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Goods Vehicles (Licensing of Operators) Bill [H.L.]

The Lord Chancellor (Lord Mackay of Clashfern): My Lords, I beg to introduce a Bill to consolidate Part V of the Transport Act 1968 and related provisions concerning the licensing of operators of certain goods vehicles. I beg to move that this Bill be now read a first time.

Moved, That the Bill be now read a first time.—(The Lord Chancellor.)

On Question, Bill read a first time, and to be printed.

Local Government

3.7 p.m.

Lord Williams of Elvel rose to call attention to the state of local government in Great Britain; and to move for Papers.

The noble Lord said: My Lords, let me start by saying that my Motion refers particularly to the,

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It does not refer to local government reorganisation. Other noble Lords may wish to speak on that matter but I will touch on it only in so far as it illustrates comments that I wish to make. I imagine that many of your Lordships will feel that we have debated reorganisation many times and I will be forgiven, at least on this occasion, if I give it a miss. Equally—and here I hope the reasons are obvious—my Motion does not attempt to confront the problems of local government in Northern Ireland; problems which are, as your Lordships will be aware, of quite a different order from those faced by Scotland, England and Wales.

The questions that I wish to ask your Lordships resolve themselves into three groups. First, what is the proper relationship between local government, central government and the electors? Have we got the relationship right? If we have not got it right—and after Question Time this afternoon I am confirmed in my opinion that we have not got it right—what is the effect on morale, efficiency and the credibility of local authorities, their councillors, their officials and their employees? Secondly, what do we think local authorities are really meant to do? If we can establish that, do they have the resources to do it? Thirdly, when all the answers come together, to what extent do we need to rethink our view of the role and position of local authorities, and how and in what direction do we start to move?

I doubt whether anybody would disagree that the relationship between local and central government has shifted fundamentally in the past decade and a half. The most obvious and overt example of that is the way in which financial responsibility has now largely been transferred from local authorities to the Treasury. Gone are the days when local authorities could set their own rate—domestic or business—and be judged on their performance by the way that was set and the way they spent the proceeds. We now have a system in which local government has to rely on Whitehall hand-outs for approximately four-fifths of its revenue. That system, a by-product of which is that the central government grant to local authorities is a major part of central government expenditure itself, allows Whitehall to determine where, in the whole constellation of public sector finance, the axe should fall. Unless the Secretaries of State for Scotland, Wales and the Environment respectively are tough negotiators, local government tends to be the loser.

That has happened. I give one example out of many. In the year 1995-96 general government expenditure and what is known as the control total will increase by 4.1 per cent. and 2.4 per cent. respectively; but local government will face a cash freeze. Central funding for the health programme, which is no doubt desirable, will increase by 4.1 per cent., but local authority personal social services will increase by only 0.3 per cent. I could go on, but I shall refrain from mentioning the proposed teachers' settlement which has resulted in the uproar with which your Lordships will by now be familiar.

It could be argued, and many noble Lords may argue, that that would not matter if local authorities were able to raise revenue from their own localities to cover the

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deficit, even though they would have to raise it on the one-fifth of their revenue for which they are responsible. However, even that is forbidden them by Whitehall. There is a system, initially introduced in the Rates Act 1984 and subsequently re-enacted, under which Whitehall specifically limits by law those local authority budgets which are "excessive" or which represent an "excessive" increase over the previous year. That system is known as "capping".

The upshot is that however much they try, and however willing their own electors may be, to raise extra money by way of council tax to pay for services which they and their electors consider necessary, local authorities can be prevented by Whitehall from doing so.

Your Lordships will then properly ask, what is the basis on which Whitehall determines the appropriate budget for each local authority, down to the nearest penny? The answer is the standard spending assessment. I try very hard—and I mean this sincerely—to understand how this is calculated. But for the life of me I find it very difficult to get my mind round the intricacies of the calculations. There are allowances for this and that; there are regional weightings for the other; there are estimates, based, I am sure, on the most reliable census data, of specific circumstances for each community from John o' Groats to Land's End. However, try as I might, I always end with the conclusion that this is like the Schleswig-Holstein problem of the last century—only two people ever understood it, but one was dead and the other had forgotten.

