2.05 pm

The Commerical Secretary to the Treasury (Lord Deighton) (Con): My Lords, I thank noble Lords for an excellent, instructive debate; it has been thought provoking for me, absolutely. I congratulate the noble Lord, Lord Adonis, and endorse the point that the noble Lord, Lord Berkeley, made about his contribution and his receiving the European Railway Award. I was delighted that HS1 and Eurostar could get the noble Lord back here safely and on time to kick off the debate in a most interesting way.

This debate has also been useful in reinforcing the fact that infrastructure really does need to be centre stage: it is at the heart of our economic strategy—I think there is absolutely bipartisan endorsement of that. We have talked about the great opportunity that infrastructure brings, and we all agree that it is a key driver of economic growth. Transport, communications and energy systems help people and businesses improve their productivity, and as a result improve the rate of growth of the country. The construction projects, where we build them, are great short-term spurs to growth and skilled jobs. Infrastructure is also the key to unlocking growth in our regions. It is also a critical way of unlocking the housing growth that has been a big part of many of the contributions made by noble Lords.

The challenge, of course, is that historically we have underinvested, for a variety of reasons. What do we need to fix to cure that historical underinvestment? It has something to do with the shorter-term horizons of the political environment, which do not quite match

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the longer-term needs and gestation periods of investment in infrastructure. How do we tackle that more effectively? The noble Lord, Lord Adonis, referred to our ranking as 27th in the World Economic Forum. My noble friend Lord Horam was appropriately horrified by that. I should just point out that those rankings are a result of the home audience’s subjectively evaluating what it thinks of its own infrastructure, so it probably says more about the British psychology than about the objective state of our infrastructure. Noble Lords might listen more carefully to the IMF review.

Lord Hunt of Chesterton: According to the Institution of Civil Engineers, this ranking was developed for the World Economic Forum. It is rather topical.

Lord Deighton: It is topical, but it was still a subjective review of our own psychology. The IMF review in 2009 says that the UK has the fastest-improving infrastructure in the G7, which is clearly a good thing. We managed to get cross-party support for the Olympic Games. We started off with a Labour Government and a Labour mayor, and ended up with a coalition Government and a Conservative mayor, and there really was not a single slip when the baton was handed over because there was very effective cross-party support. I suspect that the nature of our immovable deadline—with Her Majesty the Queen’s parachuting into the Olympic Stadium on 27 July 2012—and our British fear of being embarrassed in public were probably helpful disciplines in getting us to that successful outcome.

There are three simple components to the Government’s plan to deliver our infrastructure more effectively: first, to have a plan; secondly, to have the money; and, thirdly, to focus on delivery so that we get it done very effectively in terms of the Government’s performance as a client and industry’s performance as the deliverer of that infrastructure. Everything that we have done as a Government has been about refining how we do those three things and making them better. I will therefore structure my comments and my responses to noble Lords’ questions around those three components of the plan.

We have a comprehensive, cross-sector plan; it is the national infrastructure plan—a number of noble Lords referred to it. It is a lot better now in 2015 than it was in 2010, simply because we have iterated it and built upon it, and we should do that every year. It was unfair of the noble Lord, Lord Adonis, to say that it is not really a plan. It is a plan and it does have timescales. At the beginning, it was a little more like a list of projects, but now it is a plan and is underpinned by a clear strategy. We have a road investment strategy: it is the road investment strategy which drove the list of projects which then enabled us to put a five-year funding plan in place.

I take on board the comments by my noble friend Lord Bradshaw that we need to invest early enough to get capacity right—the lead times on this are absolutely critical. My noble friend Lord Flight pointed out that the plan was improving. It is rather boring government: each year, each section gets a little bit better; each year, the strategy which we pull out of the departments responsible for those areas gets better. That refinement is going on. It is a plan that is backed and supported

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by industry; we work with industry to develop it; and it is a plan that has given industry and investors the certainty to plan against the pipeline which, because we have now been doing it for five years, they are just about beginning to believe in. We need to keep doing it over and again. Government’s work is done at the front end of that pipeline; that is, turning the concepts or solving the problems, and creating investable projects. As a noble Lord said, it is not the finance that is the constraint; it is shaping such projects into investable projects so that they can be carried out.

The claim I would make for this Government’s achievement is that we have got to grips with the short-term delivery challenges. We have put in place a plan to 2020-21. Many of the projects last through the 2020s. The next step is to develop a plan that addresses the UK’s infrastructure needs in the much longer term—which is where we should spend a moment addressing the case made by the noble Lord, Lord Adonis, for a national infrastructure commission, which was supported by many noble Lords here. I agree that the next stage of work is to look at our longer-term needs and to ensure that we develop strategies for them. Out of those strategies will come the work to develop the projects that will give us the outcomes that we are all looking for. I absolutely agree that that is the next stage of work.

I agree also that there is a significant role for independent expert advice. That was what we did in wrestling runway capacity in the south-east to the ground with the Davies commission. If one looks at the amount of work that has gone into solving one particular problem within one sector of the broader transport area, one sees that the kind of effort that we are talking about here is very broadly based. Defining the precise scope is an interesting question. The noble Lord, Lord Maxton, referred to the infrastructure of the internet. In the National Infrastructure Plan, there is a chapter on communications. The Government are producing a digital strategy just as they have produced a road investment strategy. So these things are all under way. I also accept the point made by the noble Lord, Lord Hunt, about integrated systems. We have very good plans for each sector, but we need to be much smarter in the longer term about understanding integration opportunities and interdependence. We have, too, to understand climate change; we have to understand the impact of technology. Those are all the things that we need to figure out.

The discussion that needs to take place on how we do this—my noble friend Lord Sassoon referred to it— is about how heavy we make the machinery to accomplish it. My experience in business and especially in government is that we need people who can get to outcomes, not people who can create layers of process. I am very nervous about signing up to quite heavily constructed process when my experience has been that what we need in government is the ability to get these things moving.

If that is where the plan fits in, let me spend a little time talking about the money. Our infrastructure is financed either publicly, from taxpayer money, or privately. Quite a lot of it is financed with a mix. Two-thirds of it is financed in the private sector. On the publicly financed component, we can effectively retain a good

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bipartisan approach, but I think that this Government have been very successful in stabilising our public finances, which is what has created the room for us to be able to spend more ambitiously on infrastructure. That is a big difference between the parties. The success in stabilising those public finances has been what through successive fiscal events has enabled us to invest more effectively in public infrastructure. On the public side, we are talking about the road network, the flood protection environment and Network Rail as the three key sectors. We have also made settlements that last right through the Parliament, which is the first time that we have ever done that. If I look at all the things that we have done in the past four years, turning a one-year financial settlement into one that lasts to 2021 has been the single most transformational thing, because those sectors can now plan, build and construct, and have much more effective delivery, by having that medium to long-term planning environment. It is absolutely transformational.

We need to work through the system to make sure that the agencies responsible, such as the Highways Agency, the Environment Agency and Broadband Delivery UK, have the skills to be able to work with industry to realise the full benefits of that longer commitment of public money. I am delighted that we have been able to finance some of the pet or favourite schemes of noble Lords; for example, the interest of my noble friend Lady Maddock in the A1 north of Newcastle and connectivity with Berwick. As my noble friend Lord Attlee pointed out, such a longer commitment is the key to avoiding the feast and famine of past years and getting the sequencing right. If you have a five to six-year settlement, you can sequence it intelligently through that period, rather than having to make sure that you have spent all the money in year 1 because you are never quite sure whether it is going to be there tomorrow.

I have talked about the fact that we in the UK are pioneers in private finance. We do private finance of infrastructure better than anybody in the world. We introduced privatisation; we introduced public/private partnerships—as my noble friend Lord Sassoon pointed out, unfortunately the PFIs were not always as well executed as they should be, but getting the balance right is hugely important. A number of things make the environment that we have got here right. We are a very attractive location for overseas investment. Of course, we cannot be complacent; we need to keep making it better. The noble Baroness, Lady O’Cathain, was very articulate about the stability of this marketplace, the clear property rights and our world-class regulation—which a number of noble Lords referred to, including my noble friend Lord Sassoon. Preserving the independence of that regulatory framework is critical. I am particularly pleased with the combined work that the regulators are doing through the new body that we set up, the UK Regulators Network, to focus on the key issues such as affordability, cross-sector infrastructure investment and how we engage with consumers to facilitate switching. The Government have also intervened in a variety of sectors to support financing, including the new electricity market reforms. The noble Lord, Lord Rooker, referred to nuclear and the way in which we are driving that forward. The noble Lord, Lord Liddle,

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talked about Cumbria. We are doing an enormous amount of work to get all three big nuclear projects off the ground—not only Hinkley Point, but also NuGen and Horizon. That will ultimately be for the benefit of the economy in Cumbria too. I agree with the noble Lord, Lord Whitty, that work is needed on the demand side of energy just as much as on the supply side. All these sectors are critical.

I support my noble friend Lord Horam in his call to accelerate fracking. We have put the planning environment and the tax incentives in place. It is now down to the developers to determine if the economics are there for them. My noble friend Lord Ridley said that there are alternative models—which other countries have embraced—for funding our roads. The noble Lord, Lord Rooker, backed this up.

The noble Lord, Lord McFall, talked about potential investment in infrastructure by the big insurance companies and the challenges they sometimes face. Of the £25 billion they said they would put up, £5 billion is already committed, so that is moving ahead pro rata. We have helped with making the Solvency II rules as benign as possible to support that development.

The third component of what we are trying to do is to get smarter on delivery, what we do in government and how we can help industry get better at it. We are much more focused on government intervention to unblock things in our top 40 projects. My noble friend Lord Marland referred to it as “energetic” and “enabling”—making sure that we have joined-up government. I ran an exercise in upgrading the commercial capability across the key departments. My noble friend Lord Cavendish correctly pointed out that it does not come that naturally to government. We have to ship in a lot of the commercial expertise; otherwise we are outgunned in big commercial negotiations. There is a lot of work going on there. We have put our top people in key leadership positions. Of all the things we have done in HS2, persuading David Higgins to be its chairman has probably been the single factor which will make most difference in the effectiveness of its delivery.

Many noble Lords made observations about the need to improve the planning system. That is part of the responsibility of government in enhancing delivery. We have done a series of things. My noble friend Lord Freeman referred to the national networks policy. The noble Lord, Lord Berkeley, referred to draining the swamps and trying not to listen too much to the frogs. At the next Budget, we will consult on CPOs, and ideas about how to financially motivate getting to the right point more quickly will be our underlying objective.

With industry, we have worked at ways to improve project initiation—how projects are set up and delivered. In the first three years we took £3 billion out of a big set of projects through working with industry and we are continuing that engagement to look at change in their own delivery. An important component is getting skills right. When I started this job, the construction companies came to see me to say, “We want work”. Now they say, “Slow down, because we do not have the capacity to deliver it all”. Skills are at the heart of this. My noble friend Lady O’Cathain was spot on when

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she said that the important short-term and medium-term challenges were to get that right. Apprenticeships are absolutely at the heart of that. I am delighted that we have the HS2 colleges set up in Birmingham and Doncaster. My right honourable friend Patrick McLoughlin, who is clearly doing a very good job as a successor to the noble Lord, Lord Adonis, was at Crossrail on Monday, celebrating its breaking through its 400-apprentice model.

I have not said much about rebalancing the economy, a subject which many noble Lords raised. The noble Lord, Lord Adonis, talked about devolution. My noble friend Lady Maddock talked about local authorities. The noble Lord, Lord Liddle, spoke about cream cakes and Cumbria. The noble Lord, Lord Rogers, talked about cities and urban regeneration. I think we all accept that we have not invested sufficiently in infrastructure in the regions, and that needs to be corrected. We are trying to do it. Chapter 2 of the National Infrastructure Plan is all about getting that right. The underlying, driving theory of HS2 is to empower the northern cities so that they can have the same kind of economics of agglomeration that can drive growth. We have seen it similarly in London.

I agree that there is a link between infrastructure and housing. Battersea is a great example. We guarantee extending the Northern Line and suddenly Battersea creates 30,000 homes. That kind of relationship needs to be worked out right around the world.

In conclusion, we must relentlessly continue our work to deliver the pipeline that we have. It is necessary to work at everything I have talked about—the plan, the money, the delivery—to ensure that consumers and businesses reap the benefits. As I believe we have demonstrated in this Parliament, where there is a clear plan to build and finance the infrastructure that we need and a powerful programme to drive its delivery, then that infrastructure can and will meet its potential to be a real engine of our economic growth.

2.26 pm

Lord Adonis: My Lords, this has been an excellent debate and I congratulate the Minister on his highly constructive speech and on the great work that he is doing. It is striking how broad has been the support across the House for the establishment of an independent national infrastructure commission, including from Conservative Members and from the Minister himself. I think he came as close as he could to endorsing the idea provided, as he said, that it is practically focused. I entirely accept that proviso.

The only dissenting note was from the noble Lord, Lord Sassoon, who said that the commission would be a bureaucracy. Any gathering of public officials is a bureaucracy. Your Lordships’ House is a bureaucracy; it just happens to be a very good one. The case for an independent commission is that it would be a good bureaucracy because its job would be to prepare a major infrastructure pipeline which has been so sorely lacking in recent decades. However, I believe that the noble Lord, Lord Sassoon, secretly agrees with me; he was just obeying orders from Tory Central Office. I say that because it was the noble Lord himself who took through the House the excellent legislation setting

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up the independent Office for Budget Responsibility— another bureaucracy, but a valuable one to provide independent advice on fiscal policy. It is precisely analogous to what we seek to do in respect of infrastructure. When making the case for the OBR to your Lordships, the noble Lord said:

“The independence of the OBR’s judgments will ensure that policy is made on an unbiased view of future prospects”.—[Official Report, 8/11/10; col.12.]

An independent infrastructure commission would have exactly the same purpose—to ensure, or at least to help ensure, that policy is made on an unbiased view of future prospects in respect of infrastructure. As almost every noble Lord who has spoken in this debate has recognised, we urgently need such an unbiased view so that we move from 27th to at least the top 10 in international rankings for the quality of our infrastructure. Nothing is more important to our future prosperity.

