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Those points are the essence of the Committee's report. My hon. Friend the Member for Milton Keynes, South-West referred to this, but the idea that the tragic death of one child could become a major debate in Parliament simply astounded the people we talked to in Sweden. They could not understand how Secretaries of State could be responsible for the actions of local
authority workers in one case, in one part of the country. They just did not get it. We have a completely different culture. My hon. Friend is right that the public in this country have a different perception, but perhaps they have had centralisation for so long that they have become accustomed to it. We now have to debate and raise the possibility of doing things differently and giving to local government genuine freedoms that are embodied in statute and monitored by a committee, and greater financial control to local councils. If we have that debate and move in that direction, we will have a much healthier democracy in this country than we do now.
Mr. Robert Syms (Poole) (Con): I have been a Member of Parliament for about 13 years. I have also served for four years as a district councillor and for 12 years on a county council, and it is my perception that local government is good and efficient, and delivers services rather better than we do nationally.
One of the key things about local government is that it is much more effective at controlling money. A perfect example of that is today's estimates day debate. We have a vast tome setting out changes in Departments, with surpluses and deficits, and money being swished and switched about. However, on estimates days we debate sport or sports centres, and so on-that is, anything but money. If we as a Parliament want to re-engage the public on a national level about the importance of MPs in these difficult times, Parliament must do something, involving this House and the other House, about controlling money.
From my experience of local government, the one thing I am sure of is that local councillors are much better at looking after money. When I was in local government, if we ever had an overspend on a budget, an officer had to explain it. I have seen a number of officers hauled over the coals because they made certain judgments or misjudged the bill for a project. Local government is much better in that regard.
We have had a series of reforms, but we always seem to get structural reforms and financial reforms out of kilter. I agree that it is vital that the national business rate be localised again, so that at least 50 per cent. of that revenue can be controlled at local authority level. It would also be rather good if the proceeds of some of the development that we have had to have in our areas stayed with local government in the form of a tariff on development. We have a lot of section 106 agreements, which need time and lawyers, and sometimes the money stays in bank accounts for donkeys' years. I would prefer a much simpler tariff system on development in which the money could be used in a variety of ways by local authorities.
A quarter of all public spending is spent by local authorities, but about 80 per cent. of it is controlled by central Government in one way or another-by specific grants, for example. We need to knock down a lot of the boundaries and put more trust in local people to deliver local services. If we did, we would have a much more efficient, effective local sector.
The hon. Member for Milton Keynes, South-West (Dr. Starkey) mentioned primary care trusts. It has always amazed me that we have set up a separate structure to deliver primary care, as it involves important
local issues. We could still have a national health service while allowing a great deal more involvement by local authorities. This would be a good area in which to give greater powers to local authorities, and I hope that those on my Front Bench are listening.
It has been my experience over a number of years that there has been far too much interference from not only the Department for Communities and Local Government but the Department for Transport. Doing anything relating to transport regulations requires permissions, costings, and so on. It is not so much about putting the lines on the roads as about applying for the necessary permissions to do so. We see the same thing happening in education-in relation to admissions processes for schools, for example. Everything has become too bureaucratic.
If we are serious, as a Parliament, about reviving local government and making it more important, we need to look at the way in which we put too many controls on local authorities and impose additional costs by expecting them to produce endless reports. My officers in Poole spend their money on bidding for endless things that they often do not have much chance of doing. They also spend an awful lot of time looking into whether they can do private finance initiative schemes. In this national Parliament, we ought to be aware that we need to cut down the burdens on local authorities wherever possible.
My experience is that it is better to deliver at local level. People usually feel a degree of identity. In our country, that is sometimes to a county or to a borough, to England and to Great Britain. I agree with what the hon. Member for Sheffield, Attercliffe (Mr. Betts) said about regions in our nation. In England, they are mainly administrative areas, although there might be a slight difference with Yorkshire-or perhaps not. People feel no great affection for a region; they are more likely to identify with their county or their borough.
