District Councils

Lord Kennedy of Southwark Excerpts

Thursday 19th October 2017 Lords Chamber

[Lord Kennedy of Southwark (Lab)]

My Lords, I refer the House to my interests in the register, as a councillor in the London Borough of Lewisham and a vice-president of the Local Government Association. I congratulate the noble Lord, Lord Greaves, on securing this debate. He has raised the important issue of the future availability of resources for district councils in two-tier areas. We have received some excellent briefing notes, which have been helpful for me in the preparation for this debate, from the Library of the House, the Local Government Association and the District Councils’ Network. I thank them all very much for what they have provided.

We quite rightly debate local government matters a great deal in this House. Local government delivers a huge range of services and, as the noble Lord, Lord Greaves, told us, district councils deliver 86 of the 137 essential services to more than 22 million people, or 40% of the population in England, covering 68% of the country by area. They also approve 90% of the planning applications and enabled most of the housing completions in their areas last year. They collect the council tax and, as the noble Lord also said, are the councils with which local residents often identify most. That gives the House some idea of the scale of what district councils do and cover.

There are particular issues that affect local government funding, which I want to go through. First is the impact of changes to the new homes bonus on district councils. The introduction of the 0.4% baseline threshold for that bonus removed funding of over £70 million from district councils in 2017-18, which was passed to adult social care authorities. We have a social care crisis and the Government need to address it with new, additional funding, recognising that we are all living longer—which is good news. Medical advances mean that conditions can be treated more successfully but that could mean a greater draw on resources over a longer period. We need ideally to get to a place where there is an agreed settlement on adult social care funding.

The Government learned an important lesson at the recent general election: that the proposals they put forward then were not fit for purpose and contributed to the loss of their majority in the House of Commons. The “robbing Peter to pay Paul” strategy, which is in effect what the Government have done recently in respect of the new homes bonus, is not a sustainable solution and anyway, it provides nowhere near the level of resources required to solve the problem. Can the Minister confirm what plans the Government have in respect of the new homes bonus in future years?

As other noble Lords have said, district councils provide a number of services that, if delivered adequately, can have a very positive effect on the public purse generally. The old adage that prevention is better than cure works here as well. Keeping people active for longer through keep-fit classes, swimming and plans to encourage more walking has positive effects on people’s health and fitness and helps to combat other problems, such as loneliness. Not only are we living longer but the number of people who live alone is increasing. Aids and adaptations to homes can keep people in their own homes longer with consequential savings to the public purse, as I mentioned earlier. Can the Minister tell the House what weight is given to the spending of money that assists with prevention rather than cure when the Government are deciding on levels of grant and the funding of programmes? How is that done or is it not done at all?

Housing is an area of concern to the whole House. The Minister referred to it as “our broken housing market”. Some of the actions the Government have taken, no matter how well intentioned, have not helped the situation. The 1%-a-year compulsory rent cut is just taking money out of the system. The housing revenue account borrowing cap and the time limitation on spending right-to-buy receipts suppress district council delivery of much-needed new homes. We also need finally to scrap any notion that any councils will be forced to sell high-value assets to fund the right to buy for housing association tenants. That should be funded direct from government. Perhaps the Minister can update us on what is happening here.

My noble friend Lord Beecham raised housing and the provision of new homes following the recent announcement of additional funding. It would be helpful if the Minister would tell the House the number of social homes on social rents as opposed to any other form of tenure that will be provided as a result of this funding.

Local government can do more. District councils can do more to deliver the Government’s aim of providing new homes, but they have to be enabled to do so. I lived in the east Midlands for many years, and I have a reasonable knowledge of the district councils there, of all different political persuasions, which often moved from Labour to no overall control to Conservative and vice versa. They would rise to the challenge if they were allowed to. They are places such as Corby Borough Council, Broxtowe Borough Council, High Peak Borough Council and City of Lincoln Council.

We have to move on from re-announcing previous announcements from the housing White Paper and elsewhere, as we saw yesterday in the Statement that the Minister presented to the House, which was previously announced in the housing White Paper in February this year.

There are new requirements to deliver welcome reforms in dealing with homelessness. When it came before the House earlier this year, we all supported the then Homelessness Reduction Bill. Our only issue is the adequacy of the funds available. This will be a much bigger pressure for London boroughs, but district councils in two-tier areas near unitary cities such as Derby, Leicester and Nottingham may have additional unfunded financial pressures in future years as a result of the new obligations. That needs to be addressed.

Planning fees are another area that needs action from the Government. This has already been referred to. Council tax payers are subsidising developers as the low level of nationally set planning fees does not cover the costs. I am well aware that the Government announced in the housing White Paper that local authorities can increase their fees by 20%, but I think they should go further by committing to allow every council the flexibility to increase their fees by up to 40%, to be invested back in the planning service, and also by quickly allowing some pilot schemes for local fees setting which are fair and transparent. I do not want councils to be making a profit but I want them to be able to recover their full costs. That would allow district councils to use other precious resources, which are presently subsidising the planning process, to be put to better use locally, helping with economic regeneration, improving the high street, supporting other measures to support healthy living and supporting housing growth. Again, if the Minister would address that in his remarks it would be most welcome.

The noble Baroness, Lady Maddock, made reference to the situation in Northumberland. I am not sure about the particular issue that she spoke about but I would say that consultation, and listening to its results, is important and should influence the decisions made.

There is no doubt that the noble Lord, Lord Shipley, is right that the coalition Government, which he supported, did some good things, but it also did some not so good things as well as some things that I opposed and which caused great damage—the LASPO Act and legal aid funding, for example. I do not blame the Liberal Democrats at all for joining the coalition; in fact, they had a duty to do so. It was the only serious coalition on offer, looking at the maths in the House of Commons. Equally, though, the Liberal Democrats have paid a heavy price for being in the coalition and making pledges that they broke, none more so than the broken promise on student fees, which I am sure has had a salutary effect on the noble Lord and his colleagues in his party.

In conclusion, I thank the noble Lord, Lord Greaves, for initiating this debate. I think I am right that all the speakers are or have been local councillors, and that is reflected in the quality of the contributions that have been made. The Minister has a number of important points to respond to and update the House on.