Motion agreed.

Criminal Justice System: Autism

Question for Short Debate

2.28 pm

Asked by Baroness Uddin

To ask Her Majesty’s Government, in the light of the case of Faruk Ali, what steps they are taking to improve access to the criminal justice system and victim support for people with autism spectrum disorders.

Baroness Uddin (Non-Afl): My Lords, I begin by mentioning my interests as declared in the register. I am very grateful to have the opportunity to debate improving the criminal justice system for people with autism, and thank all noble Lords who have kindly made time to take part. I welcome this opportunity to bring to the attention of your Lordships the appalling experience that some people with autism have of our criminal justice system.

I want to highlight the case of Faruk Ali, a 33 year-old autistic young man living with his family in Luton. According to press reports, one morning last February, Mr Ali, who has the mental age of a young child, was putting his family’s and his neighbours’ bins out for collection, as was his Thursday morning routine. While he was doing so, two police officers drove past. The officers are reported to have returned and chased Mr Ali, in the prosecutor’s words “for fun”, laughing as they went about their pursuit, which culminated in later charges of assault. A neighbour reported seeing one officer come out of his car and punch and kick Mr Ali near the bins that he had been collecting as Mr Ali ran into his home calling for his mother. Mr Ali was wearing a large red badge to signify to those who came in contact with him that he has a disability. Unfortunately, the prominent sign designed to protect him failed to protect him from those officers.

Last December, both officers were cleared of racially aggravated assault and misconduct in public office. An internal police investigation into the matter continues. Although the jury did not have sufficient evidence to convict the two officers, video and audio footage

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remains of the incident which demonstrates the callous, racist attitude of the officers to a very vulnerable and disabled man. In the recording played in court, in their interaction with him, one officer was heard describing Mr Ali as a “Paki”. Laughter followed. After the incident’s unhappy denouement, as the officers drove off, one of them was heard to have mocked family members when they asked for their police numbers. One officer was heard to say—I paraphrase to remove the expletives—“If he does not interact with people, then don’t let him out”.

The internal police investigation into misconduct will determine whether the behaviour of those officers was acceptable and worthy of a public servant against a disabled person, but will the Minister assure the House and members of the minority and disabled community that the racist language that the court is reported to have heard during its proceedings and the derision for disabled people reportedly exhibited have no place in our institutions, and that complaints will be taken seriously? What is his view of the public interest in making available the contents of the tape?

I raise that today in some detail because I am appalled by such outrageous victimisation of one disabled person, which evidence shows is not an isolated incident. Mr Faruk Ali’s case exposes a wider problem. Although we debate it as a topical debate, I regret that its relevance is enduring.

I was moved to speak on this subject having heard the disappointment and feeling of injustice expressed by Mr Ali and his friends, and from previously attending the All-Party Parliamentary Group on Autism last November, with a large number of people attending echoing similarly unhappy experiences of our criminal justice system. The Grand Committee Room was packed to the rafters with people with autism and their families, alongside policemen, psychologists, Members of Parliament and other experts who understand the problem, some of whom recounted experiences reminiscent of Mr Ali’s.

People with autism face extraordinary difficulties in obtaining justice. Autism is a lifelong developmental disability that affects more than one in 100 people in this country in many different ways. It generally affects how a person communicates with and relates to others. Some people with autism live wholly independent lives, while others rely on specialist support and may be unable to speak comprehensibly.

Autistic people are no more likely to commit crime than anyone else. Indeed, given the reliance of many with the condition on support and care, people with autism should not be disproportionately exposed to crime. However, somehow the system discriminates to pull them in. Research indicates that a third of people with autism have been a victim of crime. Those with autism are also overrepresented in our prisons, where incidence may be as high as 15%.

It is hard to avoid the conclusion that, just as stop and search has criminalised black Muslim youth, the system is criminalising our autistic population and others with learning disabilities. That we are locking people up at least in part as a result of their disability is surely of deep concern to us all. When an individual encounters the criminal justice system, they should

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expect fair, respectful treatment—treatment that is mindful of the needs of those who may not have the required skills to face up to or deal with all the complexities of our legal system.

The old cliché of working together, multiagency, may indeed yield better services and justice. In many instances, it requires a multiple set of responses. The first is through the training of professionals including police officers and judges. What progress have the Government made with the commitment in their autism strategy to update the College of Policing’s mental health e-training for new officers? Will an autism marker be introduced on the police national computer and made available to prison and probation staff? Those steps would be welcome, but alone they are insufficient. Mr Ali was wearing a marker. The incident occurred in a division in which the police had long before committed to implementing disability training. Beyond lip-service to badges and training, what steps are the Government taking to roll out appropriate quality autism training to all police officers and prison staff, not just new recruits, so that they make appropriate adjustments to and recognise the significance of disability markers?

Secondly, to cater for the significant minority of the prison population with a suspected learning disability or autism spectrum disorder, the prison and probation services must have procedures in place to assess a person’s needs as they enter and pass through the system. Will the Minister commit to the use of screening tools for autism across our prisons?

Finally, early diagnosis of autism makes a huge difference to the development and future well-being of people with autism. Speaking to several organisations last year, I was told in no uncertain terms that many parents feel that there is a racial dimension to their experience. The Government have already acknowledged the significant under-diagnosis of autism among people from black, Asian and minority backgrounds. Delayed diagnosis results in delayed support. The provision of basic social care and support for people with autism at every stage of life can mitigate the likelihood of a costly health crisis or encounter with the criminal justice system. Low-level services such as social skills training or anti-victimisation classes can be effective and should be mandated by local authorities.

Whether a person has autism or not, they should be treated with respect by all our statutory institutions. However, as a mother of an autistic boy about Mr Ali’s age, I can vouch for the wariness that many of us as parents have about exposing a disabled child to institutions. For all the brilliant dedicated professionals in our hospitals, education and social services, police and prison services, persistent incidents of racism, prejudice and abuse not only erode the public’s faith in those institutions but profoundly injure people’s lives.

The process of appeals and complaints can do long-term damage to the mental well-being of those who must endure it. For that reason among many, I salute the determination and tenacity of Mr Ali’s family, his solicitor and all his supporters in their struggle to secure justice for Faruk Ali—and all others who persist.

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2.38 pm

Lord Ponsonby of Shulbrede (Lab): My Lords, I congratulate my noble friend on securing this important debate. I will not be talking about the case of Faruk Ali, although I have read the material available on the internet. I propose to talk in more general terms about dealing with autistic people in the criminal justice system. It is indeed a large and difficult subject, and I shall talk about the courts system in particular, of which I have some experience.

In preparing for this debate, I have seen that a lot of guiding material is available published by the House of Lords Library regarding dealing with people with autism. There was a recent article in the Magistrates’ Association magazine about dealing with autistic people in a court setting. If one googles the issue, as I did, there are a lot of comment pieces about the appropriateness of different procedures within the criminal justice system as a whole.

A very important context for today’s debate is the rollout of Liaison and Diversion by the Government to those with mental capacity issues. My understanding is that the objective is that this will be fully rolled out within England and Wales by next year. Liaison and Diversionis where a mental health practitioner is available to the court, so that a hearing may be adjourned for an initial assessment to be done on the spot as to the mental capacity of either victims or the defendant. This has been at the instigation of leadership from my noble friend Lord Bradley and I understand that it has led to a measurable drop in such cases being brought to court in the pilot schemes operating to date.

I want to talk about my own experience as a London magistrate, where I have dealt with defendants who are autistic. I will not go into the details of the case I have in mind; suffice to say that I believe that the court system coped well with the challenges of the trial, in the sense that all the individual elements of dealing with this difficult situation were met. Nevertheless, by the end of the process the autistic defendant was bemused —he did not understand what had happened—and his family felt that they had not been treated fairly.

So what were the elements in place? First, the young man was charged with a sexual assault, so special measures were in place to protect the victim from the attention of the young man or his family. Secondly, an appropriate adult sat with the young man at all times when the case was being conducted. An intermediary was not believed to be required because the young man claimed he had no memory of the incident of which he was accused. We had an expert witness who gave lengthy evidence, having interviewed the young man, and was cross-examined. That was really the burden of the defence case. As the presiding magistrate, I could see that witness support was giving very active support to the family of the young man who was accused. We took regular breaks, as asked for by the defence lawyer; that would be good practice in such cases in any event. Legal aid was available but would not be for this level of charge for most defendants. Incidentally, that was one of the sources of delay.

We convicted the defendant of the sexual assault. As I said, he looked bemused as if he did not understand what had happened. The family made it very plain that

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they were unhappy with the result. We had no doubt that we had properly convicted the young man. After the trial, I discussed with my colleagues and the court staff what could have been done better. All the individual requirements had been complied with, after all, so what was the problem? It was the delay in the whole process. It had taken a year from the initial incident to when the trial took place. All the people completing their individual elements as part of the process no doubt believed that they had done their job but it added up to a long delay.

It was made plain to the court by the expert witness that delay disproportionately affects people with autism, because they are very likely to have worse memories than other people. This problem was not overcome and was, I believe, the source of the discontent of the young man’s family. We were never going to make them happy with the result but we could at least have made them feel that their son had had a fair trial. I am afraid that I do not think they believed that. My point to the Minister is very simple: all these elements are good and complex but they have to be done quickly, otherwise their benefit gets dissipated and people do not feel that they have had a fair trial.

I will close on one separate, short point regarding Liaison and Diversion. It is on the need to scrutinise whether these diverted cases are properly being diverted. As the noble Lord, Lord Faulks, will know, there are various pilot schemes in the country and various methods among police forces of recording the way that police forces divert cases. From a courts perspective, it is very important to have a realistic record of those diversions when they come to sentence people who have committed subsequent offences. We have this issue in the youth court, where we do not know which diversions have been done properly. It is potentially the case that we will also have this issue in the adult court if there is not proper recordkeeping of diversions for people with mental capacity issues.

2.45 pm

Lord Addington (LD): My Lords, we have addressed things related to this subject fairly frequently. The fact of the matter is that those with autism get a rough deal out of society, for the simple reason that they have problems communicating and that we are an animal who communicates all the time. If you have a problem with communication, you are always going to find yourselves in positions that are potentially stressful and breeders of conflict. If we take that into account when looking at just how many rules and regulations we have, the fact that the criminal justice system will have problems with those who have autism at least occasionally is obvious to us. We should look at how we deal with that now.

The noble Baroness, Lady Uddin, gave information about a case on which the police were found not guilty at the trial but into which there is an ongoing internal inquiry. The fact that it was severe enough to get to court suggests that something had gone wrong at this point. Look at the selfish genes of society. Having to take an issue like this to court in the first place means that there has been a fundamental mistake. If we lose track of that, no matter what the outcome of this, we

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are losing track of the fundamental problem. Having looked through the information and attended some of the meetings that have already been referred to, I say that the police are always going to struggle with somebody who has these communication problems. However, they know this and there are schemes in various parts of the country that are better at making the police informed. What are the Government going to do, and encourage local police forces to do, to make sure that people understand or at least have an awareness of autism?

This is not easy, quite simply because most of the problem will be at the high-functioning end of the autistic spectrum—those with Asperger’s or those who will not obviously have a problem, and where the first few lines of communication will probably not be enough to establish it. There is a desperate need for training but initial police training is a very slow way of getting this into the structure. I cannot help but feel that if a senior sergeant or inspector within the force had had a look at this case and said that an apology or some form of mediation were required, we might not have had to go through that wasteful process of taking an action in court. We might not have needed such a lengthy internal procedure. We are wasting time and money by not taking on some basic awareness training within this part of the service.

The same criticism could almost certainly be made of most bits of government. I will undoubtedly make similar points about other disabilities at other times, and already have. But unless you do this, you are building up the stress levels. If we are not to keep all our disabled people, and particularly autistics, locked away but to have them interacting with society, it is a basic requirement that we allow those in the public sector at least to be able to interact with them. I am calling not for everybody to be an expert but for them to have enough confidence and awareness so that, when they establish that something is not right, they call in the right support and help. That is not too much to ask: that you know that you do not have to soldier on here, and you call in the person who knows something. You are not wasting time or resources, or causing that individual such enormous stress.

We had a debate on mental health a week ago today, in which I spoke about the problems of those with disabilities and mental health. Autistics were a large part of that group. Some 70% of those with autism are reckoned to have some form of mental health problem, and the noble Baroness, Lady Uddin, has already referred to the fact that those on the autistic spectrum are grossly overrepresented within our prison system. By the way, it is very widely accepted that virtually all hidden disabilities or special educational needs are grossly overrepresented within the prison system. Therefore that should not come as any surprise. To try and avoid that, we should invest a little in training and time throughout the system, so that there is a way in which you can interact, apologise, back down and correct what has gone wrong, as far as you can. All systems will go wrong, but unless we can instil enough knowledge within the system so that we can say, “Yes; something has gone wrong and we will intervene to do what we can to put it right”, you will have these problems. Would it not have been better if that had taken place?

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It is equally damning in this case because this same individual had been involved in a case three years earlier, and Bedfordshire Police had agreed to undertake some of this. If it did, clearly it did not get through to the right person at the right time. We need to make sure that we get this done, and quickly. If not, we will waste the time and resources that could very usefully be spent somewhere else. The selfish gene of society means that we deal with this and move on, otherwise we waste time and resources and make people’s lives unpleasant. That is more or less an open-and-shut case.

2.51 pm

The Lord Bishop of St Albans: My Lords, I, too, thank the noble Baroness for this debate. As has already been said, Faruk Ali comes from Luton, a town in my own diocese. Quite a number of people have raised that case with me and have been concerned about what happened, so I am glad to be able to involve myself in this debate. However, I will leave it to other noble Lords to comment on the specifics of the debate—I, too, have read the media on this—as clearly it raises a number of wider problems. At an early stage I pay tribute to all those people, both professional and volunteers, who work in the statutory services and in the charitable sector, who are doing a very good job at huge personal cost and with great expertise. We need to acknowledge what they are doing and affirm it before looking at some of the problems.