People also pay attention to what goes on, but if central Government control too much-particularly in relation to money-what incentive is there for local people to turn out in any numbers to elect their local authorities? What incentive is there to get good local people back into local government? The key is to give a greater proportion of the revenue going through local authorities to those authorities and to take the hand of the Government off them.
We need to reach a stage at which national politicians do not panic whenever there is a crisis, and feel that they have to have a plan. The hon. Gentleman asked why we, as a nation, behave in such a way. I suspect that it is because we have national newspapers. Our press is highly centralised in relation to the regional and local press. Anyone following the Chancellor's pre-Budget report, for example, will see a range of papers that have been written predominantly in London. Any kind of crisis will be on the front pages and on the BBC, which still tends to be somewhat centralised in London. Other countries have not only devolved local government but have a much more vibrant regional and local press. That is certainly the case in the United States, which has a large geographical area.
That centralisation is probably one of the factors involved. The immediate question to Ministers is, "What are you going to do?", and it is terribly difficult for them
to say, "Nothing, actually. I am going home to have a bath and prepare for dinner." They always have to have a plan, and the plan leads to a Green Paper, a White Paper, legislation and reports. The consequence of all that is that we end up putting burdens on local government. I do not know whether we need a constitutional mechanism to deal with that problem. We almost need a Bill of Rights for local authorities.
In Germany, the Länder are represented in the upper House. If we ever complete the reform of the next Chamber, there would be a logical argument for larger cities or counties to be represented there to temper some of the national enthusiasms that we get in this Chamber and to bring things back to questions of "What does it cost? What does it mean for local people?"
I finish where I began. I am a great believer in local government. There are some tremendously talented people in local government. There are some very good and very conscientious councillors of all parties who put a lot into their communities. As a Parliament, we should trust them more. I agree with the hon. Member for Milton Keynes, South-West on policing and fire services. There has been a tendency to pull powers away from local authorities. Power should be going the other way, but that means that we have to accept failure and differences. If we accept that there will be bad authorities, weak authorities, better authorities and perhaps different services in different areas, we will start to have more independent local government and, in some respects, a more vibrant local government. If we do not allow failure, if we cap or if we interfere, it will level everybody down, which would be the worst solution.
There is a lot to be said for the report, which gives a great deal for us to think about. The relationship between local and national Government is crucial, and if we get it right, we will deliver better services at greater value and will reinvigorate local authorities, with more people turning out to vote and better quality people wanting to get involved.
Mr. Neil Turner (Wigan) (Lab): I am grateful for the opportunity to contribute to the debate. In the new year I shall be taking up a position as a Parliamentary Private Secretary within the Department, so this is my last opportunity to speak. I thank the Chairman for her good offices and all the guidance that she has given to me while I have served on the Committee, and I particularly thank the staff, who have done a tremendous job in drawing up the report and in getting our sometimes rambling discussions into order.
The hon. Member for Mole Valley (Sir Paul Beresford) seemed to be painting a picture of local government pre-1997 that was all sunny uplands. I was a local authority member for more years than I care to remember, certainly during the 1980s and 1990s, and that was not how I remember it. The then Conservative Government saw local authorities as theirs to command, and if they did not do as commanded, the Government abolished them, as they did with the metropolitan counties, or they starved them of funds, as happened year on year in the 1980s and 1990s. In Wigan, we had to make £10 million of cash cuts every year for three years on the trot; that was 1980s pound notes and not 2010's pound coins. We had to make a considerable reduction.
There was almost no notification whatever of those cuts. In February, we were given the figure. By April we were starting a new financial year. It was a fire-fighting exercise in which we rushed around trying to make cuts and balance the books. There is no way in which local authorities can plan properly in those circumstances. We found that programmes were being cut halfway through. Money was being wasted on those programmes and no benefit came out of it. My view of the last Conservative Government's local authority relationships is different from that of the hon. Gentleman.
