Previous Section Back to Table of Contents Lords Hansard Home Page

Lord Henley: My Lords, I would rather not be drawn on the wisdom of asking the noble Lord to write to the new President of the Commission. But I am sure that he will find a way of writing a letter in the same polite terms as he asks Her Majesty's Government to write it in. I am sure that he is quite a master at writing such a letter.

18 Jan 1995 : Column 653

Local Authority Services

3.20 p.m.

Baroness Farrington of Ribbleton rose to call attention to problems faced by local authorities in providing the services their communities need; and to move for Papers.

The noble Baroness said: My Lords, I am extremely grateful to have the opportunity to move this Motion, which stresses the importance of local authorities having the resources to meet the needs of the people in the communities that they serve. There is no doubt that the quality and quantity of services provided by local authorities throughout Great Britain affect the quality of life of every single man, woman and child. I do not need to remind your Lordships that an adequate fire and public protection service, an adequately maintained road network, and street lighting together with social services and education are critically important to the lives we live.

In speaking to the Motion, I shall concentrate on three aspects of this issue. First, I wish to call attention to the financial problems facing local government on a national basis and to draw the attention of your Lordships to the fact that local government is faring badly in terms of the generality of government proposals for public expenditure next year. Whereas general government expenditure and the control total will rise by 3.3 per cent. and 2.4 per cent. respectively, local government will face a cash freeze. An example of this unequal treatment in funding is that the health programme will increase by 4.1 per cent., but personal social services budgets will increase by only 0.3 per cent. The implications of this cash freeze are likely to be severe, with authorities having no ability to respond to the increased demands placed upon them. The result of the reduction in the grant element of resources available to local authorities will be cuts in services and, with a reduction in central government grant, an increase in council tax.

The figures I shall use refer to local government expenditure proposals for next year and relate specifically to England; but I know that similar problems face colleagues in local government in Wales and Scotland. One problem is that the Government calculate and announce their increase in expenditure for the coming year basing it not on what local authorities currently spend to provide services to meet the needs of their communities but by comparison with the figure that the Government think they ought to have spent in the current year. That is not a fair comparison in terms of evaluating the quality and quantity of services local authorities will be able to provide in the coming year.

Next year's proposals for local authority expenditure across the country will allow authorities to increase their expenditure against this year by only 0.5 per cent. There are variations as that is an average figure; but I know that 28 out of 39 shire counties in England are faced with that prospect. That figure pays no regard to the fact that there will be 110,000 additional pupils in the schools provided by local education authorities. That figure pays no regard to the increase in the number of elderly people in the community and the pressures on

18 Jan 1995 : Column 654

local authorities that will be caused by the inevitable inflationary increase due to pay and price increases, neither of which has been reflected in the figures suggested by the Government for local authority expenditure next year.

That is in direct conflict with the fact that the Government themselves, through their own assessment, are assuming that there will be an increase in inflation next year. There will be assumptions in the figures that have been agreed and discussed between local authorities and the Secretary of State and his officials on the financial calculations for next year. Those include an acceptance by local authorities and local government as a whole that, in line with the audit figure suggestions that are made annually, there will be a £250 million saving through increased efficiency. That programme rolls on from year to year.

Perhaps it would be appropriate at this stage for me to refer (as one of the speakers who follows me may refer to it) to the Audit Commission report that was published on Wednesday of last week. The report claims that the commission had surveyed those it viewed as managers in local government. I am aware that the local authority associations have never failed to pay serious regard to such reports. The local authority associations have agreed with the Secretary of State to a meeting with the Audit Commission to look at the contents of that report. However, even at this early stage, it is quite apparent that the Audit Commission, in taking £18,000 and above as a salary cut-off point to determine who is a manager rather than a service provider, has failed to acknowledge that using that figure will bring in senior librarians, environmental health officers and a range of those who are direct service providers in local government. However, notwithstanding acknowledgement that there is a need to consider the report in detail, that does not negate the Motion standing before the House today.

