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Local Authorities: Budget

Volume 769: debated on Tuesday 22 March 2016


Asked by

To ask Her Majesty’s Government what assessment they have made of the levels of service provision and council tax following local authority budget decisions for 2016–17.

My Lords, I beg leave to ask the Question in my name on the Order Paper. In doing so, I remind the House of my interest as a local councillor.

My Lords, the Government believe that local authorities, as democratically elected bodies, are best placed to determine the right service provision for the needs of their particular area. We have given them important new flexibilities to enable them to continue to do this in the most cost-effective way. Local authority council tax decisions are published annually as official statistics. The date for the 2016-17 council tax statistical release is 31 March.

My Lords, on 8 February, the Minister, the noble Baroness, Lady Williams of Trafford, told me that, if all authorities took advantage of the flexibilities which the Minister has just mentioned, the expected average local council tax increase this year would be 3.7%. Are the Government not concerned that the round of council tax decisions by local authorities this year will produce increases far above the rate of inflation and the growth in wages? At the same time, there are continuous cuts in local government services. Is it not the case that these are all due to the continuing reductions in local government funding by the Government?

My Lords, first, we acknowledge the important role of councils, including Pendle, which deliver the services on which our local communities depend. However, I take issue with the noble Lord because council tax has fallen in real terms by 11% since 2010 and councils have worked particularly hard over the past five years to deliver a better deal for local taxpayers and have coped well with reductions by reforming the way they work to become more efficient in both back-office functions and front-line delivery service.

My Lords, is the Minister aware that the SNP has reneged on its promise to abolish the council tax, but instead Kezia Dugdale, the leader of Scottish Labour, has indicated that a Labour Government in Scotland would introduce a more progressive property tax? Is this not something that the Conservative Government should look at for England?

No, we are not in that position. The Question focuses very much on England and Wales. There are lots of opportunities for councils to make savings, particularly when working with other councils or public sector bodies. We have announced plans to reform the local government pension scheme but there are certainly other areas such as procurement, counterfraud and digital where we can make progress.

My Lords, Wiltshire council became a county unitary in 2009. Since then, we have saved £25 million every year in efficiencies from that move. We have used that money to keep council tax down in a difficult time through a recession but have also protected the services which people in Wiltshire consider are important, including investing in others. If that model was replicated across the country, it is estimated that it would save £2.8 billion a year. Does the Minister agree that the Government should now seriously look at implementing this county unitary model across the country?

We are ready to promote and facilitate local government reorganisation but only where areas want this. I am aware of my noble friend’s experience in successfully leading Wiltshire. This is an example of what can be achieved for local people where local government moves to a straightforward unitary structure with clear accountability and strong leadership which is sensitive to local needs. Again, the focus will be on—and has been in Wiltshire—the efficiency of service delivery.

My Lords, recently the Campaign for Better Transport has estimated that local authority subsidies for rural bus services are likely to be cut this year alone by £27 million. In Hertfordshire, where I live and work, there have been cuts since 2010 of 62%. Forty rural bus services have seen radical declines and 14 have gone altogether. While I recognise some of the things the Government are doing, not least the serious increase in the rural services delivery grant, will the Minister tell your Lordships’ House the long-term plans of Her Majesty’s Government to engage with local authorities to ensure that we have proper rural transport as one of the essential elements of rural sustainability?

The entire point of our devolution revolution is that all authorities will have the power to set their own policy agendas and target their spending priorities to match. Local leaders know best what is right for them and we think it is right that Whitehall does not predict exactly what the cost of a local service will be, including the bus service. But by 2020, when councils will be 100% funded by council tax, business rates and other local revenues, they will finally be fully accountable to their electorate and not to Whitehall. This is devolution.

My Lords, I am sure the noble Viscount is aware that the services cut by local authorities include social care, which, as my noble friend Lord Kinnock referred to in an earlier Question, means a massive increase in the number of people coming to hospitals. Does the noble Viscount consider that that is fair and that it is the right way for a Government who care about the health service to behave?

The noble Baroness will know that the 2% adult social care precept will raise up to £2 billion by 2019-20, with a further £1.5 billion available to councils to work with the NHS to ensure that care is available for older people following hospital treatment, through the better care fund.

My Lords, is my noble friend aware that those of us who have the privilege of living in East Anglia, particularly those of us who live in Bury St Edmunds, where we have an excellent council which has improved services overall and kept rates well under control, do not need an elected mayor? That will only raise costs, introduce another layer of government and lead to further escalation of these problems.