Local Government Finance Settlement

Lord Tope Excerpts

Thursday 22nd January 2015 Lords Chamber

[Lord Tope (LD)]

My Lords, it is courtesy in your Lordships’ House to say what a pleasure it is to follow the previous speaker. I have heard pretty well all the speeches that the noble Lord has made on the local government finance settlement for at least the last 25 years. I hope your Lordships will understand that my pleasure in following him has been just a little diminished over that time, perhaps matched by the predictability of what he says each time—which, I am bound to say, is not that different, regardless of who is in government.

I have one particular point of agreement with the noble Lord, which is in regard to his comments on whole-place, total-place or community budgeting or—as he rightly says—whatever the current title happens to be. It was introduced by the last Government as total-place and fairly enthusiastically embraced by my coalition Government, albeit with a change of name to community budgeting—but I share his disappointment at the very considerable lack of progress at a time when it is actually needed even more than it was when it was first introduced. That is down to a lack of leadership—local, perhaps, but most certainly national and at departmental level. I hope that the Minister will be able to comment on that.

It will be my pleasure to hear today’s two maiden speeches: one from the right reverend Prelate, who I could possibly describe as my local bishop, and the other from my noble friend Lady Pinnock who is also a very long-time local government friend of mine. We all look forward to that. I declare my interests as a vice-president of the Local Government Association and as a signed-up member of the local government party for a very long time. I thank the LGA, which has gone to great lengths with its excellent briefings that will, I am sure, inform the debate. However, I am one of only two London local government Peers speaking in this debate; the other is the noble Lord, Lord True. I acknowledge that the Minister has a distinguished record in London local government, but I felt that he might feel a little inhibited in replying to the debate solely on behalf of London.

In the three minutes remaining to me, I will concentrate on the six points that the London councils have raised, which are probably shared across local government to a greater or lesser extent and with different emphasis. The first is the question of local welfare assistance and the funding for it, to which the noble Lord, Lord Beecham, referred. We strongly support the wish that this should be additional funding, not included—as it is—in the settlement. The Liberal Democrat Communities and Local Government Committee, which I co-chair, has actually written in response to the consultation to that effect.

London Councils calls attention to the lack of transparency in the proposals and calls on the Government to publish a full breakdown of the local government resource departmental expenditure limits alongside the settlement. We are all used to year after year of completely different figures coming from the department and from local government. Frankly, it does not matter who is in government: there is always that difference and it is almost impossible to match the two. Is it really beyond the wit of government and local government to agree on the figures, even if they do not agree on the outcome?

My next point refers to the revenue spending power calculation. I am a little surprised that the noble Lord, Lord Beecham, made so much reference to it because it is, frankly, largely discredited within local government. It certainly means different things to different people in different places. So, again, the call from London Councils is that, if we are to continue to use that reference, local government and central government should try and get together with a shared definition of what “spending power” means.

Business rates, and the business rates retention scheme, are important issues in London and indeed everywhere. We welcome the return of some of that rate to local government. I believe that it was the intention, certainly in the Department for Communities and Local Government, that that share and proportion should increase over years, and I hope that the Minister will be able to tell us how that increase is happening and what the current Government, at least, envisage will be the future for the return of the business rate to local government in greater and greater proportions until we reach 100%. I would also add the return to local government of the power to actually determine the business rate.

Lastly, but possibly most importantly, is what London Councils calls the disproportionate impact of spending cuts on London local government. By 2020, this looks like being no less than 70%—the impact of which is considerable. We are to discuss the future of local government: I hope that much of this debate will actually be about the future of local government. Unless there is a very radical change in the relationship between local and central government, with more power, responsibility and power to raise funding devolved to local government, I do not think that local government, in any meaningful sense, has a future.