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Local Government

My Lords, I am grateful to the noble Lord, Lord Bowness, for tabling this debate, coming as it does at an important time for local government: the department is reviewing the structures of local government and Sir Michael Lyons is carrying out his work on its finances. Moreover, as we have heard, we are just a week away from important local council elections. The noble Lord was spot on when he mentioned the media preoccupation with Westminster and their treatment of local government elections as nothing more than a huge opinion poll. They seem quite oblivious to the fact that many thousands of people out there are standing for their council or are involved in the campaign because they genuinely care about their local communities, their library, their swimming pool and their streets. There can be no doubt that we have seen a long-running removal of powers from local government in recent decades, coupled with an increasingly centralised financial system and a straitjacket of control and regulation. The effect has been a system of local administration rather than genuine local government as exists in other European states. Decisions that are best suited to the needs and aspirations of the community that the local council serves are often not made and accountability therefore becomes blurred. What follows from that is increasing disillusionment with local councils. It is fascinating that surveys show that, even in areas where people highly value and rate their schools, libraries and leisure facilities, they often do not value the council as the institution that provides those things. This is compounded by the voting system. In many places, there are still local one-party states, in which not only the same party but often the same councillors are there for years and years. The danger is that that can lead to out-of-touch councillors and councils and, at worst, the development of favoured geographic areas and poor standards of behaviour. I certainly believe that there would be much less justification for heavy-handed performance management from the centre and bodies such as the Standards Board for England if the ballot box were a more responsive mechanism. Localism has long been a preoccupation of these Benches, so we do not come new to this, but we welcome the more recent interest taken by the other parties and the academic sector. We would like to see a genuine reversal of the trend—the removal of powers from the centre—so that local government is both genuinely local and real government. We have long believed that there should be a written constitution to define and protect all elements of our governance, whether it is the powers and roles of your Lordships’ House or local councils. We would hope that any review of local government taking place might result in at least some sort of concordat in which the respective powers of central and local government could be defined and set out to ensure that each body is free to work within its agreed sphere. It is not the job of central government to micromanage local authorities. That does not mean that government cannot ever change anything; it means that local government would be involved in change and not have it imposed on it. The 2000 Act was a scandal whereby councils were forced to adopt new decision-making structures almost regardless of their views and those of the local people. Our approach would be for the Government to set out the powers and responsibilities along with broad principles of governance, but for structures and details to be determined by local circumstance. That would be very much the approach from these Benches to the Miliband review. The primary factor driving the boundaries of local government should be a combination of operational, financial and administrative factors, along with recognition and acceptance by the people whom each council is meant to serve. It follows from that that there is no simple single formula that can be applied to produce a uniform solution throughout the country. The key is to think about these key principles—community acceptance, financial and operational efficiency and genuine accountability. In general it can be said that the two-tier system of local government is not particularly helpful now, although we would prefer to see a presumption against a single tier. Counties are often too large to offer genuinely local delivery but, on the other hand, districts are often too small to offer many of the strategic services and they suffer from real diseconomies of scale. That can be reflected in the quality of service provided. The noble Lord, Lord Bowness, talked about the inability of some planning departments to deal with planning applications. They are simply too small. One could either have small building blocks that could be amalgamated where necessary through joint boards, or one could have larger, more strategic authorities and then devolution to recognise communities. We would like the system of local governance to maximise the levels at which communities and neighbourhoods can be involved in decision making and delivery. That would not mean that local areas would be forced to run their own affairs, but the option should be available for them to have the statutory right to take on delivery of certain services if they wished. The local authority could enable basic standards to be set and met, but local areas could decide whether they wanted to spend more on setting and delivering higher standards of service. These sorts of community councils could become joint providers if they wanted to, so economies of scale need not necessarily be lost. The key here is that a variety of mechanisms is required, because one size does not fit all. Urban areas have no history of parishing, so that solution would apply in rural areas, rather than in urban areas, but we could have neighbourhood committees of the local authority. There are also communities of interest, such as schools, libraries, housing estates and so on, and it is very important that people are involved in running those services. But we need to understand the scope and limit of that involvement, because the key question here is not just the people who use those services but those who do not use them. Why they do not use them is an important question but, even if they never use them, as taxpayers they have a right to be involved. That brings me on to the problem of the burgeoning quangocracy, whether through local trusts, regional boards or nationally appointed bodies. Such bodies are now spending more money than local councils, but they have very limited accountability. We on these Benches have been long-standing supporters of regionalism as a response to the fact that many issues require attention over a larger area than that which could be covered even by county councils. We accept now that there will not be directly elected regional bodies in the foreseeable future, but we think that there should and will be some regional dimension, because some services are simply too big for local councils. For example, there is a lot of agreement among transport academics that you need a regional dimension to transport planning. The Government’s police reforms are a classic example of where the Government are not able to see that some elements of a service are large and strategic while some are best delivered locally. A joint board would have been a perfect way to deal with the police authority question, rather than the current wholesale removal of local powers to more regional bodies. The key to genuine local freedom lies not in structure, however, but in finance. The fact that 75 per cent of local government finance is now raised centrally is the biggest single controlling factor on councils. That must change; it is what we will be looking for when the Lyons review reports. We want to see the majority of revenue locally raised and business rates retained locally, underpinned of course by a light-touch system of government redistribution. We also want to see councils empowered to raise money in all sorts of new ways: through congestion charging, tourist taxes, the extension of business improvement districts and so on. We need a renaissance in local government. We need structural, financial and administrative freedoms that are there by right, not because central government have decided that a local authority deserves to have them because it has met some targets. Many of the knotty problems of society, such as anti-social behaviour and crime, have not responded to endless legislative change or government initiatives. The solutions are often local, not legislative, and could be provided if councils had the freedom to pursue them.