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Lord Graham of Edmonton: Answer that!

3.26 p.m.

Baroness Young: My Lords, I thank the noble Lord, Lord Williams of Elvel, for introducing the debate. I heard someone say, "Answer that". I am very happy to do so. It is good that we are debating local government. I served in local government for 15 years. I found it enormously interesting and worth while. I am very glad to have the opportunity to take part in the debate today. From the list of speakers, I see that almost everyone has taken part in local government. I am not surprised at that because I can tell the noble Lord, Lord Williams, that local government is a subject which interests people in local government but, whether or not we like it, is not wildly interesting to most people outside local government. I am sorry about that fact, but I believe it to be true.

Taking part in local government involves getting to know the place where one lives, taking part in decisions and, perhaps most important of all, making friends with an enormous variety of people whom one might not normally meet in the course of one's life.

I am very pleased that we are having this debate today. I have consulted some of my colleagues in local government in preparation for the debate. I am glad to say they report that, despite what has been said, local government is alive and well, and the enormous number of people taking part in local government elections next week is indicative of that. It is distressing that we have low polls but that has always been a fact of local

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government life; it is not new. The truth of the matter is that local government is changing. It changed very considerably in the 15 years during which I took part. Local government is changing in the way that almost every institution is changing because we are in a world of great change.

Perhaps I may comment on one enormous change which took place when I was in local government. I refer to the abolition of the local police forces and the establishment of regional police forces. When I was first in local government the great thing was to be on the watch committee. When that committee was finally abolished, the event was marked by a great deal of sadness as though it was the end of everything. It was a very great change.

I turn to some of the points that the noble Lord raised. He may be surprised to hear me say this, but I believe that there is something to be said for considering the relationship between local and central government. I am particularly pleased to see that your Lordships' House will set up a Select Committee to do just that. I believe that that committee will be very valuable. I hope that an interesting debate will result.

I cannot follow the noble Lord down the same path regarding his other points. He raised the subject of quangos. I take it that he is referring to education. One needs to ask oneself why the Government have chosen the policies that they have through a succession of education Acts. The tragedy is that the average and below average child's education is not as good as it should be. We all want to see it improved.

The establishment of grant-maintained schools, city technology colleges, and the whole local management of schools devolves money down to schools. Far from taking away local responsibility, it has in fact devolved that responsibility to a much lower level where it is being effectively used. Now, for instance, we know that Mr. Blair is sending his son to a grant-maintained school, I hope that those on the Opposition Benches will abandon their hostility to those schools. I have talked to a member from one such school. The first thing that happened was that it received extra money from the Government. The school was able to be redecorated and put in order for the first time for years, quite apart from the many other benefits which flow from that status. We hear complaints on this subject. I never hear constructive suggestions as to how matters might be improved.

I make one other point regarding quangos. One of the most surprising statements made by the party opposite is that if it were to come to power—that is not something that I expect—it would prevent hereditary Peers sitting in your Lordships' House. I shall be all right; I am a Life Peer. However, what would the immediate consequence be? Who will be left? It will be the Life Peers, here by political patronage. By a stroke it will have created the biggest quango in the country. So I hardly think we need a lecture on quangos from the party opposite.

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Lord Parry: What about 1066?

Baroness Young: Maybe 1066, but nevertheless it will be a big quango. We have no plans for anything like that. I turn to finance. There again, the noble Lord—

Baroness White: If the noble Baroness will allow me to intervene, I can assure her that the quangos in Wales will go much wider than anything she has mentioned.

Baroness Young: My Lords, the noble Baroness says that, but we are talking of local government and where quangos have been established. However, we are time-limited so perhaps I may turn to finance.

The noble Lord, Lord Williams, was again critical, but on local authority spending the truth is that no government—and no future Labour Government—would not put a limit on local authority expenditure. They would have to look at it in relation to the whole of government expenditure. It is true that four-fifths of the money comes from central government, but there will be a limit on the amount that can be raised locally, otherwise, public expenditure nationally will become completely out of control. That is what happened in many places in the past. The tragedy of local government is that it has got out of control in the past and we have been brought to the state that we are in now.

I do not believe that there has been any denigration of local government. However, there has been great anxiety in many Labour authorities which have implemented the most idiotic proposals. There are great numbers of absurd committees on equality of one kind or another. Someone once suggested to me, "Lesbians against fox hunting"! They do not go quite that far, but I am sorry to say that that kind of action has brought local government into disrepute.

The issue is serious, we could make jokes about it but time does not allow. So far as I can see, the only constructive comment which the Labour Party has made about local authorities is that, were Labour to be returned to power, there would be regional authorities. I should like to know how much would be taken from local government if we had regional authorities in England and Wales. What would be left of local government? What would be the cost? Where would be the future of what I still regard as an important service?

3.31 p.m.

Baroness Thomas of Walliswood: My Lords, in the 10 years during which I have been a county councillor—a period which began with the destruction of the GLC and ended with local authorities having to pick up the pieces in the aftermath of the ill-conceived review of local government—local government has been under continuous stress.

The noble Lord, Lord Williams, covered the finance and taxation aspect of it in great detail and I do not propose to repeat what he said. However, there is no doubt that the transfer of the power of expenditure out of local hands and into the hands of central government has resulted in a loss of independence so that since 1979 Tory Administrations have been not less centrist than

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the Labour Administrations of the past, but—to the amazement of friend and foe alike—more centrist. I hope that in the debate to come we shall not hear arguments based on the data but it is one of the curious aspects that the level of taxation paid in any local authority area does not depend on the colour of the Government which controls that local authority. It depends almost entirely on the combination of government expenditure allowances, capping limits and grants which have been sent down from the Government to the local authority. Therefore I hope that we do not spend the next two hours or so discussing that.

The noble Lord, Lord Williams, also mentioned compulsory competitive tendering. That has undoubtedly brought some benefits. I do not oppose it when it is applied to certain aspects of local government, but I believe that it will be extremely destructive and I oppose it when it is applied, as it looks as though it will be, in the part of local government which offers advice to members in their client or purchaser role. The Minister looks amazed, he should know that local government is now divided into the client and contractor sides and that members are concerned with the client side. So are a good many of the officers.

If we reach the stage where, for example, we can no longer employ a sufficient body of engineers to advise county councillors and other local authority members on highways issues, then we shall be greatly weakened in our role in determining what highways policy should be and how it should be carried out. The Minister may feel that that would be an advantage, following the recent successes of Surrey County Council and others in defeating the Government's previous plans for the M.25. I shall not expand on that, undoubtedly the advice and expertise of the officer corps in Surrey County Council provided the intellectual and technical input which assisted in the defeat of the road plans. I promised the Minister that I would not talk about transport and that is the last comment that I shall make about it, so he does not need to reply.

In the period which we are discussing, over the past 10 or 15 years, local government has performed amazingly well, despite the pressures that have been put on it. Successive audit reports tend, on the whole, to be complimentary. They point to areas of unsatisfactory performance which are usually carefully considered by local authorities and attended to in subsequent years. But the Audit Commission has not been extremely critical of local government and its performance over the past few years. In well run authorities there have been extremely good working relations between officers and members. That has increased, despite the insecurity in career prospects to which those officers have been subjected, particularly in the past two or three years in the period up to and during the review of local government.

Increasing resourcefulness and inventiveness have been applied in satisfying local needs in the most cost-effective way. There has been a flexible response to new duties such as care in the community. That is despite the fact that the new money attached to new clients who are the responsibility of local governments as a result of Care in the Community has disguised the

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fact that little additional money has been put into social services over the past two or three years to satisfy the needs of those clients who were already the responsibility of local authorities.

Many local authorities under Liberal Democrat and other control have expanded their activities to include a wide range of what might be called "green initiatives". The council, which is headed by my noble friend Lord Tope, who sits on the Front Bench, has been distinguished in that respect. Others have also been distinguished in their approach to what one might call a local response to a global need. That is exactly the kind of thing with which local authorities should deal.

However, despite what I believe to have been a high level of success over recent years, local government cannot continue for ever in an atmosphere of apparent hostility on the part of central government. I do not know the source of the hostility. In the old days many Conservative Members in the other place started their political careers in local government. That is less so today, and perhaps it is the source of the hostility. But there is no doubt in the minds of people who have served in local government during the past 10 or 15 years that central government have been hostile to local government. I do not know which has been the most irritating or destructive: old Labour exercising poor control in certain parts of the country; or new Tory, using those deficiencies to criticise the whole of local government. What we need is independent, well-organised, responsive local authorities which are able, if necessary, to self-finance through local taxation a response to local people's needs, and so guarantee a plural society in which power is spread and not concentrated and which I am sure Members of this House defend and support.

3.40 p.m.

Baroness Fisher of Rednal: My Lords, I thank the noble Lord, Lord Williams, for giving us the opportunity today to debate local government. The pace and radical nature of the change that local government has faced over the past decade has been mesmerising. It is almost impossible to understand the whys and wherefores of what the Government have tried to do with local government.

Government initiatives have been driven by a common philosophy; namely, that private enterprise is better than public service. This philosophy of free market competition has been forced upon councils in relation to planning and the provision of services. We have seen a gradual erosion of the power of local authorities, achieved principally by a reduction in finance—a reduction in government grants of all descriptions. We have seen all the government competitions that local authorities must enter, whereby they are asked to put in bids and show what they can do, and then at the end somebody says, "Five out of 10 of you can have some money". We have seen the introduction of capping and we have an initiative called "deregulation". I do not know who thinks up all the nomenclatures that now relate to what we used to call local democracy.

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The majority of electors are worried, as are the councils themselves, that local democracy is being taken from them. It is a matter of grave importance, about which the Government should think seriously.

All the councillors on local authorities live in the local areas. They know the electors, the schools and all the facilities that can be provided by their local authority. I was about to mention travelling on the buses, but that is no longer a concern of local authorities. How we miss that in the city of Birmingham, which was the first local authority to have free bus passes for old age pensioners. That was a long, long time ago, when my friend Denis Howell—now my noble friend Lord Howell, who is in the Chamber—and I were on the Birmingham City Council. I think my noble friend will agree with what I have said. Those initiatives can no longer take place. Every local authority has to operate within a rut to meet the Government's philosophy of free enterprise.

As a result, we see a lessening of the powers of local authorities. Sometimes that leads to local councillors wanting to resort in a very active way to different measures to prove that the Government are on the wrong track. It is in this respect that local authority councillors feel that their importance is a lot less than that of a quango. They no longer have a direct voice in parliaments. Local authorities are seen as a mere side-effect of governing the country.