Between 500 and 800 people have been victims of disability hate crime in each of the last five years. Some of those will almost definitely have been people with ASD, although it is widely accepted, as has already been pointed out, that generally they are more likely to be victims than offenders. Indeed, one of the characteristics of ASD is that very often people give inordinate attention to obeying laws and rules, and find that the most comfortable context in which to operate.

Over the years I have known a number of people with ASD, and one family in particular whose son had Asperger’s syndrome. They are a deeply supportive family; I got to know the lad when he was in his 20s. On first meeting you would have no idea that he had been diagnosed with Asperger’s syndrome, but when you got to know him you realised some of the problems it was creating. He found it difficult to relate to other people; being a young man in his 20s, he was very keen to make friends with the opposite sex, but he simply did not know how to relate to girls. He would often say things that could be taken as totally inappropriate and easily misunderstood. He was very distressed by that, but simply did not have the ability to know how to relate in any other way.

In a more extreme way, on occasion he would lose his temper, which meant that, being a full grown man, he could appear frightening. I was a neighbour of his family, and sometimes he would run out of his house in a fury and knock on my front door. I learnt over the years how to simply give him a place to sit down and calm him down. In fact he was fine, but just needed some help at that point. I am telling your Lordships this account simply to illustrate that this is an immensely

22 Jan 2015 : Column 1436

complex issue, particularly for people who are meeting someone, perhaps in extreme circumstances, for the first time. It is not easy for police or other health professionals always to recognise immediately who they are dealing with.

The National Autistic Society recommends that,

“the child or adult with ASD carries an identity card”,

as Faruk Ali was,

“stating their personal details, emergency contacts and an explanation of their condition”.

However, for someone with Asperger’s syndrome, who longs to integrate into society—and his family were trying to help him to do that; he had moved into a flat to live by himself—that can be quite humiliating, because it marks you out as different. That was precisely what he did not want to do.

I will raise three areas of concern. The first is on police training, which has already been referred to by the noble Lord, Lord Addington. I know, because I have talked to people involved with training the police, that they are already expected to cover a huge amount of different areas of training—they do not sit around with nothing to do. Having said that, it is important that part of that training is on how to recognise when you may be dealing with someone with particular needs, especially ASD. The Prison Reform Trust recommends that:

“Legal professionals and practitioners who undertake criminal work, members of the judiciary and liaison and diversion staff should be required to participate in awareness training in mental health problems, learning disabilities and other learning, developmental and behavioural disorders such as autism, attention deficit hyperactive disorder, communication difficulties and dyslexia”.

Does the Minister agree that that should equally apply to the police?

Secondly, we need to ensure that there are sufficient police interview advisers. Each police service has some of those, but again it is crucial that there are sufficient resources and that they are trained.

Thirdly, I will say a word about registered intermediaries. At the other end of the criminal justice system, we also need to ensure that people with ASD are given the right support. Back in 2012 the Prison Reform Trust published Fair Access to Justice?, which recommended that support should be made available for vulnerable defendants by registered intermediaries on the same basis as witnesses:

“The Advocacy Training Council … recognises that the handling and questioning of vulnerable people in court, in order to achieve best evidence, is a specialist skill; however, there is a lack of clarity concerning the provision and availability of intermediaries for defendants. While intermediaries appointed to support vulnerable witnesses are registered and subject to a stringent selection, training and accreditation process, and quality assurance, regulation and monitoring procedures, intermediaries for defendants are neither registered nor regulated. The practice of ‘registered’ and ‘non-registered’ intermediaries—potentially in the same trial and paid different fees—is anomalous. Intermediaries should be introduced into the statutory provision of special measures for vulnerable defendants”.

Finally, does the Minister agree that this recommendation is not only important but needs to be implemented?

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2.58 pm

Lord Touhig (Lab): My Lords, a young Japanese boy by the name of Naoki Higashida wrote a book entitled The Reason I Jump. It should be basic reading for anybody in public service who has to deal with other members of the public. It is just 198 pages long and is set out in a question and answer format. There are just 58 questions, each question no more than 10 words long, with the answer about 100 to 150 words long. Question 21 in the book is relevant to today’s debate. The question which some people ask him as an autistic person is:

“Why don’t you do what you’re told to straight away?”.

He answers:

“There are times when I can’t do what I want to, or what I have to. It doesn’t mean I don’t want to do it. I just can’t get it all together, somehow. Even performing one straightforward task, I can’t get started as smoothly as you can. Here’s how I have to go about things.

1. I think about what I’m going to do.

2. I visualise how I’m going to do it.

3. I encourage myself to get going.

How smoothly I can do the job depends on how smoothly the process goes.

There are times when I can’t act, even though I really, badly want to. This is when my body is beyond my control”.

That one sentence jumps off the page for me:

“How smoothly I can do the job depends on how smoothly the process goes”.

Just think of that sentence, and how easy it would be for the most basic and simple encounter between a police officer and an autistic person not to go smoothly, and to get out of hand.

The plain truth is that people with autism have no more desire to commit a crime than any of us. But what may start as an innocent inquiry—an encounter with a police officer—could lead to a crime being committed. A situation could escalate simply because the police, in the main, have no idea about, and lack sufficient training in dealing with, people with autism.

People with autism communicate in a way that is not familiar to most of us. The command of spoken language in a person with high-functioning autism or Asperger’s syndrome does not necessarily indicate their true level of understanding or social awareness. The wider implications of a situation may not be apparent to a person with autism, and they may not understand the kind of information they need to give in response to questioning. People with autism are also often unaware of the consequences of their actions or the effect their behaviour will have on other people, because they do not link cause and effect.

Put yourselves in this position, my Lords, and imagine that you are autistic and for one reason or another enter into a confrontational situation with a police officer. Imagine the police officer telling you to do something. They, rightly, expect you to respond immediately. And then remember that young man’s question 21:

“Why don’t you do what you’re told to straight away?”

And his answer:

“There are times when I can’t do what I want to, or what I have to. It doesn’t mean I don’t want to do it. I just can’t get it all together, somehow”.

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People with autism are often very single-minded about their interests, and can be unaware of the effect that their actions could have on others, or that those actions could lead to them putting themselves or others in danger, or committing a crime. A person with autism, when faced with a situation such as arrest, or following an incident, may have difficulties in managing their emotional reaction. The response of the criminal justice system to this is crucial. But without appropriate training in autism, the situation could escalate, leading to inappropriate sanctions being taken against a person with autism.

The refreshed autism strategy, Think Autism, which the Government published last April, commits the Home Office to working with the College of Policing to update the mental health training for new officers, and to look at the feasibility of an autism marker being used on the police national computer, so that police officers can identify whether someone has autism, and make appropriate adjustments. That point was well made by my noble friend Lady Uddin, who we congratulate on securing this debate. The strategy was signed off by both the Home Office and the Ministry of Justice. If there were a marker on the police national computer, it could also be seen by other criminal justice system professionals, including prison and probation staff. So may I ask the Minister what progress has been made in this area, and what processes exist to roll out autism training to all police officers and prison staff, not just to new recruits?

Contact with the criminal justice system will have a significant impact on a person’s life. This is no less true of a person with autism. Such contact may also be a sign that their existing care and support is no longer working. For some people with autism, the situation may have been compounded over recent years by their no longer being eligible for support as a result of changing criteria—or perhaps they never qualified for support in the first place.

I share the disappointment of the National Autistic Society—here I must declare an interest as a vice-president of that organisation—that the revised adult autism strategy failed to highlight the need to reassess a person’s needs when they enter or leave the criminal justice system. So I ask the Minister: what steps are the Government taking to ensure that people with autism in prisons are identified and given appropriate support? I must stress that they need to be properly assessed to ensure that support will be there for their journey out of prison and back into the community.

Like the noble Lord, Lord Addington, I believe that training plays a key part in trying to overcome some of these problems. The questions and answers in the small book that I have spoken about should be essential reading for everybody working in the public sector. It would make a difference in solving some of these problems.

3.04 pm

Lord Kennedy of Southwark (Lab): My Lords, I start my contribution to this debate by thanking my noble friend Lady Uddin for tabling this Question for Short Debate. In the light of the case of Faruk Ali, she raises an important issue about how people with autism

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are treated when accessing the criminal justice system as victims, witnesses, suspects or offenders. The role of victim support is important, and a proper understanding in this respect is also needed. I agree with what the right reverend Prelate the Bishop of St Albans said when he paid tribute to the people who work in the criminal justice system.

What is autism? As other noble Lords have said, it is a developmental disability that affects how people communicate with, and relate to, other people. It also affects how they make sense of the world around them. A person with autism may display a number of characteristics, which can include, among other things, being unable to read social cues, appearing to lack empathy, behaving in what would seem an odd or inappropriate manner, having difficulty in understanding tone of voice or facial expression, and making literal interpretations of figurative or metaphorical speech. They may also become extremely anxious because of unexpected events or changes in routine.

It may not be immediately obvious if someone has autism. Unusual behaviour may invite the attention of others, but it can also be said that autism is a hidden disability. People with autism do not always understand the implications of their actions or the motivations of others, and they may not learn from past experience. There are examples of people with autism being victims of crime because they are not able to deal with the situation and avoid becoming a victim. I read about the example of a person with autism who understood that it was important to avoid dark places with few people around in the late evening or at night. But they were unable to cope with the situation of being threatened by a gang in the High Street on a busy Saturday afternoon.

Only a small minority of people with autism come into contact with the criminal justice system as victims, witnesses, suspects or offenders. But it is important for people in authority to have a proper understanding of autism and to deploy effective strategies on an individual basis to ensure clear and effective communication. Some people with autism find it difficult to make eye contact, and that could, in certain circumstances, be misconstrued as being shifty or dishonest, for example. People with autism are individuals, but they all experience difficulty with social interaction, social communication and social imagination. They may not always be easy to recognise. Where a person, on coming into contact with the criminal justice system, displays unusual behaviour, it is important for the person in authority to consider whether the person has autism, and where they are on the autism spectrum.

People with autism often find unexpected or unusual situations very difficult. Encountering a situation that involves anyone from the criminal justice system or the emergency services is just the sort of situation that could be very difficult for a person with autism. My noble friend Lord Touhig gave us an excellent example of how difficult it could be for a person with autism to deal with the criminal justice system.

When the noble Lord, Lord Faulks, responds to the debate, it would be useful if he could explain what advice and guidance is given to professionals from the

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criminal justice system on adopting effective strategies for dealing with autism. Is he confident that police forces have fully understood the condition, and the steps they need to take when dealing with a person who has this disability, in whatever context?

It appears to me that more could be done to raise awareness among professionals in the criminal justice system. I read one report about a victim of crime with autism who was viewed as someone who would make an unreliable presentation in court, so the case against the suspect was dropped. It could of course be that the people who questioned the victim did it in a way that did not enable the victim to tell their story. Instead—unintentionally, I am sure—they caused that person stress and made it impossible for them to get their points across effectively, and they were denied justice as a consequence.

Organisations such as the National Autistic Society run bespoke courses for professionals in the criminal justice system. Does the Minister know what the take-up of such courses is, and what the Ministry of Justice is doing to encourage greater take-up? Has the ministry thought about talking to the Home Office and seeing whether at least one officer, if not more, in every police station has been on a course designed to equip them with the skills to communicate effectively with a person with autism?

The noble Lord, Lord Addington, made an important point about training in the criminal justice system. Perhaps the noble Lord, Lord Faulks, can tell us what he understands the Crown Prosecution Service does to communicate and deal with the needs of people with autism it comes into contact with. Is any discussion taking place with the legal professions to ensure that they have an appropriate appreciation of the condition and of how people with the condition need to be communicated with? My noble friend Lord Ponsonby of Shulbrede made an excellent contribution highlighting what happens when a person with autism appears in a magistrates’ court and the problems that delays and other issues cause them.

The autism alert card produced by the National Autistic Society is a useful initiative and can help people when dealing with someone with the condition, although I understand the point that the right reverend Prelate made in that respect. I do not intend to comment on the Faruk Ali case as IPCC proceedings are under way. In conclusion, I again thank my noble friend Lady Uddin for raising this important matter in the House today.

3.10 pm

The Minister of State, Ministry of Justice (Lord Faulks) (Con): My Lords, I am grateful to the noble Baroness, Lady Uddin, for securing this debate, and raising the important issue of access to, and support from, the criminal justice system for those with autism spectrum disorders. It is, of course, a spectrum. As has been rightly said, those with higher functioning autism can be particularly difficult to identify. Generally, autism can sometimes be difficult to identify or diagnose.

A lot of information is available about Mr Faruk Ali’s case. However, as a number of noble Lords have indicated, the two police officers were cleared after a trial relating to the incident which took place on

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20 February. Both officers remain suspended pending the outcome of a misconduct investigation. In those circumstances, it would be inappropriate for the Government to comment further. However, I have no difficulty at all in saying that we expect the highest standards of professionalism in all aspects of policing and across the criminal justice system and I am extremely happy to condemn any racist or discriminatory behaviour by any police officer in any circumstances. The decision as to whether to take further action against these officers is a matter for the Independent Police Crime Commission and the Crown Prosecution Service.

I am well aware of the need for all parliamentarians, and especially those who work in public services, to be more conscious of the needs and experiences of people with autism. This issue is particularly important as regards the criminal justice system. It is thought that around 2% of the general population have autism, but I recognise that the figure within the offending population could be much higher as a percentage.

The Government’s autism strategy, which was updated in April 2014, contains specific actions in relation to criminal justice. The Ministry of Justice is a signatory to that strategy. The update contains new obligations for the Ministry—obligations which I am pleased to say we are taking forward. These include the commitment to establish a cross-government group to take forward issues with autism and the criminal justice system. I am pleased to say that although the system encompasses a large number of players, as noble Lords will understand —for instance, the police and prosecutors, to which the noble Lord, Lord Kennedy, referred, as well as courts, prisons and probation—my department is leading on this work and chairing the group.

