Lords debate on Local Government: Reinvigorating Local Democracy - Jun 15

Moved by

Lord Shipley

That this House takes note of the state of local government in England and the case for the reinvigoration of local democracy.

Lord Shipley (LD)

My Lords, I remind the House that I am a vice-president of the Local Government Association, although I should add that the LGA has had no role in what I will say. I thank all those who will speak in this debate, the title of which reflects my serious concerns about the Government’s increasing desire to centralise local service delivery across England out of Whitehall.

I have been asked several times why it is the Cabinet Office, through the noble Lord, Lord Evans, that will respond, rather than the Whitehall department responsible for local government. Well, there no longer is a department with the words “local government” in its title. What was the Department for Communities and Local Government, or the Ministry of Housing, Communities and Local Government, is now the Department for Levelling Up, Housing and Communities.

This matters, because the absence of the title “local government” implies that service delivery by local government can increasingly be managed out of a range of departments across Whitehall, but you cannot run local services for 56 million people across England out of London. Local government exists to lead delivery of many public services, and to represent the interests of those areas in the availability and quality of those services. It is a fundamental foundation stone of the public’s engagement with public services, in which locally elected councillors have representative duties extending beyond their own council, such as in the health service and transport.

We have experienced in recent years a centralising policy and greater fiscal controls. I can remember the days, when I was a young councillor, when local government had absolute power over the level of the rates and business rates—no more. I regret that increasing fiscal centralisation. It is as though Whitehall, not in control of the nations, sees its role as increasingly running England out of London as opposed to managing policy development across the United Kingdom.

The question must be asked as to why Scotland and Wales have devolved powers supported by a block grant when Yorkshire and several other English regions with a bigger population than either of them do not have those powers or those resources. We should note that the Barnett formula skews public spending. In the year 2021-22, the formula allocated, in terms of UK identifiable expenditure per capita on services, £11,549 across England, £13,881 to Scotland, £13,401 to Wales, and £14,062 to Northern Ireland. England gets substantially less than the others. Within England, the east Midlands receives less per capita than any other English region at only £10,528. I find these figures very hard to understand—and let me assure your Lordships that I have tried.

The state of local government is of concern to me. The Government say that they are committed to continue devolving power to local government. However, what they have actually done is create a complex patchwork of structures based on 317 local councils, 62 unitaries, 32 London boroughs, 36 metropolitan districts, 21 county councils, 164 district councils and 9,000 town or parish councils, with 16 elected local authority mayors plus 11 mayoral combined authorities. It is a complex picture and the relative powers are opaque.

This is made even worse by the proposals in the Levelling-up and Regeneration Bill. I point Members to Clause 74, on alternative mayoral titles for local authorities in England. This relates to combined counties. The elected person does not have to be called a mayor; they can be called a county commissioner, county governor, elected leader, governor or any other

“title that the authority considers more appropriate than the alternative titles mentioned”.

This tells me that the Government do not really know they want and there is no real plan. That worries me.

I am sure that the Minister will argue that the Government have signed six devolution deals in the past year and point to the welcome creation of the first statutory subnational transport body in the north of England, which is good. He will, I guess, also point to the creation of metro mayors and the recent trailblazer deals with Greater Manchester and the West Midlands, which are welcome and very important. However, progress on devolution is too slow, and anyway, these are subregional strategic bodies; they do not actually run local government services.

It is good that the West Midlands has more power over transport, skills and housing, with a single pot of funding rather than one-off funds from bidding. Andy Street, the mayor of the West Midlands, described the trailblazer deal as

“the beginning of the end of the begging bowl”.

That is true in one sense, but I wonder whether it will really prove to be true. There are no extra fiscal powers for the West Midlands other than the retention of business rates for a 10-year period.

We need to reinvigorate local government in England, and we must reverse the increasing preference of Ministers and Whitehall for running more and more out of London. For example, during the Covid pandemic we saw all the problems of centralised test and trace. More recently—just a few days ago—I discovered that regional schools commissioners reporting to the DfE are now known as regional directors. In the recent Schools Bill, we saw an attempt to get academies run directly by Whitehall and Ministers; thankfully, that has now been withdrawn. Amazingly, a few weeks ago it was trailed in the press that there are going to be regional directors for levelling up. How they are going to operate, given that there is a local government structure across England, I really do not know.

Let me share a specific, current example of what I perceive to be the problem: regional care co-operatives working directly for Ministers. Three weeks ago, the Public Services Committee, of which I am a member, commented on the Government’s implementation strategy for children’s social care. The chair, the noble Baroness, Lady Morris of Yardley, said in a press release:

“Without increasing the supply of places for children to live, we are sceptical that regional care cooperatives can empower local authorities to better manage the care market. A regional approach to commissioning also risks cutting smaller providers, including non-profits, out of the market—further limiting options for local authorities and regional care cooperatives. Moving commissioning and planning to a regional level could reduce local autonomy, leaving directors of children’s services less able to deliver the type of services their area needs. It also risks marginalising the voice of young people in decision-making about their own care—something young people with care experience told the committee was already a serious issue”.

The Government have to test much better. When they come up with proposals such as this, they have to explain why they really are going to make things better. In this case, I fear that what will happen is that a few very large contracts will be let and the real problem, which is the number of places for children, will not change. I suggest that Whitehall should concentrate on what only it can do: its priorities have to be things such as the Passport Office, the DVLA and the queues in our courts.

Whitehall also needs to look carefully at the role of audit. It may be mentioned that several councils have run up extraordinary debts in recent years. They may have been trying to offset general funding cuts, but the fact is that they have been able run up these debts. It raises questions about whether we need to re-establish something like the Audit Commission because we need to give the public confidence that their money is safe. Given the recent experiences with some councils’ mismanagement, and concerns about the audit and scrutiny of one of our mayoral development corporations, I think that most of these problems would never have arisen had there been an Audit Commission. Whitehall and, it appears, the Public Works Loan Board did not pick up the problems, so I am regretting the abolition of the Audit Commission. At the time, some 10 or 11 years ago, I thought that it was probably right, given the potential for the National Audit Office to take part of the role. I felt that the Audit Commission had developed mission creep, seeing itself a bit like Ofsted. We live and learn, but something needs to be done on audit.

Will the Government please do something about the bidding culture, which Ministers seem to like? The National Audit Office issued a report 15 months ago on supporting local economic growth. It found that

“multiple funding pots and overlapping timescales, combined with competitive funding, create uncertainty for local leaders. Local authorities wishing to make broad-based investments across skills, infrastructure, business and innovation must submit winning bids across several funds or find alternative sources of funding.”

The National Audit Office was equally critical of low-traffic neighbourhoods, with which there has been a great deal of trouble. One of the reasons that this is happening is because there are deadlines to bid and to spend. As a consequence, public consultation can be very poor, and that has been pointed out by the NAO. Too often, decision-making is not transparent: councils bidding have to pay large sums to consultants, who can be expensive, and they end up not getting the money.

This debate is also about the state of local government, which has suffered huge cuts in financial support and increasing financial burdens, particularly in adult social care, leading to worrying reductions in standards of neighbourhood services used by the general public such as libraries, youth services and leisure centres. Council tax—which the general public think is paying for all these services, when it is only an element of the tax income—is a regressive tax, which is higher than it would have been because of a deliberate decision by the Government to load part of the social care bill onto it, and increasingly so.

There is some evidence that local cuts have been a barrier to growth. I believe in the theory that councils should be able to increase or decrease tax—council tax and business rates—as they wish, but I accept that the time may not be right for that to happen at the moment, and it is essential to maintain a degree of redistribution. On Monday, we shall look at the future of business rates. I look forward to saying some more at that point.

I am very concerned to ensure that the capacity of local authorities to do what they need to do is there. Local authorities are in a partnership with Whitehall in terms of levelling up, but they lack the essential experience to drive transformative projects of scale. I have concluded that one way of addressing that would be for civil servants in Whitehall to go to work, maybe on an exchange basis, with some of the combined authorities or local authorities to bring their experience to bear.

I also suggest to Ministers that they need to look carefully at ways in which some of the functions held by Whitehall departments could be reallocated to local government. In particular, I have long felt that the 630 jobcentres—which Gordon Brown cited in his speech a few weeks ago—should be under local authority control. You would divide the benefit, tax and pension side of DWP from the work-related side. We need to get more civil servants out of London to increase the capacity of council officers.

In conclusion, I want to see a statutory cross-party commission on the future governance of England as recommended recently by the House of Commons Public Administration and Constitutional Affairs Committee. It is very disappointing that the response by the Government was negative. We need a guaranteed constitutional status for local government, and we need a fiscal understanding of what the powers of local government should be in the future. I beg to move.

3.16pm
Baroness Eaton (Con)

My Lords, it would be easy to begin my remarks by saying that this debate comes at a uniquely critical time for local government, but throughout my time as a Bradford councillor, leader of the council and chairman of the Local Government Association, I cannot think of a time when it has not been a critical time for local government. From the civic unrest we saw in Bradford in 2001 to the collapse of the Icelandic banks in 2008 to the years of austerity when the global downturn necessitated a tightening of public sector belts, there has never been a quiet year. However, it seems to me that we are at a truly pivotal point, so I am very grateful to the noble Lord, Lord Shipley, for calling the debate and reminding us of his wealth of experience as a councillor, leader and long-standing and wise champion of local government for nearly 50 years.

First, it is important that we do not get entirely mired in the challenges facing local government. We must also take time to celebrate its successes. Local government is efficient; it supports communities across the country and delivers services that so many vulnerable people rely on. Local councillors are passionate, committed to doing the best for their areas and work often-gruelling hours on local projects that can create huge, positive legacies. Our councils build houses, provide care, make people feel safe and are fundamental in creating a sense of pride in place. These are the underpinnings of the levelling-up agenda that we hear so much about.

However, it would be remiss not to acknowledge the huge challenges facing local government, some practical and others existential. One of my biggest concerns is what seems to me to be a growing disconnect between local people and the decisions being made about them. Questions around the value of elected mayors have swirled as long as I have been in local government. In some cases, they are doing great, strategic work—such as the regeneration of Teesside and of the West Midlands under Andy Street—but, equally, we see the Mayor of London making sweeping decisions about the scope of the ultra-low emission zone against the wishes of not only many Londoners but some elected representatives of his own party.

I am worried that pressure from government is pushing the establishment of new elected mayors and combined authorities against people’s wishes. Areas without mayors are being held back from getting new powers and funds, even when the geography and the economies just do not make sense.

