Local Government Finance

Lord Greaves Excerpts

Thursday 13th July 2017 Lords Chamber

[Lord Greaves (LD)]

My Lords, I congratulate the noble Lord, Lord Kennedy, on initiating this debate, which is very timely. I declare an interest as a member and deputy leader of Pendle Borough Council and various other local government interests. Talking of Pendle, I am reminded of a time, a very long time ago, when the Minister, the noble Lord, Lord Young of Cookham, visited Pendle—in fact, it was two occasions—when he was a junior Housing Minister in a Conservative Government. He gained a reputation in Pendle which one or two people still remember him for. He came and we told him why we wanted more housing money and all the rest of the things that we do when Ministers come—we showed him lots of good things and tried to hide all the bad things. Fairly soon afterwards—a few days, I think—he was sacked as a Housing Minister and we thought, “That was all a waste of time”. Time passed on and he became a junior Housing Minister again, and yet again came to visit Pendle—at the behest of the man who is now my noble friend Lord Lee of Trafford. We went through the whole rigmarole again. I do not think that he was sacked that time, but he was certainly moved on from being a Housing Minister. The word went out in Pendle: “If we get a government Minister coming, make sure it’s never that man Young”. I have to say to the noble Lord, Lord Young, that he will be very welcome indeed to come to visit Pendle again and I hope we will not have the same effect on him.

I associate myself completely with the comprehensive speech made by my noble friend Lord Shipley, who covered quite a lot of very interesting matters, some of them fundamental. If local government is going to be sorted out, many of those matters are going to have to be tackled.

I want to comment briefly on the goings-on at the moment in two local authorities in my part of the world, in Lancashire and Liverpool, where very strange things are happening. I do not know what the latest information is—it seems to change every hour—and in mentioning it briefly I shall be very careful because it involves criminal investigations. I shall not get involved in those, but some time ago four people were investigated by the police in relation, as I understand it, to goings-on in connection with partnerships between those two councils and BT, Liverpool Direct and One Connect. It may well be that that will be discussed in the future. However, one of those being investigated, a man called Geoff Driver, was released from the investigation. He was leader of Lancashire County Council at the time that is being investigated and is leader again now after an interregnum of four years. On 22 May—these are just facts—all four of these people were arrested, according to the police, “on suspicion of conspiracy to pervert the course of justice and witness intimidation”. They were bailed on 19 June and rebailed on 23 August. I do not wish to comment on those investigations in any way. I want to comment on the effect that they are having on these two councils.

In Liverpool, the chief executive, Ged Fitzgerald, one of these four, was suspended and, the press reports, is on paid leave of absence from his £200,000 a year job. However, the significant thing is that the elected mayor, Joe Anderson, the Mayor of Liverpool, has taken over the functions of the chief executive, according to the press, which seems an extraordinary thing to happen. Despite that, according to reports in the newspapers, specifically in the Liverpool Echo of 23 June:

“Liverpool’s arrested chief executive Ged Fitzgerald will continue to ‘guide and advise’ Mayor Joe Anderson while he remains on paid leave as police investigations into his conduct continue”.


What is happening in Liverpool seems unusual, to put it very mildly indeed.

As for Lancashire, Geoff Driver, perfectly properly, was elected as leader of the county council, but he has issued what I can only describe as a quite extraordinary injunction to four senior officials of Lancashire County Council: they are not to attend any briefings at which he is present. In other words, the elected leader of the county council, Geoff Driver, has banned four senior officials—including the chief executive, Jo Turton; Mr Sutton, director of development and corporate services; Ms Lowry, head of internal audit; and Ms Kitto, director of corporate services—from giving the leader any advice, except in writing. They can email and no doubt they can send old-fashioned written communications. This is causing a great deal of concern. The leader of the Labour opposition on Lancashire County Council, Councillor Azhar Ali, has written to the Communities Secretary to ask for a government investigation into what is going on in Lancashire, and I have to say that none of it does Lancashire, or Liverpool, or local government any good whatever, regardless of the ongoing investigations by the police.

It is inevitable in a discussion such as this that current budgets are top of the list; although they are current budgets, they are a symptom, a serious symptom, of the crisis which is hitting local government. I have the exciting task of being what people call the “portfolio holder for finance” on my council and it is not a particularly pleasant job at the moment. This is particularly true, if I may say so, for district councils in two-tier areas, as opposed to county councils, which are lumbered with having to deal with what in the old days, when finance for local authorities was given in blocks, were simply called “other services”. The recent general election and a great deal of speculation now about “the end of austerity” suggests that funding for health, social care, education and transport—high-level public services—might be released. I do not hear anyone saying that the same thing is going to happen for the ordinary local services on which the health and future of communities depend and which people expect to keep going: street sweeping, dustbin collection, recycling, libraries and all that kind of thing. I see no sign at all.

The Local Government Association, of which I am not a vice-president, issued a statement saying:

“Even if councils stopped filling in potholes, maintaining parks and open spaces, closed all children’s centres, libraries, museums, leisure centres, turned off every street light and shut all discretionary bus routes they will not have saved enough money to plug this gap”.


The point is that these are exactly the kinds of services which are discretionary and do not have to be done except at a very low level—and I do not know how long it is going to be before somebody takes a district council to court for not sweeping the streets properly. They are that kind of service. They are in the front line of cuts and, frankly, in a lot of places, they are in the front line to be reduced to a level where they are of no use whatever.

