Draft Somerset (Structural Changes) Order 2022

Peter Dowd Excerpts

Wednesday 23rd February 2022 General Committees

[Peter Dowd (Bootle) (Lab)]

It is a pleasure to serve under your stewardship, Mr Efford.

It is worth giving a little context to this draft structural change order, because there is always a context to such changes. We should at least explore, if only a little, that context and perhaps tease out the narrative. The process cannot simply be transactional; I thought the Minister sounded very transactional, so this Committee provides the opportunity to tease out some of the issues and to make these things less transactional. We are dealing with the lives of hundreds of thousands of people.

The financial context was set out in the Weston Mercury online in October 2013, in relation to the finances of Somerset County Council, which happens to be Tory controlled:

“A statement released by the authority said: ‘With a drastic reduction in funding from Government, coupled with increased costs and rising demand to look after elderly and disabled people, the council faces a £106 million black hole in its finances over the next four years—with cuts of £30 million required for next year alone.’”

That gives the context of the proposals. The article continued:

“The first phase of savings will be worth £7 million and include changing to low-energy streetlights and selling buildings, as well as moving services such as museums into non-profit trust ownership.”

Events, however, took a turn for the worse, if that were possible. In 2018, a report in Somerset Live stated that Somerset County Council could

“run out of money in the next two to three years”

unless urgent action was taken to curb spending. That, too, is the context for the draft order.

An official audit of the council by Grant Thornton LLP criticised its “pervasive” overspending and its failure to deliver sufficient savings over the past 12 months. That report came as the chairman and vice-chairman of the audit committee resigned from their posts and, as it happens, from the council’s ruling Conservative group. The council has said that action is being taken to ensure that services are protected and that the overspending does not continue. That is also part of the context of the draft order.

Meanwhile, the council maintained a council tax freeze—if my memory serves me right, but I could be wrong—for about six years. Mr Ruddle, one of those who resigned, told the BBC that he could

“no longer support the party’s direction of travel on local government finance.”

He went on to say:

“Somerset, in particular, finds itself in very poor financial shape after almost a decade of cuts in funding from central government, while demand for key services such as adult social care”—

to which the Minister referred—

“and children’s services is at record levels.”

He also said:

“I can no longer reconcile the basic contradiction…sitting as a local Conservative councillor under a Conservative government which is compounding this problem.”

That, too, is the context of the draft order.

That context goes to the heart of the proposals we are dealing with: a Tory council, bereft of financial stability under a Tory Government, with a Damascene conversion on the part of those two members, which took some years to ferment until reaching full maturity and ABV level. Meanwhile, the district councils in the county—Mendip, Sedgemoor, Somerset West and Taunton, and South Somerset, with three under Liberal Democrat control and one under Tory control—recognised the need for change. They all bit the bullet.

In such strained circumstances, it was therefore right to consult the people of Somerset on the new local structural arrangements. The substantive reason, as far as I can tell, however, is a decade of underfunding, which in effect made those councils unsustainable in how they operated. It was not just an organisational issue, but substantially more than that. Yet nowhere in the announcement by the then Secretary of State on 21 July last year is there any mention of the financial causes of the reorganisation, and nor was there any in the Minister’s speech today. There should have been. It is as though the upheaval caused for the councils—and more importantly for the people of Somerset—by the years of cuts that have made this decision necessary has nothing to do with the actions of the Secretary of State or previous Secretaries of State in terms of the massive cuts to local government budgets generally.

From what I can tell, in the consultation the people of Somerset supported a proposal for two councils. In a poll run by the four district councils at a cost of £300,000, with about 110,000 people taking part, 65.3% voted for the district councils’ “Stronger Somerset” proposal, which would have created two councils, Western Somerset and Eastern Somerset. However, the Tory-led Somerset County Council—which, remember, is a financial basket case, incapable of organising a tasting session in one of Somerset’s fantastic beer or cider breweries, and on the brink of a potential section 114 notice for its incompetent handling of the county finances—described the poll as “ deeply flawed” and “biased”. It got to the stage where the leader of Somerset County Council had to deny that section 114 was in the offing.