The debate about mayors and combined authorities is sucking so much oxygen out of the room, when that oxygen should be fuelling serious discussions about the relationship between Whitehall and local and regional government. People care about delivery. They care about being able to travel easily around the local area. They care about seeing their neighbourhoods well planned, well lit and clean. They care about knowing their loved ones are well cared for. All these require long-term, strategic and joined-up thinking. But we are still stuck in a mindset that sees local government in the thrall of Whitehall, as the noble Lord, Lord Shipley, has demonstrated, constantly being asked to bid for new pots of money, council in competition with council, to supply the new infrastructure and support the services that are so desperately needed.

The levelling up fund, and the process to create new investment zones, are just two cases in point where councils are required to expend time, effort and money in filling in forms to try and get funds for projects that are clearly local priorities. And then, in a turn of the electoral cycle, those priorities vaporise and the next set of hobby-horses emerge from the ether. And councils once again sigh, read the guidance, fill in the reams of paperwork and hope that distant, remote Whitehall will see fit to bestow more funds from the benevolence of its chest—another example of decisions being made too far away from the people they affect. We can do better, and we must do better if we want strategic long-term planning and delivery of the infrastructure and services people want.

The London Finance Commission, established by the then Mayor of London, Boris Johnson, and chaired by the LSE’s Tony Travers, took a deep dive into the opportunities for serious, tangible, fiscal devolution to the capital. Its conclusions remain applicable not only to London but across the country. Primarily, the commission recommends the full devolution of the full suite of property taxes—council tax, business rates, stamp duty, land tax, annual tax on enveloped dwellings and capital gains property development tax—to allow local and regional government the stability and predictability of income to plan beyond the political cycle. I urge this Government to build on their existing commitment to devolution—such as through the business rates retention scheme—to consider how further fiscal devolution can allow local areas to determine, and achieve, their individual levelling-up ambitions.

Enhanced devolution will free local government to better meet one of the most pressing challenges facing the country: lack of housing. There is little that is more immediately of concern to young people, who, thanks to a lack of supply, often can but dream of owning their own. We are a far cry from Mrs Thatcher’s vision for a nation of home owners. Rents are skyrocketing, prices are rising much faster than incomes, and we urgently need a solution. This Government have recognised the gravity of the situation and, in 2018, lifted the housing revenue account borrowing cap, which has seen an increase at least in social housing ambitions and the scaling up of existing sites. With increased and secure funding, local government can deliver—and it does. But it is simply not enough: the HRA reform frees nowhere like the transformative amount of money required to increase stock.

In town halls across the country, one of the most pressing concerns councillors hear from their residents is the increasing reach of the net-zero agenda. Many farmers, business owners, young families and rentees cannot say exactly what it means for them but they are worried. They are worried that government will be making decisions on their behalf, often hundreds of miles away, that new policies will damage their livelihoods, and that new funding streams will bypass them. They are also worried about their businesses and their livelihoods. Yes, there is a broad agreement that changes are needed, but there are broad concerns about where those changes can come from and the remoteness of support that may be available.

Responsibility for local climate action, the management of risk and the focus on the creation and guiding of new green skills and jobs should naturally sit at the local level, ensuring that local voices and needs are taken into account, and that local ambitions are understood, and met. If local aspirations are linked to real local powers and real local responsibilities, that is when you see opportunities being truly levelled up. Maintaining complicated, unstable and centralised funding pots, coupled with a lack of clarity about responsibilities, means those worries will remain, and they will grow.

I want to finish by briefly mentioning one of local government’s most emotive and vital roles: delivering care to our loved ones. There is no doubt that delivering social care in an ageing society is one of the biggest challenges facing councils. I was very pleased that the Government recognised this, and in the Autumn Statement the Chancellor provided an additional £7.5 billion to 2025 to support adult social care. This was an important and necessary acknowledgement but it is not a long-term strategic solution. This funding will not address the underlying gaps, unmet and under-met need, market fragility and workforce pressures. Neither does it provide sufficient long-term certainty for social care to invest in different models of care which prevent ill health and promote well-being, resilience and independence.

LSE research from the Centre for Analysis of Social Exclusion has exposed significant inequalities in provision and access to social care across the country. Making sure everyone has access to the care they need will require funding: according to the Local Government Association, an additional £13 billion will be necessary. However, it needs far more. It needs a revitalised relationship between local and central government. We need a jointly agreed early intervention strategy and a far-sighted plan for the workforce of the future—a workforce that can be skilled up and supported at the local level. Without sustained long-term and reliable funding streams granted by true devolution, social care will remain caught in the political cycle, to no one’s benefit.

To end, I want to strongly reiterate the passion, vision and talent of councillors and local government officers across the UK. They are embedded in communities, and their commitment is helping their communities thrive. It is time that all that talent and energy is fully embraced by Whitehall if it wants to deliver on its national growth ambitions. That is the pivotal point we are at, and one that I am sure the Minister will recognise. I want to thank Councillor James Jamieson for his six years of service to local government as the chairman of the Local Government Association. He has been a fantastic and thoughtful advocate for the sector. I also wish the very best of luck to the incoming chair, Councillor Shaun Davies, who will certainly have his work cut out.

As I said at the start, there are going to be many uniquely critical years for local government ahead, and I remain convinced that local politicians of all parties can—and should—be empowered to deliver for their residents.

3.29pm
Lord Liddle (Lab)

My Lords, I put down my name to speak in this debate because I care a lot about local government and have spent 20 years of my life as a member of three local authorities—Oxford when I was very young, Lambeth in early middle age and Cumbria as a retirement job, as it were, until the authority was abolished at the end of March this year.

I have great respect for what the noble Lord, Lord Shipley—Councillor John Shipley—said in his introduction. He has been a very distinguished person in local government. I also have great respect for the many Conservatives who have shown great commitment to local government over the years; I think that was shown in the speech we have just heard from the noble Baroness, Lady Eaton.

When I was a 23 year-old member of Oxford City Council, the leader was a lady called Janet Young. She was so effective and so brilliant that she was put in the House of Lords and Mrs Thatcher’s Cabinet. The only trouble she had was that Mrs Thatcher discovered that she was exceptionally strong woman and therefore she was dismissed. But she was great as an introduction in my apprenticeship in local government.

Reflecting on Oxford, when Labour became the majority party, I became chair of the further education committee. I was in charge of a rapidly expanding polytechnic and a college of further education. Neither of those things is run by local government today. I sometimes wonder when people complain, particularly about our education system for children who are less academic, whether the removal of local involvement has had a detrimental effect on the way these institutions have behaved. If you had had local involvement, they would have been more aligned with local labour market needs, future job needs and future local economic strategies. I just make that point. I do not know whether it is right, but it is worth thinking about.

The other thing about Oxford was that we were able to get things done. Labour’s pledge when we got in in 1972 was to increase council house building from 300 to 400 a year and we did it. We had the freedom to do it and that has now largely been taken away, although I take the point from the noble Baroness, Lady Eaton, about the Government loosening some of the controls. My main concern about local government in Oxford in the early 1970s was how we made ourselves more effective at getting things done and how we got rid of the rather traditional local government structure which was a collection of chief officers with their own independent departments—the independence of which they fiercely defended—to have a more corporate arrangement that would be better and more efficient at getting things done.

My next experience was Lambeth, and I am not going to dwell on this for very long. I was an SDP councillor in Lambeth, elected in 1982. It brought tears to my eyes to see how the party to which I had committed my life had got to in Lambeth with Ted Knight as its leader. It told me how very badly things can go wrong when people see local government as a platform for their transformational political change rather than simply trying to make life better for their residents by providing decent services efficiently delivered. It was a terrible experience, to be quite honest, and it had a profound personal effect on me. Apart from its effect on me, it has had a long-term effect on local government.

When I re-joined the Labour Party and started working closely with Gordon Brown and Tony Blair—in that order, actually—what struck me was how frightened they were of local government and of what political damage they felt it could do to Labour. They were determined that this would not happen under a Labour Government, which explains why Labour’s policy in government was cautious about granting local government more freedom. It was because of that historical experience.

In keeping with the philosophy of the times, we of course had more emphasis on the purchaser/provider split and on academies, rather than local government running schools. All those experiments were well worth while. In particular, I was a supporter of the concept of elected mayors, which seemed to me to be a way of invigorating local government. That has been a success; in London, one of the reasons why we have the Elizabeth line is that we have had an elected mayor. We have had someone to speak for London. My views about mayors are not shared by many members of my party. I have the greatest respect for my leader in Cumbria, who thought that mayors were an abomination. I am not sure what to think of that; they have actually been quite a good development.

I was privileged in 2013 to become a member of Cumbria County Council, my home area—having been brought up in Carlisle. I was elected for Wigton, a small town 10 miles from Carlisle where my grandfather, who was a miner in the Cumbrian coalfield, had been a councillor, a justice of the peace, a Poor Law guardian and God knows what else for the Wigton rural district, and a county councillor in the 1920s. I felt very proud of that; it is one of the things that I have felt proudest about in politics.

It was a bad time because we were facing austerity. Each year, we were taking lumps out of the management tiers of each service, in the hope of trying to protect the front line. We did that as a joint Labour-Liberal Democrat administration, which worked extremely well. I felt that we managed to protect essential services reasonably effectively, but it was a period of withdrawal of local government, when we could not do any of the ambitious things that in the past a council would want to do. What we had instead was greater emphasis on things such as the local enterprise partnership doing economic growth, and a health and well-being board looking at the future of health and social care in the county. We had Transport for the North trying to create a plan for the north. Those bodies were all set up, but they gave council representatives some responsibility with very little power to make change.

Indeed, the funding model of local government in these years shifted as the Government cut the general grant—rate support grant, council tax or whatever it was called then. Funding depended more and more on central grants for specific projects which had to be approved by the government department and—I hope the next Labour Government will change this—the Treasury. So we have a situation where any scheme, be it £5 million or £10 million, has to go right up to the Treasury. That has made us one of the most centralised systems in Europe. I think it is very unhealthy. The other aspect of it which I thought was very wrong was that, because it was centralised on government, and we had a very political Government, our local MPs started to pick and choose which project should go ahead, not the elected members of the council. I think that is very undesirable indeed.

What changes would I like to see? I would like to see a comprehensive scheme of local devolution for England. Lisa Nandy has promised that and I look forward to seeing its detail when we see the next Labour manifesto. It involves a broadening of the tax base of local government, council tax reform to make it fairer and other tax things. For instance, in Cumbria we should have the power to levy a tourist tax. This is the foundation of the very interesting report of the commission that Gordon Brown chaired on the future of devolution in the United Kingdom. If we do not have a comprehensive scheme for local devolution in England, how do we propose to reform the House of Lords and create a council or senate of the regions and nations? I just do not know how we will do that. It seems to me that we have to find a coherent solution and get away from the model of central government funding. I agree that if we are going to have more diversity and more freedom for local authorities, we also need stronger audit requirements to expose inefficiency.