Councils are finding all sorts of wheezes to try to get round these things, and some of them may be desirable in themselves. Apart from everything else, I hold the exciting title of chair of Pendle Borough Council’s transfer of services and facilities to town and parish councils committee. If that sounds like a low-level job, let me tell the House that negotiating with 18 or 19 parish and town councils that are full of people who want to get involved in the detail of everything—because they are very local and that is what they do, and quite rightly too—is such that I could quite easily spend much more of my time and energy on that work than on work in the House of Lords, and perhaps I do. And we are doing it: we, an ordinary district council of 90,000 people, are currently working on transferring, for example, our 11 parks to our town and parish councils. Perhaps that is the right level for those parks to be run at—and I agree with that. The problem is that the town councils will be able to do it only if they put their council tax up. One of the reasons why the councils are doing things like this is that town and parish councils can put their council tax up but the district council cannot. I hope the Government will never stop us doing that, because it is a matter for local decision, but still it does not avoid the need to raise the money. The alternative is to sell off some of the parks, for housing land, perhaps, and use that money to keep the parks going for another 10 years. That is an answer. Another is to close two or three of the parks, to stop cutting the grass very substantially, to stop planting flowers in the park or to stop painting the railings—or whatever it is. Surely local government is not down to that kind of level.

The country as a whole has to have a fundamental rethink about what local government is for and how it is organised. I wish we would stop using the word “government”. What I am interested in is local democracy. At a local democracy level it is not the regions and city regions and the arbitrary amalgamations of local authorities to make combined authorities. People are not interested in that. They do not understand it and they are not particularly bothered about electing mayors or anybody else for towns on the other side of the big city. What people want is the ability to have an influence and to get involved in making sure that basic local services in their local community are there. As far as democracy is concerned, that means coming back to the fundamental building blocks of democracy which, in my view, are towns—big towns, little towns, middling towns, small towns. Towns provide the civic focus—the name gives it away—for people to get involved in running and helping to run them, as well as the accountability that local representatives should have. I believe that towns are the key to the future, and by “towns” I include big cities such as Manchester and a little town such as Earby in Pendle which has 3,000 electors. They are the places that things have to be built on. We have to rebuild our local democracy from the bottom upwards and stop trying to run everything from London, Manchester or Leeds in a top-down way.

--- Later in debate ---

[Lord Young of Cookham]

Well, I hope that the noble Lord’s words of wisdom have fallen on his Front Bench as well as my own. I just make the point that they did revalue in Wales, in 2005; 33% of homes were placed in a higher band and only 8% of homes were placed in a lower band. Two-thirds of the net rises were among homes originally in bands A to C, meaning that in that case revaluation hit the less well-off households the hardest. Therefore, I note the case that was made, but I have to disappoint the noble Lord and say that that is not on the agenda.

I was encouraged to hear the noble Baroness, Lady Donaghy, say that she has three energetic candidates waiting to fight in her ward. I will make it my mission to ensure that they are opposed by three equally energetic, dynamic and motivated candidates from my party so that we have a proper contest in whatever part of Southwark she may live in.

The noble Lord, Lord Shipley, raised the point about local authorities investing in property. Like him, I saw the article and made some inquiries following the leader in the Times on Tuesday about local authority property investments betting with taxpayers’ money. There are strong checks and balances in place to protect taxpayers’ money, and local authorities are required to ensure that they have the right skills and commercial expertise to make investment decisions. However, we are actively monitoring the nature and scale of local authority commercial activity, working closely with the sector to ensure that the governance framework continues to be appropriate.

Yes, we have to do more on housing; I recognise that. I have some briefing here on housing, explaining how we are building more council houses than the Labour Party. I will not read this out because I am short of time, but I agree with one of the thrusts of this debate that we need to raise our game on housing.

I say to the noble Lord, Lord Greaves, that it says here that you should not comment on an ongoing police investigation, so I will not.

[Lord Greaves]

I was very careful not to comment on the ongoing police investigation. I commented on what is happening in Liverpool council and Lancashire council, which is alarming.

[Lord Young of Cookham]

I will be even more careful by moving quickly on.

The noble Baroness, Lady Pinnock, made the interesting proposal that we should somehow topslice DVLA proceeds and VAT and give it to the local authorities. However, they would not then have the certainty that they have at the moment, because they would not know how much they would raise. Local government would be out of pocket because it would have kept the money and we might simply reduce the RSG to that local authority by the amount that it was going to get from the VAT, so actually you would be back where you started. I note that in the many reviews of local government finance that proposal has not found favour.

In conclusion, local government has met some major challenges recently. It has faced immediate demands from emergencies: terrorist attacks in London and Manchester and the fire at Grenfell Tower. It is dealing with these emergencies against a background of rising demand for services in key areas such as adult social care. It has shown willingness and ability to work together across boundaries of all kinds, not just geographic boundaries but social and political ones as well, to best support the communities it represents.

Despite such challenging conditions, councils continue to deliver, and council tax is expected to be lower in real terms in 2019-20 than it was in 2010-11. Councils have embraced innovation and transformed the way they work to deliver services for their local areas. We must create the conditions for strong local public services to serve our communities. This will support the important work that our public sector workers do in ensuring that all our citizens are provided with high-quality public services at local and national level at every stage of their lives.