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My first constituency as a Member of Parliament included areas of Cambuslang and Halfway. Again, there is terrific continuity in these areas which continues to be reflected. I was lucky enough to be asked to serve in the then Opposition Whips' Office and I served a terrific apprenticeship under my noble friends Lord Foster of Bishop Auckland and Lord Dixon. I am quite sure that that apprenticeship will continue in this place, as it did in the Government Whips' Office under Nick Brown.

It is not just about systems of local government; I believe that local government is the main tool for delivering to local people. We do not want to return to what some critics said of the last Government and certainly of the previous Government, about the controls and restrictions put on local authorities established during the 1980s and 1990s. The local council can be the deliverer. The trick, if you like, is to inculcate local people with a sense of ownership and a sense of freedom, while also still inculcating the council with a sense of accountability and responsibility. They are the constant threads for delivering well to local people.

In my own life, this is the best example I can give of local people working together. In 1975, the towns of Rutherglen, Cambuslang and Halfway were incorporated into the great city of Glasgow. It is a wonderful city, but we were used to a more localised and accountable structure, and we did not take comfortably to being part of a great city. So, in 1995, in conjunction with the then Conservative Minister responsible for local government in Scotland, Allan Stewart, and the noble Lord, Lord Sanderson, we managed to set up a campaign that united the whole area. Every tenants' association, every community council and every local organisation

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combined in a joint committee to join a more local council, and in 1996 we succeeded in getting into South Lanarkshire Council. The best committee I ever served on was that one-working to get a local council for Rutherglen, Cambuslang and Halfway-because all the political parties combined. We worked with Conservative Ministers who showed a lot of co-operation, and we achieved it. So returning power to local communities has certainly happened in our area.

South Lanarkshire Council has reflected that because it has established local area committees where people can participate. It has devolved matters to local co-operatives, which is important to me. It also works extremely well with the co-operative and mutual organisations. There are many ways in which it can improve efficiency and cut costs. It is also investigating the possibility of joint administration with a neighbouring council-for instance, in regard to the education payroll-thereby cutting costs, sharing administration and saving the public money.

There should be no return to conflict between local and national government; there should be a balance. I believe in a certain amount of centralised direction but, under that, there must be total control for local people. I hope the present Government continue with that policy.

12.50 pm

Lord Rosser: My Lords, on behalf of your Lordships, I welcome my noble friend Lord McAvoy and congratulate him on his thoughtful and thought-provoking maiden speech. It is no surprise that he decided to make his maiden speech in today's debate as it addresses an issue in which he has considerable expertise and experience. He chaired the Rutherglen Community Council from 1980 to 1982 and was a councillor on Strathclyde Regional Council from 1982 to 1987.

My noble friend has had a distinguished career in the Whips Office in the other place, to which he was elected in 1987. Having been an opposition Whip prior to the 1997 general election, he became a government Whip that year and was Deputy Chief Whip from 2008 to the recent general election. In his career in the other place, he also took a keen and long-standing interest in Northern Ireland affairs. On this side, we await with some trepidation to see whether we get a seal of approval from him on the way our Whips function, or whether we receive something more akin to a rollicking.

I again congratulate my noble friend on his maiden speech. I am sure that I speak for all noble Lords in expressing the hope, having heard his excellent maiden speech today, that, taking advantage of his new found freedom having been released from his oath of silence as a Whip in the other place, he will be a regular contributor to debates in this House.

As have other speakers, I, too, congratulate the noble Baroness, Lady Perry of Southwark, on initiating today's debate. It covers an area of some concern about the coalition Government's intentions

On 10 June, the Department for Communities and Local Government announced the services and the councils on which the £1.165 billion of cuts in local

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government funding will fall in this financial year. The areas with the greatest challenges and needs will bear the brunt of the cuts-or, as the Local Government Minister in the other place put it:

"Those in greatest need ultimately bear the burden of paying off the debt".-[Official Report, Commons, 10/6/10; col. 450.]

That shows clearly shared coalition Government values in action.

