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Lords Chamber

Volume 758: debated on Thursday 22 January 2015

House of Lords

Thursday, 22 January 2015.

Prayers—read by the Lord Bishop of Coventry.

Introduction: Lord Lisvane

Sir Robert James Rogers, KCB, having been created Baron Lisvane, of Blakemere in the County of Herefordshire and of Lisvane in the City and County of Cardiff, was introduced and took the oath, supported by Baroness Boothroyd and Lord Judge, and signed an undertaking to abide by the Code of Conduct.

Libraries: Funding


Asked by

To ask Her Majesty’s Government what assessment they have made of the impact of changes to local government finances on libraries in the United Kingdom.

My Lords, the Department for Culture, Media and Sport monitors closely all developments relating to proposed changes to library services throughout England. It is for each local authority to determine how best to provide a comprehensive and efficient public library service that meets local needs within available resources. Responsibility for libraries in the remainder of the United Kingdom rests with the respective devolved Administrations and relevant local authorities.

My Lords, I thank my noble friend for his Answer—but the problem lies within it. Government spending cuts have impacted heavily on local authorities. The local authorities to which my noble friend refers are reducing expenditure on the library service by closing or reducing the number of buildings, under the guise of modernising. What will the Government do to dissuade local authorities from reducing the number of library buildings, such as ring-fencing funding? Libraries form the social hub in many areas and are a basic component in promoting literacy and reading. Finally, there is a group seeking to modernise libraries. When will we have its report, and will it be too late?

My Lords, my noble friend refers to the library service. There is still a strong library service in England, with over 3,142 public libraries, and local authorities invested £757.3 million in them in the last financial year. William Sieghart’s report was published on 18 December and presents recommendations for the Government and local authorities working in partnership. Many local authorities of all political persuasions are making some very interesting innovations in their library services.

My Lords, if the Government reduce resources for local authorities by 30% to 40%, with inevitably larger reductions in available funding for discretionary services, how can local authorities comply with their statutory duty to provide the comprehensive and efficient public library service which he mentioned?

My Lords, I could take your Lordships through many local authorities where important changes are taking place, such as Devon, which is expanding into community hubs; Newcastle upon Tyne; Northamptonshire, where there are enterprise hubs, partnerships between Northamptonshire libraries and Northamptonshire Enterprise Partnership; and Suffolk, where there is an independent organisation with charitable status. All those local authorities of different political persuasions are doing great things with fewer resources. No one is saying that there will be more resources; we all have to deal with the cuts, which all parties now recognise are necessary for the national economy. In the main, however, local authorities are doing a very good job.

My Lords, it is not good thinking to make any reduction in libraries, which play a very good role in increasing the knowledge of the nation. The economy of the country is doing well, and now, with the reduction of oil prices throughout the world, the British economy will benefit. We should support the libraries financially.

My Lords, my noble friend rightly highlights the very important role in our national life that libraries perform. As I say, libraries are changing and innovating. For instance, there is an enormous increase in lending on the e-lending side—from a smallish base, yes; but there has been a 125% increase over the past year.

My Lords, the one thing that the Minister did not mention is that the Government have a statutory duty under the libraries Act to ensure that services are maintained—that there are library services. What is the Minister doing to ensure that that obligation is met?

My Lords, the noble Lord is absolutely right: under the Public Libraries and Museums Act 1964 there is a duty on the Secretary of State—and, indeed, there are a number of situations where the Secretary of State is taking an interest in what is happening in those local authorities.

My Lords, will my noble friend join me in acknowledging the contribution of many local groups all over the country which are managing to keep their libraries open through volunteer work? As an example, Gresford and Marford local library, of which I am honoured to be a patron, is working with Wrexham local authority, which provides the books and the computer system, while the community group provides the manpower and raises the money for the utility bills. That works extremely well. That may be second best to having a full local authority-run library, but it does work.

My Lords, the first thing to say is that the community libraries and, indeed, the volunteers who are part of it deserve our congratulations. They are doing precisely what is happening in many communities, with communities joining together. They do not replace the extensive network of council-run libraries, but they are very important in providing that additional element of provision, and I congratulate them.

As a former chair of the Cheshire library service, I, too, welcome the examples of innovation that the Minister described. However, given that, will he please answer my noble friend Lord Howarth’s question about applying a statutory service when the funds made available to local councils are diminishing?

I think that local authorities have done extremely well; last year, there was a reduction, I think, of 39 out of the 3,142 libraries. That shows that there is a very strong system. In many cities and small towns, new libraries are opening because there is a refurbishment and the local needs are being identified in that way.

My Lords, does my noble friend accept that fundamental to any civilised society is a full network of public libraries, with books in them? E-learning is one thing, but the book is the fundamental foundation stone of the library, and may it long remain so.

My Lords, I am a keen fan of books myself, but it is important—for young people in particular, and given the fact that so many more people are looking after their lives digitally—that libraries provide that facility as well. That is one of the ways we shall ensure that there are more people visiting libraries.

My Lords, I have a special interest in libraries. I was the very first black person to be employed by a public library; I met my husband there, and I made many friends. The most important thing about the library that struck me when I came into the job was the facility provided for people who never spoke to anyone for the whole day, but who would come into the library, sit and read the papers, and have something to discuss. We need the libraries. I am sure the Government think that they are doing their best, but in the borough where I live and have worked, we are noticing the shortage of libraries. Will the Government look again at how they perform their statutory duty? It may not seem like a big thing, and libraries have improved in lots of ways, but all this is being lost now. Both my husband and I worked in a library, and that was the first move towards racial equality; I suffered in the beginning, but I was determined. So may I ask the Government to consider that the library has a greater purpose than people just going in there to get the odd book?

My Lords, that is precisely why the Government were so keen on William Sieghart’s report on independent libraries, because it provides recommendations for the Government and for local authorities. The Government greatly support that role. The libraries have a huge community role to play, and I am very pleased to hear of the noble Baroness’s experiences.

United Nations Secretary-General: Selection


Asked by

To ask Her Majesty’s Government what is their assessment of the selection procedure for the next United Nations Secretary-General.

My Lords, the United Nations Secretary-General must command the greatest possible support from the international community, and the authority to carry out the role effectively. The current system of selection, whereby the Security Council nominates a single candidate to the General Assembly, ensures that the candidate receives maximum support. This process has produced good consensus candidates in the past, and we would not want to see it significantly changed.

My Lords, my noble friend will know that last time the decision was effectively made by Bush, Putin and Hu Jintao—not great men of peace. And with eastern Europe in the frame now, it is likely to be just the US and Russia. What discussions are the Government having with all l5 members of the Security Council to ensure that at least two names go forward to the General Assembly—from my perspective, preferably those of two women—and, if there is a veto, to ensure that the appointment is then for a single term only, so that proper reform can be put in place by 2020?

My Lords, there are quite a few questions there, but important ones, which I shall answer as briefly as I can. The veto is within the format of the constitution—the rules of the game—so there would have to be a change in the rules for the veto to be abandoned. My noble friend refers to the method of selection last time. Last time, of course, Ban Ki-moon was unopposed for a second term, and it is clear that when he was selected at that stage, China had made it known that it would not accept anybody other than an Asian candidate. The method of selection was across the membership, but clearly the P5 have a crucial role to play. My noble friend is right to point out that it is important for women to be considered, too—and with a woman Leader of this House, a woman Leader of the Opposition and a woman on the Woolsack, who would dare think anything else?

My Lords, is it not the case that there are two admirable women in the frame—Helen Clark and Gro Harlem Brundtland? They would not be secretaries; they would be generals.

I always listen with great interest to the noble Lord, Lord Anderson. He enables me to answer another of the several questions that my noble friend Lady Falkner asked with regard to candidates. Names are, indeed, beginning to be floated. If I may change my analogy, it is almost like a susurration—but, as with all susurrations, the names change as well. The noble Lord may have the latest names; there is quite a little list, I think. We do, indeed, need not only secretaries but generals, too.

My Lords, does the noble Baroness agree that one change which could greatly improve the process and improve its transparency would be if all candidates were asked to set out their ideas for strengthening an organisation which desperately needs strengthening? Will the Government lend their support to that sort of approach, which is a good deal less ambitious than some of the other ideas around but could bring real benefits?

The noble Lord makes a very practical and important proposal. Although, of course, as just one member of the P5, we cannot force and insist on a change in the way that processes go forward, it is clear that from our point of view it would be a great advantage if we were given details by the candidates of how they intended to carry out their leadership skills and, as he indicates, how they would enable the United Nations in these difficult times to get beyond its 70th year, which it celebrates this year, and to go on for another 70. I find his suggestion very helpful indeed.

Will the British Government support and encourage whoever becomes the next Secretary-General to modernise the Security Council arrangements and deal with two disputes that have raged for far too long—50 years and more: namely, Cyprus, where too many people still hark back to the past rather than think about the future; and Israel-Palestine, where the United States has constantly allowed Israel to disobey international law via a succession of vetoes?

My Lords, with regard to United Nations Security Council reform, I was in New York just before the new year and met various actors at the United Nations. I made it clear that we support administrative and efficiency reforms but also reforms of the Security Council itself and its membership, and that in a changing world since the United Nations was founded 70 years ago, it is right that we should now look at membership for countries such as Brazil, Germany, India, Japan and, indeed, at African representation —although it would be for the African group to decide how it approached that. It is important that the United Nations Security Council as a whole works unanimously to resolve some of the most difficult and complex disagreements around the world.

My Lords, I am disappointed with the Minister’s answer. No British employer operating an equal opportunities policy would be allowed to get away with the shambolic approach that the United Nations takes to these leading posts. Surely, what we need is something that is not a travesty of an appointments system but that actually ensures that the person who gets the job is the best and most suitable person to do it.

The noble Lord is right to say that the procedure must enable the best person to be appointed. At the FCO, we approach appointments on the basis that women should always on a shortlist. That is the principle at the FCO. I hope that others hear that.

Welsh Government: Fracking


Asked by

To ask Her Majesty’s Government what discussions they have had with the Welsh Government regarding the devolution of powers over fracking for gas on land.

My Lords, in November 2014 my right honourable friend the Secretary of State for Wales announced a programme of work to seek a political consensus on the way forward for devolution and to provide a stable settlement for Wales. This work is underpinned by discussions with Welsh party leaders, including the First Minister of Wales, the right honourable Carwyn Jones AM.

My Lords, may I interpret that Answer as an indication that we can look forward to a Statement being made by the Secretary of State on St David’s Day to indeed confirm a transfer of responsibility for fracking to Wales? Since the Government have their own amendment to the Infrastructure Bill, Amendment 86, on Report in the House of Commons on Monday, removing Scotland from the provisions of that Bill concerning the right to use deep-level land for fracking, why is there not a similar amendment for Wales, if that is indeed the direction in which the Government are going? Will the Minister link up with the department today to see whether it is possible, even at this late stage, to table such an amendment?

The noble Lord should take into account the process that is under way. The Secretary of State has set great store by the fact that he wants to achieve political consensus across the four parties in Wales. The Welsh Government are involved, of course, and they have made it clear what their views are on the need to offer powers to the Welsh Government if they have been offered to Scotland. However, what is right for Scotland is not necessarily always right for Wales, and discussions are still ongoing.

My Lords, within 10 miles of my home in Gresford in north Wales—its second mention this morning—there were in 1866 some 21 shale oil extraction plants, selling petrol at three shillings and four pence per gallon. Two years later it had fallen to 10 pence a gallon and the industry was completely wrecked. Is Welsh shale oil as sound a basis for Welsh independence—which 3% of the people of Wales want, including the noble Lord—as, for example, North Sea oil is for Scotland?

My noble friend illustrates the volatility of energy prices, then as now. From current reports, the potential for significant amounts of shale gas in Wales is unclear. However, I agree with my noble friend: the recent big falls in the oil price have illustrated the shaky financial foundations on which the Scottish independence campaign was based.

My Lords, forgive me, but I did not quite follow the first Answer of the noble Baroness. Have there been discussions on the devolution of powers over fracking for gas on land—yes or no?

My Lords, there are four parts to the ongoing discussions. One of them relates to the Smith proposals, and which of those proposals would refer to Wales appropriately. Those discussions include the issue of fracking. In relation to Wales, the conversations are ongoing.

Channel Tunnel


Asked by

To ask Her Majesty’s Government what action they are taking to minimise rail passenger disruption caused by the recent closure of the Channel Tunnel.

My Lords, we are closely monitoring the situation, and we expect Eurostar to help passengers to get to their destinations as quickly as possible. Eurostar filled trains up to the maximum to help to resolve the backlog, and provided beverages on board services and in the queues. Eurostar also paid for hotels, taxis and food for some passengers. The repair works are anticipated to take two days. Eurostar is running a full service with delays of around two hours.

I am grateful to the Minister for that answer. I declare an interest as chairman of the Rail Freight Group, having spent many years building the tunnel. Eurostar may be running a full service. I came in this morning only two hours late. The tunnel is still partially closed and it has been closed for five days now. Coincidentally, at the same time, our latest political party, led by the Pub Landlord, has suggested that we should brick up the Channel Tunnel. Whether or not that is a good idea, the tunnel should be open; it is a major piece of infrastructure. Will the Minister ask the intergovernmental commission on an urgent basis to produce a report on the passenger disruption, just like at King’s Cross, the infrastructure failure and, most important, the cause of the fire—it is the fourth fire caused by a lorry fire—and recommend changes to the safety regime?

My Lords, I shall address the situation of the passengers on the train and the assistance given to them. All passengers and staff were evacuated from the train to a place of safety in good time, with no injuries or stress. As I said, most passengers were offered tea, coffee, beverages and, in some cases, hotel and train costs. In a situation like this, the first priority is always to ensure that Eurostar is running a safe service. Of course, there are inevitable delays because of the fire damage in the tunnel. It is clear that only one of the tunnels, the southbound tunnel, was affected in this incident.

My Lords, there have been four fires—actually, I think it is five—affecting lorries being taken through the tunnel on shuttle carriages going from France to England. Those carriages have lattice sides. That means that when they are going forward, any fire or possibility of fire swiftly generates a dangerous fire that causes immense damage and destruction. This would be obviated if the wagons carrying the lorries were enclosed, like those for cars, with built-in fire-extinguishing apparatus. Will he take this to the safety authority responsible for the Channel Tunnel to get something done before we have an even more serious fire and fatalities?

My Lords, the noble Lord is correct in saying that there have been previous fires. The relevant authorities are constantly reviewing how to limit this risk; in this instance, the situation was helped by the new sprinklers that were installed as a result of the previous situation. This has considerably reduced the amount of time for which the tunnel has been closed. The use of enclosed lorries is an area that has been looked into in the past but, frankly, it would be commercial suicide for the freight companies to have enclosed lorries. The whole purpose of this is to make sure that goods are transported from one end to the other as quickly and economically as possible.

My Lords, surely we should be measuring the temperature as these trucks go into the tunnel. One should easily be able to do that because of the open structure. It is likely that the temperature was rising in this case, but that information was not available on a screen to the people operating the tunnel. That would be quite economical and should certainly be instituted.

I take the noble Lord’s point but there is an ongoing investigation into this incident and I am sure that we will learn our lessons about what actually went wrong. It should be borne in mind that this incident happened on the French side of the tunnel, not ours.

Because it happened on the other side, the onus is on the French authorities to work with us. It is easier for them to investigate the cause of the fire than for us. However, our own fire authority will of course be working with those authorities to discover the cause of the fire. We will learn some lessons from this and see what further improvements we can make to ensure that we limit fires in future.

My Lords, while I regret the inconvenience and disruption to the passengers caused by the fire, will my noble friend say a word of thanks and appreciation to the staff who so efficiently got everyone out without any damage or distress?

Yes, my Lords. In fact, I commend all the Eurotunnel staff, who worked very hard. A number of volunteers also came forward at King’s Cross to help passengers, who were served with teas, coffees and beverages and given whatever assistance they could be given. It was regrettable and unfortunate for a large number of passengers that their journeys were delayed. Having said that, this incident was unexpected and they were very understanding about the delay to their journeys.

Does my noble friend accept that the prospect of new rolling stock might be one way in which to deal with some of these problems? I declare an interest as a frequent user of the shuttle service, which normally works extremely well and efficiently, not just in the summer but throughout the year.

My Lords, I take the point about new rolling stock. I am quite aware of the new rolling stock that our train operating companies in the UK will be introducing. This is a private company and, frankly, I am not briefed on whether new rolling stock has been ordered for Eurotunnel and Eurostar.

My Lords, safety regulation is a key responsibility of the binational, British and French, Channel Tunnel Intergovernmental Commission, which has as its statutory independent safety advisory body the Channel Tunnel Safety Authority. The Secretary of State appoints the heads of the British delegations to the intergovernmental commission and the Channel Tunnel Safety Authority, so this issue is not just related to the incident happening on the French side of the tunnel. Bearing in mind that fire is a tunnel’s biggest enemy, and that there have previously been fires in 1996, 2006 and 2008 in the Channel Tunnel, are the Government still satisfied with the safety arrangements and procedures for the carrying of lorries and their loads by rail through the tunnel—yes or no?

My Lords, I will take the safety aspect. The Channel Tunnel Safety Authority will be looking into the problems last weekend and at whether Eurotunnel needs to make further improvements. The Rail Accident Investigation Branch is also making preliminary inquiries in conjunction with its French counterpart, BEA-TT. We will wait for the report to come out to see what further things we can do. It is important that it is safe to travel, and it is of equal gain to both countries that our lorries travel from one end to the other.

My Lords, for many people the major disruption of the Channel Tunnel is that, despite having been able to use it for 10 years now, no one can take a direct service to either Brussels or Amsterdam or anywhere outside France. I do not know whether this is because of competition restrictions on the other side of the channel or difficulties with passport control, but can we please get this fixed ?

That is for the French Government to comment on. However, I will certainly take it to the department and will write to the noble Lord about what more the French could do to make travelling from Paris easier.

My Lords, does the noble Lord agree that the British people tend to be sailors rather than troglodytes and that we should encourage a strong cross-channel ferry sector?

On at least two occasions, the Minister has pointed in the direction of France. In the absence of the noble Lord, Lord Pearson of Rannoch, may I ask him to confirm that there was no culpability on behalf of the European Union?

My Lords, since the questions are ranging fairly widely on this topic, what progress are Her Majesty’s Government making on turning Stratford International station into a genuinely international station where services through the Channel Tunnel actually stop?

My Lords, the noble Lord’s question is not that on the Order Paper, but I will certainly investigate and come back to him.

Child Abuse Inquiry


My Lords, with permission, I will repeat an Answer to an Urgent Question which was made by my right honourable friend the Home Secretary in the House of Commons earlier today:

“Mr Speaker, in July last year I announced the establishment of the Independent Panel Inquiry into Child Sexual Abuse. The inquiry will consider whether public bodies and other non-state institutions have taken seriously their duty of care to protect children from sexual abuse. As I said when I established the inquiry, it must expose the failures of the past and must make recommendations to prevent them from ever happening again in the future.

The House is aware that the first two nominees for chairman of the inquiry resigned after it became apparent to them that they did not command the full confidence of survivors. I am clear that the new chairman must be someone who commands that confidence and who has the necessary skills and experience to carry out this vital work. In my work to find that person, as I told the House I would do, I have undertaken a number of meetings with survivors of child abuse and their representative bodies. I have been deeply moved by the candour and the courage they have shown in telling me their harrowing stories and the experiences they have been through. I am absolutely committed to finding them the right chairman to ensure they get the answers they deserve. Not only does this inquiry need the right chairman, it also needs the right powers. That means the ability to compel witnesses and full access to all the necessary evidence.

In December I wrote to panel members to set out the three options which could give the inquiry these powers. I confirmed those options in my evidence that month to the Home Affairs Select Committee. I also confirmed that I would make a decision on the right model for the inquiry and the chairman by the end of January. It remains my intention to make a Statement to the House shortly after I have made that decision, and after the necessary interviews and careful due diligence work have taken place.

It is important that this inquiry can get on with its work but it is also vital that we have the right chairman, the right structures and the full confidence of the people for whom it has been established. We face a once-in-a-generation opportunity to expose the truth, to deliver justice to those who have suffered, and to prevent such appalling abuse from ever happening again. That is what the survivors of child abuse deserve and what I remain determined to deliver”.

My Lords, I am grateful to the Minister for repeating the response from the Home Secretary. The Minister will know how serious this inquiry is and how much it means to those who endured awful abuse in childhood, who were not listened to then and who deserve to be listened to and to have the chance for justice now. For the inquiry to stall once is unfortunate but twice is careless and the situation now frankly looks incompetent.

I wonder what is going on. Given the seriousness of this matter, I fear that there is now no choice but to start this inquiry again—properly, with a new chair, full powers and proper consideration of the scope and purpose involving survivors themselves. Other people have set up effective inquiries—for example, Hillsborough, the Northern Ireland inquiry into chid abuse and the Soham inquiry. When will the Home Secretary act decisively?

We share the general consent to get at the truth of what has been happening and to get on with the work. I have explained some of the reasons for the delays. The suggestion made by the noble Baroness was very much one of the options set out by the Home Secretary in her letter of 17 December 2014 to panel members. The three options were a royal commission, giving statutory powers to the existing independent panel or starting all over again with a new chairman. Those remain the three options being actively considered.

We also very much share the view about the success of the Hillsborough inquiry in gaining truth. In fact, the model of that inquiry was the original model used to set up the independent panel. However, it proved not to be possible to command the confidence of the survivors’ groups in the structure as it was then. That is why we sought to open it up to a much wider range of people—150 people have applied or have been nominated to be considered—to go through the matter very carefully and, crucially, to keep survivors’ groups informed all the way through. We will continue to do that.

My Lords, the Minister talked about this never happening again but in the work I do it is happening every day, now. We know that this is a problem. Unless we have the right staff on the ground and the right programmes, we do not have a hope of preventing this. Meanwhile, the funding for many groups is being reduced. The funding for the Stop it Now! programme, which had a full preventive programme, has been stopped for two years in England but not in Scotland, Ireland and Wales, where it is doing well. Are the Government really serious in thinking about what is happening now when we have a whole range of inquiries with recommendations that have already taken place? We may need to look at this historical situation, but I ask: how much will that cost and how much will the Government put into present-day schemes which will stop the child being abused today?

First, I pay tribute to the work that the noble Baroness has done in this important area, not least on the all-party group and its report, which was extremely helpful and informed a lot of our thinking in this area. She made a specific point about funding and pressure that groups are experiencing at present. There is no doubt that with the increased publicity more and more people are coming forward. On one level, that is to be welcomed as an opportunity for justice and to learn lessons, but on another level it puts increasing pressure on those organisations which do tremendous work in caring for and working with victims and survivors. That was one reason why my right honourable friend the Home Secretary announced an additional £7 million of funding. Some £2.85 million of this funding will be available to the organisations representing child and adult victims of sexual abuse, and there will also be a child abuse inquiry support fund of £2 million. That fund will open very shortly, and bids will be invited.

My Lords, I wholeheartedly endorse the noble Baroness’s call for more prevention work. In my view, we need a statutory inquiry. I hope that the Secretary of State will choose the correct one of the three models, and will come up with that and the right chair as soon as possible. I have two questions. My noble friend mentioned additional funding. Could he please reassure us that this funding will both be swiftly available and not be ringed round with a lot of bureaucracy? More people will undoubtedly come forward as these issues are highlighted, and the money needs to get to the groups which support them quickly and without a lot of bureaucracy. Secondly, as more allegations are made, can the Minister assure us that these will be referred swiftly to the police, and preferably to a different police force from the one within which the allegations were made?

On the last point, of course there is nothing in the delays which we are experiencing with the inquiry which should for one moment stop the prosecution or investigation of these heinous crimes. That should not occur. We now recognise that all three options must have a statutory element, and without doubt the inquiry will have that. Regarding the funding which is available, I have mentioned some special funding. We are also working with the Department of Health and the Department for Communities and Local Government to see what additional support can be provided, particularly for those who will be invited to come forward to give evidence to the inquiry.

My Lords, have the Government considered that the difficulty in getting this inquiry off the ground is due to its size? Surely nobody could sensibly conduct an inquiry with terms of reference requiring consideration of the extent to which state and non-state institutions have failed in their duty of care since 1970. That is an impossible task, and it is surely not surprising that no competent person is able to perform it. I must say to the Minister that if an inquiry of that sort ever did start, the inevitable delays in conducting it would make Sir John Chilcot look like a chairman in a hurry.

I very much hope that that is not the case. I have to say that in most cases the pressure that we have been under was to extend the terms of reference still wider. I totally understand the noble Lord’s point that the inquiry needs to be sharp and focused, and to get to the heart of the matter. The chair who is appointed to the panel therefore has an incredible responsibility to provide that clarity of focus and speed of deliberation so that we get the answers quickly.

My Lords, the Minister is suggesting that a new panel may be set up. Could its remit be extended into inquiring into the Kincora Boys’ Home in Belfast?

This is a devolved matter in Northern Ireland. An inquiry is ongoing at present, chaired by Sir Anthony Hart. We are of course open to the devolved Administration making approaches, but at the moment this is for England and Wales.

My Lords, the Minister said that so far there have been 150 nominations for the post of chair of this inquiry. Could he tell us a little more about this? Is it really going to be decided by nomination? Is the chair to be picked from the people who have been nominated? Have they nominated themselves? What organisations nominated them? It seems to me that in an affair of this sort the discretion of the Home Secretary in choosing the chair is extraordinarily important and should not be eaten into.

We opened this up after the initial appointments of the two chairmen because they did not command confidence. Some people have responded and come forward directly, while a number of representations have been made on behalf of others by Members of your Lordships’ House. We wanted to broaden the net as widely as possible so as to allow people to come forward, and then of course to go through the due diligence aspect of their backgrounds to ensure an appropriate shortlist. Then, most crucially, before the shortlist is made public, the first people to see it will be the survivors’ groups themselves to ensure that we have their confidence in the individuals concerned.

My Lords, does my noble friend accept that many of us feel that it was little short of a tragedy that the Home Secretary’s first nomination was not able to continue as chairman? Further, would he bear in mind the importance of the points made by the noble Lord, Lord Pannick? Will he also reflect on the Saville inquiry, which went on and on? It is crucial that the remit is clearly defined, not unending in its scope, and that a report is published within a reasonable time.

I am happy to endorse the views of my noble friend about the previous nominees, who were both genuinely outstanding candidates. That is still our belief. On the approach going forward, we want a system of regular reporting retained in the methodology. Rather than an ongoing inquiry delivering at some point in the future, there will be interim reports. The initial inquiry suggested that there would be a report after six months, but I hope that there will be regular opportunities to produce reports, and that those reports will provide opportunities for noble Lords to discuss and debate the evidence received to date.

Business of the House

Timing of Debates

Moved by

That the debates on the Motions in the names of Lord Adonis and Lord Beecham set down for today shall each be limited to two and a half hours.

My Lords, with the leave of the House, I beg to move the Motion standing in the name of my noble friend Lady Stowell of Beeston.

My Lords, why is it that we have to wait until late afternoon/early evening to consider the Statement on the document, Scotland in the United Kingdom: An enduring settlement, when it has been all over the newspapers, it has been publicly explained through press conferences, and the rest of it? It directly affects the future of the United Kingdom and the interests of many Members who come from Scotland and the north of England and who will be travelling back to their homes on a Thursday night.

I do not doubt the importance of today for the people of Scotland and indeed for the United Kingdom as a whole and I understand the importance of the Statement. It is a busy day in the House today. We have Opposition day debates that will take up five hours of the business. It is one of the courtesies of the House that when a Statement is issued in another place the Opposition and the Government talk about it. The Opposition are given the choice whether to take the Statement and they are also asked whether the timing is convenient for the business of their spokesmen. Accordingly, the time that has been chosen to debate the Statement has been fixed. It is not impossible for the Government to override the wishes of the Opposition, but it is one of the long-standing courtesies of the House that the primary choice rests with the Opposition, and quite rightly so.

My Lords, I agree with the noble Lord, Lord Forsyth. Can the Minister tell us whether the delay in producing today’s speakers list was down to the debate that was taking place between the two Front Benches? To be told only at five to 11 when you are to speak in a debate is quite ridiculous.

I understand that, but unfortunately the decisions on this matter were not available to my office in order to print the list at an earlier time. The noble Lord is correct, but he will know that my office works very efficiently in this regard. When a decision had been made, the lists were then made available. I am sorry for any inconvenience that Members of the House may have suffered. I know that many noble Lords expect to be able to go home at a reasonable hour on a Thursday, having considered the business that is of interest to them. However, the interests of one Member may not be the same as those of another. I think that the tradition of the House of working with the Opposition on these matters is an important one to maintain and I hope that it will be understood and continued by noble Lords.

My Lords, I do not wish to detain the House, but if the Opposition decided to delay the Statement and prevent us from having an early opportunity to discuss it, that may explain why they are so far behind in the opinion polls—behind the SNP—in Scotland. This is a vital matter. These proposals were put forward by the leaders of the parties without any consultation. Indeed, the leader of the Labour Party in Scotland resigned, saying that she had not been consulted. It seems grossly unfair that Parliament has not been given an opportunity at an early stage to debate matters that are vital to the future of the United Kingdom.

My Lords, I do not wish to prolong this. I merely point out that tomorrow is a sitting Friday. If it were not, I would entirely accept that noble Lords would wish to go home to Scotland today. However, as it is a sitting Friday, they may wish to be here tomorrow. I would also point out that, had the Prime Minister gone to Scotland yesterday, the draft clauses would perhaps have been published yesterday. As it is, he has gone today, so I suggest that perhaps it has something to do with the Prime Minister’s diary.

Motion agreed.

National Infrastructure

Motion to Take Note

Moved by

To move that this House takes note of the case for improving investment in and planning for the United Kingdom’s national infrastructure.

