Examination of Witnesses (Questins 100-119)
COUNCILLOR JILL
SHORTLAND, COUNCILLOR
SUSAN WILLIAMS
AND MR
JULES PIPE
7 JULY 2008
Q100 Chair: Can we get the viewpoint
from London where obviously it is different?
Mr Pipe: I suppose I have less
to say on this than my colleagues simply because if people do
not like it they can vote them out and apparently they did. We
are answerable to someone other than ministers. My borough worked
quite happily with that tier of government. There was a debate
about the levels of intervention over planning, housing targets,
things like that. That was a healthy debate. It is one that will
no doubt continue with the new Mayor. Coming back to the original
part of the question about giving plenty of space and scope for
local leadership, whether within the borough or as an example
amongst the five boroughs in the Olympics, whilst a lot of people
are focusing on 2012 and the event, the bigger, place shaping
agenda of the whole of the lower Lee Valley has been driven by
the five boroughs coming together, picking up the ball and running
with it. That space was created despite the existence of the GLA
(Greater London Authority) and despite the intense interest of
the then Mayor.
Q101 Anne Main: Despite, not working
in partnership with?
Mr Pipe: I said "despite"
theoretically. I think it was posed that the existence of these
bodies would obviate any need for local leadership and it would
suck everything up to that tier. We did work fine with the Mayor
and the relevant ministers.
Q102 Anne Main: Since you say you
have a slightly different set of criteria and a slightly different
way in which things affect you, do you think this could be something
that is very different once you get out of London?
Mr Pipe: I think it is different
simply because it is elected. I can forgive some of the things
that might be interpreted as a taking up of power, although it
is generally to be frowned on and I would agree it should be frowned
on, but I can forgive it if, at the end of the day, that whole
body is directly elected. The complaint is that these regional
bodies are not elected. Then you are onto the question of should
you have tiers of regional government. You could probably have
a whole select committee on that alone.
Q103 Mr Betts: Do you think the government's
response to the Lyons Report was a disappointing response to a
disappointing report?
Councillor Shortland: We were
just saying, "What response?"
Councillor Williams: We described
the Lyons Report as like Waiting for Godot because it just
never came. Eventually it did and I suppose all that has been
got out of it is the ability to raise the supplementary business
rate, capped at 2p. What else can we say about the Lyons Report?
Q104 Chair: Do the other two dissent
or roughly agree?
Mr Pipe: I probably would dissent.
It was not full of answers. It did not give a blueprint for the
direction in which we should all go, both central and local government.
I think it certainly asked the right questions. It started off
just looking at financing and Michael kept on taking a step back
further: "Before we can look at the money, we have to look
at what is local government expected to do before we start talking
about how it is financed." It is not my place to tell the
Committee what it should be looking at but, as well as asking
the three of us, I am sure you will be returning to the Lyons
Report and the contents are the very questions that we should
be asking ourselves about the central and local government relationship.
Q105 Mr Betts: One obvious question
is: should not local government have the right to raise a bigger
percentage of its finance? Until it can do that, will it ever
really increase its standing with the public, its accountability,
its status and whatever else we want to see?
Mr Pipe: Obviously the drift has
been the wrong way over the last couple of decades. Going back
about 20 years, something like 30% of local government funding
was funded by business. Now it is down to about 21%. There has
been that shift so it is no wonder, although that is one reason,
why council tax has increased over its lifetime.
Councillor Shortland: The other
reason why council tax has increased and why we have a problem
is it is not just about local government being able to raise more
money locally, which of course it should be able to do. It is
also about the burdens that are placed upon local government by
central government. Susan talked earlier about concessionary fares.
It is not just concessionary fares; the landfill tax burden is
huge for local authorities in that sense. There are huge shortfalls
in the licensing services. It is about central government changing
legislation and placing burdens upon local government as to the
delivery on without properly funding it. Even if local authorities
were given lots of power to have their own council tax raising
ability, it is very difficult for local authorities if the government
is going to continue to place burdens on local authorities for
which they then have to raise local rates without having any control.
Q106 Mr Betts: I am not sure where
that argument takes us. It either takes us to local government
does not want these powers or local government wants more funding
from central government, neither of which takes us in the direction
of a more important, self-assertive and independent local government,
does it?
Councillor Williams: There is
the argument about the relocalisation of business rates. If my
authority could relocalise all its business rates or even some
of them, we would almost be a self-sufficient authority. We get
back about a third of what we raise. I also want to bring in the
issue of the LABGI grant, the Local Authority Business Growth
Incentive Grant, which appeared to disincentivise those authorities
that had historical high business growth. I think that needs to
be looked at again as well.
Chair: I am not sure that any of you
have addressed the fundamental philosophical point that Clive
was trying to put as opposed to specific examples of how you would
increase local government funding. As I understood Clive's question
it was, if you are saying that you do not want these additional
things to do, in what way are you saying that local government
should be more important?
Sir Paul Beresford: There is a sub-text
to that. Many local authority people tell me that the cost of
some of the pointless things like CPA (Comprehensive Performance
Assessment)—
Chair: We have been through that.
Q107 Sir Paul Beresford: We are going
through it again. Have you sat down and worked it out, because
the cost of CPA coupled up with gearing on the local council tax
payer and similar things like best value and all these various
audits seems to be pretty astronomical for little or no gain.
