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Flood Defence

10. Norman Baker (Lewes) (LD): What recent discussions he has had with the Secretary of State for Environment, Food and Rural Affairs on funding for flood defence works. [97065]

The Financial Secretary to the Treasury (John Healey): The Government recognise the importance of funding flood defences, as I have made clear to the hon. Gentleman in letters and at a meeting with him in July. We have ensured and put in place big increases in flood defence and flood management funding since 1997, and future funding will be considered in the context of next year’s comprehensive spending review.

Norman Baker: I thank the Minister for that meeting and for receiving the thousands of petition signatures from Lewes Flood Action and the National Flood Forum, which expressed concern about funding for flood defence works, but does he not realise that the Department for Environment, Food and Rural Affairs is being squeezed and that, because of the farm payment fiasco, the money for flood defence work is actually being reduced? How can the Government be consistent with their policy to tackle climate change when money for one of the major adaptation measures is being cut, and what has he got to say to my Lewes constituents, who were promised a comprehensive scheme in 2000 and are still waiting for it?

John Healey: The reality is that this year, compared with 1997, spending on flood defences and coastal erosion is more than a third higher than inflation. Let me be clear: there are no cuts in DEFRA’s spending limits or in the Environment Agency’s capital investment programme for flood risk management. DEFRA Ministers are managing the year-to-year
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pressures resulting from problems in the Rural Payments Agency and the costs associated with bird flu. It is right that we expect them to do so, although I recognise that that is not the traditional Liberal way, which is to throw money at, and make fresh spending commitments in respect of, any problem and any pressure.

US Economy

11. Harry Cohen (Leyton and Wanstead) (Lab): What recent assessment he has made of the effect of trends in the US economy on the UK economy. [97066]

The Chief Secretary to the Treasury (Mr. Stephen Timms): As it is our largest export market, trends in the US economy are important for the UK. My right hon. Friend the Chancellor will set out a full account of the UK economy in the pre-Budget report, but I can tell the House that gross domestic product rose by 2.75 per cent. in the year to the third quarter of 2006.

Harry Cohen: Is the Minister aware that The New York Times describes the US economy as a “financial mess” and that interest payments are the fastest growing component, squeezing out public spending and inducing recession? Bush’s conservative economic policy has been to spend unwisely and borrow heavily; his Administration have not had the sound financial management policies of our Chancellor. Will my right hon. Friend assure me that we have built-in protections in the UK economy against the growing US financial crisis?

Mr. Timms: I noticed that the Federal Reserve said yesterday that the economy seems

Whether it or my hon. Friend is right about the future remains to be seen. The key is maintaining our macro-economic stability in the UK—our record as a paradigm of stability, as the Organisation for Economic Co-operation and Development expressed it. For example, during the slow-down at the start of this decade, we were alone in the G7 in avoiding recession. Under the Conservatives’ policies, we were always first into recessions and last out. That is why the vast tax cuts that they are arguing for are such a threat to our continued economic well-being.

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Local Government White Paper

11.31 am

The Secretary of State for Communities and Local Government (Ruth Kelly): With permission, Mr. Speaker, I would like to make a statement on the future of local government.

Local authorities and the services they provide in partnership with others are hugely important to the health and strength of our communities and country. They help to determine the quality of our everyday lives: the schools that our children attend, the cleanliness and safety of our neighbourhoods, the health of families, the ease with which we can travel, and the leisure activities that we enjoy. Many of the biggest social advances in recent generations were led by local government and its leaders. They have served their communities well. But in 1997, this Government inherited public services and institutions that were run down, demoralised and starved of cash and resources. We responded with significant investment to expand capacity and by setting a strong direction nationally. Combined with the hard work and commitment of local councillors, the local government work force and other partners, this has led to real improvements in local public service delivery.

For the next phase of reform, we need to respond to new challenges. The increasing complexity and diversity of these—from climate change to tackling deep-rooted social exclusion—demand more flexibility at local level. Moreover, expectations of citizens are rising fast. They rightly want more choice over the services that they receive, more influence over those who provide them and higher service standards.

The White Paper that I publish today proposes that local authorities and other public service providers have the freedom and powers that they need to meet the needs of their communities and to be more clearly accountable for doing so. Communities must have a bigger say in the issues that matter to them most. We therefore propose a new settlement with local government, communities and citizens. We will give local authorities a stronger role in leading their communities and bringing services together to address local needs and problems. Central Government will play their part in guaranteeing minimum standards and setting overall national goals, but we will step back and allow more freedom and flexibility at local level. In exchange, we expect to see more accountability to local citizens, stronger local leadership, better and more efficient services and a readiness to support tougher intervention when things go wrong. The White Paper sets out how we intend to achieve this re-balancing between central government, local government and local people.

