Local Government and Public Involvement in Health Bill

My Lords, first, I congratulate the noble Lord, Lord Mawson. I am sure that your Lordships’ House will benefit greatly from his experience, knowledge and passion for social enterprise and social issues. I also congratulate the noble Baroness, Lady Campbell, on an inspiring speech. I must declare my interest, perhaps for the last time, as chairman of the Local Government Association. I believe that the Bill should be judged in the context of considering the major issues facing local government, understanding the potential for local government to meet those issues and challenges and asking what is impeding local government in its progress, how the Bill can help to release the potential and, as others have said, how that will affect people's lives. Speaking after the noble Baroness, Lady Jones, I am relieved that I am not starting off with structure. I shall concentrate first on the perhaps four major issues that we in local government face. The first, as everyone is aware, is simply the challenge of improving public services, achieving better value for the public's money, ensuring quality, extending choice and opportunity, raising public satisfaction, extending access, responding to public demand and tailoring our services to what the public actually want. The second is the need to strengthen economic prosperity, to address the backlog in housing, transport and regeneration, and to create places that are prosperous, vibrant, friendly and safe—places with a sense of identity and belonging where people are proud to live. Thirdly, apart from core public service improvements and economic issues, there are wider, more complex challenges for society, ranging all the way from climate change to health improvement. For example, it is simply tragic that after more than a decade with the luxury of a strong economy, many of the social divisions in society are widening. The affluent are becoming more affluent, but the 20 per cent or so who are least well off are today worse off. They often live in disadvantaged communities with high rates of crime and disorder, a high level of teenage pregnancy, high incidence of drug use, poor health and high worklessness. They are trapped in welfare dependency and have low skills and aspirations. These issues are highly complex and interrelated, but two things are certain: they are best tackled in partnerships and they are best tackled locally. Therefore, I welcome the Bill’s strengthening of local area agreements and council-led local area agreement boards involving the public sector, the voluntary sector—the social enterprise mentioned by the noble Lord, Lord Mawson—the community sector and the private sector. This is the way forward. The duty to co-operate is helpful, but we shall want to return to these issues during the Bill’s passage to make sure that it can release the full potential of local area agreements. This is a challenge for local authorities. The fourth issue, to build again on what the noble Baroness, Lady Jones, said, concerns trust and democracy. In recent years there has been growing cynicism about and a lack of trust in politics and politicians. Too often politicians are seen as not relevant to people’s daily lives, their worries, hopes and aspirations for the future. Yet those issues are immensely important to people—their services, community, local hospital, local school, local park and the safety of their streets. People are deeply frustrated by their inability to reach remote and, indeed, unreachable systems of governance. Therefore, we have to take government closer to people on the ground and strengthen local democracy. In each of these four major objectives we see improvement being held back by a common factor—the overcentralisation of the state. I have made my next point before and I am sure that, unfortunately, I shall do so again; namely, that this country is unique in the degree of control that our Government exert over public services and local government. This overwhelming burden of bureaucracy, plans, guidance, targets, performance indicators, financial controls and inspection systems wastes the public’s money. It stifles the enterprise and commitment of front-line staff and denies councils the ability to take local decisions, responding to what local people want. In doing so, it weakens accountability and erodes democracy. Therefore, I do not agree with what was said in the first speech—that there is a strong devolutionary element in the Bill. What we need is bold devolution. Local government is not easy but it has made great progress. It now has an outstanding track record of improvement. The Treasury says that it is leading the public sector on efficiency. Local government is determined to build on this improvement and make a real difference to people’s lives. Last year, the Local Government Association published its paper Closer to People and Places, in which it set out specific steps, some of which are in the Bill—that is to be welcomed—and some of which the Bill has failed to address. The local government White Paper set out important steps on deregulation. This followed much joint working between the Government and the Local Government Association. We argued for the reduction of the 1,000 performance indicators down to some 30 national outcomes and for no more than 200 performance indicators. That is welcome, but it needs to be accompanied by a reduction in all central controls. It is essential that this happens in practice. We shall need to return to this issue in Committee. At the same time, the local government Bill has made real progress in strengthening council leadership, but we need to look at the scrutiny issues. I welcome the electoral cycle changes. I welcome what I believe is a restoration of the right of councillors to speak on all issues affecting their constituencies. But the Local Government Association believes that all councils should have discretion in their choice of executive arrangements. The Bill makes very little progress on devolution. Coming back to the second challenge of economic prosperity, the Treasury’s document Devolving Decision Making shows clearly that the great cities of England—Birmingham, Manchester, Liverpool, Sheffield and Newcastle—now have just half the GDP per head of their European counterparts. The Treasury report concluded that one of the reasons for that is that the European cities have far stronger devolved political autonomy, as the noble Baroness, Lady Hanham, said, over the key economic levers of planning, transport and economic development. The Local Government Association therefore proposed in its publication Prosperous Communities a radical devolution in planning, transport, housing, economic development, skills and welfare from regional and national government to local authorities. The Chancellor of the Exchequer has not said a great deal about local government. He has talked about a new constitutional settlement, but in September last year he said: "““It is right that local councils, not Whitehall, should have more power over the things that matter to their community, and from economic regeneration to public transport, the empowerment and strengthening of local councils and local communities is what we must now do””." When the Chancellor becomes Prime Minister in a week or so, we shall look forward to hearing about the detail of how he will take this forward. But how will the devolution of powers be brought into the Bill? Will it be through local area agreements? We need to test this. Any meaningful devolution must include funding as well as powers. It seems that after five years of the Government reviewing this, the issue has been ducked. Yet local council tax payers need a system of local government finance which is fair, understandable and transparent, and which retains more of the taxes that are already raised locally. They need a system in which councils can respond to local priorities and in which the accountability for council tax rises is entirely clear. The Local Government Association has argued for an independent commission to oversee the local government finance system, its distribution and equalisation, the incorporation of the latest population and demographic changes and, most important of all, the introduction of a watertight ““new burdens system”” to ensure that the cost of the Government’s new policies and legislation are borne by the relevant spending departments and not by council tax payers. I was not going to dwell on finance, and I will conclude. I did not like the reference to a 39 per cent increase in local government funding over the past decade. That includes the direct schools grant. As the noble Baroness, Lady Andrews, will know, I have made that point before. It is entirely clear that the figure is 14 per cent. Before he stood down, the Deputy Prime Minister understood that you cannot include the direct schools grant, which leaves you with 14 per cent and not 39 per cent. In conclusion, devolution, deregulation, the strengthening of local leadership and local partnerships, and accountability need to be at the heart of any reform of local government. We look forward to testing those during the passage of the Bill.