My Lords, the case for improving investment in and planning for the country’s infrastructure is compelling and I hope that today’s debate will promote consensus in working towards this goal from all sides of the House. Although the value of investing in infrastructure is increasingly understood and supported by politicians and the public alike, we have got to make it happen, and my argument is that it will not happen on the scale required unless it is better planned, better led and better financed. I want to look to the future, but an understanding of past failures is essential to preparing for a better future, so I will highlight three areas of failure.

First, as a country, we have significantly underinvested in infrastructure, and there has been far too much stop-go in public investment, which is just as bad. This has been a problem during the entire post-war period, but the present coalition Government have provided a master class. Public sector net investment more than halved between 2010 and 2014, from £53 billion to £25 billion in constant prices—a decline from 3.3% of GDP to 1.5%. The OBR projects that public sector net investment, as a share of GDP, will fall further to just 1.2% by 2017 under the present Government’s forward spending plans, and it will stay at just 1.2% for the rest of the next Parliament. To put this in context, across the EU as a whole, public sector net investment has declined much less—from 3.6% to 2.9% since 2009. Yet even within this fast-shrinking total there has been damaging and expensive stop-go investment, particularly in the roads programme, which was slashed in 2010, only for a large number of schemes—including the A14, the A21 and the A27—to be reinstated last year.

On top of public investment in public infrastructure there is, of course, privately financed investment. In some of the privatised utilities—notably telecommunications and water—and in port and airports, there have been significant investment programmes, but here, too, there are serious deficiencies. Where is the superfast broadband in rural areas that has been promised for years? What has happened to the super-connected cities programme, only a fraction of which has been implemented? The electricity generation sector, although privately financed, is in a precarious position because of serious underinvestment in new generating capacity and long-standing political uncertainty about the most appropriate and cost-effective mix of new energy sources.

This brings me straight to the second long-standing problem. It has proved notoriously hard to forge long-term consensus on key infrastructure priorities and projects. This is not universally true, even of big, initially controversial projects. Crossrail, HS2, the Thames tideway tunnel, the Silvertown tunnel and the nuclear power programme are now progressing with broad consensus. But in all these cases they are progressing years—if not decades—later than they should have done. I hope it will be possible to reach consensus much more rapidly on HS3, linking the major cities of the north with much faster and higher-capacity trains, and we look forward to the Government’s plan, to be published in March.

However, in many vital areas, controversial projects have been stalled, for years if not decades. Airport expansion in the south-east of England, vitally needed bridges across the east Thames, many major new housing developments and new electricity-generating capacity have been stymied not just by understandable differences of opinion but by a protracted inability to resolve these differences at the political level. Heathrow, the Thames Gateway bridge, new nuclear power stations and onshore wind farms, eco-towns and swathes of undeveloped brownfield land in areas of high housing need are all bywords for years, if not decades, of indecision and inability to build consensus.

The third key failure of recent decades is the failure to regard homebuilding as an overriding national and local infrastructure priority, in the face of an escalating housing crisis. There is consensus that we need to be completing between 200,000 and 250,000 new homes a year to meet England’s population and household growth. When housing was a major national priority in the 1950s, 1960s and 1970s, this level of housebuilding was achieved in most years, reaching a peak of 437,000 new homes in 1968, which also happens to be the year after the state last designated a major new town—Milton Keynes. But it is now 25 years since 250,000 new home completions were achieved in any year. Under this Government the provision of new homes has barely exceeded 100,000 a year, which is not only a policy failure but a cause of acute anxiety and stress to families nationwide, particularly in London and the south-east, where population is booming.

How should we tackle these weaknesses? Partly it is a question of priorities and leadership. To govern is to choose; we need political leaders and government—national and local—choosing to give a higher priority to housing and infrastructure, prioritising funding, and being prepared to take controversial decisions where they cannot or should not be ducked. These will be key issues in the next Parliament. I am particularly glad to see my noble friend Lord Rogers of Riverside in his place. He has long been making the case for systematic planning for brownfield sites to tackle housing need, particularly in London. This requires planning not just of housing but the transport and other infrastructure required to unlock major sites. The result could be a new generation of city villages. But it simply will not happen without a strong lead and systematic support from central government developing its own landholdings, notably in defence and the NHS, mobilising local government too in a new national drive to transform housebuilding.

Institutions have a key role to play in promoting better decision-making in respect of infrastructure, and I want to set out two worthwhile institutional changes which, between them, could transform our national and regional infrastructure planning and delivery: first, devolution to city and county regions; and, secondly, an independent national infrastructure commission.

As a policymaker, I have long believed that R&D often stands for “rob and duplicate”. On devolution, hardly anyone would now dispute that the establishment of the Mayor of London and the Greater London Authority, with a particular brief to manage London transport and promote better transport infrastructure, has been a notable success. We now need similar institutions in England’s other city regions. As a former Transport Secretary, I can say with near certainty that without the Mayor of London there would be no Crossrail, no Overground, nowhere near as much upgrading of the Tube and bus infrastructure, and, although this is not the direct responsibility of the mayor, there would also have been less commercial development and even less new housing development in the capital. Indeed, a good part of the reason why we are stuck on airports is because the mayor and central government have been at loggerheads on the way forward.

It is also notable that the next most effectively led and cohesive of the city regions after Greater London, Greater Manchester, has been the next most effective in terms of transport infrastructure planning and investment. Witness the growth of the Manchester Metro and Manchester Airport, thanks to significant investment and effective regional planning. We need bold devolution for other city and county regions to enable them to promote infrastructure improvements in a similar fashion. The noble Lord, Lord Heseltine, said this in his excellent report, published two years ago. I urged it too in a report for my party last year. The challenge is to create fit-for-purpose institutions, which means more, and more powerful, combined authorities on the Greater Manchester model and devolving to them serious budgets, tax income and infrastructure planning powers. For London, there needs to be more devolution to the mayor and the boroughs, particularly in respect of housing.

I turn to national institutions. It is essential that we have better institutional machinery for assessing medium-term and long-term requirements for national infrastructure in a non-party fashion, not—I stress this—to replace government and Parliament as decision-takers but to support and strengthen them and to help build consensus. This is the purpose behind my party’s proposal for a national infrastructure commission, as recommended by an independent review led by Sir John Armitt, who, along with the noble Lord, Lord Deighton, played a key role in the planning and delivery of the Olympics. The commission would span a 25 to 30 year planning horizon, updating its assessments at least once a decade.

At the Report stage of the Infrastructure Bill in November last year, I moved an amendment to establish a national infrastructure commission. I hoped the Government would rob and duplicate the idea, particularly given the consensual way that the noble Lord, Lord Deighton, has gone about his job as infrastructure Minister. Unfortunately, this did not happen, perhaps because the noble Lord himself was not responding for the Government. I am more hopeful today because he is. In responding for the Government last November, the noble Lord, Lord Ahmad, did not address the key argument for a commission—to promote independent analysis of medium-term and long-term infrastructure requirements in energy, transport, telecoms, water, waste, flood defences and possibly also social infrastructure and major urban extensions, taking account of sustainability, both environmental and financial. In responding, the noble Lord, Lord Ahmad, simply retreated into an argument about the cost of a commission, although, of course, the Government already employ armies of civil servants and officials within Whitehall and their agencies to work on infrastructure planning. They are just not sufficiently co-ordinated, expert, long-term or independently led. The noble Lord, Lord Ahmad, also said that a commission,

“would distract from the business of providing the infrastructure that the country needs now and in the future”.—[Official Report, 05/11/14; col. 1644.]

It could hardly distract from the future, since it is all about the future. It is stark, staring obvious that governments and the state need the capacity both to deliver in the present and to plan for the future. They are not either/or. Indeed, the Government accept this in principle, which is why they now publish an annual national infrastructure plan. The problem is that the plan is not really a plan. It is a catalogue of some projects already under way and many hundreds more in the ether with little overarching needs analysis, rationale or prioritisation. I know this from bitter experience. When I became Transport Minister in 2009, the nation’s forward plan for rail modernisation stopped in 2014, which is why we had no national plan for main-line rail electrification or high-speed rail, both of which take somewhat longer than five years to plan and deliver, and which relate to national needs over the next generation, not the next decade.

It is no surprise, then, that the World Economic Forum Global Competitiveness Report 2014-2015 ranks Britain 27th for overall quality of infrastructure—27th for a country with the fifth largest GDP in the world. It is no surprise either that the view of business leaders is that future growth and prosperity prospects are being undermined by weaknesses in planning and delivering major infrastructure. A CBI survey of 443 senior business leaders in November last year showed that 96% felt political uncertainty to be discouraging investment and 89% were supportive of an independent infrastructure commission.

Let me stress that an independent infrastructure commission is not a dangerous innovation. Australia has a successful one, Infrastructure Australia. It applies to infrastructure the principle of systematic, impartial advice and analysis which is taken for granted in other spheres. It is precisely the principle behind the present Government’s decision to establish the Office for Budget Responsibility in 2010, to bring independent analysis and advice to bear on fiscal policy, although of course decisions on taxes and spending are a matter for government and Parliament. My party has endorsed the OBR, and it is here to stay. The last Labour Government also set up the National Institute for Health and Care Excellence—NICE—to make recommendations on the funding of NHS medicines and treatments based on evidence of clinical and cost effectiveness. NICE, too, has been sustained and it is clearly here to stay. A national infrastructure commission would play an analogous role. Indeed, the Davies commission, set up by the present Government to recommend a strategy for extra airport runway capacity in south-east England, is precisely such a commission but with a single-issue remit. So I hope that we hear a more positive response from the Minister today.

Let me end on an optimistic note. London 2012, the greatest infrastructure project in Britain since the Victorians, was a model of national purpose, successful planning and effective delivery. If we can make an outstanding success of the Olympics, there is no good reason why we cannot do the same in modernising our transport systems, our utilities and our housing. 2012 was Britain at its best; let’s make it the model for the future. I beg to move.

My Lords, as the former Commercial Secretary to the Treasury, I am very pleased that the noble Lord, Lord Adonis, has initiated this debate on infrastructure today. I should note that I am currently the chairman of the China-Britain Business Council.

This is the first infrastructure debate in which I have spoken from the Back Benches and I will start by congratulating my successor, my noble friend the Minister, on the expertise, the energy and the success with which he has driven forward the UK infrastructure agenda in the past two years.

No Government in recent UK history have better understood the case for improving investment in and planning for the United Kingdom’s national infrastructure. This Government have spent more and they have spent better than the last Government ever did.

Let us remember that note which was left by the last Government in the Treasury drawer in May 2012, saying:

“I’m afraid there is no money”.

That was the appalling background against which the easy thing to do would have been to cut infrastructure expenditure—but this Government did the difficult but correct thing of increasing capital spending, initially by up to £2.3 billion a year and then by switching a further £5 billion a year from revenue to capital spend.

Not only was it more expenditure, it was against a plan which the last Government never had: the first ever national infrastructure plan, to set out the challenge and to give transparency to infrastructure investors and contractors. That plan was and is at the heart of this Government’s pro-growth policies, and it is a plan against which the Government have regularly reported progress.

We also inherited a PFI programme which had been poorly executed by the last Government, with endless cases of inflated costs borne by taxpayers and excessive profits made by investors. This Government have attacked those excessive costs and, by the end of 2012, had exceeded their initial target of saving £1.5 billion.

This Government have not dodged the most difficult infrastructure challenges. As far back as 2003, the last Government published a White Paper on UK runway capacity, but for seven years they did not act on it. But this Government have set up the Davies commission to make a detailed study and recommendations on runways in the south-east. The last Government were frit. This Government have risen to the difficult challenges.

On the international front, the Government have put infrastructure at the heart of our commercial relationship with China—a relationship which had no such dimension under the previous Government. It has led to Chinese investment in our water and in our airport infrastructure, and that is to be welcomed. I would be interested to hear from my noble friend about the even more important prospects for Chinese investment in nuclear power and in high-speed rail.

Finally, the noble Lord, Lord Adonis, referred at some length to the proposal for a new infrastructure commission. The last thing we need is another quango, more paperwork and more layers of bureaucracy. I hope that my noble friend will assure the House that this is neither necessary nor something that the Government will entertain.

I have noted the recent work of the new UK Regulators Network. It seems an excellent example of how well this Government are taking forward the huge and difficult infrastructure challenge, and I commend my noble friend for that initiative.

My Lords, I thank my noble friend for securing this vital debate. I meet global business leaders regularly and they all agree that Britain must improve its infrastructure in order to attract inward investment. From China to Holland, they see what good infrastructure achieves.

British business also says that we need to improve. Some 60% believe our roads are poor. Five years ago, the cost of road congestion was £2 billion a year. Yet, after the last election, many road projects were mothballed in the spending review. Capital spending on roads fell by around a half. Now the Government boast of major new investment. I welcome these projects, but all it means is that projects such as the A21 are back on again. It demonstrates that we do not think long term. In fact, our basic weakness in this country—whether it is investment in industry or in infrastructure—is all associated with short-termism. This has consequences. As KPMG has said, foreign investors are frustrated because,

“there aren’t projects to invest in immediately”.

We know there is a better way because we put huge effort into creating long-term consensus on projects such as the Olympics or Crossrail. That needs to be systematised in our approach to all infrastructure planning and is why I strongly support my friend Sir John Armitt’s proposed national infrastructure commission. It is, to quote the Spectator, an idea,

“good enough for George Osborne to steal”.

My noble friend has set out how the commission would work. I will make one additional point. Giving an independent body authority to assess infrastructure needs would not reduce the power of elected Governments. Rather, it would give Ministers a power that they do not have already—the power to choose. One of the big problems of the other infrastructure bodies that noble Lords have mentioned is that they become quangos. That does not have to be the case. They become quangos only through the authority given to them by the Government.

Infrastructure assessments would create a better understanding of future needs and lead to stronger medium-term plans under departmental leadership. Ministers would have greater certainty about resources as their party would have been consulted on priorities from the beginning. Now Ministers only have a choice between the plans of their predecessors and further delay. With improved advance planning, Ministers could better set priorities and choose which projects should go ahead. They would get the power to deliver what they need and Parliament would be able to hold them accountable.

Some ideas make us regret that the other lot got there first. Once the National Audit Office, Bank of England independence and the Office for Budget Responsibility were established, they seemed common sense. A national infrastructure commission is the next such proposal. The Government still have time to steal it. I urge the Minister to take this opportunity.

My Lords, I declare my interests as recorded formally. I particularly draw attention to my vice-presidency of the Local Government Association, because in my remarks this morning I will be drawing on the interim findings of a report commissioned by the LGA into economic growth and the future of public services in non-metropolitan areas, under the chairmanship of Sir John Peace.

There will be no disagreement around the House that good infrastructure forms the backbone of a modern economy and is vital to our economic growth. In coalition, the Liberal Democrats have agreed to prioritise infrastructure as part of our economic strategy. Indeed, by making tough choices, the Government have been able both to reduce the deficit and to increase capital spending on infrastructure—I disagree with the noble Lord’s opening remarks. It is now higher as a percentage of gross domestic product than in the final term of the previous Government.

However, this morning, I want to concentrate my remarks on the challenges that face us now and in future to make sure that the whole of England can benefit from important infrastructure development. One of the main challenges that we face is a highly centralised system of government and financial decision-making. The coalition has taken steps to decentralise, but central government still controls 60% of local government spending in England. What is more, it prescribes how much of that can be spent and sets limits on how local government can spend much of the money that it raises locally.

Local authorities are often best placed to understand the needs of their local economies and the challenges and opportunities that they face, which cut across traditional administrative boundaries. Having control over the whole budget would enable local authorities to prioritise according to local needs. Outside London, the non-metropolitan areas—the shires, smaller towns and cities and rural and suburban areas—produce the majority of England’s growth. Although it is vital that cities should be empowered to grow their skills and productivity, it is important not to hold back areas other than the major cities. We need to ensure that transport investment provides infrastructure that better joins those non-metropolitan areas to their urban neighbours and to global trade routes.

No one wants a wholesale reorganisation of local government—I have seen at first hand how difficult and destructive that can be—but that does not mean that we cannot use our existing structures to better effect. At the end of the day, unless we can make cities and non-metropolitan areas more fiscally self-financing, we will continue to be a centralised economy.

As a resident of Berwick-upon-Tweed, I am only too aware of the effects of our centralised system of government and financial control in areas such as rural north Northumberland. The main artery, the A1 from London and Newcastle to Edinburgh, peters out to a single carriageway most of the way north of Morpeth. Morpeth is 50 miles south of Berwick and at present is the home of county hall. I am pleased to say that, after years of lobbying, my right honourable friend Danny Alexander has announced hundreds of millions of pounds to dual the road at least halfway to Berwick. Promises have been made in the past but then forgotten by both Labour and Conservative Ministers. I sincerely hope that, whatever the result of the next election, that will not happen again. We need that strategic road to be upgraded all the way to Berwick if we are to attract businesses and jobs there; it is dualled most of the way the other side to Edinburgh.

We also need good local transport that is affordable to our young people and students. We have one of the lowest take-ups of further and higher education in the country. We have one high school in Berwick; the next nearest is 30 miles away. I am very pleased that we pledge in our manifesto to give two-thirds off public transport fares to young people.

Broadband is very important in our area. The county council has worked with the Government to ensure its rollout. It is vital to every farm and small business in a rural or remote area. Again, the council had to bid for that money.

We want good infrastructure. We need more devolution, to balance the budget and to have a long-term plan for capital expenditure on infrastructure, including housing, so that we can continue to raise the amount of money available in both absolute terms and as a share of our gross domestic product.

My Lords, in a spirit of consensus, I agree with a great deal of what the noble Lord, Lord Adonis, said and congratulate him on securing this very important debate. I also associate myself with a number of recommendations that my personal friend, John Armitt, made in his excellent report to the Opposition.

I welcome the policy statement on national networks but I have one problem with it, which is the timescale. Governments of all hues over the years have made the same mistake of not thinking long-term. It seems important that one should be looking at least 30 years ahead, whereas at present the policy statement tends to be looking at a much shorter period. It is over that length of time that policy involving all modes of transport can be properly taken into account.

I will make four simple points. The first is that all modes of transport should have been involved in the policy statement, although I very much welcome it and it is definitely a step forward. Air transport is not included, for example, and it is important that we avoid some of the mistakes made in the past in rail and road planning, forgetting the implications for proposals for national airports. Secondly, and here I agree with my noble friend Lord Heseltine, local authorities up and down the country should play an important role in the planning of infrastructure. The delegation of responsibility to local authorities in this matter, in terms of both policy and finance, is extremely important. Thirdly, the private sector has a role to play in the planning of national infrastructure. I give noble Lords one example: on the west coast main line the franchisee has much responsibility, financially and in planning, in contributing to the improvement of that line running from London to Scotland. I welcome the initiatives already being taken by the Department for Transport to think long-term about improving that line.

Lastly, I will take what some of your Lordships might think a step too far. I think that this House should emulate the other place, the House of Commons, which has an excellent Select Committee on Transport. I see no reason why your Lordships—or the Government, in discussion with the Opposition—should not consider setting up a Select Committee in this House specifically to deal with transport. A lot of your Lordships have a great deal of experience in this field. Bipartisanship and looking long-term, which are both important principles, would be encouraged and developed if we could have a Select Committee, built to be bipartisan between opposition and government on planning infrastructure, devoted to considering this matter over the long term.

My Lords, we live in an urban age. Ten per cent of the world’s population lived in cities 100 years ago; today it is 50%, and in the next 30 years we shall see it at 80%. People are drawn by jobs and the possibility of meeting other people. They are the hearts of our culture and the engines of our wealth.

As part of this we need to invest in the infrastructure of cities, particularly in housing—the infrastructure of the everyday. Some 15 years ago, I chaired the Urban Task Force set up by my noble friend Lord Prescott. We said then that we needed 300,000 homes a year. That is more or less what we are saying again, but today we are for the first time building only one-third of this. We were building up to 400,000 after the war. In addition, we have some of the smallest—and in my view, the shoddiest—housing in the world. We need to rediscover our skills in creating cities that everyone wants to live in.

The only form of sustainable city is compact, mixed-use and well designed, using brownfield land, retrofitting and densification, supported by public transport, and has well designed public space—and a lot of it—for walking, cycling and leisure. For example, in the centre of Manhattan 60% of people walk to work—in a city that is known for cars. Such cities must have a mix of uses of living, working and leisure, for poor and rich, and we need to build affordable houses to make cities have a real social mix. We will meet our housing targets only if we make the most of our brownfield land, and England has among the most brownfield land of any country, first, because of a vast Industrial Revolution, which changed it completely; and secondly, because there are still remnants of the war.

That industrial change and its impact give us a tremendous opportunity to strengthen our existing cities. We have enough brownfield land for 1.5 million houses, at a medium density. That is according to government figures, and after the selection of certain areas of brownfield that are easily developable and which would link in with the cities we already have, so it is a low figure that misses out on a lot of things. That supply is constantly being replenished as industrial change continues, so 15 years ago we used lots of it but we still have the same amount. Left derelict, brownfield land is a tear in the urban fabric and a focus for crime and disorder. Intensification and retrofit add much more potential. Somewhere like Croydon, for example, has potential for new development within the urban fabric on the scale of a new town, and already has wonderful infrastructure systems. The centre of Croydon is nearly empty.

Therefore I believe—and I have studied this for many years—that building new towns is not sustainable, either regarding climate change or using already half-empty buildings which are left near those areas. The situation is made worse when the planning and building of new houses is led by volume house builders, whose primary concern is the bottom line—and I am sure they would agree. That would seem crazy anywhere else in western Europe.

I have good examples of urban regeneration, where the people and the local authority take responsibility.

We need to give elected local authorities the powers and resources to plan for new brownfield development, intensification and retrofit so that they can repair the tears in the urban fabric and build the houses that we need, building on brownfield land before green. With the right infrastructure investment, and the power taken back by local authorities, we will be able to build new towns in our cities, not outside them.

My Lords, my first point concerns the cost arguments against HS2—and, for that matter, any other large infrastructure project. My recollection is that we are spending around £3 billion a year on Crossrail. About the time we stop spending large amounts on that, we will move on to the construction phases of HS2. Clearly we can afford these projects, as we are doing so now. Affordability is a red herring used by the opponents of HS2. To put this expenditure into perspective, we spend in the order of £100 billion each year on welfare. I say “spend”, because that is not investment: next year we will have to spend another £100 billion on welfare, if we want to remain a humane and compassionate society—which I suggest we do. The beauty of a railway infrastructure project is that we can enjoy a return for 100 years or more.

My second point concerns the scheduling and sequencing of these large infrastructure projects. The advantage of having an Infrastructure Minister within the Treasury is that there is a much better chance of ensuring that projects are properly sequenced, to avoid feast and famine, and perhaps of providing some predictability for the construction industry. For example, drilling down into the HS2 phase 1 project, I would imagine that in the construction phase all the bridges will be commenced at more or less the same time. Each construction site will require at least one large crane. If we were to build HS2 phases 1 and 2 concurrently rather than sequentially, we would massively increase the demand, and therefore the cost, of the construction equipment—but everyone would know that famine would follow. The same argument would apply to every other capability, including professionals, that we need for HS2 and other projects. It would be much better for my noble friend the Treasury Minister to do his best to ensure a steady flow of work and avoid the stop-go that the noble Lord, Lord Adonis, mentioned in his excellent introduction. We should therefore do phase 1 of HS2 followed by phase 2, and then I hope by HS3 in due course.

My last point is that we cannot undertake large infrastructure projects without very adversely affecting some of the population. Sadly, an infrastructure commission would not change that. Unhelpfully, those who are adversely affected often do not benefit directly once the project is in operation. There are many inside and outside your Lordships’ House who query the economics of HS2. I sympathise with those adversely affected, and respect the opposing views, but I firmly believe that such projects should be authorised at national level, in Parliament, at the earliest possible point. The paving Bill for HS2 has been approved by Parliament, and it would be very difficult to stop it now, because that would involve writing off hundreds of millions of pounds of public money in sunk costs.

My concern is about the use of judicial review to delay, derail or stop a project. Some of the recent cases involved the HS2 consultation procedure, and claims that the consultation was not done in precisely the right way. It was a case not of no consultation, but of exactly how consultation was done. I am pleased to say that most of those claims have been thrown out by the courts, although some minor technical points were upheld.

My Lords, I congratulate the noble Lord, Lord Adonis, on generating this debate. I shall focus on three areas: the mindset of the Government, the present strategy, and the consistency or inconsistency of approach. The Government’s mantra has been fiscal consolidation, which is nothing more than a euphemism for cuts in public spending. That view was shared by the IMF, but it changed its tune dramatically in October, in its World Economic Outlook, where it said that there was a need for a substantial increase in public infrastructure investment globally. It asserted that properly designed infrastructure investment would reduce, rather than increase, government debt burdens. In other words, it would pay for itself. There is therefore an overwhelming case for investment now, and on a substantial scale.

The second issue is strategy. The Government’s strategy needs to embrace the entire country. That is mentioned in their document on transport, Rebalancing Britain, but it has to mean what it says.

I note that the Prime Minister is in Scotland today. He has to emphasise that the tools to deliver such projects need to come from the decentralisation proposals which will be implemented in England and the devolution proposals which will be implemented in Scotland, Northern Ireland and Wales.

The Economic Affairs Committee is looking at HS2 at the moment. I had a revealing exchange recently with Sir David Higgins, who is in charge of that. Sir David is a man of great integrity and impeccable professional credentials. However, I questioned him about his statement that we need an east-west train line in the north of England. He had called for that to be built alongside HS2, at a cost of £15 billion. It was revealing that Sir David replied:

“I do not think we were even talking about east-west six months ago, and as I started spending time with northern politicians, a number of them said, ‘Why do you not at least consider the issues?’ … the more I thought about it the more I thought that this debate needs to be had”.

Under questioning from me on whether the six-month timescale added up to a national strategy, he replied:

“You are right, so it is not a national transport strategy”,

so we are building HS2 without a national strategy. His advice to the committee was that,

“you need to say, ‘There needs to be a national transport strategy’”.

Two conclusions can be drawn from that: first, that we have a London-centric approach; and, secondly, that we have a lack of clear strategic planning. The Public Accounts Committee report published last week was very clear that the Department for Transport is making decisions about which programmes to prioritise for investment on unclear criteria. Indeed, it has still to publish proposals for how Scotland will benefit from HS2, including whether or not the route is extended into Scotland. What goes for transport goes for other areas such as energy, airports and housing, which have been mentioned.

The third issue is inconsistent government policies. To deliver projects there needs to be public-private collaboration. There was a great initiative a few years ago whereby pension funds were going to invest £25 billion in infrastructure projects. However, for them to do so, they needed to match their investment with long-term liabilities. The Chancellor radically redesigned the pensions landscape in the 2014 Budget. The result will be a net gain to the Treasury in the next four years of £3 billion, and £17 billion a year by 2030 at 2013-14 prices, but uncertainty for pension funds and long-term investment.

There is a case for greater certainty in long-term strategic policy. That can be delivered only by an independent national infrastructure commission, as has been said. Sadly, that task will be left to the next Government, who need to make it a primary responsibility.

My Lords, I welcome the debate initiated by the much respected noble Lord, Lord Adonis. I completely concur with other noble Lords that it should be conducted in a bipartisan spirit because, as we all know, infrastructure is for the long term and crosses Governments and Parliaments.

From my experience in government, which ended a year ago, I know that government has a poor history of developing infrastructure. It is not a naturally commercial animal and should avoid carrying out projects at all times, as they often end in overspend and incompetent management. However, government is an enabler. I congratulate the current Government and my noble friends Lord Sassoon and Lord Deighton, who have set about the task of enabling in an extraordinarily energetic and vigorous fashion.

We have had a very poor landscape of infrastructure development. We have had economic failure and the failure of banks to lend, which is fundamental to development. That has led to lack of confidence. Through my noble friends’ initiatives, despite having their hands tied behind their back, we have been able to develop confidence. I have enjoyed working closely with them on projects such as Battersea, Sellafield, when I was a Minister for energy and climate change, the early stages of Hinkley Point and now the Tottenham redevelopment.

What they have established is joined-up government. It is fundamental that across departments we must all share and work for a common aim. They should be further congratulated on setting up a showcase of the infrastructure projects that are available. This is the first time a Government have ever done this.

The noble Lord, Lord Adonis, quite rightly refers to the regions. He has taken London as a shining example of infrastructure showing the fundamental prosperity of a region. I totally concur with him that if we are to get real infrastructure projects going in this country, we have to empower the regions; we have to let them make the decisions and therefore generate the opportunities.

If one wants to see how that works, as the noble Lord said, one needs look no further than at Boris Johnson’s mayoralty, which has shown London as having travelled so widely. It is now the centre of the world in terms of how people look to see a city prosper and develop. We now have an opportunity, surely, because the economic landscape is changing. We have cheap money. We have the availability and the thirst of many investment organisations to invest in long-term projects. We must grasp this opportunity, as noble Lords have said, to develop infrastructure projects for generations to come. Now is the moment when government should act and take those opportunities.

I would like to thank my noble friend Lord Adonis for securing this debate. All major parties have enthusiastically committed to infrastructure investment, but there are some key differences that have emerged over the level of funding, the process for evaluating projects and whether responsibility should reside in Westminster or increasingly in the nations and regions of the UK.

The Conservatives are clear that they will seek to achieve an overall budget surplus by 2018-19, with investment spending maintained at the current 1.2% share of GDP. Labour has sensibly proposed to unbundle current and capital expenditure and committed to secure a current budget surplus as soon as possible, to reduce the national debt as a share of GDP, but—critically—to increase infrastructure spend as a percentage of GDP back to 1.5%. The difference between the Labour and Conservative plans for infrastructure spend has been independently assessed as being up to £20 billion by the end of the next Parliament. The case for increasing the level of infrastructure spend at a time of record low long-term borrowing rates and when it can sustain and improve the current momentum in the economy is indeed powerful.