The implications for services of such a level of expenditure and an increase limited to 0.5 per cent. in local authority budgets can be seen across a range of services. It is quite clear that there is not adequate funding to meet the needs of the 110,000 new pupils coming into our schools. This year saw a further worsening in the pupil-teacher ratio. Next year no money will be available to local authorities to meet the teachers' pay award and the increased costs, through inflation, of providing a similar level of education service for the children in our schools. The only thing that can happen, our school governors warned, is that class sizes across the country will worsen yet again.

Other speakers will no doubt refer to the increased pressures on local authorities as a direct result of new statutory duties placed on local government. One example can be cited in the field of education—namely, the special educational needs provisions—which are welcomed by all but which cannot be delivered without additional expenditure and for which adequate additional finance has not been provided. To review, assess and provide a statement of a child's special educational needs takes time and money. The process of statementing alone has meant the recruitment of

18 Jan 1995 : Column 655

additional educational psychologists, many of whom incidentally, because of their level of experience, will be in that group earning more than £18,000 per annum.

As your Lordships are aware—because I have heard the subject mentioned in many contributions to debates since I became a Member of your Lordships' House—one further example of the pressures on local authorities is the care in the community legislation. There is a tragic side to the increased pressure to try to meet the needs of the community in those areas where local authorities deal with statutory services. Those local government functions which are discretionary come under even greater pressure. I refer in particular to discretionary awards. A Question was asked in this House earlier this week about the 21-hour rule. The Minister who replied referred to the role of local authorities in paying awards to people who wish to seek vocational qualifications. For non-advanced vocational qualifications awards have to be met in full by the local education authority. However, if local education authorities are faced with ever larger classes in primary schools, they cannot then afford to meet the discretionary areas of activity and provide discretionary awards so that adults who are under-qualified and unemployed can play a full role in society.

There is also the problem of reductions in public expenditure on housing. I refer to the massive reduction in the amount of money that is available for social housing through housing corporations. I understand that originally it was the Government's intention that some local authority social housing needs could be met by money from the housing association sector. However, that money is to be reduced inexorably, year on year, by 25 per cent. I appeal to your Lordships that if we really want to uphold family life, we must accept the responsibility to make resources available so that families can live in civilized conditions and children can grow up in a household where families are not under pressure from overcrowding and multiple occupancy. Many examples could be given to illustrate the problems.

I shall conclude by referring to democracy. Central government has a responsibility to accept that the relationship between communities and the councils they elect is little short of sacrosanct in a genuinely democratic society. Any central government which arrogates to itself powers to appoint people to serve as placemen and women to replace those elected councillors do so at their peril. That erodes democratic accountability.

Local authorities in England, Scotland and Wales are responsible organisations, but they face an almost impossible task in providing the services that their communities need, rather than desire, in order to have a civilized quality of life. If care in the community cannot be properly funded to meet people's needs, the solution is not for those services to be carried out by somebody who is appointed rather than elected. We should respect

18 Jan 1995 : Column 656

the role of local government, and it should receive its fair share of national resources and national public expenditure. I beg to move for Papers.

3.34 p.m.

Lord Dixon-Smith: My Lords, the whole House will be grateful to the noble Baroness for providing the opportunity to debate this important Motion today, and will have been very interested by the way in which she introduced the subject. The noble Baroness holds an office which I held formerly. Therefore, at one and the same time we are old friends, old colleagues and indeed, old antagonists. I hope that that explains our relationship sufficiently.

Of course local government has problems. But one only has to read the daily financial press to realise that every country in the world has its financial problems. One has only to look at any daily newspaper to realise that our own Government have their financial problems. Business and commerce constantly have problems. It could be argued that compared with business and commerce local government has done rather well in recent years. Many businesses have had to close altogether, a matter which we all regret. I know that in many businesses staff have received letters from management inviting them to take 5 per cent. salary cuts. Their opinion is sought, and they are invited to decline. If they are rash enough to do so the consequences are immediate.