I was therefore interested when the Prime Minister put forward his new thinking on a drive to bring government nearer to the people. I thought that at last the Government—I was about to say "had seen the red light", but being a female speaker I do not think that that is a phrase I should use. It is welcome that the Prime Minister wants to do that. I was interested in the regional government idea that I thought he had in mind. I thought that he might be thinking along the same lines as Labour. I thought about it seriously because of the new integrated regional offices, as the Government call them, that have been set up in different parts of the country. There are now 10 such offices, the largest of which is in the West Midlands. I understand that between them those offices employ nearly 4,000 people and control spending programmes for local authorities totalling almost £4.5 billion a year. What is the need for those offices? Perhaps the Minister could explain why they were set up and what the benefits will be for local authorities. I shall be interested in his reply.

What worries me is that this could be the first step towards creating quangos. One wonders whether that is what will arise from the establishment of regional offices, or whether it means that at last the Government have said, "We'll move all these civil servants out of London where they are completely wasting their time and get them into the regions. We'll get them working with local authorities and in future local authorities will be smiling". That would be a very welcome reply from the Minister.

I turn to education. This is the area in which the Government want to get nearer to the people. Therefore, they involved parents and governors in the schools. As a result of being involved, those parents and governors

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began to understand how the money was spent in schools. For a long time they have realised that the Government have not been playing fair with them. Consequently, they began to agitate, to go on marches, and to write to Ministers saying, "Come, come, you can't blame local government any more; it's your responsibility". That was because they had seen the books. Once parents and governors are given that responsibility they cannot be hoodwinked any more. They know where the fault lies. They realise that it does not lie with the local authority; that is why they go on marches. So that is now laid at the Government's door.

My remarks may have been humourous and perhaps not very sensible, and they may not have added to the debate; but on these Benches political values differ fundamentally in relation to the role of local authorities from those of the Government Benches. With that remark I rest my case.

3.47 p.m.

Lord Boyd-Carpenter: My Lords, like my noble friend Lady Young, I am very glad that noble Lords have the opportunity to discuss this enormously important subject this afternoon, although I must confess that I am sorry that we do so on the basis that most of the speeches are limited to seven minutes. As has already been demonstrated, the effect is that it is not possible to give way to an intervention and therefore to get a live debate going. Within a seven-minute time limit it is not possible to give way. All you can do is quickly make one or two points. The points that I want to make relate to finance.

I choose that topic deliberately because finance is probably the weakest area in local government today. The local government tax is proving highly unsatisfactory. It is unsatisfactory in one particular way that has not been mentioned. Householders are placed in a band for the purposes of local government taxation. You are told that you have a right of appeal. But in fact, the right of appeal is very, very slow in being effective. In my own case, I was placed in a band 18 months ago. I appealed at once, and my appeal has not yet been dealt with. I suggest that to have an important tax provision such as this with a so-called right of appeal which is not in fact honoured and effective for 18 months is undoubtedly a weakness. The amounts of money involved are substantial. I understand that the appeal has been undertaken by the Inland Revenue who quite obviously are not very interested in the matter. I hope that my noble friend the Minister will indicate that the Inland Revenue will be told to get on with it.

There is also the very important question of the way in which the tax is raised and applied. Where single tier government has been accepted, I believe that the system is working fairly well. But where two tiers of government are operating, the system works very strangely indeed. Perhaps I may again quote from my own experience in Hampshire. On my own property, the local government tax is levied by the Borough of Basingstoke, which in fact is some 20 miles away. But when papers are received in respect of that tax, it

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appears that nearly 90 per cent. of the revenue so raised does not go to Basingstoke but goes to Hampshire County Council at Winchester.

I suggest to your Lordships that it is quite wrong to have a system of taxation in which the amount of tax is decided by a body that will take quite a small share of it. If there is to be an effective system of local government taxation people should be able to weigh the benefits of the services rendered against the amount of tax demanded. When, as we are told, 90 per cent. of the revenue raised goes to an authority which does not impose the tax, then the discipline which otherwise operates is lost—the good discipline of knowing that if one imposes a tax, one has to face the unpopularity of that tax in order to justify the services which will be rendered. That seems to me to be another very serious defect of the system. It is indeed wrong for one authority to collect most of the money which another authority spends.

That disadvantage is overcome when there are single tier authorities. But as my noble friend the Minister will have to admit, the changes effected to the structure of local government have not been very far-reaching. Far too many authorities still remain two-tier, with what is to my mind a very serious division between the responsibility of raising revenue and the decisions on how that revenue shall be spent.

Finally, as regards finance, my noble friend Lord Orr-Ewing asked a very important Question earlier this afternoon. There are a number of major local authorities in this country which have incurred very heavy debts and have given the impression that they have not been particularly resolute in restraining the growth of debt. I do not wish to cast aspersions at the four local authorities mentioned in my noble friend's Question; but I ask your Lordships to have very much in mind the fact that those local authorities decided to incur very heavy debts indeed. That must be unsound finance. In the long run, it must work against their capacity to render proper services. It seems to me that it is thoroughly unsound.

I have referred to a number of points on finance, which is just one aspect—perhaps the most important one—of local government. I hope that my noble friend the Minister will be able to answer those questions. All of us in the House desire to see local government working well and it is quite clear that in matters of finance local government is not working well at the moment.

3.55 p.m.

Baroness David: My Lords, subsidiarity, on which the Government are very keen in the EU, is forgotten when policies affecting central and local government are concerned. There has been a constant sapping of the powers of local government since 1979, which has accelerated since John Major succeeded Margaret Thatcher.

So far as concerns financing, the abolition of the poll tax was followed by a significant decrease in the local government share of revenue raising. In fact, it is now down to 14 per cent. The combination of SSA and the

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capping regime effectively means that central government sets the expenditure and taxation levels for local government, which is left with a mere prioritising role.

Local government has lost control of higher education, further education, grant-maintained schools, school inspection, aspects of housing, the police and the careers service—waste management is soon to go. People have probably forgotten that local authorities once dealt with health. In each case, local democratic control has been replaced by quangos; the funding agency for schools; FEFC; TECs and the new police authorities.

The CCT legislation, now extended to white-collar workers, removes any discretion or independence from local government in responding to local circumstances. Many local authorities have provided examples of innovation in private sector contracting, without the diktat of central government. For example, my own county of Cambridgeshire has externalised its education personnel service, its information technology facilities management, and recently its transportation engineering services, all in response to local circumstances. CCT is more likely to inhibit such local innovation than to stimulate it. The Audit Commission has shown that CCT adds to costs rather than reduces them. A new report from the Equal Opportunities Commission puts beyond doubt the damage that it has done and the enormous waste that it has caused.

The local government review has been bitterly fought within local government. It is seen as a kind of hostile colonialism in Wales and Scotland, where it was imposed without an independent commission. After four years of the review the Secretary of State has revived it in a new form. We do not yet know the terms of reference. That will inevitably lead to a period of more uncertainty and loss of morale. There can be no expectation of delivering savings; very much the reverse.

So far as concerns Cambridgeshire, the first suggestion was for three unitary authorities: Huntingdonshire, Peterborough with Fenland and Cambridge City with South and East Cambs. When the people of the county had a chance to express their views, support was weak. The greatest support—35 per cent. in an independent MORI poll—was for the status quo. That is what the commission finally recommended to the Secretary of State in October 1994. Over four months later he announced that he was not prepared to accept the no-change recommendation but was to set up a new commission with a new chairman—Sir John having been unceremoniously sacked—to examine the case for Peterborough, among others, becoming a unitary authority. Also, he was prepared to look at the case for Huntingdon. Can there be anything in the fact that the MPs for Peterborough and Huntingdon happen to sit in the Cabinet with the Secretary of State?

Should both those suggestions become realities, the rest of Cambridgeshire would not have the population to sustain a two-tier structure; and as the Peterborough proposal is for the City of Peterborough, one wonders how the neighbouring towns, such as Whittlesey and Yaxley, which look to Peterborough for work and recreation, would manage. I myself would have favoured two unitary authorities based on Peterborough and Cambridge, which was what Redcliffe-Maud proposed in his Royal Commission report in 1970. That would have

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made sense and each would have been large enough to sustain key services such as education, libraries, social services, environmental planning and conservation. If the new review procedure produces the results that I fear it may, nothing but harm can be done to those services and another slice of public money which could have gone on those services will have been wasted.

It is depressing to see the deteriorating relationship between central and local government, now in the 1990s as evident in the shire counties as in the metropolitan areas. There are a number of reasons for that. Financial constraints have bitten much deeper. Many rural areas do not have the opportunity to "bid" for supplementary government grant—for example, City Challenge. GM legislation has hit LEAs more fiercely. The Conservative Party's demise in large swathes of shire England—Buckinghamshire is the one remaining Conservative-controlled council—has plainly had an impact. No wonder Conservative councillors are deserting in droves. Some of the most derogatory and dismissive observations from the Secretary of State and his Ministers have been directed at shire local authorities—for example Suffolk, Nottinghamshire and Cornwall—yet from shire counties (and I proudly say, particularly my own) there are many examples of innovation and good practice.

In praise of local government I point to the way it has successfully implemented a wide range of government-inspired legislation—complex and contentious legislation at that; for example, the abolition of the rates, replacement by the poll tax and then the council tax, at immense cost; the implementation of the Government's continuous programme of education reforms; the new "special needs" legislation; the introduction of Community Care; the implementation of the Children Act, and publication of statutory performance indicators and league tables required by the Audit Commission. Public opinion polls show high and increasing levels of satisfaction with local authority-provided services.

A new partnership must be founded on mutual respect. We must have change. I mind about local government; I believe in its importance and I want it to succeed. But it is not surprising that local government feels under siege from the range of government reforms, most of which have two principles. The first is to remove major services from local government and the second is to minimise any remaining freedom and discretion exercised by local authorities.

There must be acknowledgment that the centralising tendency has gone too far. I am sure that there could be partnership and co-operation if the Government could be persuaded to change tack. Can the Minister give us some hope? The future of local democracy is an extremely important issue and one which has implications for democracy itself.

4.2 p.m.

Lord Sefton of Garston: My Lords, in opening her speech the noble Baroness, Lady Young, referred to the question of when the change in local government first took place. All speakers will recognise that change has

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occurred. The powers that have been taken from local government are so obvious to everybody that there is no need for me to repeat them. But beneath that change we should understand what happened.

We can consider the police forces, to which the noble Baroness referred—the regional task forces. We should bear in mind how those task forces came into existence. One would assume that politicians had something to do with the formulation of regional task forces. No such thing. Regional task forces came into operation because the police services did not consider that they could do their job properly without a regional input. That sprang into regional task forces which were not answerable to a local authority. I doubt that they were answerable to the Government, though I suppose the Minister in charge of the Home Office may exert some influence on the regional police services. That is how they started.