Many noble Lords opposite may think that that is a reasonable way to handle local government. If they do, I ask them to consider the effect on local councillors, their officials and employees. Who on earth would volunteer for such a sad and unrewarding business, particularly if their jobs are continually put at risk by compulsory competitive tendering? I have with me a sheaf of cuttings from provincial newspapers explaining the effects of the present system on their own communities. I shall not weary your Lordships by reading them all out, but they come from all parts of the country: the Manchester Evening News, the Birmingham Post, the Newcastle Journal, the Western Mail, the Scotsman—all newspapers of distinction, none of them, as far as I know, exactly dedicated to the Left-wing of politics.

Those newspapers, and others up and down the land, reflect local opinion, and they are not happy with Whitehall. Add to that, if you will, the sustained campaign of denigration to which local authorities and their employees have been subjected over the years, being told time and time again that town halls are staffed by bureaucrats with nothing better to do than to make life as difficult as possible for the citizen, and your Lordships will see why local authorities are in a state of near revolt.

My second question is, in one sense, more rewarding, because in asking what local authorities could and should do I can allow myself, and your Lordships, to consider the real potential that is at our disposal if only we have the courage to realise it. I am constantly

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surprised at the ingenuity and inventiveness which exists in local government if we want it. It is there, not only in local economic development, but in ideas on how to improve the local environment, how to improve social work when local social and economic conditions are deteriorating, or even how to make do when school governors are forced to trim budgets to meet a centrally dictated teachers' pay award.

So what should local authorities do? We have to start from what I regard as a very simple fact. Local authorities are what might be called "providers of last resort". It is they who have to run emergency services, environmental planning, rubbish collection, social services, housing, community care and so on. In other words, they look after the most vulnerable in our society. Furthermore, it is right that that should be so, not merely because nobody else can do it, although not even the finest quango in the land could do it, but because elected authorities are in the best position to appreciate local sensitivities. It must be a fundamental principle, and I shall state it frankly and openly as such, that decisions should be taken at the level which is nearest to those who are affected and which is also consistent with maximum efficiency in the provision of that service. I recognise that that is a difficult balance to strike. There is no pretence that it could be easy. However, the one thing that is absolutely certain is that the least sensible, least humane, least acceptable and, above all, least efficient place from which to try to run things is Whitehall.

But that is precisely what is happening. That is precisely the trend over the past decade and a half. Central government have progressively taken over more and more control; and the results have been very worrying.

First, the morale of those in local government has sunk to rock bottom. No one in his right mind—I was told this by a chief executive of a Conservative-run district council only the other day—would recommend a career in local government to his son or daughter. It would be sheer madness.

Secondly, there has been a dreadful waste of our money. I am told that, taken together, the introduction of the poll tax, the subsequent abolition of the poll tax, and the various pieces of local government reorganisation, have cost us in all some £3 billion. That is £3 billion of our money just to satisfy the vanity of those who think that they can do other people's jobs for them.

Thirdly, there is the electoral effect. We saw in Scotland this month, and I expect that we shall see in England and Wales next month, local elections being turned into what is little more than a referendum on the performance of the government in office. I do not mind particularly if Conservative councillors are so ashamed of their party that they prefer to describe themselves as "horticulturalist", or whatever other bizarre name they may choose. That is not my affair. The danger I see is that many competent and able councillors will no longer be serving their communities not because of their local record—it may be very good since there are good

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councillors in all parties—but because they are stuck with being associated with their party's perceived failure in central government.

So how can we retrieve the situation? How can we start on what may be a long process of improving morale and confidence in local government? We must look again at the proportion of their revenue that lies within the responsibility of local authorities to raise. That may mean looking again at the operation and mechanics of the business rate, of the council tax, and so on. We must also avoid laying burdens on local authorities without allowing them corresponding resources. We must send our tanks into quangoland to make sure that it is brought under democratic control. But, above all, we must recognise that decisions taken in Whitehall are not necessarily as wise as decisions taken in the town hall: that our country is by nature pluralistic rather than monolithic, complex rather than simple, and indeed now divided rather than united.

It would be absurd to think that all that will be easy. Too much damage has been done. But it would be wrong not to make the effort. For my part, I should like to believe that the party opposite is capable of changing its spots, of reversing 15 years of centralisation, of encouraging rather than sniping at local government. I should like to believe it, but it stretches the imagination. I suppose—I admit it with some gloom—that we shall have to wait until the Government recognise that enough is enough, or until the country recognises that for them. The sooner that time comes the healthier the state of local government will be. I beg to move for Papers.

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