Another key difference between the main parties is the process of evaluating and deciding which of the many competing projects to pursue. The coalition published a National Infrastructure Plan, which has been referenced, and has subsequently published updates. This approach is most important. It has focused on delivery, cost control and implementation—all of which are of absolute and vital importance. But we are invariably proceeding without a clearly articulated strategic plan. As my noble friend Lord McFall mentioned, the Economics Affairs Committee is currently reviewing the economic case for HS2. Many of our witnesses have criticised the absence of a comprehensive strategy for HS2. This, they say, has undermined public confidence and stands in the way of a thorough and transparent review of alternative solutions. Professor Overman said that the case for HS2 and the alternatives presented to Parliament was so poorly analysed that it left MPs in a quite hopeless position to make a decision.

This is the crux of the problem: without a clear strategy, how are the Government, let alone the public, to decide what are the most appropriate and cost-effective options, and to prioritise investment? The Treasury carries out rigorous, zero-based capital reviews to determine priorities. But it is HS2 and the Department of Transport which are responsible for providing all of the data and analysis to support this evaluation. There is no independent review and the detailed analysis is not made public. This stifles informed debate and independent analysis.

The establishment of the national infrastructure commission—described by my noble friend—by the next Labour Government, will allow future Governments the luxury of making their decisions on which infrastructure options to pursue in the light of an overall strategy, and only after rigorous independent, impartial assessment.

The huge regional disparity in infrastructure spend was a very hot topic when our HS2 enquiry took evidence in Manchester from five Midlands and northern city authorities. The cities want to combine into large metro groups and take responsibility for infrastructure planning and implementation. Spending per head on infrastructure in 2013 was £2,595 in London but a meagre £5 in the north-east and only £99 in the north-west. The cities were justified in claiming that they are being short-changed and resented their subservience to Westminster. My noble friend Lord Adonis has made a powerful case to give large metro regions the responsibility for regional infrastructure and devolved budgets to support their projects. The noble Lord, Lord Heseltine, holds similar views, as does the City Growth Commission—chaired by Jim O’Neill, who appeared before our committee—which has called for the power to approve projects and secure finance to be devolved to the regions.

It is interesting to speculate whether, if HS2’s £50 billion budget was available to promote growth and connectivity in the regions, the regional metro authorities would pursue what one economist described as the lowest common denominator solution, or a more focused series of transport initiatives. Only when the regions are freed from the grip of Westminster will we know the answer to that question.

My Lords, this is a brilliant debate, given that we are looking at investment in and planning for the United Kingdom’s national infrastructure. As noble Lords can probably see, I have torn up my speech completely and have scribbled only a few things because almost everything that I had wanted to talk about has been mentioned.

The letter of May 2010 was a fact, although even then we were more infrastructure-minded when looking at plans for 2012. We are now looking at many greater plans for the next five years. It was slightly unfair of the noble Lord, Lord Adonis, to castigate the Government, because investment in infrastructure in the five years of this coalition Government was at a higher proportion of GDP than under the last five years of the Labour Government.

Investment is something that we do not have too many worries about. Sovereign wealth funds and individual corporate investors want to invest in this country. Why? They trust us, appreciate our rule of law and the relatively stable political climate, and approve of the established regime of independent regulators. They are all part of a climate that is attractive to investors. Investment is certainly part of our normal business proposition.

However, I am concerned about the future of infrastructure programmes in this country because of the skills shortage. The skills deficit is definitely a fact. We have funds, brains, designers, brilliant architects and award-winning engineers. We have a history of excellent research and innovation. What we must do is make skills the most important short and medium-term focus of our education system. I wish that I was convinced that there would be more rapid upskilling than seems to be happening. We need more of the technical academies such as those set up by my noble friend Lord Baker, who I am glad to see is sitting in his place.

I ask my noble friend the Minister if he could use his undoubted influence to resolve the current visa problems of overseas students who graduate from UK research institutes and have to leave the country after graduating. This is crazy; it flies in the face of common sense and sends all the wrong messages to would-be investors. This country is home to four of the top 10 graduate colleges in the world league table for research and innovation—Cambridge, Imperial College, Oxford and UCL. I have deliberately listed them alphabetically. Why do we educate these people to such a high standard in the best colleges in the world and then say, as soon as they have completed their PhD, DPhil or whatever, “You cannot stay. You’ve got to go”?

In conclusion, I firmly believe that we are in a very good place, both to attract investment and to produce great new developments in infrastructure. However, there is a caveat. We cannot put this at risk by allowing political posturing to damage the course we should be taking. We definitely need a national consensus. The leader of the Opposition in the other place certainly did this when he announced that he would insist on a freeze in energy prices if he were leading the Government. The overseas reaction was immediately bad. Investors are not risk-averse but when political whims enter the equation trust is damaged and we all know how hard it is to roll back from that situation.

I very much support and congratulate my noble friend Lord Adonis on this debate. I would definitely support the national infrastructure commission proposed in the excellent report produced by Sir John Armitt. I follow HS2 with a certain amount of interest. When my noble friend was Minister of Transport, and subsequently Secretary of State, he put a vision into the railways and quite a lot of discipline as well. He started the idea of HS2. The noble Lord, Lord Marland, and my noble friend Lord McFall suggested that everything was too London-centric. I remember suggesting to my noble friend Lord Adonis at the time that it might have been better to start in the Manchester and Leeds areas and work south. It would be easier to get across the Chilterns when there was nothing else to do but join them together. Nevertheless, it went well while he was in charge. I am sad that, in the period from then until the present Secretary of State, Patrick McLoughlin, took office—he is taking a great interest in it and doing very well—I detected a slight rudderlessness in the way HS2 was taken forward at the political level.

Last night I was pleased to be in Brussels with my noble friend Lord Adonis to see him being awarded a very important prize by the European rail supply industry for the vision that he showed in this country when he was Secretary of State. He went round many high-speed lines that were being developed across Europe in Germany, Spain, France and Italy to see how they did it. It was quite clear that in all those places they manage to build these lines much more quickly than we do. When it comes to operating their trains they are nothing like as good as we are, but they do the building very well. I suspect that this is something to do with us being a mature democracy—I am not saying that they are not—and listening to people’s complaints a bit more. I remember when I was starting off the Channel Tunnel, my French colleagues used to say to me: “Why is it taking so long to get permission to build this thing? We got permission in six weeks”. In the UK, we took three years. I asked them how they did it and they said: “If you want to drain the swamp, you do not consult the frogs.” That is an interesting way of putting it but it is quite true. One thing they did was related to arguments about compensation for people who owned property or whose businesses might be affected. There is a system in France where it is normal to pay a good 10% over the assessed market value of the business or the house. I hope we take up some of these big projects and wonder whether we should look at that when we do so. I am sure that if people felt they had been given a little bit extra, in addition to their moving and relocation costs, it would help a lot.

We also need to discuss how to get these permissions. The Bill for HS2 is grinding through the Commons. I do not know whether it is going to take three, four or five years. In many ways, it is no more contentious than the Bill for High Speed 1 was, but is that the right process? If it is, what about having a Joint Committee of both Houses to do it? Do we really need to offer people the opportunity to petition on the same subject—and it can be in exactly the same format—to both Houses? I suggested this a few years ago for HS2 but it has not been taken up. Or should we abandon the hybrid Bill process completely and go for the new regime within the Planning Inspectorate? This, of course, is the way the Thames tideway tunnel is being done. I happen to object to that project, but the process is probably going quite well. We need to have this debate; we need to reflect that, being a mature democracy, we have to take a bit longer. We have a long way to go but I welcome my noble friend’s debate today and hope we can take it forward.

My Lords, I congratulate the noble Lord, Lord Adonis, on securing this debate and on the prize we have just heard about from the noble Lord, Lord Berkeley. I have had huge respect for him ever since his recent very fine report about the north-east of England. I am very sympathetic to much of what he has to say about the future of infrastructure but I will focus my remarks on roads.

Since 1990, France has built 2,700 miles of new motorway. Between 2001 and 2009, under the previous Government, this country built just 46 miles. To use the words of the noble Lord, Lord Adonis, himself, this was a “master class” in underinvestment, although admittedly it was before he was Transport Secretary. The UK has half as much motorway per vehicle mile as other major EU countries. It is not as if the Labour Government did not know that they were underinvesting in this, because in 2006 they commissioned Sir Rod Eddington to look into the road network and make suggestions. He wanted to tackle a number of bottlenecks, build bypasses, widen roads, improve junctions and so on, and he made a number of recommendations which largely were not acted on.

The Institute for Economic Affairs calculates that, over the last decade or so, we have been cancelling road projects that would have an average benefit to cost ratio of 3.2 to 1 and deferring ones with a benefit to cost ratio of 6.8 to 1. Yet at the same time we have been funding public transport projects with much lower benefit to cost ratios averaging about 1.8 to 1. I ask the noble Lord, Lord Adonis, why so little was done to fix the roads when the fiscal sun was shining. Was it just because we were all frit of Swampy in those days? I welcome the fact that, as my noble friend Lord Sassoon said, this Government are planning, under much tougher fiscal conditions, to spend £24 billion on roads between 2010 and 2021 to resurface 80% of national roads, to add 221 lane-miles of motorways and start 52 major road projects. I echo what my noble friend Lady Maddock said about welcoming the dualling of the A1 through Northumberland.

The crucial point is that we need to rethink how we pay for roads. In 2011, the RAC Foundation said that we had fallen behind other nations in the way we fund road building because in both the United States and across Europe contracts to build roads are nearly always, or very frequently, privately financed, often regionally commissioned and invested in by pension funds because there is a capital return through tolls. For example, in the United States, 4,500 miles of new highway infrastructure have been built in this way, using tolls, since the early 1990s. In France, which is hardly a hotbed of free-market economics, they have privatised most of the strategic road network and drivers are now very used to using tolls, particularly because of electronic tolling. That is, of course, why the roads in France are so good and they have been able to build so much more. The RAC Foundation concluded:

“Across continental Europe, toll roads now account for a significant portion of the strategic road network in all of the countries we have reviewed.”

We need to be more radical, open and imaginative if we are to cut congestion, which is a huge drain on business in this country, and boost economic growth.

My Lords, I join many other noble Lords in congratulating the noble Lord, Lord Adonis, on securing this debate. It is impossible to do in four minutes what one wants to do in a debate of this kind but I congratulate the staff of the House of Lords Library who have produced an excellent note, full of facts and figures. I do not intend to knock previous programmes but to remind the House of what has happened to some of them, such as the sale of council housing.

In 1979, there were 6,568,000 council homes. By 2012, this figure had shrunk to 2,096,000, and there one may find some of the seeds of the present problems. Of course it was a good policy to sell council houses—we backed it in this Chamber. But the problem was that the Government of the day, because of their political stance, did not allow councils to replace the houses that they had sold. As a consequence, we have the problems that we have today, and that is not very good.

On the disposal of national assets to allow private landlords to amass a portfolio, I should like to put on the record a recent piece from a national newspaper. When houses were allowed to be sold, one assumed that people would own them for the rest of their lives or that they would be inherited by their children. But what has happened? A number of private individuals have made it a business to buy council houses and to rent them. I know of a situation where a man is saying, “If you have more than two children; if you are on a zero hours contract; if granny moves in; or if you are on housing benefit, you will be evicted”. That is what that man is doing. The terrible problem is that nothing can be done about it. He is operating within the law. I should like to ask the Minister, if it is possible to do this in this very busy period, whether there is any move towards examining the manner in which previous assets have been distributed and are now working against us.

Housing is not the only issue. I look at the extent to which water, electricity and other public assets have been distributed. Noble Lords will know the slogan: “Tell Sid”. Everyone jumped on the bandwagon but the shares did not remain in the hands of the individuals. They were bought up by, among others, the Canadian Pension Plan, a consortium in Hong Kong, Australian and Canadian pension funds, Cheung asset management, the Norway central bank, and organisations in China, Malaysia and Singapore.

I am conscious of the time and I do not want the Whip, who is doing her job, to remind me. This has been said in the country and I have said sufficient to indicate that I am in favour of the plans ahead. However, we need to be very careful that the defence of this realm is not put in jeopardy by selling or allowing to be bought the assets that we have inherited from our predecessors. We should be very careful not to allow too much imbalance.

My Lords, those of us who work in systems industries are well aware of the fact that when you are using 85% of capacity—whether it is roads, water, electricity or railways—you put yourself in a position where a slight aberration in performance starts to collapse the system. We have to get our priorities right and we have to invest early enough. The noble Lord, Lord Adonis, will remember that when he was Secretary of State, we persuaded him to order 200 new diesel trains but he was unpersuaded after the OECD notice and I do not know why.

The noble Lord, Lord Deighton, would do well to address the whole issue of the appraisal of schemes and the capturing of the economic effects. Last night’s Evening Standard announced that house prices would rise 54% in Whitechapel because of Crossrail. As far as I know, none of that money accrues to the public purse or is even credited to Crossrail. We create wealth but it is not created for the public purse.

Air quality and congestion are enormous problems. As at present constructed, business cases do not give enough emphasis to that. In the infrastructure plan, there is a very imaginative scheme for Bath city centre. The local council wants to improve the appalling traffic flow and the huge damage to buildings by relieving the whole pressure of traffic on Bath. However, it is difficult to get the scheme to conform to the appraisal system. While I am on appraisal systems, I do not think there is any economic justification for adding together huge numbers of very small time savings and justifying things on that basis. They have to be credible and realisable time savings to be worth being taken into account.

I am very pleased to say that the railway franchise bidding procedure is at last taking quality into account. That has long needed to be done but the Treasury has shied away from it because it cannot be proved in financial terms. It is very heartening to see that the Stagecoach bid for the east coast and the Abellio bid for the ScotRail franchise have taken these things into account. I ask the Minister to note that the railway franchise system overspecifies the service. Lots of small stops are put into routes. Lincoln to Nottingham could be a very fast service, end to end or stopping at Newark, but it is precluded from that by the passenger service obligation.

I am interested in the idea of an independent infrastructure commission, as advanced by the noble Lord, Lord Adonis. I am a victim, I suppose, of the Strategic Rail Authority. In the years in which I was involved with it, we had constant fights with government departments as to who was in charge of what. A decision has to be made about who will be in charge—Whitehall or the independent infrastructure commission. There have to be clear lines of demarcation.

I endorse what the noble Baroness, Lady O’Cathain, said about training. Training is essential. We need huge numbers of engineers and people to support them. I am very pleased that this Government have at last delivered a great increase in the number of apprentices.

My Lords, I declare an interest as a member of Cumbria County Council. My purpose in speaking in this debate is to bring a cold wind of Cumbrian reality to all this chatter about infrastructure. When it comes to infrastructure, London gets most of what it wants—as, probably, as a global city, it should—but the rest of England has to be content with crumbs. These crumbs are from Chancellor Osborne’s table, which his spin doctors try to confect into some imaginary tray of appetising cream cakes. They look tempting and delicious when they are offered but, in the modern world on public health grounds, you are not allowed to get near them.

In Cumbria, we were greatly heartened by the Chancellor’s talk of a northern powerhouse and by the idea of High Speed 3 connecting our great northern cities. But what is the reality? A couple of weeks ago, the Transport Secretary, Patrick McLoughlin, who is a good man, came to Carlisle. It was one of those visits to marginal constituencies that Ministers have to make at this time in the political cycle. Doubtless, he had asked his department to identify what suitable goodies he could announce or perhaps reannounce for Cumbria. However, the cupboard proved very bare. There would be no road improvements to link the centre of Britain’s nuclear industry on the west coast to the M6. Nor would there be improvements in rail connectivity or an improvement in the east-west line from Carlisle to Newcastle. That is a journey of 60 miles, which in the modern world takes 100 minutes but should take 45 minutes. Instead the Transport Secretary came up with the announcement of a single additional early morning train service to take workers from Carlisle to the nuclear site at Sellafield. In my youth, the railway would have described that as a workmen’s special.

This beneficial improvement came out of the recent refranchising of the Northern and TransPennine rail services. What Mr McLoughlin failed to highlight in this announcement was that, as a result of this refranchising, Barrow-in-Furness has lost its direct rail service to Manchester Airport, which used to run every two hours. That service was a crucial lifeline for this isolated town. Why is Barrow losing this service? It is because the TransPeninne units have to be transferred south to tackle overcrowding on the Chiltern line. In other words, there is not so much a northern powerhouse as a southern smash and grab. As a consequence of this shortage of modern rolling stock, in order to provide services in Cumbria, diesels from the freight operator DRS will have to be used to haul old-fashioned coaches that have been retained for steam train excursions.

That is an extraordinary failure and it shows a deeper failure. We in Cumbria were supposed to get the third nuclear power station to be built, but there is no planning for that power station. It is in the national infrastructure plan, but there is no planning whatever. Planning is lacking. That is why I fervently hope that a new Government will implement the proposals made by Sir John Armitt in his excellent paper.

My Lords, I add my congratulations to the noble Lord, Lord Adonis, both on his speech and on his prize. He is clearly speaking very much to the converted. However, I have some reservations—and need to be convinced—about his argument for a commission. Over the past four years we have not done so badly given the difficult economic climate. Crossrail has gone well and projects have advanced, and the 2014 NIP plan is a big improvement on the 2001 plan.

I will point to some specific issues that other noble Lords have raised. A key problem for major infrastructure projects remains the excessive regulatory, environmental and consultation requirements. These cause delays and costs and eventually lead to indecision, as was pointed out by the noble Lord, Lord Adonis. There is too much centralisation, and the regions need to be empowered.

I agree with my noble friend Lord Ridley that the biggest inadequacy is in our road network. While I am aware of inadequacies to the north, this applies particularly to southern England. For a long time we have desperately needed a motorway from Dover to Bournemouth, going through the middle of my former parliamentary constituency. There are still ridiculous traffic queues every day at Worthing and Arundel.

It is slightly wrong to think of infrastructure investment as part of the public sector. The major investor and manager of projects is the private sector, which accounts for something like 70%. Like my noble friend Lord Marland, I have rather greater confidence in the private sector’s ability to manage projects than in that of the public sector, which is not a natural for the purpose. I will add that there is no problem with financing proper projects, and I trust that my noble friend Lord Deighton would support this. If anything, we do not have enough projects lined up for the pension funds, the sovereign wealth funds and economies such as China to finance.

In 2010 I went to hear the shadow Chief Secretary present the infrastructure plan of the time. It consisted of roughly £200 billion of energy investment and £200 billion of communication, transport and digital investment, but with no particular timeframe. Indeed, I asked him when these projects were likely to take effect, and he could not answer. What has actually happened over the last four difficult years has been surprisingly good, in a way. We have averaged £47 billion per annum of investment, making a total approaching £250 billion over the last five years. This is also some 15% more than infrastructure investment in the previous Parliament.

The 2014 NIP is extremely good. There is an organised pipeline of £554 billion of investment, of which £303 billion is in energy and £176 billion in transport. Again, the financing of this is 64% private, 23% public and 13% mixed.

Before I sit down, I refer to the specific point of co-operation with China on infrastructure, which was raised by my noble friend Lord Sassoon. I understand that China has some concerns that the Hinkley joint venture project, which is 49% Chinese and 51% French, is in a state of stalemate. This is partly because the French do not have the funds, and partly because of political problems here about whether the National Security Council views China as a security risk for investment in nuclear energy. I hope that my noble friend Lord Deighton can sort this out, because I believe that it is causing some evaporation of Chinese support.

My Lords, I join in thanking my noble friend both for obtaining this debate and for the very eloquent way in which he introduced it. Rather like my noble friend Lord Liddle, I will take a slightly different course by saying that we live in a world that is changing very fast indeed. That must be taken into account when we look at the investment and planning of our infrastructure.

A friend from America told me recently, in an e-mail in which he gathered together a lot of information, that the computing power contained on my mobile phone at the present time would have cost me £3.5 million in 1991, only 24 years ago. That is the computing power that I now have on my mobile phone. That is only an example of the way in which the world has changed and is continuing to change. That is the important point. The world is not only changing, but is continuing to do so and is changing faster and faster.

After all, most of the infrastructure we are talking about deals with transport problems that would not have existed 250 years ago. Yet 250 years is a very short time in the history of mankind, let alone the history of the world. Railways and motor transport did not exist then, so there was no infrastructure as we talk about it at the present time. Having said that, I make the plea that the infrastructure for the internet be considered as part of the essential needs of the people of this country. At the moment, the internet is provided by a variety of individual capitalist companies which, quite rightly, desire to make a profit. However, there are three distinct groups of people who lose out in the present structure.

The first group is the elderly, which I have to say includes some of my noble friends around the House.

I am elderly, but not in that category. Some people think that I am quite an expert on computers in this place, but I consider myself to be a one-eyed man in the kingdom of the blind. There is some element of truth in that.

The fact is that the elderly often lose out because they do not have computers, and if they do, they do not know how to use them. Even mobile phones can be a bit baffling. The second group is the poor: those who cannot afford to pay for a monthly internet service.

I was tempted to say that the third group is made up of those who live in rural areas, but it is not just them, it is those who do not have a fast internet connection in their home. I want this Government—or any Government, because two out of these three groups would benefit from having a Labour Government—to ensure that the telephone network is part of the infrastructure that we are looking at in terms of planning because it is the main way of providing access to the internet. If we do not do that, we will leave these groups behind. We have already seen in education that children who have access to computers and the internet are benefiting over those who do not. I therefore ask the Government to consider this.

My Lords, I rise to make a few points in this debate on what is clearly an extensive subject and one which has a significant impact on our own and our children’s long-term future. I would like to say first that in this debate, whatever our political allegiance, we all essentially want the same outcome, which is an infrastructure that will strengthen our economy and ensure that we remain one of the leading economies of the world. To do that, though, we cannot rely on our Victorian heritage. We must have a long-term vision and the will to make it happen. As the Chancellor said last year:

“We must learn from the past, not be the past. Decide or decline. That is the choice”.

That means not only putting aside our political differences but doing things differently, for clearly, as it stands, the system of decision-making still leaves considerable room for improvement. I welcome Sir John Armitt’s proposals for an independent infrastructure commission because it has sparked a debate and, it is hoped, will lead to the outcome that we all want.

From a business perspective, there is clearly support for doing things differently. The noble Lord, Lord Adonis, quoted the views of the CBI on this. That is not to say that the direction of travel in recent years has not been positive. The publication late last year of the road investment strategy and the forthcoming publication of a digital strategy this year indicate that we are starting to think beyond the immediate future. The innovations in the Infrastructure Bill currently going through the Commons are helping to put in place the building blocks for this. These are less controversial, though, than some of the tough decisions that are still outstanding, and none is more pressing than the key question of the airport capacity that is required if the UK is to remain competitive, and if we are to rebalance our economy and secure longer-term sustainable growth.

The experience of the Airports Commission, currently led by Sir Howard Davies, offers interesting insights upon which we can draw, demonstrating the importance of taking an evidence-based approach. When analysed in the cold hard light of day, the case for new runway capacity in the south-east is clear. With this clarity, it is essential that we as politicians play our part and commit to implementing the proposals when they are published in June, so that we can finally increase our capacity and grow the links to emerging markets that our businesses so desperately need. In the past five years, while we have been reviewing one runway, China has gone from 175 to 230 airports.

Getting value for money is important, although I cannot help but ask the question: did the Victorians rigidly cost-benefit analyse every project they undertook or did they start with a vision of what they wanted to achieve as a country? Where do we want to be: among the top industrial nations of the world or lagging behind because we have made an industry of analysing the detail of the tools we require in order to get there? Indecision on new runway capacity is already impacting on business investment, so we must take action as soon as possible. Business needs clarity, and not just on aviation but on the long-term future of infrastructure across the board, from our energy supplies to our funding for upkeep of the road network. These are key aspects that will promote growth. In all these areas we need to have an adult conversation both with each other and with the public about what we need and when we need it.

For too long, major infrastructure projects have become a painful process which has been hijacked by bureaucracy, electoral cycles and interest groups, despite the fact that we have democratically elected representatives to take these important decisions. It is important that we have a national debate which involves both politicians and the public, but we must also keep the end goal in mind—job growth, prosperity and security for our citizens. Perhaps an independent body made up of experts is the best way to help politicians to achieve this.

My Lords, I welcome this debate, which was introduced by my noble friend Lord Adonis, and I am pleased to follow the noble Baroness, Lady Mobarik, who commented on the broader considerations of our infrastructure. Of course, when levels of pollution got too bad during the great stink, this Parliament had to abandon the area. Similarly, China has to stop activities when the pollution levels get too high. Sometimes they turn off all the factories in order to have clean days, which are called “APEC blue”.

This debate concerns what we do for everyone’s benefit in both the immediate and the long term by using the space below the ground, the shrinking space we have available at ground level, and the increasing value of the space above the ground—right up to the ionosphere, which is one of the most valuable parts of our infrastructure. The debate has embraced all aspects of our built environment, our engineering structures and our natural resources, which include the vital and invaluable element of radio communications. I found out the other day that “infrastructure” was not in my 1960 edition of the OED, although the French introduced it in 1875. The noble Viscount, Lord Ridley, pointed out that the French understand systems. Perhaps that explains the lack of UK investment in the broader infrastructure. In that area, the UK is now ranked 28th in the world, having fallen from 24th place. I declare my interest as an engineer and scientist and as a former head of the Met Office, a very successful government agency that is a world leader. Vis-à-vis the remarks of the noble Lord, Lord Sassoon, and others, it was criticised for generating excess profits.

The UK’s engineers, scientists, architects and landscape architects, of which my wife is a distinguished exemplar, have gained a worldwide reputation and have contributed to some of the world’s greatest infrastructure projects. Although there is some great infrastructure in this country, as my noble friend Lord Adonis said, there are many areas where we have failed. One of the points which other speakers have perhaps not emphasised is the need for an integrated approach. The suspicion of integrated systems mooted in this House by Lord Shackleton in 1976, when the idea of systems thinking in government began to be discussed, was exemplified by the noble Lord, Lord Sassoon. He suggested that any kind of integrated visionary commission would essentially hold things up. I believe that a proper UK system would not necessarily mean adopting a top-down bureaucratic approach, but rather a visionary commission that considers many factors: the environment, climate change, training and many other areas which have been mentioned in the debate. Of course, a visionary commission should also look to its rather unvisionary colleagues in the Treasury, whose job it is to find the money and make sure that it is properly spent. I believe that a commission as envisaged in the Armitt review would be very different from what happens in the Treasury.

The other important point about such a visionary commission is that it must devolve powers to the regions and the cities, to government agencies, and most importantly to industry. That will ensure interconnected planning, particularly for new forms of power, technology and transportation. The remarks of my noble friend Lord Liddle exemplify this point. Such a commission will also link the UK infrastructure system to the network systems in other countries. In Europe, we have an interconnected system for electricity and other interconnected systems for other aspects of our power and business, and that is an important role of the visionary commission.

I end by referring noble Lords to the remarkable concepts of Buckminster Fuller, the great visionary engineer, who talked about an electrified interconnection grid developing around the globe. We are now seeing this, for example, in Asia. That is the kind of visionary idea that the commission would be able to have, and I believe that that kind of openness is what we need.

My Lords, I am pleased to join other noble Lords in thanking the noble Lord, Lord Adonis, for introducing this important debate. His considerable experience, knowledge and enduring interest in Britain's economic performance were all evident in his eloquent opening remarks. In contributing today I declare my interests, which are quite numerous and varied, so I refer noble Lords to the register.

I wish to make two points. Given that the funding for 64% of our infrastructure projects is met by the private sector, it is worth asking why our national performance has slipped relative to other developed countries. Part of the answer must lie with the fact that our planning system moves at a glacial pace and needs urgently to be more responsive. More importantly—and I am sorry to say it—there seems to be no doubt that confidence is still lacking among the business community. It is not as though the Government have done nothing; on the contrary, as noble Lords have heard, they have done a great deal and in difficult circumstances, and I congratulate them warmly. I have listened to the arguments put forward by the Government against the establishment of an independent infrastructure commission and so doggedly advocated by the noble Lord, Lord Adonis, over a long time. I do not feel qualified to challenge those arguments. The rather convincing worry is that 89% of business wants such a body so that well developed infrastructure strategies are less exposed to political cycles, and, in a raft of other areas, business still has misgivings about the future.

One problem is that neither this Government nor any other understand business properly. It is not that we lack clever and committed politicians and officials—there is no shortage of those—but, crucially, not a single Minister, civil servant or public sector officer woke up this morning or any other morning to the reality of risk-taking and being held accountable, and the subtle workings of capital are not understood at all. It is an interesting reflection that barely a handful of noble Lords participating this morning have current experience of constructing a capital budget, or worrying about how they will pay the wages tomorrow morning or how they will cope with the daily tsunami of regulations. Business wants to see the politics of infrastructure change fundamentally in order to improve the perception of the UK as a place to do business. It would help if the noble Lord, Lord Adonis, would perhaps persuade his colleagues to talk less about such things as nationalising the railways.

I will finish by speaking about my own area of south Cumbria. I am more optimistic than the noble Lord, Lord Liddle. As he would agree, in common with many other rural areas we have had a varied economic history, but today in the Furness peninsula we are preparing ourselves for the biggest investment in our history. It is estimated that over the next decade some £40 billion will be spent in industries that include civil nuclear, biopharmaceuticals and nuclear submarine building, To put that in perspective, in money terms it is equivalent to one and a half times the Olympics. While it is hard to exaggerate this good fortune, the infrastructure implications are huge. Quite simply, we lack that infrastructure by magnitudes, as the noble Lord, Lord Liddle, said. My major concern is to see that small and medium-sized businesses benefit from this investment and have access to the supply chain. I am out of time, but I simply ask my noble friend to visit and see for himself the scale of the opportunities and the challenges that face us.