I have enjoyed my 20 years in local government. I do not regret it at all. I have learned a lot. I think it has kept me in touch, in a way that very few other things can, with local opinion and the real needs of people. I only hope that in future we can make local government more of a success.

3.43pm
Baroness Scott of Needham Market (LD)

My Lords, like previous speakers, I have spent a lot of time in local government and absolutely agree with the closing remarks of the noble Lord, Lord Liddle. I want to speak about town and parish councils. In doing so, I declare an interest as the president of the National Association of Local Councils, the national membership body which works across 43 county associations to represent and support England’s 10,000 local town and parish councils. What I will say this afternoon I have said before, and the bad news is that I am going to keep saying it until I think someone in central government actually listens.

This is a tier of councils that varies enormously. My husband is chair of our parish council; we have about 200 residents and a precept of a few thousand pounds. Some town councils have budgets of many millions and are delivering a whole range of important services but, whatever their size, what they have in common is that this is the level of government which is literally closest to the people, yet it is often ignored by central government and other tiers of local government which, frankly, ought to know better. These hyper-local councils and their 100,000 councillors—all local people who have put themselves forward because they want to help their community—are an essential part of local democracy. At a time when people are losing faith in politicians, they can be a really important part of restoring trust and visibility, a point powerfully made by the noble Baroness, Lady Eaton. They are delivering hyper-local services, building strong communities and strengthening local fabric.

Of course, these councils are doing all the things we would expect them to do—delivering the services we know and love, such as allotments, war memorials, parks and playgrounds—but, looking at the current picture across the country, they are now doing so much more by supporting their communities in many innovative and surprising ways, such as promoting health and well-being through building dementia-friendly communities, offering carer respite schemes and mental health first aid, and tackling loneliness through clubs and outreach. They are developing their local economies and community businesses by supporting high streets, holding markets, promoting their towns as tourist destinations, and helping to set up community businesses such as shops, pubs and post offices. They are supporting young people by providing youth services and summer events, running youth centres, employing youth and outreach officers, providing skate parks and outdoor gyms, and providing bursaries for students and grants for school uniforms.

Even at parish level, councils are stepping up and taking responsibility for playing their part in tackling the climate crisis. Some 40% of local councils have declared a climate emergency and are developing action plans, installing EV charging points, signing Motion for the Ocean, cleaning up their local rivers, and increasing biodiversity in their green and open spaces. They are tackling the current cost of living crisis through creating community pantries and warm hubs. Finally, they are helping to tackle the housing crisis through neighbourhood planning—a vital tool in which local councils are working with their communities to shape new development, promote affordable local housing and tackle the problem of holiday lets.

This is real parish power in action, but there is an awful lot more that could be done. Very helpfully, NALC has created a manifesto for building stronger communities across England, which sets out policy ideas to strengthen the sector. The first is that the sector must be expanded across all areas of England. At the moment, around two-thirds of England’s population are being left behind in taking community-led action because they do not have a local council at this level. Onward’s social fabric index shows that areas with full coverage of local councils score significantly higher than those without local councils when you look at the key measures of community strength.

Over the last decade, more than 300 places have seen new councils created in response to community demand or through local government reorganisation, but there are still significant barriers to extending local democracy right across the country. Sometimes it is about awareness in the communities themselves that they could have such a council; in some cases it is about the lack of support to help those communities go through the process. The process itself is very complicated and principal councils are often resistant and entirely unhelpful in their attitude. I urge the Government to use the opportunity of the levelling-up White Paper to make it easier and quicker to establish local councils.

Secondly, we should be making it easier and more attractive for people to get involved. We need to make performing this civic role easier, not harder. The main example of that is giving councils the flexibility to hold online and hybrid council meetings. This year marks the two-year anniversary of the Government’s call for evidence on remote council meetings, but they have yet to publish the results or take any steps to address the issue. There has been some new research from NALC: nine out of 10 local councils want flexibility to have some form of online meetings. Two-thirds of them said they would use the power for some but not all of their meetings. One-third of the respondents to that survey knew of councillors who had stood down once councils had returned to being fully in person, and one-fifth of those quoted childcare as the main reason.

NALC’s census survey of councillors shows that 40% of parish councillors are women—three times as many as in 1966. We are working really hard to get more women involved, but one of the big barriers is helping those with caring responsibilities, so the option of remote meetings would make a very big contribution to that. Unlike every other type of councillor in England and Wales, parish councillors are specifically excluded from being able to access help with childcare and other caring costs in order to attend meetings and perform their duties. I can see absolutely no reason at all why that is the case. When I raised this on the levelling-up Bill, I was told that it would be too expensive. I tabled a Written Question to ask how much it would cost and was told that the department did not know.

Thirdly, we should be supporting local councils better. Local councils are very diverse, both in the areas they cover and in the people who bring themselves forward in terms of their skills, resources and capacity. We have developed many self-improvement initiatives as a baseline for building but are hampered by a lack of investment, including from the Government. Since the national improvement strategy for town and parish councils was published, there has been no direct investment from the Government to support that vision and its initiatives. That contrasts with the £18 million a year of funding that goes to the Local Government Association, for example. That underinvestment leads to constraints in increasing the sector’s efficiency and its capacity to take on these new challenges, so I hope the Government will consider funding it directly with a share of the ongoing sector support.

I look forward to the Minister’s reply. This is a wide-ranging debate and he has a lot of ground to cover, but I hope he can commit to taking this sector more seriously than perhaps some of his predecessors have.

3.51pm
The Lord Bishop of Durham

My Lords, as Bishop of Durham it is my privilege to work with seven local authorities—Hartlepool; Darlington and Stockton, which are part of the whole Teesside set-up; County Durham; the City of Sunderland; South Tyneside and Gateshead—and I will not try to list all the town and parish councils that then come under those. The four northerly ones are in a region that is building towards the election of a new regional mayor for the north-east.

It has also been my privilege to chair the Brighter Bishop Auckland board, which has been a recipient of the future high streets fund. As chair of that board, I have been a member of the stronger towns board, where we have had stronger towns fund money for Bishop Auckland. So my contribution comes from a quite different perspective from those who have been local authority engaged; it is more of an overview, and I want to share some examples of what I hope is reinvigorating.

I shall start with Hartlepool. The Wharton Trust runs a local community and resource centre in the Dyke House area of Hartlepool, one of the most deprived wards in the whole of the UK. It has high unemployment, huge health inequalities and low educational attainment. From social housing and promoting healthy lifestyles to engaging young people in activities and developing IT skills, the Wharton Trust has worked over the past two decades to reduce the effects of poverty. It has provided support and initiatives that do not just help people facing these issues but empower them to bring about resident-led regeneration. The work of the Wharton Trust and its people-led approach reflects the nature of local democracy, and it would not be able to do that without good relations with Hartlepool Borough Council. It prioritises the needs of the community, not simply delivering services but placing local people at the heart of decision-making, empowering them to take responsibility for change.

Sadly, though, that does not often represent the reality of local democracy across England. The figures from the May 2023 local elections have yet to be released, but the statistics from the 2021 local elections in England display a vast disengagement from local government and decision-making. The elections saw a turnout of only 35.9%; sadly, in Marfleet it was only 14.6%—the lowest in the country. These statistics are always deeply concerning, and we have to question the kind of democracy we live in. Is the diverse range of people in our country truly represented when elected officials have been chosen by such a small proportion?

Democracy is simply strongest when people show up and are involved in decision-making, and it is therefore necessary that we increase voter engagement throughout local regions. So we have to ask: why do so few people vote in local elections as opposed to general elections? Bluntly, what I hear is that there is a feeling among the public, regardless of political flavour, that local elections are irrelevant, and that it is not through local government that change can be made.

However, local governments are concerned with the very issues, and provide the very services, that people care most about. The noble Baroness, Lady Eaton, made the point that what people care most about is their immediate family and home, then their local community and then national and international issues. Somehow, a lot of people do not make the connection that it is local government that meets most of those needs. From schools and housing to social care and the clearing of bins, local governments deal with the issues that impact the details of our everyday lives. We need to reinvigorate the role that local government plays in our lives, and the impact that it has the potential to have.

People need to feel that their vote matters: that taking their polling card down to the local polling station—with their ID—or posting it through a post box, will make a difference. When asked to what extent people agree that they personally can influence decisions affecting their local area, the response in my region of the north-east as a whole was that 22% believed they could. It is evident that attitudes towards local government need to change.

I welcome the Government’s commitment to devolving power to local governments as part of their levelling-up agenda, but it is being carried out with a top-down approach. England remains one of the most centralised democracies, still being primarily run through UK-wide institutions. Let me give an example, as chair of a local future high streets fund board. It is wonderful when the money is given, because it is for that local community. Then, when there are delays in delivery, civil servants in Whitehall say, “It’s got to be delivered by this date”, and the local community and local authority—both the town council and the county council—are told there is no flex whatever. That does not encourage local people, who have worked hard on a local plan, to believe that they are really wanted or encourage them to serve their local community. I am afraid I have seen it time and again with the stronger towns fund as well. Here are some things that I would like to explore further. We have to find ways of devolving power to local government and engaging people in local elections.

I have been privileged to be involved with Citizens UK in different ways over many years. I helped found Nottingham Citizens and Tyne & Wear Citizens. Citizens and I do not always agree that its methods have necessarily been the best, but I have learned from it the power of the strong advocacy of local community organising and using local citizens to lead the decisions about what matters most to them and then to work with local decision-makers on how that can be delivered. How might we encourage the greater use of community organising, and how might the use of local citizens’ assemblies work to effect a greater sense of belonging and ownership of our local communities and a sense of empowering local people?

I previously mentioned the success of Wharton Trust in Hartlepool, but I will also highlight two further initiatives that, for me, demonstrate the impact and power of partnerships where local people and organisations collaborate.

County Durham has really effective area action partnerships. These truly give local people and organisations a say in how services are provided. There are 14 across the county. They each consist of members of the public and representatives from the council and local organisations. Together, the members work with communities to meet their needs and take action to tackle local priorities. Each area action partnership has a forum, which anyone in the area can join to discuss local priorities, and, importantly, a budget that it decides how to use. In the past year alone, its work has supported more than 820 local projects: youth work, mental support work, activities for older people, environmental projects, community centres and employment schemes. I know that area action partnerships are not unique to County Durham, but I ask the Minister how lessons learned might be better disseminated and encouraged around the country.