We also agreed, as part of our commitments in the strategy, to examine and share good practice in prisons towards prisoners with autism. We are also considering whether autism awareness training can be made available to probation staff. We are having conversations with the new independent Probation Institute about this. As part of our strategy, we agreed to make information available to potential bidders for contracts for the new providers of probation services under our transforming rehabilitation programme.

All the strategy objectives have one thing in common: they are helping with our aim to ensure that the criminal justice system can adapt to cope with people with autism, whether they are suspects, victims or witnesses. As a number of noble Lords have said, training is key to this. All staff in the criminal justice system cannot be expected to be subject experts in every disability they may encounter, as my noble friend Lord Addington said, but they should at least be on notice that there might be a problem, which I think was the burden of his remarks. For example, a person whose possibly different perception of social norms may get them into trouble and the chances of someone in the criminal justice system encountering someone with autism is therefore significant.

As part of the autism strategy, the Home Office has committed to ensuring that the College of Policing develops better training for the police in recognising autistic spectrum disorders. I am pleased to update noble Lords on the fact that the college now has a

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full-time mental health co-ordinator and, arising from that role, it has set in train important streams of work around the development of new authorised professional practice guidance on mental health, including autism. The new guidance should be available to consult in the near future and we hope will go live and be public by autumn 2015.

The guidance for police will be underpinned by the first comprehensive package of training, pitched at different levels of detail and relevance for different ranks and roles of officers across the service. These training packages will be relevant for the promotion process and professional development, right up to the Police National Assessment Centre, which selects senior officers. This training is delivered through a formal training board, including the police national curriculum manager, and has already highlighted the need to understand the extent to which police training should confirm condition-specific awareness.

It has been recognised that these disorders may need to affect a policing response. The work is at an early stage and will develop in 2015, with a view to training products being ready for piloting in 2015 and completed for consumption nationally by the end of the first quarter of 2016.

As to prison officers, NOMS has a Prison Service instruction, a set of binding rules for prisons which covers autism. It includes a specific section to help people understand autism as well as a section on communicating with people who have learning difficulties or related disorders because it is sometimes the case that there is comorbidity, as it were. There may be autism and other difficulties within one person.

Some prisons have developed their own autism strategies and sets of training materials—for example, the excellent work that is being done at Dovegate prison. As I mentioned earlier, my department is very keen to find best practice among local practitioners and to share and promote this more widely.

I am glad to say that within the Ministry itself training is available for staff on autism. I know that a number of charities offer training on interacting with people with autism, written specifically for criminal justice professionals. I hope that this will mean a real improvement in the experiences that autistic people have when they interact with the criminal justice system.

Liaison and diversion schemes, mentioned by the noble Lord, Lord Ponsonby, and others, are key to this. It is, of course, crucial that we are able to identify autism. Twenty- five million pounds has been invested across England to fund mental health professionals in police stations and courts to establish liaison and diversion services. These services identify people when they first come into contact with the youth and adult criminal justice systems and help support the most appropriate outcomes. They are available 24 hours a day and ensure that across the trial areas they will be provided with the same level of care and service.

By identifying someone with a health problem such as autism when they are brought into a police station or involved in court proceedings, liaison and diversion schemes can ensure that an individual is supported through the criminal justice system and into the right mental health or social care service. We have strong

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anecdotal evidence that they can reduce the overall length of court proceedings—a point raised by the noble Lord, Lord Ponsonby—through the provision of timely reports to magistrates, limiting the number of court hearings, and probably adjournments, and therefore avoiding periods on remand. They should be passed between authorities and should follow the individual through the criminal justice system to probation or prison services, so that from the first encounter, quite apart from the question of flagging this on a computer—that important point was raised and is being looked into—there is not, as it were, a gap in people’s awareness.

There is a real opportunity here for the liaison and diversion service to help courts do their job. The case mentioned by the noble Lord, Lord Ponsonby, was a considerable challenge to the court, by the sound of it. It almost sounded like an exam set for a judge in all the most difficult problems a court would have to confront. Even the question of unfitness to plead, I dare say, would have come before the court on that particular occasion. I am sorry that there were delays. Of course, delays can sometimes be encountered in finding the appropriate expert to make the diagnosis or identify the disorder. It can still take too long. I have had briefings from the Department of Health on this issue. It has commissioned the National Institute of Health and Care Excellence to produce guidance which will lead to quicker diagnosis. There is a role for NHS England in looking at people’s experience of diagnosis, and the importance of timely and effective services will be highlighted in a forthcoming statutory guidance on autism for local authorities and the NHS.

The new model—the liaison and diversion model—has already seen more than 10,000 children, young people and adults, come through the service while going through the justice process. The model will be independently evaluated to inform a business case for services to cover all of the English population by 2017-18. As to victims and witnesses—as in the case raised by the noble Lord, Lord Ponsonby, there can be times when both a victim and a defendant may need support—it is very difficult for a court and all those taking part in the criminal justice system to come to the truth and nevertheless respect the rights of all those involved in the process.

The Government are committed to providing support for all types of vulnerable and intimidated victims and have a range of special measures in place to support them in the criminal justice system. Of course, the courts have an inherent right to ensure that someone on the autistic spectrum has appropriate facilities to assist them in their defence, including the use of intermediaries. There is guidance given to judges as to this use of special measures and the access to materials on the private judicial websites. If they are confronted with difficulties they should be aware of the possibility—and indeed they are—of helping those who have difficulties, although, as I said, the information should be conveyed by the liaison and diversion services or through the probation service in any event.

The registered intermediary should help them communicate their evidence. Intermediaries are communication specialists to help vulnerable witnesses provide their best evidence. They are one of the special

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measures introduced in the Youth Justice and Criminal Evidence Act. In 2014, 499 requests for a registered intermediary to help witnesses with disorders such as autism were received. In addition, victims and witnesses can also expect to be able to use communication aids, devices such as books and symbol boards to help them communicate when giving evidence in court.

A new victims’ code implemented in December 2013 sets out the support and services that victims can expect to receive from agencies throughout the criminal justice process. It also sets out that victims in the following three priority categories of crime are entitled to receive enhanced support and information: victims of the most serious crime; intimidated or vulnerable victims; and persistently targeted victims, which can be a particular feature of those who are on the autistic spectrum. The code entitles them to receive this enhanced support including the referral to specialist organisations.

The police and the Crown Prosecution Service have a duty under their code to assess the victims’ needs at an early stage—this is a partial answer to the noble Lord, Lord Kennedy—and to refer any eligible victims for enhanced services for pre-trial therapy where appropriate. So every single player in the criminal justice process should be equipped—and should be better equipped—to identify and help those with autism. In addition, of course, victims with disabilities, or a close relative, can nominate a family spokesperson as a single point of contact to receive services under the code.

The conclusion that I invite the House to reach is that there is an increasing appreciation by the Government —increasing joined-up thinking—that the criminal justice system must respond to the challenge of autism. I genuinely think that the Government are taking this seriously and that the access to and experience of the criminal justice system for those who have these disorders should improve in the future.

This is a very sad case, whatever ultimately may be the determination of the facts. If it has done anything, it has perhaps helped stimulate this debate and further reinforced the importance for all those in the criminal justice system to be aware of autism, the challenges that it confronts, and responding appropriately to them.

I thank all noble Lords for their contribution to this useful debate.

Local Government Finance Settlement

Motion to Take Note

3.25 pm

Moved by Lord Beecham

To move that this House takes note of the Local Government Finance Settlement and its implications for the future of local government.

Lord Beecham (Lab): My Lords, I look forward to hearing the maiden speeches of the right reverend Prelate the Bishop of Southwark and the noble Baroness, Lady Pinnock, of Kirklees in Yorkshire. They, and perhaps others of your Lordships’ House, may recall a well known broadcaster from Yorkshire—one Wilfred Pickles, whose catchphrase was, “Give him the money, Mabel”. The local government world would be surprised

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if the Secretary of State proved to be related, though the Chancellor might be forgiven for seeing in him the very reincarnation of his namesake. This after all was the first Minister across the door of Number 11 in 2010, offering up to the Treasury the largest cuts of any government department.

Year after year the story has been the same: injury compounded by the insult of meaningless consultations and a last-minute announcement of the annual settlement, this year on the very last day before the Recess. I have had the privilege of serving as a member of Newcastle City Council since May 1967 and I declare my interests in that capacity and as a vice-president of the Local Government Association. I have lived through good times, difficult times, and bad times in local government, but I have never known a time when local government and local democracy were in such a desperate plight as they now are.

Even during the Thatcher era, Secretaries of State such as the noble Lords, Lord Heseltine and Lord Baker, and Lord Jenkin displayed a sympathy with local authorities and understanding of the importance in their role. Such, sadly, is not the case today. What is in some ways worse is the propensity of the Secretary of State not only to promote his obsessions—weekly bin collections or car parking charges, for example—at the same time as he presides over massive cuts, but also to suggest that the damage is not serious, that councils in general are sitting on vast reserves, or that the 50 helpful hints for savings he jotted down on the back of an envelope could avoid difficulty.

The reality, as the Secretary of State must well know, is very different. Capital reserves cannot be used for revenue purposes, revenue reserves must be available to meet contingencies as they arise or be held on a prudential basis, and of course, once spent, are no longer available. Councils of all political colours are in dire difficulties even after making significant efficiency savings. He must also know of the claims of the Under-Secretary of State, Mr Hopkins. Like Mr Pickles, he is a former leader of Bradford Council, though unfortunately both cast from a very different mould from that of the noble Baroness, Lady Eaton, from whom we will hear later, who was also a leader of that council. Mr Hopkins, after all, stated that,

“the settlement leaves councils with considerable spending power”.

That claim is grossly misleading. In the first place, the LGA point out that real-terms cuts since 2010 will reach 40% by the end of 2015-16. In fairness, the National Audit Office figure is a little lower at 37%—but there is, of course, more still to come.

Secondly, the Government's claims about spending power—an artificial construct designed to conceal the reality of what is happening—are utterly misleading. The Government claim a reduction in spending power of 1.8%. But that includes council tax income and the NHS element of the better care fund, which in fairness is a good policy, but which represents money that is not the councils’ money to spend. If those two elements are taken out, the cut becomes 8.8%, and this rises to 11.8% if ring-fenced funding and social care cost new burdens are taken into account, making a like-for-like comparison cut not of 1.8% but 11.8% in all.

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This does not, of course, reflect equal misery all round. Hackney’s spending power, a deeply deprived inner London borough, drops by £199.50 per head, and Birmingham’s by £156.77, but Surrey’s goes up by £56.42—and even then, the Conservative leader of Surrey complains that it is not enough. Wokingham, which is frequently referred to by Ministers as a comparator with Newcastle, also gets an increase of just under £50 per head.

The National Audit Office is critical of the Government’s use of spending power, which it describes as,

“an indicator that combines government funding with council tax income”,

and which does not give,

“a measure of the scale of the financial challenge facing local authorities over time”.

Local auditors moreover, the NAO reports, say that 52% of single-tier and county councils,

“are not well placed to deliver their medium-term financial strategies”.

Worryingly, the NAO asserts that:

“The Department has a limited understanding of the financial sustainability of local authorities and the extent to which they may be at risk of financial failure”,

and, moreover,

“does not monitor the impact of funding reductions in a co-ordinated way”.

Of course it, and we, no longer have the benefit of the Audit Commission’s views of these matters since it was abolished in a fit of Pickles pique.

On top of this, there are instances of sleight of hand in the published figures. A £200 million cut in the grant to education authorities for central services for schools is not reflected in the declared spending power, and the £70 million New Homes Bonus going to the Greater London Authority is still included in the spending power figures for the London boroughs, while the Government’s better care fund is not all spent on social care or other services commissioned by local councils.

A number of areas of general application are worrying. In relation to business rates, councils have made a provision of £660 million for back-dated appeal losses, representing local government’s 50% share of the cost, as decreed by the Government, who received all the money in the first place but are meeting only half the subsequent bill. If anything, this provision underlines the need for a prudent level of reserves.

Council tax support sees a £1 billion cut, which is certainly going to make life even more difficult for low-income and, frequently, working households, and the councils which will have to attempt to recover unpaid council tax. Moreover, the Government are cutting local welfare assistance, which partially cushioned the blow of the council tax support cut and simply absorbed it into the funding assessment, which will therefore be at the expense of other services. The LGA has rightly sought the restoration of this funding.

What does all this look like on the ground? Twelve north-east councils stand to lose £240 million in spending power—that artificial measure—next year, on top of a 40% cut in grant thus far; and that is happening in the region with the highest unemployment in the UK, and

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where the council tax yield is much less than in the more prosperous areas. By 2017-18 Newcastle’s budget will have fallen from £280 million in 2011-12 to £207 million, with a reduction of 48% in government funding.

The pattern is similar in all the metropolitan areas, many of the inner London authorities, and many other places such as seaside towns. However, breaking down the figures in service terms illustrates the problems more vividly. Children’s services, for example, have seen the number of looked-after children increase by 11% in five years, but by 33% in the north-east; yet government funding for core children’s services has suffered an estimated cut of £2 billion, or about 50%, including a cut of 17% or £0.5 billion for 2015-16 alone. Local welfare assistance schemes, a lifeline to the most vulnerable, have been scrapped by the Department for Work and Pensions, and £129 million is now included in the overall settlement but is not ring-fenced and has to be seen in the context of the 11.8% cut overall.

Sure Start everywhere faces cutbacks, although in Newcastle we are managing to maintain provision in the most deprived areas by a reconfiguration of the service. Yet the pressures are palpable across a range of services, from adult social care to the state of the streets and open spaces, from threatened cuts to policing and fire services, and from the provision of library services—although we in Newcastle have managed to retain a reduced service in all but one of those threatened with closure by working with residents’ groups and other partners—to a much reduced youth service. The council faces a cut of £26.7 million in government funding next year as we struggle to meet the rising costs of demographic change, particularly in the light of an increasing number of elderly residents, and huge pressures on children’s services.