On top of that, we had micro-management. My hon. Friend the Member for Sheffield, Attercliffe (Mr. Betts) mentioned compulsory competitive tendering. I was chair of the committee that had to implement CCT in Wigan. It reminded me of the French education system, under which every child in every school in every village in France would open their book at the same page at the same time on the same day. The micro-management of CCT meant that every council had to do everything in a certain way, and a week later they had to send out another letter and so on. It was more like a French farce than French education.
The hon. Gentleman mentioned inspection regimes. I seem to remember that inspections were brought about by the Audit Commission set up by the then Conservative Government; I checked that with my hon. Friend, whose memory is better than mine, and he agreed. I do not disagree in principle with inspections; I think it is right for local authorities to be properly inspected, and to be shown, in a proactive and positive way, where improvements can be made. However, I do not like the prescriptive system we had in the past, under which authorities that did not do as they were told got clobbered. That was very difficult.
One problem was that targets were applied everywhere, so there was no relationship with local need or a local authority's resources, but we now have a different system. Under the new regime, targets are agreed by the local authority, which means that they have relevance to the area. More importantly, because local authorities are engaged in strategic partnerships that involve people and sectors across the entire community, such as commerce and voluntary organisations, targets-whether to do with sport, industry or regeneration, for instance-are part of an overall package bringing together all the sub-partnerships. That enables councils to promote their area on the basis of targets and priorities set by the local community, which is a very different way of dealing with things.
We can now also work in strategic partnerships with primary care trusts. The Conservatives deprived local authorities of such influence in the 1980s and 1990s when they took their members off area health authorities, which resulted in a complete split between local health provision and local government provision. We have now addressed that, however. We can meet hospital and other health trusts and the family care trusts, and therefore we can draw together those elements of local government service that are particularly relevant to the broader social services.
I do not know about other areas, but in Wigan we hold regular meetings-at least six a year-with health organisations and those involved in the local economy. The local MPs are also invited and can make a contribution. That works well and enables us to have better co-ordination.
My hon. Friend the Member for Milton Keynes, South-West (Dr. Starkey) said that her authority has a public health officer who is jointly employed by the local authority and the PCT. We have that in Wigan as well, and it serves to cement the ability of those employed in the social and health services to work together better.
There is also much pooling of resources between the two areas, so that people who are moving from social service care into health care do not fall between those two nets. There is not the problem of their being told, on the one hand, "No, you're not yet a health service problem; you're still a social services problem," and, on the other hand, social services saying, "No, her ability to look after herself is much worse, so she has to come under the health service." That happens where each service is protecting its own budget, so by pooling budgets we can prevent people from falling between those nets-or at least we can stop that happening often.
Another idea that the Government are taking forward which I warmly welcome is that of multi-area agreements, for which we have pilot schemes in city regions. In the Greater Manchester area, the Association of Greater Manchester Authorities is generally recognised as being foremost among city regions in the way that it has set up voluntary relationships since the Greater Manchester council was abolished. What was important initially was that all but one of the councils were Labour controlled, but that has changed over time. I pay tribute to the leaders of all those councils, from all parties, because what has not changed is their recognition that this is not a zero-sum game. They see that if Tameside gains a benefit, it is not at the expense of Wigan but to the benefit of the whole of Greater Manchester. Therefore, all the leaders come together to ensure that Greater Manchester is seen as the beneficiary. With multi-area agreements and city regions, it is important to ensure that that approach is built into the psyche of local authority leaders. They should not see the situation as a zero-sum game, but see that something that benefits one authority in a city region will roll out benefits to the others.
We have come a long way. I accept that the Government think that they have gone a lot further than the Committee thinks, but everyone on the Committee accepts that there has been significant movement in shifting the balance of power between central Government and local authorities. There is an awful lot more to do, but I perceive a willingness in the DCLG to ensure that that shift continues. That bodes well not only for local government but for citizens.