I want to offer a challenge to the Minister. I was asked to explain to an audience in London (of all places!) the difference between the grants received by Greenwich and Westminster and how they were arrived at. My reply was that I did not know. However, it is simple to find out. All I had to do was write to the department, which would explain very carefully the difference between the two grants and all would be revealed. I did that and received back a folder about two inches thick. It was the SSA.

I found myself completely befuddled. The documents went into three, four and five decimal points about some part of the system on which they determined the grants. I sent the folder to a friend of mine who happened to be in the financial department of a local authority—and he shall be nameless. I asked whether he would mind persuading somebody in the authority to tell me the difference between Wandsworth and Greenwich in relation to grants. I received no reply. I am certain in my own mind that no politician in this Chamber can give us a reasonable and sensible explanation of the SSA. If my assumption is correct, can the Minister explain to this House, in terms that can be understood by everybody, how the SSA works? I have yet to find anybody in local government or in the local authority associations—perhaps we should ask them to explain how it works—who understands it.

That is the problem with local government. It is not political. I remember when I considered the change to be taking place; it was when a Labour Minister said, "The party is over". Up till then we had done well in Liverpool. We had all the usual procedures that go to launch a parliamentary Bill. We had a parliamentary Bill to govern the planning of Liverpool; we came to Parliament and had it approved, all with good consensus. Everybody agreed—there may have been party differences on some issues—that local government was one of the main essentials of our democratic system.

In my last three minutes I want to ask whether we still have local government. Can it be described as "local" when one of the services set up at great expense to ratepayers has been taken away. As was mentioned earlier, the Government should return some of the assets to local authorities. They should take them out of the hands of private enterprise and give them back. Such an undertaking was set up and now it is supposed to be a

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local service, yet at any time it is at the behest of shareholders who have shares in the company to sell it to somebody in France. Is that democracy?

In relation to electricity we see similar examples. We hear about sovereignty and democracy; no such thing. Local government is not local; neither is it democratic and neither, to a large extent, is it government. The transport services on Merseyside are not controlled by the local authorities; they are controlled by an ad hoc body which instructed nominees to sit on a board which considers transport. The real power is in the hands of the officers. That is the battle. It is not between parties; it is whether or not we as politicians, as parliamentarians, are so jealous of our Parliament and our democracy that we will stand up to the officers. I can give the House a perfect example.

I attended a delegation of some people from Manchester, which has one large undertaking. I am informed that if the Government wanted to change that undertaking there would need to be a parliamentary Bill. The Minister told Manchester transport authority, with representatives on it of the political parties, that it was to be split. They did not want that. So those representatives came down here and consulted some politicians, of which I was one. Because it was the other place I thought that I had better not open my mouth too much; after all, I am an undemocratic Member of Parliament. I left them all to do the talking and they put their case that they wanted to oppose the Minister and did not want the undertaking split up under any circumstances.

At the end of the meeting I said, "Look, are you being honest? Are you really telling me—a Manchester politician—that you are determined to oppose the Minister and make him come to Parliament for a parliamentary Bill?" "Yes", was the reply; "We will fight, fight and fight again in order to ensure the worthiness of our cause". Did they fight? No. I forecast then that within 12 months they would agree to the scheme prepared by Ministers and accept it. What was the result? They accepted it because in fact our so-called local democracy has ceased to be.

I say this across parties because I am not beholden to one party on the question of local democracy. I am glad to see that our new Labour Party will commit itself to decisions that are taken and that it will in fact introduce methods of control for new organisations. However, there is only one way to do it, and that is through proper democracy. I put forward a suggestion. The first thing a Labour Government should do is to pass a Bill on all essential services that makes it compulsory for all those services such as gas, electricity and water to consult representatives of each local authority concerned. That will be a good start to restoring proper democracy.

4.10 p.m.

Lord Bellwin: My Lords, an allocation of seven minutes to talk on this subject really is a joke. I just do not know even where to begin. I am grateful to the noble Lord, Lord Williams, for bringing it forward but I had my reservations initially and I have to say that had I realised the limitations, frankly, I would not have taken part. All one can do is make a few observations very

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quickly, touch on a few subjects and then sit down and hope for the best. Perhaps I may say first of all—and I am using part of my precious seven minutes to do so—what a pleasure it is for me to listen to my old friends, even though I do not agree with most of what they say, such as Bill Sefton, Doris Fisher, and many others. It is a bit like old times for me.

As the song says, where do I begin? To touch quickly on just a few points, may I say to the noble Lord, Lord Sefton, yes, I absolutely do understand how the SSAs work. I was the Minister responsible for introducing block grant in 1981-82. I knew how that worked and I know how the SSAs work but I cannot cover the subject in seven minutes, to the exclusion of everything else. However, I should be glad to talk to my old friend, and any one else, about this subject later on. I know how it works. It is not that difficult. In actual fact there are many people who think it is the finest system that there is anywhere. Perhaps I may quote —I know I have got to speak very quickly—what others say of it. The Audit Commission said:


    "A more sophisticated system for equalising needs than any overseas system examined in this study".

That is what the SSA system is. It is simply a means of measuring all the demographics within each authority, applying a formula to them to base need and then issuing grant. This is all intended to equalise. If that all sounds complicated, well, that is only until you start to look at it, and then it becomes something less. Anyway, I think it is a good system. Tony Travers of the London School of Economics—by no means a Conservative—and Rita Hale of CIPFA said of the SSA system:


    "No overseas country appears to have a full grant system which goes so far in its attempt to achieve equalisation".

Regarding CCT, may I say to the noble Baroness, Lady David,—another old antagonist but a friend, I hope, nevertheless—that I could not disagree with her more. The facts show that CCT has led to an average saving of seven potential contract values, usually coupled with improvements in quality. Even David Blunkett—not a Conservative—said:


    "It would be foolish to pretend that the jolt given to many local authorities has not had some beneficial effect in stimulating their own concentration on quality as well as improved managerial practice. CCT has resulted in poorly organised DSOs re-examining their role and efficiency."

It is actually common sense and I speak even today with lots of local authority leaders. Although they do not like some aspects of it they all agree that it must be right in many ways and they are all getting better value for money.

On the subject of quangos, I remind noble Lords opposite, just for the record, that there are now some 1,000 fewer quangos in the country than there were in 1979. There are 100,000 fewer people now working in quangos than there were in 1979. If anyone wants to question that with me later I shall be glad to give the source of that information.

I was sorry the noble Lord, Lord Williams, did not say anything—I presume others will later on—about the Labour Party's intentions regarding regional government. To use a Yorkshire saying, "It's just barmy". I am absolutely convinced that by the time the election comes

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the Labour Party will long have abandoned that one. It makes no sense whatsoever to talk about bringing local government closer to people when it will have precisely the opposite effect. It will simply add another tier at the most enormous cost, with committees, talking shops and all the rest of the things that go with it.

And what will it achieve? It will achieve the division of funds and resources at local levels. Fights will take place. I have yet to meet one Labour leader—and I have spoken to a number of them—who envisages the whole thing other than with some sort of horror. It is interesting that in a government survey of 1991 on local government structure one sees that of the 1,900 organisations which replied only 26—fewer than 2 per cent.—were in favour of regional government. That means that 98 per cent. were not in favour. I reckon that is a pretty fair margin by any criteria.

The noble Baroness, Lady Fisher, talked about the regional offices. It is not for me to answer on that, but I think it is a splendid idea, where there are four or five regional offices for each department in major areas, to take them all together and have them under one heading. All else apart, the saving is enormous and from what I have seen of it working in Leeds it is extremely good. I am all for it.

I should have liked very much to talk about certain things I should like to see in local government but one hardly has the chance to do that in seven minutes. However, I should like to say that there are some good things taking place. For instance, I like very much the way in which local government is now working much more closely with the private sector. They are doing things together, making land available and achieving all kinds of things. If you go round our cities you can see in nearly every one of them instances of the local authority working with the private sector; and that work is now producing all kinds of developments, to the benefit of the people. That has to be good, and I welcome it. I do not think anyone would do otherwise really.

Among other things that I had hoped to touch on but which I hope will be discussed by other speakers later, one was to discuss ways in which we can do it all better. For instance, ought there to be the same number of councillors per ward as there are now? Are our councils too big? Should they be smaller? Certainly I know things are done differently in other countries. Los Angeles has only 13 elected members, but they are all paid. Whether that is good or bad I do not know: you can argue about that. It probably is not good, but still it happens. There ought to be better ways of doing things and it is these things I hope the Select Committee will eventually be talking about.

There are other novel things we can do—better things—for which many of us have worked for such a large part of our lives and which we want to see better done. I am not happy when people are unhappy. It has got to be something we do together: otherwise it is all meaningless.

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4.19 p.m.

Lord Parry: My Lords, despite the cheerful assurances of the noble Lord, Lord Bellwin, these standard spending assessments remain a total mystery to me. However, I am sure he would agree with me that it is essential, however they are arrived at, that the new authorities should have an early indication as to what they will have for 1996 and 1997 in order to have a financial target at which to aim. Presently, existing councils have a rough idea of what will happen in the following financial year, based on previous spending performance, but in the case of the new unitary authorities there will be no such background of information on which to formulate their spending plans. It is therefore vitally important that details of the likely SSAs are provided as soon as possible. Can the noble Earl tell the House how soon the shadow authorities in Wales will be told their standard spending assessment?

On finance generally, it is essential that the SSAs, the capping levels, and so on, should be fixed at a realistic level and that the government funding should reflect each council's needs. The new authorities should not be financially squeezed in their first year of existence to an extent where they are unable to deliver services adequately. For example, there should be, as the noble Lord, Lord Williams, indicated, no repetition of the situation last year when the Government agreed to pay an award to teachers, but did not make provision to fund it in the revenue support grant settlement. The SSAs should represent reasonably the level of expenditure proved necessary by the former authority's record plus the disaggregated proportion of the former county authority's precept. Can the Minister confirm that that will in fact be the case?

I am told that most issues relating to the transfer of staff from the present to the new authorities have now become clearer. However, the problem remains of disaggregating county council staff. For example, in my own existing county of Dyfed, the staff will have to be split between three new unitary authorities. That will mean 240 people transferred to Pembrokeshire from Carmarthenshire and 160 to Cardiganshire from Carmarthenshire, which is 400 people in all. It has been agreed that that should be done on the basis of population.

That creates its own problems in deciding who goes where and how they can be fitted into the structure set up by the shadow councils. Almost inevitably there will be redundancies after 1st April 1996, as all staff now have the right to transfer, but do not have the guarantee of a job under the new structure. There will be contests and claims made against the new system. The Minister may agree with me that the Government should make adequate provision to cover redundancy costs rather than have them borne by the new authorities at the expense of other service provision.