It has been my privilege for the last couple of years to chair the ChurchWorks Commission. Last year, when it became clear that the cost of living crisis would become a more and more significant problem, a small number of us got together to ask what might be done to support people through the winter that has just gone. We came up with the idea of warm spaces and warm hubs. We were not alone. At the same time, Gateshead Council launched its plan for warm hubs across Gateshead. That was launched in July, when the temperatures were like they are outside now, because the council saw the problem coming.

The ChurchWorks Commission and Gateshead Council shared information and ideas. We learned from it, and we built a coalition, through the ChurchWorks Commission, which led to the Warm Welcome campaign. Through the winter, that involved huge numbers of places—local churches, libraries, community centres and parish halls. It was successful because parish councils, town councils, borough councils and county councils worked collaboratively with the faith sector, the voluntary sector and local organisations to identify where warm hubs could be best run, and they provided seed funding that unlocked other funding. It was the best example that I have seen of local people working with local government to care for those most vulnerable in their community.

I hope that these examples demonstrate that local democracy is not restricted to one method but involves the collaboration of many. Moving towards local democracy demands higher voter engagement in local elections, which must be done by helping people understand what local authorities can and do deliver and why it matters that they take seriously who is representing them, as well as greater and more effective devolution. That is not simply devolution to big regions but devolution that goes down to town councils and parish councils; that is where ordinary, everyday people are most concerned about what happens in their community. It require citizens, local organisations and local businesses to be empowered and involved in decision-making and bringing about change.

My core argument is that, if we want to reinvigorate local democracy, we must devolve it, but not simply to the councils, whatever level they are; we must devolve it in a way that becomes collaborative between councils, local businesses, and local voluntary and faith sectors. Working in collaboration is ultimately the most effective way to serve local people.

4.03pm
Lord Young of Cookham (Con)

My Lords, it is a pleasure to follow the right reverend Prelate, who has brought a new and valuable perspective to our debate. I agree with him about citizens’ assemblies, the potential of which has yet to be realised.

It is over 55 years since I was first elected as a local councillor, at a time when we still had town clerks—aldermen—with no hint of expenses or salaries. My time at Lambeth Town Hall was long before that of the noble Lord, Lord Liddle, and even before that of Ted Knight. My years there and at County Hall gave me an insight into and a respect for local government, which has stayed with me ever since. Indeed, when I became a Member of Parliament, that time as a councillor was invaluable, as nearly all the casework that came across my desk was the responsibility of one or two tiers of local government.

Local democracy will not take off until local people have the knowledge and confidence to contact their local councillor about a problem rather than the local MP. At the moment, it is a one-sided battle. You have a full-time, high-profile, publicity-hungry Member of Parliament with four full-time members of staff, against a councillor who is less well-known, probably with other commitments and with a fraction of the resources behind them. However, that is a debate for another time.

I agree with those who say we are an overcentralised country. The PACAC report from the other place, published last October, said it all:

“The governance arrangements for England (and the United Kingdom as a whole) are some of the most centralised among democratic countries in the world. The key question this raises is whether decisions are being made in the right place to provide effective government for the people of England. The evidence we received clearly demonstrated that, both practically and democratically, the overly centralised governance arrangements in England are problematic. The balance of decisions is weighted too much to the centre and this leads to suboptimal decisions being made. We found that the dominant reason for continued overcentralisation is a prevalent culture in Whitehall that is unwilling to let go of its existing levers of power”.

More of that in a moment.

I then sat on the Public Services Committee of your Lordship’s House, which looked at lessons learned from the pandemic. We concluded as follows:

“COVID-19 has demonstrated that certain key public service functions are best delivered locally. These include the pandemic response of public health systems, the recruitment of volunteers and contact-tracing. To increase the resilience of public services in any future health crises, the Government must give more decision-making responsibility to its partners at the local level”.

I think that is likely to be reinforced by the Covid inquiry.

I can give no better evidence of the culture that PACAC described than the Government’s response to a modest amendment of mine to allow local planning authorities to set their own fees for planning applications, in order to cover costs. Against the background of the commitment in the levelling up White Paper to

“usher in a revolution in local democracy”,

I hoped that the Government would be able to accept it. After all, why should the council tax, with all the pressing demands on it, be obliged to subsidise to the tune of several hundred million pounds a year the cost of running planning departments? It is worth quoting the two sentences used to dismiss the amendment:

“having different fees creates inconsistency, more complexity and unfairness for applicants, who could be required to pay different fee levels for the same type of development. Planning fees provide clarity and consistency for local authorities, developers and home owners”.—[Official Report, 23/4/23; col. 1003.]

As far as local authorities are concerned, they were actually the ones who sponsored my amendment. As far as developers are concerned, they already have to cope with myriad different local plans and can manage different fees. What they really want are well-resourced planning departments that can process efficiently and quickly the planning applications. One of the reasons for the disappointing housebuilding performance is planning delays, and my amendment would have addressed that.

As for home owners, I do not think they know that planning fees are set centrally, and they are used to local authorities having different charges for libraries, parking, allotments and the rest. I do not think they would mind if fees were set locally, as long as they got a good service. I give that as an example of the reluctance to let go, which we need to address if we are genuinely to decentralise.

I believe that, at the beginning of this Parliament, the Government were interested in devolving more power to local government. We were promised a White Paper on English devolution, but that was subjected to a reverse takeover by the levelling-up agenda and, when it came out, it was not the White Paper on devolution but the White Paper on levelling up. As I have mentioned before, there is an innate tension between devolution and levelling up. Devolution involves delegating decisions down to a low level and disengagement from the centre; levelling up implies more central control to remove inequalities between regions. I am in favour of this as a political objective but I have doubts about it as a slogan—which is possibly why levelling up does not get a mention in the Prime Minister’s five oft-repeated commitments.

There is an element of levelling up which successive Governments have ducked for 30 years which would at the same time help give more autonomy to local government by increasing the resilience and relevance of its tax base. Council tax bands are based on property values in 1991. Since then, relative prices have changed significantly: they have gone up six times in London and three times in the north-east. As the noble Lord, Lord Shipley, said, the council tax is currently regressive, both between individuals and between local authorities.

The noble Lord, Lord Campbell-Savours, whom I do not quote often, made this point well in an Oral Question:

“My Lords, how is it possible for a £54 million luxury house in London’s Mayfair to have a lower council tax than a former council house on Windebrowe Avenue in Keswick in Cumbria”?—[Official Report, 22/7/21; col. 345.]

Revaluing would be the right thing to do, would lead to average bills falling by more than 20% across most of the north and the Midlands, and would be of greater benefit to those on lower incomes.

Next Tuesday, we are to debate Second Reading of the Non-Domestic Rating Bill, which will introduce more regular revaluations for business premises: three years instead of five. Explaining the need for this, the Local Government Minister, Lee Rowley, said:

“We are bringing the administration of the tax up to date, and making the system more responsive to changes in the economy”.

The Financial Secretary to the Treasury echoed the case, saying that

“we are acting, including with more frequent revaluations to make the system fairer and more responsive.”

Does that not beg the question: if three yearly rather than five yearly reviews are right for non-domestic rates, what conceivable reason can there be for leaving domestic rates unrevalued for more than 30 years? The longer a decision is postponed, the more difficult it becomes to defend the council tax and put more weight on it. If revaluation is a step too far, the tax could be made more progressive by introducing two upper bands on top of band H, which would avoid the wholesale revaluation that was implied by the noble Lord, Lord Liddle.

That leads me to my next point. Local authorities need more economic freedom if they are to be genuinely accountable. Council tax increases are constrained, as we have heard. There is little freedom from non-domestic rates and most central government grants are ring-fenced. So here is a proposal to give local authorities more freedom, to complement the menu produced by my noble friend Lady Eaton. At the moment, the Government get some £30 billion in fuel duty revenue. That source of income will dry up over the next decade as we move to electric vehicles. The obvious way to recoup the lost revenue from drivers is through road pricing.

Back in 1996, when I was the Secretary of State for Transport, I proposed a pilot scheme whereby the Transport Research Laboratory would test the feasibility of a charge of 1p per mile for motorway use. Clearly, I was a little ahead of my time. Although road pricing featured in a Labour Government White Paper, no progress was made. The 2010 Labour manifesto, probably drafted by the noble Lord, Lord Adonis, said:

“We rule out the introduction of national road pricing in the next Parliament”.

Since then, much has changed. We have in-car telematics and a commitment to phase out fossil fuels, and many drivers are already familiar with congestion charges. Road pricing, making more intelligent use of our roads, is the logical answer. Here is the relevance to today’s debate: local authorities already collect parking charges and congestion charges, which are being introduced by more and more cities. The revenue from road pricing, apart from for motorways, should go to local authorities, complementing the existing schemes. This would give them something they have always lacked—a buoyant, independent source of revenue, making them less dependent on government grants.

It would be churlish in this debate on local democracy to end by criticising the Government for the one decision they have taken to give more power to local government. Last Christmas, in an attempt to head off a Back-Bench rebellion on planning, the Government proposed to make housing targets advisory, not mandatory. It was not part of a considered plan but a response to business managers’ plea to avoid a row. If you want to, you can leave local authorities free to decide how many homes to plan for—no Government have ever done this—but you cannot do that and at the same time have a manifesto commitment to build 300,000 homes a year. As I have repeatedly said in this Chamber, you cannot rely on the good will of local government to deliver the homes the country needs.

As a former MP, I am well aware of the powers of the anti-development lobby, but that is to miss the bigger picture. The bigger threat to my party is that it risks being seen as insensitive to the needs of those who desperately need the country to increase the number of new homes—those renting and sharing with parents—a vulnerability which Keir Starmer is being quick to exploit.

I will support amendments to the LUR Bill to give the other place a chance to think again and reverse that deeply unwise decision.

4.15pm
Lord Adonis (Lab)

My Lords, I follow on immediately from the brilliant speech by the noble Lord, Lord Young, on the subject of housing.

The single biggest failure of local governance—as opposed to local government; and therefore incorporating the role of central government in local administration—in the last 50 years has been the failure to build enough houses and the collapse in public housebuilding over that period. A striking statistic in the Economist last week was that, while Britain and France have roughly the same populations, France has 12 million more dwellings—37 million against 25 million. A large part of the reason for that is the collapse in the increase in the number of dwellings in Britain over the last 50 years, which has not been mirrored in other European countries.