Let me make some final points about local government finance, which, as hon. Members have said, is crucial to the relationship between central and local government. One of the best actions that the Government have taken in that regard is to introduce the certainty of a three-year system in the comprehensive spending review. That certainty of funding will allow local authorities to plan much better and to institute programmes knowing that they can carry them through. Let me make a suggestion to the Minister that I hope she will take back to the Secretary of State for discussion in the Cabinet: rather than having three-year blocks, which means that at the end of a block there is certainty only for the next year, there could be a rolling three-year programme. With such a programme, one would have some certainty in
the first year regarding the next two years, and in the second year, one would have some indication as to what the fourth year would bring. Such a system could be used in both local and central Government to allow local authorities and Departments to plan more effectively.
If finance is crucial to the relationship between central and local government, it is important to get the figures right, particularly the balance that central Government pay to local government. I think it is a universally acknowledged truth that a council in search of a revision of formula funding is a council in search of money. We must always recognise that there will never be a perfect funding formula, as there is no such thing. The idea of a perfect funding formula is a chimera, or a holy grail that can never be grasped. However, I think that our funding formula is reasonably reflective of the needs and resources of local authorities. If that is the case, it is incumbent on the Government to ensure that the formula is put into action as quickly as possible. It cannot be right that many local authorities are massively overfunded while others are massively underfunded. The needs of Kensington and Chelsea have been assessed at £89 million under the formula, but it is receiving £104 million in Government grant, whereas Wigan's needs have been assessed at £135 million, but it is receiving only £129 million. One local authority is receiving £14 million more than it is entitled to under the formula, while another is receiving £6 million less.
I spoke earlier about the relationships between PCTs and local authorities, and unfortunately the same problem arises with PCT funding. I shall again make a comparison between Kensington and Chelsea and Wigan. Kensington and Chelsea needs £277 million but gets a grant of £337 million, which amounts to overfunding of £60 million. Wigan needs £537 million but gets £512 million in grant, which amounts to underfunding of £25 million.
Adding together £6 million and £25 million makes a total of £31 million. That is the amount that the Wigan authority is not allowed to spend-last year, this year and next year-on the services that it wants to provide. Another way of looking at it is that it is money that is being taken out of people's pockets and, given Wigan's population of 300,000, that is a lot of money per head.
That brings me back to the earlier point about the existence of a postcode lottery. It is clearly very much easier for a place like Kensington and Chelsea, which is getting so much more funding than it is entitled to, to reduce council tax or increase services, or do a bit of both, than it is for a place like Wigan. People ask why Wigan does not have the same services as other authorities, but they have no knowledge of where we stand in relation to the funding formula and the amount of money that we get. It is extremely important that the Government move forward as quickly as possible on funding.
I do not want to return to the huge cuts that we used to get in the 1980s. Because of my experiences then, I am a big supporter of the damping process and the floors and ceilings that have been introduced, but the pace of change in funding for family care trusts and local authorities is far and away to slow. Speeding it up would help local authorities, and ensure that citizens were being treated fairly.
One last point on the financial history is that we surely have to recognise that council tax is inherently unfair. That is what it was designed to be, and one of the few achievements of John Major and his Government was to make sure that it was. It is quite wrong that a person who lives in 25-bedroom mansion should pay only three times as much council tax as a person who lives in a two-up, two-down terraced house. That is not the right way to organise finances. The Lyons review was at least an opportunity to open the debate about that, although my hon. Friend the Member for Sheffield, Attercliffe suggested that it was a lost opportunity. The Government's response was far too timid, and we need to look at ways of ensuring that many more bands are introduced and that there is a much fairer relationship between bands. Finally, it is essential to have constant revaluations of houses in the council tax system, to ensure that the system does not get into the same untenable state that characterised the old rates.
This is an excellent report. I am glad that I was able to contribute to it, and sorry that I will not be able to help my colleagues on the Committee in compiling further reports for the House. I believe that this is an extremely important area, and it is one that I feel very strongly drawn to.
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