I have received a letter from outside Wales and my own area of influence. It is from the chairman of the education committee for the Royal County of Berkshire. She asks me to add a question to the list which I am asking on behalf of my own area. Will the Minister answer her question? The question is: Why has Berkshire been singled out in this way so as to cause

26 Apr 1995 : Column 939

even greater difficulties, as she sees it, than those which appertain in Pembrokeshire? I simply add that question to my list. I know that the Minister is grateful to me for asking these detailed questions.

There is also the vexed question of "detriment". It applies to those staff who obtain posts with a new authority but at a salary lower than they presently earn. The Government have approved a detriment scheme which will enable such staff to retain their present salary for a period of three years. Apparently, most of the criticisms of the original draft scheme have been met and rectified. But again, the question arises as to where the money is coming from to cover the detrimental schemes. The local authorities in West Wales have expressed concern to the Staff Commission for Wales concerning the terms of the compensation for redundancy regulations. While accepting that there is little possibility of these being further amended, there is one matter that should be further considered, which is termed "clawback".

When an employee decides to leave under the compensation provisions, and additional service exceeds six-and-two-thirds years and there is entitlement to redundancy pay, compensation under the regulations is abated or clawed back. The retirement lump sum is reduced and sometimes the retirement pension. This effectively nullifies in whole or in part the value of a redundancy payment.

I hope that that can be accepted as a very real disincentive to retirement from that very group of staff that local government would expect to leave. The local authority for Pembrokeshire is a major employer and undoubtedly there will be eventually a reduction in jobs as a result of reorganisation. Current provisions that act as a very real disincentive to retirement for those who would consider leaving need to be dealt with, and I urge that for the local government period in Wales at least, which is up to 31st March 1997, it would be very helpful if these clawback arrangements could be set aside.

I had planned to speak about compulsory competitive tendering, but I shall simply ask a question. Will the Government consider deferring the requirements for 12 months? We can then perhaps return to the arguments.

I shall just introduce electoral arrangements. As regards the fire brigades of the new authorities, there will be some disintegration of all these services in Wales. In fact, two of the authorities have received commendations in the Government's own terms.

Perhaps I may conclude by underlining what one very senior Welsh local government officer said. He will be accepting redundancy because he is "disappointed and disillusioned by all the uncertainties". He told me yesterday, "The general view of senior officers and experienced councillors from all parties is that the underlying intention is not so much to reform local government as to disinvent it".

4.25 p.m.

Lord Dean of Beswick: My Lords, I too welcome the opportunity to take part in this debate on local government. As most speakers have said, one cannot cover many of the areas of local government in seven

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minutes. First, I wish to deal with a Question asked earlier today during which the noble Lord, Lord Elton, intervened on the side of the Government. I believe that he made my case in what he said. He asked why local authorities do not spend more of their assets in order to help run the cities. That was my point. The assets that I was speaking about were probably the largest that they had and the easiest to filter through the legal process. The Government perpetrated an act of legalised brigandry on local authorities when they privatised the water industries and confiscated the money. It was a diabolical act and one of the worst actions that any government have taken against local authorities in this country. They were substantial sums of money which could have been used to keep debt charges down.

I wish to question some of the responsibilities which have now been placed on local government by the Government and which are seriously underfunded. When I was in local government I was opposed to the implementation of the Seebohm Act which gathered unto itself care from the cradle to the grave in one huge committee known as the social services committee. I believe that I was the first to make a plea in your Lordships' House about care for the aged which used to take place in the community through the old welfare services department before it was amalgamated into the new social services department, along with childcare. That body used to do a job for which it was well suited and better suited than any other agency. At last the Government saw sense and brought in community care, but grossly underfunded it.

It is not only me who is saying this. One has only to read the press at weekends to realise that elderly people are having to mortgage their homes or whatever assets they have, in order to obtain adequate nursing accommodation when they are on the downward trail and permanently ill. It is one of the disgraces of our community that in some cases we have allowed that to happen because those people belong to the generation which made the biggest input to the wealth of the country as a result of their hard work over a long period of time in order to get that money together. I understand that the Prime Minister himself has taken this matter on board and has asked a working party to report on it in order to resolve the problem. The sooner we get away from the problem the better. The sooner that local authorities are given finance to take care of the ageing population, the better it will be done to the satisfaction of most people concerned.

With the permission of your Lordships, I quote from today's Evening Standard in which Mr. Major, the Prime Minister, attacks the grey face of London. He speaks about the monstrosities that were built in the last housing drive by local government but force-fed by the governments of the day, both Conservative and Labour, which insisted on building properties which local authorities in the main did not want. He wants to change all that.

The Prime Minister spoke about the success of London Docklands. I do not begrudge that success. It is a marvellous achievement. However, I must tell your Lordships that of all the money that the Government have made available for inner-city development, 90 per

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cent. has been spent in London. I am not arguing that point, but surely only 10 per cent. for the rest of the country—for Liverpool, Leeds, Sheffield and Manchester—is an absolute pittance. If those cities had received similar financial support, they would not have needed urban development corporations. The local authorities could have done the job themselves—but only if they had been allowed the money.

If the Prime Minister really wants to rejuvenate the inner cities by providing affordable housing, the Government will have to put their money where their mouth is. Once again, the Prime Minister is falling back on the idea of partnership with the private sector. I am in favour of that. If the private sector can be persuaded to put in money pound for pound to help to provide low-cost housing for rent, that would be ideal. I have never been against that. I have never thought that everybody wants to live in council houses. There should be alternatives. I hope that the Prime Minister's words do not fall on deaf ears. I hope that private investment will come forward. But first the mould that the Government have been operating since 1979 must be broken. They have virtually banned local authorities building houses for rent. That is nonsense. It is nonsense to prevent local authorities embarking on building programmes which would also help the building industry.

Up to a few years ago I used to speak on housing pretty regularly at the Dispatch Box and I always pressed the Minister of the day to allow local authorities to get on with their historical job. All the reports from non-political groups, including the Duke of Edinburgh's Report and that entitled Faith in the City from the most reverend Primate the Archbishop of Canterbury, have come up with the figure of 100,000 extra houses a year being needed for rent if we are to get rid of the appalling homelessness that now faces us. I was constantly advised by the Minister of the day that the Government would do that—but through the Housing Corporation and with the help of housing associations.

But what has happened? About two years ago, I was told by the noble Baroness, Lady Blatch, when she served at the Department of the Environment—it might have been another Minister, but I believe that my recollection is correct—that eventually the housing associations, through the auspices of the Housing Corporation, would achieve their target of building 68,000 houses a year. But what has happened this year? That figure has been cut drastically to, I believe, a total of about 30,000. Indeed, the figure has dipped because at one time it reached over 40,000.

On that basis, are we ever going to be able to tackle the housing problem in this country? Over the past 10 years, the number of registered homeless has increased by 50 per cent.—and that does not include the number of people who do not have a roof over their head but who do not register as homeless. If they are included in the calculation, the official figure trebles. As I said, seven minutes is not long to discuss all this, but I hope that I have

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given your Lordships some ideas of the direction that we should be taking if we are to deal with the current situation.

4.33 p.m.

Baroness Seccombe: My Lords, I also should like to thank the noble Lord, Lord Williams of Elvel, for bringing this matter before the House today. It is timely that we should debate the state of local government just one week before going to the polls.

I was very tentative about speaking today as I have had only one four-year term on a local authority. Sadly, the electors decided that I should not continue—and then the same fate befell the West Midland County Council as four years later it too ceased to continue.

I am a great supporter of local government. I believe that people who live and work in their communities should have control over the cost and quality of the services they receive. They should also have the ability to shape the development of their local environment. Over the years, many distinguished people have given outstanding service, often without remuneration, so I should like to pay tribute to them, and of course to everyone who has made a devoted and unstinting contribution in his or her capacity as a councillor.

I pondered on whether I should concentrate on how Conservative councils give a better quality of service to their council tax payers—and always with a better value for money—but, as the Audit Commission has confirmed that, I decided not to do so. On reflection, I thought it would be useful to remind ourselves of where the Labour Party, old or new, stands on two issues: competitive tendering and regional government.

I am sure that we all remember that during the 1970s local government had become inefficient, bureaucratic and overstaffed. We can probably all recall an example of that. My own is the sight of the local refuse vehicle, with all the refuse collectors relaxing on it, parked at the cricket club from 12.30 to 3 p.m. as they were not allowed back in the depot until then.

Change obviously had to take place. In our personal lives, we shop around to find where we can get the best value for money. It therefore was sensible to take the same attitude with some of the services provided by local authorities. Legislation in the Local Government Act 1988 extended a whole range of services, such as refuse collection, street cleaning and catering services, to compulsory tendering. That followed the success of some Conservative councils which had pioneered the initiative of introducing competition into the provision of local services. The result has been an enormous success, and council tax payers across the country have benefited and received services giving real value for money. The legislation was fiercely contested by the Labour Party which, sadly, too often behaves as if local services should be run in the interests of those who provide them.

Labour's 1992 general election manifesto committed a future Labour Government to abolishing CCT. There then appeared to be a softening of attitude on the issue, but in recent weeks "New Labour", just like "Old

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Labour", appears to commit the party to abolishing CCT. As it says—I quote from Renewing Democracy, Rebuilding Communities:


    "Labour believes it would be best for everyone to end compulsory competitive tendering".

That worries me—and it worries me even more when I read that the national secretary of the TGWU, Mr. Jack Dromey, Harriet Harman's husband, and hailed as the great moderniser referred to—again I quote:


    "the detailed discussions between the unions and Labour's front bench prior to the publication of the document"—

that is, the document to which I referred a few moments ago. He said on another occasion:


    "A local authority must include as many hurdles as it can in the tender specification it sends to private contractors. It must try every possible way to prevent services being taken over by private firms."

I find that very threatening and I cannot conceive how it could possibly be in the public interest. We want a quality service at the lowest cost. It certainly does not seem that that is a priority for the Labour Party of the 1990s.

The second issue which concerns me greatly is the confusion over regional government in England. My experience on the doorstep is that people are not the slightest bit interested in yet another layer of government. I believe that what they want is good government at Westminster and good administration in their local councils. I live in the Midlands and I have never heard anyone clamouring for a regional assembly. As a resident of Stratford-upon-Avon, I cannot believe that there is anyone there who would welcome that expensive bureaucratic tier, which would probably be based in Birmingham. What would it do? Would central government and local government give up powers to the new body? Perhaps I can follow my noble friend Lord Bellwin and say, "What a barmy idea!"

It is difficult to find out where the Labour Party stands on this issue. One day it is for it; the next it is not so sure. I can surmise only that it is the West Lothian issue that is at the bottom of it. Frightened of the SNP, the Labour Party has committed itself to a Scottish parliament and an assembly in Wales. Why they should be different I do not know. Therefore, it had to suggest regional assemblies for England in order to get around the difficulties of the West Lothian question.