That is a reasonable summation of the background environment. Therefore, while I accept that the revenue support grant settlement for local government for the coming financial year is hard and could be argued to be harsh in relation to the generality of government expenditure, in fact local government in general within the economy as a whole has not done too badly over the past few years. When I look back over the 28 years in which I served in local government the current regime seems particularly hard, because during that period expenditure rose by 12½ per cent. annually, year in and year out. That is an average figure. Obviously there were years when it was greater and years when it was less. However, that is the background environment. It is a problem which for a number of years central government—not exclusively under Conservative management—has had increasing difficulty in handling.

Despite the perceived attempt of the present Government to create a procrustean bed and squeeze local government into it, there is still immense diversity within local government, in a physical, cultural, economic, philosophical and political sense. Although I hesitate to bore the House with a few statistics it may be worth illustrating that diversity, taking as my source the CIPFA comparative statistics for local government for 1993.

Costs per head of population provide a reasonable indicator. Average amounts spent on education were: inner London, £484; outer London, £376; metropolitan districts, £385; shire counties, £338. The highest amount was £717 per head of population and the lowest was £280 per head of population. One was the borough of

18 Jan 1995 : Column 657

Tower Hamlets and the other the county of East Sussex. One can immediately perceive the immense differences, which one would expect.

Social services have received a strong mention. Again, the figures are instructive. In inner London, the average cost per head of population for such services is £241.67. The amount goes down to £124 in outer London. The figure for the metropolitan districts is £109 while it is £74 for the shire counties. The highest expenditure is £507 per head of population—that is in Newham—and the lowest such expenditure is £58 in Surrey. Again, the cultural differences do not need explanation.

I turn now to the figures for refuse collection and disposal. It is a basic service, but it is one of the most important. Again, there is a similar range of figures, varying from £33 per head of population which, as one might expect, is the average figure for inner London, down to £4.45 in the shire counties. The highest figure is over £40 in Merton and the lowest is £1.24 in the county of Cambridgeshire.

One might have expected there to be greater homogeneity in the cost per secondary school pupil. However, there is again great diversity. The cost is greatest in inner London with an average of £2,635 per pupil, with the shire counties coming at the bottom end of the range with expenditure of just over £2,000 per pupil. The highest figure in the country was £3,207 in the Royal Borough of Kensington and Chelsea while the lowest was £1,698 in Suffolk.

I could go on in that vein, but I think the point is made. Despite all that is done, local government is still flourishing; it is still local and, wherever you go in the country, it is still different. The consequences of those differences and of the philosophical, structural and economic problems that arise mean that each authority will have its own particular difficulties and its own particular problems. They will be different.

I listened to the opening speech of the noble Baroness with considerable interest. It would have been immediately familiar to any chairman of a local authority finance committee who was meeting any one of his service committee chairmen during the construction of the council's budget for the coming year. Despite the increase in expenditure over my career in local government, which I have retailed, the point that I did not make at that time was that for the whole of that period we were supposedly cutting expenditure. Listening to the chairmen of the service committees as they appeared before me as a member of the finance committee, I heard that each of those reductions severally was potentially disastrous and that the services would break down. They have not done so.

Equally, anybody who has an experience of the Consultative Council on Local Government Finance, which is the consultative organisation in which local government meets Ministers from the Department of the Environment and elsewhere to discuss the coming year's finance, would also recognise that argument. Since I have done it myself, I know exactly what the arguments are. The old ploy of local government at this time of the year is to compare outturns and actual expenditure with

18 Jan 1995 : Column 658

estimates. Local government consistently goes to the consultative council with comparisons of year-on-year expenditure. The Government quite properly go to the council every year where they compare their original estimate for that year with their original estimate for the previous year. The sadness is that ne'er the twain shall meet. Both sides are essentially correct. Local government has not broken down—so to that extent the Government are right—yet if one compares the original estimates with the outturns, one sees that they are different. That is not surprising. In the end, it is with the delivery of service and the quality of that service that we should be concerned.