My Lords, whatever view we take in this debate, one word concentrates all our minds: capacity. The House will no doubt remember the fire at Didcot power station last October, which resulted in its partial closure. This, added to the planned closure of two more power stations and the decommissioning of others, was a wake-up call.

Last November, the Royal Academy of Engineering published the findings of an investigation into the capacity margin of GB’s electricity system. The investigation was commissioned by the Prime Minister’s Council for Science and Technology. The report warned that, in the absence of intervention, the capacity margin,

“would present an increasing risk to security of supply”.

The nation’s transport capacity—road, rail and air—is rehearsed daily in our media. Indeed, we consider it regularly in this Chamber. It cannot be ignored much longer. Investment is not something you do tomorrow; its implementation has to be decided on today. The lack of investment throughout our infrastructure leads to misery for many, destitution for some, and a massive cost to both the local and the national economy.

Throughout my industrial and political career, save for the National Economic Development Council, I can recall no overarching body charged with the responsibility for planning or co-ordinating the national infrastructure needs of the nation. It is now, I believe, an idea whose time has come. Last autumn, an article by Dan Lewis, senior adviser on infrastructure policy at the Institute of Directors, summed up the malaise of the nation, saying that until now the UK had somehow “muddled through”. He predicted that this was about to change and that over the next 15 years Britain would face a rolling series of major infrastructure shocks. Coming from the IoD, it was indeed a wake-up call.

I am pleased to say that the wake-up call is being heard loud and clear in this Chamber and in this debate. The Armitt report, which has been discussed, was published last September. It called on the Government to hand over responsibility for identifying the UK’s long-term infrastructure needs to an independent panel, which would monitor, plan and report. We need that debate because we have to reach a consensus. At least we have to convince those from whom we seek investment.

The call that I hear today is no different from what the Armitt report said. It called for a cross-party political consensus to encourage investment in long-term transport, energy, telecommunications and flood defences. I have heard the call, and I hope that the Government are also listening.

My Lords, as others have done, I congratulate the noble Lord, Lord Adonis, on introducing this debate. We all respect his great record in transport and education. Equally, I am glad that my noble friend Lord Deighton is answering for the Government because he is the great implementer, as the noble Lord, Lord Adonis, admitted in his remarks. Indeed, with the two of them together, the House of Lords leads once again over our colleagues in the House of Commons; I do not believe that it could field two such Ministers as we have today leading our debate.

Undoubtedly, infrastructure planning has been a problem for this country for many years, stretching over many different Governments. The noble Lord, Lord Adonis, said that we were now 27th in the league of international comparisons. I thought it was 24th but, whether it is 24th or 27th, it is far too far down for a country that is fifth overall in the economic league tables. Now we have the annual infrastructure plan, which is an excellent idea and has cleared up some of the chaos that we were left in by the previous Government due to their bad planning over PFI and their penury on the macroeconomic front. That has helped to bring an element of stability to the whole situation but it is not enough.

Urgent attention needs to be paid to two things that I want to stress to the Minister, which I hope he will pay attention to. The first is that we need to get going on fracking. There is an important decision being taken shortly—in the right direction, I hope—by Lancashire County Council. I speak as a Lancastrian who knows the area of Bowland extremely well; it is where I was born. That decision needs to go the right way. If it does not go the right way, I hope that the Government will intervene and overrule the council. We need to make progress on this matter, otherwise we will be left behind in this very important area of energy development.

Secondly, affordable housing was mentioned by the noble Lord, Lord Adonis, and in a very important speech by the noble Lord, Lord Rogers of Riverside. I agree with both of them: our housing record is appalling. We need between 200,000 and 250,000 houses a year. Even Harold Macmillan in the 1950s was able, from an almost standing start, to get up to 312,000 houses in two years. He was able to do that only by a careful and dynamic plan from the centre, organised by the Government. It will not be enough to rely on private housing providers. They will not build the houses in the right places for the country or for the people who need affordable housing. What is happening in London now is a disgrace in terms of the number of houses and flats that are being built and immediately sold off-plan to foreign buyers and are not available to people who live in London. That must not happen any longer if we can possibly avoid it.

I therefore say to my noble friend: I want to see in the next Conservative manifesto something very concrete on fracking and something very concrete on affordable housing.

My Lords, I have agreed with almost every speech that I have heard today. I resented the petty, demeaning, partisan comments made by the noble Lord, Lord Sassoon, but they were the exception.

I tore up my notes and will use as an aid the Chamber of Commerce note that we all had because I agree with all the points it raises. When I visited an infrastructure project recently—the oldest railway tunnel in the world in daily use, a couple of miles down the road—I thought: what would Brunel think about us today, with our lethargy on infrastructure?

The message I took from the speech of the noble Earl, Lord Attlee, was crucial: the need for sequential planning to ensure that you can smooth things out and do not have all the cranes at once and then nothing for months afterwards. I think that is really important.

Let’s face it: until this Government came along, the last person to order a nuclear power station in this country was the late Tony Benn. The previous Government missed the post—we know that—with the disastrous 2003 energy White Paper. Between the start of HS2 under the previous Government and it being fully supported by this one, there was a hiatus for about a year when there was a bit of backsliding within my own party, which we had to correct in this House by making it clear that we were fully in support and wanted to buy into it.

That brings me to the point. I do not know too much about the plan for the commission and building it all together, but what is clearly needed is a grand coalition on infrastructure that goes across Parliaments. We cannot go on saying that no Parliament can bind itself; by definition, it has to bind itself on infrastructure planning, otherwise we waste a fortune in money, crash hopes, destroy industry and end up not doing anything. So it requires more than what probably is planned. We need to tie ourselves down. The consensus we have here today shows that that can be done.

On motorways, years ago I was amazed when the noble Lord, Lord Mawhinney, as Transport Secretary, published a paper showing how small a proportion of the population actually regularly used a motorway—in other words, those who use them should pay for them or pay a contribution. I agree with the noble Viscount, Lord Ridley, that it is not too late to do that. Energy storage was on the list as well. Our gas storage is woefully inadequate and I do not think we have done much about it in the past decade. We are heading for trouble.

The Government own enough land to build 1.5 million houses. Most of it is brownfield, as my noble friend Lord Rogers said. Why are we not using it as a master plan within the Government? I do not worship the green belt like everybody else—most of it is rubbish land. It is not areas of outstanding natural beauty and it is not the national parks—they are quite separate. It is the urban collar around the big cities where the infrastructure is already there to have houses added to. That is the key point: we do not have to go for big greenfield new towns any more. It is not necessary. We can use the land we have. As I say, the Government own enough land to build 1.5 million houses on, and basically they ought to get on with it.

I agree that infrastructure should stick with the Treasury. Whatever I might have said about the Treasury in the past, the long-term nature of the Treasury is crucial. The DWP is subcontracted to the Treasury. Every decision that it makes on pensions and benefits has a 30-year to 40-year consequential change, and it is crucial that the Treasury is four-square with that. With infrastructure, it is exactly the same. The Treasury does not have to take the detailed decisions, but rest assured that it has a bigger bite on it than it used to have.

My Lords, when I left university in the 1970s, I did not take a gap year; I got in a Morris 1100 with two of my friends and we did something slightly unusual for those days: we drove around eastern Europe. Of course, those were the days of the Soviet empire and central economies, and one thing that particularly struck me was that there was no lack of infrastructure; in fact, plenty of infrastructure got built. The problem was that, first, it was not maintained, and, secondly, when they had failed to maintain it, they failed to repair it. That is one of the issues that I would like to pursue in my few minutes today. There are similar problems in the developing world.

Fast-forward to the United Kingdom in 2015: we have a major area of infrastructure that, when we go home and walk around, we see most often—our homes, our housing stock. One area that we have a problem with is upgrading our housing stock. There are 22 million homes in the United Kingdom, of which 82% do not meet even an energy performance certificate standard of C. That standard is not fantastic, it is merely okay, but the other 82% fall well below that. The previous Government and this one have had a number of schemes—Warm Front, CERT, ECO and the Green Deal—that have tried to tackle this issue. They have been successful to a degree and have been better than a drop in the ocean, but they have far from solved the problem of energy efficiency, fuel poverty and the cost of fuel to the economy and to families trying to keep themselves warm.

I will refer to a report produced by Cambridge Econometrics, among others, called Building the Future: The Economic and Fiscal Impacts of Making Homes Energy Efficient. It has set what would be a very reasonable target for any Government—the next Government, I hope—to bring all poor households up to energy performance certificate standard C level and to provide free loans of 0%, as is done in fiscally conservative Germany, for other households that can afford to pay for those changes in order to bring them up to those standards as well. The report estimates the cost of that over the lifetime of a Parliament as something in the order of £13 billion, which is a lot of money. Compare that with what the overall infrastructure spend might be for those five years in the next Parliament, which is estimated to be hundreds of billions. So it is something like 10% of the total infrastructure cost over a five-year term Parliament.

What are the benefits that come out of that? The estimate, which I see as being reasonable and reasonably conservative, is some £8 billion of energy savings, and that is taking into account what is called, shall we say, “comfort take”—people who are already too cold increasing their energy consumption or bringing up their temperatures after that. It reduces carbon emissions, of course, and increases energy security. The other area, which people like myself who deal with energy and climate change do not always take into account, is the huge benefit that there would also be to the National Health Service. In this country we have some 30,000 excess winter deaths, of which 30% to 50% occur because of cold homes. That is something that we can solve, something that is really important to us.

The cost of all that would be something like £13 billion, but every year we pay £2 billion worth of winter fuel payments to everyone universally. Over the same parliamentary period, that would be £10 billion. I suggest to my noble friend the Minister that this is an area where we could move on from Soviet and developing-world models, invest in our housing infrastructure and be of real benefit and cost benefit for our country in the future.

My Lords, I think my noble friend Lord Adonis was right to put the proposal for a national infrastructure plan at the centre of his speech, and I think this debate has rather brought that out. We need a mechanism whereby we have an overall prioritisation; an overall allocation of resources; an effective form of scheduling, as the noble Earl, Lord Attlee, said; a consistency of project assessment, as my noble friend Lord Hollick implied; and something therefore that investors of all sorts can have confidence in, so that they can avoid the tendency to short-termism and to knee-jerk political or financial reaction.

The investors include the Treasury, but they also include the corporate headquarters of multinational companies, the banking system, the finance markets and institutions such as the pension funds. At the moment they can have virtually no confidence. For those who say that a national infrastructure commission would simply be a bureaucracy and produce all sorts of favours, I refer to all the papers emanating from several different government departments and agencies that we should have read if we were to be properly informed on this debate, as recommended by the Library. We need an overall plan. The glossy that the Government produced on the national infrastructure plan in the past month is very helpful but incomplete; it does not give its basis or, in most regards, its timescale.

I shall concentrate my remarks on areas that are not in there: energy efficiency, which is hardly there apart from a brief reference to smart meters, and housing, which is hardly there at all. Had I had longer, I would have liked to have talked about transport and flood defence, but not in four minutes. However, I say to the noble Lord, Lord Sassoon, if I may depart briefly from my bipartisan approach to this, that the areas that the Government cut when they came in were exactly those: housing, energy efficiency, roads and flood defence. That was a ridiculous short-term decision, but luckily the Government have recovered from it. I hope that therefore we have a basis for bipartisanship in future.

On energy efficiency, the noble Lord, Lord Teverson, has spelt out the need for investment in energy efficiency at the point of use, and I echo virtually all his remarks. There is also energy efficiency in the system itself. We lose the bulk of our energy before it gets to the point of use. We need to look at improving the transmission and distribution of energy, at decentralised energy, at CHP and at carbon capture and storage, which is mentioned there but only briefly. That should all be part of an investment and infrastructure plan, and should be assessed on the same basis as, if you like, the sexier parts of the agenda, which relate to big roads and big airports. At the moment the process of assessment of such projects is very differential and, if you like, politically and subjectively charged, depending on which area you are looking at.

The same applies to housing. In a sense, the noble Lord, Lord Horam, must be right that this is the biggest lack of infrastructure failure of successive Governments in the past 30 years. Housing for our people must be a central part of the infrastructure agenda. At the moment it is not in the December document, and it ought to be. I hope that we can rectify this as we go forward. I hope that we can do so on a consensual basis, but I think we also have to recognise that we need new structures in order to be able to do so. Sir John Armitt’s report is a very good basis for starting.

My Lords, I thank noble Lords for an excellent, instructive debate; it has been thought provoking for me, absolutely. I congratulate the noble Lord, Lord Adonis, and endorse the point that the noble Lord, Lord Berkeley, made about his contribution and his receiving the European Railway Award. I was delighted that HS1 and Eurostar could get the noble Lord back here safely and on time to kick off the debate in a most interesting way.

This debate has also been useful in reinforcing the fact that infrastructure really does need to be centre stage: it is at the heart of our economic strategy—I think there is absolutely bipartisan endorsement of that. We have talked about the great opportunity that infrastructure brings, and we all agree that it is a key driver of economic growth. Transport, communications and energy systems help people and businesses improve their productivity, and as a result improve the rate of growth of the country. The construction projects, where we build them, are great short-term spurs to growth and skilled jobs. Infrastructure is also the key to unlocking growth in our regions. It is also a critical way of unlocking the housing growth that has been a big part of many of the contributions made by noble Lords.

The challenge, of course, is that historically we have underinvested, for a variety of reasons. What do we need to fix to cure that historical underinvestment? It has something to do with the shorter-term horizons of the political environment, which do not quite match the longer-term needs and gestation periods of investment in infrastructure. How do we tackle that more effectively? The noble Lord, Lord Adonis, referred to our ranking as 27th in the World Economic Forum. My noble friend Lord Horam was appropriately horrified by that. I should just point out that those rankings are a result of the home audience’s subjectively evaluating what it thinks of its own infrastructure, so it probably says more about the British psychology than about the objective state of our infrastructure. Noble Lords might listen more carefully to the IMF review.

According to the Institution of Civil Engineers, this ranking was developed for the World Economic Forum. It is rather topical.

It is topical, but it was still a subjective review of our own psychology. The IMF review in 2009 says that the UK has the fastest-improving infrastructure in the G7, which is clearly a good thing. We managed to get cross-party support for the Olympic Games. We started off with a Labour Government and a Labour mayor, and ended up with a coalition Government and a Conservative mayor, and there really was not a single slip when the baton was handed over because there was very effective cross-party support. I suspect that the nature of our immovable deadline—with Her Majesty the Queen’s parachuting into the Olympic Stadium on 27 July 2012—and our British fear of being embarrassed in public were probably helpful disciplines in getting us to that successful outcome.

There are three simple components to the Government’s plan to deliver our infrastructure more effectively: first, to have a plan; secondly, to have the money; and, thirdly, to focus on delivery so that we get it done very effectively in terms of the Government’s performance as a client and industry’s performance as the deliverer of that infrastructure. Everything that we have done as a Government has been about refining how we do those three things and making them better. I will therefore structure my comments and my responses to noble Lords’ questions around those three components of the plan.

We have a comprehensive, cross-sector plan; it is the national infrastructure plan—a number of noble Lords referred to it. It is a lot better now in 2015 than it was in 2010, simply because we have iterated it and built upon it, and we should do that every year. It was unfair of the noble Lord, Lord Adonis, to say that it is not really a plan. It is a plan and it does have timescales. At the beginning, it was a little more like a list of projects, but now it is a plan and is underpinned by a clear strategy. We have a road investment strategy: it is the road investment strategy which drove the list of projects which then enabled us to put a five-year funding plan in place.

I take on board the comments by my noble friend Lord Bradshaw that we need to invest early enough to get capacity right—the lead times on this are absolutely critical. My noble friend Lord Flight pointed out that the plan was improving. It is rather boring government: each year, each section gets a little bit better; each year, the strategy which we pull out of the departments responsible for those areas gets better. That refinement is going on. It is a plan that is backed and supported by industry; we work with industry to develop it; and it is a plan that has given industry and investors the certainty to plan against the pipeline which, because we have now been doing it for five years, they are just about beginning to believe in. We need to keep doing it over and again. Government’s work is done at the front end of that pipeline; that is, turning the concepts or solving the problems, and creating investable projects. As a noble Lord said, it is not the finance that is the constraint; it is shaping such projects into investable projects so that they can be carried out.

The claim I would make for this Government’s achievement is that we have got to grips with the short-term delivery challenges. We have put in place a plan to 2020-21. Many of the projects last through the 2020s. The next step is to develop a plan that addresses the UK’s infrastructure needs in the much longer term—which is where we should spend a moment addressing the case made by the noble Lord, Lord Adonis, for a national infrastructure commission, which was supported by many noble Lords here. I agree that the next stage of work is to look at our longer-term needs and to ensure that we develop strategies for them. Out of those strategies will come the work to develop the projects that will give us the outcomes that we are all looking for. I absolutely agree that that is the next stage of work.

I agree also that there is a significant role for independent expert advice. That was what we did in wrestling runway capacity in the south-east to the ground with the Davies commission. If one looks at the amount of work that has gone into solving one particular problem within one sector of the broader transport area, one sees that the kind of effort that we are talking about here is very broadly based. Defining the precise scope is an interesting question. The noble Lord, Lord Maxton, referred to the infrastructure of the internet. In the National Infrastructure Plan, there is a chapter on communications. The Government are producing a digital strategy just as they have produced a road investment strategy. So these things are all under way. I also accept the point made by the noble Lord, Lord Hunt, about integrated systems. We have very good plans for each sector, but we need to be much smarter in the longer term about understanding integration opportunities and interdependence. We have, too, to understand climate change; we have to understand the impact of technology. Those are all the things that we need to figure out.

The discussion that needs to take place on how we do this—my noble friend Lord Sassoon referred to it— is about how heavy we make the machinery to accomplish it. My experience in business and especially in government is that we need people who can get to outcomes, not people who can create layers of process. I am very nervous about signing up to quite heavily constructed process when my experience has been that what we need in government is the ability to get these things moving.

If that is where the plan fits in, let me spend a little time talking about the money. Our infrastructure is financed either publicly, from taxpayer money, or privately. Quite a lot of it is financed with a mix. Two-thirds of it is financed in the private sector. On the publicly financed component, we can effectively retain a good bipartisan approach, but I think that this Government have been very successful in stabilising our public finances, which is what has created the room for us to be able to spend more ambitiously on infrastructure. That is a big difference between the parties. The success in stabilising those public finances has been what through successive fiscal events has enabled us to invest more effectively in public infrastructure. On the public side, we are talking about the road network, the flood protection environment and Network Rail as the three key sectors. We have also made settlements that last right through the Parliament, which is the first time that we have ever done that. If I look at all the things that we have done in the past four years, turning a one-year financial settlement into one that lasts to 2021 has been the single most transformational thing, because those sectors can now plan, build and construct, and have much more effective delivery, by having that medium to long-term planning environment. It is absolutely transformational.

We need to work through the system to make sure that the agencies responsible, such as the Highways Agency, the Environment Agency and Broadband Delivery UK, have the skills to be able to work with industry to realise the full benefits of that longer commitment of public money. I am delighted that we have been able to finance some of the pet or favourite schemes of noble Lords; for example, the interest of my noble friend Lady Maddock in the A1 north of Newcastle and connectivity with Berwick. As my noble friend Lord Attlee pointed out, such a longer commitment is the key to avoiding the feast and famine of past years and getting the sequencing right. If you have a five to six-year settlement, you can sequence it intelligently through that period, rather than having to make sure that you have spent all the money in year 1 because you are never quite sure whether it is going to be there tomorrow.

I have talked about the fact that we in the UK are pioneers in private finance. We do private finance of infrastructure better than anybody in the world. We introduced privatisation; we introduced public/private partnerships—as my noble friend Lord Sassoon pointed out, unfortunately the PFIs were not always as well executed as they should be, but getting the balance right is hugely important. A number of things make the environment that we have got here right. We are a very attractive location for overseas investment. Of course, we cannot be complacent; we need to keep making it better. The noble Baroness, Lady O’Cathain, was very articulate about the stability of this marketplace, the clear property rights and our world-class regulation—which a number of noble Lords referred to, including my noble friend Lord Sassoon. Preserving the independence of that regulatory framework is critical. I am particularly pleased with the combined work that the regulators are doing through the new body that we set up, the UK Regulators Network, to focus on the key issues such as affordability, cross-sector infrastructure investment and how we engage with consumers to facilitate switching. The Government have also intervened in a variety of sectors to support financing, including the new electricity market reforms. The noble Lord, Lord Rooker, referred to nuclear and the way in which we are driving that forward. The noble Lord, Lord Liddle, talked about Cumbria. We are doing an enormous amount of work to get all three big nuclear projects off the ground—not only Hinkley Point, but also NuGen and Horizon. That will ultimately be for the benefit of the economy in Cumbria too. I agree with the noble Lord, Lord Whitty, that work is needed on the demand side of energy just as much as on the supply side. All these sectors are critical.

I support my noble friend Lord Horam in his call to accelerate fracking. We have put the planning environment and the tax incentives in place. It is now down to the developers to determine if the economics are there for them. My noble friend Lord Ridley said that there are alternative models—which other countries have embraced—for funding our roads. The noble Lord, Lord Rooker, backed this up.

The noble Lord, Lord McFall, talked about potential investment in infrastructure by the big insurance companies and the challenges they sometimes face. Of the £25 billion they said they would put up, £5 billion is already committed, so that is moving ahead pro rata. We have helped with making the Solvency II rules as benign as possible to support that development.

The third component of what we are trying to do is to get smarter on delivery, what we do in government and how we can help industry get better at it. We are much more focused on government intervention to unblock things in our top 40 projects. My noble friend Lord Marland referred to it as “energetic” and “enabling”—making sure that we have joined-up government. I ran an exercise in upgrading the commercial capability across the key departments. My noble friend Lord Cavendish correctly pointed out that it does not come that naturally to government. We have to ship in a lot of the commercial expertise; otherwise we are outgunned in big commercial negotiations. There is a lot of work going on there. We have put our top people in key leadership positions. Of all the things we have done in HS2, persuading David Higgins to be its chairman has probably been the single factor which will make most difference in the effectiveness of its delivery.

Many noble Lords made observations about the need to improve the planning system. That is part of the responsibility of government in enhancing delivery. We have done a series of things. My noble friend Lord Freeman referred to the national networks policy. The noble Lord, Lord Berkeley, referred to draining the swamps and trying not to listen too much to the frogs. At the next Budget, we will consult on CPOs, and ideas about how to financially motivate getting to the right point more quickly will be our underlying objective.

With industry, we have worked at ways to improve project initiation—how projects are set up and delivered. In the first three years we took £3 billion out of a big set of projects through working with industry and we are continuing that engagement to look at change in their own delivery. An important component is getting skills right. When I started this job, the construction companies came to see me to say, “We want work”. Now they say, “Slow down, because we do not have the capacity to deliver it all”. Skills are at the heart of this. My noble friend Lady O’Cathain was spot on when she said that the important short-term and medium-term challenges were to get that right. Apprenticeships are absolutely at the heart of that. I am delighted that we have the HS2 colleges set up in Birmingham and Doncaster. My right honourable friend Patrick McLoughlin, who is clearly doing a very good job as a successor to the noble Lord, Lord Adonis, was at Crossrail on Monday, celebrating its breaking through its 400-apprentice model.

I have not said much about rebalancing the economy, a subject which many noble Lords raised. The noble Lord, Lord Adonis, talked about devolution. My noble friend Lady Maddock talked about local authorities. The noble Lord, Lord Liddle, spoke about cream cakes and Cumbria. The noble Lord, Lord Rogers, talked about cities and urban regeneration. I think we all accept that we have not invested sufficiently in infrastructure in the regions, and that needs to be corrected. We are trying to do it. Chapter 2 of the National Infrastructure Plan is all about getting that right. The underlying, driving theory of HS2 is to empower the northern cities so that they can have the same kind of economics of agglomeration that can drive growth. We have seen it similarly in London.

I agree that there is a link between infrastructure and housing. Battersea is a great example. We guarantee extending the Northern Line and suddenly Battersea creates 30,000 homes. That kind of relationship needs to be worked out right around the world.

In conclusion, we must relentlessly continue our work to deliver the pipeline that we have. It is necessary to work at everything I have talked about—the plan, the money, the delivery—to ensure that consumers and businesses reap the benefits. As I believe we have demonstrated in this Parliament, where there is a clear plan to build and finance the infrastructure that we need and a powerful programme to drive its delivery, then that infrastructure can and will meet its potential to be a real engine of our economic growth.

My Lords, this has been an excellent debate and I congratulate the Minister on his highly constructive speech and on the great work that he is doing. It is striking how broad has been the support across the House for the establishment of an independent national infrastructure commission, including from Conservative Members and from the Minister himself. I think he came as close as he could to endorsing the idea provided, as he said, that it is practically focused. I entirely accept that proviso.

The only dissenting note was from the noble Lord, Lord Sassoon, who said that the commission would be a bureaucracy. Any gathering of public officials is a bureaucracy. Your Lordships’ House is a bureaucracy; it just happens to be a very good one. The case for an independent commission is that it would be a good bureaucracy because its job would be to prepare a major infrastructure pipeline which has been so sorely lacking in recent decades. However, I believe that the noble Lord, Lord Sassoon, secretly agrees with me; he was just obeying orders from Tory Central Office. I say that because it was the noble Lord himself who took through the House the excellent legislation setting up the independent Office for Budget Responsibility— another bureaucracy, but a valuable one to provide independent advice on fiscal policy. It is precisely analogous to what we seek to do in respect of infrastructure. When making the case for the OBR to your Lordships, the noble Lord said:

“The independence of the OBR’s judgments will ensure that policy is made on an unbiased view of future prospects”.—[Official Report, 8/11/10; col.12.]

An independent infrastructure commission would have exactly the same purpose—to ensure, or at least to help ensure, that policy is made on an unbiased view of future prospects in respect of infrastructure. As almost every noble Lord who has spoken in this debate has recognised, we urgently need such an unbiased view so that we move from 27th to at least the top 10 in international rankings for the quality of our infrastructure. Nothing is more important to our future prosperity.

Motion agreed.

Criminal Justice System: Autism

Question for Short Debate

Asked by

To ask Her Majesty’s Government, in the light of the case of Faruk Ali, what steps they are taking to improve access to the criminal justice system and victim support for people with autism spectrum disorders.

My Lords, I begin by mentioning my interests as declared in the register. I am very grateful to have the opportunity to debate improving the criminal justice system for people with autism, and thank all noble Lords who have kindly made time to take part. I welcome this opportunity to bring to the attention of your Lordships the appalling experience that some people with autism have of our criminal justice system.

I want to highlight the case of Faruk Ali, a 33 year-old autistic young man living with his family in Luton. According to press reports, one morning last February, Mr Ali, who has the mental age of a young child, was putting his family’s and his neighbours’ bins out for collection, as was his Thursday morning routine. While he was doing so, two police officers drove past. The officers are reported to have returned and chased Mr Ali, in the prosecutor’s words “for fun”, laughing as they went about their pursuit, which culminated in later charges of assault. A neighbour reported seeing one officer come out of his car and punch and kick Mr Ali near the bins that he had been collecting as Mr Ali ran into his home calling for his mother. Mr Ali was wearing a large red badge to signify to those who came in contact with him that he has a disability. Unfortunately, the prominent sign designed to protect him failed to protect him from those officers.

Last December, both officers were cleared of racially aggravated assault and misconduct in public office. An internal police investigation into the matter continues. Although the jury did not have sufficient evidence to convict the two officers, video and audio footage remains of the incident which demonstrates the callous, racist attitude of the officers to a very vulnerable and disabled man. In the recording played in court, in their interaction with him, one officer was heard describing Mr Ali as a “Paki”. Laughter followed. After the incident’s unhappy denouement, as the officers drove off, one of them was heard to have mocked family members when they asked for their police numbers. One officer was heard to say—I paraphrase to remove the expletives—“If he does not interact with people, then don’t let him out”.

The internal police investigation into misconduct will determine whether the behaviour of those officers was acceptable and worthy of a public servant against a disabled person, but will the Minister assure the House and members of the minority and disabled community that the racist language that the court is reported to have heard during its proceedings and the derision for disabled people reportedly exhibited have no place in our institutions, and that complaints will be taken seriously? What is his view of the public interest in making available the contents of the tape?

I raise that today in some detail because I am appalled by such outrageous victimisation of one disabled person, which evidence shows is not an isolated incident. Mr Faruk Ali’s case exposes a wider problem. Although we debate it as a topical debate, I regret that its relevance is enduring.

I was moved to speak on this subject having heard the disappointment and feeling of injustice expressed by Mr Ali and his friends, and from previously attending the All-Party Parliamentary Group on Autism last November, with a large number of people attending echoing similarly unhappy experiences of our criminal justice system. The Grand Committee Room was packed to the rafters with people with autism and their families, alongside policemen, psychologists, Members of Parliament and other experts who understand the problem, some of whom recounted experiences reminiscent of Mr Ali’s.

People with autism face extraordinary difficulties in obtaining justice. Autism is a lifelong developmental disability that affects more than one in 100 people in this country in many different ways. It generally affects how a person communicates with and relates to others. Some people with autism live wholly independent lives, while others rely on specialist support and may be unable to speak comprehensibly.

Autistic people are no more likely to commit crime than anyone else. Indeed, given the reliance of many with the condition on support and care, people with autism should not be disproportionately exposed to crime. However, somehow the system discriminates to pull them in. Research indicates that a third of people with autism have been a victim of crime. Those with autism are also overrepresented in our prisons, where incidence may be as high as 15%.

It is hard to avoid the conclusion that, just as stop and search has criminalised black Muslim youth, the system is criminalising our autistic population and others with learning disabilities. That we are locking people up at least in part as a result of their disability is surely of deep concern to us all. When an individual encounters the criminal justice system, they should expect fair, respectful treatment—treatment that is mindful of the needs of those who may not have the required skills to face up to or deal with all the complexities of our legal system.

