cup of tea and connect with others. This is an example of what can be achieved when local government works in partnership with local actors to build stronger and more integrated communities. It is one thing that I will definitely continue to press ahead with.

In conclusion, I assure noble Lords that this Government are committed to providing local government with the funding it needs and to ensuring that the funding is both flexible and proportionate to an area’s demographic needs. The noble Earl, Lord Listowel, spoke about homelessness and I want to write to him on that specific point.