Many of the problems relate to political philosophy and money. I find it slightly ironical to go back to my former local authority and to talk to my former colleagues who, despite the description of the overall situation of local government finance, now regard that authority as being awash with money. There is a certain delicious irony in the fact that after I was kicked out of office the council was given for whatever reason—and probably for a very good reason —an enhanced cash flow by the Government. I find that interesting. In fact, the council now holds a great deal of money in balances, which was not formerly the case. It holds those balances as an authority; and because it now gives its departments devolved budgets—a new departure to make them more financially responsible—the departments hold cash balances. Schools with devolved budgets also hold cash balances. Aside from everything else, that raises the question of how best those sums of money should be used.

Particular mention has been made of personal social services and funding. On a strict year-on-year comparison there is almost no enhancement of funding for the coming financial year, but the special transitional grant is continuing next year at the rate of £647.6 million and personal social services departments will have a total of about 11 per cent. in additional funds to dispose of in relation to care in the community and the provision of personal social services.

The Audit Commission report to which I should like to refer is not that which the noble Baroness called into account. I refer to the report Taking Stock, Progress with Community Care of December 1994, which assesses progress in the development of community care. The report contains two chilling statements. Paragraph 31 states:

    "It is particularly worrying that some Authorities audited were unable to assemble the sort of information needed to check the financial implications of placements already made, let alone explore possible options for tackling projected overspending. These Authorities could be heading for difficulty without a clear idea of what is going wrong or why!"

I could go on, but time prevents me, so I shall say simply that local government is strong and healthy. Its situation is not as bad as the noble Baroness portrayed it to be.

3.47 p.m.

Lord Tope: My Lords, as a mere London borough council leader I find it a little daunting to follow two such distinguished Chairs of the Association of County

18 Jan 1995 : Column 659

Councils, but I shall do my best. I start by joining the noble Lord, Lord Dixon-Smith, in paying tribute to and thanking the noble Baroness, Lady Farrington, for initiating today's debate. We have served together on a number of local authority bodies both in this country and in Europe. The noble Baroness is always a passionate advocate for local government, so it comes as no surprise to me that she has chosen this subject for what I believe is the first debate that she has initiated in this House. I welcome that.

Now is a particularly opportune time to be having such a debate. The Government are currently consulting (in their customary manner) on the settlement, and local authorities throughout the land are wrestling with ever-more difficult and severe budget cuts. As I have said, this is a particularly good time for the debate. I am sure that reference will be made to a number of the tangible effects of what has been happening year after year in local government. Indeed, that has already been mentioned.

I should like to start, however, by referring to some of the less tangible effects. They may be more difficult to measure, but they are nonetheless very real. Local government in this country is facing a period of enormous change. Some of that change is for the good and the better and is generally welcomed by everybody; some of it is not. Nevertheless, change is always unsettling. People are never quite sure whether the risk of losing what they have is worth the rather less obvious benefits of what they might get. So it is always difficult and a challenge to go through change. We are also in a period of ever-increasing public expectations, especially of local authorities—public expectations encouraged by central government, but often rightly so. Yet, at the same time, almost every local authority faces a period of ever-diminishing resources with which to meet the challenge of change and all those increased public expectations.

I want to pay tribute to local government staff who, on the whole, do their best to meet that challenge, and try still to be creative in doing so; but my impression is that their morale is at rock bottom. People are worrying increasingly not just about their jobs but about the services of which they feel so proud. They are faced with making ever more difficult decisions. Local councillors wonder increasingly why they volunteer to inflict such pain upon themselves and upon others when their powers are constantly being diminished. Those are not tangible effects which are easy to measure, but they are real and dangerous to the health of our democracy and the fabric of our society.

In my few minutes, I want to dwell on just one particular aspect of the subject. As a council leader there are many upon which I would wish to dwell, but I shall talk about one only, and that is education. For those local authorities that are LEAs, it is usually the largest part of their budget. It is usually stated to be the priority, or certainly one of them, for most people and all political parties. In Sutton (my own council) the schools budget alone represents 40 per cent. of the total council budget. Our small London borough is now looking at cuts of £8 million for the fifth year running. It is difficult

18 Jan 1995 : Column 660

to make cuts of that magnitude for the fifth year running without affecting that 40 per cent. of the budget that relates to schools.