At present, there are as many as 1,200 national targets and indicators for a local area. In future—[ Interruption.]

Mr. Speaker: Order. Let the Secretary of State make the statement.

Ruth Kelly: We will cut that figure to 200 indicators with around 35 targets, plus statutory education and child care targets. The targets will be tailored to local
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needs, agreed between Government and local partners and set out in the local area agreement.

In that way, we will focus on the things that matter to people everywhere, guaranteeing national minimum standards, but encouraging local innovation and local priorities. We will introduce a more proportionate, risk-based inspection regime to cut bureaucracy and more targeted support or intervention when things go wrong.

Our best local authority leaders have made a huge difference to the citizens and communities that they serve. The White Paper sets out measures to ensure that all communities benefit from strong, accountable and visible leadership.

In future, there will be three choices for councils: a directly elected mayor, a directly elected executive of councillors or a leader elected by fellow councillors with a clear four-year mandate. All the executive powers of local authorities will be vested in the leader of the council, with a strong role for the council to scrutinise the leader’s actions and approve the budget and major plans.

The way in which councils choose to govern themselves will be different in different parts of the country. We will make it easier for local authorities to move to a directly elected mayor or executive by resolution of the council, in consultation with local people. When they want to do so, they will also be able to introduce whole-council elections and single-member wards, improving accountability to voters.

We recognise the gains that unitary status can offer in accountable, strategic leadership and improved efficiency. There will be a short window of opportunity for councils in shire areas to seek unitary status. We expect a small number of proposals to meet the value-for-money and other criteria set out in the invitation that we have issued today. In remaining two-tier areas, we will work with local authorities to deliver better value for money and greater efficiency.

Stronger leadership works best if it is balanced by citizens and communities having a bigger say in the quality of the services that they receive and the places where they live. To ensure that services are more accountable, responsive and efficient, local authorities will involve and consult service users more fully and provide better information about standards in their local area. In addition, we will review barriers and incentives to increased community ownership and management of local facilities and other assets.

We will increase and strengthen the powers of local people to demand answers and action through a new community call for action. Councillors should be champions for their local community, able to speak out on all issues affecting their area, including planning and licensing. They should be able to sort out issues on the ground or demand a formal response through scrutiny procedures. Effective scrutiny by councillors is an essential part of robust local democracy. We will strengthen it.

Communities need strategic leadership to help bring local partners, the business sector and the voluntary and community sectors together. Issues such as community safety, public health or community cohesion require all local partners to share the same agenda. Our best local authorities already recognise
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this—and their citizens and communities benefit as a result. Our proposals will ensure that that happens throughout the country.

Sir Michael Lyons described the “place-shaping” role of local authorities in his report in May. I pay tribute to his work so far. The proposals before the House today provide a clear basis for Sir Michael’s future conclusions on local government funding.

Cities play an increasingly important role as engines of economic growth. In recent years, there has been a renaissance in our towns and cities, thanks to the vision and leadership of local authorities and their partners. However, we need to go further. We must look beyond city and town boundaries to consider the success and prosperity of the surrounding area. Over recent months, we have consulted our towns and cities on the tools and powers that they need for economic development. There is no “one size fits all”. The White Paper provides a response to issues raised by towns and cities on transport, skills, economic development and co-operation between neighbouring local authorities. We will continue to work with them in the coming months. Our clear, overriding principle is that the greater the powers devolved, the greater the premium on clear, visible leadership.

None of our reforms can be carried out without a strong and committed work force. Local government contains many high quality councillors and public servants. It has transformed our towns and cities and, in many areas, it leads public services in partnership working, innovation and efficiency.

Our reforms will give citizens and communities a clearer voice, create stronger and more visible leadership and establish a new settlement with local government and its partners, communities and citizens.

The White Paper is about creating better services and better places. It sets out the tools that will help all local areas tackle the challenges of the 21st century, capture the strength and talents of their citizens and communities and achieve their full potential. I commend it to the House.

Mrs. Caroline Spelman (Meriden) (Con): I thank the right hon. Lady for letting me have a copy of the White Paper in advance. I have had just enough time to check the number of pages and the price tag, which is £32.50—at least it is two for the price of one.

I shall begin on a note of consensus. I agreed with the right hon. Lady when she said that local government is in much better shape since 1997. The reason for that is that the Conservative party is now the largest party in local government and Labour councillors are an endangered species.