It is hardly the way, either, to say that you are serious about devolving powers if one of your first decisions as the Secretary of State is to let local services and local government bear the brunt of the reductions by accepting over-the-top cuts in funding amounting to some 20 per cent of the additional cuts this year of £6.2 billion. This can only reduce the flexibility and ability of local communities to take on more responsibility and determine their own priorities and courses of action.

The Chancellor has announced an average 25 per cent reduction in budgets across departments and it remains to be seen, when the spending review is announced in the autumn, whether the cut in the Department for Communities and Local Government budget will be 25 per cent, or more, or less. These further cuts, though, will have a big impact on local government and local communities and will be in addition to the £1.165 billion already announced.

This raises the issue of whether it is the coalition Government's shared value to weaken, rather than support or strengthen, local government and locally elected representatives. The Secretary of State's lack of action in fighting local government's corner must be a cause for concern. The early decisions of the coalition Government would certainly suggest that, through the Secretary of State, they are tightening, not loosening, Whitehall's grip on local government, as well as squeezing it hard financially.

The Secretary of State has ordered councils to put spending information on line, without consultation on cost or how this should be done, while, at the same time, not properly explaining where £500 million of cuts will fall. When asked in the other place what estimate he had made of the cost to, first, Durham County Council and, secondly, all local authorities of publishing the details of each item of expenditure of £500 or more, the Minister for Local Government said:

"No estimate has been made of either figure".-[Official Report, Commons, 2/6/10; col. 34W.]

I am sure the Minister will today tell us if a figure is now available.

The coalition Government, without consultation, appear to have watered down powers given to councils to control the spread of houses in multiple occupation where difficulties are being caused, and has replaced it with a system where it is the Secretary of State who decides what is best for local people.

The coalition Government have also stepped in to determine how councils can and cannot communicate with those to whom they are accountable through free council newspapers. Whatever one may feel about council newspapers, that is not the action of a Government looking to devolve power but, rather, the actions of a Government determined to keep and increase their powers over local government.

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The academies proposals of the coalition Government will further reduce the role of councils and their locally elected representatives in education without increasing parental involvement in governance. Direct elections for police commissioners and health bodies risk creating conflicting policies and objectives with local councils and within local communities, while proposals on GP commissioning could lead to further fragmentation of responsibility and decision-making in health and social care without enhancing accountability.

There will, of course, be different views about the merits of elected mayors, but they tend to weaken, not strengthen, the representative role of locally elected councillors. The coalition Government are clearly keen on bringing them in in 12 cities, and it is not clear whether the confirmatory referendum will be required before a mayor can be installed or whether it will take place some time after the mayor has taken over.

Proposals for referendums could well hinder joined-up policy and thinking. It is interesting that the Government appear to be thinking of a referendum on the level of council tax increases but not, apparently, of referendums geared to ensuring minimum or improved levels of service.

The danger is that the Government's actions to date and proposals for the future will fragment the provision and accountability for local services when it is important to join them up as envisaged in the philosophy of Total Place, which looks at making the best use of local public service spending as a whole, whether it be, for example, police, school, health or council money. Often that money is being spent on the same particular specific groups or areas in the community, and the question is not whose money it is but how, when looked at in total, that money can most efficiently be spent to produce better services for the specific groups or areas concerned.

Local government, with its elected local representatives and direct accountability, has the vital role in co-ordinating activities in its communities, including those of the voluntary sector, to ensure that overall resources, both human and financial, can be deployed in the most effective manner to the maximum benefit of the communities served, achieving the priorities of those communities. That role has been made that much harder by the coalition Government's decisions to date and there must be real concern that their declared future intentions will make the situation even worse.

With the reduction in local government funding already announced, and those even larger reductions still to come, grants to voluntary organisations that communities value and need to provide services over and above, and in addition to, those provided by local government and statutory agencies are also likely to be significantly reduced. Many charities are dependent on public money to carry out their valuable work, with just over one-third of charities' income being funded from central and local government. More volunteering cannot fill the gaps because there is a cost to volunteering.