The noble Lord referred to the 300,000 figure, which has a kind of mythical status in Britain: under Harold Macmillan in the 1950s, the housebuilding figure was 300,000 a year, but then it was revisited. When you look at the history of housing statistics, the striking thing is that the only period when England—I need to keep the statistics on Scotland separate—built 300,000 units a year was in the late 1960s and early 1970s, when about half of them were built by local authorities.

The noble Lord managed to make my noble friend Lord Liddle seem extremely young by pointing out that he had been on Lambeth Council many years before my noble friend. Of course, that was many years before Ted Knight, when it was held in a different esteem. I had the great privilege of being a 23 year-old member of Oxford City Council, but 15 years after my noble friend. The biggest and most striking difference is that, while he referred to a debate in the 1970s about whether Oxford City Council should build 300 or 400 units of housing a year, by the time I became a member of Oxford City Council in 1987, it was building no units at all. Housebuilding had stopped entirely on the part of the local authority.

There is always a plethora of issues, and the right reverend Prelate mentioned many of them, such as local engagement and how you engage local people more in decisions taken in their neighbourhoods. But if you stand back from the many other issues and look at the big, critical, strategic functions of local authorities and local governments, the one that stands out far and away in its importance is housing. There are clearly three elements to housing which need to be addressed. Again, if you go back to the late 1960s and 1970s, when 300,000 units were consistently being produced each year, about half were directly provided by local government. We need a debate about the extent to which that should start again. The noble Baroness, Lady Eaton, said that local authorities have started building houses again in recent years, but the numbers are tiny compared to the past. This requires radical reallocation of capital budgets and local taxation if that is going to happen—a point I will return to in a moment. I very much hope that the next Labour Government will take a much more dramatic, strategic approach to this.

There was something else striking about the 1960s and 1970s: it was not just that local authorities were big builders of housing on behalf of the state; the state itself was a very big builder of housing, through the new towns. The peak year for the building of housing in Britain since the war, when more than 400,000 units were built, was 1967; but it was also, symbolically and importantly, the last year when a significant new town was designated: Milton Keynes.

Milton Keynes went on to be one of the largest of the new towns; indeed, Milton Keynes has an economy almost as large as the city of Liverpool, which tells you a lot about what has happened to Britain in the last 40 years. From the 1945 Labour Government until the 1980s, the state was itself a major provider and strategic planner of new housing through the setting up of development corporations to build the whole string of new towns that were developed very successfully, most of them in the south of England: Harlow, Stevenage, Crawley and so on. The last one was Milton Keynes.

It is very striking and significant that, at the point the state instructed local authorities to stop building housing, leaving it entirely to the private markets—I regret to say that it was the Government of whom the noble Lord, Lord Young, was a part—the state itself also ceased to engage in housebuilding. I see the two as two sides of the same coin. A state that regarded itself as no longer engaged in the business of housebuilding, stopped designating new towns and stopped being engaged in the strategic development of housing also instructed local authorities to follow the same route. What effectively happened is that the state in the 1980s removed itself entirely from the process of housebuilding—not just from providing social housing, which is important, but from the strategic planning and provision of housing directly through the new towns.

A big subject for a debate—which is worth having—is whether there should be a new generation of new towns. It is not an easy decision to take. It would be in the face of massive resistance from many of the local authorities either adjoining these proposed new towns or of the towns that are proposed to be extended, as was the case with the original new towns after the war. It is also the case that, if it happened, most of them would be in southern England.

It is a debate worth having because it is perfectly possible that a better way of getting the same result is to densify cities and have significant new development there. If that were to happen, it would also involve a big change on the part of the state, because the single biggest owners of housing in most of the areas you would want to densify are the local authorities. Local authorities have generally been averse to significant densification of their own estates, which are predominantly post-war council housing estates, through the same democratic pressures that have been against development in more rural areas.

The third reason we have difficulty in housebuilding is the regulation of the private sector, which the noble Lord, Lord Young, referred to. That may be in part because of the planning system, although a very large number of planning applications have not been taken up. I think it is also, much more significantly, because of the failure of public/private partnerships. Where the provision of housing has been left entirely to private developers, their only concern has been the margins and yields they can get from those houses. If there had been public/private partnerships—maybe though housing associations in many cases or directly through local authorities in the development of many of the bigger housing projects affecting localities—the local authorities would have more leverage over the private developers to see that they actually deliver on the planning permissions they are seeking. They would also have much more incentive to give the planning applications permission in the first place, because they would be a party to them.

Standing back from all this, we need a revolution in our whole approach to housebuilding over the next generation. Otherwise, a whole generation of young people will not be able to access housing, particularly in London and the south-east, and we will see the disillusionment, which has been growing in recent years over the failure of government to deliver the basic needs of the people, increasing radically.

The fact that there is not even a department of housing at the moment is deeply telling and needs to be changed. One of the biggest and most important changes in the machinery of government that I think the next Government should make is to create a department of housing. All through the post-war period, until the recent past, there has been a department of housing. It was set up as a separate department, splitting from the Department of Health, in 1951. No one would think of putting housing in with health again.

The other big failure of governance affecting local government in the last 50 years has been the complete collapse in the sound system of local finance, which the noble Lord, Lord Young, also referred to. I am afraid that was also a result of misgovernment in the 1980s. The really terrible decision to replace the rating system with a per-head poll tax in 1989 led to a complete collapse in the system of local taxation, and the only reason why the council tax was thought to be an acceptable system was because it succeeded an even less acceptable system of taxation. Those of us of a certain age will remember the chaos and confusion created by the attempts to introduce the council tax in 1989-90, such as attempts to collect a per-head tax of nearly £500 in Hackney, and 20% of that from people who had no income and were on benefits. It was a project of mind-boggling ludicrousness, the only example of which I have seen since was by the next Conservative Government, which did Brexit. We have not recovered in local governance from the chaos and confusion created by the collapse in the rating system in the 1980s, the chaos and crisis produced by the poll tax and the introduction of the council tax.

The problem with the council tax is not just extremes—which the noble Lord, Lord Campbell-Savours, has made great play of—but averages. It is important to understand the impact that averages have on the council tax. Of the 10 local authorities in England with the lowest council tax, an average council tax at band D of just over £1,000, nine are in London. Of the 10 local authorities with the highest council tax—over £2,000 in all cases—only three are in London and the south-east. All the others are in other regions. At the moment, the poorest regions with the least capacity to raise money are the ones with the highest council tax, and the richest regions with the highest-valued property are the ones with the lowest. If levelling up was going to be anything more than a slogan, the first thing it should have addressed on local governance was the inequity of the council tax; there should have been a radical reform. But, of course, the Government were not prepared to do that.

The noble Lord asked—somewhat disingenuously, I thought, because he is a politician—why we still have 1991 valuations for the council tax. The answer is because no Government have wanted to go through a wholesale revaluation of domestic property since. It has been hard enough to do with business properties, and businesses do not have votes, but with domestic properties it has been very hard. I say good luck to the Government who decide to do a comprehensive revaluation that leads overnight to a systematic increase of 20% or more in council tax bills in London and the south-east.

The only way of dealing with this that will work is radical incremental reform. There has not been enough incremental reform. The Government of whom I was a part introduced one new band on the council tax; as the noble Lord says, there is a strong case for having two additional bands. I would introduce them in successive years, not all in one go. Reform of the council tax to raise more from higher-valued properties, which have grown disproportionately in value since 1991, is a very significant reform. This is the key point: if levelling up is to mean anything, that money should be redistributed directly to authorities in the Midlands and the north. If that were done, there would be a greater degree of equity quite quickly in the council tax system.

In respect of reforming business rates to localise them, it would be a very retrograde step if the localisation of business rates did not maintain a significant measure of equalisation across the country. I think we need to face the reality that, without that equalisation, you will get an even greater disparity in funding across regions.

The other big area that needs to be addressed in respect of local taxation, which the noble Baroness, Lady Eaton, briefly referred to, is devolving other property taxes besides the council tax. It seems to me that the case for devolving those taxes, particularly the large revenue from stamp duty, is unanswerable and would give a very big development incentive to local authorities if they were the recipients of all the benefits of what is essentially a development tax. It might also enable them to distribute taxation more equally across different heads, because the level of stamp duty is now excessively high and is a big obstacle to people moving houses. It might be that a shift towards council tax, if there were more bands, would be a sensible step in that direction.

Progressively reforming local taxation and making it more equitable is clearly absolutely vital to addressing all the issues raised in this debate. Unless local authorities have greater, equitable access to more funding, they will not be able to address all the other issues that need to be addressed or the crisis in the delivery of many local services.

I hope that when we debate these issues in 30 or 40 years’ time, we will not have this massive disparity in housing between Britain and France; we will at last have done something about council tax; we will not still be relying on 1991 valuations for property as the basis of our main local taxation system; and we will have radically addressed the important underlying message of levelling up—the drawing and pulling apart of London and the south-east from the rest of the country.

4.30pm
Lord Razzall (LD)

My Lords, rather like the noble Lord, Lord Liddle, I was attracted to speak in this debate because of my lengthy experience in local government. I was a councillor on the London Borough of Richmond for 24 years and deputy leader for 15 years, although, unlike him, that is the only local authority I served on. There are three other former councillors of that London borough in your Lordships’ House: my noble friends Lady Doocey and Lady Hamwee and the current Leader of the House, the noble Lord, Lord True, who cut his teeth as a young member of Richmond Council when we had virtually a one-party Liberal Democrat state in Richmond. That explains why, before he became Leader of the House, he was always very critical about the Liberal Democrats on these Benches.

This has been a good opportunity to look over our history with a number of former councillors here. When I was first elected to Richmond Council in 1974, 80% of the council’s revenue came from taxes locally raised both from the rates, as we then called them, and the business rates. By the time I left in 1998, the percentages had completely reversed: only 20% of revenue was locally raised, and 80% came from central government. The result was that, by the end of my time there, and even more so now, the Government interfered, because he who pays the piper calls the tune. As my noble friend Lord Shipley indicated, if money is being paid by the Treasury, it wants to dictate what happens, in an Orwellian sense, in Room 101. Whitehall prevails.

A further effect of the Treasury impact is that, in the years, of which we have had a number recently, when the Government tried to introduce significant cuts in government spending, the easiest thing to do was to give a big slice of it to local authorities, because when you cut local government spending, the resulting cuts in services are blamed not on central government but on the local authority. The Governments of both persuasions spotted that.