For those members who do not know what a section 114 is, I will explain, as it is directly relevant. The then Housing, Communities and Local Government Committee’s “Local authority financial sustainability and the section 114 regime” report—its second report of the 2021-22 Session—set out the definition well:

“under section 114 of the Local Government Finance Act 1988, a Chief Finance Officer is required to make a report, known as a section 114 notice, if it appears to them that the expenditure of the authority in a financial year is ‘likely to exceed the resources (including sums borrowed) available to it to meet that expenditure.’…Once a council has issued a notice, spending on all but essential services must immediately cease. It is a statement that a council is in deep financial distress and requires assistance from central government.”

That goes to the heart of the proposals. Hon. Members might want to read that report, because it helps to contextualise further the problems faced by local government in Somerset and more broadly. The hon. Member for Bassetlaw and my hon. Friend the Member for City of Durham were members of that Select Committee. I am sure we can consult them on their views, if necessary.

I was the leader of a council for many years, and I have known a fair number of council leaders in my time, but I have known none who had to deny that a section 114 was in the offing, let alone anyone who had a section 114 —I think there have been four in the past few years. So the leader of Somerset County Council was the pot calling the kettle black. As it happens, the hon. Member for Bridgwater and West Somerset (Mr Liddell-Grainger), said that the Secretary of State “cannot afford” to ignore the vote in the poll to which I referred. However, the former Secretary of State did ignore that poll.

Reorganisations of local government, such as the one proposed by the Minister today, really only paper over the cracks. That is the fact of the matter. Eventually, the Government will have to address the sustainability of local government finances, as per the report to which I referred. In that regard, the question for the Committee is whether we think that the draft order is a long-term solution for the problems facing Somerset local government, when those responsible for the problem in the first place, namely the Government, with their underfunding of local government, and the Tory-controlled county council, with its—let us be honest—incompetence, have not resolved it. The proposals, I hope, will help to resolve the problem, but they will not necessarily do so.

When the elections of 1 April 2022 come about in Somerset, as a result of the provisions under article 4, the people of Somerset will, I hope, send a message to the leader of the existing county council that, in the newly renamed Somerset Council, they do not want more of the financial and organisational incompetence that they have had in the old Somerset County Council. In the meantime, the statement by the former Secretary of State that he would not impose “top-down government solutions” has as much substance as a balloon.

The people of Somerset face major reorganisation of a council that has the responsibility to provide the services on which they rely every single day. From the moment a person wakes up, they will hear or see services provided by the local council. They might hear their bins being collected, before they see them. They will notice the lights on their street coming on or going off. Walking out of their house, they will step on a pavement, cross a road or walk through a park maintained by the council as they make their way to a library maintained by their council. There will be many services provided by the council that they did not even know the council had to provide. Local councils have as many as 3,000 statutory responsibilities.

Given that, given the major changes occurring and given the context in which these things are happening in Somerset, what assurances can the Minister give us in Committee that her Department will closely monitor the community engagement process undertaken by the new council? We should remember that people in Somerset have been used to a council that has provided services much more locally and much closer to them. So when it comes to this new county-wide council, to be authorised under the draft order by us in this Committee today, people need assurances that everything has been done to ensure that they are heard not just at election time, but throughout the years, by way of robust local community networks and engagement infrastructure.

How will the new council engage with its partners in the business, voluntary, community, faith and health—the Minister referred to that—sectors? What are the appropriate arrangements for the transition more broadly to the new council referred to in paragraph 2 of the explanatory notes? When will the Minister decide what incidental, consequential, transitional and supplementary provisions may be necessary in relation to section 14 of the Local Government and Public Involvement in Health Act 2007?

Paragraph 7.4 of the explanatory notes refers to the Secretary of State not being convinced that the two-council proposal would improve local government or be “a credible geography”. Why is that, when the 110,000 people in the poll, and even the official consultation, showed that that was not the view of local people? So much for listening to local people.

Is the Minister prepared to write to members of the Committee about paragraph 7.7 of the explanatory notes on the progress that the Implementation Executive is making? Paragraph 10.10 of the explanatory notes refers to those who did not support the unitary model—the majority of people—on the grounds that it would be

“too remote and local democracy would be diminished.”

Will the Minister ensure that those concerns are given full vent in any community network arrangements? It would be helpful to know what those are. The topography, the demography and the social and economic landscape is so varied in Somerset that careful consideration of community structures is required.

Will the Minister and the Department assure the people of Somerset that, despite the transactional approach we heard today, their views have not been discarded in the consultation and will be heard loud and clear during the transition phase? The people of Somerset deserve to be fully involved in the process at all stages. I hope that the Minister can give general and specific assurances on the impact of the proposals on the people of Somerset.