Mr Pipe: I am sure if Steve Bundred
was sitting here, he would make a strong defence of what the effects
have been on local government, driving up standards, but that
is for him to do. Those costs pale into insignificance when compared
with the swings one gets under the four block model of funding
that we now have. The removal of damping, say, on social services
could cost an authority, as it did ours, £25 million. If
it was not for the floors, we lose that £25 million. What
it does mean is that we do not see any money that finances new
burdens, that goes into the formula, until all that £25 million
is eaten up. Other than any floor increase, we will not see any
additional money for additional burdens until about 2019 until
someone comes along and changes the formula again..
Q108 Mr Betts: This is another example
where local government does not have a big picture to paint for
us. There is a real feeling that what you want is independence
and an ability to deliver local services for the needs of local
people. Should not local government come forward and say, "Actually,
we believe the vast majority of the money that we spend should
be raised locally; that all central government should be doing
is some sort of equalisation process according to the different
needs and resources of areas", which is probably about a
third of the total. You can probably do it on something like that.
Then you can try to find some consensus about how that significant
majority of money that you want to raise locally should be raised.
Mr Pipe: This is where I come
back to Lyons again. He proposed that there should be a mosaic
of charges and an incremental change. I do not think that any
government would get the repatriation of business rates through
because the business lobby would be too strong on it. They just
do not trust local government.
Q109 Chair: Are they right not to
trust local government?
Mr Pipe: They probably were right
not to trust it in places like Hackney ten years ago but there
are probably very few places where they would not trust it now.
Reputation lingers. I am a three star, strongly improving authority.
It puts me in about the top 22 authorities in the country, but
most people's perception of Hackney would not be that. Perhaps
that comes as a surprise to Members here. That reputation is what
you are dealing with and that reputation goes across many other
patches of local government. Perhaps business would not be justified
in thinking that but they would think it nonetheless.
Q110 Mr Olner: There is an aspiration
as to what local government wants to achieve for its community.
There is also a service that you need to do because central government
says, "These are the rules and regulations. This is what
you should do." Do you believe that capping should go?
Councillor Shortland: Yes.
Councillor Williams: Yes.
Mr Pipe: Yes. I say that as an
authority that over the last three years has set a zero increase
in council tax levels and probably 1.9% the year before that.
I say it out of simple principle.
Councillor Williams: For low spend
authorities it is even more appropriate that it should go.
Councillor Shortland: If you are
going to cap, you should tell people. We now have three years'
worth of funding. If you are going to cap, let us know now what
you are going to cap at. How can you set your budget if you do
not know what the cap is going to be until after your budget has
already gone through your council?
Q111 Anne Main: I can see some grimaces
on faces with the Chair and Clive's question. My understanding
was, correct me if I am wrong, that what you were saying to the
Committee was that, because you are being told to deliver extra
things such as free swimming and concessionary bus passes, that
eats into your budget so basically government is spending your
money. Even though you might raise more locally to top up because
you wish to do that, the government is still coming along with
a shopping list. You want the shopping list removed to some extent—is
that right?—so that you locally can decide whether or not
it is a priority to give free swimming rather than it being a
government priority? You want that devolved down. Is that right?
Councillor Shortland: Yes.
Q112 Anne Main: I think we are getting
slightly different views here.
Councillor Shortland: I was not
saying that we did not want the powers. We do want the powers
but, if you are going to prescribe something at central government
level that has to be delivered, then you have to fully fund it.
Q113 Mr Betts: Local government is
against ring fenced grants.
Councillor Shortland: Absolutely.
Mr Pipe: It does not have to be
ring fenced.
Q114 Chair: How can it not be ring
fenced? Let us take free swimming. If you want to be fully funded
for free swimming, are you then saying, "We want to be fully
funded but we are not necessarily going to spend it on free swimming"?
Councillor Williams: If we want
free swimming within our funding package, can we say that we want
free swimming rather than government saying we want free swimming
and then leave us stranded as to how we are going to pay for it?
Q115 Chair: You would not get the
money, so there would be money for free swimming and councils
could decide. Are you saying, just to use that as an example,
that government should say, "We want you to introduce free
swimming in two years' time and we will give you this much funding
for it. Do you want the funding or not?" and, if you decided
not to do the free swimming, you would not get the funding?
Councillor Williams: I am very
cynical about the government's announcement of free swimming because—
Q116 Chair: Just as an example.
Councillor Williams: If we get
a funding package from government and within that funding package
we want to introduce free swimming, we should be able to do it.
Why does the government claim it as its victory and we then have
to struggle to deliver it?
Q117 Chair: Using free swimming as
an example on this point that Clive was trying to raise, the LGA
is against ring fencing funding. You, Councillor Williams, then
seemed to be saying that it would be okay to have it ring fenced
if councils could decide they did not want the money and they
were not going to give the free swimming either.
Councillor Williams: I did not
say that. I said that it should be a local decision, not a government
decision.
Q118 Chair: You should get the money
and then you can spend it on something else.
Councillor Williams: We should
get a local government settlement and decide how we wish to spend
it.
Q119 Sir Paul Beresford: Would you
say the concessionary fare decision years ago in London amongst
a number of authorities was an example of that working?
Councillor Williams: It certainly
was not because it was devolved down to the PTA, who distributed
it as a per capita funding for the authorities and we lost out
significantly. The way it was done was quite crude.
| 