In my submission, a generation of hollowing out of local government has had a dramatic effect on our society, in many ways. The noble Lord, Lord Adonis, referred to housing. One of the fundamental reasons why local authority housing has completely disappeared since the time that the noble Lord, Lord Liddle, referred to, is what happened when central government permitted people to buy their council property. The whole idea of that—and I was not against it; most people across the board were not against it—was that you allowed a tenant to buy the property, and that freed up a capital sum that would be used to build new properties. That, however, never happened, and the reason was that the Treasury gave with one hand and took away with the other: capital controls were imposed that meant that local authorities could not use the capital receipts to build new housing. That fundamentally and completely destroyed the programme of building new houses that we all thought the sale of council houses would enable.

The other factor, going into history, was what happened to care in the community. When a number of rather unsatisfactory places—what people used to refer to as lunatic asylums, which then became known as mental hospitals—all closed down, we had what was known as care in the community. People were going to be released into the community, and social services provided by local authorities were going to look after them. That often did not happen because, at the same time, the Government were cutting local government expenditure so local authorities could not properly afford to provide that care in the community. As a result, there were significant complaints to all of us in local authorities as to why X or Y—a drug addict—was sitting next door causing problems. The answer was that there was no money being provided by the local authority because of cuts in the government grant.

This, of course, as various speakers have mentioned, has now morphed into the inability of local authorities to provide day care. Because they cannot afford to provide adequate day care, we have bed-blocking in hospitals, which has a significant impact on the National Health Service.

Your Lordships would not expect me not to refer to the impact on our arts. If you endlessly cut local government, local government is going to endlessly cut the provision of its budget for artistic venues in their areas. I will give just one example. Let us look at a place like Stuttgart in Germany—let us forget about Berlin, which has so much art funded by its local government. The budget in Stuttgart for all the arts provided in Stuttgart, funded by local government in Stuttgart, is greater than the whole of the Arts Council budget in the UK. That tells you what the impact is of endless cuts in local government.

There is also another fundamental effect that has occurred since I first became a councillor, and then left in the late 1990s. That is the quality of people, very often, who are now elected as local authority members. This is not a party-political point: I think it is true across the board, because why would anybody want to be elected these days to sit on a local authority? Often your only job would be to provide cuts in services, damaging the interests of the people whom you were elected to serve. We have across the board, in this Chamber, a number of very talented people, all across the parties—apart from the DUP, possibly—who have served lengthy time very effectively in local government. I wonder, in 10 or 15 years’ time, whether that will be the case because of the quality of people who have been hollowed out in relation to the existing provision of local authorities. I will ask the Minister a fundamental question. We know that this Government, since 2019, have led a massive attack on a number of our key institutions. Let us pick the judiciary, the civil service or the BBC. Do this Tory Government want to add local government to that list?

4.40pm
Lord Wallace of Saltaire (LD)

My Lords, the noble Lord, Lord Adonis, and others made comparisons between Britain and France. That reminds me that, when I first began to be interested in politics as an undergraduate student, people used to joke about how centralised France was, and that the Minister for Education in France could look at his watch and say exactly what was being taught in every French school at 11 am, whereas in Britain we had strong local authorities and a much greater sense of confidence in our democratic institutions than those poor, benighted French people. Things have changed now.

I realised just how much they have changed when I took the director of education of the musical education charity that I used to chair to see the Minister for Schools to discuss some of the innovative efforts we have been undertaking to bring music back to primary schools that have no one with any musical expertise. After nearly a minute, the Minister for Schools interrupted us and began to tell us, at considerable length, exactly how he thought music ought to be taught in all schools in England, and that was the end of it. That would not have happened 30 or 40 years ago—the Department for Education was very much smaller.

The noble Baroness, Lady Eaton, may remember the West Riding Education Authority—a splendid local education authority that had a large staff and a range of experts, including on music, no doubt. This meant that, in the West Riding in those days, you could be proud of the way that education was provided by the local state, with the central state having very little to do with it. That is how far we have gone away from a lively multilevel democracy towards an overcentralised state—though one that does not supply many of the public services that it did then.

We talked about confidence in democracy. I looked at the Office for National Statistics analysis of the most recent OECD cross-country survey of trust in government, which shows that trust in central government in Britain is lower than in almost any other advanced democracy in the OECD. Trust in local government is considerably higher than in central government, in spite of everything that local government is no longer able to do, but it is also a good deal lower than trust in local government in our counterparts across the channel. Incidentally, for those in the Conservative Government who deeply mistrust the courts and the Civil Service, trust in the Civil Service is almost twice as high as it is in central government, and trust in the judiciary is way above that, so attacks on the Supreme Court, et cetera, seem to be out of whack with what the will of the people is alleged to be.

As an undergraduate, I was taught that all politics starts with the local, which is where most of our citizens learn about how politics affects them. National politics looks like a rather distant game, which is part of the problem of the loss of trust that we have in British politics. Sadly, declining turnout in local elections shows that the public do not see local government as central to their lives and recognise that central government calls the shots.

This Government do not trust local government, and we heard from the noble Lord, Lord Liddle, that the Blair and Brown Governments did not trust it either. Successive Governments have tinkered with structures and reorganisation, imposing mayors on places that did not want them and forcing through single-tier structures in Somerset, Cumbria and North Yorkshire, while permitting two-tier structures to continue elsewhere, including across London, the only part of England that has, in effect, a regional government. Conditional funding by central government is used as a lever to strike what are called devolution deals, and recently even to require competitive bids for little pots of funding in what is supposed to be levelling up.

The structure of local government across England is an incoherent mess. London has two tiers, with a regional mayor and second-tier local councils. Metropolitan regions have metro mayors and metropolitan combined authorities, with large unitary authorities now sharing their authority. In the eastern counties, we have county councils and districts councils, although in the north and the south-west these are being dismantled and single-tier authorities are thought to be the only thing you can have. Michael Gove now wants to extend to county combined authorities, with semi-regional mayors imposed upon them.

I find what has happened recently in North Yorkshire the most appalling, and when I heard someone assure me that no councillor in North Yorkshire would need more than two hours to drive from the ward they represent to council meetings, it showed me just how far we have gone. Decent places such as Harrogate, Scarborough, Richmond and Craven, which had working district authorities and which represented real places, have been dismantled and they are now trying to set up very large town councils for them. We have the prospect of a mayor, somehow, for North Yorkshire and, incidentally, one for East Yorkshire. That is the effective destruction of local government and I really do not understand the rationale for it.

In West Yorkshire, we have the absurdity of Leeds and Bradford having councillors elected in wards which in some cases have over 20,000 electors—Headingley in Leeds has nearly 24,000 voters. It is virtually impossible for a councillor to get to know his or her voters in every village and street in the way that local government used to link politics with people. My friend, the noble Baroness, Lady Eaton—she is a very good friend of mine and was an excellent leader of Bradford Council—has represented a rural ward with over 15,000 voters. It has four distinct villages at some distance from each other, as well as several smaller settlements. That is not really local, however local a councillor tries to be.

How we revive and reconstruct local government is a real problem. My noble friend Lady Scott talked about town councils, and we are conscious that in West Yorkshire it is, on the whole, the prosperous and middle-class areas with the most graduates that have the town councils. It is Ilkley and Shipley; it is not the inner-city wards in Bradford, which really need them in order to get people involved again. If we are going to promote town councils as part of the answer to the disconnect between ordinary people and politics, we are going to have to put some real effort into providing support for setting up town councils in those areas.

The incoherence of our current structure is shown in the contrast with Cambridgeshire, which has a county council and several districts. In the Fenland District Council county councillors represent wards of 8,000 to 10,000 voters and district councillors 1,500 to 3,000 voters. That is rather more local and representative. It reminds me of my daughter’s godmother, who accidentally got herself elected in Hertfordshire on one occasion because, when asked to stand as a paper candidate, she said, as a good conscientious Baptist, “This really was a little bit of a cheek, William, because I had only lived there for three years, so I thought at least I want to go round and introduce myself to people”. You can get yourself elected in a ward of 2,000 to 3,000 people such as that; you cannot do it if you have 15,000 people.

As a result, MPs now find themselves spending more time on constituency surgery matters because people understand who their MP is and take their local issues to them, leaving the business of parliamentary scrutiny to the Lords, which is why we are so much busier than when I first entered this House. It is all deeply dysfunctional, and leaves our citizen electors increasingly dissatisfied with democratic politics as such. Then we have police and crime commissioners and other aspects which make it even more incoherent.

The conviction that central government knows best even when local expertise is essential to resolving a challenge, as the noble Lord, Lord Young, remarked, was best shown when Covid came. Public health officers should have been key to the response—they knew what needed to be done on the ground and where facilities should be provided—instead of which, central government outsourced the original arrangements to two multinational companies, one of which was headquartered in Miami. That is how far we have slipped away from understanding that politics on the ground—government on the ground—needs people familiar with local circumstances. As has been said, the same is true of apprenticeships, further education and how we deal with children in care.

There has been a great deal of discussion about councils losing funding and powers, and what we do about the tax base. We all recognise that council tax is not at all the answer. I can speak with particular passion on this, having had two houses for 40 years, one in the Bradford district and one in Wandsworth. In most of those years I have paid more council tax in Bradford than in Wandsworth, in spite of an absurd difference in value between the two houses. That is an example of a tax that is illogical and desperately in need of reform. As the noble Lord, Lord Young, remarked, we need to find a wider tax base but we also need to recognise that fiscal redistribution—what the Germans call Finanzausgleich—is absolutely important if we are to redress the very damaging regional inequalities between the prosperous south-east and the north of England.

Dehenna Davison, when speaking to the Northern Research Group conference last week, defined devolution as:

“Give more cash and get out of the way”.

But central government is not going to give more cash and get out of the way. We know that—we have seen that—so we have to find some way of having a negotiation process whereby we redistribute central government money but also find a wider tax base from which local government can draw.

Incidentally, I say to the noble Baroness, Lady Eaton, and others that by far the most important thing for me in the Northern Research Group conference last week was the chairman, John Stevenson, saying that the north should stop talking about improving transport links. Instead it should say, “What we need in the north is the Charles line”—the trans-Pennine link renamed—because that makes it sound like the obvious equivalent of the Elizabeth line, and that is the way we have to pitch our arguments.

Where shall we go from here? The PACAC report has not received as much attention as it deserved. Governing England sets out the arguments for a statutory cross-party commission on the future structure and powers of England’s government. It needs to be cross-party because we all know that once we have one Government setting something up, the next Government are bound to change the structure. As far as we can, we need to get a degree of consensus about a structure for local government that is both coherent and stable for a change, and will last for 20 or more years. We also need shared assumptions on what the reform of the tax base would be.