The White Paper prompts many questions, and the logical place to start is on the timing, which is extraordinary. The White Paper comes barely a month before the Lyons review into local government and ahead of the Barker review into planning. How can a local government White Paper mean anything, if it does not deal with finance? Does the Secretary of State agree that the function and finance of local government are two sides of the same coin? If she agrees, will she accept that without the financial
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dimension, the White Paper is incapable of addressing the real concerns of people outside Westminster? The true test of this White Paper is not whether it delivers enough localist soundbites; the test is whether it will deliver tangible changes for the majority of people, who are not interested in the machinery of local government or its incomprehensible jargon.

I want to ask the Secretary of State about the things that really matter to people who receive services from their councils. What will the White Paper do for those people who are worried about how they will pay for care in old age? What will it do for people who are struggling to pay council tax, which has soared for most people by 84 per cent. under Labour? And what will it do for people who desperately want to have a say about where new housing goes and the character of their neighbourhood? The answer, I fear, is precisely nothing.

The White Paper is toothless, because it is a series of compromises and halfway houses. Does the Secretary of State appreciate that the rhetoric on localism will be treated with scepticism, because of the poisoned chalice that she received from her predecessor’s obsession with regions? Month by month, more power and money is going to regional quangos, bypassing local councils. Until unelected regional assemblies are abolished and powers are returned to elected local councils, those localist pledges are not worth the paper on which they are written.

There are, of course, things in the White Paper with which we agree, because they are harmless. We warmly welcome the decision to cut the number of directives from Whitehall to councils from 1,200 to 200, but we will carefully monitor what that means in practice. It will be good to see power devolved to parish councils to pass byelaws, but where will the resources come from to enforce those byelaws?

What worries me about the White Paper is the level of compromise, which is the symptom of a party that is unsure of its direction. Does the Secretary of State agree that empowering council leaders is a fudge between the Prime Minister’s stated preference for directly elected mayors and the Chancellor’s opposition to them? And will the White Paper delay legislation on new powers for the Mayor of London?

Is not the reduction in the number of performance targets an admission of Government failure? The inspection regimes imposed by the Local Government Acts 1999, 2000 and 2003 were a mistake. Are not city regions just a muddled and ill-defined hybrid between a failing regional agenda and real local autonomy? And how does that fit with the powers enjoyed by the regional development agencies? Is not talk of the business case for unitaries just a strained bridge between the original big idea of the Secretary of State for Environment, Food and Rural Affairs, which is characterised by the headline “Restructure or else”, and the more realistic description by the Secretary of State for Communities and Local Government of restructuring as “a distraction”?

Does the Secretary of State feel embarrassed because the Prime Minister charged her in an open letter with the need for a radical and devolutionary White Paper, which her own Department now describes as

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Restructuring was in, and now it is out. Elected mayors were in, and now they are out. Targets were in, and now they are out. That is not progress or radicalism; it is the politics of the hokey-cokey.

While the Government chop and change, the real opportunity to improve people’s quality of life is being missed. That is the tragedy of the White Paper. It provides not a crumb of comfort to people worrying about how to pay for their mum’s care home costs. Is not it the case that people who are already scrimping and saving to meet their council tax bills will find nothing in the White Paper to help them? Will not those who want to have a say on the scale and shape of new development in their community still find their views ignored?

The White Paper is a wasted opportunity by a Government who have squandered their third term. A few pious platitudes and a bonfire of past Labour mistakes are no substitute for policy. The right hon. Lady must do better. Councils are straining to be set free. She should not be so timid. She should give freedoms back to local government and local people.

Ruth Kelly: For a moment, I thought that the hon. Lady might have welcomed the Government’s proposals to recast the relationship between central and local government. I am disappointed that she did not choose to agree with the Tory chair of the Local Government Association, who, this morning, with his colleagues, described the forthcoming White Paper as

I shall deal with each of the hon. Lady’s comments. It is welcome that she has not chosen to dispute the fact that the Government have significantly increased investment in local public services by almost 40 per cent. in real terms over the past nine years. Nor did she choose to dispute the fact that the quality and delivery of public services has increased over that period, that local government performance has improved, or that two thirds of local councils are now judged by the Audit Commission to be good or excellent. At least she recognises the role that local government can play in the future. In fact, her party’s recognition of the importance of local government is long overdue. Only recently, one of her colleagues confessed that

It is a pleasant change to hear some words of substance from her right hon. Friend the Leader of the Opposition. I could not agree more with his comments.

The hon. Lady made a point about the timing of the local government White Paper. She argued that we cannot consider giving more powers to local government, giving it more flexibility over the use of its resources, or slashing targets for local areas from 1,200 to 200, without at the same time reopening the debate and considering proposals on local government finance. It is a bit rich for her and her party to lecture us about the council tax. Most people would agree that it is right to think about what local government does before we think about how we raise finance. As the hon. Lady also knows, Sir Michael Lyons will consider local government finance in his independent report and make recommendations later in the year.

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