Devolving powers to communities, whether through local government, statutory agencies or the voluntary and third sectors, becomes a bit meaningless if it is being done against a background of a Secretary of

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State who so far has displayed greater interest in grabbing more control into his own hands than he has in protecting local government and local communities from over-the-top reductions in funding. One suspects that what the coalition Government may really be interested in is seeking to devolve responsibility for their own actions down the line but not their power or influence. Only time, of course, will tell, but the coalition Government's actions to date have not matched their declared intentions.

1 pm

Lord Rennard: My Lords, I wish to make a few general remarks about the philosophical approach that we are discussing today and then raise a few specific issues.

Devolving power to local communities has always been at the heart of the Liberal approach to government, but it has generally been the opposite approach to that adopted by successive Westminster Governments. I hope therefore that there will now be a real and long-lasting change in approach with the recent change in Government.

The coalition agreement says that it is,

The agreement commits the new Government to promoting decentralisation and democratic engagement, ending, it says,

The question is how to turn this rhetoric into reality.

In a recent speech entitled "The Big Society: moving from romanticism to reality", the chief executive of the Association of Chief Executives of Voluntary Associations, Stephen Bubb, argued that there are two planks underpinning the approach to what is now called the "big society". The first, he said, is,

The second is,

Speaking on behalf of many voluntary organisations, I believe that he was right to say that the "smart, strategic state" of which the Prime Minister has spoken will need a Government who work in genuine partnership with that sector and with local government in order to address the challenges ahead, not a Government who simply retrench and leave others to pick up the pieces.

Our debate today concerns fundamental issues about the role of the state. That issue has been at the heart of the divide between the major parties' philosophies for as long as they have existed. In describing my own view and, I believe, generally the Liberal Democrat view of the role of the state, I sometimes quote a great liberal politician, Mario Cuomo, a former Governor of New York. He said that we demand only the government that we need-but we also demand all the government that we need. He was speaking at a time when the values espoused by leaders like Ronald Reagan and the noble Baroness, Lady Thatcher, were considered

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hostile to almost any action by the state, and when it was once famously claimed that there was no such thing as society. The coalition agreement is a complete rejection of that view. We have moved on a great deal if the commitment to what is being called the big society is genuine, and there may now be more consensus in the major parties about achieving the culture change that I hope really underpins it.

I turn to some specific issues-first, money. If you want to look at where power lies, you have to look at where there is control over revenue-raising and spending decisions. When you look at our system of local government today, you see that currently just a quarter of the money spent locally is raised locally. Without control over the major tax-raising and spending decisions there is little local power, so I hope that national controls over council tax levels will be only very temporary and that the review of local government finance contained in the coalition agreement will address the issue of devolving financial responsibility, as well as creating a system for paying for local services based more on ability to pay than the present council tax system is.

I know that the Local Government Association is keen to work now with central government on improving local delivery and getting better value for money by looking at area-based budgeting that could reduce the cost of unnecessary bureaucracy, saving money and freeing up resources for what we all now call "front-line services".

Secondly, there is the issue of making councils more accountable and representative, which will be even more important if they are more financially autonomous. It seems to me that the real governance issue for many councils is that they have simply become one-party states for long periods of time. This will no longer generally be the case in Scottish local authorities, where a system of proportional representation has been introduced. If we want local democracy, we must make local councils more representative of the people they serve, and that means giving them a voting system that is fit for purpose in the 21st century.

The third issue is the devolution of power from local councils to neighbourhoods. It seems to me that the logical conclusion of moves to allow community organisations to bid to run local services may also be to allow local communities to do so through electing neighbourhood councils, particularly in many urban areas where the council may seem remote and unresponsive.

Fourthly, giving councils a general power of competence is an essential aspect of delivering the localism agenda. Councils need to be able to offer innovative services tailored to local needs, doing what they consider would benefit their area and the people who live there.

Lastly, education is of course one of the most important locally delivered services. While accepting that there can be benefits in reducing some of the barriers to people who want to establish new schools and reducing the level of government-imposed regulation on all schools, we must also ensure that the proper role of the state in safeguarding children's health and

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welfare is maintained. We should recognise that the free-school model is unlikely to be a form of education for many children, that principles of equality of opportunity must always be preserved and therefore that the state, at an appropriate level, must still be able to play its part in ensuring that lessons of best practice learned in schools over many years continue to be learned in the decades ahead.