The voluntary sector is also under enormous strain—I declare my interest as president of Age UK Newcastle—and unable to meet the increasing demands on it. We are, in 2015, a city with eight food banks and seven low-cost food centres, by no means the only area with such a necessary provision. There are also 5,376 house -holds paying the bedroom tax, which is costing them and the city’s economy £3.75 million this year. Some of these cuts will lead to greater expenditure elsewhere—notably but not exclusively in the National Health Service, as well as in pressures on other services, which is reflected, for example, in a failure to equip youngsters to participate in the local economy. That also impinges on the general welfare of the area and the success or otherwise of local business—as well as, perhaps, on the criminal and family justice systems.

What we desperately need is a fair system of distributing financial support for local government based not on spending power but on spending need, accompanied by the revival of Total Place, or place-based budgeting as it appears to be known now. It is a concept developed by the Local Government Association, adopted by the previous Government with the full support of the Treasury and the Department for Communities and Local Government at that time, but disappointingly not necessarily taken on board by other departments. In any case, it has withered on the vine over the past

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few years. Under this approach, one would look at all relevant public spending in an area, at the appropriate local level, thereby enabling both efficiency savings and reduced overheads, but essentially allowing a more integrated and effective approach to issues and problems that necessarily cross departmental and service boundaries —whether in Whitehall or the local town hall.

The Motion refers to the settlement,

“and the implications for the future of local government”.

Thomas Hobbes famously described the life of man as “nasty, brutish and short”—epithets which some might be tempted to apply to me from time to time. Unless there is a change of course, I fear that the future of local government is destined to be depicted in those sombre Hobbesian terms.

I hope that the Government will, in their final settlement announcement in February, reflect the widespread concerns expressed across the whole of local government, and of all political colours, as well as by independent bodies, those who deliver services and those who assess their efficiency, and that a more realistic appraisal of what is happening up and down the country will result. I do not have any great confidence about that because the department is not representing, as it were, local government in Whitehall but is merely an instrument for cutting services. That is in part, apparently, in the pursuit of an ideological approach of down-sizing the state in general and local government in particular. That does no service for the people who need our help—whether they be deprived individuals in deprived communities or businesses that need a thriving local economy and investment in skills and infrastructure. The prospect is indeed gloomy. It is not too late to begin to reverse it and, in particular, to redress the grotesque inequalities perpetrated by this Government in their distribution of cuts. We are living in difficult times obviously, but the burden should not be borne by those who are least able to bear it. That has been the hallmark of the Government’s approach to funding local government in the past five years, and it is high time for a change.

3.39 pm

Lord Tope (LD): My Lords, it is courtesy in your Lordships’ House to say what a pleasure it is to follow the previous speaker. I have heard pretty well all the speeches that the noble Lord has made on the local government finance settlement for at least the last 25 years. I hope your Lordships will understand that my pleasure in following him has been just a little diminished over that time, perhaps matched by the predictability of what he says each time—which, I am bound to say, is not that different, regardless of who is in government.

I have one particular point of agreement with the noble Lord, which is in regard to his comments on whole-place, total-place or community budgeting or—as he rightly says—whatever the current title happens to be. It was introduced by the last Government as total-place and fairly enthusiastically embraced by my coalition Government, albeit with a change of name to community budgeting—but I share his disappointment at the very considerable lack of progress at a time when it is actually needed even more than it was when it was first

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introduced. That is down to a lack of leadership—local, perhaps, but most certainly national and at departmental level. I hope that the Minister will be able to comment on that.

It will be my pleasure to hear today’s two maiden speeches: one from the right reverend Prelate, who I could possibly describe as my local bishop, and the other from my noble friend Lady Pinnock who is also a very long-time local government friend of mine. We all look forward to that. I declare my interests as a vice-president of the Local Government Association and as a signed-up member of the local government party for a very long time. I thank the LGA, which has gone to great lengths with its excellent briefings that will, I am sure, inform the debate. However, I am one of only two London local government Peers speaking in this debate; the other is the noble Lord, Lord True. I acknowledge that the Minister has a distinguished record in London local government, but I felt that he might feel a little inhibited in replying to the debate solely on behalf of London.

In the three minutes remaining to me, I will concentrate on the six points that the London councils have raised, which are probably shared across local government to a greater or lesser extent and with different emphasis. The first is the question of local welfare assistance and the funding for it, to which the noble Lord, Lord Beecham, referred. We strongly support the wish that this should be additional funding, not included—as it is—in the settlement. The Liberal Democrat Communities and Local Government Committee, which I co-chair, has actually written in response to the consultation to that effect.

London Councils calls attention to the lack of transparency in the proposals and calls on the Government to publish a full breakdown of the local government resource departmental expenditure limits alongside the settlement. We are all used to year after year of completely different figures coming from the department and from local government. Frankly, it does not matter who is in government: there is always that difference and it is almost impossible to match the two. Is it really beyond the wit of government and local government to agree on the figures, even if they do not agree on the outcome?

My next point refers to the revenue spending power calculation. I am a little surprised that the noble Lord, Lord Beecham, made so much reference to it because it is, frankly, largely discredited within local government. It certainly means different things to different people in different places. So, again, the call from London Councils is that, if we are to continue to use that reference, local government and central government should try and get together with a shared definition of what “spending power” means.

Business rates, and the business rates retention scheme, are important issues in London and indeed everywhere. We welcome the return of some of that rate to local government. I believe that it was the intention, certainly in the Department for Communities and Local Government, that that share and proportion should increase over years, and I hope that the Minister will be able to tell us how that increase is happening and what the current Government, at least, envisage will

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be the future for the return of the business rate to local government in greater and greater proportions until we reach 100%. I would also add the return to local government of the power to actually determine the business rate.

Lastly, but possibly most importantly, is what London Councils calls the disproportionate impact of spending cuts on London local government. By 2020, this looks like being no less than 70%—the impact of which is considerable. We are to discuss the future of local government: I hope that much of this debate will actually be about the future of local government. Unless there is a very radical change in the relationship between local and central government, with more power, responsibility and power to raise funding devolved to local government, I do not think that local government, in any meaningful sense, has a future.

3.44 pm

The Lord Bishop of Portsmouth: My Lords, I welcome this debate on the implications and challenges of the local government settlement. On these Benches, and indeed in the whole House, we look forward to the maiden speeches of the noble Baroness, Lady Pinnock, and of my colleague and friend, the right reverend Prelate the Bishop of Southwark. I look forward to that for many reasons, not least that he was a senior curate in the diocese that I now serve. He is the most recent in this House of a long line of able clergy nurtured and grown in the Diocese of Portsmouth.

I will focus on local welfare provision, which is a vital service to people in crisis, many of whom are very vulnerable. A single mother in Portsmouth, escaping domestic violence, lived for a while in overcrowded conditions with her mother. She successfully applied for her own accommodation but it was unfurnished, so she and her children shared a sofa-bed and lived on sandwiches and takeaways. The local council, through the Government’s allocation for local welfare provision, awarded her money for beds, a cooker and a fridge freezer. That sort of situation is repeated many times in my see city of Portsmouth and in other places. A modest award of a few hundred pounds provides the essentials for the decent nourishment and reasonable comfort of a mother and children.

I want to place on record my relief that the settlement announced in mid-December includes notional provision for the continuation of local welfare provision. I express both relief and gratitude but there are two caveats—two disappointments. First, the allocated amount of £129.6 million is substantially lower than in the past two settlements. Secondly, there is no obligation on councils to use the funding for that purpose; even the reduced allocation is not ring-fenced. It is possible to make a strong case for every item of local authority expenditure. However, this emergency local welfare provision surely should be an exceptional case. First, this is emergency help to very vulnerable people in crisis situations. Secondly, we are all aware that the tightening impact of welfare reform on mainstream benefits has increased the need for, and importance of, an effective safety net. Thirdly, the heavily reduced allocations for local welfare provision since 2010-11 means that in my city of Portsmouth, for instance, the amount spent since then has declined from £900,000

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to £440,000, just over half. My anxiety is less about that particular decline and more about the considerable variation in local authority practice around the country.

Only ring-fenced allocations will commit the welcome, although reduced, resources to guarantee this crisis provision continuing. A relatively small amount of non-discretionary funding would not significantly restrict the local government autonomy which many of us seek to preserve. Alongside the moral case is an economic rationale. Portsmouth City Council’s review of the provision concluded that this modest expenditure saved substantial costs elsewhere. The loss of the provision increases demand for mental health services, for children’s social care, for temporary accommodation provision and debt advice. Preventing a tenancy breakdown, for instance, saves the authority nearly £7,000 per eviction.

On moral, economic and practical grounds, I make a modest request about a small but significant matter in this settlement and invite the Government, if they cannot maintain the level of local welfare allocation, at least to ring-fence it and ensure that those in crisis need are helped.

3.50 pm

Lord True (Con): My Lords, I declare an interest as leader of a London borough. I thank the noble Lord, Lord Beecham, for initiating this debate and I, too, very much look forward to the maiden speeches that we will hear.

During this short debate, Britain will borrow over £25 million more. To say that the public sector must go on making savings should be blindingly obvious and, amid the many strictures that we heard from the noble Lord opposite, I heard no promise from that Front Bench to reverse the downward squeeze on spending. Doubtless the noble Lord, Lord McKenzie of Luton, will correct me if I am wrong by laying out Labour’s plans to increase local government spending.

Gaps cannot be filled by new taxes, such as the vindictive homes tax that Mr Miliband seems to have picked up off the back of a rather tatty old lorry that has been abandoned by his penfriend, Dr Vince Cable. I agree with the noble Lord, Lord Mandelson: it is unreasonable to ask Londoners to pay ever more on the nominal value of homes, many of them heavily mortgaged. The average terraced house in Richmond costs £944,000 and the average semi costs £1.2 million. Already, people buying these homes face higher levels of stamp duty set on property over £937,000 in the Chancellor's otherwise very welcome stamp duty reform. These are not super-rich people; they are average people who have often made more than average sacrifices. I submit that they cannot bear more.

My right honourable friend Mr Osborne has done a fine job in handling the economy. He is also to be thanked for supporting the freezing of council tax, which is of enormous value to millions of families. Richmond has frozen council tax since 2010 and we intend to freeze again this year. That reflects greater efficiency, but the Government have made a sustained contribution in freeze grant and deserve recognition.

That is the background to tough but necessary decisions in this settlement. Yes, there is a hard squeeze on, but even in the Newcastle of the noble Lord, Lord

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Beecham, the online budget report tells me that it plans to spend another £5 million next year on buying new council vehicles and a further £5 million on upgrading IT. It is not enough to peddle on the doorsteps that, “It’s all the fault of Mr Pickles”. We all have to face hard challenges, and all local authority leaders have. We have to do even more to assess priorities—the right reverend Prelate set down important challenges—to pool costs and to share services with others. We must do that.

However, I believe in the fundamental value of local choice. Local government deserves more respect than it is sometimes given. If other parts of the public sector had been as good at cutting costs as councils, we would be far better off. Frankly, in my submission, a team of good local government finance directors, paid far less than top NHS bosses, could cut a swathe through the waste and inefficiency that is protected in the NHS while fully safeguarding services. The Secretary of State loves having a pop at local authority chief executives. I do not actually think that helps very much, but I hope that further thought will be given to the details of the new plan to cap public sector redundancies. It will not help with the major restructuring at the top that will often be needed. I hope that can be reconsidered.

I conclude with three requests. The first is about spending power. Richmond is given what is described as a 1.7% increase but, as others have said, this is nonsense because it includes pre-existing health money that is not available for councils to use, and the spending power measure ought to be quietly dropped. Our real reduction in grant and business rates is nearly 7%. Secondly, can local authorities have the power to set planning fees, albeit on a cost-recovery basis only? Currently my taxpayers subsidise developers to the tune of £1 million per year, or 1% on council tax. I wish that that could be looked at.

Thirdly, I point to an emerging problem in education that already affects us, but will affect others. Our DSG grant does not meet the needs of special needs pupils, and we will overspend by more than £1 million. We have England’s best primary school results. Given that, it was surprising for my chief executive and director of education to be summoned by a DfE Minister, Mr Laws, to be told that he was concerned about Richmond’s performance. I would like my Ministers to have better things to do. I urge my noble friends in the Department for Education and Skills to consider a more flexible and responsive method of calculating the DSG high-needs block, including an element of pupil-led funding.

These requests show that we will all have practical issues to raise within the funding formulae. However, it is an inescapable reality that savings must continue to be made. The Government are right, and we must act accordingly.

3.56 pm

Baroness Armstrong of Hill Top (Lab): My Lords, it is a great pleasure to join in this debate. I congratulate my noble and very good friend Lord Beecham, who is from a neighbouring authority. When my noble friend was leader of the old AMA, and then of the new LGA, I was Local Government Minister during the first Labour term from 1997. We did not always agree, but we always had a good relationship. His absolute passion for local

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government is well known and acknowledged in this House. It is significant that so many Members of this House have kept that commitment to local government, and in that light I really look forward to the maiden speeches that will follow shortly.

As I say, I was Local Government Minister for four years, so I know about formulas and how they are tweaked. I know the sort of information that Ministers get, making clear the potential for fundraising in each area, what one tweak will do to that and all the rest. My father, who was also involved in local government in the old Department of the Environment, used to say that only three people in the country understand this formula and they all disagree. There is a lot in that too.

Essentially, this is about the fact that in this country too much money is held at the centre. Some of that has historically been for quite good reasons, or for reasons that we have always defended but actually need to have the bravery to think about. The reason why so much has been controlled centrally is that the Government have priorities. They want to make sure that those priorities are reflected, and they are committed to sharing money out around the country in order to ensure that those priorities are met. That makes the main issue how the money is divided up to get fairness. Fairness has to reflect need, and I suggest that that is the problem we are discussing today. How do you achieve such fairness with what will be a reducing amount of money?