I regret that my party and the Labour Party did not respond fully to that report—we did not pay as much attention to it as we should have—and I regret that the Government’s response to that report has not been particularly generous either. After the next election, a reform of the way in which the governance of England is conducted at all levels is a vital part of what any new Government must be. If we want to regain trust in politics and re-engage some of our citizens more, that is part of how we do it. Let us all recognise that we face a situation of deep popular disengagement and disillusionment with the democratic politics we have in this country.

4.55pm
Baroness Hayman of Ullock (Lab)

My Lords, I start by thanking the noble Lord, Lord Shipley, for introducing this important debate. There is much that we need to discuss around the future of local government. I would also like to make the point—and I feel this in many debates I take part in—that Members of this House and the other place who have been in local government bring an important and different perspective to our debates. It is important that we listen carefully to what has been said.

One of the things that has come out strongly from this debate is the fact that councils touch people’s lives every day. It is the councillors who experience at first hand how national and even international pressures impact on local communities. At one extreme they have arranged accommodation for refugees fleeing Ukraine, for example, and they have to support residents through the cost of living crisis that we have been facing. But it is also important that local government is fundamentally very different from central government. There is a more direct line to residents, listening more closely to their wishes, which need local decision-making.

One thing we have heard a lot in the debate from a number of noble Lords is the PACAC inquiry into the different initiatives the Government have introduced on devolving power locally in England. The report, Governing England, concluded, as we know, that there needs to be urgent and significant reform of the way in which England is governed. It came up with a number of areas of concern that noble Lords have talked about today. One was that current local government structures were too complex and created a confusing and opaque system. I have concerns that the Levelling-up and Regeneration Bill may well add to that complexity. This is something we need to think carefully about. We need to ensure that local people understand where responsibility and accountability lie for decisions that are made. When I was a Member of Parliament, I was often asked to get my councillors into order. People genuinely get confused about responsibility and where reporting lies.

The noble Lord, Lord Shipley, began by saying that England and the UK as a whole are overly centralised compared with other democratic countries around the world. Again, that has come through time and again in today’s debate. PACAC argued that this was the result of

“a prevalent culture in Whitehall that is unwilling to let go of its existing levers of power”.

The noble Lord, Lord Young, gave some very good examples of its reluctance to let go. It would be interesting to know whether the Minister agrees with that analysis.

We know that devolution to local leaders of real, genuine power, backed by sustainable resources and funding, is the most efficient and effective way to address the current fiscal crisis and secure a path to long-term prosperity. I was very pleased to hear the comments of my noble friend Lord Liddle on this, and I fondly remember our days together on Cumbria County Council.

Research that the LGA has commissioned on fiscal devolution clearly shows that the UK is an international outlier with the most fiscally centralised systems in the developed world. In addition, the Institute for Public Policy Research shows that countries with a greater level of devolution experience lower levels of regional inequality. The Institute for Government has also argued that there should be further devolution of responsibility to local councils. Last month it wrote a report called How Can Devolution Deliver Regional Growth in England?, which argued that councils should have greater responsibility for transport, skills and planning to better support growth in their areas. My noble friend Lord Adonis gave housebuilding in the 1960s as an example of exactly how councils can push forward things that local areas need.

The report also said that the Government really need to simplify the funding system. We have heard a lot about the reasons why that has to be. The current funding arrangements for local government are simply ineffective. The system by which local authorities pit themselves against each other, bidding for separate pots of money, is not just a waste of local resources; it means that the money does not necessarily go to where it is needed. The Government need to commit to ending this system. I have asked about this a number of times. We also debated it at some length on the levelling-up Bill, and I imagine we will continue to do so.

The point is that councils have the potential to identify and address the challenges that matter most to people and their local communities, but they will achieve this only if the relationship between national and local government can be reset to allow for more local determination. Will the Minister ask his department to consider accelerating work to genuinely devolve both legal and fiscal powers to local government so that we have long-term, sustainable funding arrangements? The way we are moving at the moment simply does not allow local government to deliver properly and effectively for local communities.

I also ask the Minister: when are we likely to hear from the Government about the outcomes of the fair funding review, so that local authorities can benefit from more equitable distribution of income right across the country? Surely, if the Government have any chance of delivering on their ambitious levelling-up agenda, we have to have the outcome of the fair funding review so that we can make sure that local authorities have the money to deliver on what the Government will be asking them to do.

I will mention the comments made by the noble Lord, Lord Razzall. He talked about the cuts a lot. Again, it is important that we put that in context, but I was very pleased that he talked about the cuts to the arts, because we really do not hear about that enough. They are an extremely important part of our local communities.

I also mention the abolition of the Audit Commission, which the noble Lord, Lord Shipley, mentioned. The Society of County Treasurers has produced a chart that shows that over 83% of council audits for 2021-22 have not yet been signed off. In other words, the private sector has comprehensively failed to provide effective audit services for local government and for the public it serves. How do the Government intend to address this serious issue?

Something else that was discussed and which should be of great concern to us all is the fact that people are increasingly feeling that political and social change is simply not possible and will not happen. We heard that people are being dissuaded from participating in politics in the first place because they doubt the effectiveness of democratic politics to actually enact change. This is not good for the health of our democracy.

The noble Lord, Lord Wallace, talked about the importance of trust, and the difference between trust in local and national government. I looked up the figures: 27% trust central government and 55% trust local government. If you then look at government research on community life, you see that less than one-third of citizens engage in civic participation and only about one-quarter believe they can personally influence decisions in their local area. That is quite a serious statement to have to read out. If we were better at devolution, people would feel that they had more control and then, I hope, would participate more and earlier in the kinds of schemes mentioned by the right reverend Prelate.

Councils are going to thrive only when barriers to engagement are removed. We have heard about turnout at local elections. The average turnout for stand-alone local elections is around 34%, with local election registers being only 83% complete and only 89% accurate when they were last assessed back in 2018. These points were made very strongly by the right reverend Prelate the Bishop of Durham—the importance of people voting and taking part in that local democratic act.

The noble Baroness, Lady Scott, talked about the importance of community power and parish and town councils. Again, if there was more influence there and more ability to support local communities, perhaps people would feel more of an urge to vote in their district council unitary authority elections.

We think that improving registration levels and encouraging citizens to vote in all elections is a first step to reinvigorating local democracy. But we also know that when the Electoral Commission did a review of electoral registration recently, it found evidence that the new canvass process is not fully picking up population movement and that the number of people being registered has been falling since the introduction of individual electoral registration in 2014. So I ask the Minister: have the Government picked up that report? Are they going to look at how registration, particularly when people are moving around the country, can be improved?

On this matter, the LGA has recommended a number of things that the Government could consider. First, it suggests that the process of registration could be reviewed from end to end, including a realistic assessment of the cost, as well as a consideration of what further data could be used in the annual canvass to better identify those who move around regularly; for example, you could tie it in with the renewal of driving licences or passports or the issuing of national insurance numbers—there are ways these things can be pulled together. I see the noble Lord, Lord True, here. We discussed much of this during the Elections Act.

It is important that the Government act on the Electoral Commission review of the annual canvass process, due to be published in September this year. I urge the Government to look very carefully at that report when it comes out, because it may be extremely helpful in dealing with some of the issues that have been raised today.

We have heard how councillors are a vital part of local democracy, representing the needs of their residents and working to improve outcomes for their local communities. But good decision-making also needs people who reflect their local communities—the range of experiences, backgrounds and insights. But, by law, councillors now have to attend council meetings in person. One thing we discovered during the pandemic was that Zoom and Teams were actually very useful in bringing people together and ensuring that connections and meetings still happened.

We debated in Committee on the levelling-up Bill the benefits of continuing to allow virtual attendance at council meetings, which of course was stopped by the Government. This had a lot of support. It supports a range of people—such as parents of young children, carers and disabled people—and enables them to come forward and represent their communities, encouraging wider public participation as well. On the basis that the Government should really be lowering barriers to participation, why on earth can we not have as an option virtual participation in council meetings? Councils should have the flexibility to decide for themselves whether or not this is a useful tool for them to use.

In conclusion, I thank the noble Baroness, Lady Eaton, for the considerable expertise and experience in her speech. She made the important point that this is a pivotal moment. I think one of the reasons for that is that the Levelling-up Bill provides us with an opportunity.

Local government underpins the whole levelling-up agenda, so it is important that the noble Lord takes back to his department, and to the Department for Levelling Up, Housing and Communities, the concerns raised in this debate, and asks the Government to work with local authorities so that they have the powers and resources they need to deliver the Government’s ambitions on levelling up. It needs to be much more than just a slogan. Finally, I congratulate Shaun Davies on his appointment and I am sure we all wish him well.

5.10pm
Lord Evans of Rainow (Con)

My Lords, your Lordships may have noticed that at Questions I paid tribute to the noble Lord, Lord Kennedy, for his service over many years as a councillor. Indeed, I pay tribute to all of your Lordships because I have really enjoyed the speeches. Former leaders have also paid tribute to my noble friend Lady Eaton for the work she did on Bradford Borough Council.

I was particularly interested to hear the noble Lord, Lord Shipley, talk about the Barnett formula. I have to declare an interest: when I was a councillor in Cheshire, people used to ask me about that formula and I had to read up on it. I had to work out how to explain the Barnett formula and why the good citizens of Cheshire were £2,000 per head poorer that those in Scotland. I still find that hard to explain, as many of your Lordships have said they did.

As I said, I was a local authority councillor. I was persuaded by my local councillor, who introduced me to politics but sadly died of cancer; he said that I should stand, in 2000, when my party was not in power, and so I stood. My chances were apparently slim, and the Liberal Democrats fancied their chances of taking a Macclesfield constituency, while the Labour Party candidate was doing a really good job. I always remember that, at the count at Macclesfield sports centre, there were the two candidates who thought they were going to win—the Liberal Democrat and the Labour candidate—and me, the unknown outsider. I came in and polled more votes than those candidates put together.

What has come through in the debate, and it is important, is that if you have a local authority background you have a feel for the citizens of this country. I know West Yorkshire and the areas that the noble Lord was talking about but less so those in London. There is a difference between rural and metropolitan areas. My experience was of being on a town council. I was elected to a borough council and told not to go for the parish council, as in the point made by the noble Baroness, Lady Scott: “Don’t go for the parish council, go for the borough council”. We also had a Cheshire County Council, so it was a bit like that sketch in which borough councillors looked up to county councillors but looked down on parish councillors. I was not having any of that.