I believe that regional assemblies would be resented by English people, cause friction within the Union of the United Kingdom, reduce our influence in the European Union and be a very expensive folly. I believe that it is right to be discussing these matters today as I believe that there is a very real threat to local government.

4.40 p.m.

Lord Desai: My Lords, the noble Baroness, Lady Young, said that all of us have some experience of local government. I rise to say that I have no active experience whatever of local government. However, I hope that being an academic I can still spend seven minutes saying something useful.

For a long time there have been attempts to reform local government. For the past 20 years we have heard of Royal Commissions, Green Papers, White Papers,

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reform and so on. There is a great superstition that local authorities spend too much money. Anyone who looked at the figures would know that for every £1 that local authorities could overspend—and they cannot—central government has overspent much more. Earlier today we discussed local authority debt. Compared to the national debt, local authority debt is puny.

We had grant-related expenditure assessments and now we have standard spending assessments. We had the poll tax and now we have the council tax. All those efforts have resulted only in the fact that local authority spending as a proportion of GDP was 12 per cent. in the 1970s and it is 12 per cent. today. That is flat as flat can be. Of course, one may argue that it took a great deal of effort to achieve that. But along the way there has been enormous waste. One could have built several hospitals for the amount of money that the poll tax cost the country.

One may ask why it is that there is a suspicion of local government. Why have considerable attempts been made by the present Government to turn British local government into the French model of centralised préfectures, which are run from the top with little local freedom? I argue that it is based on two aspects: ignorance and contempt. Whitehall is ignorant of townhall and has contempt for it. I do not make such an assertion lightly.

I wish to quote extensively from a research report which was published by the independent Commission for Local Democracy. It was written by two colleagues of mine at the London School of Economics, George Jones and Tony Travers. They interviewed many civil servants, former Ministers and Ministers. They prepared a paper called Attitudes to Local Government in Westminster and Whitehall. It makes chilling reading and is somewhat amusing too.

All the people must remain nameless, which was the condition under which they agreed to be interviewed. Therefore, the guilty shall remain nameless. A former Minister stated:


    "Local government is a lower middle-class activity, of course with some exceptions. The top mandarins of the civil service come from different social strata from those in local government. There are more graduates in Parliament than in local councils. These differences point to differences in quality ... Local government people have limited vision. There are some good chief officers, but a lot are pretty ordinary. Mayors are chosen on Buggin's Turn: they have no ideas and cannot speak. Parties find it hard to get good candidates to stand for election".

That was summarised by a civil servant who said that civil servants possess:


    "Rolls-Royce minds and local government officers have motor-cyclists' minds".

If people start with such an attitude, is it a surprise that we have what we have?

A former adviser at the Treasury and at the Department of the Environment stated:


    "the Treasury sees local government as an unnecessary encumbrance the country can ill afford ... a hole in cost control ... a threat to macroeconomic policies".

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The Treasury, which spends several times what it allows local government to spend and has such little control over spending that lately we have seen some spectacular PSBR figures, blames the local authorities for what it presumes is overspending.

Of course, the truth is that local authorities have limited powers to spend. They are not allowed to raise revenues locally and that is a great denial of democracy. When this Government first came into power they had a great theory called "the theory of public choice", which is market oriented. The theory was that if there is accountability these people will not get away with over spending.

But local authorities are perfectly willing to state in an election campaign, "We will tax you more". When rate-capping was introduced I went around collecting signatures. Plenty of people in Islington were willing to sign a paper stating that they did not want rate-capping. They would rather pay rates and have decent services than have central government tell their local government how much to spend and how much to tax. We have neither local taxation nor local control on revenue.

The standard spending assessment comes from something called "a regression analysis". I know a great deal about regression analysis but I shall not bore your Lordships with that. The point about it is that it shows only that across all the authorities the average weekly cost of keeping a five year-old child is £35.20. That is an average figure and is an utterly useless device for settling local variations. I did not make that up; it is part of statistical theory. I would not mind making it up but I do not have to.

Rigid centralised formulae have been used to take away local government autonomy and, by and large, to have deteriorating local services in the Government's hope that the people will dislike their local authorities. What happens time and time again—and it will happen next week—is that more and more people are supporting the Labour party. Next week there will be no Conservative councils left in this country.

4.48 p.m.

Lord Stoddart of Swindon: My Lords, I wish to declare three interests. First, I have the honour to be vice-president of the Association of District Councils. Secondly, I am an adviser to UNISON. Thirdly, for 18 years I served as a member of the Reading County Borough Council, leading it for seven years. Of course, that was in the days when there was real local government, a proper partnership between central government and local government and when each organisation respected what the other did.

Now we have central government with all the power, having taken most of it away from local government. I believe that all noble Lords will agree that in this country we want independent, viable, well-governed local government that is organised in units near to the people and accountable to them. It should operate with the minimum of interference from government and with wide powers to provide, control and direct services within its area. That is essential to democratic government.

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The Victorians knew that and provided us with just such a democratic local government system. That is a Victorian value which the present government have failed to emulate. Indeed, they have gone out of their way to destroy what Victorian Conservatives and others built in local government.

One of the policies which illustrates just how centralising this Government are—and we have already heard about it—is that of compulsory competitive tendering, not only for manual services such as refuse collection and street cleaning but now for administrative services, including housing management. If ever there were a social service which needs sensitivity and continuity, it is housing management.

The noble Baroness, Lady Seccombe, who unfortunately is not in her place, criticised local government and sought to join us all with that slanderous criticism. I now unjoin us from it because I believe that it was a slander on local government which will be very much resented by those decent people who give to local government their voluntary services now and who have done so for many years past.

Perhaps I may return to compulsory market-testing madness, because that is what it has become. It is now causing local government real problems and indeed, some of those problems were set out in an excellent article by Sonia Purnell in Monday's's Daily Telegraph. I should like to quote some passages from that article to show how CCT is indeed failing. The article states:


    "The Government's drive to privatise council services is in crisis with increasing resistance from local authorities of all political colours.


    Scores of contractors have gone bust or been sacked, costs are rising and local government auditors have given warning about the increasing risk of corruption with so many multi-million pound contracts at stake".

The article later continues:


    "Some of the contractors have also expressed doubts about its efficacy, particularly when it compels councils to privatise, often against their will, and attracts over-agressive bidding with a resultant low priority on quality".

Those are not my words. That is an article in the Daily Telegraph, which I hope noble Lords opposite still read. I wish that they would do so because it would give them some very good advice which they may wish to take on occasion.

For local government to succeed and for it to be free, effective and accountable, it must be financed properly from sources over which it has control, not from handouts from central government who then seek to dictate which services should be provided and what should be the level of those services. As my noble friend pointed out, it is nonsensical that local authorities are now raising only 15 per cent. to 20 per cent. of their expenditure from one significant source; that is, domestic council taxpayers. It is even more nonsensical that the Government are permitting only a 0.4 per cent. increase in the standard spending assessments this year when their own limit for their own spending is six times that, with a 2.4 per cent. increase. Some government departments are spending even more than that.

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Local governments need far greater access to their own resources. I believe that they should have a share as of right and at a locally decided rate of some of the taxes which at present go to central government; for example, a locally determined local sales tax. But that is for the future and after much debate.

But one source of finance which could be returned immediately to local government is the business rate. That was removed from local government because businesses moaned constantly to the Government that they were being mulcted by local authorities. They have since learnt to their cost that central government are more predatory and less efficient than local government. I believe that many businesses would now return gladly to the local business rate, particularly if they were given an input into local government decision-making.

I say to my noble friends on the Front Bench that we need the Labour Party—because it will not happen with this Government—to return to local government the services that have been lost. Having returned those services, they must trust local government to do its job. Let the Labour Party remember that it built itself up on independent local government and it should never forget that. What is more, the Labour Party should remember that more power breeds a more rather than less responsible attitude. Let the Labour Party trust local government because the Conservatives never will.

4.56 p.m.

Lord Dixon-Smith: My Lords, I speak with some pride as a fairly recently-created vice-president of the Association of County Councils. I am doubly proud because I happen to know that one of my predecessors as chairman of that association is also to speak in the debate. It says something for the quality of local government that there are two of us here from opposite sides of the House.

Of course, it is not for anyone to impute a political motive for a debate on local government at a time such as this but we should all be grateful to the Labour Party because it has made possible a wider examination of some of the significant issues which face society today. That wider examination arises because local government is a part of government. It is not a separate estate which stands alone but is part of a whole. Thus, in examining the attitudes of one part of government, we must inevitably illuminate and throw light on attitudes relating to the remainder. When we do that, we begin to come up against some very difficult questions which I suspect those who promoted the debate would prefer not to have to answer.

I have listened with great care to what has been said today about local government and in particular about the problems of those government services for which it is responsible. Those are serious matters of vital interest to all members of the community and as such are portrayed by speakers with a careful eye on the impression that they wish to create in the minds of the public, even if that means paying more attention to difficulties and problems than to successes.

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But behind all the criticism and complaint, there is a common theme: everything would be better if only the Government would allow the odd extra million pounds here, the odd few hundred thousand pounds there, and so on. Money is the problem and always has been; and of course it is the Government's fault.

I should perhaps make it clear that I believe very strongly in local government. I spent 28 years working hard in it. I believe in the power of local, democratically-elected representatives to set priorities and to guide and develop their communities. Decisions affecting people's lives should be taken at the closest possible level to those people.

But we must remember all the time that it has long been the case in this country that authority for such powers of decision-making is given to the representatives of the community by Parliament, and Parliament always has had the right to define the limit of those powers. Thus it is that the relationship between the two levels of administration has always been tense. And so I edge slowly towards those difficult questions.

During my years as a councillor, I had the privilege and good fortune to work with many people who sought to serve their community. Whatever our political affiliation, we had a common interest that helped to bring us together even when the differences of political party seemed insuperable. However, even with that common interest, there was always a distinction within the political and administrative tussles which clearly defined the lines of debate and decision. That difference was over the subject of money. Is it correct strictly to manage resources so as to squeeze out the last drop of value from every pound spent that is taken from the pockets of the public, or is public expenditure inherently good, and therefore, by definition, more public expenditure inherently better?

And so I come to these difficult questions to which not just we as Members of this House should have clear answers, but which the public at large should seek to have clearly answered also. When I look at local government today, I see all my old colleagues, whose appetite to spend was greater than their capacity to manage, present in increasing numbers. Moreover, local government, which dispenses around 20 per cent. of national public expenditure, has lost none of its old appetites. Of course, it still retains its powers of resource allocation between the various services for which it has responsibility and so still has real power to influence the style and ambience of a community because central government funds are largely distributed through a general grant that does not seek to define the way that money is spent, whatever the method of calculation for the distribution of that grant between authorities might seem to imply. But, local government's power to raise its own funds independently is constrained by Parliament, as eventually it had to be because local government's appetite was too great for the national economy to bear.