I want briefly to talk about the authority I live in and where I served on the county council for a brief period, shortly before I became one of its Members of Parliament: Durham, which is now a large unitary authority. Since 2011, Durham has seen its money from central government reduce by £137 million, which is not easy to deal with. By 2018-19, the Red Book states that the reduction will be £250 million, which is not an insignificant amount. The area is hugely rural, with the lowest rate of car ownership in the country, some of the highest unemployment rates and, of course, one of the largest ageing populations because many young people go elsewhere. The welfare assistance that the right reverend Prelate the Bishop of Portsmouth talked about is due to be reduced in Durham by £1.9 million by the end of March this year. Actually, none of us can find it in the allocation; we have been told that it is there but no one can find it, including the chief finance officer.

I simply challenge how the Government acknowledge need and how an authority like Durham can see such large reductions whereas counties like Surrey, with nothing like the level of need experienced in Durham, have seen such a large increase in the money that they are getting. We all have different views of fairness but I do not know of any external commentator who is saying that the Government have put in place a system of fair distribution. It means that inequalities will increase and, as we discussed in the House yesterday, consequences will arise from that, particularly in different parts of the country.

What about the future? I am clear that we need much more devolution, but it must recognise need. We need much more public service reform but that, too, has to be done on the basis of being fair in the end. In the town where I live at the foot of the north Pennines,

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which has a population of around 12,000 people, we have just lost our only supermarket and, as a result, the post office and the petrol station. I do not believe that anyone living in a town of that size in the south would be able to say that. This is what unfairness brings, and the Government have a responsibility to pay heed.

4.02 pm

Baroness Pinnock (LD) (Maiden Speech): My Lords, I am fortunate indeed to have been given the great privilege and wonderful opportunity of joining your Lordships’ House. Over the past few weeks, I have been listening and observing in this historic Chamber, and I am left wondering how my background and experience can add to the wealth of knowledge here.

Some 30 years ago, with a young family and a career in teaching, I was motivated to become involved in saving our local school from closure. The success of this campaign gave me a taste for being where the action is. After 28 years’ continuous service to my town of Cleckheaton in West Yorkshire as its elected councillor, I can still say that being able to serve the community where I live is a role I love.

My supporters, my noble friends Lord Shutt of Greetland and Lady Bakewell of Hardington Mandeville, have likewise devoted many years of distinguished service to their local communities and local democracy. I thank them for their patient help and support while I make many errors in your Lordships’ House.

When I first entered your Lordships’ House, I was overwhelmed by the grandeur of the buildings and the ease with which I got lost. I had nothing to fear as the doorkeepers, attendants and indeed all members of staff in all parts of the House have been unstinting in their time in helping me learn both my way around the House and the protocols. I thank them for that.

Kirklees Council, of which I was leader for six years, serves over 400,000 people in West Yorkshire, with the Victorian woollen towns of Huddersfield and Dewsbury at its heart, but including my own town of Cleckheaton as well as large rural areas best illustrated as the setting for the television series, “Last of the Summer Wine”. Noble Lords may remember that it was a sitcom about a group of elderly rabble-rousers, including a man called Clegg—something with which I am sure many on these Benches can empathise.

The finances of local councils have been complained about in each of those 28 years, and this year is no different. I can tell noble Lords about the impact on services for local people in Kirklees—for let us not make the mistake of presuming that reductions in funding of this severity will not have an impact on services provided.

One thing I learnt early on as a councillor is that it is virtually impossible to compare funding year on year, simply because of the changes that take place to different elements of the central government grant. The better care fund, the transfer of the public health function and the transfer of the council tax benefit scheme have added around £75 million to Kirklees’s finances—with, of course, the greater responsibilities that go with that. On a national scale, these significant transfers mask what has happened to funding via the revenue support grant.

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In Kirklees, a total of £152 million of spending on services is being taken out of the budget between 2011 and 2018. Obviously, with schools’ budgets being ring-fenced, and my council rightly protecting as far as possible services to vulnerable adults and children, the cuts fall heavily on the other services on which people rely. The current Kirklees proposals to meet this budget deficit include a 15% reduction in spending on services for vulnerable adults; and, despite rising numbers, as a third of the council's controllable budget is spent on vulnerable adults, this expenditure has also inevitably had to be reduced.

Another proposal is to reduce the number of fully funded libraries from 26 to two, and to reduce spending on parks and open spaces by 30%, with the result that some recreation areas will not have their grass cut at all. Road maintenance has already been reduced by 15%, with the inevitable consequences for road users. Sponsorship of concerts and music education is being removed altogether. So local government in Kirklees is facing challenging times. This is confirmed by a report by the National Audit Office on the financial sustainability of local authorities, which states that local government’s spending power has been reduced by 25% over the life of this Parliament.

Our democratic reaction to this immense change could be hand-wringing. That may be satisfying but it will not get us very far. Those of us committed to providing essential services must think outside the box. As my noble friend Lord Tope said, one thing we need to do is seriously loosen the ties with central government, find new ways to raise local finances, and challenge central government to devolve responsibility for services such as Jobcentre Plus and community health services. If those measures are combined with greater accountability, our councils may—just—be able to survive the current financial desert and start to bring new vitality and involvement in local democracy once more.

4.09 pm

Lord Whitty (Lab): My Lords, I very much welcome the noble Baroness to this House. Everybody in the House will appreciate her speech, her passion for local government and for her local community and the problems that are faced there. In her speech she combined a lightness of touch with very serious content. The House will appreciate that and the other contributions she will make. Of course, she is from Kirklees, which used to regard itself as the greenest council in the country. I had the privilege of serving on the board of the Environment Agency with two former leaders of that council—one Labour, Sir John Harman, and one Tory, Robert Light. Now the noble Baroness is joining me, I have the full Kirklees set. I think her presence will be appreciated by the whole House.

My positioning between two maiden speeches does not in practice mean that I need to be non-controversial. Indeed, that is the end of my consensual stuff. Like my noble friend Lord Beecham, I am profoundly despondent about the prospects for local government as a result of the strategy being pursued by George Osborne and Eric Pickles. Their strategy seems to show—not just in this year’s settlement but in what they have done

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already and what they intend for the next five years—that they intend to ensure that the bulk of the cuts in public expenditure and a disproportionate amount of the costs of austerity will fall on local authorities and thence in practice on those who depend on their services. Within the diminishing total central support for local government, there is a deplorable—and, I would say, systematic—favouring of better-off areas over more deprived areas. If the Government, whoever they are after the next election, blindly stick to this strategy for another five years, contrary to all the talk about localism and devolution, we will have to adapt to a much diminished role of local authorities in our national life. That would be extremely unfortunate.

My noble friend Lord Beecham has spelt out what this year’s cuts actually mean. I agree with the noble Lord, Lord Tope, that the definition needs pinning down, but the Local Government Association’s view is that a 1.8% cut actually amounts to an 11.8% cut in things that the local authorities themselves can control. Whatever the precise statistics, it is clear from next year’s figures that there will be very substantial cuts in services—in schools, police, fire and, as the right reverend Prelate said, local welfare assistance. Spending on public health is being frozen and, in housing, the top-slicing of the new homes bonus effectively means that there is a cost to urban authorities to benefit the shires. If we look at the long-term effect of cuts in support over the past five years, by the end of next year there will have been a 40% cut since the Government came to power, and that is intended to continue. That contrasts with slightly over a 1% cut of total government expenditure. It is therefore clear that the pain is concentrated on English local authorities and the poorer element within them.

The distribution of the cuts can be seen as a north/south divide but that is only one part of the equation; it is also true within each category of local authority. In London, Hackney has a cut of £200 per head; in Richmond the noble Lord, Lord True, has done rather well with an increase of £37 per head. Among the urban districts, Barrow has a cut of 6.4% and Cambridge has an increase of 2.2%. Among the rural districts, West Somerset has a cut of 5.9% and Horsham an increase of 2.9%. Even among shire counties, which are by and large favoured, Northumberland has a cut of 1.7% and Surrey an increase of 3.1%. That is a shift by anybody’s definition—this embedded regression and a systematic transfer from the poorer to the richer areas.

The right reverend Prelate who is about to give the next maiden speech is the Bishop for an area I lived in for most of my life. Although I no longer live in Southwark, I am still Lord Whitty of Camberwell, so I hope he might be able to elucidate for me what was always a puzzling piece of scripture:

“For he that hath, to him shall be given: and he that hath not, from him shall be taken even that which he hath”.

That does seem to be Eric Pickles’s approach to local government finance.

If we continue to go down this road, we will be in very serious difficulty. The role of local authorities in our society will inevitably diminish. We need a constructive new Government who will engage in encouraging co-operation between local authorities, in city deals or whatever, allow local authorities to raise their own taxes

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in many respects, end ring fencing and predetermining expenditure, allow local authorities to borrow in housing and infrastructure and accept that there will be differences in priorities and outcomes between authorities. We need to give local authorities power, which is at present tightly restrained by Whitehall. The next Government, in contradistinction to this, need to create a properly financed and truly decentralised state.

4.15 pm

The Lord Bishop of Southwark (Maiden Speech): My Lords, I address your Lordships’ House on this first occasion with some trepidation. As I was advised not to drift into preaching mode, I will resist the temptation to expound on the interesting passage from scripture that the noble Lord has just quoted.

As a student of history, I am conscious of the dignity and importance of this House in the life of our nation, and I am acutely aware of the privilege of sharing in your Lordships’ deliberations. Throughout my life I have been inspired by the model of service found in the life of Jesus Christ, and I am humbled when I reflect on where that service has led me—not least, now, to your Lordships’ House. I will seek to serve to the best of my ability, using the gifts that God has given me.

I am most grateful for the welcome I have received from noble Lords, not least in the course of this debate, and in particular for the kindness of the members of staff who have helped me by way of induction, as well as assisting me in navigating the labyrinthine corridors of the Palace. One phrase that I have often been glad to hear is, “Head towards the river”—not, I trust, because there is any hope that the new prelate might jump in. Rather, I take great consolation that, whenever noble Lords take their libations on the terrace, they gaze across the river and into the diocese that I have the joy of serving as bishop.

The diocese of Southwark, with the notable exception of the home of the most Reverend Primate the Archbishop of Canterbury, comprises all that part of London to the south of the river, from Kingston upon Thames and Richmond in the west through central London to well beyond the Thames Barrier at Woolwich. The fast-flowing northern boundary of the diocese is rich with the history of this great city. The diocese is of course more than that, extending down through Croydon into east Surrey, well beyond the M25.

It is a diocese of some 317 square miles, with some 2.7 million people served by nearly 300 parishes and some 700 clergy and 450 lay ministers. Many thousands of young people are educated in more than 100 church schools. Our parish churches reflect the huge diversity of the capital as they are enlivened by Christian witness from every part of the world. Our communities include some of the richest in London and some of the poorest, and range from the inner city to the rural. It is a world in a diocese with all the challenges and opportunities that arise in very diverse communities. I believe that our city is greatly enriched by the diversity that immigration brings, and I look forward to playing a part in debates on such issues. The diocese is further enriched by its companion links with the church in Zimbabwe, in which I also take a strong interest, as well as in the affairs of the Holy Land and the church in Syria.

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There are 16 local authorities and London boroughs in the diocese, which will see cuts of up to 15.5% in their funding as a result of the settlement that we are debating. This is in common with much of the rest of the country, and I note this with much regret. It is increasingly difficult to see how these cuts can be made effectively, given the huge savings that have already been visited upon local services.

I am acutely aware of the experience of a charity that is important to the life of my diocese and of which I have the honour of being president. Welcare, founded some 120 years ago by Edith Davidson and her husband Randall, who went on to become Archbishop of Canterbury, has always sought to work in partnership with churches, community groups and other voluntary agencies to support families and young people who are at risk. Welcare receives ongoing funding support from a variety of sources, including the diocese and many of our parishes. Since 2011, though, it has seen income from local authorities fall from £1.5 million to £500,000 and, as a consequence, much excellent work and the expertise of trained workers has disappeared, putting great pressure on a falling number of willing volunteers. This has meant that over the same period the number of families that the charity has been able to support has fallen from 5,400 to 1,050. By any reckoning this is a matter of grave concern, particularly as there is no evidence to suggest that the need is decreasing.

Indeed, the charity heard only yesterday that one local authority would continue to fund a service for a further year but without any increase in funding. So Welcare is expected to deliver the service at the same level of funding as was first awarded four years ago. This means absorbing all increases in costs, which amounts to providing a subsidy for the local authority. This is a common story in the voluntary sector, which continues to address very real need. The remarkable resources of voluntary endeavour are finite and it is morally wrong to push them to breaking point.

My concern is that, as yet, we do not pay enough attention to the very human needs that lie behind our financial decisions. In strategic terms, it would be better to continue to encourage early intervention and preventative work rather than storing up problems further down the road. That makes fiscal sense to me. However, far more importantly, it attends to another imperative that at times it is easy to lose sight of in financial discussions: namely, that of ensuring human flourishing.

4.21 pm

Baroness Donaghy (Lab): My Lords, it is a pleasure to follow the right reverend Prelate the Bishop of Southwark in this debate. If he is half as relieved as I was when I completed my maiden speech, I know something of his feelings at the moment.

The right reverend Prelate was an assistant curate at Sandhurst and, as has been said by the right reverend Prelate the Bishop of Portsmouth, a senior curate in the Diocese of Portsmouth in his early career. With his having covered the Army and the Navy, I wonder when the Air Force will benefit from his talent.

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The right reverend Prelate’s interests, which he has already outlined, include urban affairs, and that was very clear from his contribution. He is very active in promoting retreats and pilgrimages, as well as in chairing the Zimbabwe round table and pursuing deaf/hearing integration. He is a man of many parts indeed. As a resident of the Borough of Southwark for the past 35 years, I thank the right reverend Prelate for his contribution. I am sure that the House looks forward to his thoughtful and moving contributions in the future.

I believe that this is the fourth occasion on which I have taken part in a local government finance debate, and I thank my noble friend Lord Beecham for making it happen. Looking around, I see that the usual suspects are in the Chamber today, plus one or two distinguished additions. It feels like being a prisoner in a gulag where we are hunched up against the cold and then, once a year, we lift our heads out of our mufflers to acknowledge each other and renew our dedication to the cause of local government. It is a chilly environment indeed.