[Mr Marcus Fysh (Yeovil) (Con)]

It is a pleasure and an honour to serve under your chairmanship. Mr Efford. I would like to ask the Minister a couple questions, but first, I welcome the order.

In my view, moving to a unitary authority is absolutely the right thing for the people of Somerset. It will allow a more integrated approach to health and social care, security, the way our police interact with district councils, and to powers that have not been implemented in a joined-up way before. Overall, that joined-up approach gives us the opportunity to transform services and improve them at the same time as providing better value for money for our residents in Somerset. Even more importantly, it means that we can speak with one voice in Somerset and work, as MPs who support the Government, with local people to achieve things for our area. It is a massive, once-in-a-generation opportunity that we must not pass up.

We heard some points about supposed context. They represented cloud cuckoo land when compared with my experience and knowledge of what has been going on Somerset for many years. The opposite is the case. Our county council, of which I used to be a member, was saddled with a huge debt of £350 million by the previous Lib Dem administration. That costs residents of Somerset £40,000 a day to this day. It is outrageous.

[Peter Dowd]

Will the hon. Gentleman give way?

[Mr Fysh]

I will not. The hon. Gentleman said many things that were patently not the case.

There is another point that people might not understand, and I would like the Minister’s feedback on it. She talked about the transition arrangements and the commitments that the various councils would make not to enter into contracts and so on. South Somerset District Council, which is Lib Dem-run at the moment, has just run up another £120 million of debt against its assets. That is an outrageous layer of extra debt, which will fall to the unitary authority and the residents of Somerset to pay off. The council sold the council housing in Somerset some years ago and got £40 million. It was therefore in net cash but is now in massive debt. What can the Minister do to try to stop the Lib Dems implementing such a scorched earth policy in the coming months? They are undoubtedly engaged in that at the moment.

Somerset County Council plans to spend 13% more on adult social care and children’s services in this year’s budget, but it is raising council tax by only 2% on the main precept. That is a very strong performance, so it is wrong to say that the scheme is being planned on the basis of trying to solve an issue that we, on this side of the House, have created.

I will just end by saying that we heard lots of aspersions cast against Somerset’s Tory leader. Without wanting to saying anything untoward here, I think that the residents of Somerset have a right to understand that the previous Lib Dem council leader of South Somerset is currently in jail for 11 years for pretty heinous crimes—well, very heinous crimes—and the main character witness at his trial was none other than the previous Lib Dem leader of the county council, who sits now in the other place, outrageously. My point is that these are not fit and proper people. The Lib Dems are not a fit and proper party to be involved in local government in Somerset ever again.

It is also worth the people of Somerset understanding that that district council—that Lib Dem-led district council—is currently also under investigation for endemic and widespread corruption. I wonder what the Minister can say about whether she will, for this period, which is so important in making the transition to a proper integrated unitary council, put the Lib Dem South Somerset administration—today—into special measures.

[Mike Amesbury (Weaver Vale) (Lab)]

Mr Efford, once again, it is a pleasure to serve under your chairmanship. I think we may be marching towards local elections in some patches. I thank the Minister for an informative introduction to the draft statutory instrument. It obviously follows the one that we did last week, and I think we have another next week, too. I thank my hon. Friend the Member for Bootle for his eloquent and powerful speech, and also, of course, the hon. Member for Yeovil for trying to add some local context.

I will use the National Audit Office figures for local government cuts. It is coming up to 12 years of cuts, which are now at 50%. When 50% is taken away, councils struggle, including Somerset County Council—indeed, my hon. Friend the Member for Bootle explained the seriousness of the matter, with the section 114 notice; in plain English, it was on the verge of bankruptcy.

Getting back to the statutory instrument, the Government consulted on two proposals, which the Minister outlined, for a move towards a unitary authority system for Somerset: Stronger Somerset, which proposed an east-and-west split with two unitary authorities, and One Somerset, which proposed a single unitary authority. The answer from the public was clear, as my hon. Friend the Member for Bootle mentioned, with well over 100,000 responses—I think there were 110,000 responses—to a public poll. That is quite substantial, and, as politicians, we have an eye on polls.

