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Local Government: Big Society

Volume 725: debated on Monday 28 February 2011


Asked By Lord Dubs

To ask Her Majesty’s Government what assessment they have made of the effect of cuts in local government spending on their big society proposals.

The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham): The challenge the country faces from the public finance mess left by the previous Government means that local government has had to take its share of the burden required to reduce the deficit. Local authorities, however, now have control over virtually all of the grant that they receive from central government. Therefore, they have choices as to how they manage their budgets, the areas that they protect and the priorities that they set. The big society is a wide concept of social action, community empowerment and public service reform that is embedded in localism.

Does the Minister agree that many people find it difficult to understand how the whole idea of a big society can survive the many devastating cuts that are taking place particularly in the most disadvantaged areas of our country? Can the Minister explain how voluntary organisations, many of which are now under threat and might not be able to survive, can provide the services to the poor, to young people and to the mentally ill when their money is being cut from under their feet? It is not a tenable way of approaching the big society and it will not work.

My Lords, as I made clear in my original reply, local authorities are now almost entirely responsible for the money that they receive from government. They are responsible for their budgets and, therefore, have their choices to make. However, it seems to me to be an inescapable fact that local authorities ought to continue to support the voluntary sector because, as the noble Lord said, it provides great support for the work that they do. It is also part of the Government’s policy under the Localism Bill, which we will be discussing quite soon, that the voluntary sector should have a large part to play in managing and directing the services that are in local authority control.

A number of local authorities now appear to be making disproportionate cuts in the grants to charities and voluntary groups. Why they are doing that is not clear. Is there not a reason for local authorities to consult with charities and voluntary groups to ensure that the right long-term solutions are arrived at to provide services for the communities that they look after at a time when we have perfectly appalling economic circumstances inherited from the last Labour Government?

I thank my noble friend. The Government’s whole purpose is to pass responsibility and money from central to local government. Therefore, on the decisions that they have to make, they will consult with those who they will be using or who are co-operating with them. The whole question of a voluntary sector is the purpose of these questions today. The voluntary sector remains an extremely important provider not only of services but also of support. I am sure that any local authority worth its salt would recognise that.

Does the Minister accept that the provision being made to charities by local authorities falls short of the standards that we might reasonably expect? Can the Government do anything to regulate the process or do they simply stand back and wash their hands of what is not part of their brief or responsibility?

The Government are not in the business of regulating local authorities on these matters. It is for local authorities themselves to come up with sensible and sustainable answers. Not every local authority is finding itself in trouble. Many local authorities have recognised the value of the voluntary sector and are determined to continue to support it in all the ways that they can. We should not be too disheartened by all this because, as I say, there is a complete recognition that the voluntary sector is of great value.

Is the Minister aware that there are those who believe in the big society concept and who also understand the need for fiscal responsibility, but who nevertheless believe that there is an unevenness in the distribution of finances across the country and in particular the financial settlement with local authorities? Will the Minister be prepared to look again at the financial settlement to ensure that there is a fair and just treatment of local authorities right across the country?

My Lords, we are not really on the subject of local government spending at the moment. We have had several discussions on the finance settlement. All I can say is that that finance settlement was demonstrated against a formula, the relative-needs weighting was increased so that money followed socioeconomic indicators. Banded floors were put in place so that the most dependent authorities got the smallest cuts and social service authorities and shire district councils were grouped together in four bands reflecting their relative reliance on central government grant. The right reverend Prelate’s view would suggest that the Government have not taken the greatest possible care with the local government finance settlement in these very difficult circumstances, and that is not the situation.

My Lords, is the Minister aware that her right honourable friend the Minister for Decentralisation, in an article in the Local Government Chronicle last week, rightly called on local authorities considering cuts on the voluntary sector to discuss those matters? Which voluntary organisations did the Government consult when they abolished the working neighbourhoods fund, reduced the area-based grant and made massive cuts in local government funding that are inevitably going to impact on those very organisations?

My Lords, the working neighbourhoods fund was not going to continue. Under the noble Lord’s Government, it was due to finish at the end of three years. The three years would have been up in this financial year, so I do not think that the accusation of getting rid of the working neighbourhoods fund can be levelled against this Government. Decisions have had to be made against the serious financial situation. There have been consultations with the voluntary sector during the course of these decisions. It has made its representations and has been listened to.