Nevertheless, education has been a stated priority for all parties, and one would like to think that it has been relatively protected in the round of cuts, and to some extent that is true: it has been relatively protected because local authorities, including mine, have sought to make their cuts elsewhere than in schools. They have cut the central departments of the education department considerably. Reference has been made to cuts in discretionary funding, and that is serious. They have tried to protect schools. Yet we need to look at what has happened with our schools budgets.

The Government like to talk in global figures, and in global figures to show an actual increase in funding for schools, but that is masked by the rise in the number of pupils. A rather better measure about which the Government are singularly reluctant to speak, is the standard spending assessment per pupil. There we find that next year, as compared with this year, for primary schools there will be an actual cut on average of 2.5 per cent. per pupil; in secondary schools there will be a cut of nearly 7 per cent. per pupil. There will be a £194 per pupil cut in funding for secondary schools. Those are average figures. As with any average, they disguise figures which are very much worse.

I wish to illustrate that point with some figures from my own authority. That is not to use the House for special pleading, but because it happens to be the authority that I know best. Sutton's SSA for secondary education this year is £2,916 per pupil. Next year—assuming the settlement goes ahead—it will be £2,727 per pupil. That is a cut of £189 per pupil before we have taken any account of inflation, teachers' pay awards, increased demands, and so on. That is a strange way of showing a priority for education.

Recoupment is ending next year. That will have almost disastrous effects on boroughs such as mine, which is a substantial importer of children. That may be because my authority seems always to come near the top of the much disputed examination league tables. We import 2,400 pupils to our schools from outside the borough; 1,100 of those are secondary school children from the next door borough of Croydon. Yet Croydon will be allowed to spend £129 more per pupil on educating those children if they remain in Croydon than if they cross the borough boundary and come to Sutton.

When we met the Secretary of State last week at the Consultative Council on Local Government Finance (the noble Baroness, Lady Farrington, was also there) he said that he was anxious to put right all the "technical errors, quirks and stupidities"—those were his words—in the settlement. That is one stupidity that I hope he will put right this year rather than next year.

We all know that it has been a tough settlement for local government this year. One might perhaps say that this year is a one-off, so we need to look at the cumulative effect on the per pupil SSA over the years. Comparing 1992-93 with 1995-96, funding per pupil has fallen in real terms by 2.5 per cent. in primary schools and nearly 11 per cent. in secondary schools—again, a strange way to show priority for education. That is not

18 Jan 1995 : Column 661

the end of it. We are already told that for the next three years the local government settlement will be even worse. There will be 3 per cent. cuts in real terms. The Audit Commission has calculated that if community care is taken out of that, the cuts will be 6 per cent. in real terms. As education forms such a substantial part of local government expenditure, it cannot be immune from the effects of such severe cuts.

I said earlier that local authorities have done their best to avoid hitting schools with these cuts by making cuts elsewhere in the budget; but, even so, if we look at class sizes and compare what has happened—the most recent figures available are to January 1994—with the position in January 1992, just two years previously, we see that the number of primary school classes of over 30 has risen by 19 per cent. There are 173,676 more children now in primary school classes of over 30. That number has now reached over 1 million for the first time.

In those two years secondary school classes of over 25 have increased by 15 per cent.; 44 per cent. of all secondary school children are now in classes of over 25. If you ask any teacher—I happen to be married to a teacher—what is most important, they will always say that it is class size. There has been some questioning of that, but I have yet to meet a teacher, or anyone who has been a teacher, who says that class size is unimportant. With smaller classes pupils can be given the individual attention that is so necessary, and yet our classes are becoming larger and larger by the year.

Shortly before Christmas the Minister of State for Education said:

    "The plea from LEAs that they do not have enough money will not wash".—[Official Report, Commons, 19/12/94; col. 1514.]

It is the Minister of State's statement that just will not wash. The figures deny it, wherever one looks and however one interprets them.