In all of this we know the position of the Government and their determination to manage the nation's finances to the wider benefit of all the community, restraining inflation and creating scope for an enlarging economy through the increase of industry and commerce. We do

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not know the position of Her Majesty's loyal Opposition. Do they believe that 20 per cent. of public expenditure can be unfettered and run without government interest? I have read speeches about the possible removal of capping, which is always carefully qualified. If capping is to be removed, what constraint will be put in its place? Alternatively, might we have to consider the possibility of legislative recantation post facto? Will authorities be permitted to push local expenditure up to the point where economic migration takes place again within this country, as used to be the case?

We need answers to those questions because that will illumine the attitude of the Opposition to the national economy. Do they believe that the whole business of government should be tightly managed, or do they believe, as they appeared to do in the past—and as most of their members in local government still appear to do—that the business of government is service driven and that the costs of services must be met whatever the burden on the nation and whatever the burden such a course implies?

I understand all too well the great efforts that are made in another place to avoid anything that might look like a financial commitment and that could make it possible to begin to answer such questions. I understand why it is better to concentrate on window dressing, such as Clause 4 and the party constitution. But we need answers to those questions because, whatever the state of local government now, if we do not have such answers its fate in the future may be much worse.

5.4 p.m.

Lord Monkswell: My Lords, I should also like to join other noble Lords in thanking my noble friend Lord Williams of Elvel for introducing the debate. My noble friend was exactly right when he said that what we had to look at was the relationship between central and local government and between the structures that we have and the involvement of electors.

One of the concepts that I should like to think of as my little theme in today's debate is respect for people. I was interested in the remarks made by the noble Lord, Lord Dixon-Smith, who said that local government always asks for more money. Well, everyone asks for more money. It is the responsible consideration of borrowing money, raising taxes and spending that money that is important when one thinks in terms of respect for people. The noble Lord said that it was Parliament's responsibility to set the limits and rules. But what right have parliamentarians to make decisions about the spending of our money—indeed, taxpayers' money—compared with the right of elected representatives at the local level? What makes them different? What makes Members of another place different from local councillors in terms of their capacity to raise revenue and spend it?

I had not intended to spend much time—and, indeed, there is not much time available—talking about the finances of local government. However, I should like to mention two elements. I shall refer, first, to the capital element which was discussed during Question Time today. I should like to give your Lordships an example of the problems that we were faced with in Manchester City Council. Because of government restrictions on our

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ability to raise and spend capital, we had the problem of disintegrating schools—that is, schools with leaking roofs which needed major capital repairs and schools that had in fact gone well beyond the end of their designed life which needed to be bulldozed and replaced with new schools.

A few years ago, while I was serving on Manchester City Council, we asked the Government for permission to borrow money. That is what one has to do in local government—one has to go to the Government and ask for permission to borrow money upon which one then has to pay interest. It is not a question of asking the Government for money; it is a question of asking the Government for permission to borrow and spend money. We wanted to spend £30 million on capital repairs and on rebuilding projects for our schools. I should point out to your Lordships that we could probably have spent £100 million and made still further improvements. However, we asked permission to borrow £30 million and we were given permission to borrow £3 million. Such local government problems cause a deterioration in capital stock. That is not the right way to go about it.

I have a question for the noble Earl to which I hope he will respond. I have in mind the problems, especially this year, with school budgets. In fact, the impact will, effectively, hit them next year in terms of funding. Because of the individual characteristics of schools and the formula funding of LMS, some schools will have a deficit while others may have a surplus. Moreover, there is a requirement that they balance the books on an annual basis. As regards next year and, possibly, the year after, will the Government permit local education authorities to retain the surpluses from those schools which have them and use them to go towards meeting the deficits of the schools concerned? Will the Government also allow the budgets to be rolled over across two or three years to enable some of the problems to be tackled?

In the remaining two minutes at my disposal, I should like to talk about the structure of local government. I suggest that what we should be about is enabling people to come together to do things that people want to do collectively. Some may want to produce better or different services than others. I suggest that we think of it in terms of a range of tiers and in terms of a community or a parish coming together to do things at that level or a district or a town coming together to do things at that level, or in terms of a county or an urban conurbation coming together to do things at that level, that will benefit those communities.

Should we not think in terms of (dare I say it?) our national Parliament bringing people together and enabling the nation as a whole to do things together? Unfortunately, over the past few years, we have been singularly bad at doing things at a national level. One thinks of the national economy and the way we respect people or the way we utilise people. Some 25 per cent. of our population is not properly utilised, harnessed and economically active. That is a major scandal that affects our national community. I hope that we can have some

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respect for all of our fellow citizens and enable them to build the structures, to work, to come together, to be supportive and to govern themselves.

5.11 p.m.

Baroness Nicol: My Lords, I begin to wonder what place my particular contribution has in this afternoon's debate, having heard the rather heated speeches which have come from both sides. I do not propose to be heated because I am glad of this opportunity to speak about a subject in which I have a great interest. I am grateful to my noble friend for giving me the opportunity to do so.

I wish to concentrate on one local authority area of activity which seems to go unnoticed by most commentators, and has certainly gone unnoticed this afternoon. I do not think a single speaker has referred to it, and yet it is a subject which underpins all the activities of local authorities, and indeed all our activities too, and that is the creation and the implementation of Local Agenda 21. I am sure that there will be blank faces when I mention that because whenever I have mentioned to anyone in the past week that I wish to speak about Local Agenda 21, they have asked me what it is. Therefore, I had better explain.

During the Earth Summit conference on sustainable development in Rio in 1992, local authorities worldwide were challenged in the following terms, that,


    "By 1996 most LAs in each country should have undertaken a consultative process with their populations, and achieved a consensus on a 'Local Agenda 21' for the community".

The purpose of the exercise is to support and take forward at local level the strategies needed to achieve the aims agreed at Rio. I remind your Lordships that those aims were fully supported by our Government, and therefore the work that is being done by local authorities should be, and I hope is, done in co-operation with national government and should be supported by them.

Despite the difficulties of which the noble Lord, Lord Williams, and others have spoken, local authorities have taken up the challenge in a commendable, all-party effort. I stress that it is an all-party effort. There has been no party division on this whatever. The local authority associations set up a Local Agenda 21 steering group which started work at the end of 1992. I believe that the noble Baroness, Lady Thomas of Walliswood, was the only speaker who agreed that green issues were a firm objective of local authorities. I am glad of that small bit of support on that matter; I have not heard any from anyone else! The efforts of the local authority associations have already been recognised by the United Nations commission on sustainable development—which has invited the chairman of Local Agenda 21 to address its next meeting—and indeed by His Royal Highness Prince Charles who has promised his support. They have produced guidance notes to assist local authorities to identify the need for integrating sustainable development criteria into all local authority policies and activities, and indeed to raise public awareness on the issue. Already there is an impressive list of subjects covered by these notes—I do not have time to read them out—and more are in preparation.

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The majority of local authorities in the United Kingdom are in the process of developing their plans and I wish to give the House some of the results up to last week. Thirty local authorities have appointed new staff to work on Local Agenda 21; 111 have organised seminars on Local Agenda 21; 187 authorities are seeking to adopt environmental management systems; 192 authorities have integrated sustainable development principles into their land use planning strategies, and 113 have done the same with their transport policies; 182 authorities have adapted or created new public consultation procedures to respond to Local Agenda 21. Some 198 authorities have embarked upon state of the environment reports and 134 are planning to develop local sustainability indicators. That is quite an impressive list in a relatively short time.

Local authorities are at the sharp end of so many policies. They provide the interface between the components which make up our communities. They are the front line in our efforts to remain a civilised society. Almost all their activities have implications for sustainable development aims. It should therefore be a high priority of national government to support and to encourage the work of this vital layer of democracy and not to engage in its destruction, which seems to be the current trend. If there had been more time I would very much have liked to engage in the defence of local authorities on other matters, but for now I shall leave in your Lordships' minds the question of how we can unite in pursuit of the aims of Local Agenda 21. I hope that politics can continue to be left out of it.

5.16 p.m.

Baroness Farrington of Ribbleton: My Lords, I, too, wish to thank my noble friend Lord Williams for the way in which he introduced and opened this debate. I thought that I agreed with the noble Baroness, Lady Young, when she began to talk about what people were interested in. It is my view that few people outside local government are interested in the structure of local government. Their real concern is the services. People are passionately concerned about the quality and availability of nursery education, care in the community, the state of the environment, transport and other matters. The list is endless.

I begin by declaring two interests. First, I am an elected member of Lancashire County Council. Secondly, I declare an interest as someone who is a resident of the country, who believes in being not a subject but a citizen and who believes in a multi-layer democracy. I believe that "subsidiarity" is occasionally being misused by Government speakers when they imply that subsidiarity involves something less than universal suffrage, at whichever level.

I am also saddened when speakers make certain remarks. I believe it was the noble Baroness, Lady Young, who referred to schools opting out of local authorities into grant-maintained status and receiving extra money. As someone who is elected in my local area, I want every child to have access to an equal resource, whether he is in a church voluntary aided school or in a local authority county school or in a grant-maintained school. The resource available for

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children's education should be equally important for each child and should be of equal value because children are of equal importance.

I also believe, as a citizen of a member country of the European Union, that I want to live in a country where the imaginative, innovative and dynamic process of strategic partnership between the public and the private sectors can take place with the democratic voice of my colleagues from Wales, from Scotland and from different regions of the country. I would say to the noble Lord, Lord Bellwin, that we do have regional government in England; it is regional government determined in Westminster by a combination of national government decisions made at the political level and by civil servants.

I am saddened by the way the debate on local government in this country has been harmed ever since the former Prime Minister, the noble Baroness, Lady Thatcher, decided that it was for her, not the local democratically elected councils and ultimately the local voters, to decide how much it was appropriate to spend on a small village school in Cumbria and on a school in Lambeth, on the basis of a formula worked out by computer in Whitehall.

I was also saddened when, at the end of her contribution, the noble Baroness, Lady Seccombe, said that what she wanted was good government from Westminster and good administration at local level. I do not want that. I want good government at local level; I want good, democratically accountable government at regional level; I want good government at Westminster; and I want good government from Brussels.

That is where the problem has arisen. We have heard a plethora of conflicting arguments about what is wrong within local government regarding local government finance. Local government recognises, and should recognise, that the amount of government grant redistributed, and the formula resulting from consultation whereby that grant is distributed, is quite properly a matter for national government. However, I find it shocking for national government then to say, as they do, that hundreds of school governors, hundreds of head teachers and hundreds of parent governors are being bamboozled into keeping balances in school budgets wilfully to increase class sizes. A snapshot taken on one day—1st April last year—before the Government failed fully to fund last year's teachers' pay award, has been used and has then been thrown in the teeth of head teachers, parents and governors.