They were a plucky bunch on Bollington Town Council, because when they realised that I was not standing to be a parish councillor they voted unanimously to co-opt me. They caught me out, and I ended up having 10 years on the parish council in Bollington and 10 years on Macclesfield Borough Council. Then Hazel Blears, God bless her, introduced unitaries, so I now live within Cheshire East Council. As many of your Lordships are, I am steeped in local government. Being a councillor helped me as a Member of Parliament in the Commons; the noble Baroness said something similar.

The noble Baroness, Lady Scott, talked about how people do not think that those on parish councils are interested. I can assure your Lordships that, in my experience, the parish councils in my part of the world are very vibrant. They work well with the unitary council and seem to have a lot of flexibility. It is a wonderful place to live, work and bring up a family. It is not called “Happy Valley” for no reason at all. If you look up Bollington Town Council, you will see that it is a very special place.

The noble Lord, Lord Liddle, mentioned that his grandfather was a miner, a councillor and a JP. The wonderful former chairmen of the town council were all, I noticed, JPs until about the 1960s. I also pay tribute to my noble friend Lord Young of Cookham. I have learned a lot about his good self and the work that he did as a councillor in London.

The noble Lord, Lord Shipley, is right, and he speaks from experience, in his argument for why devolution is so essential for a flourishing local democracy. Devolution is at the heart of the Government’s plans for economic growth and to level up the whole country. Indeed, the levelling-up White Paper made explicit the need for empowered, devolved local leadership. It set out, for the first time since the emergence of mayoral combined authorities in 2014, a clear menu of options available for places seeking to draw down, and take more control over, a range of powers and functions in local areas.

The Government’s overall approach to supporting local growth has put local institutions at the heard of decision-making, whether through the £2.6 billion UK shared prosperity fund, the £4.8 billion levelling up fund or the £150 million community ownership fund, to name just a few. In my own community of Cheshire East, this has empowered local leaders to spend £49 million through the UK shared prosperity fund, the future high streets fund and the towns fund on projects that are identified and led locally.

All that is alongside the overall increase to local government budgets. The final local government finance settlement for 2023-24 makes available up to £59 billion for local government in England, an increase in core spending power of up to £5 billion—9.4% in cash terms—on 2022-23. This boost in funding demonstrates how the Government stand behind councils up and down the country.

Devolution goes further and enables communities and their elected leaders to use their local knowledge to fix the problems that they face and harness opportunities unique to local places. Crucially, it maintains the core principle of a thriving local democracy: the right of residents to judge how well their representatives and leaders are doing at the ballot box.

There are many different approaches to devolving power. Scotland, Wales, Northern Ireland and London all have their own models. As the noble Lord will no doubt remember from his time with Newcastle City Council, the top-down approach was tried; the north-east was given the opportunity to vote for a regional assembly, which it rejected in 2004.

The truth is that there is not a one-size-fits-all approach to devolution in England. Devolution must be locally led, rather than top-down and imposed by the Government. Through our devolution framework and process of devolution deals, we work hand in glove with existing local government to agree the right model for governance in their regions. Instead of creating a conflicting or purely additional tier of governance, this process establishes combined authorities that are made up of constituent local authorities in the area. They are the combined authority’s constituent members.

As constituent members, the local authorities have a seat at the combined authority’s table. They not only consent to devolution but continue to play a role in how devolution works in that area. That includes the requirement that they, alongside the Secretary of State and Parliament, must consent to any further devolution in their area. This is devolution to empower local government, working with existing local government structures for the benefit of residents.

The work of our existing combined authorities and mayors demonstrates how devolution can play an incredibly powerful role in driving economic growth, improving public services and giving local areas a real voice on the national stage. For example, in the Tees Valley, the mayor, Ben Houchen, has worked with business to trial new approaches to sustainable transport with an e-scooter trial, with free e-scooter rides for the NHS, the Armed Forces and emergency services.

At the height of the pandemic, Steve Rotheram set up LCR Cares to raise money for community and voluntary organisations in Liverpool City Region. They raised more than £2 million. Research funded by the Health Foundation found that Greater Manchester had better life expectancy than expected after devolution, particularly in the areas with the highest income deprivation and lowest life expectancy. That is levelling-up in action. Those are just a few examples of the powerful role of mayors and how they help to create greater convening power to deliver place-based programmes.

As a result of these successes, we have been determined to roll out devolution further to places that believe it will benefit their businesses, communities and residents. We set ourselves a mission that by 2030 every part of England that wants one will have a devolution deal, with powers at or approaching the highest level of devolution and with a simplified, long-term funding settlement.

Significant progress has already been made. The Government signed five mayoral deals with areas last year. This takes the proportion of England now covered by a devolution deal to above half for the first time, up from 41% in 2021. It also means that almost 75% of the population in the north is now covered by a devolution deal, providing greater opportunities to help level up those regions.

These new deals will see more than £3.6 billion invested over a period of 30 years and mean that more than 5.8 million more people can directly elect a mayor or leader to represent them in the future. Once elected, these deals will give the directly elected mayors or leaders and their combined authorities greater local control over crucial levers of economic growth and public service, such as transport, infrastructure and skills.

Our devolution journey will not simply conclude with the successes of last year; the Government are committed to rolling out devolution across England. We are particularly interested in exploring opportunities for devolution deals that will empower local leaders and communities where places want a directly elected leader, such as a mayor, across the devolved area. This additional layer of accountability and leadership is necessary to secure the highest level of powers and responsibilities. Indeed, those single, accountable, elected leaders act as an ongoing champion for those regions. That is why, alongside extending devolution to new places, the Government continue to work with existing mayors and combined authorities to push the frontier of devolution.

In the levelling-up White Paper, the Government committed to deepen the devolution settlements of the most mature institutions, to support them in delivering further benefits for local residents. We are delivering on this commitment. Alongside the Spring Statement in March, the Government announced the trailblazer deeper devolution deals with the Greater Manchester and West Midlands combined authorities. These deals included commitments to a single department-style settlement which will give the Greater Manchester and West Midlands combined authorities the flexibility and autonomy they need to deliver for their areas.

Single settlements represent an ambitious step on the road to greater simplification of the funding that GMCA and WMCA receive from central government. The Government’s ambition is to roll this model out to all areas in England with a devolution deal and a directly elected leader over time. These trailblazers will act as a blueprint for deepening devolution elsewhere in England. We will begin talks with other institutions on deeper devolution this year. The Government will set out more plans for those talks soon.

The noble Lord will know from his time in local government, and in this place, that power cannot be passed without clear accountability. That too is crucial for effective and transparent local democracy and is why a crucial part of our work to bring decision-making closer to the people is developing a strong accountability framework. The Government published the English Devolution Accountability Framework in March this year. This sets out how areas with devolution deals will be scrutinised and held to account through local scrutiny by the public and by the Government. The accountability framework will empower local residents and provide them with confidence that devolution is leading to developments in their area. We also published new scrutiny arrangements for the trailblazer deals, to match the ambition of the powers agreed with Mayors Andy Street and Andy Burnham. This includes a model for assurance to cover the new single departmental-style funding settlement.

With great devolved power comes great responsibility. We have agreed with local government mechanisms to ensure that local leaders and institutions are transparent and accountable, work closely with local businesses, seek the best value for taxpayers’ money and maintain strong ethical standards.

The Lord Bishop of Durham

Will those accountability agreements also be in reverse? In my experience with the high streets fund and the stronger towns fund, a lot of the delays happened at the central government end and there has then been no flex at the local end, so we have lost 18 months’ delivery time. Accountability must be both ways.

Lord Evans of Rainow (Con)

I agree with the right reverend Prelate that accountability is at both ends. In my experience, if there is good local leadership in the local authority that can communicate well with the government departments, it can help things, but he raises a very important point and if we can avoid those delays, working both ways is exactly the way to do it.

The noble Baroness, Lady Hayman, asked a couple of questions on local government structures. The English Devolution Accountability Framework, published in March, sets out how areas with devolution deals will be scrutinised and held to account through local scrutiny by the public and by the Government.

Through its accountability framework, the Government have committed to review how current scrutiny and accountability arrangements in London are operating in practice, exploring the strengths and challenges of the capital’s devolution settlement, and how the Greater London Authority works with London’s boroughs. This will be aimed at sharing best practice, learning lessons for other mayoral authorities and considering how current scrutiny arrangements may need to evolve over time.

I will also mention the abolition of the Audit Commission. We are establishing the Office for Local Government, a new data-focused performance body for local government which will increase transparency of local government performance and improve the accountability of performance across the local government sector. There is a need to have the appropriate checks and balances in the system; Oflog will support others to interpret performance data and take action on it, particularly where the data shows early warning signs of failure.

Baroness Hayman of Ullock (Lab)

Is the intention that Oflog will do the financial audit?

Lord Evans of Rainow (Con)

That is the case. In conclusion, we recognise the importance of local democracy, and that devolution is essential for flourishing local democracy. Devolution is a process, not a moment, and the country continues to see the model evolve and the benefits it brings. I thank again the noble Lord, Lord Shipley, for bringing forward this debate, and all noble Lords for their contributions today and their service as councillors. I look forward to continuing our discussions on local government in England as we continue our efforts to put power in the hands of local people.

The Lord Bishop of Durham

I apologise, but I did ask a specific question about the use of citizens’ assemblies, which the noble Lord, Lord Young of Cookham, was kind enough to support. I wonder if the Minister would like to comment.

Lord Evans of Rainow (Con)

Do forgive me. I do not have a specific answer, but from my experience I can confirm that citizens’ assemblies certainly have a role to play in communities, together with strong parish, local and unitary councils. If the right reverend Prelate would like me to write to him confirming that, I can certainly do so.

5.27pm
Lord Shipley (LD)

My Lords, I would like to thank the Minister for his reply, and all those who have taken part in this debate. In one sense, it has been a trip down memory lane, as we compare our own experiences and how much those have changed over the last two or three decades. It has been important for me, because it has demonstrated how much can change in a relatively short period.

I hope that there will be a constitutional commission of some kind. If there is, today’s debate, recorded in Hansard, could form the basis of its first paper. Quite soon there will be a general election. Political parties are writing manifestoes. The only way to effect change in this constitutional area is through cross-party working. That has been generally agreed across the Chamber, but it is important. As I keep saying, you cannot run 56 million people in England out of London.

I thank everyone for taking part. The noble Baroness, Lady Hayman, reminded us about local audit. There is an issue about what Oflog’s role will be. We might want to pursue over the next two or three weeks the timing of Oflog and its exact terms of reference. I had not thought that its work would be similar to that of the Audit Commission, but I was thinking of the problems that have arisen which are very short term—of stopping things from going wrong as they are about to go wrong, rather than of something a year or two after the event, when you are reviewing an audit.

Motion agreed.