I wish to conclude in the same way as did the noble Baroness, Lady Farrington, with a plea for democracy. My plea, first, is to say to Ministers, "Please stop pretending that everything is all right when everyone knows that everything is not all right. But above all"—this is a plea that will fall on deaf ears—"set local government free" because we must return to the position where local councillors have their fundamental democratic right restored; that is, the right to determine the priorities that meet the needs of local communities, balanced by the level of tax and charges that they have to levy to meet those needs, and to be properly and effectively accountable to their local communities for their decisions. There will always be difficult decisions to take, but it is high time that local government again was allowed to take its own decisions.

4 p.m.

Baroness Gould of Potternewton: My Lords, I too thank and express appreciation to my noble friend Lady Farrington for initiating the debate. I wish to concentrate my remarks on the emasculation of local authorities, which I believe makes it more difficult for them to provide the services that local government can and

18 Jan 1995 : Column 662

should provide. My noble friend clearly outlined in detail the financial restraints against which those services have to be provided.

In 1979, Michael Heseltine, then Secretary of State for the Environment, pledged to sweep away tiresome and excessive control over local government. But 15 years later, with the passage of more than 150 separate Acts of Parliament, power has been shifted from the town hall to Whitehall, creating the most centralised system in Western Europe. Local government has become a means of carrying out the wishes of central government instead of being the voice of local people.

This Government, despite their protestations, have centralised power in a deliberate way. Power has been transferred from people in the localities to non-elected, non-accountable quangos and boards appointed by various Secretaries of State. These government-appointed bodies now spend more than £30 billion that was previously under the influence or control of elected local authorities. These bodies go about their business in secret and in this era of so-called open government Whitehall is stuffed to the gills with more than 100,000 secret files. Compare that with the innovative, flexible way in which most local councils have themselves decentralised their administration and involved their electors.

It is quite plain that as the influence of local representatives has diminished people are not clear who is responsible for what. In the past, if people wanted to complain about any local service they could go to their local councillor. That is no longer the case. They are, for instance, no longer represented on the governing bodies of grant-maintained schools, further education and sixth-form colleges, school-funding councils, housing action trusts and urban development corporations or bodies responsible for local bus services. In response to the noble Lord, Lord Dixon-Smith, I must point out that these bodies may still be local but they certainly are not accountable.

Responsibility has been fragmented. Therefore, for instance, in order to reduce crime in the locality a local group will have to liaise not only with its local council but separately with a range of other bodies, including the local police, the health authority, the local TECs and so forth. However, it is significant to note that of those bodies only the council and the police are obliged even to listen to local demands.

Realising public expectations is best achieved by local people having the power to decide for themselves how they want to live, what services they require and to choose who represents them in the provision of those services. The views of users should be aggressively sought and thoroughly considered. As my noble friend Lady Farrington said, we are talking about the quality of life of the people of this country.

The Audit Commission, in its guide to the Citizens Charter indicators, Watching their Figures, states:

    "Everyone has the right to know how their money is being spent".

It is unfortunate that that is not the reality.

To paraphrase Sir Karl Popper in his book, Poverty of Historicism, the greater the centralised power the greater the loss of knowledge. Ministers cannot know

18 Jan 1995 : Column 663

what the priorities should be in every community. Again I quote the Audit Commission document, Watching their Figures:

    "No two councils are the same, there may be different reasons for the way services are provided in different authorities—differences between councils that are beyond their control".

We see again a further emasculation of local government by the imposition of the toughest financial settlement on local authorities since the 1970s.

Department of the Environment officials have made it clear that this reduction in aggregate external finance is a shift of the tax burden from centrally-raised taxation to council tax. If local councils follow the advice of government, and meet their standard spending guidelines, council tax bills for those in Bands C and D can expect an increase of more than £20. This is effectively a new tax on local communities. There was an opportunity to look at ways in which the tax could be made fairer. It might have been achieved by introducing new tax bands at the top end of the existing scale to differences in property values, introducing regional valuations to reflect regional differences in house prices and providing better arrangements for updating valuation lists and a better and speedier appeals machinery.

