Neighbourhood Services: Government Support

Lord Greaves Excerpts

Thursday 24th October 2019 Lords Chamber

Moved by

[Lord Greaves]

That this House takes note of the levels of government support for neighbourhood services provided by district councils and other local authorities.

[Lord Greaves (LD)]

My Lords, in moving this Motion, I remind the House of my registered interest as a member of Pendle Borough Council.

I refer noble Lords and the Minister to previous debates that we have had on this matter and in which I have taken part. Having read what I said then, I simply reiterate that it is all still true, because the concerns that I put forward at that time, along with other noble Lords, have simply not been taken up by the Government. On 19 October 2017 there was a debate on the future availability of resources for the provision of district council services; a debate on local government finance generally was introduced by the noble Lord, Lord Kennedy, in July 2017; and on 25 September this year I made a speech in the debate on the public spending review, which I shall refer to later. However, nothing has changed. Neighbourhood services continue to be the Cinderella of public services in this country. Things such as bin collection, street cleansing and local leisure facilities have less and less money spent on them every year, and the quality and quantity of what is happening, taken as a whole, is deteriorating.

These services comprise much of the work of ordinary district councils in two-tier areas—I am a member of one—but they are also carried out by unitary authorities, metropolitan councils and London boroughs. Some services, such as the maintenance of local highways, are carried out by county councils. However, the amount of funding provided and allowed for them by central government is the same whichever council carries them out, and it is going down. Indeed, an increasing number of these services are being provided by town and parish councils. In many areas, county, unitary and district councils are deliberately seeking to transfer some services to town and parish councils, which can levy an extra council tax to pay for them as an alternative to the services being closed down or seriously deteriorating.

We are told by our new Prime Minister that austerity is over, yet, as far as local government is concerned, the only real increases in funding, with a few exceptions, are for social care. As we know, that itself is inadequate and the social care system is in serious crisis but, nevertheless, there is real extra money going to those authorities that deal with social care. For neighbourhood or street-level services, whether they are provided by districts or larger authorities, there is no extra money at all. In fact, in real terms, the money this year is being reduced yet again.

What are these services that people like me go on about? They include street cleansing—where sweepers and other people clean up litter—and litter removal generally, as well as the local highways and streets services which tackle the potholes that the Government panicked about last year. Other services include local traffic management, street lighting, pavements and housing standards. The increasing number of private landlords in many areas of poor housing mean that housing standards are a growing problem; housing stock that had been improving over several decades—50 years, perhaps—is now in many cases deteriorating again. There are services addressing environmental health, pollution control and antisocial behaviour measures, for which district councils have responsibility following legislation a few years ago. There are local public health initiatives and all the services that safeguard the local environment, with green spaces, local amenity areas and mini parks. All this concerns not only the green environment but the whole urban environment and any public spaces.

If the district councils and local authorities do not go out deliberately to look after these areas and keep them decent, they deteriorate. It is an easy thing not to do. We are talking about children’s play areas, parks, leisure facilities, sports pitches and facilities, community centres and community facilities generally—the whole question of managing the local environment. Town centres, and towns, pose a huge problem at the moment; we are not talking about the big cities here but towns that may be large, small or medium sized. The local authority is very often the body that has to try to get a grip on maintaining viable, decent, properly maintained town centres. If it does not, who else will?

At the moment, there are lots of competitions that authorities can enter to get extra money for town centres, but they are competitions. People spend a lot of time and effort entering these competitions. Some win and get amounts of money—but resources are required for local authorities generally to look after their town centres, not just those lucky enough to win competitions. At a local level, the planning system is absolutely crucial for keeping areas as good places to live.

Refuse collection is on the front line of recycling, which is so important as part of climate initiatives. On community safety, councils may work with the local police and other bodies. The local authority has no duty to get involved but, if it does not, efforts will often not succeed. All this has a particular impact on ordinary districts, because this is what they do. It also affects everybody else and neighbourhood services everywhere.

The fabric of communities all over the country—not all of them, but many—is falling apart, as is the structure of the local services which maintain that fabric. There are rich areas and poor areas, and there are areas which are more affected by this than others. As far as the climate emergency is concerned, local authorities have an absolutely crucial role to play. A large number—maybe over 200—have declared a local climate emergency, but without the resources to do things to tackle climate issues locally, across the wide range of everything they do, it will not come to anything.

On resources, according to the National Audit Office, since the 2015 spending review, districts have had a 13.9% reduction in core spending power in real terms. That feeds across to non-districts in relation to the services they carry out, which would otherwise be district services. Since 2010-11, the median reduction in core spending power for all districts is over 30% in real terms. For the worst-hit districts, including my own, it is 50% or more. If a local authority’s spending power is cut by more than half over 10 years, it has a huge effect on what it can and cannot do. The areas that are affected are very often the poorest areas, because they are the ones which do not have the ability to raise extra money in other ways.