One could summarise the present situation by saying that it is the same as in the previous four years, only worse—a redistribution of wealth from the poorest to the better off. It is disproportionate compared with other public service cuts. It is done in the name of deficit reduction, yet the deficit is not reducing. It was first announced in June 2010 that the Government’s deficit reduction programme would be for six years; now it appears that we are only half way through a nine-year programme of austerity. Does that mean that the sacrifice of local government, amounting to a 37% reduction by 2015-16, was really in vain?

Reductions in services to the vulnerable elderly and children, increased bills for the working poor and a general diminution in the quality of the environment and the arts do not make headlines. Reductions in the numbers of police, firefighters and local government officers do not make front-page news either, unless something goes wrong. The cuts in social care and the closure of residential homes have a direct impact on the National Health Service, which does make the national news. The NHS is under attack from some in the press, when much of the problem can be laid at the door of the social care crisis.

Noble Lords will be aware that the Children’s Society, among others, campaigned to retain DWP funding for local welfare provision. That has already been comprehensively covered by my noble friend Lord Beecham and the right reverend Prelate the Bishop of Portsmouth, so I will not go into detail as I had intended except to underscore that the local welfare assistance schemes cover the most vulnerable in our society: families under exceptional pressure, people with disabilities, lone parents, young people and victims of domestic violence. How is real need to be met, given the funding gap that is forecast to increase at an average rate of £2.1 billion per year until 2019-20, when it will reach £12.4 billion?

I turn to council tax. The reduction in government funding will leave councils facing unpalatable choices to increase council tax bills for some or all, and to further reduce other council budgets. The Parliamentary

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Under-Secretary of State for Communities and Local Government, Kris Hopkins, said in his Statement on local government,

“Councils facing the highest demand for services continue to receive substantially more funding”.—[Official Report, Commons, 18/12/14; col. 1590.]

The position on the ground is the exact opposite, and the cumulative impact of the reductions will be felt for a generation.

4.27 pm

Baroness Eaton (Con): My Lords, as a former leader of Bradford Council and a serving member of that authority, a former chairman of the LGA and a current LGA vice-president, I am particularly pleased to have had the privilege of hearing two excellent maiden speeches from the noble Baroness, Lady Pinnock, and the right reverend Prelate the Bishop of Southwark. I am also pleased to have the opportunity to speak in this debate.

As we all know, the noble Lord, Lord Beecham, is a serving councillor, a former leader of Newcastle City Council and a former chairman of the LGA so, despite our political differences, we have much in common. He is someone I respect and whose opinions I always listen to carefully. That said, I am afraid that he, along with so many of his colleagues in the Labour Party, appears to have a highly selective view of the spending reductions that the current Government have had to make. Let us be clear: if Labour had been re-elected in May 2010, there would also have been many reductions in government expenditure that would inevitably have impacted on local government. We know this because the previous Chancellor of the Exchequer, Alistair Darling, said quite clearly before the general election that that was the position. Nor should we forget the letter from Liam Byrne, the then Chief Secretary to the Treasury, who admitted that after 13 years of Labour Government there was “no money left”.

So local government was always going to be faced with significant financial challenges regardless of who was elected in May 2010. Councils have seen reductions in their grant from central government. However, in response, they have risen to the challenge positively by forming partnerships with other local authorities to reduce backroom costs and by securing efficiencies through new ways of working. A common theme of such initiatives is that they can often improve services for residents while simultaneously reducing costs. For example, South Holland District Council now works in partnership with neighbouring East Lindsey District Council to share services in relation to finance, IT, benefits and revenues and human resources. That has been delivered through a joint company that has secured savings of more than £1 million a year and is now attracting work from other councils. South Holland also shares a chief executive with Breckland council, which is creating significant annual savings for both councils.

In recent years, councils have also demonstrated their ability to work with other public sector partners to reduce the cost of services. Along with the noble Lords, Lord Tope and Lord Beecham, I am a great fan of community budgets. Research from Ernst & Young,

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following the successful pilots, shows that rolling out community budgets nationally could save up to £20 billion in five years. Meanwhile, the Troubled Families programme has helped to turn around the lives of more than 40,000 families, resulting in better outcomes for the individuals concerned and securing major savings for the taxpayer.

In the London borough of Wandsworth, more than two-thirds of troubled families that the borough has been focusing on have successfully turned their lives around within a year. Each of those families represents a potential saving to the taxpayer of £29,000 per year due to a reduction in crime and antisocial behaviour, the number of children taken into care, visits to accident and emergency and intervention from the police and courts, and increased employment.

It is also interesting to note that independent research indicates that the public perception of council services is very different from the doom and gloom rhetoric that we are used to hearing from the Labour Party. Ipsos MORI said last year that two-thirds of local residents consider that council budget reductions had not made a noticeable difference to services.

Of course, none of that is to deny that local government continues to face a challenging financial situation; clearly, like the rest of the public sector, it does. In particular, we need to ensure that as we are all living longer, adult social care is properly funded. For that reason, I particularly welcome the introduction of the better care fund, a £3.4 billion programme to ensure radical transformation in integrated health and social care. It is one of the most ambitious programmes ever across the National Health Service and local government, and will deliver improved services for some of our most vulnerable people.

No one would pretend that the past five years have not been difficult for local government. However, councillors and council staff have risen to the challenge and, through their hard work and willingness to embrace new ways of working, local government has adapted to changing circumstances.

4.32 pm

Lord Liddle (Lab): My Lords, I declare an interest as a member of Cumbria County Council and congratulate the right reverend Prelate the Bishop of Southwark on his moving maiden speech, and Councillor Pinnock—the noble Baroness, Lady Pinnock—on her excellent maiden speech.

I also particularly congratulate my noble friend Lord Beecham on what I thought was a fine and passionate speech. I realise that all Members will not agree with it, but we have to take into account that here we have a Member with 47 years’ experience of local government. I have only 11 and a half years on three different authorities in my time; 47 years can rarely have been matched, particularly in the House of Lords.

The essence of what my noble friend said addresses two really tough questions to the noble Lord, Lord Ahmad of Wimbledon. I fully accept the argument of the noble Baroness, Lady Eaton, that there would have been severe cuts under a Labour Government. The first question is: do the Government believe that their distribution of grants is fair, how do they justify it and

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how do they avoid the charge of partisanship in the way in which better-off authorities, particularly in the south of England, have been treated? Secondly, instead of scoring cheap points designed to mislead the public about the scale of the local government financial challenge, will the Minister promise to work with local authorities to find ways of protecting essential services at a very difficult time? I will make a particular suggestion in relation to Cumbria.

The situation we face in Cumbria is of forecasting that in the six years starting from 2012-13, all of what was £148 million of revenue support grant will have gone. In total, we have to find £213 million of savings—more than 30% of our budget. We have found £130 million of those already and we have £83 million to go. We think that we have found how to find £53 million of those but there is a black hole of £30 million, which represents a serious threat to essential services in the county. We have been efficient, as the noble Lord, Lord True, said. At its peak, Cumbria County Council had more than 10,000 staff. It now has only 6,800 and there will be another 1,800 redundancies in the next three years, come what may.

However, I had a case in Wigton, which is in my ward on Cumbria County Council, in the last few weeks of an elderly lady who has been looking after her Down’s syndrome son for getting on for 50 years. She can no longer cope. He has dementia and needs to go into a home. There is great difficulty in finding a suitable placement which the authorities can afford. If we cannot do that, we have no right to say that we are a civilised society. We have to find the money for that kind of social help.

In Cumbria, we on the county council think that we could save a huge amount of money if we became a unitary authority. In Cumbria at present, there is a county council, six districts and a national park. There are eight chief executives, eight finance officers and 350 or so councillors to serve a population of half a million people. On top of that, there is an absurd muddle of powers between the different levels. We estimate that £25 million of the £30 million black hole that we need to fill can be saved by creating a unitary authority, but this consensus is extremely difficult to arrive at. It needs a very strong lead from a Government who are prepared to work with authorities rather than rubbish them at every turn. I hope that the Minister will take away from this debate the need not to start a lot of partisan blaming of people for cuts but to start thinking about how the Government can make a real contribution to working with authorities to address the desperate situation in which they find themselves.

4.38 pm

Baroness Janke (LD): My Lords, I very much welcome this debate and thank the noble Lord, Lord Beecham, for initiating it. I also add my congratulations to my noble friend Lady Pinnock and the right reverend Prelate the Bishop of Southwark on their excellent and interesting maiden speeches. My own was very recent so I empathise with how they must feel at this moment, as has been said.

As we have heard, local government funding has been cut dramatically—by 40% by the end of 2015. After several years of cutbacks, the viability of some

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councils is now becoming a major concern. As a member of the LGA resources board and a serving councillor, I know that local government is seeking solutions to this very hard problem of financing local expenditure, both capital and revenue. With an ever-shrinking cake, we need to find other ways to fund the vital services that people rely on, or recognise that many of those services will disappear. There is great anxiety about care of the elderly, support for vulnerable people, respite care—they are fundamental to many people’s lives. Cuts to community services such as libraries, sports facilities and public health promotion programmes all hit the poorest people hard.

The UK, however, has one of the most centralised systems of government. Just 17% of local expenditure is raised locally in the UK, whereas the OECD average is 54%. Over the past 20 years, in my time in local government, I have been aware of an enormous amount of work which shows clear evidence that cities and city regions can generate economic growth and increase income in local economies. The core cities, the Centre for Cities and the City Growth Commission have produced a range of publications, research reports and recommendations which show that decisions about transport, housing, skills and employment—key economic drivers of local economies—are best taken at local level.

The most recent report from the Centre for Cities shows the potential of cities—not just the largest ones—to deliver economic growth and prosperity within their areas. I hear people asking, “What about areas outside cities?”. The Peace commission shows how non-metropolitan areas can, if given the powers, lead growth, expanding investment and employment in their own areas. The City Growth Commission report of last year describes how an evolving programme could devolve decision-making and financial powers to more strategic local government bodies, whether city regions, county regions or metro areas—all at a pace that suits them.

The evidence is clear that national economic performance could be boosted if all the areas of the UK were to achieve their potential, but that requires commitment from central government to accelerate the pace of devolution to local areas; by “devolution” I mean the devolution of powers, decision-making and financial flexibility, not decentralisation, which I see as much more of an administrative concept. Cities and counties are being prevented from regenerating the local economy by tight bureaucratic control of finances and unsuccessful remote management of key factors that affect economic performance.

It is time to recognise that local government in England needs to be set free from shrinking and conditional grants from central government and competitive bids that increase bureaucracy and are costly and time consuming to produce. When I was leader of my own city I found that my twin cities, especially Bordeaux, were astonished by the time it takes to achieve transport systems in English cities. They conceived of, built and were using their own tram in a fraction of the time it took Bristol to be told that it would not get one.

People in my city ask me why cities in this country are not free to invest in the transport system that suits their needs rather than standing in the queue at the

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DfT behind other cities and authorities, waiting their turn, when they could invest in the long term and raise revenue to support their investment as do other European and world cities. In the light of devolution of powers and decision-making in Scotland and Wales, there is now an opportunity for government to recognise the potential that devolution could bring and invite proposals that would attract financial freedoms as regards long-term investment and revenue-raising powers.

Local services are effectively in crisis, which is affecting other areas of public finance. There is ample evidence that devolution of financial powers and decision-making to the local level would enable councils to become increasingly self-sustaining as a result of improved economic performance. It is right that devolution of powers to Scotland and Wales is now becoming a reality. It is only fair that the strong local economies of England should not be left out.

4.44 pm

Lord Rooker (Lab): My Lords, I welcome both the maiden speeches and congratulate both Members. I shall base my account of my concerns on the work of Dr Chris Game of Birmingham University, who recently set out, in thechamberlainfiles.com, a master class in local authority funding. What follows is just a summary of that. Dr Game says that the Minister, on 18 December in the other place, claimed that the,

“settlement leaves councils with considerable … spending power. As planned, we have kept the overall reduction to 1.8%”.—[

Official Report

, Commons, 18/12/14; col. 1590.]

He said that the reduction could be 1.6% if additional transformation money was taken into account. But, as Dr Game points out, grant funding and spending power are not the same. Revenue spending includes council tax receipts, certain grants, and NHS social care funds. That gives a fuller picture. But income from fees, charges and investments is not included in spending power.

So in this confusing system—which is designed to confuse—total government funding to local authorities is really down 13.7%. Furthermore, if council tax income is excluded from spending power, since it is a different kind of income from government grant, the reduction is not 1.8% but 3.7%. Then, as others have said, if we remove the NHS portion of the £3.5 billion better care fund, and include in spending power only the £2 billion for social care by local government, the reduction becomes 8.8%—nearly five times the figure that Ministers have used. Chris Game has done anybody who reads that piece a great service.

The situation in Birmingham is unfair. The cut in spending power for Birmingham is 6%—very close to the government maximum of 6.4%. If one checks all the London boroughs, the metropolitan districts and the all-purpose authorities, the only ones with a cut of 6% or more are Hackney, Knowsley and Birmingham. Yet the recent Kerslake report, which I very much support, and am pleased to see is being implemented quickly, pointed out that Birmingham has,

“more poor children than anywhere else in England”.

In terms of multiple deprivation, it is the 13th on the list. Things are so bad that the Government have had to send in both a social services commissioner and an

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education commissioner. It appears that Ministers, on a whim, can choose to define spending power to mean what they say it is, or is not, as in

Alice in Wonderland

. This is not sensible. It is misleading and unfair to Birmingham.

I declare an interest. I have never been a councillor, although I was a failed candidate twice in 1967. None the less, I have had views for 30 years about the way the city should be governed, and I hope the latest attempt to modernise, as set out in the Kerslake report, will work. In the mean time I hope in a few minutes’ time to hear from the noble Lord, Lord Whitby, who, with his Lib Dem partners, was in charge for more than half a decade, until two years ago, why the city is in the parlous state that it is.