[Peter Dowd]

The point that my hon. Friend has raised is pertinent. As it happens, the hon. Member for Bridgwater and West Somerset (Mr Liddell-Grainger) said, in relation to that poll, that the Secretary of State “cannot afford” to ignore the vote but, of course, he did, didn’t he?

[Mike Amesbury]

That certainly seems to be the case; it is evidently clear. In that poll of more than 110,000 people, 65% supported the two-unitary proposal, and only 35% the single-unitary proposal, yet the Secretary of State and the Minister march on with this devolution proposal that seems to have been rejected by a public poll.

It was not just the public who did not support the single-unitary proposal. In response to the consultation, a statement by the four district councils disputed the idea that the proposal had local support, describing the Government as

“foisting a manifestly unpopular new local government on our residents”—

not my words, but those of the district councils.

The Government criteria for unitary authority proposals, to which the Minister rightly referred, include the need for plans to be locally approved. As I stated earlier this week, on a previous statutory instrument similar to the draft order, the explanatory notes for such restructuring instruments state that plans should be “locally led”, as any devolution proposal should be, and should

“command a good deal of local support”.

Will the Minster therefore explain whether 35% is now considered “a good deal” of support?

[Peter Dowd]

The hon. Member for Bridgwater and West Somerset said—my hon. Friend is probably aware of this, but perhaps he will clarify—not only that the Secretary of State “could not afford” to ignore that vote, but:

“The Secretary of State might have preferred us all to go away and forget this referendum, but we didn’t”.

Is that an important comment by a Member of Parliament who represents the area?

[Mike Amesbury]

It is very important. I concur with that good and important intervention by my hon. Friend.

The Secondary Legislation Committee marked the draft order, as well as those for North Yorkshire—which we have already discussed in Committee—and Cumbria as instruments of interest, because of that question of local say in and ownership of devolution. Does the Minister consider the local support aspect of the criteria to be less important than the others in this and other similar proposals that we will discuss in the not-too-distant future? Is that why, when the Stronger Somerset proposal was apparently rejected on other grounds, the One Somerset proposal was taken forward despite clearly not fulfilling the criteria that the Government had set out?

The hon. Member for Bridgwater and West Somerset (Mr Liddell-Grainger)—whom the hon. Member for Yeovil knows well—repeatedly and loudly expressed his concerns in the House of Commons Chamber about the plan, stating that the logic of the decision to approve the plan is bizarre. He is not a shadow Minister, but a local Conservative Member of Parliament. His concerns and those of the local people who supported the plan for two unitary councils appear to centre on the fear of a loss of local connection and of democracy under one authority—one authority that is currently struggling and financially on its knees.

--- Later in debate ---

[Kemi Badenoch]

I have been very encouraged by our spirited debate on this statutory instrument. Yesterday we managed to complete our discussion in 15 minutes; this has been a genuine debate. I thank all members of the Committee for their contribution, but I will say that I disagree with the entire premise of the arguments made by the hon. Member for Bootle. He seems to believe that this is an issue of local government finance. It is not; it is about devolution and levelling up. Unitarisation is not a solution to deep-seated—

[Peter Dowd]

Will the hon. Lady give way?

[Kemi Badenoch]

No, because I can tell that the hon. Gentleman wants to have a debate about local government finance. This is a structural change order. He did not speak in the local government finance settlement debate a couple of weeks ago, in which he could have raised many of these issues. In fact, a lot of the points that he made would be more suitable for a debate in the Somerset County Council chamber, and were not really relevant to the structural change order that we are considering.

I must stress to all Members—I have made this point previously—that unitarisation is not a one-size-fits-all solution to multiple problems. If what the hon. Gentleman said is true—from what I heard from Members representing Somerset, it is not true that there are deep-seated financial issues—unitarisation would not fix the problems, so it does not make sense for him to argue that those problems are why we are making these changes. Considering what we have had to do in Liverpool—I will not go into the details—it is extraordinary that he, a Merseyside MP, is talking about what is happening in Somerset.

[Peter Dowd]

On a point of order, Mr Efford. The Minister really needs to get her facts right. I am the Member of Parliament responsible for Sefton Council, which is a different borough. Why on earth she is referring to Liverpool, when I do not represent Liverpool, is beyond me.

[The Chair]

Thank you for your intervention. We do not need to get sidetracked into the finances of local authorities. We are dealing with Somerset, and if we could stick with what we are here to debate, I would be grateful.