I raised this on 25 September in the debate on the public spending review. The Minister at that time, the noble Lord, Lord Duncan of Springbank, promised to write to me to explain how everything was happening. I have his letter here. It says:

“The Government also announced that it will consult on a 2% core council tax referendum principle, which will allow councils to access additional funding for their local services”.


We know that, but of course 2% is less than the rate of inflation. So it is not enough even on the amount to be raised by the council tax alone, and the amount from other sources is either static or has gone down. The Minister’s letter also says that,

“local authorities should be able to make decisions to meet pressures where appropriate, informed by local knowledge, and be accountable for them”.

I am afraid that if that is what the Government are saying, it will result in a lot of belly laughs in a lot of local authorities.

I am not here to engage in any special pleading for my own local authority in Pendle, although I will mention as an example that the number of people employed by that authority has halved since 2010. Local authority services depend on employing people. There may be greater efficiencies—I am certain that there are—but when you slash your staff numbers by half and many of your remaining staff have gone down to a three- or four-day week, and you are trying to do the same things you did before, it is impossible.

The affected authorities are often old industrial towns in the north of England and elsewhere. Generally, they are places on the edge and in the areas in between. Even in the south-east, authorities are affected. We are not talking here about major cities, but about all the ordinary places that get missed out. I had better be careful about what I say with my noble friend Lord Goddard sitting in front of me, but the north of England is more than just Manchester, Leeds and Sheffield.

One very good example is the new homes bonus, which was introduced to encourage local authorities to give planning permission for new housing. In practice, it top-sliced government money for all local authorities, including the poorest, and redistributed it to those that could build new houses, which were very often already in the pipeline. The truth is that it resulted in the redistribution of money from poor areas and areas where people did not want to build houses to places with high demand for houses and where new housing had already been planned and agreed. It resulted in a redistribution of funding from the north of England to the south-east, the south-west and the east taken overall, with individual exceptions, of course. Now that the new homes bonus has been cut, the top-sliced money has not been returned to the poorer areas from which it was taken in the first place.

I could talk for the whole of this debate, but I will not. The dark clouds of austerity still hang over far too many of the ordinary streets and roads, towns and communities of England. Further cuts are not sustainable. It is no wonder that people in many of these areas are fed up with the system, fed up with everything and vote for unicorns. Two years ago, in a debate in 2017, I said that things were “at breaking point”. They are not broken yet, thanks to the efforts of the staff, the councillors and everybody working in these areas, but it is pretty damned near broken. Something has to happen to put more resources into the ordinary services that people expect when they pay their council tax.

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[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?

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[Lord Greaves]

My Lords, I thank everybody who has contributed to this debate. At the beginning I was a bit worried that not enough people were taking part, but I think we have proved that, if the people taking part have a good enough argument and narrative and know what they are talking about, allowing them time to develop what they say can be better than them having to rush through a two or three-minute speech.

I think I have a couple of minutes in which to speak —I cannot see anyone objecting to that—so I would like to respond to the noble Baroness, Lady Redfern, and my noble friend Lady Pinnock on libraries. If anyone ever finds themselves near the town of Colne, they should give me a ring and I will take them to Trawden in the Lancashire Pennines. It used to be a weaving village but is now very much a middle-class professional village. The Trawden community centre, which used to be run by the council, has taken over an old nursery and turned it into the only village shop, which is thriving as a community shop, and it works in partnership with the county council to run the local library. That is a superb example of how that kind of thing can be really successful. I should declare an interest as a non-active member of the community interest company that runs it. Therefore, it can be done and the service provided is far better than it ever was under the council. However, that will not happen everywhere. In poorer and working-class areas, it can be, and often is, done, but it requires a greater input of resources and harder work if the people taking part do not already have the skills that retired professional people have, so it is not the answer to everything.

I say to my noble friend Lord Goddard that what Stockport Council has done with the ground at Stockport County FC is brilliant. In Colne, where I live, Pendle Council owns the land of Colne FC, another up-and-coming non-league club. Colne FC has a free 99-year lease on the ground. That is the sort of thing that can be done. I know of other non-league clubs that have been put out of business by their councils demanding unpaid rent and the clubs having to go into liquidation. You can see the difference when a council regards its community as important, even if something like a local football club is owned not by the council but perhaps privately.

I shall not go through everything the Minister said—apart from anything, he would not allow that—but I will read what he said very carefully. I am very grateful for his comments and no doubt we will have many discussions about them in the future.

I have one final thing to say about neighbourhood services. I stress that I am talking about neighbourhood services, not local government as a whole. We have squeezed the pips until they squeal. We have cut to the bone. We have built partnerships with the private and voluntary sectors and got private sector money in. We have transferred services to town and parish councils, which often run them in a more community-oriented manner and much more cheaply. We have harnessed the volunteers who are there and will continue to do so. As I said in my original speech, however, we are reaching the end of this process in many places. Neighbourhood services will start to collapse seriously unless more resources are put into them. For as long as I am an active Member of your Lordships’ House, I shall continue to harass the Government over this matter.

Motion agreed.