The old cliché of working together, multiagency, may indeed yield better services and justice. In many instances, it requires a multiple set of responses. The first is through the training of professionals including police officers and judges. What progress have the Government made with the commitment in their autism strategy to update the College of Policing’s mental health e-training for new officers? Will an autism marker be introduced on the police national computer and made available to prison and probation staff? Those steps would be welcome, but alone they are insufficient. Mr Ali was wearing a marker. The incident occurred in a division in which the police had long before committed to implementing disability training. Beyond lip-service to badges and training, what steps are the Government taking to roll out appropriate quality autism training to all police officers and prison staff, not just new recruits, so that they make appropriate adjustments to and recognise the significance of disability markers?

Secondly, to cater for the significant minority of the prison population with a suspected learning disability or autism spectrum disorder, the prison and probation services must have procedures in place to assess a person’s needs as they enter and pass through the system. Will the Minister commit to the use of screening tools for autism across our prisons?

Finally, early diagnosis of autism makes a huge difference to the development and future well-being of people with autism. Speaking to several organisations last year, I was told in no uncertain terms that many parents feel that there is a racial dimension to their experience. The Government have already acknowledged the significant under-diagnosis of autism among people from black, Asian and minority backgrounds. Delayed diagnosis results in delayed support. The provision of basic social care and support for people with autism at every stage of life can mitigate the likelihood of a costly health crisis or encounter with the criminal justice system. Low-level services such as social skills training or anti-victimisation classes can be effective and should be mandated by local authorities.

Whether a person has autism or not, they should be treated with respect by all our statutory institutions. However, as a mother of an autistic boy about Mr Ali’s age, I can vouch for the wariness that many of us as parents have about exposing a disabled child to institutions. For all the brilliant dedicated professionals in our hospitals, education and social services, police and prison services, persistent incidents of racism, prejudice and abuse not only erode the public’s faith in those institutions but profoundly injure people’s lives.

The process of appeals and complaints can do long-term damage to the mental well-being of those who must endure it. For that reason among many, I salute the determination and tenacity of Mr Ali’s family, his solicitor and all his supporters in their struggle to secure justice for Faruk Ali—and all others who persist.

My Lords, I congratulate my noble friend on securing this important debate. I will not be talking about the case of Faruk Ali, although I have read the material available on the internet. I propose to talk in more general terms about dealing with autistic people in the criminal justice system. It is indeed a large and difficult subject, and I shall talk about the courts system in particular, of which I have some experience.

In preparing for this debate, I have seen that a lot of guiding material is available published by the House of Lords Library regarding dealing with people with autism. There was a recent article in the Magistrates’ Association magazine about dealing with autistic people in a court setting. If one googles the issue, as I did, there are a lot of comment pieces about the appropriateness of different procedures within the criminal justice system as a whole.

A very important context for today’s debate is the rollout of Liaison and Diversion by the Government to those with mental capacity issues. My understanding is that the objective is that this will be fully rolled out within England and Wales by next year. Liaison and Diversion is where a mental health practitioner is available to the court, so that a hearing may be adjourned for an initial assessment to be done on the spot as to the mental capacity of either victims or the defendant. This has been at the instigation of leadership from my noble friend Lord Bradley and I understand that it has led to a measurable drop in such cases being brought to court in the pilot schemes operating to date.

I want to talk about my own experience as a London magistrate, where I have dealt with defendants who are autistic. I will not go into the details of the case I have in mind; suffice to say that I believe that the court system coped well with the challenges of the trial, in the sense that all the individual elements of dealing with this difficult situation were met. Nevertheless, by the end of the process the autistic defendant was bemused —he did not understand what had happened—and his family felt that they had not been treated fairly.

So what were the elements in place? First, the young man was charged with a sexual assault, so special measures were in place to protect the victim from the attention of the young man or his family. Secondly, an appropriate adult sat with the young man at all times when the case was being conducted. An intermediary was not believed to be required because the young man claimed he had no memory of the incident of which he was accused. We had an expert witness who gave lengthy evidence, having interviewed the young man, and was cross-examined. That was really the burden of the defence case. As the presiding magistrate, I could see that witness support was giving very active support to the family of the young man who was accused. We took regular breaks, as asked for by the defence lawyer; that would be good practice in such cases in any event. Legal aid was available but would not be for this level of charge for most defendants. Incidentally, that was one of the sources of delay.

We convicted the defendant of the sexual assault. As I said, he looked bemused as if he did not understand what had happened. The family made it very plain that they were unhappy with the result. We had no doubt that we had properly convicted the young man. After the trial, I discussed with my colleagues and the court staff what could have been done better. All the individual requirements had been complied with, after all, so what was the problem? It was the delay in the whole process. It had taken a year from the initial incident to when the trial took place. All the people completing their individual elements as part of the process no doubt believed that they had done their job but it added up to a long delay.

It was made plain to the court by the expert witness that delay disproportionately affects people with autism, because they are very likely to have worse memories than other people. This problem was not overcome and was, I believe, the source of the discontent of the young man’s family. We were never going to make them happy with the result but we could at least have made them feel that their son had had a fair trial. I am afraid that I do not think they believed that. My point to the Minister is very simple: all these elements are good and complex but they have to be done quickly, otherwise their benefit gets dissipated and people do not feel that they have had a fair trial.

I will close on one separate, short point regarding Liaison and Diversion. It is on the need to scrutinise whether these diverted cases are properly being diverted. As the noble Lord, Lord Faulks, will know, there are various pilot schemes in the country and various methods among police forces of recording the way that police forces divert cases. From a courts perspective, it is very important to have a realistic record of those diversions when they come to sentence people who have committed subsequent offences. We have this issue in the youth court, where we do not know which diversions have been done properly. It is potentially the case that we will also have this issue in the adult court if there is not proper recordkeeping of diversions for people with mental capacity issues.

My Lords, we have addressed things related to this subject fairly frequently. The fact of the matter is that those with autism get a rough deal out of society, for the simple reason that they have problems communicating and that we are an animal who communicates all the time. If you have a problem with communication, you are always going to find yourselves in positions that are potentially stressful and breeders of conflict. If we take that into account when looking at just how many rules and regulations we have, the fact that the criminal justice system will have problems with those who have autism at least occasionally is obvious to us. We should look at how we deal with that now.

The noble Baroness, Lady Uddin, gave information about a case on which the police were found not guilty at the trial but into which there is an ongoing internal inquiry. The fact that it was severe enough to get to court suggests that something had gone wrong at this point. Look at the selfish genes of society. Having to take an issue like this to court in the first place means that there has been a fundamental mistake. If we lose track of that, no matter what the outcome of this, we are losing track of the fundamental problem. Having looked through the information and attended some of the meetings that have already been referred to, I say that the police are always going to struggle with somebody who has these communication problems. However, they know this and there are schemes in various parts of the country that are better at making the police informed. What are the Government going to do, and encourage local police forces to do, to make sure that people understand or at least have an awareness of autism?

This is not easy, quite simply because most of the problem will be at the high-functioning end of the autistic spectrum—those with Asperger’s or those who will not obviously have a problem, and where the first few lines of communication will probably not be enough to establish it. There is a desperate need for training but initial police training is a very slow way of getting this into the structure. I cannot help but feel that if a senior sergeant or inspector within the force had had a look at this case and said that an apology or some form of mediation were required, we might not have had to go through that wasteful process of taking an action in court. We might not have needed such a lengthy internal procedure. We are wasting time and money by not taking on some basic awareness training within this part of the service.

The same criticism could almost certainly be made of most bits of government. I will undoubtedly make similar points about other disabilities at other times, and already have. But unless you do this, you are building up the stress levels. If we are not to keep all our disabled people, and particularly autistics, locked away but to have them interacting with society, it is a basic requirement that we allow those in the public sector at least to be able to interact with them. I am calling not for everybody to be an expert but for them to have enough confidence and awareness so that, when they establish that something is not right, they call in the right support and help. That is not too much to ask: that you know that you do not have to soldier on here, and you call in the person who knows something. You are not wasting time or resources, or causing that individual such enormous stress.

We had a debate on mental health a week ago today, in which I spoke about the problems of those with disabilities and mental health. Autistics were a large part of that group. Some 70% of those with autism are reckoned to have some form of mental health problem, and the noble Baroness, Lady Uddin, has already referred to the fact that those on the autistic spectrum are grossly overrepresented within our prison system. By the way, it is very widely accepted that virtually all hidden disabilities or special educational needs are grossly overrepresented within the prison system. Therefore that should not come as any surprise. To try and avoid that, we should invest a little in training and time throughout the system, so that there is a way in which you can interact, apologise, back down and correct what has gone wrong, as far as you can. All systems will go wrong, but unless we can instil enough knowledge within the system so that we can say, “Yes; something has gone wrong and we will intervene to do what we can to put it right”, you will have these problems. Would it not have been better if that had taken place?

It is equally damning in this case because this same individual had been involved in a case three years earlier, and Bedfordshire Police had agreed to undertake some of this. If it did, clearly it did not get through to the right person at the right time. We need to make sure that we get this done, and quickly. If not, we will waste the time and resources that could very usefully be spent somewhere else. The selfish gene of society means that we deal with this and move on, otherwise we waste time and resources and make people’s lives unpleasant. That is more or less an open-and-shut case.

My Lords, I, too, thank the noble Baroness for this debate. As has already been said, Faruk Ali comes from Luton, a town in my own diocese. Quite a number of people have raised that case with me and have been concerned about what happened, so I am glad to be able to involve myself in this debate. However, I will leave it to other noble Lords to comment on the specifics of the debate—I, too, have read the media on this—as clearly it raises a number of wider problems. At an early stage I pay tribute to all those people, both professional and volunteers, who work in the statutory services and in the charitable sector, who are doing a very good job at huge personal cost and with great expertise. We need to acknowledge what they are doing and affirm it before looking at some of the problems.

Between 500 and 800 people have been victims of disability hate crime in each of the last five years. Some of those will almost definitely have been people with ASD, although it is widely accepted, as has already been pointed out, that generally they are more likely to be victims than offenders. Indeed, one of the characteristics of ASD is that very often people give inordinate attention to obeying laws and rules, and find that the most comfortable context in which to operate.

Over the years I have known a number of people with ASD, and one family in particular whose son had Asperger’s syndrome. They are a deeply supportive family; I got to know the lad when he was in his 20s. On first meeting you would have no idea that he had been diagnosed with Asperger’s syndrome, but when you got to know him you realised some of the problems it was creating. He found it difficult to relate to other people; being a young man in his 20s, he was very keen to make friends with the opposite sex, but he simply did not know how to relate to girls. He would often say things that could be taken as totally inappropriate and easily misunderstood. He was very distressed by that, but simply did not have the ability to know how to relate in any other way.

In a more extreme way, on occasion he would lose his temper, which meant that, being a full grown man, he could appear frightening. I was a neighbour of his family, and sometimes he would run out of his house in a fury and knock on my front door. I learnt over the years how to simply give him a place to sit down and calm him down. In fact he was fine, but just needed some help at that point. I am telling your Lordships this account simply to illustrate that this is an immensely complex issue, particularly for people who are meeting someone, perhaps in extreme circumstances, for the first time. It is not easy for police or other health professionals always to recognise immediately who they are dealing with.

The National Autistic Society recommends that,

“the child or adult with ASD carries an identity card”,

as Faruk Ali was,

“stating their personal details, emergency contacts and an explanation of their condition”.

However, for someone with Asperger’s syndrome, who longs to integrate into society—and his family were trying to help him to do that; he had moved into a flat to live by himself—that can be quite humiliating, because it marks you out as different. That was precisely what he did not want to do.

I will raise three areas of concern. The first is on police training, which has already been referred to by the noble Lord, Lord Addington. I know, because I have talked to people involved with training the police, that they are already expected to cover a huge amount of different areas of training—they do not sit around with nothing to do. Having said that, it is important that part of that training is on how to recognise when you may be dealing with someone with particular needs, especially ASD. The Prison Reform Trust recommends that:

“Legal professionals and practitioners who undertake criminal work, members of the judiciary and liaison and diversion staff should be required to participate in awareness training in mental health problems, learning disabilities and other learning, developmental and behavioural disorders such as autism, attention deficit hyperactive disorder, communication difficulties and dyslexia”.

Does the Minister agree that that should equally apply to the police?

Secondly, we need to ensure that there are sufficient police interview advisers. Each police service has some of those, but again it is crucial that there are sufficient resources and that they are trained.

Thirdly, I will say a word about registered intermediaries. At the other end of the criminal justice system, we also need to ensure that people with ASD are given the right support. Back in 2012 the Prison Reform Trust published Fair Access to Justice?, which recommended that support should be made available for vulnerable defendants by registered intermediaries on the same basis as witnesses:

“The Advocacy Training Council … recognises that the handling and questioning of vulnerable people in court, in order to achieve best evidence, is a specialist skill; however, there is a lack of clarity concerning the provision and availability of intermediaries for defendants. While intermediaries appointed to support vulnerable witnesses are registered and subject to a stringent selection, training and accreditation process, and quality assurance, regulation and monitoring procedures, intermediaries for defendants are neither registered nor regulated. The practice of ‘registered’ and ‘non-registered’ intermediaries—potentially in the same trial and paid different fees—is anomalous. Intermediaries should be introduced into the statutory provision of special measures for vulnerable defendants”.

Finally, does the Minister agree that this recommendation is not only important but needs to be implemented?

My Lords, a young Japanese boy by the name of Naoki Higashida wrote a book entitled The Reason I Jump. It should be basic reading for anybody in public service who has to deal with other members of the public. It is just 198 pages long and is set out in a question and answer format. There are just 58 questions, each question no more than 10 words long, with the answer about 100 to 150 words long. Question 21 in the book is relevant to today’s debate. The question which some people ask him as an autistic person is:

“Why don’t you do what you’re told to straight away?”.

He answers:

“There are times when I can’t do what I want to, or what I have to. It doesn’t mean I don’t want to do it. I just can’t get it all together, somehow. Even performing one straightforward task, I can’t get started as smoothly as you can. Here’s how I have to go about things.

1. I think about what I’m going to do.

2. I visualise how I’m going to do it.

3. I encourage myself to get going.

How smoothly I can do the job depends on how smoothly the process goes.

There are times when I can’t act, even though I really, badly want to. This is when my body is beyond my control”.

That one sentence jumps off the page for me:

“How smoothly I can do the job depends on how smoothly the process goes”.

Just think of that sentence, and how easy it would be for the most basic and simple encounter between a police officer and an autistic person not to go smoothly, and to get out of hand.

The plain truth is that people with autism have no more desire to commit a crime than any of us. But what may start as an innocent inquiry—an encounter with a police officer—could lead to a crime being committed. A situation could escalate simply because the police, in the main, have no idea about, and lack sufficient training in dealing with, people with autism.

People with autism communicate in a way that is not familiar to most of us. The command of spoken language in a person with high-functioning autism or Asperger’s syndrome does not necessarily indicate their true level of understanding or social awareness. The wider implications of a situation may not be apparent to a person with autism, and they may not understand the kind of information they need to give in response to questioning. People with autism are also often unaware of the consequences of their actions or the effect their behaviour will have on other people, because they do not link cause and effect.

Put yourselves in this position, my Lords, and imagine that you are autistic and for one reason or another enter into a confrontational situation with a police officer. Imagine the police officer telling you to do something. They, rightly, expect you to respond immediately. And then remember that young man’s question 21:

“Why don’t you do what you’re told to straight away?”

And his answer:

“There are times when I can’t do what I want to, or what I have to. It doesn’t mean I don’t want to do it. I just can’t get it all together, somehow”.

People with autism are often very single-minded about their interests, and can be unaware of the effect that their actions could have on others, or that those actions could lead to them putting themselves or others in danger, or committing a crime. A person with autism, when faced with a situation such as arrest, or following an incident, may have difficulties in managing their emotional reaction. The response of the criminal justice system to this is crucial. But without appropriate training in autism, the situation could escalate, leading to inappropriate sanctions being taken against a person with autism.

The refreshed autism strategy, Think Autism, which the Government published last April, commits the Home Office to working with the College of Policing to update the mental health training for new officers, and to look at the feasibility of an autism marker being used on the police national computer, so that police officers can identify whether someone has autism, and make appropriate adjustments. That point was well made by my noble friend Lady Uddin, who we congratulate on securing this debate. The strategy was signed off by both the Home Office and the Ministry of Justice. If there were a marker on the police national computer, it could also be seen by other criminal justice system professionals, including prison and probation staff. So may I ask the Minister what progress has been made in this area, and what processes exist to roll out autism training to all police officers and prison staff, not just to new recruits?

Contact with the criminal justice system will have a significant impact on a person’s life. This is no less true of a person with autism. Such contact may also be a sign that their existing care and support is no longer working. For some people with autism, the situation may have been compounded over recent years by their no longer being eligible for support as a result of changing criteria—or perhaps they never qualified for support in the first place.

I share the disappointment of the National Autistic Society—here I must declare an interest as a vice-president of that organisation—that the revised adult autism strategy failed to highlight the need to reassess a person’s needs when they enter or leave the criminal justice system. So I ask the Minister: what steps are the Government taking to ensure that people with autism in prisons are identified and given appropriate support? I must stress that they need to be properly assessed to ensure that support will be there for their journey out of prison and back into the community.

Like the noble Lord, Lord Addington, I believe that training plays a key part in trying to overcome some of these problems. The questions and answers in the small book that I have spoken about should be essential reading for everybody working in the public sector. It would make a difference in solving some of these problems.

My Lords, I start my contribution to this debate by thanking my noble friend Lady Uddin for tabling this Question for Short Debate. In the light of the case of Faruk Ali, she raises an important issue about how people with autism are treated when accessing the criminal justice system as victims, witnesses, suspects or offenders. The role of victim support is important, and a proper understanding in this respect is also needed. I agree with what the right reverend Prelate the Bishop of St Albans said when he paid tribute to the people who work in the criminal justice system.

What is autism? As other noble Lords have said, it is a developmental disability that affects how people communicate with, and relate to, other people. It also affects how they make sense of the world around them. A person with autism may display a number of characteristics, which can include, among other things, being unable to read social cues, appearing to lack empathy, behaving in what would seem an odd or inappropriate manner, having difficulty in understanding tone of voice or facial expression, and making literal interpretations of figurative or metaphorical speech. They may also become extremely anxious because of unexpected events or changes in routine.

It may not be immediately obvious if someone has autism. Unusual behaviour may invite the attention of others, but it can also be said that autism is a hidden disability. People with autism do not always understand the implications of their actions or the motivations of others, and they may not learn from past experience. There are examples of people with autism being victims of crime because they are not able to deal with the situation and avoid becoming a victim. I read about the example of a person with autism who understood that it was important to avoid dark places with few people around in the late evening or at night. But they were unable to cope with the situation of being threatened by a gang in the High Street on a busy Saturday afternoon.

Only a small minority of people with autism come into contact with the criminal justice system as victims, witnesses, suspects or offenders. But it is important for people in authority to have a proper understanding of autism and to deploy effective strategies on an individual basis to ensure clear and effective communication. Some people with autism find it difficult to make eye contact, and that could, in certain circumstances, be misconstrued as being shifty or dishonest, for example. People with autism are individuals, but they all experience difficulty with social interaction, social communication and social imagination. They may not always be easy to recognise. Where a person, on coming into contact with the criminal justice system, displays unusual behaviour, it is important for the person in authority to consider whether the person has autism, and where they are on the autism spectrum.

People with autism often find unexpected or unusual situations very difficult. Encountering a situation that involves anyone from the criminal justice system or the emergency services is just the sort of situation that could be very difficult for a person with autism. My noble friend Lord Touhig gave us an excellent example of how difficult it could be for a person with autism to deal with the criminal justice system.

When the noble Lord, Lord Faulks, responds to the debate, it would be useful if he could explain what advice and guidance is given to professionals from the criminal justice system on adopting effective strategies for dealing with autism. Is he confident that police forces have fully understood the condition, and the steps they need to take when dealing with a person who has this disability, in whatever context?

It appears to me that more could be done to raise awareness among professionals in the criminal justice system. I read one report about a victim of crime with autism who was viewed as someone who would make an unreliable presentation in court, so the case against the suspect was dropped. It could of course be that the people who questioned the victim did it in a way that did not enable the victim to tell their story. Instead—unintentionally, I am sure—they caused that person stress and made it impossible for them to get their points across effectively, and they were denied justice as a consequence.

Organisations such as the National Autistic Society run bespoke courses for professionals in the criminal justice system. Does the Minister know what the take-up of such courses is, and what the Ministry of Justice is doing to encourage greater take-up? Has the ministry thought about talking to the Home Office and seeing whether at least one officer, if not more, in every police station has been on a course designed to equip them with the skills to communicate effectively with a person with autism?

The noble Lord, Lord Addington, made an important point about training in the criminal justice system. Perhaps the noble Lord, Lord Faulks, can tell us what he understands the Crown Prosecution Service does to communicate and deal with the needs of people with autism it comes into contact with. Is any discussion taking place with the legal professions to ensure that they have an appropriate appreciation of the condition and of how people with the condition need to be communicated with? My noble friend Lord Ponsonby of Shulbrede made an excellent contribution highlighting what happens when a person with autism appears in a magistrates’ court and the problems that delays and other issues cause them.

The autism alert card produced by the National Autistic Society is a useful initiative and can help people when dealing with someone with the condition, although I understand the point that the right reverend Prelate made in that respect. I do not intend to comment on the Faruk Ali case as IPCC proceedings are under way. In conclusion, I again thank my noble friend Lady Uddin for raising this important matter in the House today.

My Lords, I am grateful to the noble Baroness, Lady Uddin, for securing this debate, and raising the important issue of access to, and support from, the criminal justice system for those with autism spectrum disorders. It is, of course, a spectrum. As has been rightly said, those with higher functioning autism can be particularly difficult to identify. Generally, autism can sometimes be difficult to identify or diagnose.

A lot of information is available about Mr Faruk Ali’s case. However, as a number of noble Lords have indicated, the two police officers were cleared after a trial relating to the incident which took place on 20 February. Both officers remain suspended pending the outcome of a misconduct investigation. In those circumstances, it would be inappropriate for the Government to comment further. However, I have no difficulty at all in saying that we expect the highest standards of professionalism in all aspects of policing and across the criminal justice system and I am extremely happy to condemn any racist or discriminatory behaviour by any police officer in any circumstances. The decision as to whether to take further action against these officers is a matter for the Independent Police Crime Commission and the Crown Prosecution Service.

I am well aware of the need for all parliamentarians, and especially those who work in public services, to be more conscious of the needs and experiences of people with autism. This issue is particularly important as regards the criminal justice system. It is thought that around 2% of the general population have autism, but I recognise that the figure within the offending population could be much higher as a percentage.

The Government’s autism strategy, which was updated in April 2014, contains specific actions in relation to criminal justice. The Ministry of Justice is a signatory to that strategy. The update contains new obligations for the Ministry—obligations which I am pleased to say we are taking forward. These include the commitment to establish a cross-government group to take forward issues with autism and the criminal justice system. I am pleased to say that although the system encompasses a large number of players, as noble Lords will understand —for instance, the police and prosecutors, to which the noble Lord, Lord Kennedy, referred, as well as courts, prisons and probation—my department is leading on this work and chairing the group.

We also agreed, as part of our commitments in the strategy, to examine and share good practice in prisons towards prisoners with autism. We are also considering whether autism awareness training can be made available to probation staff. We are having conversations with the new independent Probation Institute about this. As part of our strategy, we agreed to make information available to potential bidders for contracts for the new providers of probation services under our transforming rehabilitation programme.

All the strategy objectives have one thing in common: they are helping with our aim to ensure that the criminal justice system can adapt to cope with people with autism, whether they are suspects, victims or witnesses. As a number of noble Lords have said, training is key to this. All staff in the criminal justice system cannot be expected to be subject experts in every disability they may encounter, as my noble friend Lord Addington said, but they should at least be on notice that there might be a problem, which I think was the burden of his remarks. For example, a person whose possibly different perception of social norms may get them into trouble and the chances of someone in the criminal justice system encountering someone with autism is therefore significant.

As part of the autism strategy, the Home Office has committed to ensuring that the College of Policing develops better training for the police in recognising autistic spectrum disorders. I am pleased to update noble Lords on the fact that the college now has a full-time mental health co-ordinator and, arising from that role, it has set in train important streams of work around the development of new authorised professional practice guidance on mental health, including autism. The new guidance should be available to consult in the near future and we hope will go live and be public by autumn 2015.

The guidance for police will be underpinned by the first comprehensive package of training, pitched at different levels of detail and relevance for different ranks and roles of officers across the service. These training packages will be relevant for the promotion process and professional development, right up to the Police National Assessment Centre, which selects senior officers. This training is delivered through a formal training board, including the police national curriculum manager, and has already highlighted the need to understand the extent to which police training should confirm condition-specific awareness.

It has been recognised that these disorders may need to affect a policing response. The work is at an early stage and will develop in 2015, with a view to training products being ready for piloting in 2015 and completed for consumption nationally by the end of the first quarter of 2016.

As to prison officers, NOMS has a Prison Service instruction, a set of binding rules for prisons which covers autism. It includes a specific section to help people understand autism as well as a section on communicating with people who have learning difficulties or related disorders because it is sometimes the case that there is comorbidity, as it were. There may be autism and other difficulties within one person.

Some prisons have developed their own autism strategies and sets of training materials—for example, the excellent work that is being done at Dovegate prison. As I mentioned earlier, my department is very keen to find best practice among local practitioners and to share and promote this more widely.

I am glad to say that within the Ministry itself training is available for staff on autism. I know that a number of charities offer training on interacting with people with autism, written specifically for criminal justice professionals. I hope that this will mean a real improvement in the experiences that autistic people have when they interact with the criminal justice system.

Liaison and diversion schemes, mentioned by the noble Lord, Lord Ponsonby, and others, are key to this. It is, of course, crucial that we are able to identify autism. Twenty- five million pounds has been invested across England to fund mental health professionals in police stations and courts to establish liaison and diversion services. These services identify people when they first come into contact with the youth and adult criminal justice systems and help support the most appropriate outcomes. They are available 24 hours a day and ensure that across the trial areas they will be provided with the same level of care and service.

By identifying someone with a health problem such as autism when they are brought into a police station or involved in court proceedings, liaison and diversion schemes can ensure that an individual is supported through the criminal justice system and into the right mental health or social care service. We have strong anecdotal evidence that they can reduce the overall length of court proceedings—a point raised by the noble Lord, Lord Ponsonby—through the provision of timely reports to magistrates, limiting the number of court hearings, and probably adjournments, and therefore avoiding periods on remand. They should be passed between authorities and should follow the individual through the criminal justice system to probation or prison services, so that from the first encounter, quite apart from the question of flagging this on a computer—that important point was raised and is being looked into—there is not, as it were, a gap in people’s awareness.

There is a real opportunity here for the liaison and diversion service to help courts do their job. The case mentioned by the noble Lord, Lord Ponsonby, was a considerable challenge to the court, by the sound of it. It almost sounded like an exam set for a judge in all the most difficult problems a court would have to confront. Even the question of unfitness to plead, I dare say, would have come before the court on that particular occasion. I am sorry that there were delays. Of course, delays can sometimes be encountered in finding the appropriate expert to make the diagnosis or identify the disorder. It can still take too long. I have had briefings from the Department of Health on this issue. It has commissioned the National Institute of Health and Care Excellence to produce guidance which will lead to quicker diagnosis. There is a role for NHS England in looking at people’s experience of diagnosis, and the importance of timely and effective services will be highlighted in a forthcoming statutory guidance on autism for local authorities and the NHS.

The new model—the liaison and diversion model—has already seen more than 10,000 children, young people and adults, come through the service while going through the justice process. The model will be independently evaluated to inform a business case for services to cover all of the English population by 2017-18. As to victims and witnesses—as in the case raised by the noble Lord, Lord Ponsonby, there can be times when both a victim and a defendant may need support—it is very difficult for a court and all those taking part in the criminal justice system to come to the truth and nevertheless respect the rights of all those involved in the process.

The Government are committed to providing support for all types of vulnerable and intimidated victims and have a range of special measures in place to support them in the criminal justice system. Of course, the courts have an inherent right to ensure that someone on the autistic spectrum has appropriate facilities to assist them in their defence, including the use of intermediaries. There is guidance given to judges as to this use of special measures and the access to materials on the private judicial websites. If they are confronted with difficulties they should be aware of the possibility—and indeed they are—of helping those who have difficulties, although, as I said, the information should be conveyed by the liaison and diversion services or through the probation service in any event.

The registered intermediary should help them communicate their evidence. Intermediaries are communication specialists to help vulnerable witnesses provide their best evidence. They are one of the special measures introduced in the Youth Justice and Criminal Evidence Act. In 2014, 499 requests for a registered intermediary to help witnesses with disorders such as autism were received. In addition, victims and witnesses can also expect to be able to use communication aids, devices such as books and symbol boards to help them communicate when giving evidence in court.

A new victims’ code implemented in December 2013 sets out the support and services that victims can expect to receive from agencies throughout the criminal justice process. It also sets out that victims in the following three priority categories of crime are entitled to receive enhanced support and information: victims of the most serious crime; intimidated or vulnerable victims; and persistently targeted victims, which can be a particular feature of those who are on the autistic spectrum. The code entitles them to receive this enhanced support including the referral to specialist organisations.

The police and the Crown Prosecution Service have a duty under their code to assess the victims’ needs at an early stage—this is a partial answer to the noble Lord, Lord Kennedy—and to refer any eligible victims for enhanced services for pre-trial therapy where appropriate. So every single player in the criminal justice process should be equipped—and should be better equipped—to identify and help those with autism. In addition, of course, victims with disabilities, or a close relative, can nominate a family spokesperson as a single point of contact to receive services under the code.