We need more integrity. It is impossible to go into detail, but when we speak about debt financing—and mortgages come to mind—and selling assets, I can tell the House that the local authority of which I am a member will sell assets and buy new assets in the interests of local people. However, I hope that it would never sell when the market was depressed and treat a public asset as less important in terms of obtaining a good return than if it belonged to any one of us privately. I would never vote for that. Such judgments must be made at local level. That is the only place where the knowledge exists and where the decision can have the support of the local community.

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There is much that must be said in a further debate which must take place about the need to protect the powers as well as the duties of local government. It is reported that the Secretary of State for Education suggested reducing nursery education in order to fund the teachers' pay award.

We now find ourselves in a sad situation. I, as an elected representative, cannot support a system of compulsory competitive tendering which, in the absence of protection, means that people I represent now work at poverty levels, below acceptable wage levels, to provide public services.

I cannot accept that I live in a country where decisions will be taken centrally about what is best for people within the local community. As the noble Lord, Lord Dixon-Smith, said, we have seen that ultimately the Government in Westminster can change the law and make it legal for no other tier of government to be democratic. I ask whether it is wise for us in your Lordships' House to sit back and watch that happen, as, inexorably, it is happening.

5.24 p.m.

Lord Tope: My Lords, I must begin by apologising on behalf of my noble friend Lady Hamwee. Unfortunately, pressing business matters prevent her from making the speech that she would have wished to make from this Bench. It is my fortunate privilege to do so in her place.

Speaking at the end of a debate such as this it is tempting to try to deal with all the points that have been made, whether they are the problems which the noble Lord, Lord Boyd-Carpenter, is having with his council tax banding appeals, despite the number of Questions that he has asked in your Lordships' House on the subject, or the very welcome speech of the noble Baroness, Lady Nicol, about Local Agenda 21, which is a very high priority for my own authority. We have just run a very successful two-day conference on the subject, attracting delegates not only from all over this country but also from Europe. The conference concentrated on practicalities. I believe that it was very successful. Perhaps one day we could have a debate devoted to that subject and do it justice.

I want to start from the same point as the noble Lord, Lord Williams of Elvel—to whom, like other noble Lords, I am grateful for initiating the debate—namely, the state of local government. The noble Lord was right to say that morale in local government now is very low. It is low for a number of reasons. As others have said, local government is undergoing substantial change. Change is always unsettling and is always threatening to some. Local government has been subject to much denigration from central government and the media for many years. That inevitably has an effect on self-esteem. Above all, local government has suffered from year after year of expenditure cuts. Whatever fat there may have been in local government many years ago has now long since gone and those cuts are serious and damaging.

I want to bring a message from local government. It is not going to collapse tomorrow. Local government will continue. It will continue through the commitment

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and professionalism of the people involved with local government. The fact that local government will not collapse tomorrow does not mean, and should not be thought to mean, that everything is satisfactory and that everything that has been said was a lot of hot air. The situation becomes more serious every year. We should not assume that because people work increasingly hard, at increasing personal cost to their health, everything is therefore satisfactory. That is not the case.

Much of the debate has concerned finance and the system of finance. I have long believed that the UK Government should add their signature to the European Charter of Local Self Government. I regret very much that we are one of the few countries not to have done so. However, I am ashamed that our European partners now tell us that they believe that the UK is no longer eligible to sign the Charter of Local Self Government even if it wanted to. In the many years since the charter was drawn up the UK has been marching steadily in the opposite direction from virtually every other European country, regardless of the politics of their central governments.

One of the reasons we are not eligible to sign the Charter of Local Self Government is that local government in this country has virtually no control over its own finances. Our locally raised tax, the council tax, represents less than 20 per cent. of the net income of local authorities. Local authorities are dependent on central government for the rest. As others have said, and I endorse, that could be corrected significantly at a stroke by the denationalisation of the business rate. That is something which many businesses, certainly in my area, would very much welcome.

Still worse is the regime of spending limits imposed by central government on every local authority in the land. At a stroke that takes away one of the most fundamental democratic principles of local government: that locally elected people should have the right to determine priorities for the needs and services of their local areas, balanced by the level of local tax needed to pay for them; and, most importantly, that they should be properly and effectively accountable to local people for those decisions. None of that applies now.

Not only are centrally imposed spending limits wrong in principle, they are misguided in practice. They disguise the quite proper differences between local authorities and between political parties. They destroy what Conservatives in local government see as their strongest argument; namely, that they provide the cheapest local government. Spending limits imposed uniformly from central government destroy that argument.

The argument about different levels of council tax is entirely bogus. As my noble friend Lady Thomas of Walliswood said, the level of council tax owes virtually nothing to the spending priorities of a local authority or to its efficiency. In effect, to all intents and purposes it is set by central government. Quite simply, it is the money needed to bridge the gap between the money received from central government and the spending limits set by central government. The ability of local authorities to influence their council tax is at best marginal. It depends

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on what they can do by the use of balances, the efficiency with which they can collect their council tax, and so on.

I had thought that I would get through a local government debate without mentioning standard spending assessments. However, there have been so many references to SSAs that I wish to add a comment. SSAs were devised as a means of distributing central government grant. I agree with the noble Lord, Lord Bellwin, that as a means of distribution they are not a bad system and certainly better than many that we have had. The problem with SSAs is not the methodology of distribution but that the amount distributed is too great. Our dependence on them and the distortions which they create are too great. Above all, the spending limits are related to SSAs. SSAs are no longer just a means of distribution, but a means of determining a spending limit for local authorities. They are seen as a measure of a need to spend, in particular in the Department for Education and, increasingly, in the Department of Health.

SSAs bring uniformity to local government which Liberal Democrats strongly decry. That factor has been reinforced by the introduction of national performance indicators this year. For Liberal Democrat-controlled councils, spending priorities should be determined locally in consultation with local people. For Liberal Democrat-controlled councils locally determined performance indicators are vastly more important and more relevant than those imposed centrally.

These are not just words. For years, Liberal Democrat councils, including my own, have been consulting widely in their local areas on all those matters as an essential part of the decision-making process—not an add-on at the end as a sort of ratification of decisions which have already been taken.

Regional government has also been mentioned. That, too, is a subject on which we should have a separate debate, not least in order to help the Labour Party to clarify its own position for us all, including itself.

The noble Baroness, Lady Young, made a telling point when she spoke about regional government taking its power from local government. Those of us—I am one—who strongly advocate regional government envisage it taking its power not from local government but from central government. That is what regional government should be about.

I wonder what evidence there is to suggest that central government are in any way equipped to tell local government how to manage its own expenditure. Time does not permit me to dwell on that subject as much as I would wish, speaking as a local authority leader. However, it has just been admitted that the Chancellor of the Exchequer has overshot his borrowing by £1.26 billion on the PSBR figure announced last November. I cannot help reflecting that if a similar situation had arisen in my local authority I would almost certainly be surcharged, probably disqualified from office, and quite possibly imprisoned by now. The Chancellor of the Exchequer sits there and carries on in his usual "gung-ho" way quite regardless. He does not even apologise to the taxpayers.

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Far from central government imposing financial disciplines on local government, it is high time that central government learned some important lessons from local government. In particular in recent years, perhaps because of what central government have been doing, councillors have learnt much about financial disciplines and real value for money. Those are lessons which would benefit some Government Ministers.

I wish to conclude with some comments about education. The elections next week have been described, rightly in my view, as a referendum on the Government's education spending cuts. As other noble Lords have said, the people have now seen through the Government. The Government's own policies have backfired on them. Their policy, which Liberal Democrats strongly welcome, of involving more parents and more people from the community in the governance of schools has backfired on them. Those people now understand the situation. They know that their local authority is not to blame for spending cuts in education. They know that those cuts come from central government. That is why we have seen parents and governors marching on the streets to protest.

The Government have been rumbled. Next week the elections will be a referendum on the Government's policies towards local government and in particular their policies on education. As a result, perhaps thousands of Conservative councillors, good as well as bad, will feel the force of the public's anger with this Conservative Government and their treatment of local government, and our schools in particular—not before time.

5.34 p.m.

Baroness Hollis of Heigham: My Lords, we are all indebted to my noble friend Lord Williams for a timely and interesting debate. Let me declare my interest as a former leader of Norwich City Council, a former Norfolk county councillor, and a Vice-President of the ADC.

Norfolk is traditionally Tory, but at present I have not seen a single Tory local election poster. Norwich has two MPs, Tory alongside Labour, admittedly on expanded boundaries. After the local elections, apart from the Lord Mayor there will probably not be a single Tory on the city council.

Let me refer, if I may, to King's Lynn, on the other side of the county. The deputy leader, a Conservative councillor of 20 years, refuses to stand as a Conservative, but stands as an independent, as does a quarter of the entire Tory group, including the mayor of King's Lynn, several committee chairmen, and even the Tory agent at the last general election. Many Tories across the country have refused to stand. Only two-thirds of shire seats are being contested by Tories. Those who are standing are distancing themselves, denying and denouncing the Tory party. When asked why, the deputy leader of the council said, "I was so angry. There was some sleazy thing that day. I have forgotten what, because there are so many. I am still

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angry with the policies of the Government". He insists that he is a Conservative; it is the Government whom he cannot stand.

The Tory Lord Mayor said it all. "I no longer feel I can defend the Conservative label. What irks me most"—and this is the Tory Lord Mayor speaking—"is the disdain with which the Government have treated local government over the past decade".

My noble friends have described that disdain. As my noble friends Lord Sefton and Lady Farrington stated so eloquently, since the early 1980s the Tory Government have refused to believe that local government should be either local or government. They insist that we should all deliver the same level of services irrespective of need. They do not recognise that local government is, above all, about local difference. Nor do they recognise that it is about local government. Central government under this Government have simply refused to recognise the mandate that local authorities receive from their electorate. In my city council of 48 members, only one person holds the majority vote in Norwich City Hall and that is the Secretary of State. How has that happened? It is because central government have privatised local authority services while nationalising local authority finance. They have privatised local authority services, as my noble friends, Lady Fisher and Lady David, pointed out, on the one hand, by a combination of compulsory competitive tendering, irrespective often of value for money, and, on the other, as my noble friend Lord Stoddart of Swindon, said, by stripping out the functions and giving them to undemocratic and unaccountable quangos. Those quangos now have more members and spend more money than the whole of local government put together. We do not know half of their members; and the names of most of the remainder are not even in the telephone book.