As has been said, no provision has been made in respect of the extra burden that will be placed on local government. The local government associations estimate that to be £1.6 billion. No provision has been made to cover inflation, pay rises or any further changes in local government responsibilities. No account has been taken of the extra demands on local authorities that will arise next year; that is, additional school pupils, nursery education and a rise in the number of elderly people requiring care. Nothing has been done relating to a previous debate on housing the homeless. However, it does include the cost of local government re-organisation and a 3 per cent. funding for police authorities, which is ring-fenced. As has been said, the net result is a virtual cash freeze.

The Secretary of State for the Environment, Mr. Gummer, told Members of the other place that the settlement was "tough" but that it was clear that many authorities had considerable scope to increase efficiency—a theme expanded by the Audit Commission. In the document entitled Paying the Piper, the Audit Commission asserts that during the past six years the cost of local authority non-manual staff has increased by 85 per cent. to £10 billion. It stipulates that if essential services are not to be curtailed there will need to be a cut of 10 per cent. in local authority wage bills. This is a direct result of the Government's three-year freeze on local authority running costs.

In reality, however, most local government salaries lag behind the median for the national pay market. The Audit Commission defines "senior posts" as anyone paid more than £18,000. Those in senior posts are not all managers; they include necessary front-line staff, housing officers, social workers, consumer protection and other officers. If local government is to reach the standard set by government it must have reasonably-paid, well-trained and motivated staff. The

18 Jan 1995 : Column 664

Audit Commission needs to adopt some caution, in particular as, in its own words, it justifies at least some of that increase in staff when it states:

    "There are very few services in local government which cannot justify more staff—the demands on services seem almost infinite".

So it is not argued that the growth in staff is not needed. The Controller of the Audit Commission stated:

    "Councils have done well to cope with a formidable agenda of change".

But local authorities should not dismiss this report. They are responsible bodies and I am sure that they will not do so. It is necessary for them to deal constructively and efficiently with the increased pressures arising from new statutory duties and to continue the process that many councils have begun in streamlining structures, sharpening performance and finding ways of getting closer to the public.

In debating the finances of local government, one must look at the impact made by compulsory competitive tendering. The Association of District Councils, in its response to the consultation paper Competing for Quality, expressed the view that CCT is not always the most cost-effective way of ensuring service delivery. If the Government really want to assist local authorities they could adopt the ADC proposal that local authorities are allowed to draw up their own communal targets for exposing new areas of activity to competitive tendering.

The study carried out by the London Business School, which looked at the long-term effects of CCT, showed that after an initial saving of 20 per cent. in the first two years, the cost at the end of five years was up by 11 per cent., even though average staff members went down by 20 per cent. The reason for that was that a number of private sector contractors introduced loss leaders in the early stages of the contract. They will now disappear. It is useful to note that that study took examples of councils which put out contracts to tender in the early 1980s, before there was a compulsory element.

Despite many attacks on local government over the years and the starving of resources by central government, local authorities and the public whom they are there to serve have begun a debate on the quality of the services and the way in which local authorities react to community and individual needs.

In that context, finally, I wish to refer to the role of the Citizen's Charter. The Citizen's Charter is a useful contribution to a long-standing commitment to public service by most of those who are in local government. In the 1980s the Labour Party issued two policy documents on the potential use of charters and the introduction of a quality commission responsible for ensuring that local government provides value for people as well as for value for money.

For example, Sheffield was pushing for clean air laws long before they became fashionable. Leeds decentralised its housing service in the 1960s. York and Lewisham were pioneers of service guarantees and Lancashire and Derbyshire were acting to save local jobs and attract new ones.

18 Jan 1995 : Column 665

The whole question of the charters and charter marks should not be seen as a substitute for the services which local authorities should be providing. We need to ensure that those services are well funded. I echo the joint statement of the three local authority associations by saying that vital services could be lost during this difficult year for local authorities.

While central government should set standards and have a responsibility for macro-economic management, they should cease their detailed interference in the day-to-day affairs of local councils. They cannot know better than local people and local councillors about the depth, degree and urgency of the needs of each and every local community and its capacity to pay for what it needs. That cannot be right —in principle or in practice. That interference does not make for responsible government; quite the reverse. As the noble Lord, Lord Tope, said, let us set local government free.