The conclusion that I invite the House to reach is that there is an increasing appreciation by the Government —increasing joined-up thinking—that the criminal justice system must respond to the challenge of autism. I genuinely think that the Government are taking this seriously and that the access to and experience of the criminal justice system for those who have these disorders should improve in the future.

This is a very sad case, whatever ultimately may be the determination of the facts. If it has done anything, it has perhaps helped stimulate this debate and further reinforced the importance for all those in the criminal justice system to be aware of autism, the challenges that it confronts, and responding appropriately to them.

I thank all noble Lords for their contribution to this useful debate.

Local Government Finance Settlement

Motion to Take Note

Moved by

To move that this House takes note of the Local Government Finance Settlement and its implications for the future of local government.

My Lords, I look forward to hearing the maiden speeches of the right reverend Prelate the Bishop of Southwark and the noble Baroness, Lady Pinnock, of Kirklees in Yorkshire. They, and perhaps others of your Lordships’ House, may recall a well known broadcaster from Yorkshire—one Wilfred Pickles, whose catchphrase was, “Give him the money, Mabel”. The local government world would be surprised if the Secretary of State proved to be related, though the Chancellor might be forgiven for seeing in him the very reincarnation of his namesake. This after all was the first Minister across the door of Number 11 in 2010, offering up to the Treasury the largest cuts of any government department.

Year after year the story has been the same: injury compounded by the insult of meaningless consultations and a last-minute announcement of the annual settlement, this year on the very last day before the Recess. I have had the privilege of serving as a member of Newcastle City Council since May 1967 and I declare my interests in that capacity and as a vice-president of the Local Government Association. I have lived through good times, difficult times, and bad times in local government, but I have never known a time when local government and local democracy were in such a desperate plight as they now are.

Even during the Thatcher era, Secretaries of State such as the noble Lords, Lord Heseltine and Lord Baker, and Lord Jenkin displayed a sympathy with local authorities and understanding of the importance in their role. Such, sadly, is not the case today. What is in some ways worse is the propensity of the Secretary of State not only to promote his obsessions—weekly bin collections or car parking charges, for example—at the same time as he presides over massive cuts, but also to suggest that the damage is not serious, that councils in general are sitting on vast reserves, or that the 50 helpful hints for savings he jotted down on the back of an envelope could avoid difficulty.

The reality, as the Secretary of State must well know, is very different. Capital reserves cannot be used for revenue purposes, revenue reserves must be available to meet contingencies as they arise or be held on a prudential basis, and of course, once spent, are no longer available. Councils of all political colours are in dire difficulties even after making significant efficiency savings. He must also know of the claims of the Under-Secretary of State, Mr Hopkins. Like Mr Pickles, he is a former leader of Bradford Council, though unfortunately both cast from a very different mould from that of the noble Baroness, Lady Eaton, from whom we will hear later, who was also a leader of that council. Mr Hopkins, after all, stated that,

“the settlement leaves councils with considerable spending power”.

That claim is grossly misleading. In the first place, the LGA point out that real-terms cuts since 2010 will reach 40% by the end of 2015-16. In fairness, the National Audit Office figure is a little lower at 37%—but there is, of course, more still to come.

Secondly, the Government's claims about spending power—an artificial construct designed to conceal the reality of what is happening—are utterly misleading. The Government claim a reduction in spending power of 1.8%. But that includes council tax income and the NHS element of the better care fund, which in fairness is a good policy, but which represents money that is not the councils’ money to spend. If those two elements are taken out, the cut becomes 8.8%, and this rises to 11.8% if ring-fenced funding and social care cost new burdens are taken into account, making a like-for-like comparison cut not of 1.8% but 11.8% in all.

This does not, of course, reflect equal misery all round. Hackney’s spending power, a deeply deprived inner London borough, drops by £199.50 per head, and Birmingham’s by £156.77, but Surrey’s goes up by £56.42—and even then, the Conservative leader of Surrey complains that it is not enough. Wokingham, which is frequently referred to by Ministers as a comparator with Newcastle, also gets an increase of just under £50 per head.

The National Audit Office is critical of the Government’s use of spending power, which it describes as,

“an indicator that combines government funding with council tax income”,

and which does not give,

“a measure of the scale of the financial challenge facing local authorities over time”.

Local auditors moreover, the NAO reports, say that 52% of single-tier and county councils,

“are not well placed to deliver their medium-term financial strategies”.

Worryingly, the NAO asserts that:

“The Department has a limited understanding of the financial sustainability of local authorities and the extent to which they may be at risk of financial failure”,

and, moreover,

“does not monitor the impact of funding reductions in a co-ordinated way”.

Of course it, and we, no longer have the benefit of the Audit Commission’s views of these matters since it was abolished in a fit of Pickles pique.

On top of this, there are instances of sleight of hand in the published figures. A £200 million cut in the grant to education authorities for central services for schools is not reflected in the declared spending power, and the £70 million New Homes Bonus going to the Greater London Authority is still included in the spending power figures for the London boroughs, while the Government’s better care fund is not all spent on social care or other services commissioned by local councils.

A number of areas of general application are worrying. In relation to business rates, councils have made a provision of £660 million for back-dated appeal losses, representing local government’s 50% share of the cost, as decreed by the Government, who received all the money in the first place but are meeting only half the subsequent bill. If anything, this provision underlines the need for a prudent level of reserves.

Council tax support sees a £1 billion cut, which is certainly going to make life even more difficult for low-income and, frequently, working households, and the councils which will have to attempt to recover unpaid council tax. Moreover, the Government are cutting local welfare assistance, which partially cushioned the blow of the council tax support cut and simply absorbed it into the funding assessment, which will therefore be at the expense of other services. The LGA has rightly sought the restoration of this funding.

What does all this look like on the ground? Twelve north-east councils stand to lose £240 million in spending power—that artificial measure—next year, on top of a 40% cut in grant thus far; and that is happening in the region with the highest unemployment in the UK, and where the council tax yield is much less than in the more prosperous areas. By 2017-18 Newcastle’s budget will have fallen from £280 million in 2011-12 to £207 million, with a reduction of 48% in government funding.

The pattern is similar in all the metropolitan areas, many of the inner London authorities, and many other places such as seaside towns. However, breaking down the figures in service terms illustrates the problems more vividly. Children’s services, for example, have seen the number of looked-after children increase by 11% in five years, but by 33% in the north-east; yet government funding for core children’s services has suffered an estimated cut of £2 billion, or about 50%, including a cut of 17% or £0.5 billion for 2015-16 alone. Local welfare assistance schemes, a lifeline to the most vulnerable, have been scrapped by the Department for Work and Pensions, and £129 million is now included in the overall settlement but is not ring-fenced and has to be seen in the context of the 11.8% cut overall.

Sure Start everywhere faces cutbacks, although in Newcastle we are managing to maintain provision in the most deprived areas by a reconfiguration of the service. Yet the pressures are palpable across a range of services, from adult social care to the state of the streets and open spaces, from threatened cuts to policing and fire services, and from the provision of library services—although we in Newcastle have managed to retain a reduced service in all but one of those threatened with closure by working with residents’ groups and other partners—to a much reduced youth service. The council faces a cut of £26.7 million in government funding next year as we struggle to meet the rising costs of demographic change, particularly in the light of an increasing number of elderly residents, and huge pressures on children’s services.

The voluntary sector is also under enormous strain—I declare my interest as president of Age UK Newcastle—and unable to meet the increasing demands on it. We are, in 2015, a city with eight food banks and seven low-cost food centres, by no means the only area with such a necessary provision. There are also 5,376 house -holds paying the bedroom tax, which is costing them and the city’s economy £3.75 million this year. Some of these cuts will lead to greater expenditure elsewhere—notably but not exclusively in the National Health Service, as well as in pressures on other services, which is reflected, for example, in a failure to equip youngsters to participate in the local economy. That also impinges on the general welfare of the area and the success or otherwise of local business—as well as, perhaps, on the criminal and family justice systems.

What we desperately need is a fair system of distributing financial support for local government based not on spending power but on spending need, accompanied by the revival of Total Place, or place-based budgeting as it appears to be known now. It is a concept developed by the Local Government Association, adopted by the previous Government with the full support of the Treasury and the Department for Communities and Local Government at that time, but disappointingly not necessarily taken on board by other departments. In any case, it has withered on the vine over the past few years. Under this approach, one would look at all relevant public spending in an area, at the appropriate local level, thereby enabling both efficiency savings and reduced overheads, but essentially allowing a more integrated and effective approach to issues and problems that necessarily cross departmental and service boundaries —whether in Whitehall or the local town hall.

The Motion refers to the settlement,

“and the implications for the future of local government”.

Thomas Hobbes famously described the life of man as “nasty, brutish and short”—epithets which some might be tempted to apply to me from time to time. Unless there is a change of course, I fear that the future of local government is destined to be depicted in those sombre Hobbesian terms.

I hope that the Government will, in their final settlement announcement in February, reflect the widespread concerns expressed across the whole of local government, and of all political colours, as well as by independent bodies, those who deliver services and those who assess their efficiency, and that a more realistic appraisal of what is happening up and down the country will result. I do not have any great confidence about that because the department is not representing, as it were, local government in Whitehall but is merely an instrument for cutting services. That is in part, apparently, in the pursuit of an ideological approach of down-sizing the state in general and local government in particular. That does no service for the people who need our help—whether they be deprived individuals in deprived communities or businesses that need a thriving local economy and investment in skills and infrastructure. The prospect is indeed gloomy. It is not too late to begin to reverse it and, in particular, to redress the grotesque inequalities perpetrated by this Government in their distribution of cuts. We are living in difficult times obviously, but the burden should not be borne by those who are least able to bear it. That has been the hallmark of the Government’s approach to funding local government in the past five years, and it is high time for a change.

My Lords, it is courtesy in your Lordships’ House to say what a pleasure it is to follow the previous speaker. I have heard pretty well all the speeches that the noble Lord has made on the local government finance settlement for at least the last 25 years. I hope your Lordships will understand that my pleasure in following him has been just a little diminished over that time, perhaps matched by the predictability of what he says each time—which, I am bound to say, is not that different, regardless of who is in government.

I have one particular point of agreement with the noble Lord, which is in regard to his comments on whole-place, total-place or community budgeting or—as he rightly says—whatever the current title happens to be. It was introduced by the last Government as total-place and fairly enthusiastically embraced by my coalition Government, albeit with a change of name to community budgeting—but I share his disappointment at the very considerable lack of progress at a time when it is actually needed even more than it was when it was first introduced. That is down to a lack of leadership—local, perhaps, but most certainly national and at departmental level. I hope that the Minister will be able to comment on that.

It will be my pleasure to hear today’s two maiden speeches: one from the right reverend Prelate, who I could possibly describe as my local bishop, and the other from my noble friend Lady Pinnock who is also a very long-time local government friend of mine. We all look forward to that. I declare my interests as a vice-president of the Local Government Association and as a signed-up member of the local government party for a very long time. I thank the LGA, which has gone to great lengths with its excellent briefings that will, I am sure, inform the debate. However, I am one of only two London local government Peers speaking in this debate; the other is the noble Lord, Lord True. I acknowledge that the Minister has a distinguished record in London local government, but I felt that he might feel a little inhibited in replying to the debate solely on behalf of London.

In the three minutes remaining to me, I will concentrate on the six points that the London councils have raised, which are probably shared across local government to a greater or lesser extent and with different emphasis. The first is the question of local welfare assistance and the funding for it, to which the noble Lord, Lord Beecham, referred. We strongly support the wish that this should be additional funding, not included—as it is—in the settlement. The Liberal Democrat Communities and Local Government Committee, which I co-chair, has actually written in response to the consultation to that effect.

London Councils calls attention to the lack of transparency in the proposals and calls on the Government to publish a full breakdown of the local government resource departmental expenditure limits alongside the settlement. We are all used to year after year of completely different figures coming from the department and from local government. Frankly, it does not matter who is in government: there is always that difference and it is almost impossible to match the two. Is it really beyond the wit of government and local government to agree on the figures, even if they do not agree on the outcome?

My next point refers to the revenue spending power calculation. I am a little surprised that the noble Lord, Lord Beecham, made so much reference to it because it is, frankly, largely discredited within local government. It certainly means different things to different people in different places. So, again, the call from London Councils is that, if we are to continue to use that reference, local government and central government should try and get together with a shared definition of what “spending power” means.

Business rates, and the business rates retention scheme, are important issues in London and indeed everywhere. We welcome the return of some of that rate to local government. I believe that it was the intention, certainly in the Department for Communities and Local Government, that that share and proportion should increase over years, and I hope that the Minister will be able to tell us how that increase is happening and what the current Government, at least, envisage will be the future for the return of the business rate to local government in greater and greater proportions until we reach 100%. I would also add the return to local government of the power to actually determine the business rate.

Lastly, but possibly most importantly, is what London Councils calls the disproportionate impact of spending cuts on London local government. By 2020, this looks like being no less than 70%—the impact of which is considerable. We are to discuss the future of local government: I hope that much of this debate will actually be about the future of local government. Unless there is a very radical change in the relationship between local and central government, with more power, responsibility and power to raise funding devolved to local government, I do not think that local government, in any meaningful sense, has a future.

My Lords, I welcome this debate on the implications and challenges of the local government settlement. On these Benches, and indeed in the whole House, we look forward to the maiden speeches of the noble Baroness, Lady Pinnock, and of my colleague and friend, the right reverend Prelate the Bishop of Southwark. I look forward to that for many reasons, not least that he was a senior curate in the diocese that I now serve. He is the most recent in this House of a long line of able clergy nurtured and grown in the Diocese of Portsmouth.

I will focus on local welfare provision, which is a vital service to people in crisis, many of whom are very vulnerable. A single mother in Portsmouth, escaping domestic violence, lived for a while in overcrowded conditions with her mother. She successfully applied for her own accommodation but it was unfurnished, so she and her children shared a sofa-bed and lived on sandwiches and takeaways. The local council, through the Government’s allocation for local welfare provision, awarded her money for beds, a cooker and a fridge freezer. That sort of situation is repeated many times in my see city of Portsmouth and in other places. A modest award of a few hundred pounds provides the essentials for the decent nourishment and reasonable comfort of a mother and children.

I want to place on record my relief that the settlement announced in mid-December includes notional provision for the continuation of local welfare provision. I express both relief and gratitude but there are two caveats—two disappointments. First, the allocated amount of £129.6 million is substantially lower than in the past two settlements. Secondly, there is no obligation on councils to use the funding for that purpose; even the reduced allocation is not ring-fenced. It is possible to make a strong case for every item of local authority expenditure. However, this emergency local welfare provision surely should be an exceptional case. First, this is emergency help to very vulnerable people in crisis situations. Secondly, we are all aware that the tightening impact of welfare reform on mainstream benefits has increased the need for, and importance of, an effective safety net. Thirdly, the heavily reduced allocations for local welfare provision since 2010-11 means that in my city of Portsmouth, for instance, the amount spent since then has declined from £900,000 to £440,000, just over half. My anxiety is less about that particular decline and more about the considerable variation in local authority practice around the country.

Only ring-fenced allocations will commit the welcome, although reduced, resources to guarantee this crisis provision continuing. A relatively small amount of non-discretionary funding would not significantly restrict the local government autonomy which many of us seek to preserve. Alongside the moral case is an economic rationale. Portsmouth City Council’s review of the provision concluded that this modest expenditure saved substantial costs elsewhere. The loss of the provision increases demand for mental health services, for children’s social care, for temporary accommodation provision and debt advice. Preventing a tenancy breakdown, for instance, saves the authority nearly £7,000 per eviction.

On moral, economic and practical grounds, I make a modest request about a small but significant matter in this settlement and invite the Government, if they cannot maintain the level of local welfare allocation, at least to ring-fence it and ensure that those in crisis need are helped.

My Lords, I declare an interest as leader of a London borough. I thank the noble Lord, Lord Beecham, for initiating this debate and I, too, very much look forward to the maiden speeches that we will hear.

During this short debate, Britain will borrow over £25 million more. To say that the public sector must go on making savings should be blindingly obvious and, amid the many strictures that we heard from the noble Lord opposite, I heard no promise from that Front Bench to reverse the downward squeeze on spending. Doubtless the noble Lord, Lord McKenzie of Luton, will correct me if I am wrong by laying out Labour’s plans to increase local government spending.

Gaps cannot be filled by new taxes, such as the vindictive homes tax that Mr Miliband seems to have picked up off the back of a rather tatty old lorry that has been abandoned by his penfriend, Dr Vince Cable. I agree with the noble Lord, Lord Mandelson: it is unreasonable to ask Londoners to pay ever more on the nominal value of homes, many of them heavily mortgaged. The average terraced house in Richmond costs £944,000 and the average semi costs £1.2 million. Already, people buying these homes face higher levels of stamp duty set on property over £937,000 in the Chancellor's otherwise very welcome stamp duty reform. These are not super-rich people; they are average people who have often made more than average sacrifices. I submit that they cannot bear more.

My right honourable friend Mr Osborne has done a fine job in handling the economy. He is also to be thanked for supporting the freezing of council tax, which is of enormous value to millions of families. Richmond has frozen council tax since 2010 and we intend to freeze again this year. That reflects greater efficiency, but the Government have made a sustained contribution in freeze grant and deserve recognition.

That is the background to tough but necessary decisions in this settlement. Yes, there is a hard squeeze on, but even in the Newcastle of the noble Lord, Lord Beecham, the online budget report tells me that it plans to spend another £5 million next year on buying new council vehicles and a further £5 million on upgrading IT. It is not enough to peddle on the doorsteps that, “It’s all the fault of Mr Pickles”. We all have to face hard challenges, and all local authority leaders have. We have to do even more to assess priorities—the right reverend Prelate set down important challenges—to pool costs and to share services with others. We must do that.

However, I believe in the fundamental value of local choice. Local government deserves more respect than it is sometimes given. If other parts of the public sector had been as good at cutting costs as councils, we would be far better off. Frankly, in my submission, a team of good local government finance directors, paid far less than top NHS bosses, could cut a swathe through the waste and inefficiency that is protected in the NHS while fully safeguarding services. The Secretary of State loves having a pop at local authority chief executives. I do not actually think that helps very much, but I hope that further thought will be given to the details of the new plan to cap public sector redundancies. It will not help with the major restructuring at the top that will often be needed. I hope that can be reconsidered.

I conclude with three requests. The first is about spending power. Richmond is given what is described as a 1.7% increase but, as others have said, this is nonsense because it includes pre-existing health money that is not available for councils to use, and the spending power measure ought to be quietly dropped. Our real reduction in grant and business rates is nearly 7%. Secondly, can local authorities have the power to set planning fees, albeit on a cost-recovery basis only? Currently my taxpayers subsidise developers to the tune of £1 million per year, or 1% on council tax. I wish that that could be looked at.

Thirdly, I point to an emerging problem in education that already affects us, but will affect others. Our DSG grant does not meet the needs of special needs pupils, and we will overspend by more than £1 million. We have England’s best primary school results. Given that, it was surprising for my chief executive and director of education to be summoned by a DfE Minister, Mr Laws, to be told that he was concerned about Richmond’s performance. I would like my Ministers to have better things to do. I urge my noble friends in the Department for Education and Skills to consider a more flexible and responsive method of calculating the DSG high-needs block, including an element of pupil-led funding.

These requests show that we will all have practical issues to raise within the funding formulae. However, it is an inescapable reality that savings must continue to be made. The Government are right, and we must act accordingly.

My Lords, it is a great pleasure to join in this debate. I congratulate my noble and very good friend Lord Beecham, who is from a neighbouring authority. When my noble friend was leader of the old AMA, and then of the new LGA, I was Local Government Minister during the first Labour term from 1997. We did not always agree, but we always had a good relationship. His absolute passion for local government is well known and acknowledged in this House. It is significant that so many Members of this House have kept that commitment to local government, and in that light I really look forward to the maiden speeches that will follow shortly.

As I say, I was Local Government Minister for four years, so I know about formulas and how they are tweaked. I know the sort of information that Ministers get, making clear the potential for fundraising in each area, what one tweak will do to that and all the rest. My father, who was also involved in local government in the old Department of the Environment, used to say that only three people in the country understand this formula and they all disagree. There is a lot in that too.

Essentially, this is about the fact that in this country too much money is held at the centre. Some of that has historically been for quite good reasons, or for reasons that we have always defended but actually need to have the bravery to think about. The reason why so much has been controlled centrally is that the Government have priorities. They want to make sure that those priorities are reflected, and they are committed to sharing money out around the country in order to ensure that those priorities are met. That makes the main issue how the money is divided up to get fairness. Fairness has to reflect need, and I suggest that that is the problem we are discussing today. How do you achieve such fairness with what will be a reducing amount of money?

I want briefly to talk about the authority I live in and where I served on the county council for a brief period, shortly before I became one of its Members of Parliament: Durham, which is now a large unitary authority. Since 2011, Durham has seen its money from central government reduce by £137 million, which is not easy to deal with. By 2018-19, the Red Book states that the reduction will be £250 million, which is not an insignificant amount. The area is hugely rural, with the lowest rate of car ownership in the country, some of the highest unemployment rates and, of course, one of the largest ageing populations because many young people go elsewhere. The welfare assistance that the right reverend Prelate the Bishop of Portsmouth talked about is due to be reduced in Durham by £1.9 million by the end of March this year. Actually, none of us can find it in the allocation; we have been told that it is there but no one can find it, including the chief finance officer.

I simply challenge how the Government acknowledge need and how an authority like Durham can see such large reductions whereas counties like Surrey, with nothing like the level of need experienced in Durham, have seen such a large increase in the money that they are getting. We all have different views of fairness but I do not know of any external commentator who is saying that the Government have put in place a system of fair distribution. It means that inequalities will increase and, as we discussed in the House yesterday, consequences will arise from that, particularly in different parts of the country.

What about the future? I am clear that we need much more devolution, but it must recognise need. We need much more public service reform but that, too, has to be done on the basis of being fair in the end. In the town where I live at the foot of the north Pennines, which has a population of around 12,000 people, we have just lost our only supermarket and, as a result, the post office and the petrol station. I do not believe that anyone living in a town of that size in the south would be able to say that. This is what unfairness brings, and the Government have a responsibility to pay heed.

My Lords, I am fortunate indeed to have been given the great privilege and wonderful opportunity of joining your Lordships’ House. Over the past few weeks, I have been listening and observing in this historic Chamber, and I am left wondering how my background and experience can add to the wealth of knowledge here.

Some 30 years ago, with a young family and a career in teaching, I was motivated to become involved in saving our local school from closure. The success of this campaign gave me a taste for being where the action is. After 28 years’ continuous service to my town of Cleckheaton in West Yorkshire as its elected councillor, I can still say that being able to serve the community where I live is a role I love.

My supporters, my noble friends Lord Shutt of Greetland and Lady Bakewell of Hardington Mandeville, have likewise devoted many years of distinguished service to their local communities and local democracy. I thank them for their patient help and support while I make many errors in your Lordships’ House.

When I first entered your Lordships’ House, I was overwhelmed by the grandeur of the buildings and the ease with which I got lost. I had nothing to fear as the doorkeepers, attendants and indeed all members of staff in all parts of the House have been unstinting in their time in helping me learn both my way around the House and the protocols. I thank them for that.

Kirklees Council, of which I was leader for six years, serves over 400,000 people in West Yorkshire, with the Victorian woollen towns of Huddersfield and Dewsbury at its heart, but including my own town of Cleckheaton as well as large rural areas best illustrated as the setting for the television series, “Last of the Summer Wine”. Noble Lords may remember that it was a sitcom about a group of elderly rabble-rousers, including a man called Clegg—something with which I am sure many on these Benches can empathise.

The finances of local councils have been complained about in each of those 28 years, and this year is no different. I can tell noble Lords about the impact on services for local people in Kirklees—for let us not make the mistake of presuming that reductions in funding of this severity will not have an impact on services provided.

One thing I learnt early on as a councillor is that it is virtually impossible to compare funding year on year, simply because of the changes that take place to different elements of the central government grant. The better care fund, the transfer of the public health function and the transfer of the council tax benefit scheme have added around £75 million to Kirklees’s finances—with, of course, the greater responsibilities that go with that. On a national scale, these significant transfers mask what has happened to funding via the revenue support grant.

In Kirklees, a total of £152 million of spending on services is being taken out of the budget between 2011 and 2018. Obviously, with schools’ budgets being ring-fenced, and my council rightly protecting as far as possible services to vulnerable adults and children, the cuts fall heavily on the other services on which people rely. The current Kirklees proposals to meet this budget deficit include a 15% reduction in spending on services for vulnerable adults; and, despite rising numbers, as a third of the council's controllable budget is spent on vulnerable adults, this expenditure has also inevitably had to be reduced.

Another proposal is to reduce the number of fully funded libraries from 26 to two, and to reduce spending on parks and open spaces by 30%, with the result that some recreation areas will not have their grass cut at all. Road maintenance has already been reduced by 15%, with the inevitable consequences for road users. Sponsorship of concerts and music education is being removed altogether. So local government in Kirklees is facing challenging times. This is confirmed by a report by the National Audit Office on the financial sustainability of local authorities, which states that local government’s spending power has been reduced by 25% over the life of this Parliament.

Our democratic reaction to this immense change could be hand-wringing. That may be satisfying but it will not get us very far. Those of us committed to providing essential services must think outside the box. As my noble friend Lord Tope said, one thing we need to do is seriously loosen the ties with central government, find new ways to raise local finances, and challenge central government to devolve responsibility for services such as Jobcentre Plus and community health services. If those measures are combined with greater accountability, our councils may—just—be able to survive the current financial desert and start to bring new vitality and involvement in local democracy once more.

My Lords, I very much welcome the noble Baroness to this House. Everybody in the House will appreciate her speech, her passion for local government and for her local community and the problems that are faced there. In her speech she combined a lightness of touch with very serious content. The House will appreciate that and the other contributions she will make. Of course, she is from Kirklees, which used to regard itself as the greenest council in the country. I had the privilege of serving on the board of the Environment Agency with two former leaders of that council—one Labour, Sir John Harman, and one Tory, Robert Light. Now the noble Baroness is joining me, I have the full Kirklees set. I think her presence will be appreciated by the whole House.

My positioning between two maiden speeches does not in practice mean that I need to be non-controversial. Indeed, that is the end of my consensual stuff. Like my noble friend Lord Beecham, I am profoundly despondent about the prospects for local government as a result of the strategy being pursued by George Osborne and Eric Pickles. Their strategy seems to show—not just in this year’s settlement but in what they have done already and what they intend for the next five years—that they intend to ensure that the bulk of the cuts in public expenditure and a disproportionate amount of the costs of austerity will fall on local authorities and thence in practice on those who depend on their services. Within the diminishing total central support for local government, there is a deplorable—and, I would say, systematic—favouring of better-off areas over more deprived areas. If the Government, whoever they are after the next election, blindly stick to this strategy for another five years, contrary to all the talk about localism and devolution, we will have to adapt to a much diminished role of local authorities in our national life. That would be extremely unfortunate.

My noble friend Lord Beecham has spelt out what this year’s cuts actually mean. I agree with the noble Lord, Lord Tope, that the definition needs pinning down, but the Local Government Association’s view is that a 1.8% cut actually amounts to an 11.8% cut in things that the local authorities themselves can control. Whatever the precise statistics, it is clear from next year’s figures that there will be very substantial cuts in services—in schools, police, fire and, as the right reverend Prelate said, local welfare assistance. Spending on public health is being frozen and, in housing, the top-slicing of the new homes bonus effectively means that there is a cost to urban authorities to benefit the shires. If we look at the long-term effect of cuts in support over the past five years, by the end of next year there will have been a 40% cut since the Government came to power, and that is intended to continue. That contrasts with slightly over a 1% cut of total government expenditure. It is therefore clear that the pain is concentrated on English local authorities and the poorer element within them.

The distribution of the cuts can be seen as a north/south divide but that is only one part of the equation; it is also true within each category of local authority. In London, Hackney has a cut of £200 per head; in Richmond the noble Lord, Lord True, has done rather well with an increase of £37 per head. Among the urban districts, Barrow has a cut of 6.4% and Cambridge has an increase of 2.2%. Among the rural districts, West Somerset has a cut of 5.9% and Horsham an increase of 2.9%. Even among shire counties, which are by and large favoured, Northumberland has a cut of 1.7% and Surrey an increase of 3.1%. That is a shift by anybody’s definition—this embedded regression and a systematic transfer from the poorer to the richer areas.

The right reverend Prelate who is about to give the next maiden speech is the Bishop for an area I lived in for most of my life. Although I no longer live in Southwark, I am still Lord Whitty of Camberwell, so I hope he might be able to elucidate for me what was always a puzzling piece of scripture:

“For he that hath, to him shall be given: and he that hath not, from him shall be taken even that which he hath”.

That does seem to be Eric Pickles’s approach to local government finance.

If we continue to go down this road, we will be in very serious difficulty. The role of local authorities in our society will inevitably diminish. We need a constructive new Government who will engage in encouraging co-operation between local authorities, in city deals or whatever, allow local authorities to raise their own taxes in many respects, end ring fencing and predetermining expenditure, allow local authorities to borrow in housing and infrastructure and accept that there will be differences in priorities and outcomes between authorities. We need to give local authorities power, which is at present tightly restrained by Whitehall. The next Government, in contradistinction to this, need to create a properly financed and truly decentralised state.

My Lords, I address your Lordships’ House on this first occasion with some trepidation. As I was advised not to drift into preaching mode, I will resist the temptation to expound on the interesting passage from scripture that the noble Lord has just quoted.

