Local Authority Grants: Impact of Cuts

Lord Tope Excerpts

Thursday 9th December 2010 Lords Chamber

[Lord Tope]

My Lords, I declare an interest as both a councillor and a member of the executive in the London Borough of Sutton, which is now celebrating its 25th year of continuous Liberal Democrat administration.

The following is more a confession than a declaration. When I was first elected as a councillor, back in 1974, the then Conservative leader in local government, who happened also to be a Sutton councillor, said to me, “There are really only two parties. One is the local government party; the other is the central government party”. For the past 36 years, I have clearly been firmly in the local government party. Then, slightly to my surprise, I now find myself closely associated with the central government party as well. Some might say that that is a challenge, but I intend to regard it as an opportunity.

I thank the noble Baroness, Lady Thornton, for this debate, and for the way in which she introduced it. Normally, we should congratulate her at this stage. I feel more inclined to commiserate with her. I am sure she understandably expected, when she tabled this debate, that by now we would know what the provisional grant settlement was going to be, and probably have before us the long-awaited, much heralded decentralisation and localism Bill. Instead, the Bill is at the printers and we will have it tomorrow, not today. The settlement is clearly settled but, for reasons in another place, we will not actually know how it is settled until next Monday. That is a little unfortunate.

In the few minutes I have, I will concentrate not on speculating about what we might find out on Monday, or what we might discover in the Bill that we have not already heard about, but, rather, on the things that we do know. Those of us in local government and, I am sure, elsewhere, have known for a long time that the coming years were going to be very difficult regardless of who had won the general election. Sometimes that is forgotten. Many local authorities, certainly my own, were planning well before the general election for hard times to come, even if we were not able to quantify them. Before the election, my own authority set up what we are calling the smarter services Sutton review, to review all our services with a view not simply to slashing budgets but to transforming services and looking at what we do, how we do it, with whom we do it, and what we need no longer do because it is neither possible nor appropriate. All of that was known. Sensible local authorities of all political persuasions will have been planning for it. What was not expected was the extent to which the CSR would be front-loaded, with by far the heaviest cuts coming in the first two years.

I know that there is no way that that will now change. It is well beyond the powers not just of the Minister but of the department that she represents. That is a given, whether we like it or not. However, I plead that the Government look at the effects of that in trying to achieve what I hope we all want to achieve— not simply a slashing of budgets but radical reform, coupled with the new freedoms that local government will get but will not have in the years when the greatest cuts are before us.

It is always difficult. Some local authorities may be in the now fortunate position of having sufficient reserves to enable them to ease the burden and produce both the savings and reformation over a period of time. However, local authorities in that position are few and far between and, frankly, until now, have been subject to much criticism for having overly large reserves. Most local authorities, including my own, have long since lost what anyone would consider superfluous reserves and are not in the position to be able to use such funding to ease the burden of the cuts. My plea to Government, and to the DCLG in particular, is to continue to explore ways of working with local government so that we can phase the introduction of these cuts over two or perhaps three years to achieve the same result in the end that the Government want to achieve but being able to do so by truly transforming services and not simply slashing budgets, which I fear is what might happen.

The particular focus of this debate is social care and that has been very well described. My noble friends on this Bench will concentrate on it. The additional funding for social care is very welcome. I am pleased to see it not least because it is being introduced by a Minister who was once my deputy leader on Sutton council. There is a real danger that that additional funding—welcome though it is—will be more than overtaken by the cuts that local government have to make. Now that local authorities are no longer directly responsible for schools funding, for those authorities with this responsibility, adult social services make up by far the largest part of the budget. It is inconceivable that local authorities will be able to make the savings that they will have to make and reform the services in the way that they have to without being able to avoid adversely affecting adult social services. We want to avoid losing all the very welcome benefits that come from the additional social care funding because of the actions that are taken.

More immediate is the very real threat to voluntary sector funding. It is a great temptation—which I very much hope that all local authorities will resist—to make quick and, to some, apparently easy savings by cutting grants to the voluntary sector. Some would suggest that, in the past, central government have sometimes done that to local government. However, in my new role I would not dream of suggesting any such thing.

I hope that the Government will now look at how they can work with local government to try to ease the passage of this so that what lies before us is not simply seen as a threat to local government services. It would be idle to pretend that there are no threats to local government services—of course there are. However, there is a very real opportunity for the local government party and the central government party to work together to use this opportunity to transform the services that we provide.