4.12 p.m.

Baroness Faithfull: My Lords, I join with others in thanking the noble Baroness, Lady Farrington, for initiating the debate.

I wish to approach the debate from a very grass-roots practical point of view. Last week I visited Greenwich. A mental hospital there had been emptied completely and community care had been given to all the patients who had been in the hospital. I attended a party with those patients and they told me how they felt about being in a community rather than in the mental hospital, which has since closed down. I support entirely the Government's policy with regard to community care. I believe that that is the right policy for this country at this time.

This morning I visited the Royal Free Hospital. I talked to doctors, managers and social workers about the community care which is being provided jointly by the hospital and the social workers. In fact, it was a celebration of the health-related social service which was started 100 years ago. That service has been developed jointly by the Royal Free Hospital and Camden council. It has been a great success.

We should do all that we can to support community care. However, I should point out that I have travelled to many authorities and many shire counties have had their expenditure cut to such an extent that they have had to declare redundant social workers in their services. It cannot be right to have and support a very good policy on the one hand but at the same time to have the local authorities in a position where they are unable to carry it out through a lack of good staff.

It is very difficult to be a social worker. As regards the implementation of the Mental Health Act, one may be called out at night in order to help patients and to be with doctors if patients are being admitted to hospital. One has to deal with handicapped children, children in care and children who have been sexually abused. It is a very difficult role to play. Nevertheless, if the community is to be happy and balanced, there must be an adequate number of well qualified social workers.

18 Jan 1995 : Column 666

I have great sympathy with city treasurers. They have to reduce their expenditure and very often incur feelings of animosity in doing so. Unfortunately I do not have the figures with me, but I am a vice-president of the Association of County Councils and I understand that there has been a serious reduction in the number of social workers in the country at the moment.

I turn now to the question of special needs under the Education Act 1993. That legislation was introduced by the Government and I believe that it was a very good Act. In particular, Part III which deals with special educational needs is excellent. I am sure your Lordships will understand that I could not get away without speaking about the needs of children. Many children in this country could have been helped and prevented from becoming delinquent and disturbed had we used the facilities which we now have.

I pay tribute to the many voluntary homes in this country which provide services for difficult and emotionally disturbed children who come from families which have disintegrated and which, therefore, are not able to give them support. But what has happened? If those voluntary homes are to provide a good service, it is expensive. I do not wish to say in any way that it is not expensive. There are vacancies in many homes in this country because the treasurers have said that the local authorities do not have the money to pay for children to go to those homes. Therefore, I regret to say that there is a rise in the delinquency rate; there are more disturbed children in this country due to the breakdown of families; and there is a rise in the crime rate among young children.

One or two years ago, I approached several people and begged them to set up secure local authority units. But the response that I received from someone who is well-known to your Lordships and who is a leading county councillor was that local authorities could not afford to set up secure training units within local authorities and under their jurisdiction. So what has happened? We have now passed an Act of Parliament which provides that secure training units are to be set up for children. The estimated cost is £30 million per year for the next five years for only 200 children aged 12 to 14.

I contend that if the local authorities had had enough money to set up secure training units over the past five years, it would have been unnecessary to spend that £30 million per year for the next five years. That would have been a more cost-effective way in which to proceed rather than waiting until matters became so serious that the Home Office felt it necessary to set up those expensive centres.

We should really look to see whether or not measures are cost-effective. I believe that by depriving local authorities of the money to spend on those children this country has had in the end to spend much more. I would suggest that we look seriously at our social services, at our community care and at our care for children taking into account the whole spectrum. We should also think about a five-year plan and not just a one-year plan. While resources for local government are being cut back, I believe we will find that at the end of the day we will spend more. That will not be in the interests of

18 Jan 1995 : Column 667

the country. I believe that community care and the special needs mentioned in Part III of the Education Act 1993 are both valid and excellent policies. Let us interpret them and administer them in a cost-effective way over a long period.

Next Section Back to Table of Contents Lords Hansard Home Page