As a student of history, I am conscious of the dignity and importance of this House in the life of our nation, and I am acutely aware of the privilege of sharing in your Lordships’ deliberations. Throughout my life I have been inspired by the model of service found in the life of Jesus Christ, and I am humbled when I reflect on where that service has led me—not least, now, to your Lordships’ House. I will seek to serve to the best of my ability, using the gifts that God has given me.

I am most grateful for the welcome I have received from noble Lords, not least in the course of this debate, and in particular for the kindness of the members of staff who have helped me by way of induction, as well as assisting me in navigating the labyrinthine corridors of the Palace. One phrase that I have often been glad to hear is, “Head towards the river”—not, I trust, because there is any hope that the new prelate might jump in. Rather, I take great consolation that, whenever noble Lords take their libations on the terrace, they gaze across the river and into the diocese that I have the joy of serving as bishop.

The diocese of Southwark, with the notable exception of the home of the most Reverend Primate the Archbishop of Canterbury, comprises all that part of London to the south of the river, from Kingston upon Thames and Richmond in the west through central London to well beyond the Thames Barrier at Woolwich. The fast-flowing northern boundary of the diocese is rich with the history of this great city. The diocese is of course more than that, extending down through Croydon into east Surrey, well beyond the M25.

It is a diocese of some 317 square miles, with some 2.7 million people served by nearly 300 parishes and some 700 clergy and 450 lay ministers. Many thousands of young people are educated in more than 100 church schools. Our parish churches reflect the huge diversity of the capital as they are enlivened by Christian witness from every part of the world. Our communities include some of the richest in London and some of the poorest, and range from the inner city to the rural. It is a world in a diocese with all the challenges and opportunities that arise in very diverse communities. I believe that our city is greatly enriched by the diversity that immigration brings, and I look forward to playing a part in debates on such issues. The diocese is further enriched by its companion links with the church in Zimbabwe, in which I also take a strong interest, as well as in the affairs of the Holy Land and the church in Syria.

There are 16 local authorities and London boroughs in the diocese, which will see cuts of up to 15.5% in their funding as a result of the settlement that we are debating. This is in common with much of the rest of the country, and I note this with much regret. It is increasingly difficult to see how these cuts can be made effectively, given the huge savings that have already been visited upon local services.

I am acutely aware of the experience of a charity that is important to the life of my diocese and of which I have the honour of being president. Welcare, founded some 120 years ago by Edith Davidson and her husband Randall, who went on to become Archbishop of Canterbury, has always sought to work in partnership with churches, community groups and other voluntary agencies to support families and young people who are at risk. Welcare receives ongoing funding support from a variety of sources, including the diocese and many of our parishes. Since 2011, though, it has seen income from local authorities fall from £1.5 million to £500,000 and, as a consequence, much excellent work and the expertise of trained workers has disappeared, putting great pressure on a falling number of willing volunteers. This has meant that over the same period the number of families that the charity has been able to support has fallen from 5,400 to 1,050. By any reckoning this is a matter of grave concern, particularly as there is no evidence to suggest that the need is decreasing.

Indeed, the charity heard only yesterday that one local authority would continue to fund a service for a further year but without any increase in funding. So Welcare is expected to deliver the service at the same level of funding as was first awarded four years ago. This means absorbing all increases in costs, which amounts to providing a subsidy for the local authority. This is a common story in the voluntary sector, which continues to address very real need. The remarkable resources of voluntary endeavour are finite and it is morally wrong to push them to breaking point.

My concern is that, as yet, we do not pay enough attention to the very human needs that lie behind our financial decisions. In strategic terms, it would be better to continue to encourage early intervention and preventative work rather than storing up problems further down the road. That makes fiscal sense to me. However, far more importantly, it attends to another imperative that at times it is easy to lose sight of in financial discussions: namely, that of ensuring human flourishing.

My Lords, it is a pleasure to follow the right reverend Prelate the Bishop of Southwark in this debate. If he is half as relieved as I was when I completed my maiden speech, I know something of his feelings at the moment.

The right reverend Prelate was an assistant curate at Sandhurst and, as has been said by the right reverend Prelate the Bishop of Portsmouth, a senior curate in the Diocese of Portsmouth in his early career. With his having covered the Army and the Navy, I wonder when the Air Force will benefit from his talent.

The right reverend Prelate’s interests, which he has already outlined, include urban affairs, and that was very clear from his contribution. He is very active in promoting retreats and pilgrimages, as well as in chairing the Zimbabwe round table and pursuing deaf/hearing integration. He is a man of many parts indeed. As a resident of the Borough of Southwark for the past 35 years, I thank the right reverend Prelate for his contribution. I am sure that the House looks forward to his thoughtful and moving contributions in the future.

I believe that this is the fourth occasion on which I have taken part in a local government finance debate, and I thank my noble friend Lord Beecham for making it happen. Looking around, I see that the usual suspects are in the Chamber today, plus one or two distinguished additions. It feels like being a prisoner in a gulag where we are hunched up against the cold and then, once a year, we lift our heads out of our mufflers to acknowledge each other and renew our dedication to the cause of local government. It is a chilly environment indeed.

One could summarise the present situation by saying that it is the same as in the previous four years, only worse—a redistribution of wealth from the poorest to the better off. It is disproportionate compared with other public service cuts. It is done in the name of deficit reduction, yet the deficit is not reducing. It was first announced in June 2010 that the Government’s deficit reduction programme would be for six years; now it appears that we are only half way through a nine-year programme of austerity. Does that mean that the sacrifice of local government, amounting to a 37% reduction by 2015-16, was really in vain?

Reductions in services to the vulnerable elderly and children, increased bills for the working poor and a general diminution in the quality of the environment and the arts do not make headlines. Reductions in the numbers of police, firefighters and local government officers do not make front-page news either, unless something goes wrong. The cuts in social care and the closure of residential homes have a direct impact on the National Health Service, which does make the national news. The NHS is under attack from some in the press, when much of the problem can be laid at the door of the social care crisis.

Noble Lords will be aware that the Children’s Society, among others, campaigned to retain DWP funding for local welfare provision. That has already been comprehensively covered by my noble friend Lord Beecham and the right reverend Prelate the Bishop of Portsmouth, so I will not go into detail as I had intended except to underscore that the local welfare assistance schemes cover the most vulnerable in our society: families under exceptional pressure, people with disabilities, lone parents, young people and victims of domestic violence. How is real need to be met, given the funding gap that is forecast to increase at an average rate of £2.1 billion per year until 2019-20, when it will reach £12.4 billion?

I turn to council tax. The reduction in government funding will leave councils facing unpalatable choices to increase council tax bills for some or all, and to further reduce other council budgets. The Parliamentary Under-Secretary of State for Communities and Local Government, Kris Hopkins, said in his Statement on local government,

“Councils facing the highest demand for services continue to receive substantially more funding”.—[Official Report, Commons, 18/12/14; col. 1590.]

The position on the ground is the exact opposite, and the cumulative impact of the reductions will be felt for a generation.

My Lords, as a former leader of Bradford Council and a serving member of that authority, a former chairman of the LGA and a current LGA vice-president, I am particularly pleased to have had the privilege of hearing two excellent maiden speeches from the noble Baroness, Lady Pinnock, and the right reverend Prelate the Bishop of Southwark. I am also pleased to have the opportunity to speak in this debate.

As we all know, the noble Lord, Lord Beecham, is a serving councillor, a former leader of Newcastle City Council and a former chairman of the LGA so, despite our political differences, we have much in common. He is someone I respect and whose opinions I always listen to carefully. That said, I am afraid that he, along with so many of his colleagues in the Labour Party, appears to have a highly selective view of the spending reductions that the current Government have had to make. Let us be clear: if Labour had been re-elected in May 2010, there would also have been many reductions in government expenditure that would inevitably have impacted on local government. We know this because the previous Chancellor of the Exchequer, Alistair Darling, said quite clearly before the general election that that was the position. Nor should we forget the letter from Liam Byrne, the then Chief Secretary to the Treasury, who admitted that after 13 years of Labour Government there was “no money left”.

So local government was always going to be faced with significant financial challenges regardless of who was elected in May 2010. Councils have seen reductions in their grant from central government. However, in response, they have risen to the challenge positively by forming partnerships with other local authorities to reduce backroom costs and by securing efficiencies through new ways of working. A common theme of such initiatives is that they can often improve services for residents while simultaneously reducing costs. For example, South Holland District Council now works in partnership with neighbouring East Lindsey District Council to share services in relation to finance, IT, benefits and revenues and human resources. That has been delivered through a joint company that has secured savings of more than £1 million a year and is now attracting work from other councils. South Holland also shares a chief executive with Breckland council, which is creating significant annual savings for both councils.

In recent years, councils have also demonstrated their ability to work with other public sector partners to reduce the cost of services. Along with the noble Lords, Lord Tope and Lord Beecham, I am a great fan of community budgets. Research from Ernst & Young, following the successful pilots, shows that rolling out community budgets nationally could save up to £20 billion in five years. Meanwhile, the Troubled Families programme has helped to turn around the lives of more than 40,000 families, resulting in better outcomes for the individuals concerned and securing major savings for the taxpayer.

In the London borough of Wandsworth, more than two-thirds of troubled families that the borough has been focusing on have successfully turned their lives around within a year. Each of those families represents a potential saving to the taxpayer of £29,000 per year due to a reduction in crime and antisocial behaviour, the number of children taken into care, visits to accident and emergency and intervention from the police and courts, and increased employment.

It is also interesting to note that independent research indicates that the public perception of council services is very different from the doom and gloom rhetoric that we are used to hearing from the Labour Party. Ipsos MORI said last year that two-thirds of local residents consider that council budget reductions had not made a noticeable difference to services.

Of course, none of that is to deny that local government continues to face a challenging financial situation; clearly, like the rest of the public sector, it does. In particular, we need to ensure that as we are all living longer, adult social care is properly funded. For that reason, I particularly welcome the introduction of the better care fund, a £3.4 billion programme to ensure radical transformation in integrated health and social care. It is one of the most ambitious programmes ever across the National Health Service and local government, and will deliver improved services for some of our most vulnerable people.

No one would pretend that the past five years have not been difficult for local government. However, councillors and council staff have risen to the challenge and, through their hard work and willingness to embrace new ways of working, local government has adapted to changing circumstances.

My Lords, I declare an interest as a member of Cumbria County Council and congratulate the right reverend Prelate the Bishop of Southwark on his moving maiden speech, and Councillor Pinnock—the noble Baroness, Lady Pinnock—on her excellent maiden speech.

I also particularly congratulate my noble friend Lord Beecham on what I thought was a fine and passionate speech. I realise that all Members will not agree with it, but we have to take into account that here we have a Member with 47 years’ experience of local government. I have only 11 and a half years on three different authorities in my time; 47 years can rarely have been matched, particularly in the House of Lords.

The essence of what my noble friend said addresses two really tough questions to the noble Lord, Lord Ahmad of Wimbledon. I fully accept the argument of the noble Baroness, Lady Eaton, that there would have been severe cuts under a Labour Government. The first question is: do the Government believe that their distribution of grants is fair, how do they justify it and how do they avoid the charge of partisanship in the way in which better-off authorities, particularly in the south of England, have been treated? Secondly, instead of scoring cheap points designed to mislead the public about the scale of the local government financial challenge, will the Minister promise to work with local authorities to find ways of protecting essential services at a very difficult time? I will make a particular suggestion in relation to Cumbria.

The situation we face in Cumbria is of forecasting that in the six years starting from 2012-13, all of what was £148 million of revenue support grant will have gone. In total, we have to find £213 million of savings—more than 30% of our budget. We have found £130 million of those already and we have £83 million to go. We think that we have found how to find £53 million of those but there is a black hole of £30 million, which represents a serious threat to essential services in the county. We have been efficient, as the noble Lord, Lord True, said. At its peak, Cumbria County Council had more than 10,000 staff. It now has only 6,800 and there will be another 1,800 redundancies in the next three years, come what may.

However, I had a case in Wigton, which is in my ward on Cumbria County Council, in the last few weeks of an elderly lady who has been looking after her Down’s syndrome son for getting on for 50 years. She can no longer cope. He has dementia and needs to go into a home. There is great difficulty in finding a suitable placement which the authorities can afford. If we cannot do that, we have no right to say that we are a civilised society. We have to find the money for that kind of social help.

In Cumbria, we on the county council think that we could save a huge amount of money if we became a unitary authority. In Cumbria at present, there is a county council, six districts and a national park. There are eight chief executives, eight finance officers and 350 or so councillors to serve a population of half a million people. On top of that, there is an absurd muddle of powers between the different levels. We estimate that £25 million of the £30 million black hole that we need to fill can be saved by creating a unitary authority, but this consensus is extremely difficult to arrive at. It needs a very strong lead from a Government who are prepared to work with authorities rather than rubbish them at every turn. I hope that the Minister will take away from this debate the need not to start a lot of partisan blaming of people for cuts but to start thinking about how the Government can make a real contribution to working with authorities to address the desperate situation in which they find themselves.

My Lords, I very much welcome this debate and thank the noble Lord, Lord Beecham, for initiating it. I also add my congratulations to my noble friend Lady Pinnock and the right reverend Prelate the Bishop of Southwark on their excellent and interesting maiden speeches. My own was very recent so I empathise with how they must feel at this moment, as has been said.

As we have heard, local government funding has been cut dramatically—by 40% by the end of 2015. After several years of cutbacks, the viability of some councils is now becoming a major concern. As a member of the LGA resources board and a serving councillor, I know that local government is seeking solutions to this very hard problem of financing local expenditure, both capital and revenue. With an ever-shrinking cake, we need to find other ways to fund the vital services that people rely on, or recognise that many of those services will disappear. There is great anxiety about care of the elderly, support for vulnerable people, respite care—they are fundamental to many people’s lives. Cuts to community services such as libraries, sports facilities and public health promotion programmes all hit the poorest people hard.

The UK, however, has one of the most centralised systems of government. Just 17% of local expenditure is raised locally in the UK, whereas the OECD average is 54%. Over the past 20 years, in my time in local government, I have been aware of an enormous amount of work which shows clear evidence that cities and city regions can generate economic growth and increase income in local economies. The core cities, the Centre for Cities and the City Growth Commission have produced a range of publications, research reports and recommendations which show that decisions about transport, housing, skills and employment—key economic drivers of local economies—are best taken at local level.

The most recent report from the Centre for Cities shows the potential of cities—not just the largest ones—to deliver economic growth and prosperity within their areas. I hear people asking, “What about areas outside cities?”. The Peace commission shows how non-metropolitan areas can, if given the powers, lead growth, expanding investment and employment in their own areas. The City Growth Commission report of last year describes how an evolving programme could devolve decision-making and financial powers to more strategic local government bodies, whether city regions, county regions or metro areas—all at a pace that suits them.

The evidence is clear that national economic performance could be boosted if all the areas of the UK were to achieve their potential, but that requires commitment from central government to accelerate the pace of devolution to local areas; by “devolution” I mean the devolution of powers, decision-making and financial flexibility, not decentralisation, which I see as much more of an administrative concept. Cities and counties are being prevented from regenerating the local economy by tight bureaucratic control of finances and unsuccessful remote management of key factors that affect economic performance.

It is time to recognise that local government in England needs to be set free from shrinking and conditional grants from central government and competitive bids that increase bureaucracy and are costly and time consuming to produce. When I was leader of my own city I found that my twin cities, especially Bordeaux, were astonished by the time it takes to achieve transport systems in English cities. They conceived of, built and were using their own tram in a fraction of the time it took Bristol to be told that it would not get one.

People in my city ask me why cities in this country are not free to invest in the transport system that suits their needs rather than standing in the queue at the DfT behind other cities and authorities, waiting their turn, when they could invest in the long term and raise revenue to support their investment as do other European and world cities. In the light of devolution of powers and decision-making in Scotland and Wales, there is now an opportunity for government to recognise the potential that devolution could bring and invite proposals that would attract financial freedoms as regards long-term investment and revenue-raising powers.

Local services are effectively in crisis, which is affecting other areas of public finance. There is ample evidence that devolution of financial powers and decision-making to the local level would enable councils to become increasingly self-sustaining as a result of improved economic performance. It is right that devolution of powers to Scotland and Wales is now becoming a reality. It is only fair that the strong local economies of England should not be left out.

My Lords, I welcome both the maiden speeches and congratulate both Members. I shall base my account of my concerns on the work of Dr Chris Game of Birmingham University, who recently set out, in, a master class in local authority funding. What follows is just a summary of that. Dr Game says that the Minister, on 18 December in the other place, claimed that the,

“settlement leaves councils with considerable … spending power. As planned, we have kept the overall reduction to 1.8%”.—[Official Report, Commons, 18/12/14; col. 1590.]

He said that the reduction could be 1.6% if additional transformation money was taken into account. But, as Dr Game points out, grant funding and spending power are not the same. Revenue spending includes council tax receipts, certain grants, and NHS social care funds. That gives a fuller picture. But income from fees, charges and investments is not included in spending power.

So in this confusing system—which is designed to confuse—total government funding to local authorities is really down 13.7%. Furthermore, if council tax income is excluded from spending power, since it is a different kind of income from government grant, the reduction is not 1.8% but 3.7%. Then, as others have said, if we remove the NHS portion of the £3.5 billion better care fund, and include in spending power only the £2 billion for social care by local government, the reduction becomes 8.8%—nearly five times the figure that Ministers have used. Chris Game has done anybody who reads that piece a great service.

The situation in Birmingham is unfair. The cut in spending power for Birmingham is 6%—very close to the government maximum of 6.4%. If one checks all the London boroughs, the metropolitan districts and the all-purpose authorities, the only ones with a cut of 6% or more are Hackney, Knowsley and Birmingham. Yet the recent Kerslake report, which I very much support, and am pleased to see is being implemented quickly, pointed out that Birmingham has,

“more poor children than anywhere else in England”.

In terms of multiple deprivation, it is the 13th on the list. Things are so bad that the Government have had to send in both a social services commissioner and an education commissioner. It appears that Ministers, on a whim, can choose to define spending power to mean what they say it is, or is not, as in Alice in Wonderland. This is not sensible. It is misleading and unfair to Birmingham.

I declare an interest. I have never been a councillor, although I was a failed candidate twice in 1967. None the less, I have had views for 30 years about the way the city should be governed, and I hope the latest attempt to modernise, as set out in the Kerslake report, will work. In the mean time I hope in a few minutes’ time to hear from the noble Lord, Lord Whitby, who, with his Lib Dem partners, was in charge for more than half a decade, until two years ago, why the city is in the parlous state that it is.

Now I shall say a few words about my adopted local authority—although nothing I say about it is meant as a comparison with Birmingham. Some call it Shropshire, but others call it “Greater Shrewsbury”, as it is a council very much centred on Shrewsbury, where all the bosses live. That is how it looks from Ludlow, a handful of miles from the Herefordshire border. I want to deal with only one Shropshire issue. The budget consultation introduction claims Shropshire as a “hub for creative business”, and says that it is,

“accelerating the move of services online”,


“broadband and mobile internet is of equal value”,

and that the council knows,

“we need to do more”.

In October 2012 the head of finance said in an interview that broadband was a problem. And this the most rural county—a great county.

The Prime Minister has said he is not going to overlook rural issues, rural voters or rural concerns. The Chancellor of the Exchequer has claimed that the Government are paying for the expansion of superfast broadband into more and more rural areas. The Secretary of State for Environment, Food and Rural Affairs has tried to spin that all is well with rural broadband. But the reality is that the coalition bosses are ignoring the really rural areas, which need good broadband far more than others to survive. We are creating a two-speed rural economy by not giving priority to rural areas.

Shropshire—or Greater Shrewsbury—Council is absolutely silent on the issue, which I have raised in this House before. Would that I were joined by the county’s MPs. A recent Shropshire Council cabinet paper said that the council would,

“undertake a fresh competitive procurement; with or without match funding”,

as part of phase 2 of the rollout of broadband. No one knows if this means even partial priority for the rural areas of the county. What is more, no one from the county will say, although councillors were questioned at a public meeting in December. It is all a big secret. We have lost too much time already in Shropshire. Businesses and jobs in the “creative hub” of the county are all the losers in this settlement.

My Lords, I thank the noble Lord, Lord Beecham, for securing this debate and for his introduction to it. I also thank the noble Baroness, Lady Pinnock, and the right reverend Prelate the Bishop of Southwark, who both gave us very specific examples of some of the issues involved in this area.

I want to step back and look at the bigger picture because this debate is about the future of local government. There are some major issues that we need to consider very carefully. The context is, of course, one of cuts and fairness, to which the noble Lord, Lord Beecham, and others referred. However, there is a second context of people’s disengagement from the political process and responsibility for local government. The Minister in the other place talked about the necessity of increasing local democracy. That is part of the bigger picture because one of the issues about the availability of resources is that people want to pay lower taxes. Who is going to have the courage to put their head above the parapet and say that a lot of these services will require higher taxation and more investment? There is a limited interest in the common good, as we would call it. As the welfare state mentality dissolves, the big question is how systems will be encouraged to step into a space and support politics and the funding of it that will deliver all the services that we rightly cherish.

I want to give noble Lords a picture of my work in the city of Derby and ask the Minister two questions about whether there is a new future for local government that we need to build on. I chair the inner city renewal project in Derby, which examines how we spend money in the most deprived areas of the city. All the political parties and all those involved recognise that local government and national government have for years and years put millions of pounds into these very needy areas, providing all the services we are talking about, but to very little effect. That is the challenge in renewing local government. This inner city renewal partnership involves councillors, people who head up the local authority departments, people from the health service, the head of the police operations and people involved in housing, the voluntary sector, the faith sector and community groups. It is hard work to achieve cohesion and connectivity given the different cultures involved. We in the voluntary sector are used to choosing what we are interested in and supporting it, and probably leaving other people to do everything else. Those involved in professional statutory services are used to controlling a budget and controlling the outcomes and there is probably not a lot of opportunity for the community to be genuinely consulted. It is hard work.

Business in our city is interested in contributing to this process but does not know how to do so. We struggle to bring business enterprise to the table, but we are trying. It is vital to find ways to energise people at the grass-roots level from different communities and holding different perspectives to look at the issues in a place—we note the Our Place methodology—be interested in them and want to invest in them. I am not talking just about investing through government grants or local council tax but about the social capital and business contributions that can be raised if people get really involved.

I want to ask the Minister two questions because the Government have a role in creating incentives for adopting this approach to local government and the workings of local authorities. First, will the Government give priority to investing in arrangements for local government and the delivery of services that score highly in terms of partnership working with local community enterprise and local business? Will the Government create incentives for local authorities to reinvent the way they deliver services and fund them by having a strong working partnership with community involvement and local business? My second question also relates to the incentives that can be offered to local government. Can the Government give priority to investing in arrangements that are clearly designed to find new ways of creating and deploying social capital and business involvement?

There is an urgent need for these things if local government is to have a future and be able to deliver what it should do: local people recognising and engaging with local issues and using a variety of resources to try to meet them. There is a great danger at the moment of our just going in two different directions: people shouting for services, quality and professionalism, but not feeling engaged with or responsible for their provision. I will be interested in the Minister’s response on that challenge.

My Lords, since the recent Scottish referendum on independence and the ensuing frenzied end game, devolution has become a major political issue and has stimulated an intense debate over how new powers and resources can be devolved to the most relevant, effective and inclusive political structure. I believe passionately—certainly in local government—that we should celebrate cultural diversity and recognise the significance of regional identity embraced within a national state. So I am very relieved and happy that we are still a United Kingdom.

Britain, however, has one of the most centralised systems of government in the world in terms of its relationship between local government and central government. Just 5% of all the taxes raised by our local people in our great cities is under the control of the city council. The remaining 95% goes to the Treasury and comes back through a multitude of funding streams controlled by Whitehall. Research has shown—and it has been alluded to in this debate—that nations that allow more freedom and independence to their cities tend to have better performing cities and a more balanced economy.

Sadly, our cities have underperformed the economic performances of most of our major European cities. It is imperative that we recognise that. I believe that the coalition Government are rectifying this dilemma and meeting the challenge. As a former city leader of the largest local authority in the United Kingdom, and as a vice-president of the LGA, I welcome the debate on the local government finance settlement, the implications of devolved power and the ramifications of direct funding to our cities. The coalition Government have listened and delegated, in an unprecedented manner, power, decision-making and direct funding—especially to the city of Birmingham—in addition to the financial settlement. While the settlement reduces Birmingham’s revenue spending power by 6%, as already mentioned, the revenue spending power per household in Birmingham is still £2,461 per dwelling—considerably larger than almost all local authorities. Its gross expenditure is still in the region of £3.2 billion.

The Government have devolved power and funding in a sophisticated and imaginative manner. Birmingham Council and the city are benefiting from a range of new freedoms and funds being made available. My friend the noble Lord, Lord Rooker, asked: what has Birmingham done and how has it benefited? A range of investments outside the financial settlement have allowed us to encourage 19,000 new start-ups in 2014. We are already attracting more FDI investment than any other region outside Birmingham. During the period of my administration, we grew tourism from £29 million to £34 million, generating formidable wealth for local industry and small businesses. We left a city that was proud, pointing outward, attracting Chinese investment, and building a whole range of entities that allowed us to be quoted, by the Mercer survey, as one of the only English cities in the top 100 in the world for quality of life. It was local government doing what it should do—making its city globally relevant but caring for its community.

As someone who has worked with Labour and Conservative-led Governments, I know the evolution of devolution has been, at times, extremely slow. Ultimately, however, the coalition Government’s attitude to local government—in particular, their generosity to the city of Birmingham—has to be measured not simply by the financial settlement but through the devolution of power and the many hundreds of millions of pounds that Birmingham has received through the direct, innovative funding streams that are now acceptable through the coalition Government.

My Lords, the finances of local government are an opaque matter. The sources of revenue and the categories of expenditure can be represented in various ways that can give widely differing and quite contrary impressions regarding the state of the finances and the severity of the financial restraints faced by local authorities. There is ample scope for bamboozlement by a Government who are intent on conveying the most favourable impression.

On 18 December in the Commons, Kris Hopkins, who is the Under-Secretary of State for Communities and Local Government, asserted that the overall reduction in spending planned for the year 2015-16 was a mere 1.8%. This figure relates to a wide category of expenditures that include various protected budgets, such as the education, police and principal health budget. However, the so-called settlement funding assessment, which excludes ring-fenced grants for education, but which nevertheless includes the ring-fenced new homes bonus and the ring-fenced public health grant, will decrease by 13.9 %. The wholly discretionary spending of local authorities will decrease by an even greater percentage. When matters are looked at in this way, we begin to get a more realistic impression of the stringency of local government finances.

Another aspect of the finances is the restraint that has been imposed on council taxes. Local authorities proposing to raise council tax by more than 2% will have to hold a local referendum on such a proposal. The high cost of doing so and the likelihood of a negative response will effectively prevent any authority from seeking the sanction of the local electorate. A recent report from the Local Government Association has indicated that since the abolition of the council tax benefit scheme in 2013 and its replacement by a localised council tax support scheme, there has be a significant increase in the burden of taxation borne by lower-income families, many of whom were previously exempted from the tax. These are the people who are suffering most from the curtailment of the services of local authorities.

A summary of the current state of local government finances has been provided in two documents of the National Audit Office published in November 2014, entitled, Financial Sustainability of Local Authorities, and, Impact of Funding Reductions on Local Authorities. These documents point to an estimated reduction in government funding of local authorities in real terms of a 37% between 2010-11 and 2015-16.

In the most severe cases that concern urban local authorities, there will be a real-terms reduction that is in excess of 40% between those two financial years. The question that one has to ask is: how have the local authorities managed their finances throughout a prolonged period of funding reductions? The answer is that, rather than increasing their locally raised income, which they are now largely disbarred from doing, they have reduced their provision of services and cut back on their staffing costs. At the same time, they have sought to increase the levels of their reserves to guard against financial uncertainties and to prepare for future shortfalls in revenues.

A glib answer that has been offered by the Government is that local authorities have been able to manage their finances by making substantial efficiency savings. “Efficiency savings” is a euphemism that bears some examination. Efficiency savings refer primarily to the financial savings that are made by reducing pay. This is achieved when services that have hitherto been provided by local authorities are outsourced to private contractors. By outsourcing the same services to a succession of suppliers, local authorities have been able to drive down the costs.

There are provisions in law that are intended to prevent the deterioration in wages and conditions when the activities and employees of one supplier are transferred to another. However, these provisions apply for a limited time, and they are easily evaded. This is a spurious concept of efficiency and, indeed, the further immiseration and alienation of low-paid workers must lead directly to inefficiencies in the workplace. There is a limit to how far this process of so-called efficiency saving can go. It is liable, eventually, to bequeath a large proportion of our public services to the surviving private suppliers, who will become monopolists serving multiple local authorities. I will end by saying that I would favour the replacement of council taxes by a local income tax and a graduated property tax, levied on both buyers and sellers at the time of a sale.

My Lords, I extend my own congratulations to my noble friend Lady Pinnock and the right reverend Prelate the Bishop of Southwark on their excellent maiden speeches. I declare that I am a vice-president of the Local Government Association.

The very first paragraph in DCLG’s guide to the local government finance settlement in England says:

“Local government finance in England is complicated and can be difficult to understand”.

I think noble Lords would all agree with that, but it is an understatement. It is true, but we now know that the system is unsustainable. The rising pressures on all councils are well documented and it is a tribute to them that they have managed as well as they have. However, it is unlikely that the financial problems facing local government will get much easier, at least in the short term. I hope that they will for those where the cuts have been biggest, but it seems that there will be little extra money for local government overall until at least 2017, whoever wins the election. Labour has now confirmed that it cannot commit to reversing the public sector pay freeze or to scrapping council cuts for the first year after the election.