Government, too, while privatising local authority functions have nationalised local authority finance. They nationalised the business rate. They have also nationalised through standard spending assessments, about which many noble Lords have spoken including my noble friend Lord Parry. We now have a spending formula which says that Hove is more deprived than Hartlepool, that the City of London is more deprived than Liverpool and—surprise, surprise—that the City of Westminster is the fourth most deprived borough in the country. So Westminster obtains extra money because it has more people coming in by day; and it receives additional extra money because it has fewer people coming in by night than by day.

If Norwich had the same level of grant on the standard spending formula as Westminster, not only would it not have to levy any council tax at all this year, but it would give every household in Norwich a rebate of £816.58p. King's Lynn would not have had to levy any council tax. It could have given its residents a rebate of £809—not forgetting the 44p! Put together, there has been a warped standard spending assessment, a settlement which my noble friend Lord Williams mentioned of 0.5 per cent., which is well below inflation.

Put that with the total capping, together with growing community needs, and we see the consequences all around us. They have been spelt out by my noble friend

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tonight. In housing, we see the budgets of both local authorities and housing associations so slashed that they cannot meet the responsibility for homelessness which has increased by 50 per cent. in the past 10 years. That is all right, the Government will solve the problem for us next autumn by removing the right of the homeless to housing, given that local authorities can no longer provide housing for the homeless.

The noble Lord, Lord Tope, is absolutely right: as regards education we have seen school governors and parents of middle England in revolt. They are setting illegal budgets. Fourteen thousand teachers are due to lose their jobs next year. I believe that in Warwickshire it is one teacher in every school. Somerset has already sent out redundancy notices to over 100 teachers. That is all right, let the class sizes float upwards, we all know that it makes no difference until we come to choose our own school where, if we can, we go for the school with the smallest classes.

So far, we know about 42 libraries which are due to close. The inner city single regeneration budget tries to bring inner cities back into the mainstream of our communities so that they are no longer alienated, disadvantaged and deprived. That budget is being cut by a total of £300 million. Eighty per cent. of local authorities are cutting social services. Homes are being closed, charges are being increased, daycentres are being closed and meals on wheels are being cut back.

In Shropshire, cuts of £1 million are being made in spending on the elderly; cuts of £½ million in spending on people with learning difficulties; cuts of £½ million are being made on children, including abused children. Is that what we as a society really want? Are we so poor that we cannot finance services for those with learning difficulties and abused children? Are we so poor that as a country we cannot afford them?

In my city of Norwich, we have to make cuts of £5 million in a budget of £20 million, having lost 40 per cent. of our jobs in the past five years. We cannot close the swimming pool, we did that last year; we cannot shut the municipal greenhouses, we did that the year before last. Instead, we will close the main community centre used by 112 clubs for the elderly and unemployed. Let them play on the streets. As for sheltered housing, we shall halve the number of wardens who keep frail and elderly people afloat in the community. We shall abandon the football pitches, the bowling greens and the tennis courts in our parks which were laid out in the 1930s under a Tory Government more enlightened than this one. That government rebuilt all those through public works programmes.

Our historic buildings crumble; our grants to voluntary organisations dry up; our maintenance work is cut. Those skilled people who provided the services will now draw benefit. It is not because the people of Norwich want it. It is not because the city council wants to do it. It is not because the business community is pressing us to do it. It is because the Secretary of State, who knows little and cares less about the needs of the city, has decreed it. We call it "local government". It comes from the arrogance and, as the Tory mayor of Kings Lynn said, the disdain of a government who have been in power too long. They no longer even pay lip

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service to the values on which local government was built of pluralism, participation, local responsibility and democratic citizenship. We know that; we suspect that noble Lords on the opposite Benches know it. We are confident that the citizens of this country will show that they too know it when next week they go to the polls.

5.45 p.m.

The Earl of Lindsay: My Lords, I welcome the opportunity afforded to us by the noble Lord, Lord Williams, to remind the House that in Great Britain we have an active and vibrant local government sector. That is an essential element of the democratic fabric of this country, of which we can be proud.

My noble friend Lady Young described local government as being alive and well. She is quite right. So alive and well is it that public authorities in the new democracies of central and eastern Europe have been eager to establish links with authorities here to learn from their experience.

We cannot accept, as some noble Lords such as the noble Lord, Lord Williams, and the noble Baroness, Lady David, suggested, that local democracy is under threat from what they called "quangoland". Many non-departmental public bodies—or NDPBs, as they are called—are neither new nor recent creations. Many bodies such as the Arts Council and the Legal Aid Board have not taken functions from local authorities, nor have they ever been directly elected. Indeed, the number of NDPBs has actually fallen by about one third since 1979, as my noble friend Lord Bellwin clearly stated.

NDPBs with a local dimension, such as urban development corporations and housing action trusts, have representatives from the local community and local councils on their boards, to ensure that local interests are properly reflected in the decision making process. The most important factor in selecting board members is to ensure that the correct balance of skills, experience and expertise is maintained to enable the organisation to carry out its functions. It would be wrong not to make use of people with valuable expertise within the community just because they were not elected members of local authorities. The Government would welcome more suggestions from local government for public appointments.

I also point out that some NDPBs play a part in the process of national government and therefore are accountable through their responsible Minister to Parliament.

The noble Baroness, Lady Fisher of Rednal, was uneasy about the government offices for the regions and wanted an explanation. The GORs meet a widespread demand for a single point of contact with government in the regions. Each office is headed by a single regional director who is accountable to the appropriate Secretary of State for each programme and each statutory function that the office administers. The offices work in partnership with local people to maximise the competitiveness, prosperity and quality of life in each region. The government offices can look at problems in the round and regional directors can take a balanced and pragmatic view of the issues that come before them.

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Working in harness with the key local players, they can identify the fundamental issues and balance departmental policy concerns before they provide considered advice to Ministers. I should also point out that it is part of devolving power away from Whitehall and sending decision making closer to local communities.

Our aim is quite clear. We wish to see effective local government throughout Great Britain. That requires action by central government. It requires action by local government itself. It also requires an effective partnership between the two and the importance of the partnership is something about which the noble Lord, Lord Williams, spoke at length. I believe that an increasingly sensible and constructive partnership has been developed over recent years, most recently demonstrated by the guidelines for the conduct of central and local relations agreed between the Prime Minister and the chairmen of the local authority associations last November.

For our part, central government have put in place a framework within which local authorities can develop quality services at a price which their residents can afford and which ensures that authorities are accountable for their performance.

The noble Baroness, Lady Fisher, was worried about the eroded powers of local authorities. Sometimes local authorities are best placed to provide a service and sometimes they are not. Our policy is to put the organisation of services as close as possible to the people who use them. For example, our educational reforms have greatly increased control by parents of schools and school governors over what happens in the schools which their children use. Likewise, our housing reforms have given tenants greater opportunities to manage their own homes.

Taking a power and giving 90 per cent. of it to the local community and only 10 per cent. to central government is not centralisation. I appreciate the anxiety on which the noble Lords, Lord Williams, Lord Monkswell and Lord Stoddart, and my noble friend Lord Dixon-Smith focused: the correct structure between central government and local government.

Functions have been given to and removed from local government throughout this century. Hospitals, gas, electricity and water were all once the responsibilities of local government. But who would seriously argue that they should all now go back, except possibly for the noble Lord, Lord Sefton?

Most recently, local authorities have been given responsibility for community care worth £565 million per annum, and for the administration of housing benefit. Local authorities remain big business, accounting for one-quarter of total public spending.

One new area has recently emerged for local government. I agree with the noble Lord, Lord Tope, in recognising its importance. It was mentioned by the noble Baroness, Lady Nicol. Agenda 21 is a vital partnership to which local government is able to contribute, and to do so in a framework of partnership with central government. We very much welcome local government's involvement with the UK Round Table on Sustainable Development and the Going for Green

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initiative, and continuing work in the Central and Local Government Environment Forum, as well as local government's representation on the Environment Agency Advisory Committee.

A central element of the framework of local government is the local government map. The new structure reflects local circumstances and is one that will last. We should now focus on reaping the benefits that the new structure will provide. The noble Baroness, Lady David, and the noble Lord, Lord Parry, queried specific decisions that have emerged from the reorganisation. All I can do is stress that in every case we have carefully considered the Local Government Commission's report and the many representations which my right honourable friend and the commission received.

The underlying case for unitary authorities is that they offer an opportunity to bring all local government functions together in a way that is responsive to local needs. Unitary authorities can provide clear accountability by being the single provider of services.

I know that my noble friend Lord Boyd-Carpenter has misgivings about the two-tier system. But the retention of the existing two-tier system will in some parts of England provide the best solution. In other areas the creation of unitary urban districts, with the rest of the county remaining two-tier, will be the best way of securing effective local government. My right honourable friend is currently considering which urban areas should be referred to the commission for further review. Above all, we have adopted a flexible approach.

This flexibility will strengthen local government. Where new unitary authorities are created, there will be the opportunity to review completely and improve old working methods. We hope that the new unitary authorities will now be better placed to provide cost-effective services.

But there is also scope for improvements in two-tier areas in England. Many told us during the commission's reviews that they were looking at ways to provide services more effectively within the two-tier system. The reviews have been useful in getting counties and districts to work together to reassess their working methods and to look for improvements. We shall be contacting those authorities and others to see what progress is being made.

The framework that government has provided consists of more than just the map. We have established mechanisms to improve local authorities' efficiency and local accountability. This will strengthen the quality of the services that they provide.

I noticed in today's debate that the approach adopted towards local government by many of the speakers paralleled the approach that they adopted towards compulsory competitive tendering. There were the cynics, the enthusiasts and the realists. Competition exposes the true costs of carrying out a service and leads to greater efficiency in the use of resources. My noble friend Lord Bellwin called it common sense, and he and my noble friend Baroness Seccombe stressed its creditable qualities. Indeed, independent research carried out by the University of Birmingham shows that CCT has not only led to average savings of 7 per cent.

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a year, but has also, and perhaps more significantly, led to better management of services, which in turn has led to more responsive and better quality services. I wonder why the Labour Party opposes CCT?

The process of competitive tendering has spurred local authorities into reviewing services and considering what is wanted in a systematic way. The new contracts set explicit standards and performance is monitored much more effectively. Productivity has been improved and inefficient work practices have been tackled. We also believe that the benefits already achieved through the tendering of blue collar services should be extended to local authority corporate and support services. The new white collar services subject to competitive tendering amount to over £6 billion of public money, and the opportunity for efficiency gains and improvements are there.

The noble Baroness, Lady David, posed a few other questions about CCT, as did other noble Lords. CCT applies only if authorities wish to carry out work in-house. If authorities contract services out, as Cambridgeshire has done, the formal processes of CCT do not have to be complied with. For professional services, only a proportion of each service will have to be subject to CCT. This will protect the client side and other services which have to be kept in-house. The Government have made it clear that when authorities contract services out, by whatever means, this will count towards the CCT percentage—


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