Now I shall say a few words about my adopted local authority—although nothing I say about it is meant as a comparison with Birmingham. Some call it Shropshire, but others call it “Greater Shrewsbury”, as it is a council very much centred on Shrewsbury, where all the bosses live. That is how it looks from Ludlow, a handful of miles from the Herefordshire border. I want to deal with only one Shropshire issue. The budget consultation introduction claims Shropshire as a “hub for creative business”, and says that it is,

“accelerating the move of services online”,


“broadband and mobile internet is of equal value”,

and that the council knows,

“we need to do more”.

In October 2012 the head of finance said in an interview that broadband was a problem. And this the most rural county—a great county.

The Prime Minister has said he is not going to overlook rural issues, rural voters or rural concerns. The Chancellor of the Exchequer has claimed that the Government are paying for the expansion of superfast broadband into more and more rural areas. The Secretary of State for Environment, Food and Rural Affairs has tried to spin that all is well with rural broadband. But the reality is that the coalition bosses are ignoring the really rural areas, which need good broadband far more than others to survive. We are creating a two-speed rural economy by not giving priority to rural areas.

Shropshire—or Greater Shrewsbury—Council is absolutely silent on the issue, which I have raised in this House before. Would that I were joined by the county’s MPs. A recent Shropshire Council cabinet paper said that the council would,

“undertake a fresh competitive procurement; with or without match funding”,

as part of phase 2 of the rollout of broadband. No one knows if this means even partial priority for the rural areas of the county. What is more, no one from the county will say, although councillors were questioned at a public meeting in December. It is all a big secret. We have lost too much time already in Shropshire. Businesses and jobs in the “creative hub” of the county are all the losers in this settlement.

4.49 pm

The Lord Bishop of Derby: My Lords, I thank the noble Lord, Lord Beecham, for securing this debate and for his introduction to it. I also thank the noble

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Baroness, Lady Pinnock, and the right reverend Prelate the Bishop of Southwark, who both gave us very specific examples of some of the issues involved in this area.

I want to step back and look at the bigger picture because this debate is about the future of local government. There are some major issues that we need to consider very carefully. The context is, of course, one of cuts and fairness, to which the noble Lord, Lord Beecham, and others referred. However, there is a second context of people’s disengagement from the political process and responsibility for local government. The Minister in the other place talked about the necessity of increasing local democracy. That is part of the bigger picture because one of the issues about the availability of resources is that people want to pay lower taxes. Who is going to have the courage to put their head above the parapet and say that a lot of these services will require higher taxation and more investment? There is a limited interest in the common good, as we would call it. As the welfare state mentality dissolves, the big question is how systems will be encouraged to step into a space and support politics and the funding of it that will deliver all the services that we rightly cherish.

I want to give noble Lords a picture of my work in the city of Derby and ask the Minister two questions about whether there is a new future for local government that we need to build on. I chair the inner city renewal project in Derby, which examines how we spend money in the most deprived areas of the city. All the political parties and all those involved recognise that local government and national government have for years and years put millions of pounds into these very needy areas, providing all the services we are talking about, but to very little effect. That is the challenge in renewing local government. This inner city renewal partnership involves councillors, people who head up the local authority departments, people from the health service, the head of the police operations and people involved in housing, the voluntary sector, the faith sector and community groups. It is hard work to achieve cohesion and connectivity given the different cultures involved. We in the voluntary sector are used to choosing what we are interested in and supporting it, and probably leaving other people to do everything else. Those involved in professional statutory services are used to controlling a budget and controlling the outcomes and there is probably not a lot of opportunity for the community to be genuinely consulted. It is hard work.

Business in our city is interested in contributing to this process but does not know how to do so. We struggle to bring business enterprise to the table, but we are trying. It is vital to find ways to energise people at the grass-roots level from different communities and holding different perspectives to look at the issues in a place—we note the Our Place methodology—be interested in them and want to invest in them. I am not talking just about investing through government grants or local council tax but about the social capital and business contributions that can be raised if people get really involved.

I want to ask the Minister two questions because the Government have a role in creating incentives for adopting this approach to local government and the

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workings of local authorities. First, will the Government give priority to investing in arrangements for local government and the delivery of services that score highly in terms of partnership working with local community enterprise and local business? Will the Government create incentives for local authorities to reinvent the way they deliver services and fund them by having a strong working partnership with community involvement and local business? My second question also relates to the incentives that can be offered to local government. Can the Government give priority to investing in arrangements that are clearly designed to find new ways of creating and deploying social capital and business involvement?

There is an urgent need for these things if local government is to have a future and be able to deliver what it should do: local people recognising and engaging with local issues and using a variety of resources to try to meet them. There is a great danger at the moment of our just going in two different directions: people shouting for services, quality and professionalism, but not feeling engaged with or responsible for their provision. I will be interested in the Minister’s response on that challenge.

4.50 pm

Lord Whitby (Con): My Lords, since the recent Scottish referendum on independence and the ensuing frenzied end game, devolution has become a major political issue and has stimulated an intense debate over how new powers and resources can be devolved to the most relevant, effective and inclusive political structure. I believe passionately—certainly in local government—that we should celebrate cultural diversity and recognise the significance of regional identity embraced within a national state. So I am very relieved and happy that we are still a United Kingdom.

Britain, however, has one of the most centralised systems of government in the world in terms of its relationship between local government and central government. Just 5% of all the taxes raised by our local people in our great cities is under the control of the city council. The remaining 95% goes to the Treasury and comes back through a multitude of funding streams controlled by Whitehall. Research has shown—and it has been alluded to in this debate—that nations that allow more freedom and independence to their cities tend to have better performing cities and a more balanced economy.

Sadly, our cities have underperformed the economic performances of most of our major European cities. It is imperative that we recognise that. I believe that the coalition Government are rectifying this dilemma and meeting the challenge. As a former city leader of the largest local authority in the United Kingdom, and as a vice-president of the LGA, I welcome the debate on the local government finance settlement, the implications of devolved power and the ramifications of direct funding to our cities. The coalition Government have listened and delegated, in an unprecedented manner, power, decision-making and direct funding—especially to the city of Birmingham—in addition to the financial settlement. While the settlement reduces Birmingham’s revenue spending power by 6%, as already mentioned, the revenue spending power per household in Birmingham

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is still £2,461 per dwelling—considerably larger than almost all local authorities. Its gross expenditure is still in the region of £3.2 billion.

The Government have devolved power and funding in a sophisticated and imaginative manner. Birmingham Council and the city are benefiting from a range of new freedoms and funds being made available. My friend the noble Lord, Lord Rooker, asked: what has Birmingham done and how has it benefited? A range of investments outside the financial settlement have allowed us to encourage 19,000 new start-ups in 2014. We are already attracting more FDI investment than any other region outside Birmingham. During the period of my administration, we grew tourism from £29 million to £34 million, generating formidable wealth for local industry and small businesses. We left a city that was proud, pointing outward, attracting Chinese investment, and building a whole range of entities that allowed us to be quoted, by the Mercer survey, as one of the only English cities in the top 100 in the world for quality of life. It was local government doing what it should do—making its city globally relevant but caring for its community.

As someone who has worked with Labour and Conservative-led Governments, I know the evolution of devolution has been, at times, extremely slow. Ultimately, however, the coalition Government’s attitude to local government—in particular, their generosity to the city of Birmingham—has to be measured not simply by the financial settlement but through the devolution of power and the many hundreds of millions of pounds that Birmingham has received through the direct, innovative funding streams that are now acceptable through the coalition Government.

5 pm

Viscount Hanworth (Lab): My Lords, the finances of local government are an opaque matter. The sources of revenue and the categories of expenditure can be represented in various ways that can give widely differing and quite contrary impressions regarding the state of the finances and the severity of the financial restraints faced by local authorities. There is ample scope for bamboozlement by a Government who are intent on conveying the most favourable impression.

On 18 December in the Commons, Kris Hopkins, who is the Under-Secretary of State for Communities and Local Government, asserted that the overall reduction in spending planned for the year 2015-16 was a mere 1.8%. This figure relates to a wide category of expenditures that include various protected budgets, such as the education, police and principal health budget. However, the so-called settlement funding assessment, which excludes ring-fenced grants for education, but which nevertheless includes the ring-fenced new homes bonus and the ring-fenced public health grant, will decrease by 13.9 %. The wholly discretionary spending of local authorities will decrease by an even greater percentage. When matters are looked at in this way, we begin to get a more realistic impression of the stringency of local government finances.

Another aspect of the finances is the restraint that has been imposed on council taxes. Local authorities proposing to raise council tax by more than 2% will

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have to hold a local referendum on such a proposal. The high cost of doing so and the likelihood of a negative response will effectively prevent any authority from seeking the sanction of the local electorate. A recent report from the Local Government Association has indicated that since the abolition of the council tax benefit scheme in 2013 and its replacement by a localised council tax support scheme, there has be a significant increase in the burden of taxation borne by lower-income families, many of whom were previously exempted from the tax. These are the people who are suffering most from the curtailment of the services of local authorities.

A summary of the current state of local government finances has been provided in two documents of the National Audit Office published in November 2014, entitled, Financial Sustainability of Local Authorities, and, Impact of Funding Reductions on Local Authorities.These documents point to an estimated reduction in government funding of local authorities in real terms of a 37% between 2010-11 and 2015-16.

In the most severe cases that concern urban local authorities, there will be a real-terms reduction that is in excess of 40% between those two financial years. The question that one has to ask is: how have the local authorities managed their finances throughout a prolonged period of funding reductions? The answer is that, rather than increasing their locally raised income, which they are now largely disbarred from doing, they have reduced their provision of services and cut back on their staffing costs. At the same time, they have sought to increase the levels of their reserves to guard against financial uncertainties and to prepare for future shortfalls in revenues.

A glib answer that has been offered by the Government is that local authorities have been able to manage their finances by making substantial efficiency savings. “Efficiency savings” is a euphemism that bears some examination. Efficiency savings refer primarily to the financial savings that are made by reducing pay. This is achieved when services that have hitherto been provided by local authorities are outsourced to private contractors. By outsourcing the same services to a succession of suppliers, local authorities have been able to drive down the costs.

There are provisions in law that are intended to prevent the deterioration in wages and conditions when the activities and employees of one supplier are transferred to another. However, these provisions apply for a limited time, and they are easily evaded. This is a spurious concept of efficiency and, indeed, the further immiseration and alienation of low-paid workers must lead directly to inefficiencies in the workplace. There is a limit to how far this process of so-called efficiency saving can go. It is liable, eventually, to bequeath a large proportion of our public services to the surviving private suppliers, who will become monopolists serving multiple local authorities. I will end by saying that I would favour the replacement of council taxes by a local income tax and a graduated property tax, levied on both buyers and sellers at the time of a sale.

5.05 pm

Lord Shipley (LD): My Lords, I extend my own congratulations to my noble friend Lady Pinnock and the right reverend Prelate the Bishop of Southwark

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on their excellent maiden speeches. I declare that I am a vice-president of the Local Government Association.

The very first paragraph in DCLG’s guide to the local government finance settlement in England says:

“Local government finance in England is complicated and can be difficult to understand”.

I think noble Lords would all agree with that, but it is an understatement. It is true, but we now know that the system is unsustainable. The rising pressures on all councils are well documented and it is a tribute to them that they have managed as well as they have. However, it is unlikely that the financial problems facing local government will get much easier, at least in the short term. I hope that they will for those where the cuts have been biggest, but it seems that there will be little extra money for local government overall until at least 2017, whoever wins the election. Labour has now confirmed that it cannot commit to reversing the public sector pay freeze or to scrapping council cuts for the first year after the election.

The reason is that the problem for any Government is stark. The Government are still overspending and are trying to get the annual deficit down. The debt, however, has continued to rise: by over £500 billion in this Parliament. If we protect the NHS, schools, pensions and overseas aid, it follows that everything else has to take a bigger hit. It does not help local government that the general public are broadly content with the performance of their local councils. I suspect that this is because schools and health are protected, many council services are actually minority services and council tax levels have been held down. Given a choice, I think most people would see the NHS as their priority for more spending, not councils.

Despite this, the National Audit Office has said that councils are showing clear signs of financial stress. It also says that DCLG does not gather sufficient evidence to know whether individual councils can or cannot cope with expected cuts in funding. So, in the absence of meaningful data, it is no surprise that opinions can masquerade as fact on all sides, with one side claiming that key services are unsustainable and another claiming that the settlement is fair. For local government, money is at the heart of all of this. There is not enough of it to meet demand and I have come to the conclusion that we would benefit from a clearer link, in the medium term, between the provision of universal local services and the council tax that householders actually pay.

In the short term we need a partnership between central and local government, working jointly with the National Audit Office, to agree a set of baseline facts and approaches. The first of these is how the LGA’s publication Rewiring Public Servicescan be delivered, because it offers very large annual savings through public service reform. The second is whether we should remove adult social care from the annual settlement process for local government and treat it differently, given the specific pressures on it.

Thirdly, we need to identify clearly the impact of rising demand generally on statutory services. We need to assess why councils charge different levels of council tax in broadly similar places for broadly similar outcomes. We need to explain why rural areas get less

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per head from central government yet pay much more in council tax, and we need to assess what the savings would be if two-tier areas moved to unitary status.

Councils are going to have to reduce overheads further and raise more of their own money. But I am puzzled by the slow speed of transformation in some councils—although not all—and a similar slowness by some in sharing services across council boundaries. Why is there such a reluctance by some areas to adopt a unitary structure when the cost savings are well established? We have heard from the noble Lord, Lord Liddle, about Cumbria, but this week a report in Oxfordshire said that there could be savings of up to £32 million a year if the six councils merged.

As part of the preparation for what will be an important period after May, it would help if councils did two things: first, talk more in terms of the levels of government support that they receive, rather than just the cuts since 2010, important though those are, since this presupposes that 2010 is the right baseline; and, secondly, understand clearly the level of total public spending in their area, not just their own direct spending, and talk about that publicly.

In conclusion, the big issue is resource equalisation and revenue support allocations based on need. Of course it is right to encourage income growth and good to see the vast majority of councils expecting growth in their share of business rates. But the crucial issue remains: central government allocations should be needs-based.