The reason is that the problem for any Government is stark. The Government are still overspending and are trying to get the annual deficit down. The debt, however, has continued to rise: by over £500 billion in this Parliament. If we protect the NHS, schools, pensions and overseas aid, it follows that everything else has to take a bigger hit. It does not help local government that the general public are broadly content with the performance of their local councils. I suspect that this is because schools and health are protected, many council services are actually minority services and council tax levels have been held down. Given a choice, I think most people would see the NHS as their priority for more spending, not councils.

Despite this, the National Audit Office has said that councils are showing clear signs of financial stress. It also says that DCLG does not gather sufficient evidence to know whether individual councils can or cannot cope with expected cuts in funding. So, in the absence of meaningful data, it is no surprise that opinions can masquerade as fact on all sides, with one side claiming that key services are unsustainable and another claiming that the settlement is fair. For local government, money is at the heart of all of this. There is not enough of it to meet demand and I have come to the conclusion that we would benefit from a clearer link, in the medium term, between the provision of universal local services and the council tax that householders actually pay.

In the short term we need a partnership between central and local government, working jointly with the National Audit Office, to agree a set of baseline facts and approaches. The first of these is how the LGA’s publication Rewiring Public Services can be delivered, because it offers very large annual savings through public service reform. The second is whether we should remove adult social care from the annual settlement process for local government and treat it differently, given the specific pressures on it.

Thirdly, we need to identify clearly the impact of rising demand generally on statutory services. We need to assess why councils charge different levels of council tax in broadly similar places for broadly similar outcomes. We need to explain why rural areas get less per head from central government yet pay much more in council tax, and we need to assess what the savings would be if two-tier areas moved to unitary status.

Councils are going to have to reduce overheads further and raise more of their own money. But I am puzzled by the slow speed of transformation in some councils—although not all—and a similar slowness by some in sharing services across council boundaries. Why is there such a reluctance by some areas to adopt a unitary structure when the cost savings are well established? We have heard from the noble Lord, Lord Liddle, about Cumbria, but this week a report in Oxfordshire said that there could be savings of up to £32 million a year if the six councils merged.

As part of the preparation for what will be an important period after May, it would help if councils did two things: first, talk more in terms of the levels of government support that they receive, rather than just the cuts since 2010, important though those are, since this presupposes that 2010 is the right baseline; and, secondly, understand clearly the level of total public spending in their area, not just their own direct spending, and talk about that publicly.

In conclusion, the big issue is resource equalisation and revenue support allocations based on need. Of course it is right to encourage income growth and good to see the vast majority of councils expecting growth in their share of business rates. But the crucial issue remains: central government allocations should be needs-based.

My Lords, first, I declare my interests as the leader of Wigan Council and chairman of the Greater Manchester Combined Authority. I am also a vice-president of the LGA and vice-chairman of SIGOMA. I congratulate the two maiden speakers on their contributions. The right reverend Prelate showed his experience of urban affairs and I agree with him entirely about prevention work, which can save lots of money downstream. The noble Baroness, Lady Pinnock, has a lot of experience in local government. No doubt her contribution was aided by her treasurer from Kirklees, David Smith, who was pinched from Wigan. Not only did he move from Wigan to Kirklees, he changed allegiance from Wigan Warriors to Huddersfield Giants.

My noble friend Lord Beecham showed the fantastic record of knowledge, passion and care for local government that he has built up but I thought that he was a bit unfair on himself. I will give him that he may be short but I do not think that anyone would ever describe him as nasty and brutish. He outlined the scale of the loss of moneys to local government and the fact that it has not been distributed by any means fairly. Like the noble Lord, Lord Shipley, we should congratulate local authorities. Despite all the cuts that many of them have had to make, their financial stability has remained very good. Whether that can continue, as he suggests, may not be the case. We have also managed public expectations quite well. Some of us thought that if we were to make the reductions that we have been making to a number of services, there could be riots on the streets. However, that has not happened, although it may have contributed to the alienation mentioned by the right reverend Prelate the Bishop of Derby.

One of the disadvantages of speaking towards the end of the debate is that everyone has used your language, so I want to move on. Faced with loss of funding as we have, local authorities have a limited number of options. There are efficiencies in local government but we have taken all the low-hanging fruit and there is not a lot left. We can work to transform services but the DCLG unfortunately does not seem to understand. It is not an instant solution and one needs to work hard on that. There has been reluctance to increase council tax, although I see from reports in the media today that in the next year council tax might go up by more in most places. But no one will challenge the referendum. We always said that that was the case.

The real option is making cuts in services. Yesterday, Age UK showed that £1 billion had been taken out of care services. One-third of adults who were receiving home care visits no longer have them. That is the scale of the impact of the cuts to care. It cannot be said that care services must not be cut at all because, given the scale of cuts needed, care services must take a share. However, we hear daily about the crisis in the NHS, particularly in A&E. The contribution of local authorities is a return to the state of bed-blocking. Because we cannot get care packages for people who are in hospital, they are blocking beds and preventing those beds being used for people coming in at the front door in A&E. We need to recognise that.

Being in local government for this period has been a bit depressing. It has been a bit difficult to make the cuts, but we in Wigan have always believed that we would not let Eric Pickles decide our budget. There would always be something in our budget that reflected the values that we have in Wigan, not the values—whatever they are—of the Secretary of State. We have introduced new services that benefit local people. We introduced the living wage, got rid of zero-hours contracts and invested in the community. We have a programme which gives disadvantaged youngsters a chance to get a job. A cost-benefit analysis showed that that scheme saved £4 to the public sector for every £1 we invested. More than that, its impact on vulnerable young people is quite remarkable.

However, we need to think about the future. This settlement is for one year only, and the concern in local government is about what will happen in future years. I remember that in 2010 we suddenly had to face in-year cuts, which was very difficult indeed. I hope we do not have more of those. Everybody I know in local government is revising their forecasts downwards. We have to do better on transformation; this is the only way forward. We can do more in terms of devolution but, as was noted by the noble Baroness, Lady Williams of Trafford, there is more to collaboration among local authorities than sitting down in a room. It takes a lot of work. We have to do that in partnership, with local authorities and central government recognising the problem and working on it.

My Lords, I am extremely grateful to my noble friend Lord Beecham for tabling this Motion today. Like others, I pay tribute to his formidable record of representing local government over many years, as well as the demolition job he has done on the Government’s record today. He quite rightly points out that the scale of the cuts now being demanded of councils will inevitably have a devastating effect on core services and vulnerable residents. What is truly shocking is the unfairness of the distribution of the cuts, with the 10 most deprived areas having their spending power cut by 16 times the amount of the 10 least deprived areas. It is not difficult to see whose side the Government are really on. I also welcome the noble Baroness, Lady Pinnock, and the right reverend Prelate the Bishop of Southwark, and congratulate them on their excellent maiden speeches. I look forward to working with them in the future.

In the short time I have, I would like to focus on two examples of the consequences of the Government’s short-sighted policies for disadvantaged children and young people. A couple of weeks ago, we had a very good debate in this Chamber on the importance of early intervention for child development. There was widespread support for the notion that intervention and family support for the very youngest children, those between the ages of nought and three, could make the biggest difference to a child’s life chances and their opportunities for social mobility. This was particularly so for children from the most deprived families, with increasing evidence that this could lead to fewer demands on public services at a later date.

Of course, this was the very notion that led the previous Government to develop the network of Sure Start centres. This policy was so popular that it forced David Cameron to pledge that the centres would be safe under a Tory Government in his hands. Sadly, we now know that this was not the case. The ring-fenced funding was removed and already 600 centres have closed, with councils now forced to consider further closures to meet the new budget reductions.

The last Department for Education figures show that spending by councils on early years services was slashed by some £400 million over three years. In 2013-14 alone, spending on children’s centres and associated early years activities fell by 8.5%. This is despite all the evidence that investment in parenting and support services for very young people can reap enormous rewards later, both for individuals and, indeed, for the state. Does the Minister agree that there is an urgent need to revitalise the Sure Start network, perhaps as a basis for co-located family services, and with secure funding reinstated?

Secondly, I want to refer to the decline in youth services. Again, the Department for Education estimates that these budgets fell by more than 12% in just one year, compounding year-on-year decreases. This too represents a very short-sighted approach. For example, last week I had the pleasure of visiting the Hangleton and Knoll youth project in Hove, along with my honourable friend Tristram Hunt and our Labour candidate, Peter Kyle. We heard about the fantastic work the project is doing to turn around the lives of young people, particularly those who are alienated from the school system and would otherwise be facing poverty and unemployment. But, like many other youth centres around the country, it faces a precarious future. What these young people clearly need is a route into full-time training or quality paid apprenticeships, and it was heartening to hear the leader of the Labour group pledging, if elected, to end youth unemployment in the city by the 2019 election.

Given David Cameron’s new-found friendship with the Green Party, I wonder if the Minister could ask him to have a word with the Green-run council in Brighton and Hove about recognising the value of its youth services and to do something about the hundreds of young people in the city who have been unemployed for more than a year. While he is at it, please could he also have a word with the council about the appallingly low levels of recycling in the city, which have actually fallen by 16% since the incompetent Green Party took office? That highlights its abject failure to deliver on what should be a basic issue for any party that cares about the environment. Finally, will the Minister join me in congratulating the Labour-run Welsh Government, who are already achieving 54% recycling rates and are well on their way to their zero-waste goal? I look forward to hearing his response.

My Lords, with the leave of the House, I should like to speak in the gap. Lancashire County Council found itself, with the Social Fund transfer from DWP, with less than had been spent—a cut. The Local Government Association states that the core funding budget for Lancashire County Council has fallen by 38.79% over the life of this Parliament, while the net budget for Preston City Council will have fallen by 31% over the same period.

I, too, declare a former interest of being involved in local government. There have always been discussions at what were called local government consultative finance meetings. What has changed is the ability of local authorities to initiate new projects because of the tight grip on spending levels, which are based on an assessment of grant distribution and may in no way at all recognise a genuine local assessment of need. There will never be a perfect funding formula for grant because there will always be disputes about weighting levels—how much this or that particular factor ought to be taken into account. However, once you have a vicious system that prevents a local authority from being able to move away from a target set by Whitehall, that is the beginning of the end of local government.

Whitehall does not know best what is needed in Preston and the county of Lancashire, just as it does not in other areas. There could be an argument about how much grant is deserved, whether it is in my noble friend’s Newcastle or in Preston or Surbiton. If one looks at everything that has advanced human life over the past century and a half, a whole range of issues—including public education for all, nursery education and youth services—began as local government initiatives. To me, the real tragedy is that if we have a system that prevents local authorities from experimenting and innovating, we will all suffer.

It is extremely important that we take at face value what people say about their satisfaction with local government, or indeed with the Government or politics. I remember a constituent speaking to me about a reduction in a particular service. I said that the alternative was worsening primary school staff/pupil ratios. His reply was: “I don’t want you to start confusing me with the facts”.

My Lords, I offer my congratulations to our two maiden speakers today. I have no doubt that the noble Baroness, Lady Pinnock, will have much to contribute to our deliberations in the future, and it will be a privilege to have the right reverend Prelate the Bishop of Southwark involved in our deliberations. Like others, I thank my noble friend Lord Beecham for securing this debate, for his typically robust, incisive and passionate introduction and for making a veteran of our noble friend Lady Donaghy.

The settlement under consideration heralds another year of cuts in funding and restrictions in services, another year with unfairness at its heart and doubtless another year of heroic efforts by many councils up and down the country to deliver vital services to their communities in the face of these challenges. My noble friend rightly berates the Government for the manner in which they have represented the settlement, suggesting that the damage is not serious, and the lack of transparency in how some of the numbers are presented.

Indeed, we have heard from most noble Lords this afternoon about the particular challenges for their areas and their authorities. We have had Cumbria from my noble friend Lord Liddle; Bradford from the noble Baroness, Lady Eaton; the London perspective from the noble Lord, Lord Tope; Newcastle from my noble friend Lord Beecham; Birmingham from my noble friend Lord Rooker and the noble Lord, Lord Whitby; Kirklees from the noble Baroness, Lady Pinnock; and Durham from my noble friend Lady Armstrong. We have heard from my noble friend Lord Smith of Leigh, who, in his roles for the combined authority of Wigan and Greater Manchester, is on the front line in endeavouring to cope with the consequences of earlier settlements but has also been at the forefront of trying to work with the grain of government on innovative city deals.

As we have heard, the settlement funding assessment is to reduce by 13.9% on average in 2015-16. This comprises the local share of business rates and the revenue support grant, which itself is to reduce by 27%. This means a real-terms cut of £2.6 billion next year, contributing to £20 billion of savings required of councils by the end of next year. It amounts, as we have heard, to a staggering 40% reduction in core government funding since 2010. Local government has taken a larger share of austerity adjustments than any other part of government and is scheduled to take more.

Noble Lords will know that the settlement reflects the business rate retention scheme. Under this, the central share of business rates—£11.3 billion for next year—should be returned by the Government to local government in full; that was the deal. However, some £0.9 billion is missing at present, so perhaps the Minister will specifically take this opportunity to say how and when this sum is to be channelled back to councils. As the NAO points out, there have also been real-terms cuts in council tax income because of the encouragement to freeze, and the referendum hurdle. Perhaps we are entering a time when more will test the democratic process through that referendum. I will resist the temptations of my noble friend Lord Hanworth to go down the path of a local income tax. Of course, not all councils have frozen council tax, including some Tory councils.

As many noble Lords have said, we know that the Government’s favourite measure of the settlement is to quote spending power, which includes not only estimates of council tax plus the SFA but the new homes bonus, the public health grant, some other grants and the better care fund. Such a metric produces a reduction for councils of just 1.8% next year. Of course, we understand politically why the Government would wish to promulgate this figure in the court of public opinion, but we join the LGA—and, I think, other noble Lords—in asking them to come clean on the impact of this by including it in the grant settlement. In particular, will the Minister confirm that not all BCF spending is on social care services or commissioned by local authorities? The LGA estimates £2 billion of the £3.4 billion to be of this nature. What is the Government’s assessment?

We know that whatever happens in May, resources in the next Parliament will be constrained. That makes it all the more important that what is available is distributed fairly, and on this score the Government fail lamentably. We will doubtless hear from the Minister that the 10% most deprived authorities receive 40% more than the least deprived areas. If true, that is still not an answer to why, when applying cuts and adopting the Government’s preferred measure of spending power per head, they are reducing—and have in the past reduced—the spending power of the most deprived areas and actually increasing the spending power of the least deprived areas. Noble Lords have heard the statistics: for Hackney, a loss per head of £109.50; for Wokingham, a gain of £49.47. Will the Minister confirm that this is the position and let us have the Government’s specific justification for this outcome? In the words of my noble friends Lord Liddle and Lady Jones, why is this fair?

Indeed, if we look into the Government’s approach to fairness, other aspects of the settlement give cause for concern. First, there will no longer be a separate element for council tax support schemes in the settlement, and funding for council tax support schemes is estimated to have fallen by £1 billion since they were localised. LGA research suggests that household bills are rising for some of the poorest households in the country as councils struggle to maintain their schemes—sadly, an outcome that we predicted. This will eventually feed through in higher levels of debt, lower levels of council tax collection and more costs for local authorities. Of course, the fact that council tax support funding is no longer separately identified contrasts with the treatment of council tax freeze funding, which has been specifically protected.

A number of noble Lords have commented that the Government have now determined to separately identify what is in the settlement for local welfare assistance, which is at a lower level than the current year. There is no new money attached to this, and this is a matter that we would wish to review in government. The Government’s approach is illustrative of their short-term thinking. Most of us will have heard from Crisis and the Children’s Society, and we heard from the right reverend Prelate the Bishop of Portsmouth this afternoon, about the importance of this funding stream as a safety net of last resort to protect the most vulnerable. They express fears about emerging evidence that the cuts will mean more and more councils will not be able to provide this welfare assistance, with consequential impacts on services such as homelessness and support for children leaving care, with the resultant higher costs in the longer term.

The treatment of some other significant numbers in the settlement also raises issues of fairness. The top-slicing of most of the new homes bonus means less being distributed by the RSG and more through the NHB mechanisms. This is disadvantageous to those authorities that face inherently more difficulties in stimulating growth or which may lack development land.

Where is all this leading the local authorities? The NAO’s findings are that councils’ focus has changed over the period of the 2010 spending review, with statutory services such as adult social care services contributing a higher percentage of savings in the latter period than in the former. The reverse is true for discretionary services such as planning and development, although the Federation of Master Builders has pointed out the folly of further reduction in planning departments where there is a housing crisis that needs addressing. CIPFA’s annual survey of chief finance officers showed nearly half of them less confident of being able to deliver services next year. The NAO’s report on the sustainability of local authority finances predicted that 55% of metropolitan district councils are in danger of missing savings targets. CIPFA refers to a “perfect storm” of demographic pressures bringing increasing demand for adult and children’s services at a time of continuing cuts and an erosion of the local tax base.

The evidence from adult social care is that savings have been made through both efficiencies and cuts in service levels, but the scope of the efficiency savings is diminishing. The LGA reports that adult social care is facing a funding gap of £1.6 billion next year, which could rise to £4.5 billion by 2019-20. It highlights that savings of £3.5 billion have been delivered over the past four years, but its research showed that 60% of councils were considering stopping at least some services in 2015.

What reassurance will the Minister give today to councils that remain very concerned about the affordability of the Care Act and, indeed, the timetable for implementation? This settlement follows the pattern of others under this Government. It cuts the budgets of local authorities in the most deprived areas significantly more than those in the better-off areas, leaving councils facing a huge funding gap that will only increase by 2020 unless we take another course.

With regard to the question from the noble Lord, Lord True: given a chance at government, we would implement a fairer system to ensure that those communities that need the most support did not have to bear the brunt of the cuts. We would also devolve power and resources currently held by central government to city and council regions to enable local authorities to reshape and integrate services to more effectively support local people. We would put a stop to making the poorest bear the biggest burdens.

My Lords, I join other noble Lords in acknowledging the excellent contributions and two maiden speeches. I congratulate my noble friend Lady Pinnock on her maiden speech and reassure her somewhat. Her sense of getting lost in the House is something that perhaps those who have been here slightly longer and much longer still experience. That is not an individual experience. From her maiden speech, we have seen that she is going to be an incredible asset, to the party, to the Government and, indeed, to your Lordships’ House.

I turn to the excellent and reflective speech of the right reverend Prelate the Bishop of Southwark. Everyone has laid claim to the diocese of Southwark. I suppose that, being Lord Ahmad of Wimbledon, I can also lay claim to being part of the diocese of Southwark. I look forward to working with the right reverend Prelate as another representative voice of the town of Wimbledon. I welcome his contribution today. We look forward to the contributions of both noble Lords in future debates.

It would be remiss of me not to pay tribute to the noble Lord, Lord Beecham. I was listening very attentively to all the contributions and I want to single out the description that the noble Baroness, Lady Armstrong, gave. She said that she described her relationship with him, when she was Local Government Minister, as one of deep respect, at times friendship as well—I would add to that—and she did not always agree with the noble Lord. I think that sums up my relationship with the noble Lord as well, although I was a bit concerned when the noble Lord, Lord Liddle, said that he would pose a challenge. He then talked about the 47 years of experience of the noble Lord, Lord Beecham, in public life. I must admit I have not been around for 47 years, so I thought he was going to pose the challenge that I would have to account for every year. I am sure that when he writes his autobiography we will all reflect on those worthwhile years. In thanking him, he will not be surprised to hear that I cannot agree with most of what he said about the challenges of the settlement.

The Government have inherited the largest deficit in post-war history. Thanks to the actions that we have taken as part of our long term economic plan, the deficit is falling, the economy is growing and employment is at a record high. The Government are putting our public finances back on track. Of course, we could not have done this alone, and I fully acknowledge the incredible effort and significant contribution that local government, like every part of the public sector, has made. Councils all over England have responded strongly to the challenge of delivering public services in this new context. I thank my noble friends Lord True and Lady Eaton for their words of support and for highlighting some of the challenges that remain.

Of course, there is much still to do. English local government accounts for about a quarter of all public expenditure, more than £114 billion this year. So the Government still need to take difficult decisions on local government funding to ensure that the public finances are on a sustainable path. Local councils will continue to play their part in this.

Much has been made of the delivery of a fair settlement. The noble Lords, Lord McKenzie, Lord Liddle and Lord Rooker, and the noble Baroness, Lady Jones, all mentioned it. We announced the provisional local government finance settlement on 18 December, as many noble Lords acknowledged. With this settlement, we have kept the overall reduction in local authorities’ spending power to 1.8%, one of the lowest levels of reduction under this Government. If we include the funds that the Government have provided to support local transformation, the overall reduction is even lower, at 1.6%.

I acknowledge that councils are facing the highest demand for services. They continue to receive substantially more funding and we are continuing to ensure that no council will face a loss of more than 6.4% in their spending power in 2015-16, which is the lowest level in this Parliament. The noble Baronesses, Lady Armstrong and Lady Farrington, talked of relative needs. These were reflected in the funding baselines at the outset of the new system of business rates retention in 2013-14.

Growth is also a key part of this Government’s agenda. Throughout this Parliament, we have deliberately shifted the emphasis from keeping authorities dependent on grant to providing councils with the tools they need to grow and shape their local economies.

The noble Lord, Lord Beecham, asked about the LGA and the NAO figures. The NAO estimates a 37% reduction in spending power, but the Government’s spending power figures are transparent and allow others to calculate their own figures. The NAO does not include the better care fund or public health, which are two important policy initiatives worth more than £6 billion. Various figures for settlements and spending power were cited—we could have this debate all evening and further into the night. There is no doubt that some authorities have had reductions, but, when we look, for example, at the new homes bonus, we see that Leeds has seen an increase of £1.92 million, Salford £27.94 million, Warrington £22.67 million, Ryedale £40.59 million, East Riding of Yorkshire £5.02 million and Kirklees £3.86 million. Those are positive figures.

We have also given councils a real stake in stimulating local growth. Authorities up and down the country are benefiting from the greater powers and incentives that we have provided to invest in growth. These include Newcastle. I am delighted that the noble Lord’s council has also benefited and has frozen its council tax for the past four years in response to the challenge laid down by the Government. The noble Lord shakes his head. Is it not true?

Of course I said for the four years up to where we are now. I am sure that, under his direction, the council will respond to future challenges.

My noble friend Lady Janke asked about devolution, which is a subject high on the Government’s agenda. I would assure her that Newcastle, Sunderland and Northampton have seen the greatest growth in the amount of business rates retained in 2013 as a result of enterprise zones and new development deals. We have done city deals with Manchester and Sheffield. Additionally, we have provided £730 million in Growing Places funds. We have also emphasised a close working association with local enterprise partnerships—that is part of my ministerial responsibility when it comes to European funding. Local priorities have been reflected in ERDF funding up to 95%, and also in European social funding. For 2014-15, authorities’ own estimates show that 91% are expecting a growth in their business rates—a total of £414 million.

The noble Lord, Lord Rooker, talked about issues to do with cities. He mentioned Birmingham. I trust that my noble friend Lord Whitby addressed some of his concerns. Looking at some of the figures, for example, during the period 2010 to 2014, the reserves in Birmingham increased by £221 million, or 396%—and that was from a relatively low base—notwithstanding some of the serious challenges the city has had.

Councils benefit directly from the new homes bonus as well, bringing long-term empty homes back into use. We have provisionally allocated £1.2 billion of new homes bonus funding to local authorities in England for 2015-16, and this brings the total to almost £3.4 billion since the scheme began.

The noble Lord, Lord McKenzie, raised issues of business rate retention and excesses. The excess of central business rates over revenue support grant will be returned to local government through specific grants, of which there are many across government, thus complying with the statute. I shall write to him with specific examples if he so desires.

The noble Lord, Lord Tope, talked about the direction of travel when it came to the retention of business rates. I can assure him that my right honourable friend the Secretary of State, whom he, too, knows well, has indicated his personal commitment to see business rates retained locally—perhaps to a level of 90% from the current 50% by 2020, if financial circumstances allow.

The noble Lord, Lord Rooker, also talked about the rural economy. We continue to recognise the challenges faced by rural communities. The Government have a clear commitment to rural areas, and consecutive settlements have helped to address the gap in urban/rural spending power. The gap is closing and has already benefited rural authorities to the tune of £208 million over the last four years. I assure the noble Lord that we expect this gap to continue to close. In the mean time, the settlement confirms another year of additional resources for most rural authorities, to recognise the challenges they may face in delivering their services. In 2015-16, this grant has been increased to £15.5 million.

The noble Lord also rightly raised the issue of broadband. I will share with him a personal experience. I went to Cornwall and the Isles of Scilly to launch a broadband service with senior management and the chief executive. The only hitch was that we were unable to land on the Isles of Scilly because it was clouded over. I have never been, but I saw an aerial view and hope that I shall return one day. We are investing a great deal more—£780 million has been allocated to roll out broadband—with priority given, exactly as the noble Lord suggested, to the hard-to-reach areas.

My noble friend Lord Shipley talked with great aplomb about the need for transformation and for local authorities to lead. I was heartened by the contribution of the noble Lord, Lord Smith of Leigh, most of which I can relate to and agree with. As well as growing their economies, the best authorities are transforming the way they do business. This includes places such as Devon, where libraries are being expanded into community hubs, providing a greater range of services, including those designed to tackle digital exclusion and improve employability skills.

The Government are also supporting councils to demonstrate innovation, achieve real savings and, most importantly, improve outcomes for the people who use local services. In November we announced 73 projects that had successfully bid for the Transformation Challenge Award. These projects will receive about £90 million to improve services, and will ultimately save the public sector more than £900 million.

I turn to the better care fund and refer briefly to the Troubled Families programme. That programme has illustrated how together, government departments working closely with local authorities can achieve the best results for our residents—indeed, the citizens of our country. We have therefore created the better care fund. It has a £3.8 billion pooled budget for health and social care in 2015-16. My noble friend Lady Eaton spoke with great eloquence about that initiative, which will help drive further and faster integration between those services.

Local partnerships have chosen to pool an extra £1.5 billion, and this will help to achieve significant change in services that will benefit some of the most vulnerable in society. That was a specific concern expressed by the right reverend Prelate the Bishop of Derby. We are looking to prioritise those areas where there is greater partnership working. As the right reverend Prelate will know, on a wider scale we have looked to the community directly, and the Near Neighbour scheme, so ably chaired by my noble friend, has shown dividends from communities working on the ground together to provide the best services and the best initiatives to create the more cohesive communities that we all desire.

As noble Lords have said, and I fully acknowledge, the challenge for local government over the next few years is substantial, as it is for everyone managing public services. I fully acknowledge that there is huge energy and commitment in the sector to deliver the best possible public services for our local communities. I know that members and officers up and down the country are already thinking radically and creatively about the years ahead, and we will continue to support them. I assure the noble Lord, Lord Liddle, among others, that we will work with them directly to ensure that we get the best service provision at a local level.

Local welfare provision was raised by several noble Lords, including the noble Baroness, Lady Donaghy. We will work closely with colleagues in the Treasury and the Department for Work and Pensions. We have been analysing the responses to our consultation. I have met two or three councils directly, along with my honourable friend Kris Hopkins. This concern has come up consistently among local authorities’ priorities. We have been looking at how local welfare assistance should be funded in 2015-16 and, as I said, working with the Department for Work and Pensions on it. The Government believe that local authorities will continue to be able to offer local welfare assistance for 2015 from within existing budgets, alongside a range of other services if they judge it to be a priority in their area.

The right reverend Prelate the Bishop of Portsmouth talked about earmarking certain funding. There are demands for greater devolution and for local authorities to judge their priorities. It is our view that this is what should prevail in this area. We have consulted on having a separately identified amount relating to local welfare provision in each upper tier authority’s general grant, totalling £129.6 million nationally. This will not be ring-fenced and we will not be placing any new duties, expectations or monitoring requirements on its use. The Government have also been very clear that councils should choose how best to support local welfare needs, because what is right for Croydon will not be right for Cumbria. In relating that, I hope that I address some of the concerns expressed by, among others, the noble Lord, Lord Whitty.

The right reverend Prelate the Bishop of Portsmouth raised the issue of vulnerable women, particularly those who suffer domestic violence. Recently I announced from this Dispatch Box an additional £10 million of funding for women’s refuges up and down the country, which will benefit more than 100 local areas.

I assure your Lordships that the Government will consider all responses to the consultation on the settlement, including those which relate to the provision for local welfare over existing budgets, and will take these into consideration when announcing the final settlement.

All councils should be freezing their council tax in 2015-16 to help people with the cost of funding. The noble Viscount, Lord Hanworth, and the noble Lords, Lord Smith and Lord McKenzie, raised the issue of referendums. A referendum in 2015-16 can be held at reduced cost when combined with the general election. If a council has a good case for an increase above the 2% threshold, we believe that it should trust its electorate.

There were other points covering some of the areas that I look after, such as tackling fraud, but time does not permit me to go into them. If specific questions have been raised, I shall of course review Hansard to ensure that we answer them.

Finally, I wish to put on record the thanks of the Secretary of State, as well as other ministerial and governmental thanks, and mine, to all councils that are working tremendously hard in ensuring the best local services. I believe that anyone who goes into public life does so with the right intent. As we have heard from several noble Lords today who have represented electorates at a local level, it is for the right reasons: to serve their electorate to the best of their abilities.

Finally, it falls upon me to thank once again all noble Lords for their contributions, which have again provided a very informed and deep insight into the debate over local government finance. I am sure that I am accurate in saying that it is not the last time we shall discuss it. Nevertheless, the quality of the debate that we have had has again demonstrably shown the best of this House.

My Lords, I will say three things very briefly, given the time. First, I think the Minister for his usual courteous response—actually there are four things, because that was the first. Secondly, I congratulate again the maiden speakers, from whom we will hear a great deal to our benefit in future. Thirdly, the noble Baroness, Lady Eaton, referred to surveys showing that people have not noticed a particular difference in services. I remind her that a y