1.07 pm

Lord McKenzie of Luton: My Lords, I congratulate the noble Baroness, Lady Perry, on securing this debate and giving us an early opportunity to discuss this aspect of the coalition Government's proposals. It also gives us the opportunity to take stock of progress made in recent years and of where we are today, and to set out an optimistic vision for the future. I add my congratulations to my noble friends Lord Knight and Lord McAvoy and the right reverend Prelate the Bishop of Derby on their impressive maiden speeches.

The proposition that the noble Baroness advanced is effectively that we have an overcentralised government that is stifling local activity. But, listening to the debate, what has struck me is that pretty much every contributor has given us an example of what is happening locally in their patch and their environment in their town. The noble Baroness herself made reference to the third sector flourishing, and I agree, as well as to the work of the churches and the community land trusts.

The right reverend Prelate talked about his work with the Inter Faith Network. I pay tribute to that, but I ask him what that network would have looked like 13 years ago; I bet it was much less developed than it is now. Community safety partnerships were created under the previous Government, as were local strategic partnerships.

My noble friend Lord Knight reminded us that even if, as we should, we support devolution and power going to individuals and communities, we would be quite wrong to brush aside the importance of central government and the role that it can play. To my noble friend Lord McAvoy I can say in all honesty that as I am now no longer responsible for getting Bills through this place, I hope that he does not wait another 14 years before he makes his next speech.

When Labour took power in 1997, many public services were on their knees. In the preceding four years local government had received a 7 per cent reduction in real-terms funding. Contrast that with a 45 per cent increase in real-terms funding under Labour which, together with a drive for efficiencies and tough capping powers, has led to the lowest council tax rises on record.

It is undoubtedly the case that local services are now more effective and that the existence of rigorous targets and inspection regimes helped to bring this about. But things should not stand still. In July 2008 we published Communities in control: real people, real power, focused on passing power to local communities and giving real control over local decisions and services to a wider pool of active citizens. We published a progress report on it last year.

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We should have high expectations of local public services, where residents and communities have the right and ability to shape the area in which they live and the services that they receive and provide. We believe that local services can be higher quality, more personalised and lower cost. Notwithstanding progress over recent years, we accept that there is much still to do. We want greater local flexibility and responsiveness, so that services are shaped around the personal needs of citizens and their entitlements, not the silos of government departments. For us, it is not about cutting services; we believe that there is the opportunity to achieve more and save money. We support the role of elected local authorities in driving change, and we support giving local public services more freedom, fewer targets, less ring-fenced finance and slimmer, more effective inspections-a process which is under way.

We have the chance through the Total Place approach-I did not realise that we had to expunge this phrase from our vocabulary; I ask noble Lords to forgive me if I do not-to look at all local spending across all local agencies, giving local services the opportunity to bring together bodies such as the police, councils and the NHS to save money, but also radically to improve services. As the LGA put it:

"To achieve real reform and devolution, there must be a transformation of the way the public sector works. Area-based budgeting would deliver real savings by giving power to the people who know their areas best".

There is no mention of Total Place in the coalition agreement. On the basis of what the noble Baroness, Lady Hamwee, has said, I perhaps now understand why that is. The Minister might take this opportunity to say whether the coalition Government plan to continue to develop this approach, with all its advantages.

The signs do not look altogether promising, as actions proposed in the coalition document look effectively to be reinforcing rather than breaking down silos. Total Place is not just about local government policy. It makes sense only as local public services policy; it needs all the partners coming together. The coalition Government's proposals threaten to bypass local councils rather than put them at the centre of a dynamic and holistic approach to delivering local services. Academies and free-school proposals marginalise the role of councils. Direct elections for police commissioners and health bodies will create competing mandates with local authorities. The Conservatives have repeatedly attacked independent inspections of local public services, and the coalition is to scrap the CCA, stripping away inspections and scrutiny and making it easier to hide cuts

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